FORM OF DEALER MANAGER AGREEMENT
EXHIBIT
1.01
FORM
OF DEALER MANAGER AGREEMENT
XXXXX
RETAIL CENTERS, INC.
Up to
3,000,000 Shares of Common Stock
November
15, 2010
Xxxx X.
Xxxxxxxxxxxx, President
Freedom
Investors Corp
000
Xxxxxxx Xxx, Xxxxx 000
Xxxxxxxxxx,
Xxxxxxxxx 00000
Dear Xx.
Xxxxxxxxxxxx:
Xxxxx
Retail Centers, Inc., a Delaware corporation (the “Company”), is registering for
public sale a maximum of 3,000,000 shares of its common stock, par value $0.0001
per share (the “Shares), to be issued and sold for $5.25 per Share at an
aggregate purchase price of $15,000,000.00 (the “Offering”). There shall be a
minimum purchase by any one person of ______ Shares (except as otherwise
indicated in the Prospectus or in any letter or memorandum from the Company to
Freedom Investors Corp. (the “Dealer Manager”). Terms not defined herein shall
have the same meaning as in the Prospectus. 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 Soliciting Dealer
Agreement in the form attached to this Agreement as Exhibit A (you and
said dealers being hereinafter sometimes referred to collectively as the
“Dealers”) that:
1.1
A Prospectus with respect to the Company and
the Offering 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. Copies of such Prospectus and each amendment thereto have been or
will be delivered to the Dealer Manager. (The Prospectus and any amendments
thereto hereinafter referred to as the “Prospectus”),
1.2
The Company has been duly and validly
organized and formed as a corporation, and is validly existing in good standing,
under the laws of the state of Delaware, with the power and authority to conduct
its business as described in the Prospectus.
1.3
The Prospectus complies with the Securities
Act and the Rules and Regulations and does 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 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. In making the representations and warranties
required herein (including without limitation, that made pursuant to Section
3.4) you may, as to factual matters, rely upon certificates, statements,
letters, representations and affidavits of officers of the Company, your
officers, any other records of the Company, certificates of public officials,
and letters of independent certified public accountants. With respect to
the opinions required herein, “known to us”, “to the best of our knowledge” or
any like phrase or reference shall mean to the best of your knowledge after due
inquiry and investigation; “due inquiry and investigation” shall include only
(i) discussions, inquiries and conferences with officials and agents of the
Company occurring in connection with your relationship with the Company, (ii)
review of certain corporate records, documents and proceedings of the Company as
is provided to you by the Company, and (iii) review of files maintained by you
relating to the Company. “Due inquiry and investigation” shall not mean or imply
any independent verification of any factual matter of which you become aware as
a result of the aforementioned discussions, inquiries, conferences and
reviews.
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, bylaw, 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.
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 Prospectus,
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. The Company further represents and warrants to, and
agrees with, you as follows:
(a) The
Company will take all necessary action and file all forms and documents
necessary (“Blue Sky Application”) to either qualify or register the Shares for
sale or exempt the Shares from such qualification or registration in the State
of Wisconsin and such other jurisdictions as are agreed upon in writing between
you and the Company; the Company will take all necessary action and file all
forms and documents necessary to either qualify or register the Shares for sale
or exempt the Shares from such qualification or registration in such other
states as you and the Company shall agree upon in writing. (b) The Company or
its counsel will provide you or your counsel with copies, at the time they are
filed, of all correspondence, applications, forms, and other documents filed
with each jurisdiction where the Shares are to be registered or qualified or
offered in an exempt transaction; upon receipt of notification by the Company of
the qualification, registration, or exemption of the Shares by an applicable
jurisdiction, the Company or its counsel will promptly notify you or your
counsel in writing of such action, which writing shall summarize the conditions
and other requirements imposed by such jurisdiction in granting such
qualification, registration or exemption, including offeree qualification or
suitability and broker-dealer and agent registration requirements applicable to
the conduct of the Offering; you shall not offer or sell the Shares in any
jurisdiction until receipt of such written notification from the Company or its
counsel.
(c) In
each jurisdiction where the Shares have been registered or qualified or is
offered or sold in an exempt transaction as provided above, the Company will
make and file such statements, documents, materials, and reports in each year as
are or may be required to be made or filed either by the Company under the laws
of such jurisdiction.
(d) The
Company will promptly provide to you for delivery to all offerees and purchasers
and their representatives, if any, any additional information, documents and
instruments which you or the Company deem necessary to comply with the rules,
regulations, and judicial and administrative interpretations respecting
compliance with such exemptions or qualifications and registrations in those
jurisdictions where the Shares is to be offered or sold.
2.3
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.
3.
Obligations and Compensation
of Dealer Manager
3.1
The Company hereby appoints the Dealer
Manager as its exclusive agent and principal distributor for the purpose of
selling for cash up to a maximum of 3,000,000 Shares through Dealers, all of
whom shall be members in good standing of the Financial Industry Regulatory
Authority (“FINRA”). 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 (i) it is a member of FINRA; (ii) it will at all times maintain and
employ an adequate number administrative personnel (who shall be acceptable to
the Company) to fulfill its obligations under this agreement and any
supplemental or successor agreement and shall be solely responsible for the
compensation of such personnel. Whether or not the transactions contemplated
hereunder are consummated or this Agreement becomes effective or is terminated
for any reason, except as set forth below, the Company will pay (directly or by
reimbursement) all costs and expenses incurred in connection with the offering,
including (a) all costs, fees and expenses (other than certain legal fees of
your counsel and other out-of-pocket expenses incurred by you, as provided
below) incurred in connection with the performance of the Company's obligations
hereunder, including, without limiting the generality of the foregoing, all
costs and expenses incurred in connection with the registration or qualification
of the Shares for sale pursuant the securities or “blue sky” laws and
regulations of any state and the preparation, printing, filing and distribution
of the Prospectus and all amendments and supplements thereto, all in such
quantities as you, on behalf of the Dealers, may reasonably require; (b) all
costs, fees and expenses of the Company's counsel, independent public
accountants, and transfer agent(s); all transfer taxes, if any, with respect to
transfer, sale and delivery of the Shares, and printing of certificates
representing any and all of the foregoing securities; and (c) your reasonable
out-of-pocket expenses incurred in connection with the Offering, promptly upon
demand, including fees and expenses of your counsel; provided, however, that,
without the consent of the Company, such payment or reimbursement of legal fees
and expenses shall not exceed in the aggregate $30,000 and there shall be no
reimbursement of other out-of-pocket expenses. The Company will be responsible
for payment of such other costs incurred by it in connection with the Offering
as shall be agreed between the Company and the Dealer Manager. You and your
employees and representatives have all required licenses and registrations to
act under this Agreement and have established and implemented anti-money
laundering compliance programs in accordance with applicable law, including
applicable FINRA rules, SEC rules and the USA PATRIOT Act of 2001, reasonably
expected to detect and cause the reporting of suspicious transactions in
connection with the sale of Shares of the Company. The Dealer Manager
agrees to be bound by the terms of the Escrow Agreement, a copy of which is
attached as Exhibit “B” (the “Escrow Agreement”).
3.2
Promptly after the effective date of this
agreement, 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 a fee of up to 7% of gross proceeds of the Offering (“Dealer
Manager Fee”), before reallowance to participating broker-dealers. Pursuant to
separately negotiated agreements, the Dealer Manager may re-allow a portion of
the Dealer Manager Fee in an aggregate amount not to exceed the maximum
permitted under the FINRA and NASAA REIT Guidelines to broker-dealers
participating in the distribution of the Offering. Notwithstanding the
foregoing, no commissions, payments or amount whatsoever will be paid to the
Dealer Manager under this Section 3.3 unless or until the gross proceeds of the
Shares sold are disbursed to the Company pursuant to the Escrow Agreement. The
Company will not be liable or responsible to any Dealer for direct authorization
of payment of commissions to such Dealer, it being the sole and exclusive
responsibility of the Dealer Manager for authorizing payment of commissions to
Dealers. Total underwriting compensation, including the Dealer Manager Fee and
underwriter expense reimbursement, if any, may not exceed the maximum amount
allowed under the rules of FINRA. As additional compensation, Dealer Manager
will receive options in accordance with a certain Underwriters Warrant, and
20,000 shares of shares of Common Stock which shall be restricted from resale
for one year from the effective date of the registration statement. To comply
with FINRA Rule 5110(g)(1), for a period of six months after the issuance date
of the compensation warrants (which shall not be earlier than the closing date
of the offering pursuant to which the compensation warrants are being issued),
neither the compensation warrants nor any warrant shares issued upon exercise of
the compensation warrants shall be (A) sold, transferred, assigned, pledged, or
hypothecated, or (B) the subject of any hedging, short sale, derivative, put, or
call transaction that would result in the effective economic disposition of the
securities by any person for a period of 180 days immediately following the date
of effectiveness or commencement of sales of the offering pursuant to which the
compensation warrants are being issued, except the transfer of any security as
permitted by the FINRA rules.
3.4
The Dealer Manager represents and warrants to
the Company and each person and firm that signs the Registration Statement that,
to the best of its knowledge, 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 shall use and distribute in
conjunction with the offer and sale of any Shares only the Prospectus and such
sales literature and advertising as shall have been previously approved in
writing by the Company.
3.6
The Dealer Manager shall cause Shares to be
offered and sold only in those jurisdictions specified in writing by the Company
for whose account Shares are then offered for sale, and such list of
jurisdictions shall be updated by the Company as additional states are added.
The Company shall specify only such jurisdictions in which the offering and sale
of its Shares has been authorized by appropriate state regulatory authorities.
No Shares shall be offered or sold for the account of the Company in any other
states. See Section 2.2.
3.7
The Dealer Manager represents and warrants to
the Company that it will not represent or imply that the escrow agent, as
identified in the Prospectus, has investigated the desirability or advisability
of investment in the Company, or has approved, endorsed or passed upon the
merits of the Shares or the Company, nor will it use the name of said escrow
agent in any manner whatsoever in connection with the offer or sale of the
Shares other than by acknowledgment that it has agreed to serve as escrow
agent.
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 Application”), or (b) the omission or alleged
omission to state in the Prospectus 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 agreement, 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. Notwithstanding the
foregoing, the Company may not indemnify or hold harmless the Dealer Manager,
any Dealer or any of their affiliates in any manner that would be inconsistent
with the provisions of Section II.G. of the Statement of Policy Regarding Real
Estate Investment Trusts of the North American Securities Administrators
Association, Inc. effective May 7, 2007, as amended (the “NASAA REIT
Guidelines”). In particular, but without limitation, the Company may not
indemnify or hold harmless the Dealer Manager, any Dealer or any of their
affiliates for liabilities arising from or out of a violation of state or
federal securities laws, unless one or more of the following conditions are
met:
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(a)
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there has been a successful
adjudication on the merits of each count involving alleged securities law
violations;
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(b)
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such claims have been dismissed
with prejudice on the merits by a court of competent jurisdiction;
or
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(c)
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a court of competent jurisdiction
approves a settlement of the claims against the indemnitee and finds that
indemnification of the settlement and the related costs should be made,
and the court considering the request for indemnification has been advised
of the position of the SEC and of the published position of any state
securities regulatory authority in which the securities were offered as to
indemnification for violations of securities
laws.
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4.2
The Dealer Manager will indemnify and hold
harmless the Company and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act, from and against 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 Prospectus
, or any post-effective amendment thereof or (ii) any Blue Sky Application, or
(b) the omission to state in the Prospectus 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 this agreement 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 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, or (e) any failure to comply with applicable laws governing
money laundry abatement and anti-terrorist financing efforts, including
applicable FINRA rules, SEC rules and the USA PATRIOT Act of 2001, 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 the Prospectus with his consent, as about to become a
director), 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 Prospectus or any post-effective amendment thereof or
(ii) in any Blue Sky Application, or (b) the omission or alleged omission to
state in 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 this agreement,
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 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 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 or
Dealer’s representations or agents in violation of Section 4 of the Soliciting
Dealer Agreement or otherwise, or (e) any failure to comply with applicable laws
governing money laundry abatement and anti-terrorist financing efforts,
including applicable FINRA rules, SEC rules and the USA PATRIOT Act of 2001, 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 such indemnifying party 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 obligated
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 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 therefore, 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 and the obligation of Company to
reimburse out of pocket expenses, 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;
Venue
This
Agreement was executed and delivered in, and its validity, interpretation and
construction shall be governed by the laws of, the State of Wisconsin; provided
however, that causes of action for violations of federal or state securities
laws shall not be governed by this Section. Venue for any action brought
hereunder shall lie exclusively in Milwaukee, Wisconsin.
7.
Counterparts
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
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. This Agreement may be amended by the written agreement of the Dealer
Manager and the Company.
9.
Term
This
Agreement may be terminated by either party (i) immediately upon notice to the
other party in the event that the other party shall have materially failed to
comply with any of the material provisions of this Agreement on its part to be
performed during the term of this Agreement or if any of the representations,
warranties, covenants or agreements of such party contained herein shall not
have been materially complied with or satisfied within the times specified or
(ii) by either party on 60 days’ written notice.
In any
case, this Agreement shall expire at the close of business on the effective date
that the Offering is terminated. The provisions of Section 4 hereof shall
survive such termination. In addition, the Dealer Manager, upon the expiration
or termination of this Agreement, shall (i) promptly deposit any and all funds
in its possession which were received from investors for the sale of Shares into
the appropriate escrow account or, if the minimum number of Shares have been
sold and accepted by the Company, into such other account as the Company may
designate; and (ii) promptly deliver to the Company all records and documents in
its possession which relate to the Offering and are not designated as dealer
copies. The Dealer Manager, at its sole expense, may make and retain copies of
all such records and documents, but shall keep all such information
confidential. The Dealer Manager shall use its best efforts to cooperate
with the Company to accomplish an orderly transfer of management of the Offering
to a party designated by the Company. Upon expiration or termination of this
Agreement, the Company shall promptly pay to the Dealer Manager all fees to
which the Dealer Manager is or becomes entitled under Section 3 at such time as
such fees become payable.
10.
Confirmation
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 FINRA, and will 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 of
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 Dealers will, comply with the provisions of all applicable
rules and regulations relating to suitability of investors.
12.
Submission of
Orders
(a) Each
subscriber for Shares shall be required to (i) complete and execute duplicate
originals of the subscription agreement (in the form included as an exhibit to
the Prospectus and the Escrow Agreement) and any purchaser representative
questionnaire or other document(s) which may be required by you or the Company
in connection with such subscription (collectively, “Subscription Documents”)
and (ii) tender payment in full for the Shares subscribed for (“Subscription
Payment”); checks representing Subscription Payments should be made payable to
“Xxxxx Retail Centers, Inc. Escrow Account”; all Subscription Payments received
by any Dealer (including you) shall be delivered to Century Bank and Trust
(“Escrow Agent”), at 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000, Attention:
Xxx Xxxxxxx, by 12:00, noon, on the business day following such receipt,
together with a schedule setting forth the amount of each such Subscription
Payment and the name, mailing address and state of residence of the subscriber.
Subscription Payments received by the Escrow Agent shall be deposited and
administered by it pursuant to the terms of the agreement by and among the
Company, you and the Escrow Agent (“Escrow Agreement”). Concurrently with your
delivery of each Subscription Payment to the Escrow Agent, you shall forward to
the Company, at the address appearing in Section 13 hereof, two (2) executed
originals of all related Subscription Documents, retaining copies of all such
Subscription Documents for your records.
(b)
Within thirty (30) days following receipt by it of executed Subscription
Documents, the Company shall determine to accept or reject each subscription and
shall notify you and the Escrow Agent orally (to be confirmed in writing). If
the Company elects to accept a subscription, it shall, within forty-five (45)
following receipt by it of executed Subscription Documents relating thereto,
countersign and forward to the subscriber a counterpart original of the
subscription agreement at the mailing address set forth therein. If the Company
elects to reject a subscription, the related Subscription Payment shall, upon
receipt by the Escrow Agent of oral notice (to be confirmed in writing) from the
Company of such rejection, be returned within ten (10) business days following
such notice, directly to the subscriber by the Escrow Agent, without interest
thereon or deduction there from, pursuant to the terms of the Escrow Agreement.
The Company reserves the right, in its sole discretion for any reason, to refuse
to sell Shares to any person at any time.
(c) The
Company may continue the Offering until (i) 3,000,000 Shares are sold or (ii)
____________, 20__, whichever first occurs; the Offering may be terminated at
any time prior thereto at the discretion of the Company, or extended by
amendment to this Agreement.
(d)
Subject to the terms hereof and of the Escrow Agreement, the first disbursement
of subscription proceeds (including disbursement of amounts due to you
hereunder) shall take place not less than five (5) days nor more than fifteen
(15) days following the date upon which cleared funds representing payment in
full for the Shares purchased therewith have been received by the Escrow Agent
under the terms of the Escrow Agreement, unless otherwise agreed in writing
between you and the Company; such initial disbursement is referred to herein as
the “Initial Closing,” and the date thereof is referred to as the “Initial
Closing Date.” Following the Initial Closing, subscription proceeds shall be
disbursed from time to time as agreed between the Company and the Placement
Agent, but not less frequently than monthly; each such further disbursement of
subscription proceeds is referred to herein as an “Additional Closing” and the
date thereof as an “Additional Closing Date.” The Initial Closing and Additional
Closings are sometimes referred to herein as a “Closing” or “Closings”; the
Initial Closing Date and Additional Closing Dates are sometimes referred to
herein as a “Closing Date” or “Closing Dates.” The last Closing Date hereunder
is referred to herein as the “Final Closing Date”. The date, upon which the
Offering shall terminate, for any reason, is referred to herein as the
“Termination Date.”
(e) Each
Closing shall take place at the offices of the Company or, at your option, at
such other place as you may agree upon in writing with the Company.
(f) On or
before each Closing Date, you shall supply to the Company a list setting forth
the name and state of residence of each person to whom you have then distributed
a Memorandum, together with the serial number of the Memorandum so distributed
to each such person and an accounting for each serially-numbered Memorandum not
distributed by you.
(g) After
the Final Closing Date, you will not be considered to have any continuing or
future duty or obligation of any kind to the Company. You have not
assumed, nor will you assume or be permitted to assume, any duties,
responsibilities, or obligations with regard to the management, operations or
any of the business affairs of the Company after the final Closing
(h) You
will maintain in your files documents disclosing the basis upon which the
determination of suitability was reached as to each potential investor. You
hereby represent that you will communicate to each of your sales agents,
representatives and other appropriate persons associated with you the
above-referenced suitability standards. Notwithstanding the provisions of this
Section 12, you shall not execute any transaction in the Company in a
discretionary account without prior written approval of the transaction by the
potential investor.
(i)
Prior to participating in the Offering, you or a person associated
with you shall have reasonable grounds to believe, based on information made
available to you or such person by the Company through the Prospectus or other
materials, that all material facts are adequately and accurately disclosed and
provide a basis for evaluating the Company.
13
Notices.
Any
notice, approval, request, authorization, direction or other communication under
this Agreement shall be given in writing and shall be deemed to be delivered
when delivered in person or deposited in the United States mail, properly
addressed and stamped with the required postage, registered or certified mail,
return receipt requested, to the intended recipient as set forth
below:
|
If
to the Company:
|
Xxxxx
Retail Centers, Inc.
|
|
000
Xxxxxxxxx Xxxxxxx, 0xx
Xxxxx
|
|
|
Xxxxxx,
Xxxxxxx 00000
|
|
|
Attention:
Xxxxxxx X. Xxxxx, President
|
|
|
If
to the Dealer Manager:
|
Xxxx
X. Xxxxxxxxxxxx, President
|
|
Freedom
Investors Corp.
|
|
|
000
Xxxxxxx Xxx, Xxxxx 000
|
|
|
Xxxxxxxxxx,
Xxxxxxxxx 00000
|
Any party
may change its address specified above by giving the other party notice of such
change in accordance with this Section 13.
This
agreement may be executed in counterparts, including electronically transmitted
counterparts, each of which shall be deemed an original and together shall be a
single agreement. 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
RETAIL CENTERS, INC.
|
|
|
By:
|
|
|
Xxxxxxx
X. Xxxxx, President
|
|
Accepted
and agreed to as of the day and year first above written.
|
FREEDOM
INVESTORS CORP.
|
|
|
By:
|
|
|
Xxxx
X. Xxxxxxxxxxxx,
President
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|
