BLUEROCK ENHANCED MULTIFAMILY TRUST, INC. Up to $1,282,499,999 in Shares of Common Stock, $0.01 par value per share FORM OF PARTICIPATING DEALER AGREEMENT Dated: , 200
Exhibit 1.2
BLUEROCK ENHANCED MULTIFAMILY TRUST, INC.
Up to
$1,282,499,999 in Shares of Common Stock, $0.01 par value per share
FORM OF PARTICIPATING DEALER AGREEMENT
Dated: , 200
Ladies and Gentlemen:
Subject to the terms described herein, Select Capital Corporation, as the dealer manager (the
“Dealer Manager”) for Bluerock Enhanced Multifamily Trust, Inc., a Maryland corporation (the
“Company”), invites you (“Participating Dealer”) to participate in the
distribution, on a “best efforts basis,” of up to
$1,282,499,999 in shares of common stock of the
Company, $0.01 par value per share (the “Common Stock”) to the public (the
“Offering”), of which amount: (a) up to $1,000,000,000 in shares of Common Stock are being
offered to the public pursuant to the Company’s primary offering (the “Primary Shares”);
and (b) up to $282,499,999 in shares of Common Stock are being offered to stockholders of the
Company pursuant to the Company’s distribution reinvestment plan (the “DRIP Shares” and,
together with the Primary Shares, the “Offered Shares”). The Primary Shares are to be
issued and sold to the public at an initial purchase price of $9.50 per share until $50,000,000 in
Primary Shares are sold. Thereafter, the Primary Shares will be offered at $10.00 per Primary
Share. The price at which Primary Shares will be offered and sold is subject in certain
circumstances to discounts based upon the volume of shares purchased and for certain categories of
purchasers. Notwithstanding the foregoing, the Company has reserved the right to reallocate the
Offered Shares between the Primary Shares and the DRIP Shares.
A registration statement on Form S-11 (File No. 333-153135) 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 of the Securities and Exchange
Commission (the “Commission”) promulgated thereunder (the “Securities Act
Regulations”), for the registration of the Offered Shares. Such registration statement, which
includes a preliminary prospectus, was filed with the Commission on August 22, 2008. The Company
has prepared and filed such amendments thereto, if any, and such amended prospectus, if any, as may
have been required to the date hereof, and will file such additional amendments and supplements
thereto as may hereafter be required. Copies of such registration statement and each amendment
thereto have been or will be delivered to Participating Dealer. The prospectus, as amended or
supplemented, on file with the Commission at the Effective Date (as defined below) of the
registration statement (including financial statements, exhibits and all other documents related
thereto filed as a part thereof or incorporated therein), is hereinafter referred to as the
“Prospectus,” except that if the Prospectus is amended or supplemented after the Effective Date,
the term “Prospectus” shall refer to the Prospectus as amended or supplemented to date, and if the
Prospectus filed by the Company pursuant to Rule 424(b) or 424(c) of the Securities Act Regulations
shall differ from the Prospectus on file at the time the registration statement or any
post-effective amendment to the registration statement shall become effective, the term
“Prospectus” shall refer to the Prospectus filed pursuant to either Rule 424(b) or 424(c) of
the Securities Act Regulations from and after the date on which it shall have been filed with the
Commission. As used in this agreement, the term “Registration Statement” means the Registration
Statement, as amended through the date hereof, except that, if the Company files any post-effective
amendments to the Registration Statement, “Registration Statement” shall refer to the Registration
Statement as so amended by the last post-effective amendment declared effective, and the term
“Effective Date” means the applicable date upon which the Registration Statement or any
post-effective amendment thereto is or was first declared effective by the Commission.
I. Dealer Manager Agreement
The Company is the sole general partner of Bluerock Enhanced Multifamily Holdings, L.P., a
Delaware limited partnership that serves as the Company’s operating partnership subsidiary (the
“Operating Partnership”). The Dealer Manager has entered into a Dealer Manager Agreement
with the Company and the Operating Partnership dated [ ], 2008 (the “Dealer Manager
Agreement”). Upon effectiveness of this Participating Dealer Agreement (this
“Agreement”), you will become one of the Participating Dealers referred to in the Dealer
Manager Agreement.
II. Sale of Shares
Participating Dealer hereby agrees to use its best efforts to sell the Primary Shares for cash
on the terms and conditions stated in the Prospectus. Nothing in this Agreement shall be deemed or
construed to make Participating Dealer an employee, agent, representative, partner of the Dealer
Manager, the Company or the Operating Partnership, and Participating Dealer is not authorized to
act for the Dealer Manager, the Company or the Operating Partnership or to make any representations
on their behalf except as set forth in the Prospectus and any printed sales literature or other
materials prepared by the Company or Bluerock Enhanced Multifamily Advisor, LLC, a Delaware limited
liability company that serves as the Company’s advisor pursuant to the terms of an advisory
agreement (the “Advisor”), provided that the use of said sales literature and other
materials has been approved for use by the Company in writing and all appropriate regulatory
agencies (the “Authorized Sales Materials”).
III. Submission of Orders
Each person desiring to purchase Primary Shares in the Offering will be required to complete
and execute a subscription agreement (“Subscription Agreement”) in the form attached as an
Appendix to the Prospectus and to deliver to Participating Dealer such completed Subscription
Agreement, together with a check, draft, wire or money order (hereinafter referred to as an
“instrument of payment”) in the amount of $9.50 per Share until $50,000,000 in Primary Shares are
sold. Thereafter, Primary Shares will be offered and sold at a purchase price of $10.00 per Share,
or such discounted purchase price per Share that may apply based upon the available discounts
specified in the Prospectus. There shall be a minimum initial purchase by any one purchaser of 250
Primary Shares. Any Subscription Agreement and instrument of payment not conforming to the
foregoing instructions shall be returned to such subscriber not later than the end of the second
business day following receipt by Participating Dealer of such
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materials. Subscription Agreements and instruments of payment received by the Participating
Dealer which conform to the foregoing instructions shall be transmitted for deposit pursuant to one
of the following methods:
(a) where, pursuant to Participating Dealer’s internal supervisory procedures, internal
supervisory review is conducted at the same location at which Subscription Agreements and
instruments of payment are received from subscribers, then, by the end of the next business
day following receipt by Participating Dealer, Participating Dealer will transmit the
Subscription Agreements and instrument of payment to the Escrow Agent (as defined below) or,
after the Company has received and accepted subscriptions for at least 250,000 Primary
Shares (the “Minimum Offering”), to the Company or to such other account or agent as
directed by the Company; and
(b) where, pursuant to Participating Dealer’s internal supervisory procedures, final
internal supervisory review is conducted at a different location (the “Final Review
Office”), then Subscription Agreements and instruments of payment will be transmitted by
Participating Dealer to the Final Review Office by the end of the next business day
following receipt by Participating Dealer. The Final Review Office will in turn, by the end
of the next business day following receipt by the Final Review Office, transmit such
Subscription Agreements and instrument of payment to the Escrow Agent or, after the Minimum
Offering has been obtained, to the Company or to such other account or agent as directed by
the Company.
Participating Dealer understands that the Company and/or the Dealer Manager reserves the
unconditional right to reject any order for any or no reason.
Notwithstanding the foregoing, with respect to any Primary Shares to be purchased by a
custodial account, the Participating Dealer shall cause the custodian of such account to deliver a
completed Subscription Agreement and instrument of payment for such account directly to the Escrow
Agent. The Participating Dealer shall furnish to the Escrow Agent with each delivery of
instruments of payment a list of the subscribers showing the name, address, tax identification
number, state of residence, amount of Primary Shares subscribed for, and the amount of money paid.
Participating Dealer hereby agrees to be bound by the terms of the Escrow Agreement, dated
[ ], 2008 (the “Escrow Agreement”), by and among Xxxxx Fargo Bank, N.A., as escrow
agent (the “Escrow Agent”), and the Company.
IV. Participating Dealer’s Compensation
Subject to volume discounts and other special circumstances described in or as otherwise
provided in the “Plan of Distribution” section of the Prospectus, Participating Dealer’s selling
commission applicable to the total public offering price of Primary Shares sold by Participating
Dealer which it is authorized to sell hereunder is 7.0% of the gross proceeds from the Primary
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 Primary Shares” shall occur if and only if a
Subscription Agreement is accepted by the Company and the Company has thereafter
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distributed the commission to the Dealer Manager in connection with such transaction.
Participating 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. Participating
Dealer affirms that the Dealer Manager’s liability for commissions payable to Participating Dealer
is limited solely to the commissions received by the Dealer Manager from the Company associated
with Participating Dealer’s sale of Primary Shares.
In addition, as set forth in the Prospectus, the Dealer Manager, in its sole discretion, may
reallow a portion of the dealer manager fee described in the Prospectus (the “Dealer Manager
Fee”) to Participating Dealer as marketing fees or to defray other distribution-related
expenses. Such reallowance, if any, shall be determined by the Dealer Manager in its sole
discretion based on factors including, but not limited to, the number of Primary Shares sold by
Participating Dealer, the assistance of Participating Dealer in marketing the Offering and due
diligence expenses incurred, the extent to which similar fees are reallowed to participating
broker-dealers in similar offerings being conducted during the Offering and the level of services
that the Participating Dealer performs in connection with the distribution of the Primary Shares,
including ministerial, record-keeping, sub-accounting, stockholder services and other
administrative services; provided, however, that Participating Dealer will not be entitled to
receive Dealer Manager Fees which would cause the aggregate amount of selling commissions, Dealer
Manager Fees and all other forms of underwriting compensation (as defined in accordance with
applicable FINRA rules) received by the Dealer Manager and all Participating Dealers to exceed
10.0% of the gross proceeds raised from the sale of Primary Shares in the Offering. The Dealer
Manager’s reallowance of Dealer Manager Fees to Participating Dealer shall be described in Schedule
1 to this Agreement.
Participating Dealer acknowledges and agrees that no selling commissions or Dealer Manager
Fees will be paid in respect of the sale of any DRIP Shares.
The parties hereby agree that the foregoing selling commissions and Dealer Manager Fees are
not in excess of the usual and customary distributors’ or sellers’ commission received in the sale
of securities similar to the Primary Shares, that Participating Dealer’s interest in the offering
is limited to such selling commissions and Dealer Manager Fees from the Dealer Manager and
Participating Dealer’s indemnity referred to in Section XII hereinbelow, and that the Company is
not liable or responsible for the direct payment of such selling commissions and Dealer Manager
Fees to Participating Dealer. In addition, as set forth in the Prospectus, the Dealer Manager will
reimburse Participating Dealer for reasonable bona fide due diligence expenses incurred by
Participating Dealer. Such due diligence expenses may include travel, lodging, meals and other
reasonable out-of-pocket expenses incurred by Participating Dealer and its personnel when visiting
the Company’s offices or properties to verify information relating to the Company or its
properties. Participating Dealer shall provide a detailed and itemized invoice for any such due
diligence expenses.
V. Payment
Payments of selling commissions will be made by the Dealer Manager (or by the Company as the
agent of the Dealer Manager, as provided in the Dealer Manager Agreement) to
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Participating Dealer within 30 days of the receipt by the Dealer Manager of the gross
commission payments from the Company.
Participating Dealer, in its sole discretion, may authorize Dealer Manager (or the Company as
the agent of the Dealer Manager, as provided in the Dealer Manager Agreement) to deposit selling
commissions, Dealer Manager Fees and other payments due to it pursuant to this Agreement directly
to its bank account. If Participating Dealer so elects, Participating Dealer shall provide such
deposit authorization and instructions in Schedule 2 to this Agreement.
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 and/or the Dealer Manager, which reserves the right to
reject any order for any or no reason. Orders not accompanied by the required instrument of
payment for the Primary Shares may be rejected. Issuance and delivery of the Primary Shares will
be made only after actual receipt of payment therefor. In the event an order is rejected, canceled
or rescinded for any reason, Participating Dealer agrees to return to the Dealer Manager any
selling commissions or Dealer Manager Fees theretofore paid with respect to such order, and, if
Participating Dealer fails to so return any such selling commissions, the Dealer Manager shall have
the right to offset amounts owed against future commissions or Dealer Manager Fees due and
otherwise payable to Participating Dealer.
VII. Prospectus and Authorized Sales Materials
Participating Dealer is not authorized or permitted to give, and will not give, any
information or make any representation (written or oral) concerning the Offered Shares except as
set forth in the Prospectus and the Authorized Sales Materials. The Dealer Manager will supply
Participating Dealer with reasonable quantities of the Prospectus (including any supplements
thereto), as well as any Authorized Sales Materials, for delivery to investors, and Participating
Dealer will deliver a copy of the Prospectus (including all supplements thereto) to each investor
to whom an offer is made prior to or simultaneously with the first solicitation of an offer to sell
the Primary Shares to an investor. Participating Dealer agrees that it will not send or give any
supplements to the Prospectus or any Authorized Sales Materials to any investor unless it has
previously sent or given a Prospectus and all supplements thereto to that investor or has
simultaneously sent or given a Prospectus and all supplements thereto with such Prospectus
supplement or Authorized Sales Materials. Participating Dealer agrees that it will not show or
give to 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 Offered Shares to members of the public.
Participating Dealer agrees that it will not use in connection with the offer or sale of Offered
Shares any materials or writings which have not been previously approved by the Company other than
the Prospectus and the Authorized Sales Materials. Participating Dealer agrees 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, as amended (the “Exchange Act”).
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VIII. License and Association Membership
Participating Dealer’s acceptance of this Agreement constitutes a representation to the
Company and the Dealer Manager that Participating Dealer is a properly registered or licensed
broker-dealer, duly authorized to sell Primary Shares under Federal and state securities laws and
regulations in all states where it offers or sells Primary Shares, and that it is a member in good
standing of FINRA. Participating Dealer represents and warrants that it is currently licensed as a
broker-dealer in the jurisdictions identified on Schedule 3 to this Agreement and that its
independent contractors and registered representatives have the appropriate licenses(s) to offer
and sell the Primary Shares in such jurisdictions. This Agreement shall automatically terminate if
Participating Dealer ceases to be a member in good standing of FINRA, or with the securities
commission of the state in which Participating Dealer’s principal office is located. Participating
Dealer agrees to notify the Dealer Manager immediately if Participating Dealer ceases to be a
member in good standing of FINRA or with the securities commission of any state in which
Participating Dealer is currently registered or licensed. The Participating Dealer also hereby
agrees to abide by the Rules of Fair Practice of FINRA and to comply with Rules 2340, 2420, 2730,
2740, 2750 and 2810 of the FINRA Conduct Rules.
IX. Anti-Money Laundering Compliance Programs
Participating Dealer’s acceptance of this Agreement constitutes a representation to the
Company and the Dealer Manager that Participating Dealer has established and implemented an
anti-money laundering compliance program (“AML Program”) in accordance with applicable law,
including applicable FINRA Rules, rules promulgated by the Commission (the “Commission
Rules”) and the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act (USA PATRIOT Act) of 2001, as amended by the USA Patriot
Improvement and Reauthorization Act of 2005 (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 sale of Primary Shares. Participating
Dealer’s acceptance of this Agreement also constitutes a representation to the Company and the
Dealer Manager that as of the date hereof, Participating Dealer 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. Participating Dealer covenants that it
will perform all activities it is required to perform by applicable AML Rules and its AML Program
with respect to all customers on whose behalf Participating Dealer submits orders to the Company.
To the extent permitted by applicable law, Participating Dealer will share information with the
Dealer Manager and the Company for purposes of ascertaining whether a suspicious activity report is
warranted with respect to any suspicious transaction involving the purchase or intended purchase of
Primary Shares.
Upon request by the Dealer Manager at any time, Participating Dealer hereby agrees to (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 Participating Dealer’s most
recent independent testing of its AML Program. Participating Dealer further represents that
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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, and Participating Dealer hereby covenants to remain in compliance with such
requirements and shall, upon request by the Dealer Manager, provide a certification to Dealer
Manager that, as of the date of such certification (i) its AML Program is consistent with the AML
Rules, (ii) it has continued to implement its AML Program, and (iii) 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.
X. Limitation of Offer; Suitability
Participating Dealer will offer Primary Shares only to persons who meet the suitability
standards set forth in the Prospectus and any suitability letter or memorandum sent to it by the
Company or the Dealer Manager and will only make offers to persons in the jurisdictions in which it
is advised in writing by the Company or the Dealer Manager that the Primary Shares are qualified
for sale or that such qualification is not required (the “Qualified Jurisdictions”).
Notwithstanding the qualification of the Primary Shares for sale in any respective jurisdiction (or
the exemption therefrom), Participating Dealer represents, warrants and covenants that it will not
offer Primary Shares and will not permit any of its registered representatives to offer Primary
Shares in any jurisdiction unless both Participating Dealer and such registered representative are
duly licensed to transact securities business in such jurisdiction. In offering Primary Shares,
Participating Dealer will comply with the provisions of the Rules of Fair Practice set forth in the
FINRA Manual, as well as all other applicable rules and regulations relating to suitability of
investors, including without limitation, the provisions of Section III.C. of the Statement of
Policy Regarding Real Estate Investment Trusts of the North American Securities Administrators
Association, Inc. (the “NASAA REIT Guidelines”).
Participating Dealer further represents, warrants and covenants that neither Participating
Dealer, nor any person associated with Participating Dealer, shall offer or sell Primary Shares in
any jurisdiction except to investors who satisfy the investor suitability standards and minimum
investment requirements under all of the following: (1) applicable provisions of the Prospectus;
(2) applicable laws of the jurisdiction of which such investor is a resident; (3) applicable FINRA
Conduct Rules; and (4) the provisions of Section III.C. of the NASAA REIT Guidelines.
Participating Dealer agrees to ensure that, in recommending the purchase, sale or exchange of
Primary Shares to an investor, Participating Dealer, or a person associated with Participating
Dealer, shall have reasonable grounds to believe, on the basis of information obtained from the
investor (and thereafter maintained in the manner and for the period required by the Commission,
any state securities commission, FINRA or the Company) concerning such investor’s age, investment
objectives, other investments, financial situation and needs, and any other information known to
Participating Dealer, or person associated with Participating Dealer, that (A) the investor is or
will be in a financial position appropriate to enable the investor to realize to a significant
extent the benefits described in the Prospectus, including the tax benefits to the extent they are
a significant aspect of the Offered Shares, (B) the investor has a fair market net worth sufficient
to sustain the risks inherent in an investment in Primary Shares in the amount proposed, including
loss and lack of liquidity of such investment, and (C) an investment in Primary Shares is otherwise
suitable for such investor. Participating Dealer further represents,
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warrants and covenants that Participating Dealer, or a person associated with Participating
Dealer, will make every reasonable effort to determine the suitability and appropriateness of an
investment in Primary Shares of each proposed investor solicited by a person associated with
Participating Dealer by reviewing documents and records disclosing the basis upon which the
determination as to suitability was reached as to each such proposed investor, whether such
documents and records relate to accounts which have been closed, accounts which are currently
maintained, or accounts hereafter established. Participating Dealer agrees to retain such
documents and records in Participating Dealer’s records for a period of six years from the date of
the applicable sale of Primary Shares, to otherwise comply with the record keeping requirements
provided in Section XIV below and to make such documents and records available to (i) the Dealer
Manager and the Company upon request, and (ii) representatives of the Commission, FINRA and
applicable state securities administrators upon Participating Dealer’s receipt of an appropriate
document subpoena or other appropriate request for documents from any such agency. Participating
Dealer shall not purchase any Primary Shares for a discretionary account without obtaining the
prior written approval of Participating Dealer’s customer and such customer’s completed and
executed Subscription Agreement.
XI. Due Diligence; Adequate Disclosure
Prior to offering the Primary Shares for sale, Participating Dealer shall have conducted an
inquiry such that Participating Dealer has reasonable grounds to believe, based on information made
available to Participating Dealer by the Company or the Dealer Manager through the Prospectus or
other materials, that all material facts are adequately and accurately disclosed and provide a
basis for evaluating a purchase of Primary Shares. Notwithstanding the foregoing, Participating
Dealer may rely upon the results of an inquiry conducted by an independent third party retained for
that purpose. Prior to the sale of the Primary Shares, Participating Dealer shall inform each
prospective purchaser of Primary Shares of pertinent facts relating to the Primary Shares including
specifically the risks related to limitations on liquidity and marketability of the Primary Shares
during the term of the investment but shall not, in any event, make any representation on behalf of
the Company or the Operating Partnership except as set forth in the Prospectus and any Authorized
Sales Materials.
XII. Indemnification
For the purposes of this Section XII, an entity’s “Indemnified Parties” shall include
such entity’s officers, 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 of 1933, as amended (the “Securities Act”) or Section 20 of the
Exchange Act.
(a) Participating Dealer severally agrees to indemnify, defend and hold harmless the
Company, the Operating Partnership, the Dealer Manager, each of their respective Indemnified
Parties, and each person who signs the Registration Statement, from and against any losses,
claims, damages or liabilities to which the Company, the Operating Partnership, the Dealer
Manager, or any of their respective Indemnified Parties, or any person who signed the
Registration Statement, may become subject, under the Securities Act or otherwise, insofar
as such losses, claims (including the reasonable cost of investigation), damages or
liabilities (or actions in respect thereof) arise out of or
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are based upon (a) in whole or in part, any material inaccuracy in a representation or
warranty by Participating Dealer, any material breach of a covenant by Participating Dealer,
or any material failure by Participating Dealer to perform its obligations hereunder, or (b)
any untrue statement or alleged untrue statement of a material fact contained (i) in any
Registration Statement or any post-effective amendment thereto or the Prospectus or any
amendment or supplement to the Prospectus or (ii) in any Authorized Sales Materials or (iii)
in any application to qualify the Offered Shares for the offer and sale under the applicable
state securities or “blue sky” laws of any state or jurisdiction, or (c) the omission or
alleged omission to state a material fact required to be stated in the Registration
Statement or any post-effective amendment thereof or in the Prospectus or any amendment or
supplement to the Prospectus or necessary to make statements therein not misleading,
provided, however, that in each case described in clauses (b) and (c) 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, the Operating Partnership or
the Dealer Manager by Participating Dealer specifically for use with reference to
Participating Dealer in the Registration Statement or any such post-effective amendments
thereof or the Prospectus or any such amendment thereof or supplement thereto, or (d) any
use of sales literature by Participating Dealer not authorized or approved by the Company or
use of “broker-dealer use only” materials with members of the public concerning the Offered
Shares by Participating Dealer or Participating Dealer’s representatives or agents, or (e)
any untrue statement made by Participating Dealer or its representatives or agents or
omission 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 Offered Shares, or (f) any material violation of this Agreement by Participating
Dealer, or (f) any failure of Participating Dealer to comply with applicable laws governing
money laundry abatement and anti-terrorist financing efforts in connection with the
Offering, including applicable FINRA Rules, Commission Rules and the USA PATRIOT Act, or (g)
any other failure by Participating Dealer to comply with applicable FINRA rules or
Commission Rules or any other applicable Federal or state laws in connection with the
Offering. Participating Dealer will reimburse the aforesaid parties 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 Participating Dealer may otherwise
have.
(b) Promptly after receipt by any indemnified party under this Section XII 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 XII, notify in writing the
indemnifying party of the commencement thereof and the omission to so notify the
indemnifying party will relieve such indemnifying party from any liability under this
Section XII 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
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party for reasonable legal and other expenses (subject to Section XII (c) below)
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.
(c) An indemnifying party under this Section XII of this Agreement 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 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.
XIII. Contribution
If the indemnification provided for in Section XII hereof 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, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (a) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Operating Partnership, the Dealer Manager and
Participating Dealer, respectively, from the offering of the Primary Shares pursuant to this
Agreement and the Dealer Manager Agreement or (b) if the allocation provided by clause (a) is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (a) above but also the relative fault of the Company and the
Operating Partnership, the Dealer Manager and Participating Dealer, respectively, in connection
with the statements or omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Operating Partnership, the Dealer
Manager and Participating Dealer, respectively, in connection with the offering of the Primary
Shares pursuant to this Agreement shall be deemed to be in the same respective proportion as the
total net Dealer Manager Agreement (before deducting expenses), received by the Company, and the
total selling commissions and Dealer Manager Fees received by the Dealer Manager and Participating
Dealer, respectively, in each case as set forth on the cover of the Prospectus bear to the
aggregate initial public offering price of the Primary Shares as set forth on such cover.
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The relative fault of the Company and the Operating Partnership, the Dealer Manager and
Participating Dealer, respectively, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact related to information supplied by the Company or the Operating
Partnership, or by the Dealer Manager or by Participating Dealer, respectively, and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Operating Partnership, the Dealer Manager and Participating Dealer agree that
it would not be just and equitable if contribution pursuant to this Section XIII were determined by
pro rata allocation or by any other method of allocation which does not take account of the
equitable contributions referred to above in this Section XIII. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in
this Section XIII shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section XIII, the Dealer Manager and Participating
Dealer shall not be required to contribute any amount by which the total amount of selling
commissions and Dealer Manager Fees received by them exceeds the amount of any damages which the
Dealer Manager and Participating Dealer have otherwise been required to pay by reason of any untrue
or alleged untrue statement or omission or alleged omission.
No party guilty of fraudulent misrepresentation (within the meaning of Section 1(f) of the
Securities Act) shall be entitled to contribution from any party who was not guilty of such
fraudulent misrepresentation.
For the purposes of this Section XIII, the Dealer Manager’s officers, directors, employees,
members, partners, agents and representatives, and each person, if any, who controls the Dealer
Manager within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution of the Dealer Manager, and each officers, directors,
employees, members, partners, agents and representatives of the Company and the Operating
Partnership, respectively, each officer of the Company who signed the Registration Statement and
each person, if any, who controls the Company or the Operating Partnership, within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution of the Company and the Operating Partnership, respectively. Participating Dealer’s
obligations to contribute pursuant to this Section XIII are several in proportion to the number of
Primary Shares sold by Participating Dealer and not joint.
XIV. Compliance with Record Keeping Requirements
Participating Dealer 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.
Participating Dealer further agrees to keep such records with respect to each
11
customer who purchases Primary Shares, his suitability and the amount of Primary Shares sold,
and to retain such records for such period of time as may be required by the Commission, any state
securities commission, FINRA or the Company.
XV. Customer Complaints
Participating Dealer hereby agrees to provide to the Dealer Manager promptly upon receipt by
Participating Dealer copies of any written or otherwise documented customer complaints received by
Participating Dealer relating in any way to the Offering (including, but not limited to, the manner
in which the Primary Shares are offered by Participating Dealer), the Offered Shares or the
Company.
XVI. Effective Date
This Agreement will become effective upon the last date it is signed by either party hereto.
XVII. Termination; Amendment
Participating Dealer will immediately suspend or terminate its offer and sale of Primary
Shares upon the request of the Company or the Dealer Manager at any time and will resume its offer
and sale of Primary Shares hereunder upon subsequent request of the Company or the Dealer Manager.
Any party may terminate this Agreement by written notice pursuant to Section XX below. This
Agreement and the exhibits and schedules hereto are the entire agreement of the parties and
supersedes all prior agreements, if any, between the parties hereto relating to the subject matter
hereof.
This Agreement may be amended at any time by the Dealer Manager by written notice to
Participating Dealer, and any such amendment shall be deemed accepted by Participating Dealer upon
placing an order for sale of Primary Shares after it has received such notice.
XVIII. Assignment
Participating Dealer shall have no right to assign this Agreement or any of Participating
Dealer’s rights hereunder or to delegate any of Participating Dealer’s obligations. Any purported
assignment or delegation by Participating 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 Participating Dealer shall be deemed to have consented to such assignment by execution
hereof. Dealer Manager shall provide written notice of any such assignment to Participating
Dealer.
XIX. Privacy Laws
The Dealer Manager and Participating Dealer (each referred to individually in this Section XIX
as a “party”) agree as follows:
(a) Each party agrees to abide by and comply with (i) the privacy standards and requirements
of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 (“GLB Act”); (ii) the privacy standards
12
and requirements of any other applicable Federal or state law; and (iii) its own internal
privacy policies and procedures, each as may be amended from time to time;
(b) Each party agrees to refrain from the use or disclosure of nonpublic personal information
(as defined under the GLB Act) of all customers who have opted out of such disclosures except as
necessary to service the customers or as otherwise necessary or required by applicable law; and
(c) Each party shall be responsible for determining which customers have opted out of the
disclosure of nonpublic personal information by periodically reviewing and, if necessary,
retrieving a list of such customers (the “List”) as provided by each to identify customers
that have exercised their opt-out rights. In the event 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 each 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.
XX. Notice
All notices will be in writing and deemed given (a) when delivered personally, (b) on the
first business day after delivery to a national overnight courier service, (c) upon receipt of
confirmation if sent via facsimile, or (d) on the fifth business day after deposit in the United
States mail, properly addressed and stamped with the required postage, registered or certified
mail, return receipt requested, to the Dealer Manager at: 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxx
Xxxx, Xxxxxxxxxx 00000, (000) 000-0000, Attention: Xxxxx Xxxxx, and to Participating Dealer at the
address specified by Participating Dealer on the signature page hereto.
XXI. Attorneys’ Fees, Applicable Law and Venue
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 New York. Venue for any action (including arbitration)
brought hereunder shall lie exclusively in New York, New York.
[SIGNATURES ON FOLLOWING PAGES]
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on its behalf
by its duly authorized agent.
| “DEALER MANAGER” SELECT CAPITAL CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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 jurisdictions identified below
represent a true and correct list of all jurisdictions in which we are registered or licensed as a
broker or dealer and are fully authorized to sell securities, and we agree to advise you of any
change in such list during the term of this Agreement.
1. Identity of Participating Dealer:
Full Legal Name: |
||||
| (to be completed by Participating Dealer) |
||||
Type of Entity: |
||||
| (to be completed by Participating Dealer) |
||||
| Organized in the State of: | ||||
| (to be completed by Participating Dealer) |
||||
| Tax Identification Number: | ||||
| (to be completed by Participating Dealer) |
||||
| FINRA/CRD Number: | ||||
| (to be completed by Participating Dealer) |
||||
2. Any notice under this Agreement will be deemed given pursuant to Section XX hereof when
delivered to Participating Dealer as follows:
Company Name: |
||||
Attention to: |
||||
|
|
||||
|
|
||||
Street Address: |
||||
City, State and Zip Code: |
||||
Telephone No.: |
( ) |
|||
Facsimile No.:
|
( ) |
|||
Email Address: |
||||
| Accepted and agreed as of the date below: | ||||
| “PARTICIPATING DEALER” | ||||
| (Print Name of Participating Dealer) |
||||
By: |
||||||
| Name: | ||||||
| Title: | ||||||
| Date: | ||||||
NAME
OF ISSUER: BLUEROCK ENHANCED MULTIFAMILY TRUST, INC.
NAME OF
PARTICIPATING DEALER:
SCHEDULE
TO AGREEMENT DATED:
As marketing fees and to defray other distribution-related expenses, the Dealer Manager will pay
basis points of the gross cash proceeds on all sales generated by Participating Dealer
pursuant to Section IV of this Participating Dealer Agreement. These amounts are in addition to
the selling commissions provided for in Section IV of this Participating Dealer Agreement and
will be due and payable at the same time as the selling commissions, as more fully described in
Section V hereof.
| “DEALER MANAGER” | ||||||||||
| SELECT CAPITAL CORPORATION | ||||||||||
| By: | ||||||||||
| Name: | ||||||||||
| Title: | ||||||||||
| “PARTICIPATING DEALER” | ||||||||
| (Print Name of Participating Dealer) |
||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
NAME OF ISSUER: BLUEROCK ENHANCED MULTIFAMILY TRUST, INC.
NAME OF
PARTICIPATING DEALER:
SCHEDULE
TO AGREEMENT DATED:
Participating Dealer hereby authorizes the Dealer Manager or its agent to deposit selling
commissions, reallowances and other payments due to it pursuant to the Participating Dealer
Agreement to its bank account specified below. This authority will remain in force until
Participating Dealer notifies the Dealer Manager in writing to cancel it. In the event that the
Dealer Manager deposits funds erroneously into Participating Dealer’s account, the Dealer Manager
is authorized to debit the account with no prior notice to Participating Dealer for an amount not
to exceed the amount of the erroneous deposit.
Bank Name: |
||||
Bank Address: |
||||
Bank Routing Number: |
||||
Account Number: |
||||
| “PARTICIPATING DEALER” | ||||||
| (Print Name of Participating Dealer) |
||||||
By: |
||||||
| Name: | ||||||
| Title: | ||||||
| Date: | ||||||
Participating 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 |
