BUSINESS DEVELOPMENT CORPORATION OF AMERICA FORM OF SOLICITING DEALER AGREEMENT
BUSINESS
DEVELOPMENT CORPORATION OF AMERICA
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
January __, 2011 (the “Dealer
Manager Agreement”), with Business Development Corporation of America a
Maryland corporation that intends to elect to be treated as a business
development company under the Investment Company Act of 1940, as amended, (the
“Company”),
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 up to 150,000,000 shares of the Company’s common stock, par value $0.001 per
share (the “Shares”), on a continuous basis, for a purchase price of $10.00 per
Share, with a minimum initial investment of $1,000, commencing on the Effective
Date (as defined below). Unless otherwise defined herein, capitalized
terms used herein shall have the respective meanings therefor as in the Dealer
Manager Agreement.
In
connection with the performance of the Dealer Manager’s obligations under
Section 3 of the Dealer Manager Agreement, the Dealer Manager is authorized to
retain the services of securities dealers (the “Soliciting
Dealers”) who are members of the Financial Industry Regulatory Authority
(“FINRA”)
to solicit subscriptions for Shares in connection with the
Offering. You are hereby invited to become a Soliciting Dealer and,
as such, to use your reasonable best efforts to solicit subscribers for the
Shares, in accordance with the following terms and conditions of this soliciting
dealer agreement (this “Agreement”):
1. Registration
Statement.
(a)
A registration statement on Form N-2 (File No. 333- 166636), including a
preliminary prospectus, has been prepared by the Company and was filed with the
Securities and Exchange Commission (the “Commission”)
on May 7, 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 thereto
and such amended prospectus as may have been required to the date hereof, and
will file such additional amendments and supplements thereto as may hereafter be
required. The registration statement on Form N-2 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 Rule 497 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 Rule 497, 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.
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2. Compliance with Applicable
Rules and Regulations; License and Association Membership.
Upon the
effectiveness of this Agreement, the undersigned dealer will become one of the
“Soliciting Dealers” referred to in the Dealer Manager Agreement and is referred
to herein as “Soliciting
Dealer”). Soliciting Dealer agrees that solicitation and other activities
by it hereunder shall comply with, and shall be undertaken only in accordance
with, the terms of the Dealer Manager Agreement, the terms of this Agreement,
the Securities Act, the Securities Act Rules and Regulations, the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”) and the applicable rules and regulations promulgated thereunder
(the “Exchange
Act Rules and Regulations”), the Blue Sky Survey (as defined below), the
Rules of Fair Practice of FINRA, the FINRA Conduct Rules (including, without
limitation, Rules 2340, 2420, 2730, 2740, 2750 and 2810 of the FINRA Conduct
Rules), and the provisions of Article III.C. of the Statement of Policy
Regarding Real Estate Investment Trusts of the North American Securities
Administrators Association, Inc., as revised and amended on May 7, 2007 and as
may be further revised and amended (the “NASAA
Guidelines”).
Soliciting
Dealer’s acceptance of this Agreement constitutes a representation to the
Company and to the Dealer Manager that Soliciting Dealer is a properly
registered or licensed broker-dealer, duly authorized to sell Shares under
federal and state securities laws and regulations in all states where it offers
or sells Shares, and that it is a member in good standing of
FINRA. Soliciting Dealer represents and warrants that it is currently
licensed as a broker-dealer in the jurisdictions identified on Schedule 1 to
this Agreement and that its independent contractors and registered
representatives have the appropriate licenses to offer and sell the Shares in
such jurisdictions. This Agreement shall automatically terminate with no further
action by either party if Soliciting Dealer ceases to be a member in good
standing of FINRA or with the securities commission of the state in which
Soliciting Dealer’s principal office is located. Soliciting Dealer
agrees to notify the Dealer Manager immediately if Soliciting Dealer ceases to
be a member in good standing of FINRA or with the securities commission of any
state in which Soliciting Dealer is currently registered or
licensed.
3. Limitation of Offer;
Investor Suitability.
(a) Soliciting
Dealer will offer Shares only (i) to persons that meet the financial
qualifications set forth in the Prospectus or in any suitability letter or
memorandum sent to it by the 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 securities business in
such jurisdiction. In offering Shares, Soliciting Dealer shall comply
with the provisions of the Rules of Fair Practice set forth in the FINRA Manual,
as well as other applicable rules and regulations relating to suitability of
investors, including, but not limited to, the provisions of Section III.C. of
the NASAA REIT Guidelines.
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In
offering the sale of Shares to any person, Soliciting Dealer will have
reasonable grounds to believe (based on such information obtained from the
investor concerning the investor’s age, investment objectives, other
investments, financial situation, needs or any other information known by
Soliciting Dealer after due inquiry) that: (A) such person is in a
financial position appropriate to enable such person to realize to a significant
extent the benefits described in the Prospectus, including the tax benefits
where they are a significant aspect of the Company; (B) the investor has a fair
market net worth sufficient to sustain the risks inherent in the program,
including loss of investment and lack of liquidity; (C) the purchase of the
Shares is otherwise suitable for such person; and (D) such person has either:
(1) a minimum annual gross income of $70,000 and a minimum net worth (exclusive
of home, home furnishings and automobiles) of $70,000; or (2) a minimum net
worth (determined with the foregoing exclusions) of $250,000 and meets the
higher suitability standards, if applicable, imposed by the state in which the
investment by such investor is made. Soliciting Dealer
further will use its best efforts to determine the suitability and
appropriateness of an investment in the Shares of each proposed investor
solicited by a person associated with Soliciting Dealer by reviewing documents
and records disclosing the basis upon which the determination as to suitability
was reached as to each proposed investor, whether such documents and records
relate to accounts which have been closed, accounts which are currently
maintained or accounts hereinafter established. In making the
determinations as to financial qualifications and as to suitability required by
the NASAA Guidelines, Soliciting Dealer may rely on (x) representations from
investment advisers who are not affiliated with Soliciting Dealer, banks acting
as trustees or fiduciaries, and (y) information it has obtained from a
prospective investor, including such information as the investment objectives,
other investments, financial situation and needs of the person or any other
information known by Soliciting Dealer after due
inquiry. Notwithstanding the foregoing, Soliciting Dealer shall not
execute any transaction in the Company in a discretionary account without prior
written approval of the transaction by the customer.
(b) Soliciting
Dealer shall maintain, for at least six years or for a period of time not less
than that required in order to comply with all applicable federal, state and
other regulatory requirements, whichever is later, a record of the information
obtained to determine that an investor meets the suitability standards imposed
on the offer and sale of the Shares (both at the time of the initial
subscription and at the time of any additional subscriptions) and a
representation of the investor that the investor is investing for the investor’s
own account or, in lieu of such representation, information indicating that the
investor for whose account the 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.
4. Delivery of Prospectus and
Approved Sales Literature.
(a) Soliciting
Dealer will: (i) deliver a Prospectus, as then supplemented or
amended, to each person who subscribes for Shares at least five business days
prior to the tender of such person’s subscription agreement (the “Subscription
Agreement”); (ii) promptly comply with the written request of any person
for a copy of the Prospectus, as then supplemented or amended, during the period
between the initial Effective Date and the termination of the Offering; (iii)
deliver to any person, in accordance with applicable law or as prescribed by any
state securities administrator, a copy of any prescribed document included
within or incorporated by reference in the Registration Statement and any
supplements thereto during the course of the Offering; (iv) not use any sales
materials in connection with the solicitation of purchasers of the Shares except
Approved Sales Literature; (v) to the extent the Company provides Approved Sales
Literature, not use such materials unless accompanied or preceded by the
Prospectus, as then currently in effect, and as may be supplemented in the
future; and (vi) not give or provide any information or make any representation
or warranty other than information or representations contained in the
Prospectus or the Approved Sales Literature. Soliciting Dealer will
not publish, circulate or otherwise use any other advertisement or solicitation
material in connection with the Offering without the Dealer Manager’s express
prior written approval.
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(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 investor unless it has previously sent or provided a
Prospectus and all supplements thereto to that investor or has simultaneously
sent or provided a Prospectus and all supplements thereto with such Prospectus
supplement or Approved Sales Literature.
(d) Soliciting
Dealer will not show to or provide any investor or reproduce any material or
writing which is supplied to it by the Dealer Manager and marked “broker-dealer
use only” or otherwise bearing a legend denoting that it is not to be used in
connection with the offer or sale of Shares to members of the
public.
(e) The
Dealer Manager will supply Soliciting Dealer with reasonable quantities of the
Prospectus (including any supplements thereto), as well as any Approved Sales
Literature, for delivery to investors.
(f) Soliciting
Dealer shall furnish a copy of any revised preliminary Prospectus to each person
to whom it has furnished a copy of any previous preliminary Prospectus, and
further agrees that it will mail or otherwise deliver all preliminary and final
Prospectuses required for compliance with the provisions of Rule 15c2-8 under
the Exchange Act.
5. Submission of Orders; Right
to Reject Orders.
(a) Subject
to certain individual state requirements as described in the Prospectus, Shares
may be sold only to investors who initially purchase a minimum of 100 Shares for
$1,000 or, unless prohibited by state law, a husband and wife may jointly
contribute funds from their separate individual retirement accounts, or IRAs,
provided that each such contribution is made in increments of
$500. 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 $2,500,000 in Shares has been sold, payments for Shares
shall be made by checks payable to “Xxxxx Fargo Bank as agent for Business
Development Corporation of America. 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. If the
minimum amount has not been obtained prior to the termination date, the Escrow
Agent shall, promptly within a reasonable time following the termination date,
but in no event more than thirty (30) days after the termination date, refund to
each investor by check funds deposited in the Escrow Account, or shall return
the instruments of payment delivered to Escrow Agent if such instruments have
not been processed for collection prior to such time, directly to each investor
at the address provided in the list of investors.
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 10
business days from the date of rejection.
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Once the
minimum offering of $2,500,000 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 “Business Development
Corporation of America.” At such time, Soliciting Dealer shall
forward original checks together with an original Subscription Agreement,
executed and initialed by the subscriber as provided for in the Subscription
Agreement, to Business Development Corporation of America, 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, the
Dealer Manager shall have the right to offset amounts owned against future
commissions or dealer manager fees due and otherwise payable to Soliciting
Dealer (it being understood and agreed that such right to offset shall not be in
limitation of any other rights or remedies that the Dealer Manager may have in
connection with such failure).
6. Soliciting Dealer
Compensation.
(a)
Subject to the terms and conditions set forth herein and in the Dealer Manager
Agreement and, subject to the volume discounts and other special circumstances
described in the “Plan of Distribution” section of the Prospectus, the Dealer
Manager shall pay to Soliciting Dealer a selling commission of up to 7.0% of the
gross proceeds from the Shares sold by it and accepted and confirmed by the
Company. Alternatively, a Soliciting Dealer may elect to receive a fee equal to
7.5% of gross proceeds from the sale of Shares by such Soliciting Dealer, with
2.5% thereof paid at the time of such sale and 1% 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% 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 commission to the Dealer Manager
in connection with such transaction.
(b) Notwithstanding
the foregoing, it is understood and agreed that no commission shall be payable
with respect to particular Shares if the Dealer Manager or the 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.
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(c) The
Dealer Manager may, in its sole discretion, re-allow a portion of the Dealer
Manager Fee received by it to Soliciting Dealer. The Dealer Manager
may, in its sole 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.
(d) Certain
marketing expenses such as Soliciting Dealer conferences may be advanced to
Soliciting Dealer and later deducted from the portion of the Dealer Manager Fee
re-allowed to that Soliciting Dealer. If the Offering is not
consummated, Soliciting Dealer will repay any such advance to the extent not
expended on marketing expenses. Any such advance shall be deducted
from the maximum amount of the Dealer Manager Fee that may otherwise be
re-allowable to Soliciting Dealer. Notwithstanding anything herein to
the contrary, Soliciting Dealer will not be entitled to receive any Dealer
Manager Fee which would cause the aggregate amount of selling commissions,
dealer manager fees and other forms of underwriting compensation (as defined in
accordance with applicable FINRA rules) received by the Dealer Manager and all
Soliciting Dealers to exceed 10.0% of the gross proceeds raised from the sale of
Shares in the Offering.
(e) The
Company will not be liable or responsible to any Soliciting Dealer for the
payment of any selling commissions or any reallowance of fees to Soliciting
Dealer, it being the sole and exclusive responsibility of the Dealer Manager for
the payment of selling commissions or any reallowance to Soliciting
Dealer. Soliciting Dealer acknowledges and agrees that the Dealer
Manager’s liability for commissions payable to Soliciting Dealer is limited
solely to commissions received by the Dealer Manager from the 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.
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; but the Dealer Manager has not assumed and will not
assume any obligation or responsibility as to Soliciting Dealer’s right to act
as a broker and/or dealer with respect to the Shares in any such jurisdiction.
Soliciting Dealer agrees that Soliciting Dealer will not make any offers or sell
any Shares except in states in which the Dealer Manager may advise Soliciting
Dealer that the Offering has been qualified or is exempt and in which Soliciting
Dealer is legally 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.
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(b) It
is understood and agreed that under no circumstances will Soliciting Dealer, as
a Soliciting Dealer, engage in any activities hereunder in any jurisdiction in
which Soliciting Dealer may not lawfully so engage or in any activities in any
jurisdiction with respect to the Shares in which Soliciting Dealer may lawfully
so engage unless Soliciting Dealer have complied with the provisions
hereof.
9. Dealer Manager’s
Authority. Subject to the Dealer Manager Agreement, the Dealer Manager
shall have full authority to take such action as it may deem advisable with
respect to all matters pertaining to the Offering or arising thereunder. The
Dealer Manager shall not be under any liability to Soliciting Dealer (except for
(a) its own lack of good faith, and (b) for obligations expressly assumed by us
hereunder) for or in respect of the validity or value of or title to, the
Shares; the form of, or the statements contained in, or the validity of, the
Registration Statement, the Prospectus or any amendment or supplement thereto,
or any other instrument executed by the Company or by others; the form or
validity of the Dealer Manager Agreement or this Agreement; the delivery of the
Shares; the performance by the Company or by others of any agreement on its or
their part; the qualification of the Shares for sale under the laws of any
jurisdiction; or any matter in connection with any of the foregoing; provided,
however, that nothing in this paragraph shall be deemed to relieve the 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.
(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.
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(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, or (ii) any untrue statement or any
alleged untrue statement of a material fact contained (A) in any Registration
Statement or any post-effective amendment thereto or in the Prospectus or any
amendment or supplement to the Prospectus, or (B) in any Approved Sales
Literature, or (C) any blue sky application or other document executed by the
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, or (iii) the omission or alleged omission to state a material fact
required to be stated in the Registration Statement or any post-effective
amendment thereof to make the statements therein not misleading or the omission
or alleged omission to state a material fact required to be stated in the
Prospectus or any amendment or supplement to the Prospectus to make the
statements therein, in light of the circumstances under which they were made,
not misleading, provided,
however, that in each case described in clauses (ii) and (iii) to the
extent, but only to the extent, that such untrue statement or omission was made
in reliance upon and in conformity with written information furnished to the
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
Soliciting Dealer’s representatives or agents or omission by Soliciting Dealer
or Soliciting Dealer’s representatives or agents to state a fact necessary in
order to make the statements made, in light of the circumstances under which
they were made, not misleading in connection with the offer and sale of the
Shares in each case, other than statements or omissions made in conformity with
the Registration Statement, Prospectus, Approved Sales Literature or any other
materials or information furnished by or on behalf of the 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.
(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.
8
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.
The
Company shall be a third party beneficiary of Soliciting Dealer’s
representations, warranties, covenants and agreements contained in Sections 10 and 11. 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, rules
and regulations promulgated under the Exchange Act and the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act (USA PATRIOT Act) of 2001, as amended (the “USA
PATRIOT Act”), specifically including, but not limited to, Section 352 of
the International Money Laundering Abatement and Anti-Terrorist Financing Act of
2001 (the “Money
Laundering Abatement Act,” and together with the USA PATRIOT Act, the
“AML
Rules”) reasonably expected to detect and cause the reporting of
suspicious transactions in connection with the offering and sale of the
Shares. Soliciting Dealer further represents that it currently is in
compliance with all AML Rules, specifically including, but not limited to, the
Customer Identification Program requirements under Section 326 of the Money
Laundering Abatement Act, and Soliciting Dealer hereby covenants to remain in
compliance with such requirements and shall, upon request by the Dealer Manager
or the 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.
9
15. Miscellaneous.
(a) Soliciting
Dealer hereby authorizes and ratifies the execution and delivery of the Dealer
Manager Agreement by the Dealer Manager as Dealer Manager for itself and on
behalf of all Soliciting Dealers (including Soliciting Dealer party hereto) and
authorizes the Dealer Manager to agree to any variation of its terms or
provisions and to execute and deliver any amendment, modification or supplement
thereto. Soliciting Dealer hereby agrees to be bound by all provisions of the
Dealer Manager Agreement relating to Soliciting Dealers. Soliciting Dealer also
authorizes the Dealer Manager to exercise, in the Dealer Manager’s discretion,
all the authority or discretion now or hereafter vested in the Dealer Manager by
the provisions of the Dealer Manager Agreement and to take all such actions as
the Dealer Manager may believe desirable in order to carry out the provisions of
the Dealer Manager Agreement and of this Agreement.
(b) This
Agreement, except for the provisions of Sections 9, 10, 11, 12 and 13 and this Section 15, may be
terminated at any time by either party hereto by two days’ prior written notice
to the other party and, in all events, this Agreement shall terminate on the
termination date of the Dealer Manager Agreement, except for the provisions of
Sections 9,
10, 11, 12 and 13 and this Section
15.
(c) Any
communications from Soliciting Dealer should be in writing addressed to the
Dealer Manager at:
Realty
Capital Securities, LLC
Three
Xxxxxx Place, Suite 3300
Xxxxxx,
Xxxxxxxxxxxxx 00000
Facsimile
No.: (000) 000-0000
Attention: Xxxxxx
Xxxxxx
President
with a
copy to:
Bass,
Xxxxx & Xxxx PLC
000
Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx,
XX 00000-0000
Facsimile
No: (000) 000-0000
Attention: Xxxx
X. Good, Esq.
Any
notice from the Dealer Manager to Soliciting Dealer shall be deemed to have been
duly given if mailed, communicated by electronic delivery or facsimile or
delivered by overnight courier to Soliciting Dealer at Soliciting Dealer’s
address shown below.
(d) Nothing
herein contained shall constitute the Dealer Manger, Soliciting Dealer, the
other Soliciting Dealers or any of them as an association, partnership, limited
liability company, unincorporated business or other separate
entity.
10
(e) If
this Agreement is executed before the initial Effective Date, then the Dealer
Manager will notify Soliciting Dealer in writing when the initial Effective Date
has occurred. Soliciting Dealer agrees that Soliciting Dealer will
not make any offers to sell the Shares or solicit purchasers for the Shares
until Soliciting Dealer has received such written notice of the initial
Effective Date from the Dealer Manager or the 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. 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]
11
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:
|
||
__________,
2011
The
undersigned dealer confirms its agreement to act as a Soliciting Dealer pursuant
to all the terms and conditions of the above Soliciting Dealer Agreement and the
attached Dealer Manager Agreement. The undersigned dealer hereby represents that
the it will comply with the applicable requirements of the Securities Act and
the Exchange Act and the published rules and regulations of the Commission
thereunder, and applicable blue sky or other state securities laws. The
undersigned dealer represents and warrants that the undersigned dealer is duly
registered as a broker-dealer under the provisions of the Exchange Act and the
Exchange Act Rules and Regulations or is exempt from such
registration. The undersigned dealer confirms that it and each
salesperson acting on its behalf are members in good standing of FINRA and duly
licensed by each regulatory authority in each jurisdiction in which the
undersigned dealer or such salesperson will offer and sell Shares, or are exempt
from registration with such authorities. The undersigned dealer hereby
represents that it will comply with the Rules of FINRA and all rules and
regulations promulgated by FINRA.
Dated:
________, 2011
|
Name
of Soliciting Dealer
|
||
|
Federal
Identification Number
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
Kindly
have checks representing commissions forwarded as follows (if different than
above): (Please type or print.)
|
Name
of Firm:
|
|||
|
Address:
|
|||
|
Street
|
|||
|
City
|
|||
|
State
and Zip Code
|
|||
|
(Area
Code) Telephone No.
|
|||
|
Attention:
|
|||
12
SCHEDULE
1
TO
REALTY
CAPITAL SECURITIES, LLC
Soliciting
Dealer represents and warrants that it is currently licensed as a broker-dealer
in the following jurisdictions:
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¨
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Alabama
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¨
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Nebraska
|
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¨
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Alaska
|
¨
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Nevada
|
|
¨
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Arizona
|
¨
|
New
Hampshire
|
|
¨
|
Arkansas
|
¨
|
New
Jersey
|
|
¨
|
California
|
¨
|
New
Mexico
|
|
¨
|
Colorado
|
¨
|
New
York
|
|
¨
|
Connecticut
|
¨
|
North
Carolina
|
|
¨
|
Delaware
|
¨
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North
Dakota
|
|
¨
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District
of Columbia
|
¨
|
Ohio
|
|
¨
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Florida
|
¨
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Oklahoma
|
|
¨
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Georgia
|
¨
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Oregon
|
|
¨
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Hawaii
|
¨
|
Pennsylvania
|
|
¨
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Idaho
|
¨
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Puerto
Rico
|
|
¨
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Illinois
|
¨
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Rhode
Island
|
|
¨
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Indiana
|
¨
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South
Carolina
|
|
¨
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Iowa
|
¨
|
South
Dakota
|
|
¨
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Kansas
|
¨
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Tennessee
|
|
¨
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Kentucky
|
¨
|
Texas
|
|
¨
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Louisiana
|
¨
|
Utah
|
|
¨
|
Maine
|
o
|
Vermont
|
|
¨
|
Maryland
|
¨
|
Virgin
Islands
|
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¨
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Massachusetts
|
¨
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Virginia
|
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¨
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Michigan
|
¨
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Washington
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13
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¨
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Minnesota
|
¨
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West
Virginia
|
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¨
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Mississippi
|
¨
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Wisconsin
|
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¨
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Missouri
|
¨
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Wyoming
|
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¨
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Montana
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14
