AMERICAN REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC. FORM OF SOLICITING DEALER AGREEMENT
AMERICAN
REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC.
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
, 2010 (the “Dealer
Manager Agreement”), with American Realty Capital – Retail Centers of
America, Inc., a Maryland corporation (the “Company”)
and American Realty Capital Retail Advisor, LLC, pursuant to which the Dealer
Manager agreed to use its reasonable best efforts to solicit subscriptions in
connection with the public offering (the “Offering”)
of: (i) up to 35,000,000 shares of the Company’s common stock, $.01 par value
per share (“Common
Stock”) for a purchase price of $10.00 per share (subject in certain
circumstances to discounts based upon the volume of shares of Common Stock
purchased) (the “Primary
Shares”), and (ii) up to 1,000,000 shares of Common Stock for a purchase
price of $9.50 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 Company 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 (each a “Soliciting
Dealer”, and collectively 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”).
This
Agreement shall become effective and binding with respect to the parties hereto
on the date set forth on the Soliciting Dealer’s signature page
hereto.
1.
Registration
Statement.
(a) A
registration statement on Form S-11 (File No. 333- ),
including a preliminary prospectus, has been prepared by the Company and was
filed with the Securities and Exchange Commission (the “Commission”)
on , 2010, 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
Company has prepared and filed such amendments and supplements to the
registration statement, including 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 Company files
a post-effective amendment to such registration statement, then the term
“Registration Statement” shall, from and after the declaration of the
effectiveness of such post-effective amendment 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 Company 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.
1
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 amended on May 7, 2007 and as may be
further amended from time to time (the “NASAA
Guidelines”).
Soliciting
Dealer’s acceptance of this Agreement constitutes a representation to the
Company and to the Dealer Manager that Soliciting Dealer is a properly
registered or licensed broker-dealer, duly authorized to sell the 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.
2
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 Company or the Dealer Manager, and (ii) in
accordance with Section 8, to persons
in the jurisdictions in which it is advised in writing by the Company 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 business in securities
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 Guidelines.
In
offering for sale the Shares to any person, Soliciting Dealer will have
reasonable grounds to believe (based on such information obtained from the
prospective investor concerning the prospective investor’s age, investment
objectives, other investments, financial situation, needs or any other
information known by Soliciting Dealer after due inquiry) that: (i)
such prospective investor is in a financial position appropriate to enable such
prospective investor to realize to a significant extent the benefits described
in the Prospectus, including the tax benefits where they are a significant
aspect of the investment; (ii) the prospective investor has a fair market net
worth sufficient to sustain the risks inherent in the investment, including loss
of investment and lack of liquidity; (iii) the purchase of the Shares is
otherwise suitable for such prospective investor; and (iv) such prospective
investor (A) has either: (1) a minimum annual gross income of $70,000 and a
minimum net worth (exclusive of such prospective investor’s home, home
furnishings and automobiles) of $70,000; or (2) a minimum net worth (exclusive
of such prospective investor’s home, home furnishings and automobiles) of
$250,000 or (B) meets the higher suitability standards, if applicable,
imposed by the state in which the investment by such prospective investor is
made. Soliciting
Dealer further will use its best efforts to determine the suitability and
appropriateness of an investment in the Shares for each prospective 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 prospective 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 and 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 prospective investor or
any other information known by Soliciting Dealer after due
inquiry. Notwithstanding the foregoing, Soliciting Dealer shall not
execute any transaction in the Company in a discretionary account without prior
written approval of the transaction by the customer.
(b) Soliciting
Dealer shall maintain, for at least six (6) 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 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 Company 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.
3
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 (5) 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 Company provides Approved Sales
Literature, not use such Approved Sales Literature 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 Company, and Soliciting Dealer is not authorized to act for the Dealer
Manager or the Company.
(c) Soliciting
Dealer will not send or provide supplements to the Prospectus or any Approved
Sales Literature to any prospective investor unless it has previously sent or
provided a Prospectus and all supplements thereto to that prospective 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 prospective investor with, 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.
4
(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 prospective 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 250 Shares for $2,500 or, unless
prohibited by state law, a minimum of 10 Shares for $100 if the purchase is made
jointly by a husband and a wife through their separate XXX or other qualified
accounts. 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 $2,000,000 in Shares has been sold, payments for Shares
shall be made by checks payable to “Xxxxx Fargo Bank, National Association,
Escrow Agent for American Realty Capital – Retail Centers of America,
Inc.”. 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 Xxxxx Fargo
Bank, National Association (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 Company, then the Subscription
Agreement and check will be returned to the rejected subscriber within ten (10)
business days from the date of rejection.
5
Once the
minimum offering of $2,000,000 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 “American Realty
Capital – Retail Centers of America, Inc.” At such time, Soliciting
Dealer shall forward each original check, together with each original
Subscription Agreement, executed and initialed by the subscriber as provided for
in the Subscription Agreement, to American Realty Capital – Retail Centers of
America, Inc., 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 Company 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 Company 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 Company 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 or
Dealer Manager Fees, 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’s
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 up to 7.0% of the gross
proceeds from the Shares sold by it and accepted and confirmed by the
Company. Alternatively, Soliciting Dealer may elect to receive a
selling commission equal to 7.5% of gross proceeds from the sale of Shares by
Soliciting Dealer, with 2.5% thereof paid at the time of such sale and
1.0% thereof paid on each anniversary of the closing of such sale up
to and including the fifth anniversary of the closing of such sale, in which
event, a portion of the Dealer Manager Fee will be reallowed such that the
combined selling commission and Dealer Manager Fee do not exceed 10.0% of gross
proceeds of the Offering. For purposes of this Section 6(a), Shares
are “sold” only if an executed Subscription Agreement is accepted by the Company
and the Company has thereafter distributed the selling 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.
6
(c) Notwithstanding
the foregoing, it is understood and agreed that no selling commission shall be
payable with respect to particular Shares if the Dealer Manager or the Company
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 of the
Offering.
(d) The
Dealer Manager may, in its sole discretion, re-allow all or any portion of the
Dealer Manager Fee received by it to Soliciting Dealer. The Dealer
Manager may, in its sole discretion, request the Company 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 Company and the Company 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 ten percent (10.0%) of the gross proceeds raised from the sale
of Shares in the Offering.
(f) The
Company will not be liable or responsible to Soliciting Dealer for the payment
of any selling commissions or fees or any reallowance of selling commissions or
fees to Soliciting Dealer, such payment and reallowance of selling commissions
and fees being the sole and exclusive responsibility of the Dealer
Manager. Soliciting Dealer acknowledges and agrees that the Dealer
Manager’s liability for selling commissions and fees payable to Soliciting
Dealer is limited solely to selling commissions and fees received by the Dealer
Manager from the Company 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 Company. 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.
7
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 Company that the Shares have been
qualified for sale or are exempt under the respective securities or “blue sky”
laws of such jurisdictions; provided, however, that the Dealer
Manager has not assumed and will not assume any obligation or responsibility as
to Soliciting Dealer’s right or ability to act as a broker and/or dealer with
respect to the Shares in any such jurisdiction. Soliciting Dealer
agrees that it will not make any offers or sell any Shares except in states in
which the Dealer Manager advises Soliciting Dealer that the Offering has been
qualified or is exempt and in which Soliciting Dealer is legally 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
Company 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 has 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. Except
for obligations and liabilities expressly assumed by the Dealer Manager
hereunder or arising from the Dealer Manager’s bad faith, the Dealer Manager
shall not have any liability to Soliciting Dealer for or in respect of (a) the
validity or value of or title to, the Shares; (b) the form of, or the statements
contained in, or the validity of, the Registration Statement, the Prospectus,
any amendment or supplement thereto, or any documents incorporated by reference
therein; (c) any instrument executed by the Company or by others; (d) the form
or validity of the Dealer Manager Agreement or this Agreement; (e) the delivery
of the Shares; (f) the performance by the Company or by others of any agreement
on its or their part; (g) the qualification of the Shares for sale under the
laws of any jurisdiction; or (h) any matter in connection with any of the
foregoing; provided,
however, that nothing in this Section 9 shall be
deemed to relieve the Company or the Dealer Manager from any liability imposed
by the Securities Act. No obligations or liability on the part of the Company or
the Dealer Manager shall be implied or inferred herefrom.
10. Indemnification.
8
(a) Under
the Dealer Manager Agreement, the Company 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 Company 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 Company 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 Company, and their 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 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, (ii) any untrue statement or any
alleged untrue statement of a material fact contained (A) in the Registration
Statement or any post-effective amendment thereto or in the Prospectus or any
amendment or supplement thereto, (B) in any Approved Sales Literature, or (C)
any blue sky application or other document executed by the Company or on its
behalf specifically for the purpose of qualifying any or all of the Shares for
sale under the securities laws of any jurisdiction or based upon written
information furnished by the Company under the securities laws thereof, (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 thereto 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 Company 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 its
representatives or agents or omission by Soliciting Dealer or its 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 Company, 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.
9
(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
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. Company as Party to
Agreement.
10
The
Company shall be a third party beneficiary of Soliciting Dealer’s
representations, warranties, covenants and agreements contained in Sections 10 and 11 of this
Agreement. The Company shall have 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 Company that it has established and implemented
anti-money laundering compliance programs in accordance with applicable law,
including applicable FINRA Conduct Rules, the Exchange Act Rules and Regulations
and the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism 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 Company, provide a certification to the Dealer Manager or the Company
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.
11
15. Miscellaneous.
(a) Soliciting
Dealer hereby authorizes and ratifies the execution and delivery of the Dealer
Manager Agreement by the Dealer Manager as the dealer manager of the Offering
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 the
terms or provisions of the Dealer Manager Agreement 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, 13 and 15, may be terminated
at any time by either party hereto upon two (2) 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, 13 and 15, which shall
survive the expiration or earlier termination of this Agreement.
(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
with a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000)
000-0000
Attention: Xxxxx X. Xxxx,
Esq.
Xxxxxx X.
Xxxxxxx, 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 appearing following
its signature below.
12
(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.
(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 it 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 Company. This Agreement shall be effective for all sales
by Soliciting Dealer on and after the initial Effective Date.
(f) The
Company may authorize the Company’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 Company 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 hereunder. 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.
[Signatures on following
page]
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:
|
||
14
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
Dealer Manager Agreement attached as Exhibit A hereto. The
undersigned dealer hereby represents that it will comply with the applicable
requirements of the Securities Act, the Securities Act Rules and Regulations,
the Exchange Act and the Exchange Act Rules and Regulations, and applicable blue
sky or other state securities laws. The undersigned dealer represents and
warrants that it 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 salespersons 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:
,
2010
|
___________________________________
|
|
|
Name
of Soliciting Dealer
|
||
|
___________________________________
|
||
|
Federal
Identification Number
|
||
|
By:
|
_______________________________
|
|
|
|
Name: | |
|
|
Authorized Signatory | |
Kindly
have checks representing selling commissions forwarded as follows (if different
than above): (Please type or print)
|
Name
of Firm:
|
________________________________________
|
|
Address:
|
________________________________________
|
|
Street
|
|
|
________________________________________
|
|
|
City
|
|
|
________________________________________
|
|
|
State
and Zip Code
|
|
|
________________________________________
|
|
|
Telephone
No.
|
|
|
________________________________________
|
|
|
Fax
No.
|
|
|
Attention:
|
________________________________________
|
SCHEDULE
1
TO
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
|
Exhibit
A
(Dealer
Manager Agreement)
