HINES GLOBAL REIT, INC. Up to 352,631,579 Shares of Common Stock DEALER MANAGER AGREEMENT ______________, 2009
EXHIBIT 1.1
XXXXX GLOBAL REIT, INC.
Up to 352,631,579 Shares of Common Stock
DEALER MANAGER AGREEMENT
______________, 2009
Up to 352,631,579 Shares of Common Stock
DEALER MANAGER AGREEMENT
______________, 2009
Xxxxx Real Estate Securities, Inc.
Suite 5000
0000 Xxxx Xxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Suite 5000
0000 Xxxx Xxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Ladies and Gentlemen:
Xxxxx Global REIT, Inc., a Maryland corporation (the “Company”), is registering for public
sale a maximum of 352,631,579 shares (the “Shares”) of its common stock, $.001 par value per share
(the “Offering”), to be issued and sold for an aggregate purchase price of $3,500,000,000
(300,000,000 to be offered pursuant to the Company’s primary offering at a purchase price of $10.00
per Share and 52,631,579 Shares to be offered pursuant to the Company’s distribution reinvestment
plan at a purchase price of $9.50 per Share). However, the Company is entitled to reallocate Shares
between the primary offering and the offering pursuant to the distribution reinvestment plan. The
minimum purchase by any one person shall be 250 Shares except as otherwise indicated in the
Prospectus or in any letter or memorandum from the Company to Xxxxx Real Estate Securities, Inc.
(the “Dealer Manager”). It is anticipated that the Dealer Manager will enter into Selected Dealer
Agreements in the form attached to this Dealer Manager Agreement as Exhibit “A” with other
broker-dealers participating in the Offering (each dealer being referred to herein as a “Dealer”
and said dealers being collectively referred to herein as the “Dealers”). The Company shall have
the right to approve any material modifications or addendums to the form of the Selected Dealer
Agreement. Terms not defined herein shall have the same meaning as in the Prospectus. In connection
therewith, the Company and the Dealer Manager hereby agree as follows:
1. Representations and Warranties of the Company
The Company represents and warrants to the Dealer Manager and each Dealer with whom the Dealer
Manager enters into a Selected Dealer Agreement that:
1.1. A registration statement with respect to the Company has been prepared by the Company in
accordance with applicable requirements of the Securities Act of 1933, as amended (the “Securities
Act”), and the applicable rules and regulations (the “Rules and Regulations”) of the United States Securities and
Exchange Commission (the “SEC”) promulgated thereunder, covering the Shares. Said registration
statement, which includes a preliminary prospectus, was initially filed with the SEC on
January 14, 2009. Copies of such registration statement and each amendment thereto have been or
will be delivered to the Dealer Manager. The registration statement and prospectus contained
therein when declared effective by the SEC and as may be amended or modified from time to time
thereafter by any amendment (as to the registration
statement) and/or supplements (as to the prospectus) are respectively hereinafter referred to
as the “Registration Statement” and the “Prospectus”.
1.2. The Company has been duly and validly organized and formed as a corporation under the
laws of the State of Maryland, with the power and authority to conduct its business as described in
the Prospectus.
1.3. The Registration Statement and Prospectus comply with the Securities Act and the Rules
and Regulations, and the Prospectus and any and all authorized sales materials prepared or approved
by the Company for use with potential investors in connection with the Offering (“Authorized Sales
Materials”), when used in conjunction with the Prospectus, do not contain any untrue statements of
material facts or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; provided, however, that the foregoing
provisions of this Section 1.3 will not extend to such statements contained in or omitted from the
Registration Statement or Prospectus or Authorized Sales Materials as are primarily within the
knowledge of the Dealer Manager or any of the Dealers and are based upon information either (a)
furnished by a Dealer in writing to the Dealer Manager or the Company, or (b) furnished by the
Dealer Manager in writing to the Company specifically for inclusion therein.
1.4. The Company intends to use the funds received from the sale of the Shares as set forth in
the Prospectus.
1.5. No consent, approval, authorization or other order of any governmental authority is
required in connection with the execution or delivery by the Company of this Dealer Manager
Agreement or the issuance and sale by the Company of the Shares, except such as may be required
under the Securities Act or applicable state securities laws.
1.6. There are no actions, suits or proceedings pending or to the knowledge of the Company,
threatened against the Company at law or in equity or before or by any federal or state commission,
regulatory body or administrative agency or other governmental body, domestic or foreign, which
will have a material adverse effect on the business or property of the Company.
1.7. The execution and delivery of this Dealer Manager Agreement, the consummation of the
transactions herein contemplated and compliance with the terms of this Dealer Manager Agreement by
the Company will not conflict with or constitute a default under any charter, by-law, indenture,
mortgage, deed of trust, lease, rule, regulation, writ, injunction or decree of any government,
governmental instrumentality or court, domestic or foreign, having jurisdiction over the Company,
except to the extent that the enforceability of the indemnity and/or contribution provisions
contained in Section 4 of this Dealer Manager Agreement may be limited under applicable securities
laws.
1.8. The Company has full legal right, power and authority to enter into this Dealer Manager
Agreement and to perform the transactions contemplated hereby, except to the extent that the
enforceability of the indemnity and/or contribution provisions contained in Section 4 of this
Dealer Manager Agreement may be limited under applicable securities laws.
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1.9. The Shares, when subscribed for, paid for and issued, will be duly and validly issued,
fully paid and non-assessable and will conform to the description thereof contained in the
Prospectus; no holder thereof will be subject to personal liability for the obligations of the
Company solely by reason of being such a holder; such Shares are not subject to the preemptive
rights of any stockholder of the Company; and all corporate action required to be taken for the
authorization, issuance and sale of such Shares shall have been validly and sufficiently taken.
1.10. The Company is not in violation of its Articles or its bylaws.
1.11. The financial statements of the Company filed as part of the Registration Statement and
those included in the Prospectus present fairly in all material respects the financial position of
the Company as of the date indicated and the results of its operations for the periods indicated;
said financial statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis.
1.12. The Company does not intend to conduct its business so as to be an “investment company”
as that term is defined in the Investment Company Act of 1940, as amended, and the rules and
regulation thereunder, and it will exercise reasonable diligence to ensure that it does not become
an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
2. Covenants of the Company
The Company covenants and agrees with the Dealer Manager that:
2.1. It will prepare and file with the SEC and each appropriate state securities commission,
at no expense to the Dealer Manager, the Registration Statement, including all amendments and
exhibits thereto. In addition, it will furnish the Dealer Manager, at no expense to the Dealer
Manager, with such number of printed copies of the Registration Statement, including all amendments
and exhibits thereto, as the Dealer Manager may reasonably request. It will similarly furnish to
the Dealer Manager and others designated by the Dealer Manager as many copies as the Dealer Manager
may reasonably request in connection with the offering of the Shares of: (a) the Prospectus in
preliminary and final form and every form of supplemental or amended prospectus; and (b) this
Dealer Manager Agreement.
2.2. It will prepare and file with the appropriate regulatory authorities, at no expense to
the Dealer Manager, the Authorized Sales Materials. In addition, it will furnish the Dealer
Manager, at no expense to the Dealer Manager, with such number of printed copies of Authorized
Sales Materials as the Dealer Manager may reasonably request.
2.3. It will furnish such proper information and execute and file such documents as may be
necessary for the Company to qualify the Shares for offer and sale under the securities laws of
such jurisdictions in the United States as the Dealer Manager may reasonably designate and will
file and make in each year such statements and reports as may be required. The Company will furnish
to the Dealer Manager a copy of such papers filed by the Company in connection with any such
qualification.
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2.4. It will use its best efforts to cause the Registration Statement to become effective with
the SEC and each state securities commission which it deems appropriate in its sole discretion. If
at any time the SEC or any state securities commission shall issue any stop order suspending the
effectiveness of the Registration Statement, and to the extent the Company determines that such
action is in the best interest of its stockholders, it will use its best efforts to obtain the
lifting of such order at the earliest possible time.
2.5. If at any time when a Prospectus is required to be delivered under the Securities Act any
event occurs as a result of which, in the opinion of either the Company or the Dealer Manager, the
Prospectus or any other prospectus then in effect would include an untrue statement of a material
fact or, in view of the circumstances under which they were made, omit to state any material fact
necessary to make the statements therein not misleading, the Company will promptly notify the
Dealer Manager thereof (unless the information shall have been received from the Dealer Manager)
and will effect the preparation of an amended or supplemental prospectus which will correct such
statement or omission. The Company will then promptly prepare such amended or supplemental
prospectus or prospectuses as may be necessary to comply with the requirements of Section 10 of the
Securities Act.
2.6. Each of the representations and warranties contained in this Dealer Manager Agreement are
true and correct and the Company will comply with each covenant and agreement contained in this
Dealer Manager Agreement.
2.7. It will be duly qualified to do business as a foreign corporation in each jurisdiction in
which it will own or lease property of a nature, or transact business of a type, that will make
such qualification necessary.
2.8. It intends to satisfy the requirements of the Internal Revenue Code of 1986, as amended
(the “Code”), for qualification of the Company as a real estate investment trust. The Company will
elect to be treated as a real estate investment trust under the Code at such time as it so
qualifies and will direct the investment of the proceeds of the offering of the Shares in such a
manner, and will exercise reasonable diligence to operate the business of the Company so as to
comply with such requirements.
3. Obligations and Compensation of Dealer Manager
3.1. The Company hereby appoints the Dealer Manager as its agent and principal distributor for
the purpose of selling for cash up to a maximum of 352,631,579 Shares through the Dealers, all of
whom shall be members in good standing of the Financial Industry Regulatory Authority
(“FINRA”). The Dealer Manager may also sell Shares for cash directly to its own clients, customers
and employees (and certain family members of the Company and the Dealer Manager and their
affiliates), subject to the terms and conditions stated in the Prospectus. The Dealer Manager
hereby accepts such agency and distributorship and agrees to use its best efforts to sell the
Shares on said terms and conditions. The Dealer Manager represents to the Company that it is a
member in good standing of FINRA and that it and its employees and representatives have all
required licenses and registrations to act under this Dealer Manager Agreement.
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3.2. Promptly after the effective date of the Registration Statement, but in no event prior to
the effective date of the Registration Statement, the Dealer Manager and the Dealers shall commence
the offering of the Shares for cash to the public in jurisdictions in which the Shares are
registered or qualified for sale or in which such offering is otherwise permitted. The Dealer
Manager and the Dealers will suspend or terminate offering of the Shares upon request of the
Company at any time and will resume offering the Shares upon subsequent request of the Company.
3.3. Except as otherwise provided in the “Plan of Distribution” section of the Prospectus, as
compensation for the services rendered by the Dealer Manager, the Company agrees that it will pay
to the Dealer Manager selling commissions in the amount of 7.5% of the gross proceeds of the Shares
sold in the primary offering, of which
up to 7.0% of gross offering proceeds of the Shares sold in the primary offering may be reallowed
to Dealers, plus a dealer manager fee in the amount of 2.5% of the gross proceeds of the Shares
sold to the public in the primary offering, of which up to 1.5% of the gross proceeds of the Shares
sold to the public in the primary offering may be paid by the Dealer Manager to Dealers. No selling
commissions or dealer
manager fee shall be paid with respect to Shares sold pursuant to the Company’s distribution
reinvestment plan. The Company may also reimburse the Dealer Manager, which may in turn reimburse
the Dealers, up to a maximum of 0.5% of the gross proceeds raised in the primary Offering
for bona fide out of pocket itemized and
detailed due diligence expenses. Notwithstanding the foregoing, no commissions, payments or
amounts whatsoever will be paid to the Dealer Manager under this Section 3.3 unless or until
$2,000,000 in Shares have been sold by the Dealer Manager and the Dealers to at least 100
subscribers who are independent of us and of each other before [ ], one year from the date
of the Prospectus (the “Minimum Offering”) or any higher amount of Shares, as may be
required by
various states as specified in the Prospectus or in any memorandum delivered to you (“Higher
Minimum Offering”). Until the Minimum Offering or Higher Minimum Offering,
as applicable, is obtained, proceeds from
the sale of Shares will be held in escrow and, if the Minimum Offering or Higher Minimum Offering,
as applicable, is not obtained, will be
returned to the investors in accordance with the terms of the Prospectus. The Company will not be
liable or responsible to any Dealer for direct payment of commissions or reimbursements to any
Dealer, it being the sole and exclusive responsibility of the Dealer Manager for payment of
commissions, fees and reimbursements to Dealers. Notwithstanding the above, at the discretion of
the Company, the Company may act as agent of the Dealer Manager by making direct payment of
commissions to Dealers on behalf of the Dealer Manager without incurring any liability
therefor.
3.4. The Dealer Manager represents and warrants to the Company and each person that signs the
Registration Statement that the information under the caption “Plan of Distribution” in the
Prospectus and all other information furnished to the Company by the Dealer Manager in writing
expressly for use in the Registration Statement, the Prospectus, or any Authorized Sales Materials
does not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not misleading.
3.5. The Dealer Manager represents and warrants to the Company that it will not use any sales
literature not authorized and approved by the Company, use any “broker-dealer
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use only” materials with members of the public, or make any unauthorized verbal
representations in connection with offers or sales or the Shares. The Dealer Manager further
represents and warrants to the Company that it shall promptly (a) notify the Dealers of any
supplement or amendment to the Prospectus or Authorized Sales Materials, and (b) supply the Dealers
with reasonable quantities of the Prospectus, any Authorized Sales Materials and any supplements or
amendments thereto, to the extent provided to the Dealer Manager by the Company.
3.6. The Dealer Manager agrees to be bound by the terms of the Escrow Agreement executed as of
___, 2009, by UMB Bank, N.A., as escrow agent, the Dealer Manager and the Company.
4. Indemnification
4.1. The Company will indemnify and hold harmless the Dealers and the Dealer Manager, their
officers and directors and each person, if any, who controls such Dealer or Dealer Manager within
the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”) from and against any losses, claims, damages or liabilities,
joint or several, to which such Dealers or Dealer Manager, their officers and directors, or such
controlling person may become subject, under the Securities Act or the Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon (a) any untrue statement or alleged untrue statement of a material fact contained
(i) in any Registration Statement (including the Prospectus as a part thereof) or any
post-effective amendment thereto or in the Prospectus or any amendment or supplement to the
Prospectus, or (ii) in any Authorized Sales Materials (when read in conjunction with the
Prospectus), or (iii) any blue sky application or other document executed by the Company or on its
behalf specifically for the purpose of qualifying any or all of the Shares for sale under the
securities laws of any jurisdiction or based upon written information furnished by the Company
under the securities laws thereof (any such application, document or information being hereinafter
called a “Blue Sky Application”), or (b) the omission or alleged omission to state in the
Registration Statement (including the Prospectus as a part thereof), Authorized Sales Materials
(when read in conjunction with the Prospectus), or in any Blue Sky Application a material fact
required to be stated therein or necessary to make the statements therein not misleading. The
Company will reimburse the Dealer Manager, and its officers and directors and controlling persons,
for any reasonable legal or other expenses reasonably incurred by the Dealer Manager, and its
officers and directors and controlling persons, in connection with investigating or defending such
loss, claim, damage, liability or action; provided that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of, or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with written information furnished to the Company by the Dealer Manager for
use in the preparation of the Registration Statement, the Prospectus, such Authorized Sales
Materials, or any such Blue Sky Application; and further provided that the Company will not be
liable in any such case if it is determined that the Dealer Manager had knowledge of the matter or
event giving rise to or resulting in such loss, claim, damage, liability or action.
4.2. The Dealer Manager will indemnify and hold harmless the Company and its officers and
directors (including any persons named in any of the Registration Statements
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with his consent, as about to become a director), each person who has signed any of the
Registration Statements and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any losses,
claims, damages or liabilities to which any of the aforesaid parties may become subject, under the
Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (a) any untrue statement
of a material fact contained in the Registration Statement (including the Prospectus as a part
thereof), or any Authorized Sales Materials (when read in conjunction with the Prospectus), or any
Blue Sky Application, or (b) the omission to state in the Registration Statement (including the
Prospectus as a part thereof), Authorized Sales Materials (when read in conjunction with the
Prospectus) or in any Blue Sky Application a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case described in clauses (a) and
(b) to the extent, but only to the extent, that such untrue statement or omission was made in
reliance upon and in conformity with written information furnished to the Company by or on behalf
of the Dealer Manager specifically, the Prospectus, such for use with reference to the Dealer
Manager in the preparation of the Registration Statement Authorized Sales Materials or any such
Blue Sky Application, or (c) any failure of the Dealer Manager to comply with its obligations
contained in Section 3.5 hereof, or (d) any untrue statement made by the Dealer Manager 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 Shares, or (e) any material violation of this Agreement by the Dealer
Manager, or (f) any failure to comply with applicable laws governing money laundry abatement and
anti-terrorist financing efforts, including applicable rules of FINRA, including the NASD Conduct
Rules, SEC Rules and the USA PATRIOT Act of 2001, or (g) any other failure by the Dealer Manager,
to comply with applicable rules of FINRA, including the NASD Conduct Rules, or SEC Rules. The
Dealer Manager will reimburse the aforesaid parties, in connection with investigation or defending
such loss, claim, damage, liability or action. This indemnity agreement will be in addition to any
liability which the Dealer Manager may otherwise have.
4.3. The Company and the Dealer Manager will jointly and severally indemnify and hold harmless
each Dealer, its officers and directors and each person, if any, who controls such Dealer within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against
any losses, claims, damages or liabilities, joint or several, to which such Dealer, its officers
and directors, or any such controlling person may become subject, under the Securities Act or the
Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (a) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (including the Prospectus as a
part thereof), Authorized Sales Materials (when read in conjunction with the Prospectus) or any
Blue Sky Application, or (b) the omission or alleged omission to state in the Registration
Statement (including the Prospectus), Authorized Sales Material (when read in conjunction with the Prospectus)
or in any Blue Sky Application a material fact required to be
stated therein or necessary to make the statements therein not misleading. The Company and the
Dealer Manager will reimburse Dealers and their officers and directors and controlling persons, for
any reasonable legal or other expenses reasonably incurred by such Dealers and their officers and
directors and controlling persons, in connection with investigating or defending such loss, claim,
damage, liability or action; provided that the Company and the Dealer Manager will not be liable in
any such case to the extent that
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any such loss, claim, damage or liability arises out of, or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity
with written information furnished to the Company or the Dealer Manager by or on behalf of the
Dealers specifically for use in the preparation of the Registration Statement, the Prospectus, such
Authorized Sales Materials or any such Blue Sky Application; and further provided that neither the
Company nor the Dealer Manager will be liable in any such case if it is determined in a legal
proceeding that the Dealers had knowledge of the matter or event giving rise to or resulting in
such loss, claim, damage, liability or action.
Notwithstanding the foregoing, as required by Section II.G. of the Statement of Policy
Regarding Real Estate Investment Trusts of the North American Securities Administrators
Association, Inc. (the “NASAA REIT Guidelines”), the indemnifications and agreements to hold
harmless are further limited to the extent that no such indemnification by the Company of the
Dealer Manager, or its officers, directors or control persons, pursuant to Section 4.1 above or by
the Company or the Dealer Manager of a Dealer, or its officers, directors or control persons,
pursuant to this Section 4.3 shall be permitted under this Agreement for, or arising out of, an
alleged violation of federal or state securities laws, unless one or more of the following
conditions are met: (a) there has been a successful adjudication on the merits of each count
involving alleged securities law violations as to the particular indemnitee; (b) such claims have
been dismissed with prejudice on the merits by a court of competent jurisdiction as to the
particular indemnitee; or (c) a court of competent jurisdiction approves a settlement of the
claims against the indemnitee and finds that indemnification of the settlement and the related
costs should be made, and the court considering the request for indemnification has been advised of
the position of the SEC and of the published position of any state securities regulatory authority
in which the securities were offered or sold as to indemnification for violations of securities
laws.
4.4. Each Dealer, by its execution of a Selected Dealer Agreement with the Dealer Manager,
severally will indemnify and hold harmless the Company, the Dealer Manager and each of their
respective officers and directors (including any persons named in any of the Registration
Statements with his consent, as about to become a director), each person who has signed any of the
Registration Statements and each person, if any, who controls the Company and the Dealer Manager
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any losses, claims, damages or liabilities to which the Company, the Dealer Manager, any
such director or officer, or controlling person may become subject, under the Securities Act or the
Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (a) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (including the Prospectus as a
part thereof), Authorized Sales Materials (when read in conjunction with the Prospectus), or any
Blue Sky Application, or (b) the omission or alleged omission to state in the Registration
Statement (including the Prospectus as a part thereof), any Authorized Sales Materials (when read
in conjunction with the Prospectus) or in any Blue Sky Application a material fact required to be
stated therein or necessary to make the statements therein not misleading, in each case described
in clauses (a) and (b) to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company or the Dealer Manager by or on behalf of such Dealer
specifically for use with reference to such
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Dealer in the preparation of the Registration Statement, such Authorized Sales Materials or any
such Blue Sky Application, or (c) any use of sales literature not authorized or approved by the
Company or use of “broker-dealer use only” materials with members of the public or unauthorized
verbal representations concerning the Shares by such Dealer or Dealer’s representatives or agents,
or (d) any untrue statement made by such 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 Shares, or (e)
any failure by such Dealer to comply with Section VIII or Section X or any other material
violation of the Selected Dealer Agreement, or (f) any failure to comply with applicable laws
governing money laundry abatement and anti-terrorist financing efforts, including applicable rules
of FINRA, including the NASD Conduct rules, SEC Rules and the USA PATRIOT Act of 2001, or (g) any
other failure to comply with applicable rules of FINRA, including the NASD Conduct rules or SEC
Rules. Each such Dealer will reimburse the Company and the Dealer Manager and any such directors or
officers, or controlling person, in connection with investigating or defending any such loss,
claim, damage, liability or action. This indemnity agreement will be in addition to any liability
which such Dealer may otherwise have.
4.5. Promptly after receipt by an indemnified party under this Section 4 of notice of the
commencement of any action (but in no event in excess of 30 days after receipt of actual notice),
such indemnified party will, if a claim in respect thereof is to be made against any indemnifying
party under this Section 4, notify in writing the indemnifying party of the commencement thereof
and the omission so to notify the indemnifying party will relieve it from any liability under this
Section 4 as to the particular item for which indemnification is then being sought, but not from
any other liability which it may have to any indemnified party. In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the commencement thereof,
the indemnifying party will be entitled, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to participate in the defense thereof, with
separate counsel. Such participation shall not relieve such indemnifying party of the
obligation to reimburse the indemnified party for reasonable legal and other expenses (subject to
Section 4.6) incurred by such indemnified party in defending itself, except for such expenses
incurred after the indemnifying party has deposited funds sufficient to effect the settlement, with
prejudice, of the claim in respect of which indemnity is sought. Any such indemnifying party shall
not be liable to any such indemnified party on account of any settlement of any claim or action
effected without the consent of such indemnifying party.
4.6. The indemnifying party shall pay all reasonable legal fees and expenses of the
indemnified party in the defense of such claims or actions; provided, however, that the
indemnifying party shall not be obliged to pay legal expenses and fees to more than one law firm in
connection with the defense of similar claims arising out of the same alleged acts or omissions
giving rise to such claims notwithstanding that such actions or claims are alleged or brought by
one or more parties against more than one indemnified party. If such claims or actions are alleged
or brought against more than one indemnified party, then the indemnifying party shall only be
obliged to reimburse the expenses and fees of the one law firm that has been selected by a majority
of the indemnified parties against which such action is finally brought; and in the event a
majority of such indemnified parties is unable to agree on which law firm for which expenses or
fees will be reimbursable by the indemnifying party, then payment shall be made to
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the first law firm of record representing an indemnified party against the action or claim.
Such law firm shall be paid only to the extent of services performed by such law firm and no
reimbursement shall be payable to such law firm on account of legal services performed by another
law firm.
4.7. The indemnity agreements contained in this Section 4 shall remain operative and in full
force and effect regardless of (a) any investigation made by or on behalf of any Dealer, or any
person controlling any Dealer or by or on behalf of the Company, the Dealer Manager or any officer
or director thereof, or by or on behalf of the Company or the Dealer Manager, (b) delivery of any
Shares and payment therefor, and (c) any termination of this Dealer Manager Agreement or any
Selected Dealer Agreement. A successor of any Dealer or of any of the parties to this Dealer
Manager Agreement, as the case may be, shall be entitled to the benefits of the indemnity
agreements contained in this Section 4.
5. Survival of Provisions
The respective agreements, representations and warranties of the Company and the Dealer
Manager set forth in this Dealer Manager Agreement shall remain operative and in full force and
effect regardless of (a) any termination of this Dealer Manager Agreement, (b) any investigation
made by or on behalf of the Dealer Manager or any Dealer or any person controlling the Dealer
Manager or any Dealer or by or on behalf of the Company or any person controlling the Company, and
(c) the acceptance of any payment for the Shares. The provisions of Sections 4 and 6 hereof shall
also survive such termination.
6. Applicable Law
This Dealer Manager Agreement was executed and delivered in, and its validity, interpretation
and construction shall be governed by, the laws of the State of Texas; provided however, that
causes of action for violations of federal or state securities laws shall not be governed by this
Section. The Company, the Dealer Manager and each Dealer hereby acknowledges and agrees that venue
for any action brought hereunder or in connection herewith shall lie exclusively in Houston, Texas.
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7. Counterparts
This Dealer Manager Agreement may be executed in any number of counterparts. Each counterpart,
when executed and delivered, shall be an original contract, but all counterparts, when taken
together, shall constitute one and the same agreement.
8. Successors and Amendment
8.1. This Dealer Manager Agreement shall inure to the benefit of and be binding upon the
Dealer Manager and the Company and their respective successors, and to the benefit of the Dealers
to the extent set forth in Sections 1 and 4 hereof. Nothing in this Dealer Manager Agreement is
intended or shall be construed to give to any other person any right, remedy or claim, except as
otherwise specifically provided herein.
8.2. This Dealer Manager Agreement may be amended by the written agreement of the Dealer
Manager and the Company.
9. Term
This Dealer Manager Agreement may be terminated by either party (a) immediately upon notice to
the other party in the event that the other party shall have materially failed to comply with any
of the material provisions of this Dealer Manager Agreement on its part to be performed during the
term of this Agreement or if any of the representations, warranties, covenants or agreements of
such party contained herein shall not have been materially complied with or satisfied within the
times specified or (b) on 60 days’ written notice.
In any case, this Dealer Manager Agreement shall expire at the close of business on the
effective date that the Offering is terminated. In addition, the Dealer Manager, upon the expiration or termination of
this Dealer Manager Agreement, shall (a) promptly deposit any and all funds in its possession which
were received from investors for the sale of Shares into the appropriate escrow account or, if the
Minimum Offering or the Higher Minimum Offering,
as applicable, has been obtained, into such other account as the
Company may designate; and (b) promptly deliver to the Company all records and documents in its
possession which relate to the Offering which are not designated as dealer copies. The Dealer
Manager, at its sole expense, may make and retain copies of all such records and documents, but
shall keep all such information confidential. The Dealer Manager shall use its best efforts to
cooperate with the Company to accomplish any orderly transfer of management of the Offering to a
party designated by the Company. Upon expiration or termination of this Dealer Manager Agreement,
the Company shall pay to the Dealer Manager all compensation to which the Dealer Manager is or
becomes entitled under Section 3, including
commissions and dealer manager fees, at such time as such
compensation become payable.
10. Confirmation
The Company hereby agrees to prepare and send confirmations to all purchasers of Shares whose
subscriptions for the purchase of Shares are accepted by the Company.
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11. Suitability of Investors
The Dealer Manager will offer Shares, and in its agreements with Dealers will require that the
Dealers offer Shares, only to persons who meet the suitability standards set forth in the
Prospectus or in any suitability letter or memorandum sent to it by the Company and will only make
offers to persons in the states in which it is advised in writing that the Shares are qualified for
sale or that such qualification is not required. In offering Shares, the Dealer Manager will, and
in its agreements with Dealers, the Dealer Manager will, require that the Dealers comply with the
provisions of all applicable rules and regulations relating to suitability of investors, including
without limitation, the provisions of Article III.C. and Article III.E.1 of the NASAA REIT
Guidelines.
12. Submission of Orders
12.1. Those persons who purchase Shares will be instructed by the Dealer
Manager or the Dealer
to make their checks payable or wire funds to an escrow agent for the Company, whenever
appropriate, or to the
Company after the Minimum Offering or the Higher Minimum Offering,
as applicable, has been achieved. The Dealer Manager and any Dealer receiving a
check not conforming to the foregoing instructions shall return such check directly to such
subscriber not later than the end of the next business day following its receipt. Checks received
by the Dealer Manager or Dealer which conform to the foregoing instructions shall be transmitted
for deposit pursuant to one of the methods described in this Section 12. Transmittal of received
investor funds will be made in accordance with the following procedures.
12.2. Where, pursuant to a Dealer’s internal supervisory procedures, internal supervisory
review is conducted at the same location at which subscription documents and checks are received
from subscribers, checks will be transmitted by the end of the next business day following receipt
by the Dealer to the Company for deposit with an escrow agent, where appropriate, or for deposit
directly with the Company after the Minimum Offering has been achieved.
12.3. Where, pursuant to a Dealer’s internal supervisory procedures, final internal
supervisory review is conducted at a different location, checks will be transmitted by the end of
the next business day following receipt by the Dealer to the office of the Dealer conducting such
final internal supervisory review (the “Final Review Office”). The Final Review Office will in turn
transmit by the end of the next business day following receipt at a different location by the Final
Review Office such checks to the Company for deposit with an escrow agent, where appropriate, or
for deposit directly with the Company after the Minimum Offering or the Higher Minimum Offering,
as applicable, has been achieved.
If the foregoing correctly sets forth our understanding, please indicate your acceptance
thereof in the space provided below for that purpose, whereupon this letter and your acceptance
shall constitute a binding agreement between us as of the date first above written.
| Very truly yours, XXXXX GLOBAL REIT, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Accepted and agreed as of the date first above written.
| XXXXX REAL ESTATE SECURITIES, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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