HINES REAL ESTATE INVESTMENT TRUST, INC. Up to $3,500,000,000 in Shares of Common Stock DEALER MANAGER AGREEMENT June 30, 2008
XXXXX
REAL ESTATE INVESTMENT TRUST, INC.
Up to
$3,500,000,000 in Shares of Common Stock
June 30,
2008
Xxxxx
Real Estate Securities, Inc.
Suite
4700
0000 Xxxx
Xxx Xxxxxxxxx
Xxxxxxx,
Xxxxx 00000-0000
Ladies
and Gentlemen:
Xxxxx
Real Estate Investment Trust, Inc., a Maryland corporation (the “Company”), is
registering for public sale a maximum of $3,500,000,000 in shares (the “Shares”)
of its common stock, $.001 par value per Share (the “Offering”). $3,000,000,000
in Shares will be offered to the public at the price set forth in the Prospectus
(as defined in Section 1.1 below), and $500,000,000 in Shares will be offered
pursuant to the Company's dividend reinvestment plan at the price set forth in
the Prospectus. The minimum purchase for the Shares shall be $2,500 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”).
The
Company's board of directors may in its discretion change the offering price of
the Shares from time to time, and therefore the number of Shares being offered
in this Offering, through one or more supplements or amendments to the
Prospectus and/or post-effective amendments to the Registration Statement (as
defined in Section 1.1 below). 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”). With
respect to investments by customers from whom Dealers receive a fee for their
services (“Advisory Fee Sales”), Dealers shall not receive selling commissions
from the Dealer Manager. With respect to investments by customers
from whom Dealers do not receive a fee for their services
(“Commission Sales”), Dealers shall receive selling commissions from the Dealer
Manager. This Dealer Manager Agreement shall relate only to the
Shares registered with the Securities and Exchange Commission (the “SEC”)
pursuant to the Registration Statement. In the event of any change in
the purchase price of the Shares being offered and sold in this Offering, the
Company shall notify the Dealer Manager in writing, in which event this Dealer
Manager Agreement shall be deemed amended to the extent required to reflect such
change in the purchase price of the Shares, and the Dealer Manager shall notify
the Dealers of such change in the purchase price of the Shares pursuant to the
terms of the Selected Dealer Agreements. 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 hereby agrees with
the Dealer Manager, 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 covering the Shares 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 SEC promulgated thereunder. 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 revised, amended or
modified from time to time thereafter by any amendments (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.
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
shareholder 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 of Incorporation 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 or supplements
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 the Authorized Sales Materials with the appropriate
regulatory authorities, at no expense to the Dealer Manager. 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.
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 shareholders, 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
has elected to be treated as, and 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 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 up to
$3,500,000,000 in Shares through the Dealers, all of whom shall be members of
the Financial Industry Regulatory Authority (“FINRA”). The Dealer Manager may
also sell Shares for cash directly to its own clients and 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 of FINRA and that it and
its employees and representatives have all required licenses and registrations
to act under this Dealer Manager Agreement.
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 up to 7.0% of the gross proceeds of Shares sold to the public by Dealers in
Commission Sales, plus a dealer manager fee in the amount of 2.2% of the gross
proceeds of Shares sold to the public by Dealers in Commission Sales. No selling
commissions or dealer manager fee shall be paid with respect to Shares sold (a)
pursuant to the Company's dividend reinvestment plan, or (b) in Advisory Fee
Sales. The Company will not be liable or responsible to any Dealer for direct
payment of commissions to any Dealer, it being the sole and exclusive
responsibility of the Dealer Manager for payment of commissions to Dealers. In
addition, Xxxxx Advisors Limited Partnership, the Company’s advisor (“Advisor”)
may reimburse the Dealer Manager for certain employee compensation and other
expenses relating to the Offering as described in the Prospectus, including but
not limited to, reimbursement of up to 0.5% of gross proceeds for bona fide due
diligence expenses incurred by the Dealer Manager or any Dealer. The Advisor
shall reimburse the Dealer Manager for any marketing fees paid with respect to
Advisory Fee Sales. The Advisor may also reimburse the Dealer Manager
for reimbursements that the Dealer Manager makes to Dealers to defray marketing
and other distribution related costs and expenses of the Dealers’ participation
in the offering. The Advisor shall have the right to require the
Dealer Manager and any Dealer to provide a detailed and itemized invoice as a
condition to any such reimbursement. The Company and the Advisor may change
these commissions and fees, in their discretion, at any time upon 30 days
written notice to the Dealer Manager, in which event the Dealer Manager shall so
notify the Dealers of such change in accordance with the terms of the Selected
Dealer Agreements. Notwithstanding the foregoing provisions of this Section 3.3,
the Advisor shall not reimburse the Dealer Manager for amounts in excess of 0.8%
of the gross proceeds of the Offering, excluding up to an additional 0.5% of
gross proceeds for bona fide due diligence expenses incurred by the Dealer
Manager or any Dealer; provided, however, that the Advisor may pay additional
reimbursements to the Dealer Manager but only in an amount and to the extent
that the selling commissions and dealer manager fees paid in connection with the
Offering aggregate less than 9.2% of the gross proceeds.
3.4 The
Dealer Manager represents and warrants to the Company and each person who 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 or use any
“broker-dealer use only” materials with members of the public in connection with
the offer or sale of 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. In addition, the
Dealer Manager represents and warrants to the Company that, in connection with
the sale of Shares to customers of the Dealer Manager in transactions pursuant
to which the Dealer Manager rather than a Dealer is acting as the broker-dealer
of record, it will deliver or make available a copy of the Prospectus as
provided to the Dealer Manager by the Company from time to time prior to or
simultaneously with the first solicitation of an offer to sell Shares to an
investor in connection with the offer or sale of Shares.
4. Indemnification
4.1 The
Company will indemnify and hold harmless the Dealer Manager, its officers and
directors and each person, if any, who controls the Dealer Manager within the
meaning of Section 15 of the Securities Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), from and against any
losses, claims, damages or liabilities, joint or several, to which the Dealer
Manager, its officers, 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 (i) the Registration Statement
(including the Prospectus as a part thereof), (ii) 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 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 untrue statement or
alleged untrue statement or omission or alleged omission 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 its 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
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), 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 for use with reference to the Dealer Manager in the
preparation of the Registration Statement, the Prospectus, such Authorized Sales
Materials or any such Blue Sky Application, or (c) any failure by 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 by the Dealer
Manager 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 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 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 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: (i) there has been a successful
adjudication on the merits of each count involving alleged securities law
violations as to the particular indemnitee; (ii) such claims have been dismissed
with prejudice on the merits by a court of competent jurisdiction as to the
particular indemnitee; or (iii) 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 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 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
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 Dealer in 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 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
XI or any other material violation of the Selected Dealer Agreement, or (f) any
failure by such Dealer 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 such Dealer to comply with applicable SEC
Rules, or the rules of FINRA, including the NASD Conduct 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 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. THE PARTIES HERETO INTEND THAT THE INDEMNITIES SET FORTH IN
SECTION 4 BE CONSTRUED AND APPLIED AS WRITTEN ABOVE NOTWITHSTANDING ANY RULE OF
CONSTRUCTION TO THE CONTRARY. WITHOUT LIMITING THE FOREGOING, THE INDEMNITIES
SHALL, TO THE FULLEST EXTENT ALLOWED BY LAW, APPLY NOTWITHSTANDING ANY STATE’S
“EXPRESS NEGLIGENCE RULE” OR SIMILAR RULE THAT WOULD DENY COVERAGE BASED ON AN
INDEMNIFIED PERSON’S SOLE, CONCURRENT OR CONTRIBUTORY ACTIVE OR PASSIVE
NEGLIGENCE OR STRICT LIABILITY. IT IS THE INTENT OF THE PARTIES THAT, TO THE
EXTENT PROVIDED IN SECTION 4, THE INDEMNITIES SET FORTH HEREIN SHALL, TO THE
FULLEST EXTENT ALLOWED BY LAW, APPLY TO AN INDEMNIFIED PERSON’S SOLE, CONCURRENT
OR CONTRIBUTORY ACTIVE OR PASSIVE NEGLIGENCE OR STRICT LIABILITY. THE PARTIES
AGREE THAT THIS PROVISION IS “CONSPICUOUS” FOR PURPOSES OF ALL STATE
LAWS.
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.
6. Applicable
Law; Venue
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 acknowledge and agree that venue for any
action brought hereunder or in connection herewith shall lie exclusively in
Houston, Texas.
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 and, solely with respect to Section 3.3, of the
Advisor.
9. Term
This
Dealer Manager Agreement may be terminated by the Dealer Manager or the Company
(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) upon 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. The provisions of Sections 4 and
6 hereof shall survive such termination. In addition, the Dealer Manager, upon
the expiration or termination of this Dealer Manager Agreement, shall 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 commissions to which the Dealer
Manager is or becomes entitled under Section 3 at such time as such commissions
become payable.
10. Confirmations
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.
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 to the Company, or as otherwise instructed
by the Dealer. The Dealer Manager and any Dealer receiving a check
not conforming to such 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 Company for deposit.
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 by the Final
Review Office such checks to the Company for deposit.
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
REAL ESTATE INVESTMENT TRUST, INC.
By: /s/ Xxxxxxx X.
Xxxxx
Xxxxxxx
X. Xxxxx
President
and Chief Executive Officer
Accepted
and agreed as of the date first above written:
XXXXX
REAL ESTATE SECURITIES, INC.
|
By:
|
/s/ Xxxxxx X. Xxxxxx,
Xx.
|
|
|
Xxxxxx
X. Xxxxxx, Xx.
|
President —
Retail Distribution
Accepted
and agreed with respect to Section 3.3
of this
Dealer Manager Agreement as of the date
first
above written:
XXXXX
ADVISORS LIMITED PARTNERSHIP
By: Xxxxx
Advisors GP LLC,
its General Partner
By: /s/ Xxxxxxx
X.
Xxxxx
Xxxxxxx X. Xxxxx
President and Chief Executive
Officer
