Exhibit 1.1
BOSTON CAPITAL REAL ESTATE INVESTMENT TRUST, INC.
Up to 105,000,000 Shares of Common Stock/$1,050,000,000
DEALER-MANAGER AGREEMENT
___________, 2005
Boston Capital Securities, Inc.
Xxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, XX 00000-0000
Dear Sirs:
Boston Capital Real Estate Investment Trust, Inc., a Maryland corporation
(the "Company"), is registering with the Securities and Exchange Commission (the
"Commission") for public sale (the "Offering") a maximum of 105,000,000 shares
of its Common Stock, $.001 par value per share (the "Shares"), to be issued and
sold for an aggregate purchase price of $1,050,000,000 (100,000,000 shares to be
offered to the public and 5,000,000 shares to be offered pursuant to the
Company's dividend reinvestment plan). The Shares are to be sold for a per share
cash purchase price of $10.00, and the minimum purchase by any one person is 100
shares except as otherwise indicated in the Prospectus or in any letter or
memorandum from the Company to Boston Capital Securities, Inc. (the
"Dealer-Manager").
The Company hereby authorizes and appoints, subject to the terms and
conditions of this Agreement, the Dealer-Manager to organize a group of
soliciting dealers (the "Soliciting Dealers"), consisting of brokers and
dealers, who shall be members in good standing of the National Association of
Securities Dealers, Inc. (the "NASD"), to solicit purchasers of the Shares.
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Dealer-Manager that:
(a) The Company has filed with the Commission a Registration Statement on
Form S-11, Registration No. 333-108426 and a related preliminary
prospectus for the registration of the Shares under the Securities Act
of 1933, as amended (the "1933 Act"), and has filed such amendments
thereto and such amended preliminary prospectuses as may have been
required as of the date hereof. Such registration statement as amended
and the amended prospectus on file with the Commission at the time the
registration statement becomes effective are herein called the
"Registration Statement" and the "Prospectus" respectively, except
that (A) if the Company files a post-effective amendment
to such registration statement, then the term "Registration Statement"
shall, from and after the declaration of the effectiveness of such
post-effective amendment, refer to such registration statement as
amended by such post-effective amendment, and the term "Prospectus"
shall refer to the amended prospectus then on file with the
Commission, and (B) if the prospectus filed by the Company pursuant to
either Rule 424(b) or (c) of the rules and regulations of the
Commission under the 1933 Act (the "Regulations") shall differ from
the prospectus on file at the time the Registration Statement or the
most recent post-effective amendment thereto, if any, shall have
become effective, the term "Prospectus" shall refer to such prospectus
filed pursuant to either Rule 424(b) or (c), as the case may be, from
and after the date on which it shall have been filed. The Commission
has not issued any order preventing or suspending the use of any
preliminary prospectus or the Prospectus.
(b) The Company at the Offering's closing date (or at each of its closing
dates if the Offering shall have more than one closing) will be duly
organized and legally existing as a corporation pursuant to the laws
of the State of Maryland with full power and authority to conduct
business as described in the Prospectus; the Company has the power and
authority to enter into and perform this Agreement; the execution and
delivery of this Agreement by the Company has been duly and validly
authorized by all necessary action; the execution and delivery of this
Agreement, the fulfillment of its terms and consummation of the
transactions contemplated hereunder do not and will not conflict with
or constitute a breach or default under any other agreement, indenture
or instrument by which the Company is bound, or any law, regulation or
order applicable to the Company or its respective properties; this
Agreement constitutes the valid and binding agreement of the Company,
enforceable against it in accordance with its terms.
(c) At the time the Registration Statement initially becomes effective and
at the time that any post-effective amendment thereto becomes
effective, the Registration Statement and the Prospectus, and at each
closing date the Prospectus, will comply with the provisions of the
1933 Act and the Regulations; at the time the Registration Statement
initially becomes effective and at the time that any post-effective
amendment thereto becomes effective the Registration Statement will
not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading; and at the time the
Registration Statement or an amendment thereto becomes effective, and
the Prospectus at each closing date, will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading;
provided, however, that the representations and warranties in this
paragraph shall not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by the
Dealer-Manager expressly for use in the Registration Statement or the
Prospectus. Every contract or other document
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required by the 1933 Act or the Regulations to be filed as an exhibit
to the Registration Statement has been so filed.
(d) Any supplemental sales literature or advertisement, regardless of how
labeled or described, used in addition to the Prospectus in connection
with the Offering which is furnished or approved by the Company
("Authorized Sales Literature") shall, to the extent required, be
filed with and approved by the appropriate securities agencies and
bodies.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE DEALER-MANAGER.
The Dealer-Manager hereby represents, warrants and agrees with the Company
that:
(a) Solicitation and other activities by the Dealer-Manager hereunder
shall be undertaken only in accordance with this Agreement, the 1933
Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and the applicable rules and regulations of the Commission and any
other applicable securities or blue sky laws and regulations. The
Dealer-Manager agrees that through the termination date of the
Offering indicated in the Prospectus (the "Termination Date") it will
not use or authorize the use of any solicitation material other than
the Prospectus and Authorized Sales Literature.
(b) The Dealer-Manager is a broker-dealer registered with the Commission
and with each state in which it intends to make an offer (but not
necessarily in each state in which a Soliciting Dealer may make an
offer); it is, and will remain until the Termination Date, a member in
good standing of the NASD and agrees to comply with the provisions and
applicable rules and regulations relating to the suitability of
investors, including, without limitation, the provisions of Article
III.C of the Statement of Policy Regarding Real Estate Investment
Trusts of the North American Securities Administrators Association,
Inc. (the "NASAA Guidelines"); and each sales representative of the
Dealer-Manager making offers or sales of Shares is properly licensed
in each such jurisdiction where he intends to so act. The
Dealer-Manager acknowledges that it has reviewed the Prospectus and
Authorized Sales Literature and has determined that the suitability
standards are fully disclosed and are consistent with the NASAA
Guidelines. In recommending to a potential investor the purchase, sale
or transfer of Shares the Dealer-Manager shall:
(i) have reasonable grounds to believe, on the basis of
information obtained from the investor concerning his investment
objectives, other investments, financial situation and needs, and
any other information known by the Dealer-Manager or an
associated person, that:
(A) the investor has a fair market net worth sufficient
to sustain the risks inherent in an investment in the
Company, including loss of investment and lack of
liquidity; and
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(B) the Company is otherwise suitable for the investor;
and
(ii) will maintain in its files documents disclosing the basis
upon which the determination of suitability was reached as to
each investor.
The Dealer-Manager hereby represents that it will communicate to each
of its sales agents, representatives and other appropriate persons
associated with it the above-referenced suitability standards, and the
Dealer-Manager shall require each Soliciting Dealer that it may engage
to acknowledge compliance with the NASAA Guidelines. Furthermore, the
Dealer-Manager shall not execute any transaction in the Company in a
discretionary account without prior written approval of the
transaction by the potential investor.
(c) The Dealer-Manager shall provide a copy of the Prospectus to each
prospective investor to whom the Dealer-Manager shall directly effect
a sale of Shares at the time of such sale of Shares to such
prospective investor. It shall not, in connection with the offer and
sale of Shares, give any information or make representations, nor
shall it authorize others to give any information or make
representations, other than such information and representations as
are contained in the Prospectus or in any Authorized Sales Literature.
(d) Each Soliciting Dealer engaged by the Dealer-Manager will be a
broker-dealer registered with the Commission and with each state in
which it intends to make an offer, will be a member in good standing
of the NASD and will agree to comply with the NASAA Guidelines, and
each sales representative employed by a Soliciting Dealer who makes
offers or sales of Shares will be properly licensed to sell securities
in the jurisdictions where such representative makes offers or sales.
(e) The Dealer-Manager will promptly deliver to the Company any
subscription documents received by it and will promptly deliver all
checks executed by or delivered on behalf of prospective investors to
Boston Private Bank & Trust Company (the "Escrow Agent") for deposit
in the escrow account in accordance with Section 8 hereof.
(f) Prior to participating in the offer and sale of the Shares, the
Dealer-Manager shall have reviewed the Prospectus and will have
reasonable grounds to believe that all material facts are adequately
and accurately disclosed and provide a basis for evaluating the
Company. In determining the adequacy of the disclosed facts, the
Dealer-Manager shall obtain written information on material facts
relating at a minimum to the following, if relevant in view of the
nature of the Offering:
(i) items of compensation;
(ii) physical properties;
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(iii) tax aspects;
(iv) the Company's conflicts and risk factors; and
(v) appraisals and other pertinent reports.
Prior to executing a purchase transaction in the Company, the
Dealer-Manager or a person associated with it shall inform the
prospective investor of all pertinent facts relating to the liquidity
and marketability of an investment in the Shares.
(g) The Dealer-Manager represents that it has not engaged, and agrees that
it will not engage, in any activity with respect to the Shares in
violation of the 1934 Act, including Rule 10b-6 thereunder.
(h) Neither the Dealer-Manager nor any other person is authorized by the
Company to give any information or make any representations in
connection with this Agreement or the Offering other than those
contained in the Prospectus and any Authorized Sales Literature
furnished to the Dealer-Manager or authorized for use by the Company.
Without limiting the generality of the foregoing, the Dealer-Manager
will not publish, circulate or otherwise use any other advertisement
or solicitation material without the prior written approval of the
Company.
(i) The Dealer-Manager will require that each of the Soliciting Dealers
retained by it enter into a soliciting dealer agreement similar in
form to the one attached hereto as Exhibit A (a "Soliciting Dealer
Agreement").
(j) On becoming a Soliciting Dealer and in soliciting purchasers of the
Shares, the Dealer-Manager agrees to comply with the terms and
conditions imposed on the Soliciting Dealers pursuant to the
Soliciting Dealer Agreement.
(k) The blue sky survey for the Company indicates or will indicate the
jurisdictions where it is believed that offers and sales of the Shares
may be made under the applicable state securities laws and
regulations. In effecting offers or sales in a jurisdiction, the
Dealer-Manager will comply with all special conditions and limitations
imposed by such jurisdiction, as set forth in the blue sky survey for
the Company. If the blue sky survey for the Company is not enclosed
herewith, it will be made available to the Dealer-Manager at a later
date. In no circumstances will the Dealer-Manager engage in any
activities as a Soliciting Dealer hereunder in any jurisdiction (a)
which is not listed in the blue sky survey as a jurisdiction where
offers and sales of Shares may be made under the blue sky or
securities laws of such jurisdiction or (b) in which the
Dealer-Manager may not lawfully so engage. The blue sky survey shall
not be considered Authorized Sales Literature.
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SECTION 3. COMPENSATION OF DEALER-MANAGER.
(a) Except as provided in the "Selling and Escrow Arrangements" section of
the Prospectus, as compensation for the securities of the
Dealer-Manager hereunder, the Company will pay to the Dealer-Manager a
selling commission of seven per cent (7%) of the gross proceeds of the
Shares sold and a dealer-manager fee in the amount of two per cent
(2.0%) of the gross proceeds of the Shares sold.
(b) The Dealer-Manager may re-allow all or any part of the selling
commission and up to one and one half percent (1.5%) of the
dealer-manager fee for which the Dealer-Manager was reimbursed by the
Company in respect of the Shares in the Company sold by such
Soliciting Dealer.
(c) No subscription shall be effective unless and until the subscription
payment is accepted by the Company, and the Company reserves the right
in its sole discretion to reject any subscription payment submitted.
In the event that a sale of Shares for which one of the Soliciting
Dealers engaged by the Dealer-Manager has solicited a subscription
shall not occur, for whatever reason, no dealer-manager fee or selling
commission with respect to such Shares shall be paid to the
Dealer-Manager or such Soliciting Dealer.
SECTION 4. MUTUAL COVENANTS.
In the event that any party hereto shall learn of any circumstances or
facts, the existence of which causes such party to believe that such
circumstances or facts (i) render the Prospectus inaccurate or misleading as to
any material facts or (ii) should otherwise be disclosed in a supplement or
amendment to the Prospectus or any Authorized Sales Literature, such party will
promptly bring such circumstances or facts to the attention of each party
hereto. If, in the opinion of any party hereto or of counsel for any party
hereto, such circumstances or facts should be set forth in an amendment or
supplement to the Prospectus or to any Authorized Sales Literature, the Company
shall cause such amendment or supplement to be prepared promptly and shall make
available to the Dealer-Manager sufficient copies thereof for its own use and/or
distribution to the Soliciting Dealers.
SECTION 5. TERMINATION.
This Agreement may be terminated by written or telegraphic notice to the
Dealer-Manager from the Company, or upon the expiration or termination of the
Offering; provided, however, that such termination shall not relieve the Company
of the obligation to pay when due all fees payable to the Dealer-Manager
hereunder or the obligations of any of the parties hereto referred to under
Section 7 hereof.
SECTION 6. LIABILITY OF PARTIES.
Nothing herein contained shall constitute the Dealer-Manager, the
Soliciting Dealers and the Company as an association, partnership,
unincorporated business or other
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separate entity, nor shall anything herein contained render the Company liable
for the obligations of any of the Soliciting Dealers. The Company shall not be
under any liability to any Soliciting Dealer or any other person for any act or
omission or any matter connected with this Agreement or the Company, except for
obligations expressly assumed by an association, partnership, unincorporated
business or other separate entity in this Agreement.
SECTION 7. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless the Dealer-Manager and
each Soliciting Dealer from and against any and all losses, claims,
damages or liabilities, joint or several, to which the Dealer-Manager
and any Soliciting Dealer may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon a breach or
alleged breach by the Company of any of its representations and
warranties or upon an untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and the Company will reimburse the Dealer-Manager and each
such Soliciting Dealer for any legal or other expenses (including, but
not limited to, reasonable attorneys' fees) reasonably incurred by the
Dealer-Manager and such Soliciting Dealer in connection with
investigating or defending any such claim or action instituted against
the Dealer-Manager or any such Soliciting Dealer, whether or not
resulting in any liability.
The indemnity agreement in this Section 7(a) will be in addition to
any liability which the Company may otherwise have and shall extend
upon the same terms and conditions to each person, if any, who
controls the Dealer-Manager and any Soliciting Dealer within the
meaning of the 1933 Act or 1934 Act, or is a registered representative
of such Dealer-Manager or Soliciting Dealer.
(b) The Dealer-Manager and each Soliciting Dealer will indemnify and hold
harmless the Company from and against any and all losses, claims,
damages or liabilities to which the Company may become subject insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) the failure or alleged
failure by the Dealer-Manager and/or such Soliciting Dealer to perform
fully and to act in compliance with the provisions of this Agreement
or the Soliciting Dealer Agreement, or (ii) any untrue statement or
alleged untrue statement of any material fact made by the
Dealer-Manager or such Soliciting Dealer to any offeree or purchaser
of any of Shares (other than any statement contained in the Prospectus
or any Authorized Sales Literature, or any amendment or supplement
thereto), or (iii) any omission or alleged omission by the
Dealer-Manager or such Soliciting Dealer to state to any offeree or
purchaser of any Shares a material fact
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necessary in order to make the statements made to such offeree or
purchaser not misleading in light of the circumstances under which
they were made (other than any such material fact omitted from the
Prospectus, or any amendment or supplement thereto), and will
reimburse any legal or other expenses (including, but not limited to,
reasonable attorneys' fees) reasonably incurred by the Company in
connection with investigating or defending any such claim or action,
whether or not resulting in any liability.
The indemnity agreement in this Section 7(b) will be in addition to
any liability which the Dealer-Manager and/or such Soliciting Dealer
may otherwise have and shall extend upon the same terms and conditions
to each person signing the Registration Statement on behalf of the
Company and each person, if any, who controls the Company within the
meaning of the 1933 Act or the 1934 Act.
(c) No person shall be liable under the indemnity agreements contained
under Sections 7(a) and (b) hereof unless the person requesting
indemnification shall have notified such indemnifying party within ten
(10) business days after the summons or other first legal process
giving notice of the nature of the claim shall have been served upon
the indemnified party, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under
this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying
party will not relieve him or it from any liability which he or it may
have to any indemnified party otherwise than under this Section 7. In
case any such action is brought against any indemnified party and he
or it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that he or it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such
indemnified party of his or its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified
party under this Section 7 for any legal or other expenses, in each
case subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of investigation.
(d) If the right to indemnification provided for in paragraphs (a), (b) or
(c) of this Section 7 would by its terms be available to a person
hereunder (collectively, the "Indemnified Parties" and individually,
an "Indemnified Party"), but is held to be unavailable by a court of
competent jurisdiction for any reason other than because of the terms
of such indemnification provision, then the Company, the
Dealer-Manager and the Soliciting Dealers (collectively, the
"Indemnifying Parties" and individually, an "Indemnifying Party")
shall contribute to the aggregate of such losses, claims, damages and
liabilities as are contemplated in those paragraphs (including, but
not limited to, any investigation, legal and other expenses incurred
in connection with, and any
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amount paid in settlement of, any claim, action, suit or proceeding)
in the ratio in which the proceeds of the Offering of Shares have been
actually received by each such Indemnifying Party. For purposes of the
preceding sentence, proceeds paid to an Indemnifying Party hereunder
and subsequently paid to another Indemnifying Party or Indemnifying
Parties pursuant to this Agreement or otherwise, shall be deemed
received by the last of such Indemnifying Parties to whom or to which
such proceeds were paid. However, the right of contribution described
in the preceding sentences is subject to the following limitations:
(i) In no case shall any Indemnifying Party and the persons
who control such Indemnifying Party within the meaning of
applicable state and federal securities laws be required
to contribute any amount in excess of the aggregate
Offering proceeds actually received by it and them
(determined as described above); and
(ii) No person guilty of fraudulent misrepresentation within
the meaning of Section 11(f) of the 1933 Act shall be
entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
Any Indemnified Party entitled to contribution will, promptly after
receipt of such notice of commencement of any action, suit, proceeding
or claim against him or it in respect of which a claim for
contribution may be made against another Indemnifying Party or
Indemnifying Parties, notify such other Indemnifying Party or
Indemnifying Parties. Failure to so notify such other Indemnifying
Party or Indemnifying Parties shall not relieve such other
Indemnifying Party or Indemnifying Parties from any other obligation
it or they may have hereunder or otherwise. If such other Indemnifying
Party or Indemnifying Parties are so notified, such other Indemnifying
Party or Indemnifying Parties shall be entitled to participate in the
defense of such action, suit, proceeding or claim at its or their own
expense or in accordance with arrangements satisfactory to all parties
who may be required to contribute. After notice from such other
Indemnifying Party or Indemnifying Parties to the Indemnified Party
entitled to contribution of its or their election to assume its or
their own defense, the Indemnifying Party or Indemnifying Parties so
electing shall not be liable for any legal or other expenses of
litigation subsequently incurred by the Indemnified Party entitled to
contribution in connection with the defense thereof, other than the
reasonable costs of investigation. No person shall be required to
contribute with respect to any action or claim settled without his or
its consent.
(e) Notwithstanding any of the foregoing provisions of this Section 7, the
Company shall in no event provide indemnification of the Directors,
Advisors or Affiliates and any person acting as a broker-dealer for
the Company for any liability or loss suffered by such Directors,
Advisors or Affiliates and any person acting as a broker-dealer, nor
shall it provide that such Directors,
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Advisors or Affiliates and any person acting as a broker-dealer be
held harmless for any loss or liability suffered by the Company, nor
shall it provide any contribution to such persons unless all of the
conditions set forth in Section II.G of the NASAA Guidelines in effect
as of the date of this Agreement are met, and any such indemnification
or contribution shall be limited to the extent permitted by said
Section II.G.
SECTION 8. TRANSFER OF FUNDS.
The Dealer-Manager shall either directly, or through each Soliciting
Dealer, instruct subscribers to make their checks payable to Boston Private Bank
& Trust Company Escrow Account. If the Dealer-Manager receives a check not
conforming to the foregoing instructions it shall return such check directly to
such subscriber not later than the end of the next business day following its
receipt. Checks received by the Dealer-Manager which conform to the foregoing
instructions shall be transmitted for deposit by the Dealer-Manager as soon as
practicable to the Escrow Agent, but in any event by noon of the second business
day following receipt by the Dealer-Manager.
SECTION 9. NOTICES.
Any notice hereunder shall be in writing or by telegram and if to the
Dealer-Manager shall be deemed to have been duly given if delivered or sent to
the Dealer-Manager at the address to which this letter is addressed, and if to
the Company, if delivered or sent to it c/o Boston Capital Corporation at Xxx
Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxxxxx 00000.
SECTION 10. PARTIES IN INTEREST.
The Agreement herein set forth is intended solely for the benefit of the
Dealer-Manager, each Soliciting Dealer and the Company (and, to the extent
provided in Section 7 hereof certain parties associated therewith), and their
respective successors and assigns, and no other person shall acquire or have any
right by virtue of this Agreement, and the term "successors and assigns" as used
herein shall not include any subscriber or purchaser, as such, of Shares.
SECTION 11. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of The Commonwealth of Massachusetts.
SECTION 12. AMENDMENT.
This Agreement may be amended by an agreement in writing signed by the
parties hereto.
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SECTION 13. CONFIRMATION.
Please confirm your agreement to become the Dealer-Manager under the terms
and conditions herein set forth by signing and returning the confirmation on the
enclosed duplicate copy of this letter to us at the above address.
Very truly yours,
BOSTON CAPITAL REAL ESTATE
INVESTMENT TRUST, INC.
By:
---------------------------------
Xxxxxxx X. Xxxxxxxxx,
President
Confirmed: BOSTON CAPITAL SECURITIES, INC.
, 2005 By:
------------------ ---------------------------------
Xxxxxxx X. XxXxxxxx,
President
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