EXHIBIT 1.1
FORM OF
DEALER MANAGER DISTRIBUTION AGREEMENT
XXXXX REAL ESTATE INVESTMENT TRUST, INC.
Up to 22,115,000 Shares of Common Stock/$221,150,000
DEALER MANAGER AGREEMENT
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----------------, ------
Xxxxx Investment Securities, Inc.
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
Xxxxx Real Estate Investment Trust, Inc., a Maryland corporation (the
"Company"), is registering for public sale a maximum of 23,000,000 shares of its
common stock, $.01 par value per share, of which amount 885,000 shares are to be
sold pursuant to a dealer warrant plan, with the balance of 22,115,000 shares
(the "Shares" or the "Stock") to be issued and sold for an aggregate purchase
price of $221,150,000. Such Stock is to be sold for a per share cash purchase
price of $10.00; and the minimum purchase by any one person shall be 100 Shares
(except as otherwise indicated in the Prospectus or in any letter or memorandum
from the Company to Xxxxx Investment Securities, Inc. (the "Dealer Manager")).
Terms not defined herein shall have the same meaning as in the Prospectus. The
Stock is being registered with the SEC (as defined herein) as part of a
registration of 23,000,000 shares, of which amount 885,000 will be issued upon
the exercise of certain warrants to be issued in connection with the Offering.
In connection therewith, the Company hereby agrees with you, the Dealer Manager,
as follows:
1. Representations and Warranties of the Company
---------------------------------------------
The Company represents and warrants to the Dealer Manager and each dealer
with whom the Dealer Manager has entered into or will enter into a Selected
Dealer Agreement in the form attached to this Agreement as Exhibit "A" (said
dealers being hereinafter called the "Dealers") that:
1.1 A registration statement with respect to the Company has been
prepared by the Company in accordance with applicable requirements of the
Securities Act of 1933, as amended (the Securities Act"), and the applicable
rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "SEC") promulgated thereunder, covering the Shares.
Said registration statement, which includes a preliminary prospectus, was
initially filed with the SEC on or about July ___, 1999. Copies of such
registration statement and each amendment thereto have been or will be delivered
to the Dealer Manager. (The
registration statement and prospectus contained therein, as finally amended and
revised at the effective date of the registration statement, are respectively
hereinafter referred to as the "Registration Statement" and the "Prospectus,"
except that if the Prospectus first filed by the Company pursuant to Rule 424(b)
under the Securities Act shall differ from the Prospectus, the term "Prospectus"
shall also include the Prospectus filed pursuant to Rule 424(b).)
1.2 The Company has been duly and validly organized and formed as a
corporation under the laws of the state of Maryland, with the power and
authority to conduct its business as described in the Prospectus.
1.3 The Registration Statement and Prospectus comply with the
Securities Act and the Rules and Regulations and do not contain any untrue
statements of material facts or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading provided, however, that the foregoing provisions of this Section 1.3
will not extend to such statements contained in or omitted from the Registration
Statement or Prospectus as are primarily within the knowledge of the Dealer
Manager or any of the Dealers and are based upon information furnished by the
Dealer Manager in writing to the Company specifically for inclusion therein.
1.4 The Company intends to use the funds received from the sale of
the Shares as set forth in the Prospectus.
1.5 No consent, approval, authorization or other order of any
governmental authority is required in connection with the execution or delivery
by the Company of this Agreement or the issuance and sale by the Company of the
Shares, except such as may be required under the Securities Act or applicable
state securities laws.
1.6 There are no actions, suits or proceedings pending or to the
knowledge of the Company, threatened against the Company at law or in equity or
before or by any federal or state commission, regulatory body or administrative
agency or other governmental body, domestic or foreign, which will have a
material adverse effect on the business or property of the Company.
1.7 The execution and delivery of this Agreement, the consummation of
the transactions herein contemplated and compliance with the terms of this
Agreement by the Company will not conflict with or constitute a default under
any charter, by-law, indenture, mortgage, deed of trust, lease, rule,
regulation, writ, injunction or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Company, except to the extent that the enforceability of the indemnity and/or
contribution provisions contained in Section 4 of this Agreement may be limited
under applicable securities laws.
1.8 The Company has full legal right, power and authority to enter
into this Agreement and to perform the transactions contemplated hereby, except
to the extent that the enforceability of the indemnity and/or contribution
provisions contained in Section 4 of this Agreement may be limited under
applicable securities laws.
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1.9 At the time of the issuance of the Shares, the Shares will have
been duly authorized and validly issued, and upon payment therefor, will be
fully paid and nonassessable and will conform to the description thereof
contained in the Prospectus.
2. Covenants of the Company
------------------------
The Company covenants and agrees with the Dealer Manager that:
2.1 It will, at no expense to the Dealer Manager, furnish the Dealer
Manager with such number of printed copies of the Registration Statement,
including all amendments and exhibits thereto, as the Dealer Manager may
reasonably request. It will similarly furnish to the Dealer Manager and others
designated by the Dealer Manager as many copies as the Dealer Manager may
reasonably request in connection with the offering of the Shares of: (a) the
Prospectus in preliminary and final form and every form of supplemental or
amended prospectus; (b) this Agreement; and (c) any other printed sales
literature or other materials (provided that the use of said sales literature
and other materials has been first approved for use by the Company and all
appropriate regulatory agencies).
2.2 It will furnish such proper information and execute and file such
documents as may be necessary for the Company to qualify the Shares for offer
and sale under the securities laws of such jurisdictions as the Dealer Manager
may reasonably designate and will file and make in each year such statements and
reports as may be required. The Company will furnish to the Dealer Manager a
copy of such papers filed by the Company in connection with any such
qualification.
2.3 It will: (a) use its best efforts to cause the Registration
Statement to become effective; (b) furnish copies of any proposed amendment or
supplement of the Registration Statement or Prospectus to the Dealer Manager;
(c) file every amendment or supplement to the Registration Statement or the
Prospectus that may be required by the SEC; and (d) if at any time the SEC shall
issue any stop order suspending the effectiveness of the Registration Statement,
it will use its best efforts to obtain the lifting of such order at the earliest
possible time.
2.4 If at any time when a Prospectus is required to be delivered
under the Securities Act any event occurs as a result of which, in the opinion
of either the Company or the Dealer Manager, the Prospectus or any other
prospectus then in effect would include an untrue statement of a material fact
or, in view of the circumstances under which they were made, omit to state any
material fact necessary to make the statements therein not misleading, the
Company will promptly notify the Dealer Manager thereof (unless the information
shall have been received from the Dealer Manager) and will effect the
preparation of an amended or supplemental prospectus which will correct such
statement or omission. The Company will then promptly prepare such amended or
supplemental prospectus or prospectuses as may be necessary to comply with the
requirements of Section 10 of the Securities Act.
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3. Obligations and Compensation of Dealer Manager
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3.1 The Company hereby appoints the Dealer Manager as its agent and
principal distributor for the purpose of selling for cash up to a maximum of
22,115,000 Shares through Dealers, all of whom shall be members of the National
Association of Securities Dealers, Inc. (NASD). The Dealer Manager may also sell
Shares for cash directly to its own clients and customers at the public offering
price and subject to the terms and conditions stated in the Prospectus. The
Dealer Manager hereby accepts such agency and distributorship and agrees to use
its best efforts to sell the Shares on said terms and conditions. The Dealer
Manager represents to the Company that it is a member of the NASD and that it
and its employees and representatives have all required licenses and
registrations to act under this Agreement.
The Dealer Manager agrees to be bound by the terms of the Escrow
Agreement executed as of ______________, ______, by Bank of America, N.A., as
escrow agent, the Dealer Manager and the Company, a copy of which is enclosed.
3.2 Promptly after the effective date of the Registration Statement,
the Dealer Manager and the Dealers shall commence the offering of the Shares for
cash to the public in jurisdictions in which the Shares are registered or
qualified for sale or in which such offering is otherwise permitted. The Dealer
Manager and the Dealers will suspend or terminate offering of the Shares upon
request of the Company at any time and will resume offering the Shares upon
subsequent request of the Company.
3.3 Except as provided in the "Plan of Distribution" Section of the
Prospectus, as compensation for the services rendered by the Dealer Manager, the
Company agrees that it will pay to the Dealer Manager selling commissions in the
amount of 7% of the gross proceeds of the Shares sold plus a dealer manager fee
in the amount of 2.5% of the gross proceeds of the Shares sold.
The Company will not be liable or responsible to any Dealer for direct
payment of commissions to such Dealer, it being the sole and exclusive
responsibility of the Dealer Manager for payment of commissions to Dealers.
Notwithstanding the above, at its discretion, the Company may act as agent of
the Dealer Manager by making direct payment of commissions to such Dealers
without incurring any liability therefor.
3.4 The Dealer Manager represents and warrants to the Company and
each person and firm that signs the Registration Statement that the information
under the caption "Plan of Distribution" in the Prospectus and all other
information furnished to the Company by the Dealer Manager in writing expressly
for use in the Registration Statement, any preliminary prospectus, the
Prospectus, or any amendment or supplement thereto does 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.
3.5 The Dealer Manager represents and warrants to the Company that it
will not represent or imply that the escrow holder, as identified in the
Prospectus, has investigated the desirability or advisability of investment in
the Company, or has approved, endorsed or passed
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upon the merits of the Shares or the Company, nor will they use the name of said
escrow holder in any manner whatsoever in connection with the offer or sale of
the Shares other than by acknowledgment thus it has agreed to serve as escrow
holder.
4. Indemnification
---------------
4.1 The Company will indemnify and hold harmless the Dealers and the
Dealer Manager, their officers and directors and each person, if any, who
controls such Dealer or Dealer Manager within the meaning of Section 15 of the
Securities Act from and against any losses, claims, damages or liabilities,
joint or several, to which such Dealers or Dealer Manager, their officers and
directors, or such controlling person may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (a) any untrue
statement or alleged untrue statement of a material fact contained (i) in any
Registration Statement (including the Prospectus as a part thereof) or any post-
effective amendment thereto or in the Prospectus or any amendment or supplement
to the Prospectus or (ii) in any blue sky application or other document executed
by the Company or on its behalf specifically for the purpose of qualifying any
or all of the Shares for sale under the securities laws of any jurisdiction or
based upon written information furnished by the Company under the securities
laws thereof (any such application, document or information being hereinafter
called a "Blue Sky Applications"), or (b) the omission or alleged omission to
state in the Registration Statement (including the Prospectus as a part thereof)
or any post-effective amendment thereof or in any Blue Sky Application a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (c) any untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus, if used prior to the
effective date of the Registration Statement, or in the Prospectus or any
amendment or supplement to the Prospectus or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, and will reimburse each Dealer or Dealer
Manager, its officers and each such controlling person for any legal or other
expenses reasonably incurred by such Dealer or Dealer Manager, its officers and
directors, or such controlling person in connection with investigating or
defending such loss, claim, damage, liability or action; provided that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of, or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with written information furnished to the Company or
Dealer Manager by or on behalf of any Dealer or Dealer Manager specifically for
use with reference to such Dealer or Dealer Manager in the preparation of the
Registration Statement or any such post-effective amendment thereof, any such
Blue Sky Application or any such preliminary prospectus or the Prospectus or any
such amendment thereof or supplement thereto; and further provided that the
Company will not be liable in any such case if it is determined that such Dealer
or Dealer Manager was at fault in connection with the loss, claim, damage,
liability or action.
4.2 The Dealer Manager will indemnify and hold harmless the Company
and each person or firm which has signed the Registration Statement and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, from and against
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any losses, claims, damages or liabilities to which any of the aforesaid parties
may become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (a) any untrue statement of a material fact contained (i)
in the Registration Statement (including the Prospectus as a part thereof) or
any post-effective amendment thereof or (ii) any Blue Sky Application, or (b)
the omission to state in the Registration Statement (including the Prospectus as
a part thereof) or any post-effective amendment thereof or in any Blue Sky
Application a material fact required to be stated therein or necessary to make
the statements therein not misleading, or (c) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus, if
used prior to the effective date of the Registration Statement, or in the
Prospectus, or in any amendment or supplement to the Prospectus or the omission
to state therein a material fact required to be stated therein or necessary in
order to make the statements therein in the light of the circumstances under
which they were made not misleading in each case to the extent, but only to the
extent, that such untrue statement or omission was made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Dealer Manager specifically for use with reference to the Dealer Manager in
the preparation of the Registration Statement or any such post-effective
amendments thereof or any such Blue Sky Application or any such preliminary
prospectus or the Prospectus or any such amendment thereof or supplement
thereto, or (d) any unauthorized use of sales materials or use of unauthorized
verbal representations concerning the Shares by the Dealer Manager and will
reimburse the aforesaid parties, in connection with investigation or defending
such loss, claim, damage, liability or action. This indemnity agreement will be
in addition to any liability which the Dealer Manager may otherwise have.
4.3 Each Dealer severally will indemnify and hold harmless the
Company, Dealer Manager and each of their directors (including any persons named
in any of the Registration Statements with his consent, as about to become a
director), each of their officers who has signed any of the Registration
Statements and each person, if any, who controls the Company and the Dealer
Manager within the meaning of Section 15 of the Securities Act from and against
any losses, claims, damages or liabilities to which the Company, the Dealer
Manager, any such director or officer, or controlling person may become subject,
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(a) any untrue statement or alleged untrue statement of a material fact
contained (i) in the Registration Statement (including the Prospectus as a part
thereof) or any post-effective amendment thereof or (ii) in any Blue Sky
Application, or (b) the omission or alleged omission to state in the
Registration Statement (including the Prospectus as a part thereof or any post-
effective amendment thereof or in any Blue Sky Application a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (c) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, if used prior to the
effective date of the Registration Statement, or in the Prospectus, or in any
amendment or supplement to the Prospectus or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information
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furnished to the Company or the Dealer Manager by or on behalf of such Dealer
specifically for use with reference to such Dealer in the preparation of the
Registration Statement or any such post-effective amendments thereof or any such
Blue Sky Application or any such preliminary prospectus or the Prospectus or any
such amendment thereof or supplement thereto, or (d) any unauthorized use of
sales materials or use of unauthorized verbal representations concerning the
Shares by such Dealer and will reimburse the Company and the Dealer Manager and
any such directors or officers, or controlling person, in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnity agreement will be in addition to any liability which such Dealer
may otherwise have.
4.4 Promptly after receipt by an indemnified party under this Section
4 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 4, notify in writing the indemnifying party of the commencement thereof
and the omission so to notify the indemnifying party will relieve it from any
liability under this Section 4 as to the particular item for which
indemnification is then being sought, but not from any other liability which it
may have to any indemnified party. In case any such action is brought against
any indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled, to the extent it may wish,
jointly with any other indemnifying party similarly notified, to participate in
the defense thereof, with separate counsel. Such participation shall not relieve
such indemnifying party of the obligation to reimburse the indemnified party for
reasonable legal and other expenses (subject to Section 4.5) incurred by such
indemnified party in defending itself, except for such expenses incurred after
the indemnifying party has deposited funds sufficient to effect the settlement,
with prejudice, of the claim in respect of which indemnity is sought. Any such
indemnifying party shall not be liable to any such indemnified party on account
of any settlement of any claim or action effected without the consent of such
indemnifying party.
4.5 The indemnifying party shall pay all legal fees and expenses of
the indemnified party in the defense of such claims or actions; provided,
however, that the indemnifying party shall not be obliged to pay legal expenses
and fees to more than one law firm in connection with the defense of similar
claims arising out of the same alleged acts or omissions giving rise to such
claims notwithstanding that such actions or claims are alleged or brought by one
or more parties against more than one indemnified party. If such claims or
actions are alleged or brought against more than one indemnified party, then the
indemnifying party shall only be obliged to reimburse the expenses and fees of
the one law firm that has been selected by a majority of the indemnified parties
against which such action is finally brought; and in the event a majority of
such indemnified parties is unable to agree on which law firm for which expenses
or fees will be reimbursable by the indemnifying party, then payment shall be
made to the first law firm of record representing an indemnified party against
the action or claim. Such law firm shall be paid only to the extent of services
performed by such law firm and no reimbursement shall be payable to such law
firm on account of legal services performed by another law firm.
4.6 The indemnity agreements contained in this Section 4 shall remain
operative and in full force and effect regardless of (a) any investigation made
by or on behalf of any Dealer, or any person controlling any Dealer or by or on
behalf of the Company, the Dealer
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Manager or any officer or director thereof, or by or on behalf of the Company or
the Dealer Manager, (b) delivery of any Shares and payment therefor, and (c) any
termination of this Agreement. A successor of any Dealer or of any of the
parties to this Agreement, as the case may be, shall be entitled to the benefits
of the indemnity agreements contained in this Section 4.
5. Survival of Provisions
----------------------
The respective agreements, representations and warranties of the Company
and the Dealer Manager set forth in this Agreement shall remain operative and in
full force and effect regardless of (a) any termination of this Agreement, (b)
any investigation made by or on behalf of the Dealer Manager or any Dealer or
any person controlling the Dealer Manager or any Dealer or by or on behalf of
the Company or any person controlling the Company, and (c) the acceptance of any
payment for the Shares.
6. Applicable Law
--------------
This Agreement was executed and delivered in, and its validity,
interpretation and construction shall be governed by the laws of, the State of
Georgia.
7. Counterparts
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This Agreement may be executed in any number of counterparts. Each
counterpart, when executed and delivered, shall be an original contract, but all
counterparts, when taken together, shall constitute one and the same Agreement.
8. Successors and Amendment
------------------------
8.1 This Agreement shall inure to the benefit of and be binding upon
the Dealer Manager and the Company and their respective successors. Nothing in
this Agreement is intended or shall be construed to give to any other person any
right, remedy or claim, except as otherwise specifically provided herein. This
Agreement shall inure to the benefit of the Dealers to the extent set forth in
Sections 1 and 4 hereof.
8.2 This Agreement may be amended by the written agreement of the
Dealer Manager and the Company.
9. Term
----
Any party to this Agreement shall have the right to terminate this
Agreement on 60 days' written notice.
10. Confirmation
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The Company hereby agrees and assumes the duty to confirm on its behalf and
on behalf of dealers or brokers who sell the Shares all orders for purchase of
Shares accepted by the Company. Such confirmations will comply with the rules
of the SEC and the NASD, and will
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comply with applicable laws of such other jurisdictions to the extent the
Company is advised of such laws in writing by the Dealer Manager.
11. Suitability Investors
---------------------
The Dealer Manager will offer Shares, and in its agreements with Dealers
will require that the Dealers offer Shares, only to persons who meet the
financial qualifications set forth in the Prospectus or in any suitability
letter or memorandum sent to it by the Company and will only make offers to
persons in the states in which it is advised in writing that the Shares are
qualified for sale or that such qualification is not required. In offering
Shares, the Dealer Manager will, and in its agreements with Dealers the Dealer
Manager will require that the Dealer comply with the provisions of all
applicable rules and regulations relating to 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.
12. Submission of Orders
--------------------
12.1 Those persons who purchase Shares will be instructed by the
Dealer Manager or the Dealer to make their checks payable to an escrow agent for
the Company, whenever appropriate, or to the Company after the Minimum Offering
has been achieved. The Dealer Manager and any Dealer receiving a check not
conforming to the foregoing instructions 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 or Dealer which conform to the
foregoing instructions shall be transmitted for deposit pursuant to one of the
methods described in this Section 12. Transmittal of received investor funds
will be made in accordance with the following procedures.
12.2 Where, pursuant to a Dealer's internal supervisory procedures,
internal supervisory review is conducted at the same location at which
subscription documents and checks are received from subscribers, checks will be
transmitted in care of the Dealer Manager by the end of the next business day
following receipt by the Dealer for deposit to an escrow agent, where
appropriate.
12.3 Where, pursuant to a Dealer's internal supervisory procedures,
final internal supervisory review is conducted at a different location, checks
will be transmitted by the end of the next business day following receipt by the
Dealer to the office of the Dealer conducting such final internal supervisory
review (the "Final Review Offices"). The Final Review Office will in turn by
the end of the next business day following receipt by the Final Review Office,
transmit such checks in care of the Dealer Manager for deposit to an escrow
agent, where appropriate.
12.4 Where the Dealer Manager is involved in the distribution
process, checks will be transmitted by the Dealer Manager for deposit to the
escrow agent, where applicable, or to the Company after the Minimum Offering has
been achieved, as soon as practicable, but in
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any event by the end of the second business day following receipt by the Dealer
Manager. Checks of rejected subscribers will be promptly returned to such
subscribers.
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding agreement between us
as of the date first above written.
Very truly yours,
XXXXX REAL ESTATE INVESTMENT TRUST, INC.
By:
----------------------------------------------------
Xxx X. Xxxxx, III, President
Accepted and agreed as of the
date first above written.
XXXXX INVESTMENT SECURITIES, INC.
By:
--------------------------------------
Xxx X. Xxxxx, III
President
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EXHIBIT "A"
XXXXX REAL ESTATE INVESTMENT TRUST, INC.
Up to 22,115,000 Shares of Common Stock/$221,150,000
SELECTED DEALER AGREEMENT
-------------------------
Ladies and Gentlemen:
Xxxxx Investment Securities, Inc., as the dealer manager ("Dealer Manager")
for Xxxxx Real Estate Investment Trust, Inc. (the "Company"), a Maryland
corporation, invite you (the "Dealer") to participate in the distribution of
shares of common stock ("Shares") of the Company subject to the following
terms:
I. Dealer Manager Distribution Agreement
The Dealer Manager has entered into an agreement with the Company called
the Dealer Manager Distribution Agreement dated ______________, ______, in the
form attached hereto as Exhibit "A." By your acceptance of this Agreement, you
will become one of the Dealers referred to in such Agreement between the Company
and the Dealer Manager and will be entitled and subject to the indemnification
provisions contained in such Agreement, including the provisions of such
Agreement (Section 4.3 of the Dealer Manager Distribution Agreement) wherein the
Dealers severally agree to indemnify and hold harmless the Company, the Dealer
Manager and each officer and director thereof, and each person, if any, who
controls the Company and the Dealer Manager within the meaning of the Securities
Act of 1933. Except as otherwise specifically stated herein, all terms used in
this Agreement have the meanings provided in the Dealer Manager Distribution
Agreement. The Shares are offered solely through broker-dealers who are members
of the National Association of Securities Dealers, Inc. ("NASD").
Dealer hereby agrees to use its best efforts to sell the Shares for cash on
the terms and conditions stated in the Prospectus. Nothing in this Agreement
shall be deemed or construed to make Dealer an employee, agent, representative
or partner of the Dealer Manager or of the Company, and Dealer is not authorized
to act for the Dealer Manager or the Company or to make any representations on
their behalf except as set forth in the Prospectus and such other printed
information furnished to Dealer by the Dealer Manager or the Company to
supplement the Prospectus ("supplemental information").
II. Submission of Orders
Those persons who purchase Shares will be instructed by the Dealer to make
their checks payable to "Bank of America, N.A., as Escrow Agent for Xxxxx Real
Estate Investment Trust, Inc." Dealer hereby agrees to be bound by the terms of
the Escrow Agreement executed as of ____________, ______ by Bank of America,
N.A., as escrow agent, the Dealer Manager and the Company, a copy of which is
enclosed. Any Dealer receiving a check not conforming to the foregoing
instructions 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 which conform to the foregoing instructions shall be transmitted for
deposit pursuant to one of the methods in this Article II. Transmittal of
received investor funds will be made in accordance with the following
procedures:
Where, pursuant to the Dealer's internal supervisory procedures, internal
supervisory review is conducted at the same location at which subscription
documents and checks are received from subscribers, checks will be
transmitted in care of the Dealer Manager by the end of the next business
day following receipt by the Dealer for deposit to an escrow.
Where, pursuant to the Dealer's internal supervisory procedures, final and
internal supervisory review is conducted at a different location, checks
will be transmitted by the end of the next business day following receipt
by the Dealer to the office of the Dealer conducting such final internal
supervisory review (the "Final Review Office"). The Final Review Office
will in turn by the end of the next business day following receipt by the
Final Review Office, transmit such checks for deposit to an escrow agent.
III. Pricing
Shares shall be offered to the public at the offering price of $10.00 per
Share payable in cash. Except as otherwise indicated in the Prospectus or in
any letter or memorandum sent to the Dealer by the Company or Dealer Manager, a
minimum initial purchase of 100 Shares is required. Except as otherwise
indicated in the Prospectus, additional investments may be made in cash in
minimal increments of at least 2.5 Shares. The Shares are nonassessable.
Dealer hereby agrees to place any order for the full purchase price.
IV. Dealers' Commissions
Except for discounts described in or as otherwise provided in the "Plan of
Distribution" Section of the Prospectus, the Dealer's selling commission
applicable to the total public offering price of Shares sold by Dealer which it
is authorized to sell hereunder is 7% of the gross proceeds of Shares sold by it
and accepted and confirmed by the Company, which commission will be paid by the
Dealer Manager. For these purposes, a "sale of Shares" shall occur if and only
if a transaction has closed with a securities purchaser pursuant to all
applicable offering and subscription documents and the Company has thereafter
distributed the commission to the Dealer Manager in connection with such
transaction. The Dealer hereby waives any and all rights to receive payment of
commissions due until such time as the Dealer Manager is in receipt of the
commission from the Company. The Dealer affirms that the Dealer Manager's
liability for commissions payable is limited solely to the proceeds of
commissions receivable associated therewith. In addition, as specified in the
Prospectus, the Dealer Manager may reallow out of its dealer manager fee a
marketing fee of up to 1.5% of the gross proceeds of Shares sold by Dealers
participating in the offering of Shares, based on such factors as the number of
Shares sold by such participating Dealer, the assistance of such participating
Dealer in marketing the offering of Shares, and bona fide conference fees
incurred.
The parties hereby agree that the foregoing commission is not in excess of
the usual and customary distributors' or sellers' commission received in the
sale of securities similar to the Shares, that Dealer's interest in the offering
is limited to such commission from the Dealer Manager and Dealer's indemnity
referred to in Section 4 of the Dealer Manager Distribution Agreement, that the
Company is not liable or responsible for the direct payment of such commission
to the Dealer.
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V. Payment
Payments of selling commissions will be made by the Dealer Manager (or by
the Company as provided in the Dealer Manager Distribution Agreement) to Dealer
within 30 days of the receipt by the Dealer Manager of the gross commission
payments from the Company.
VI. Right to Reject Orders or Cancel Sales
All orders, whether initial or additional, are subject to acceptance by and
shall only become effective upon confirmation by the Company, which reserves the
right to reject any order. Orders not accompanied by a Subscription Agreement
and Signature Page and the required check in payment for the Shares may be
rejected. Issuance and delivery of the Shares will be made only after actual
receipt of payment therefor. If any check is not paid upon presentment, or if
the Company is not in actual receipt of clearinghouse funds or cash, certified
or cashier's check or the equivalent in payment for the Shares within 15 days of
sale, the Company reserves the right to cancel the sale without notice. In the
event an order is rejected, canceled or rescinded for any reason, the Dealer
agrees to return to the Dealer Manager any commission theretofore paid with
respect to such order.
VII. Prospectus and Supplemental Information
Dealer is not authorized or permitted to give and will not give, any
information or make any representation concerning the Shares except as set forth
in the Prospectus and supplemental information. The Dealer Manager will supply
Dealer with reasonable quantities of the Prospectus, any supplements thereto and
any amended Prospectus, as well as any supplemental information, for delivery to
investors, and Dealer will deliver a copy of the Prospectus and all supplements
thereto and any amended Prospectus to each investor to whom an offer is made
prior to or simultaneously with the first solicitation of an offer to sell the
Shares to an investor. The Dealer agrees that it will not send or give any
supplements thereto and any amended Prospectus to that investor unless it has
previously sent or given a Prospectus and all supplements thereto and any
amended Prospectus to that investor or has simultaneously sent or given a
Prospectus and all supplements thereto and any amended Prospectus with such
supplemental information. Dealer agrees that it will not show or give to any
investor or prospective investor or reproduce any material or writing which is
supplied to it by the Dealer Manager and marked "dealer only" or otherwise
bearing a legend denoting that it is not to be used in connection with the sale
of Shares to members of the public. Dealer agrees that it will not use in
connection with the offer or sale of Shares any material or writing which
relates to another Company supplied to it by the Company or the Dealer Manager
bearing a legend which states that such material may not be used in connection
with the offer or sale of any securities other than the Company to which it
relates. Dealer further agrees that it will not use in connection with the
offer or sale of Shares any materials or writings which have not been previously
approved by the Dealer Manager. Each Dealer agrees, if the Dealer Manager so
requests, to furnish a copy of any revised preliminary Prospectus to each person
to whom it has furnished a copy of any previous preliminary Prospectus, and
further agrees that it will itself mail or otherwise deliver all preliminary and
final Prospectuses required for compliance with the provisions of Rule 15c2-8
under the Securities Exchange Act of 1934. Regardless of the termination of
this Agreement, Dealer will deliver a Prospectus in transactions in the Shares
for a period of 90 days from the effective date of the Registration Statement or
such longer period as may be required by the Securities Exchange Act of 1934.
On becoming a Dealer, and in offering and selling Shares, Dealer agrees to
comply with all the applicable requirements under the Securities Act of 1933,
and the Securities Exchange Act of 1934, including, without limitation, the
provisions of Rule 10b-6 and Rule 10b-7 and Rule 15c2-4 of the Securities and
Exchange Commission. Notwithstanding the termination
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of this Agreement or the payment of any amount to Dealer, Dealer agrees to pay
Dealer's proportionate share of any claim, demand or liability asserted against
Dealer and the other Dealers on the basis that Dealers or any of them constitute
an association, unincorporated business or other separate entity, including in
each case Dealer's proportionate share of any expenses incurred in defending
against any such claim, demand or liability.
VIII. License and Association Membership
Dealer's acceptance of this Agreement constitutes a representation to the
Company and the Dealer Manager that Dealer is a properly registered or licensed
broker-dealer, duly authorized to sell Shares under Federal and state securities
laws and regulations and in all states where it offers or sells Shares, and that
it is a member in good standing of the NASD. This Agreement shall automatically
terminate if the Dealer ceases to be a member in good standing of such
association, or in the case of a foreign dealer, so to conform. Dealer agrees
to notify the Dealer Manager immediately if Dealer ceases to be a member in good
standing, or in the case of a foreign dealer, so to conform. The Dealer Manager
also hereby agrees to abide by the Rules of Fair Practice of the NASD.
IX. Limitation of Offer
Dealer will offer Shares only to persons who meet the financial
qualifications set forth in the Prospectus or in any suitability letter or
memorandum sent to it by the Company or the Dealer Manager and will only make
offers to persons in the states in which it is advised in writing that the
Shares are qualified for sale or that such qualification is not required. In
offering Shares, Dealer will comply with the provisions of the Rules of Fair
Practice set forth in the NASD Manual, as well as all other applicable rules and
regulations relating to 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.
X. Termination
Dealer will suspend or terminate its offer and sale of Shares upon the
request of the Company or the Dealer Manager at any time and will resume its
offer and sale of Shares hereunder upon subsequent request of the Company or the
Dealer Manager. Any party may terminate this Agreement by written notice. Such
termination shall be effective 48 hours after the mailing of such notice. This
Agreement is the entire agreement of the parties and supersedes all prior
agreements, if any, between the parties hereto.
This Agreement may be amended at any time by the Dealer Manager by written
notice to the Dealer, and any such amendment shall be deemed accepted by Dealer
upon placing an order for sale of Shares after he has received such notice.
XI. Notice
All notices will be in writing and will be duly given to the Dealer Manager
when mailed to 0000 Xxxxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxx 00000, and to Dealer
when mailed to the address specified by Dealer herein.
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XII. Attorney's Fees and Applicable Law
In any action to enforce the provisions of this Agreement or to secure
damages for its breach, the prevailing party shall recover its costs and
reasonable attorney's fees. This Agreement shall be construed under the laws of
the State of Georgia and shall take effect when signed by Dealer and
countersigned by the Dealer Manager.
THE DEALER MANAGER:
XXXXX INVESTMENT SECURITIES, INC.
Attest:
By: By:
----------------------- ------------------------------
Name: Xxx X. Xxxxx, III
--------------------- President
Title:
--------------------
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We have read the foregoing Agreement and we hereby accept and agree to the terms
and conditions therein set forth. We hereby represent that the list below of
jurisdictions in which we are registered or licensed as a broker or dealer and
are fully authorized to sell securities is true and correct, and we agree to
advise you of any change in such list during the term of this Agreement.
1. Identity of Dealer:
Name:
---------------------------------------------------------------------------
Type of
entity:
-------------------------------------------------------------------------
(to be completed by Dealer) (corporation, partnership or proprietorship)
Organized in the State of:
------------------------------------------------------
(to be completed by Dealer) (State)
Licensed as broker-dealer in the following
states:
-------------------------------------------------------------------------
(to be completed by Dealer)
Tax I.D. #:
---------------------------------------------------------------------
2. Person to receive notice pursuant to Section XI.
Name:
---------------------------------------------------------------------------
Company:
------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
City, State and Zip Code:
-------------------------------------------------------
Telephone No.:( )
----- -----------------------------------------------------------
Telefax No.:( )
----- -------------------------------------------------------------
AGREED TO AND ACCEPTED BY THE DEALER:
-------------------------------------
(Dealer's Firm Name)
By:
----------------------------------
Signature
Title:
-------------------------------
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