UNITED DEVELOPMENT FUNDING IV FORM OF SOLICITING DEALER AGREEMENT
EXHIBIT 1.2
FORM OF SOLICITING DEALER AGREEMENT
Ladies and Gentlemen:
Realty Capital Securities, LLC (the “Dealer Manager”) entered into an exclusive dealer
manager agreement, dated as of August 24, 2009 (the “Dealer Manager Agreement”), with
United Development Funding IV, a Maryland real estate investment trust (the “Trust”), under
which the Dealer Manager agreed to use its reasonable best efforts to solicit subscriptions in
connection with the public offering (the “Offering”) for its common shares of beneficial
interest, $.01 par value per share, of which amount: (i) up to 25,000,000 shares for a purchase
price of $20.00 per share (the “Primary Shares”), and (ii) up to 10,000,000 shares for a
purchase price of $20.00 per share (the “DRP Shares” and, together with the Primary Shares,
the (“Shares”) commencing on the Effective Date (as defined below). Notwithstanding the
foregoing, the Trust has reserved the right to reallocate the Shares between Primary Shares and the
DRP Shares. Unless otherwise defined herein, capitalized terms used herein shall have the
respective meanings therefor as in the Dealer Manager Agreement.
In connection with the performance of the Dealer Manager’s obligations under Section 3 of the
Dealer Manager Agreement, the Dealer Manager is authorized to retain the services of securities
dealers (the “Soliciting Dealers”) who are members of the Financial Industry Regulatory
Authority (“FINRA”) to solicit subscriptions for Shares in connection with the Offering.
You are hereby invited to become a Soliciting Dealer and, as such, to use your reasonable best
efforts to solicit subscribers for Shares, in accordance with the following terms and conditions of
this soliciting dealer agreement (this “Agreement”):
1. Registration Statement.
(a) A registration statement on Form S-11 (File No. 333-152760), including a preliminary
prospectus, has been prepared by the Trust and was filed with the Securities and Exchange
Commission (the “Commission”) on August 5, 2008, in accordance with the applicable
requirements of the Securities Act of 1933, as amended (the “Securities Act”), and the
applicable rules and regulations of the Commission promulgated thereunder (the “Securities Act
Rules and Regulations”) for the registration of the Offering. The Trust has prepared and filed
such amendments thereto and such amended prospectus as may have been required to the date hereof,
and will file such additional amendments and supplements thereto as may hereafter be required. The
registration statement on Form S-11 and the prospectus contained therein, as finally amended at the
date the registration statement is declared effective by the Commission (the “Effective
Date”) are respectively hereinafter referred to as the “Registration Statement” and the
“Prospectus”, except that (i) if the Trust 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 by the Commission, 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 (ii) if the prospectus filed
by the Trust pursuant to either Rule 424(b) or 424(c) of the Securities Act Rules and 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, then the term “Prospectus” shall refer to such prospectus
filed pursuant to either Rule 424(b) or 424(c), as the case may be, from and after the date on
which it shall have been filed. As used herein, the terms “Registration Statement”, “preliminary
Prospectus” and “Prospectus” shall include the documents, if any, incorporated by reference
therein. As used herein, the term “Effective Date” also shall refer to the effective date of each
post-effective amendment to the Registration Statement, unless the context otherwise requires.
2. Compliance with Applicable Rules and Regulations; License and Association Membership.
Upon the effectiveness of this Agreement, the undersigned dealer will become one of the
“Soliciting Dealers” referred to in the Dealer Manager Agreement and is referred to herein as
“Soliciting Dealer”). Soliciting Dealer agrees that solicitation and other activities by it
hereunder shall comply with, and shall be undertaken only in accordance with, the terms of the
Dealer Manager Agreement, the terms of this Agreement, the Securities Act, the Securities Act Rules
and Regulations, the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and
the applicable rules and regulations promulgated thereunder (the “Exchange Act Rules and
Regulations”), the Blue Sky Survey (as defined below), the Rules of Fair Practice of FINRA, the
FINRA Conduct Rules (including, without limitation, Rules 2340, 2420, 2730, 2740, 2750 and 2810 of
the FINRA Conduct Rules), and the provisions of Article III.C. of the Statement of Policy Regarding
Real Estate Investment Trusts of the North American Securities Administrators Association, Inc., as
revised and amended on May 7, 2007 and as may be further revised and amended (the “NASAA
Guidelines”).
Soliciting Dealer’s acceptance of this Agreement constitutes a representation to the Trust and
to the Dealer Manager that Soliciting Dealer is a properly registered or licensed broker-dealer,
duly authorized to sell Shares under federal and state securities laws and regulations in all
states where it offers or sells Shares, and that it is a member in good standing of FINRA.
Soliciting Dealer represents and warrants that it is currently licensed as a broker-dealer in the
jurisdictions identified on Schedule 1 to this Agreement and that its independent contractors and
registered representatives have the appropriate licenses to offer and sell the Shares in such
jurisdictions. This Agreement shall automatically terminate with no further action by either party
if Soliciting Dealer ceases to be a member in good standing of FINRA or with the securities
commission of the state in which Soliciting Dealer’s principal office is located. Soliciting
Dealer agrees to notify the Dealer Manager immediately if Soliciting Dealer ceases to be a member
in good standing of FINRA or with the securities commission of any state in which Soliciting Dealer
is currently registered or licensed.
3. Limitation of Offer; Investor Suitability.
(a) Soliciting Dealer will offer Shares only (i) to persons that meet the financial
qualifications set forth in the Prospectus or in any suitability letter or memorandum sent to it by
the Trust or the Dealer Manager, and (ii) in accordance with Section 8, to persons in the
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jurisdictions in which it is advised in writing by the Trust or the Dealer Manager that the Shares
are qualified for sale or that qualification is not required (the “Blue Sky Survey”).
Notwithstanding the qualification of Shares for sale in any respective jurisdiction (or exemption
therefrom), Soliciting Dealer will not offer Shares and will not permit any of its registered
representatives to offer Shares in any jurisdiction unless both Soliciting Dealer and such
registered representative are duly licensed to transact securities business in such jurisdiction.
In offering Shares, Soliciting Dealer shall comply with the provisions of the Rules of Fair
Practice set forth in the FINRA Manual, as well as other applicable rules and regulations relating
to suitability of investors, including, but not limited to, the provisions of Section III.C. of the
NASAA REIT Guidelines.
In offering the sale of Shares to any person, Soliciting Dealer will have reasonable grounds
to believe (based on such information obtained from the investor concerning the investor’s age,
investment objectives, other investments, financial situation, needs or any other information known
by Soliciting Dealer after due inquiry) that: (A) such person is in a financial position
appropriate to enable such person to realize to a significant extent the benefits described in the
Prospectus, including the tax benefits where they are a significant aspect of the Trust; (B) the
investor has a fair market net worth sufficient to sustain the risks inherent in the program,
including loss of investment and lack of liquidity; (C) the purchase of the Shares is otherwise
suitable for such person; and (D) such person has either: (1) a minimum annual gross income of
$70,000 and a minimum net worth (exclusive of home, home furnishings and automobiles) of $70,000;
or (2) a minimum net worth (determined with the foregoing exclusions) of $250,000 and meets the
higher suitability standards, if applicable, imposed by the state in which the investment by such
investor is made. Soliciting Dealer further will use its best efforts to determine the suitability
and appropriateness of an investment in the Shares of each proposed investor solicited by a person
associated with Soliciting Dealer by reviewing documents and records disclosing the basis upon
which the determination as to suitability was reached as to each proposed investor, whether such
documents and records relate to accounts which have been closed, accounts which are currently
maintained or accounts hereinafter established. In making the determinations as to financial
qualifications and as to suitability required by the NASAA Guidelines, Soliciting Dealer may rely
on (x) representations from investment advisers who are not affiliated with Soliciting Dealer,
banks acting as trustees or fiduciaries, and (y) information it has obtained from a prospective
investor, including such information as the investment objectives, other investments, financial
situation and needs of the person or any other information known by Soliciting Dealer after due
inquiry. Notwithstanding the foregoing, Soliciting Dealer shall not execute any transaction in the
Trust in a discretionary account without prior written approval of the transaction by the customer.
(b) Soliciting Dealer shall maintain, for at least six years or for a period of time not less
than that required in order to comply with all applicable federal, state and other regulatory
requirements, whichever is later, a record of the information obtained to determine that an
investor meets the suitability standards imposed on the offer and sale of the Shares (both at the
time of the initial subscription and at the time of any additional subscriptions) and a
representation of the investor that the investor is investing for the investor’s own account or, in
lieu of such representation, information indicating that the investor for whose account the
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investment was made met the suitability standards. Soliciting Dealer may satisfy its obligation by
contractually requiring such information to be maintained by the investment advisers or banks
discussed above. Soliciting Dealer further agrees to comply with the record keeping requirements
of the Exchange Act, including, but not limited to, Rules 17a-3 and 17a-4 promulgated under the
Exchange Act. Soliciting Dealer agrees to make such documents and records available to the Dealer
Manager and the Trust upon request, and representatives of the Commission, FINRA and applicable
state securities administrators upon Soliciting Dealer’s receipt of an appropriate document
subpoena or other appropriate request for documents from any such agency.
4. Delivery of Prospectus and Approved Sales Literature.
(a) Soliciting Dealer will: (i) deliver a Prospectus, as then supplemented or amended, to
each person who subscribes for Shares at least five business days prior to the tender of such
person’s subscription agreement (the “Subscription Agreement”); (ii) promptly comply with
the written request of any person for a copy of the Prospectus, as then supplemented or amended,
during the period between the initial Effective Date and the termination of the Offering; (iii)
deliver to any person, in accordance with applicable law or as prescribed by any state securities
administrator, a copy of any prescribed document included within or incorporated by reference in
the Registration Statement and any supplements thereto during the course of the Offering; (iv) not
use any sales materials in connection with the solicitation of purchasers of the Shares except
Approved Sales Literature; (v) to the extent the Trust provides Approved Sales Literature, not use
such materials unless accompanied or preceded by the Prospectus, as then currently in effect, and
as may be supplemented in the future; and (vi) not give or provide any information or make any
representation or warranty other than information or representations contained in the Prospectus or
the Approved Sales Literature. Soliciting Dealer will not publish, circulate or otherwise use any
other advertisement or solicitation material in connection with the Offering without the Dealer
Manager’s express prior written approval.
(b) Nothing contained in this Agreement shall be deemed or construed to make Soliciting Dealer
an employee, agent, representative or partner of the Dealer Manager or the Trust, and Soliciting
Dealer is not authorized to act for the Dealer Manager or the Trust.
(c) Soliciting Dealer will not send or provide supplements to the Prospectus or any Approved
Sales Literature to any investor unless it has previously sent or provided a Prospectus and all
supplements thereto to that investor or has simultaneously sent or provided a Prospectus and all
supplements thereto with such Prospectus supplement or Approved Sales Literature.
(d) Soliciting Dealer will not show to or provide any investor or reproduce any material or
writing which is supplied to it by the Dealer Manager and marked “broker-dealer use only” or
otherwise bearing a legend denoting that it is not to be used in connection with the offer or sale
of Shares to members of the public.
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(e) The Dealer Manager will supply Soliciting Dealer with reasonable quantities of the
Prospectus (including any supplements thereto), as well as any Approved Sales Literature, for
delivery to investors.
(f) Soliciting Dealer shall 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 mail or otherwise deliver all preliminary and final Prospectuses required for
compliance with the provisions of Rule 15c2-8 under the Exchange Act.
5. Submission of Orders; Right to Reject Orders.
(a) Subject to certain individual state requirements as described in the Prospectus and except
for shares issued pursuant to the DRP, Shares may be sold only to investors who initially purchase
a minimum of 125 Shares for $2,500 or a minimum of 50 shares for $1,000 if the investor is
purchasing through an XXX or other qualified account. With respect to Soliciting Dealer’s
participation in any resales or transfers of the Shares, Soliciting Dealer agrees to comply with
any applicable requirements set forth in Section 2 and to fulfill the obligations pursuant to Rule
2810 of the FINRA Rules of Conduct.
(b) Until the minimum offering of $1,000,000 in Shares has been sold, payments for Shares
shall be made by checks payable to “LegacyTexas Bank, Escrow Agent for United Development Funding
IV”. During such time, Soliciting Dealer shall forward original checks together with an original
Subscription Agreement, executed and initialed by the subscriber as provided for in the
Subscription Agreement, to LegacyTexas Bank (the “Escrow Agent”) at the address provided in
the Subscription Agreement.
When Soliciting Dealer’s internal supervisory procedures are conducted at the site at which
the Subscription Agreement and check were initially received by Soliciting Dealer from the
subscriber, Soliciting Dealer shall transmit the Subscription Agreement and check to the Escrow
Agent by the end of the next business day following receipt of the check and Subscription
Agreement. When, pursuant to Soliciting Dealer’s internal supervisory procedures, Soliciting
Dealer’s final internal supervisory procedures are conducted at a different location (the
“Final Review Office”), Soliciting Dealer shall transmit the check and Subscription
Agreement to the Final Review Office by the end of the next business day following Soliciting
Dealer’s receipt of the Subscription Agreement and check. The Final Review Office will, by the end
of the next business day following its receipt of the Subscription Agreement and check, forward
both the Subscription Agreement and check to the Escrow Agent. If any Subscription Agreement
solicited by Soliciting Dealer is rejected by the Dealer Manager or the Trust, then the
Subscription Agreement and check will be returned to the rejected subscriber within 10 business
days from the date of rejection.
Once the minimum offering of $1,000,000 in Shares has been sold, subject to any continuing
escrow obligations imposed by certain states as described in the Prospectus, payments for Shares
shall be made payable to “United Development Funding IV”. At such time, Soliciting Dealer shall
forward original checks together with an original Subscription Agreement, executed and initialed by
the subscriber as provided for in the Subscription
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Agreement, to United Development Funding IV, c/o DST Systems, Inc., at the address provided in the
Subscription Agreement.
Notwithstanding the foregoing, in accordance with the applicable Exchange Act Rules and
Regulations, if Soliciting Dealer has net capital of $250,000 or more it may instruct its customers
to make their checks payable to Soliciting Dealer. In such case, Soliciting Dealer shall issue a
check made payable to the Escrow Agent or the Trust in accordance with the foregoing provisions of
this Section 5(b), as applicable.
(c) All orders, whether initial or additional, are subject to acceptance by and shall become
effective upon confirmation by the Trust or the Dealer Manager, each of which reserve the right to
reject any order in their sole discretion for any or no reason. Orders not accompanied by the
required instrument of payment for Shares may be rejected. Issuance and delivery of a Share will
be made only after a sale of a Share is deemed by the Trust to be completed in accordance with
Section 3(c) of the Dealer Manager Agreement. If an order is rejected, cancelled or rescinded for
any reason, then Soliciting Dealer will return to the Dealer Manager any selling commissions or
dealer manager fees theretofore paid with respect to such order, and, if Soliciting Dealer fails to
so return any such selling commissions, the Dealer Manager shall have the right to offset amounts
owned against future commissions or dealer manager fees due and otherwise payable to Soliciting
Dealer (it being understood and agreed that such right to offset shall not be in limitation of any
other rights or remedies that the Dealer Manager may have in connection with such failure).
6. Soliciting Dealer Compensation.
(a) Subject to the terms and conditions set forth herein and in the Dealer Manager Agreement
and, subject to the volume discounts and other special circumstances described in the “Plan of
Distribution” section of the Prospectus, the Dealer Manager shall pay to Soliciting Dealer a
selling commission of 6.5% of the gross proceeds from the Shares sold by it and accepted and
confirmed by the Trust. For purposes of this Section 6(a), Shares are “sold” only if an
executed Subscription Agreement is accepted by the Trust and the Trust has thereafter distributed
the commission to the Dealer Manager in connection with such transaction.
(b) Soliciting Dealer acknowledges and agrees that no selling commissions will be paid for
sales of DRP Shares.
(c) Notwithstanding the foregoing, it is understood and agreed that no commission shall be
payable with respect to particular Shares if the Dealer Manager or the Trust rejects a proposed
subscriber’s Subscription Agreement. Accordingly, Soliciting Dealer shall have no authority to
issue a confirmation (pursuant to Exchange Act Rule 10b-10) to any subscriber; such authority
residing solely in the Dealer Manager, as the Dealer Manager and processing broker-dealer.
(d) The Dealer Manager may, in its sole discretion, re-allow a portion of the Dealer Manager
Fee received by it to Soliciting Dealer. The Dealer Manager may, in its sole
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discretion, request the Trust to reimburse, to Soliciting Dealer for reasonable accountable bona
fide due diligence expenses, provided such expenses have actually been incurred, are supported by
detailed and itemized invoices provided to the Trust and the Trust had theretofore given its prior
written approval of incurrence of such expenses.
(e) Certain marketing expenses such as Soliciting Dealer conferences may be advanced to
Soliciting Dealer and later deducted from the portion of the Dealer Manager Fee re-allowed to that
Soliciting Dealer. If the Offering is not consummated, Soliciting Dealer will repay any such
advance to the extent not expended on marketing expenses. Any such advance shall be deducted from
the maximum amount of the Dealer Manager Fee that may otherwise be re-allowable to Soliciting
Dealer. Notwithstanding anything herein to the contrary, Soliciting Dealer will not be entitled to
receive any Dealer Manager Fee which would cause the aggregate amount of selling commissions,
dealer manager fees and other forms of underwriting compensation (as defined in accordance with
applicable FINRA rules) received by the Dealer Manager and all Soliciting Dealers to exceed 10.0%
of the gross proceeds raised from the sale of Shares in the Offering.
(f) The Trust will not be liable or responsible to any Soliciting Dealer for the payment of
any selling commissions or any reallowance of fees to Soliciting Dealer, it being the sole and
exclusive responsibility of the Dealer Manager for the payment of selling commissions or any
reallowance to Soliciting Dealer. Soliciting Dealer acknowledges and agrees that the Dealer
Manager’s liability for commissions payable to Soliciting Dealer is limited solely to commissions
received by the Dealer Manager from the Trust in connection with Soliciting Dealer’s sale of
Shares.
7. Reserved Shares.
The number of Shares, if any, to be reserved for sale by each Soliciting Dealer may be decided
by the mutual agreement, from time to time, of the Dealer Manager and the Trust. The Dealer
Manager reserves the right to notify Soliciting Dealer by United States mail or by other means of
the number of Shares reserved for sale by Soliciting Dealer, if any. Such Shares will be reserved
for sale by Soliciting Dealer until the time specified in the Dealer Manager’s notification to
Soliciting Dealer. Sales of any reserved Shares after the time specified in the notification to
Soliciting Dealer or any requests for additional Shares will be subject to rejection in whole or in
part.
8. Blue Sky Qualification.
(a) The Dealer Manager will inform Soliciting Dealer as to the jurisdictions in which the
Dealer Manager has been advised by the Trust that the Shares have been qualified for sale or are
exempt under the respective securities or “blue sky” laws of such jurisdictions; but the Dealer
Manager has not assumed and will not assume any obligation or responsibility as to Soliciting
Dealer’s right to act as a broker and/or dealer with respect to the Shares in any such
jurisdiction. Soliciting Dealer agrees that Soliciting Dealer will not make any offers or sell any
Shares except in states in which the Dealer Manager may advise Soliciting Dealer that the Offering
has been qualified or is exempt and in which Soliciting Dealer is legally
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qualified to make offers and further agrees to assure that each person to whom Soliciting Dealer
sells Shares (at both the time of the initial purchase as well as at the time of any subsequent
purchases) meets any special suitability standards which apply to sales in a particular
jurisdiction, as described in the Blue Sky Survey and the Subscription Agreement. Neither the
Dealer Manager nor the Trust assume any obligation or responsibility in respect of the
qualification of the Shares covered by the Prospectus under the laws of any jurisdiction or
Soliciting Dealer’s qualification to act as a broker and/or dealer with respect to the Shares in
any jurisdiction. The Blue Sky Survey which has been or will be furnished to Soliciting Dealer
indicates the jurisdictions in which it is believed that the offer and sale of Shares covered by
the Prospectus is exempt from, or requires action under, the applicable blue sky or securities laws
thereof, and what action, if any, has been taken with respect thereto.
(b) It is understood and agreed that under no circumstances will Soliciting Dealer, as a
Soliciting Dealer, engage in any activities hereunder in any jurisdiction in which Soliciting
Dealer may not lawfully so engage or in any activities in any jurisdiction with respect to the
Shares in which Soliciting Dealer may lawfully so engage unless Soliciting Dealer have complied
with the provisions hereof.
9. Dealer Manager’s Authority. Subject to the Dealer Manager Agreement, the Dealer Manager
shall have full authority to take such action as it may deem advisable with respect to all matters
pertaining to the Offering or arising thereunder. The Dealer Manager shall not be under any
liability to Soliciting Dealer (except for (a) its own lack of good faith, and (b) for obligations
expressly assumed by us hereunder) for or in respect of the validity or value of or title to, the
Shares; the form of, or the statements contained in, or the validity of, the Registration
Statement, the Prospectus or any amendment or supplement thereto, or any other instrument executed
by the Trust or by others; the form or validity of the Dealer Manager Agreement or this Agreement;
the delivery of the Shares; the performance by the Trust or by others of any agreement on its or
their part; the qualification of the Shares for sale under the laws of any jurisdiction; or any
matter in connection with any of the foregoing; provided, however, that nothing in this paragraph
shall be deemed to relieve the Trust or the Dealer Manager from any liability imposed by the
Securities Act. No obligations or liability on the part of the Trust or the Dealer Manager shall
be implied or inferred herefrom.
10. Indemnification.
(a) Under the Dealer Manager Agreement, the Trust has agreed to indemnify Soliciting Dealer
and the Dealer Manager and each person, if any, who controls Soliciting Dealer or the Dealer
Manager, in certain instances and against certain liabilities, including liabilities under the
Securities Act in certain circumstances. Soliciting Dealer hereby agrees to indemnify the Trust and
each person who controls it as provided in the Dealer Manager Agreement and to indemnify the Dealer
Manager to the extent and in the manner that Soliciting Dealer agrees to indemnify the Trust in the
Dealer Manager Agreement.
(b) In furtherance of, and not in limitation of the foregoing, Soliciting Dealer will
indemnify, defend and hold harmless the Dealer Manager and the Trust, and their officers,
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directors, employees, members, partners, affiliates, agents and representatives, and each person,
if any, who controls such entity within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, and each person who has signed the Registration Statement (“Indemnified
Parties”), from and against any losses, claims, damages or liabilities to which any of the
Indemnified Parties, and each person who signed the Registration Statement, may become subject,
under the Securities Act or the Exchange Act, or otherwise, insofar as such losses, claims and
expenses (including the reasonable legal and other expenses incurred in investigating and
defending any such claims or liabilities), damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) in whole or in part, any material inaccuracy in the
representations or warranties contained in this Agreement or any material breach of a covenant
contained herein by Soliciting Dealer, or (ii) any untrue statement or any alleged untrue statement
of a material fact contained (A) in any Registration Statement or any post-effective amendment
thereto or in the Prospectus or any amendment or supplement to the Prospectus, or (B) in any
Approved Sales Literature, or (C) any blue sky application or other document executed by the Trust
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 Trust
under the securities laws thereof, or (iii) the omission or alleged omission to state a material
fact required to be stated in the Registration Statement or any post-effective amendment thereof to
make the statements therein not misleading or the omission or alleged omission to state a material
fact required to be stated in the Prospectus or any amendment or supplement to the Prospectus to
make the statements therein, in light of the circumstances under which they were made, not
misleading, provided, however, that in each case described in clauses (ii) and (iii) 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 Trust or the Dealer Manager by Soliciting
Dealer specifically for use with reference to Soliciting Dealer in the preparation of the
Registration Statement or any such post-effective amendments thereof or the Prospectus or any such
amendment thereof or supplement thereto, (iv) any use of sales literature, including “broker dealer
use only” materials, by Soliciting Dealer that is not Approved Sales Literature, (v) any untrue
statement made by Soliciting Dealer or Soliciting Dealer’s representatives or agents or omission by
Soliciting Dealer or Soliciting Dealer’s representatives or agents to state a fact necessary in
order to make the statements made, in light of the circumstances under which they were made, not
misleading in connection with the offer and sale of the Shares in each case, other than statements
or omissions made in conformity with the Registration Statement, Prospectus, Approved Sales
Literature or any other materials or information furnished by or on behalf of the Trust, or (vi)
any failure by Soliciting Dealer to comply with applicable laws governing money laundry abatement
and anti-terrorist financing efforts in connection with the Offering, including applicable FINRA
Rules, Exchange Act Rules and Regulations and the USA PATRIOT Act. Soliciting Dealer will
reimburse the aforesaid parties for any reasonable legal or other expenses incurred in connection
with investigation or defense of such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which Soliciting Dealer may otherwise have.
(c) Promptly after receipt by any indemnified party under this Section 10 of notice of
the commencement of any action, such indemnified party will, if a claim in respect
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thereof is to be made against any indemnifying party under this Section 10, promptly notify
the indemnifying party of the commencement thereof; provided, however, the failure to give such
notice shall not relieve the indemnifying party of its obligations hereunder except to the extent
it shall have been prejudiced by such failure. 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 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, and unconditional release of all
liabilities from, 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, such consent not to be unreasonably
withheld or delayed.
(d) An indemnifying party under this Section 10 shall be obligated to reimburse an
indemnified party for reasonable legal and other expenses as follows: the indemnifying party shall
pay all legal fees and expenses reasonably incurred by 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 (in addition to local counsel) that has been participating 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.
11. Contribution.
If the indemnification provided for in Section 10 is for any reason unavailable to or
insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, the contributions provisions set forth in Section 9 of the
Dealer Manager Agreement shall be applicable.
12. Trust as Party to Agreement.
The Trust shall be a third party beneficiary of Soliciting Dealer’s representations,
warranties, covenants and agreements contained in Sections 10 and 11. The
Trust shall have
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all enforcement rights in law and in equity with respect to those portions of this Agreement as to
which it is third party beneficiary.
13. Privacy Laws; Compliance.
(a) Soliciting Dealer agrees to: (i) abide by and comply with (A) the privacy standards and
requirements of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 (the “GLB Act”); (B) the privacy
standards and requirements of any other applicable federal or state law; and (C) Soliciting
Dealer’s own internal privacy policies and procedures, each as may be amended from time to time;
(ii) refrain from the use or disclosure of nonpublic personal information (as defined under the GLB
Act) of all customers, except as necessary to service the customers or as otherwise necessary or
required by applicable law; and (iii) determine which customers have opted out of the disclosure of
nonpublic personal information by periodically reviewing and, if necessary, retrieving an
aggregated list of such customers (the “List”) as provided by each to identify customers
that have exercised their opt-out rights. If either party uses or discloses nonpublic personal
information of any customer for purposes other than servicing the customer, or as otherwise
required by applicable law, that party will consult the List to determine whether the affected
customer has exercised his or her opt-out rights. Each party understands that it is prohibited
from using or disclosing any nonpublic personal information of any customer that is identified on
the List as having opted out of such disclosures.
14. Anti-Money Laundering Compliance Programs.
Soliciting Dealer represents to the Dealer Manager and to the Trust that it has established
and implemented anti-money laundering compliance programs in accordance with applicable law,
including applicable FINRA Conduct Rules, rules and regulations promulgated under the Exchange Act
and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act (USA PATRIOT Act) of 2001, as amended (the “USA PATRIOT Act”),
specifically including, but not limited to, Section 352 of the International Money Laundering
Abatement and Anti-Terrorist Financing Act of 2001 (the “Money Laundering Abatement Act,”
and together with the USA PATRIOT Act, the “AML Rules”) reasonably expected to detect and
cause the reporting of suspicious transactions in connection with the offering and sale of the
Shares. Soliciting Dealer further represents that it currently is in compliance with all AML
Rules, specifically including, but not limited to, the Customer Identification Program
requirements under Section 326 of the Money Laundering Abatement Act, and Soliciting Dealer hereby
covenants to remain in compliance with such requirements and shall, upon request by the Dealer
Manager or the Trust, provide a certification to the Dealer Manager or the Trust that, as of the
date of such certification (a) its AML Program is consistent with the AML Rules, and (b) it is
currently in compliance with all AML Rules, specifically including, but not limited to, the
Customer Identification Program requirements under Section 326 of the Money Laundering Abatement
Act. Upon request by the Dealer Manager at any time, Soliciting Dealer will (i) furnish a written
copy of its AML Program to the Dealer Manager for review, and (ii) furnish a copy of the findings
and any remedial actions taken in connection with its most recent independent testing of its AML
Program.
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15. Miscellaneous.
(a) Soliciting Dealer hereby authorizes and ratifies the execution and delivery of the Dealer
Manager Agreement by the Dealer Manager as Dealer Manager for itself and on behalf of all
Soliciting Dealers (including Soliciting Dealer party hereto) and authorizes the Dealer Manager to
agree to any variation of its terms or provisions and to execute and deliver any amendment,
modification or supplement thereto. Soliciting Dealer hereby agrees to be bound by all provisions
of the Dealer Manager Agreement relating to Soliciting Dealers. Soliciting Dealer also authorizes
the Dealer Manager to exercise, in the Dealer Manager’s discretion, all the authority or discretion
now or hereafter vested in the Dealer Manager by the provisions of the Dealer Manager Agreement and
to take all such actions as the Dealer Manager may believe desirable in order to carry out the
provisions of the Dealer Manager Agreement and of this Agreement.
(b) This Agreement, except for the provisions of Sections 9, 10, 11,
12 and 13 and this Section 15, may be terminated at any time by either
party hereto by two days’ prior written notice to the other party and, in all events, this
Agreement shall terminate on the termination date of the Dealer Manager Agreement, except for the
provisions of Sections 9, 10, 11, 12 and 13 and this
Section 15.
(c) Any communications from Soliciting Dealer should be in writing addressed to the Dealer
Manager at:
Realty Capital Securities, LLC
Three Xxxxxx Place, Suite 3300
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxxx
Managing Director
Three Xxxxxx Place, Suite 3300
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxxx
Managing Director
with a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxx, Esq.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxx, Esq.
Any notice from the Dealer Manager to Soliciting Dealer shall be deemed to have been duly
given if mailed, communicated by electronic delivery or facsimile or delivered by overnight courier
to Soliciting Dealer at Soliciting Dealer’s address shown below.
(d) Nothing herein contained shall constitute the Dealer Manger, Soliciting Dealer, the other
Soliciting Dealers or any of them as an association, partnership, limited liability company,
unincorporated business or other separate entity.
12
(e) If this Agreement is executed before the initial Effective Date, then the Dealer Manager
will notify Soliciting Dealer in writing when the initial Effective Date has occurred. Soliciting
Dealer agrees that Soliciting Dealer will not make any offers to sell the Shares or solicit
purchasers for the Shares until Soliciting Dealer has received such written notice of the initial
Effective Date from the Dealer Manager or the Trust. This Agreement shall be effective for all
sales by Soliciting Dealer on and after the initial Effective Date.
(f) The Trust may authorize the Trust’s transfer agent to provide information to the Dealer
Manager and Soliciting Dealer regarding record holder information about the clients of Soliciting
Dealer who have invested with the Trust on an on-going basis for so long as Soliciting Dealer has a
relationship with such client. Soliciting Dealer shall not disclose any password for a restricted
website or portion of a website provided to Soliciting Dealer in connection with the Offering and
shall not disclose to any person, other than an officer, director, employee or agent of Soliciting
Dealer, any material downloaded from such restricted website or portion of a restricted website.
(g) Soliciting Dealer shall have no right to assign this Agreement or any of its rights
hereunder or to delegate any of its obligations. Any purported assignment or delegation by
Soliciting Dealer shall be null and void. The Dealer Manager shall have the right to assign any or
all of its rights and obligations under this Agreement by written notice, and Soliciting Dealer
shall be deemed to have consented to such assignment by execution hereof. Dealer Manager shall
provide written notice of any such assignment to Soliciting Dealer.
(h) This Agreement may be executed (including by facsimile transmission) with counterpart
signature pages or in counterpart copies, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument comprising this Agreement.
(i) The invalidity or unenforceability of any provision of this Agreement shall not affect
the other provisions hereof, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provision were omitted.
(j) The failure of any party to insist upon or enforce strict performance by any other party
of any provision of this Agreement or to exercise any right under this Agreement shall not be
construed as a waiver or relinquishment to any extent of such party’s right to assert or rely upon
any such provision or right in that or any other instance; rather, such provision or right shall be
and remain in full force and effect.
[Signature page follows.]
13
If the foregoing is in accordance with Soliciting Dealer’s understanding and agreement, please
sign and return the attached duplicate of this Agreement. Soliciting Dealer’s indicated acceptance
thereof shall constitute a binding agreement between Soliciting Dealer and the Dealer Manager.
| Very truly yours, REALTY CAPITAL SECURITIES, LLC |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
, 2009
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The undersigned dealer confirms its agreement to act as a Soliciting Dealer pursuant to all
the terms and conditions of the above Soliciting Dealer Agreement and the attached Dealer Manager
Agreement. The undersigned dealer hereby represents that the it will comply with the applicable
requirements of the Securities Act and the Exchange Act and the published rules and regulations of
the Commission thereunder, and applicable blue sky or other state securities laws. The undersigned
dealer represents and warrants that the undersigned dealer is duly registered as a broker-dealer
under the provisions of the Exchange Act and the Exchange Act Rules and Regulations or is exempt
from such registration. The undersigned dealer confirms that it and each salesperson acting on its
behalf are members in good standing of FINRA and duly licensed by each regulatory authority in each
jurisdiction in which the undersigned dealer or such salesperson will offer and sell Shares, or are
exempt from registration with such authorities. The undersigned dealer hereby represents that it
will comply with the Rules of FINRA and all rules and regulations promulgated by FINRA.
| Dated: , 2009 | ||||||
| Name of Soliciting Dealer | ||||||
| Federal Identification Number | ||||||
| By: | ||||||
| Authorized Signatory | ||||||
Kindly have checks representing commissions forwarded as follows (if different than above): (Please
type or print)
Name of Firm: |
||||
Address: |
||||
| Street | ||||
| City | ||||
| State and Zip Code | ||||
| (Area Code) Telephone No. | ||||
Attention: |
Soliciting Dealer represents and warrants that it is currently licensed as a broker-dealer in
the following jurisdictions:
o
|
Alabama | o | Nebraska | |||
o
|
Alaska | o | Nevada | |||
o
|
Arizona | o | New Hampshire | |||
o
|
Arkansas | o | New Jersey | |||
o
|
California | o | New Mexico | |||
o
|
Colorado | o | New York | |||
o
|
Connecticut | o | North Carolina | |||
o
|
Delaware | o | North Dakota | |||
o
|
District of Columbia | o | Ohio | |||
o
|
Florida | o | Oklahoma | |||
o
|
Georgia | o | Oregon | |||
o
|
Hawaii | o | Pennsylvania | |||
o
|
Idaho | o | Puerto Rico | |||
o
|
Illinois | o | Rhode Island | |||
o
|
Indiana | o | South Carolina | |||
o
|
Iowa | o | South Dakota | |||
o
|
Kansas | o | Tennessee | |||
o
|
Kentucky | o | Texas | |||
o
|
Louisiana | o | Utah | |||
o
|
Maine | o | Vermont | |||
o
|
Maryland | o | Virgin Islands | |||
o
|
Massachusetts | o | Virginia | |||
o
|
Michigan | o | Washington | |||
o
|
Minnesota | o | West Virginia | |||
o
|
Mississippi | o | Wisconsin | |||
o
|
Missouri | o | Wyoming | |||
o
|
Montana |
