TNP STRATEGIC RETAIL TRUST, INC. Up to $1,100,000,000 in Shares of Common Stock, $0.01 par value per share DEALER MANAGER AGREEMENT July 10, 2009
EXHIBIT 1.1
Up to $1,100,000,000 in Shares of Common Stock, $0.01 par value per share
DEALER MANAGER AGREEMENT
July 10, 2009
TNP Securities, LLC
0000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
0000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
TNP Strategic Retail Trust, Inc., a Maryland corporation (the “Company”), has
registered for public sale (the “Offering”) a maximum of $1,100,000,000 in shares of its
common stock, $0.01 par value per share (the “Common Stock”), of which amount: (a) up to
$1,000,000,000 in shares of Common Stock are being offered to the public pursuant to the Company’s
primary offering (the “Primary Shares”); and (b) up to $100,000,000 in shares of Common
Stock are being offered to stockholders of the Company pursuant to the Company’s distribution
reinvestment plan (the “DRIP Shares” and, together with the Primary Shares, the
“Offered Shares”). The Primary Shares are to be issued and sold to the public on a “best
efforts” basis through you (the “Dealer Manager”) as the managing dealer and the
broker-dealers participating in the Offering (the “Participating Dealers”) at an initial
offering price of $10.00 per share (subject in certain circumstances to discounts based upon the
volume of shares purchased and for certain categories of purchasers). The Company has reserved the
right to reallocate the Offered Shares between the Primary Shares and the DRIP Shares.
The Company is the sole general partner of TNP Strategic Retail Operating Partnership, LP, a
Delaware limited partnership that serves as the Company’s operating partnership subsidiary (the
“Operating Partnership”). The Company and the Operating Partnership hereby jointly and
severally agree with you, the Dealer Manager, as follows:
1. Representations and Warranties of the Company and the Operating Partnership. The
Company and the Operating Partnership hereby jointly and severally represent and warrant to the
Dealer Manager and each Participating Dealer with whom the Dealer Manager has entered into or will
enter into a Participating Dealer Agreement (the “Participating Dealer Agreement”) substantially in
the form attached as Exhibit A to this Agreement, as of the date hereof and at all times during the
Offering Period, as that term is defined in Section 5.1 (provided that, to the extent such
representations and warranties are given only as of a specified date or dates, the Company and the
Operating Partnership only make such representations and warranties as of such date or dates as
follows):
1.1 Compliance with Registration Requirements.
(a) A
registration statement on Form S-11 (File No. 333-154975), including a preliminary
prospectus, for the registration of the Offered 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 of the Securities and Exchange
Commission (the “Commission”) promulgated thereunder (the “Securities Act
Regulations”), and was initially filed with the Commission
on November 4, 2008 (the “Registration
Statement”). The Company has prepared and filed such amendments thereto, if any, and such
amended preliminary prospectuses, if any, as may have been required to the date hereof and will
file such additional amendments and supplements thereto as may hereafter be required. As used in
this Agreement, the term “Registration Statement” means the Registration Statement, as amended
through the date hereof, except that, if the Company files any post-effective amendments to the
Registration Statement, “Registration Statement” shall refer to the Registration Statement as so
amended by the last post-effective amendment declared effective; the term “Effective Date” means
the applicable date upon which the Registration Statement or any post-effective amendment thereto
is or was first declared effective by the Commission; the term “Prospectus” means the prospectus,
as amended or supplemented, on file with the Commission at the Effective Date of the Registration
Statement (including financial statements, exhibits and all other documents related thereto filed
as a part thereof or incorporated therein), except that if the Prospectus is amended or
supplemented after the Effective Date, the term “Prospectus” shall refer to the Prospectus as
amended or supplemented to date, and if the Prospectus filed by the Company pursuant to Rule 424(b)
or 424(c) of the Securities Act Regulations shall differ from the Prospectus on file at the time
the Registration Statement or any post-effective amendment to the Registration Statement shall
become effective, the term “Prospectus” shall refer to the Prospectus filed pursuant to either
Rule 424(b) or 424(c) of the Securities Act Regulations from and after the date on which it shall
have been filed with the Commission; and the term “Filing Date” means the applicable date upon
which the initial Prospectus or any amendment or supplement thereto is filed with the Commission.
As of the date hereof, the Commission has not issued any stop order suspending the effectiveness of
the Registration Statement and no proceedings for that purpose have been instituted or are pending
before or threatened by the Commission under the Securities Act.
(b) The Registration Statement and the Prospectus, and any further amendments or supplements
thereto, will, as of the applicable Effective Date or Filing Date, as the case may be, comply in
all material respects with the Securities Act and the Securities Act Regulations; the Registration
Statement does not, and any amendments thereto will not, in each case as of the applicable
Effective Date, contain an untrue statement of material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements therein not misleading;
and the Prospectus does not, and any amendment or supplement thereto will not, as of the applicable
Filing Date, contain an 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, in light of the
circumstances under which they were made, not misleading; provided, however, that the Company and
the Operating Partnership make no warranty or representation with respect to any statement
contained in the Registration Statement or the Prospectus, or any amendments or supplements
thereto, made in reliance upon and in conformity with information furnished in writing to the
Company by the Dealer Manager or any Participating Dealer expressly for use in the Registration
Statement or the Prospectus, or any amendments or supplements thereto.
2
1.2 Good Standing of the Company and the Operating
Partnership.
(a) The Company is a corporation duly organized and validly existing under the laws of the
State of Maryland, and is in good standing with the State Department of Assessments and Taxation of
Maryland, with full power and authority to conduct its business as described in the Registration
Statement and the Prospectus and to enter into this Agreement and to perform the transactions
contemplated hereby; this Agreement has been duly authorized, executed and delivered by the Company
and is a legal, valid and binding agreement of the Company enforceable against the Company in
accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally, and by general
equitable principles, and except to the extent that the enforceability of the indemnity provisions
and the contribution provisions contained in Sections 7 and 8 of this Agreement, respectively, may
be limited under applicable securities laws.
(b) The Operating Partnership is a limited partnership duly organized, validly existing and in
good standing under the laws of the State of Delaware, with full power and authority to conduct its
business as described in the Registration Statement and the Prospectus and to enter into this
Agreement and to perform the transactions contemplated hereby; as of the date hereof the Company is
the sole general partner of the Operating Partnership; this Agreement has been duly authorized,
executed and delivered by the Operating Partnership and is a legal, valid and binding agreement of
the Operating Partnership enforceable against the Operating Partnership in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally, and by general equitable
principles, and except to the extent that the enforceability of the indemnity provisions and the
contribution provisions contained in Sections 7 and 8 of this Agreement, respectively, may be
limited under applicable securities laws.
(c) Each of the Company and the Operating Partnership has qualified to do business and is in
good standing in every jurisdiction in which the ownership or leasing of its properties or the
nature or conduct of its business, as described in the Prospectus, requires such qualification,
except where the failure to do so would not have a material adverse effect on the condition,
financial or otherwise, results of operations or cash flows of the Company and the Operating
Partnership taken as a whole (a “Material Adverse Effect”).
1.3 Authorization and Description of Securities. The issuance and sale of the Offered
Shares have been duly authorized by the Company, and, when issued and duly delivered against
payment therefor as contemplated by this Agreement, will be validly issued, fully paid and
non-assessable, free and clear of any pledge, lien, encumbrance, security interest or other claim,
and the issuance and sale of the Offered Shares by the Company are not subject to preemptive or
other similar rights arising by operation of law, under the charter or bylaws of the Company or
under any agreement to which the Company is a party or otherwise. The Offered Shares conform in
all material respects to the description of the Common Stock contained in the Registration
Statement and the Prospectus. The authorized, issued and outstanding shares of Common Stock as of
the date hereof are as set forth in the Prospectus under the caption “Description of Capital
Stock.” All offers and sales of the Common Stock prior to the date hereof were at all relevant
times duly registered under the Securities Act or were exempt from the registration requirements of
the Securities Act and were duly registered or the subject of an
3
available exemption from the registration requirements of the applicable state securities or
blue sky laws. As of the date hereof, the Operating Partnership has not issued any security or
other equity interest other than units of partnership interest (“Units”) as set forth in
the Prospectus, and none of such outstanding Units has been issued in violation of any preemptive
right, and all of such Units have been issued by the Operating Partnership in compliance with
applicable federal and state securities laws.
1.4 Absence of Defaults and Conflicts.
(a) The Company is not in violation of its charter or its bylaws and the execution and
delivery of this Agreement, the issuance, sale and delivery of the Offered Shares, the consummation
of the transactions herein contemplated and compliance with the terms of this Agreement by the
Company will not violate the terms of or constitute a breach or default under: (i) its charter or
bylaws; or (ii) any indenture, mortgage, deed of trust, lease, or other material agreement to which
the Company is a party or to which its properties are bound; or (iii) any law, rule or regulation
applicable to the Company; or (iv) any writ, injunction or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the Company except, in the
cases of clauses (ii), (iii) and (iv), for such violations or defaults that, individually or in the
aggregate, would not result in a Material Adverse Effect.
(b) The Operating Partnership is not in violation of its certificate of limited partnership or
its partnership agreement and the execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and compliance with the terms of this Agreement by the Operating
Partnership will not violate the terms of or constitute a breach or default under: (i) its
certificate of limited partnership or; (ii) its partnership agreement; or (iii) any indenture,
mortgage, deed of trust, lease, or other material agreement to which the Operating Partnership is a
party or to which its properties are bound; or (iv) any law, rule or regulation applicable to the
Operating Partnership; or (v) any writ, injunction or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the Operating Partnership
except, in the cases of clauses (ii), (iii), (iv) and (v), for such violations or defaults that,
individually or in the aggregate, would not result in a Material Adverse Effect.
1.5 REIT Compliance. The Company is organized in a manner that conforms with the
requirements for qualification as a real estate investment trust (“REIT”) under the
Internal Revenue Code of 1986, as amended (the “Code”), and the Company’s intended method
of operation, as set forth in the Prospectus, would enable it to meet the requirements for taxation
as a REIT under the Code. The Operating Partnership will be treated as a partnership for federal
income tax purposes and not as a corporation or association taxable as a corporation.
1.6 No Operation as an Investment Company. The Company is not and does not currently
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 regulations 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.
1.7 Absence of Further Requirements. As of the date hereof, no filing with, or
consent, approval, authorization, license, registration, qualification, order or decree of any
court,
4
governmental authority or agency is required for the performance by the Company or the
Operating Partnership of their respective obligations under this Agreement or in connection with
the issuance and sale by the Company of the Offered Shares, except such as may be required under
the Securities Act, the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
the rules of the Financial Industry Regulatory Authority (“FINRA”) or applicable state
securities laws or where the failure to obtain such consent, approval, authorization, license,
registration, qualification, order or decree of any court, governmental authority or agency would
not have a Material Adverse Effect.
1.8 Absence of Proceedings. As of the date hereof, there are no actions, suits or
proceedings pending or, to the knowledge of the Company or the Operating Partnership, threatened
against either the Company or the Operating Partnership 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 would have a Material Adverse Effect.
1.9 Financial Statements. The financial statements of the Company included in the
Registration Statement and the Prospectus, together with the related notes, present fairly the
financial position of the Company, as of the date specified, in conformity with generally accepted
accounting principles applied on a consistent basis and in conformity with Regulation S-X of the
Commission. No other financial statements or schedules are required by Form S-11 or under the
Securities Act Regulations to be included in the Registration Statement, the Prospectus or any
preliminary prospectus.
1.10 Escrow Agent. The Company has entered into an escrow agreement (the “Escrow
Agreement”) with CommerceWest Bank, NA, as escrow agent (the “Escrow Agent”), and the
Dealer Manager, in the form included as an exhibit to the Registration Statement, which provides
for the establishment of an escrow account into which subscribers’ funds will be deposited pursuant
to the subscription procedures described in Section 6 below (the “Escrow Account”).
1.11 Independent Accountants. Deloitte & Touche LLP, or such other independent
accounting firm that has audited and is reporting upon any financial statements included or to be
included in the Registration Statement or the Prospectus or any amendments or supplements thereto,
shall be as of the applicable Effective Date or Filing Date, and shall have been during the periods
covered by their report included in the Registration Statement or the Prospectus or any amendments
or supplements thereto, independent public accountants with respect to the Company within the
meaning of the Securities Act and the Securities Act Regulations.
1.12 No Material Adverse Change in Business. Since the respective dates as of which
information is provided in the Registration Statement and the Prospectus or any amendments or
supplements thereto, except as otherwise stated therein, (a) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings or business affairs of the
Company or the Operating Partnership, whether or not arising in the ordinary course of business,
and (b) there have been no transactions entered into by the Company or the Operating Partnership
which could reasonably result in a Material Adverse Effect.
5
1.13 Material Agreements. There are no contracts or other documents required by the
Securities Act or the Securities Act Regulations to be described in or incorporated by reference
into the Registration Statement or the Prospectus or to be filed as exhibits to the Registration
Statement which have not been accurately described in all material respects in the Prospectus or
incorporated or filed as required. Each document incorporated by reference into the Registration
Statement or the Prospectus complied, as of the date filed, in all material respects with the
requirements as to form of the Exchange Act, and the rules and regulations promulgated thereunder
(the “Exchange Act Regulations”).
1.14 Reporting and Accounting Controls. Each of the Company and the Operating
Partnership has implemented controls and other procedures that are designed to ensure that
information required to be disclosed by the Company in supplements to the Prospectus and amendments
to the Registration Statement under the Securities Act and the Securities Act Regulations, the
reports that it files or submits under the Exchange Act and the Exchange Act Regulations and the
reports and filings that it is required to make under the applicable state securities laws in
connection with the Offering are recorded, processed, summarized and reported, within the time
periods specified in the applicable rules and forms and is accumulated and communicated to the
Company’s management, including its chief executive officer and chief financial officer, or persons
performing similar functions, as appropriate to allow timely decisions regarding required
disclosure; and the Company makes and keeps books, records and accounts which, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the assets of the
Company and the Operating Partnership. The Company and the Operating Partnership maintain a system
of internal accounting controls sufficient to provide reasonable assurances that (a) transactions
are executed in accordance with management’s general or specific authorization; (b) transactions
are recorded as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for assets; (c) access to
assets is permitted only in accordance with management’s general or specific authorization; and (d)
the recorded accountability for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. To the Company’s knowledge, neither
the Company nor the Operating Partnership, nor any employee or agent thereof, has made any payment
of funds of the Company or the Operating Partnership, as the case may be, or received or retained
any funds, and no funds of the Company, or the Operating Partnership, as the case may be, have been
set aside to be used for any payment, in each case in material violation of any law, rule or
regulation applicable to the Company or the Operating Partnership.
1.15 Material Relationships. No relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers, security holders of the Company,
the Operating Partnership, or their respective affiliates, on the other hand, which is required to
be described in the Prospectus and which is not so described.
1.16 Possession of Licenses and Permits. The Company possesses adequate permits,
licenses, approvals, consents and other authorizations (collectively, “Governmental
Licenses”) issued by the appropriate federal, state, local and foreign regulatory agencies or
bodies necessary to conduct the business now operated by it, except where the failure to obtain
such Governmental Licenses, singly or in the aggregate, would not have a Material Adverse Effect;
the Company is in compliance with the terms and condition of all such Governmental
6
Licenses, except where the failure to so comply would not, singly or in the aggregate, have a
Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect,
except where the invalidity of such Governmental Licenses to be in full force and effect would not
have a Material Adverse Effect; and, as of the date hereof, the Company has not received any notice
of proceedings relating to the revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect.
1.17 Subsidiaries. Each “significant subsidiary” of the Company (as such term is
defined in Rule 1-02 of Regulation S-X) and each other entity in which the Company holds a direct
or indirect ownership interest that is material to the Company (each a “Subsidiary” and,
collectively, the “Subsidiaries”) has been duly organized or formed and is validly existing
as a corporation, partnership, limited liability company or similar entity in good standing under
the laws of the jurisdiction of its incorporation or organization, has power and authority to own,
lease and operate its properties and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure to be so qualified would not reasonably be expected to have a
Material Adverse Effect. The only direct Subsidiaries of the Company as of the date of the
Registration Statement or the most recent amendment to the Registration Statement, as applicable,
are the Subsidiaries described or identified in the Registration Statement or such amendment to the
Registration Statement.
1.18 Possession of Intellectual Property. The Company and the Operating Partnership
own or possess, have the right to use or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or procedures), trademarks,
service marks, trade names or other intellectual property (collectively, “Intellectual
Property”) necessary to carry on the business now operated by the Company and the Operating
Partnership, respectively, except where the failure to have such ownership or possession would not,
singly or in the aggregate, have a Material Adverse Effect. Neither the Company nor the Operating
Partnership has received any notice or is not otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or inadequate to protect the
interest of the Company and/or the Operating Partnership therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would result in a Material Adverse Effect.
1.19 Advertising and Sales Materials. All advertising and supplemental sales
literature prepared or approved by the Company or TNP Strategic Retail Advisor, LLC, a Delaware
limited liability company that serves as the Company’s advisor pursuant to the terms of an advisory
agreement (the “Advisor”), whether designated solely for “broker-dealer use only” or
otherwise, to be used or delivered by the Company, the Advisor or the Dealer Manager in connection
with the Offering (the “Authorized Sales Materials”) will not contain any untrue statement
of material fact or omit to state a material fact required to be stated therein, in light of the
circumstances under which they were made and in conjunction with the Prospectus delivered
therewith, not misleading. Furthermore, all such Authorized Sales Materials will have received
7
all required regulatory approval, which may include, but is not limited to, the Commission and
state securities agencies, as applicable, prior to use, except where the failure to obtain such
approval would not result in a Material Adverse Effect.
1.20 Compliance with Privacy Laws and the USA PATRIOT Act. The Company complies in
all material respects with applicable privacy provisions of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 (the
“GLB Act”) and applicable provisions of 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”).
1.21 Good and Marketable Title to Assets. Except as otherwise disclosed in the
Prospectus:
(a) the Company and its Subsidiaries have good and insurable or good, valid and insurable
title (either in fee simple or pursuant to a valid leasehold interest) to all properties and assets
described in the Prospectus as being owned or leased, as the case may be, by them and to all
properties reflected in the Company’s most recent consolidated financial statements included in the
Prospectus, and neither the Company nor any of its Subsidiaries has received notice of any claim
that has been or may be asserted by anyone adverse to the rights of the Company or any Subsidiary
with respect to any such properties or assets (or any such lease) or affecting or questioning the
rights of the Company or any such Subsidiary to the continued ownership, lease, possession or
occupancy of such property or assets, except for such claims that could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
(b) there are no liens, charges, encumbrances, claims or restrictions on or affecting the
properties and assets of the Company or any of its Subsidiaries which would reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect;
(c) no person or entity, including, without limitation, any tenant under any of the leases
pursuant to which the Company or any of its Subsidiaries leases (as a lessor) any of its properties
(whether directly or indirectly through other partnerships, limited liability companies, business
trusts, joint ventures or otherwise) has an option or right of first refusal or any other right to
purchase any of such properties, except for such options, rights of first refusal or other rights
to purchase which, individually or in the aggregate, are not material with respect to the Company
and its Subsidiaries considered as one enterprise;
(d) to the Company’s knowledge, each of the properties of the Company or any of its
Subsidiaries has access to public rights of way, either directly or though insured easements,
except where the failure to have such access would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(e) to the Company’s knowledge, each of the properties of the Company or any of its
Subsidiaries is served by all public utilities necessary for the current operations on such
property in sufficient quantities for such operations, except where failure to have such public
utilities could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect;
8
(f) to the knowledge of the Company, each of the properties of the Company or any of its
Subsidiaries complies with all applicable codes and zoning and subdivision laws and regulations,
except for such failures to comply which could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect;
(g) all of the leases under which the Company or any of its Subsidiaries hold or use any real
property or improvements or any equipment relating to such real property or improvements are in
full force and effect, except where the failure to be in full force and effect could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Affect, and
neither the Company nor any of its Subsidiaries is in default in the payment of any amounts due
under any such leases or in any other default thereunder and the Company knows of no event which,
with the passage of time or the giving of notice or both, could constitute a default under any such
lease, except such defaults that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect;
(h) to the knowledge of the Company, there is no pending or threatened condemnation, zoning
change, or other proceeding or action that could in any manner affect the size of, use of,
improvements on, construction on or access to the properties of the Company or any of its
Subsidiaries, except such proceedings or actions that could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and
(i) neither the Company nor any of its Subsidiaries nor any lessee of any of the real property
improvements of the Company or any of its Subsidiaries is in default in the payment of any amounts
due or in any other default under any of the leases pursuant to which the Company or any of its
Subsidiaries leases (as lessor) any of its real property or improvements (whether directly or
indirectly through partnerships, limited liability companies, joint ventures or otherwise), and the
Company knows of no event which, with the passage of time or the giving of notice or both, would
constitute such a default under any of such leases, except such defaults as could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
1.22 Registration Rights. There are no persons, other than the Company, with
registration or other similar rights to have any securities of the Company or the Operating
Partnership registered pursuant to the Registration Statement or otherwise registered by the
Company under the Securities Act, or included in the Offering contemplated hereby.
1.23 Taxes. The Company and the Operating Partnership have filed all federal, state
and foreign income tax returns which have been required to be filed on or before the due date
(taking into account all extensions of time to file), and has paid or provided for the payment of
all taxes indicated by said returns and all assessments received by the Company and each of its
Subsidiaries to the extent that such taxes or assessments have become due, except where the Company
is contesting such assessments in good faith and except for such taxes and assessments the failure
of which to pay would not reasonably be expected to have a Material Adverse Effect.
1.24 Authorized Use of Trademarks. Any required consent and authorization has been
obtained for the use of any trademark or service xxxx in any advertising and supplemental sales
literature or other materials delivered by the Company to the Dealer Manager
9
or approved by the Company for use by the Dealer Manager and, to the Company’s knowledge, its
use does not constitute the unlicensed use of intellectual property.
2. Covenants of the Company and the Operating Partnership. The Company and the
Operating Partnership hereby jointly and severally covenant and agree with the Dealer Manager that:
2.1 Compliance with Securities Laws and Regulations. The Company will: (a) use
commercially reasonable efforts to cause the Registration Statement and any subsequent amendments
thereto to become effective as promptly as possible; (b) promptly advise the Dealer Manage of (i)
the receipt of any comments of, or requests for additional or supplemental information from, the
Commission, (ii) the time and date of any filing of any post-effective amendment to the
Registration Statement or any amendment or supplement to the Prospectus, and (iii) the time and
date that any post-effective amendment to the Registration Statement becomes effective; (c) timely
file every amendment or supplement to the Registration Statement or the Prospectus that may be
required by the Commission or under the Securities Act; and (d) if at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration Statement, the Company will
promptly notify the Dealer Manager and, to the extent the Company determines such action is in the
best interest of the Company, use its commercially reasonable efforts to obtain the lifting of such
order at the earliest possible time.
2.2 Delivery of Registration Statement, Prospectus and Sales Materials. The Company
will, at no expense to the Dealer Manager, furnish the Dealer Manager with such number of printed
copies of the Registration Statement, including all amendments and exhibits thereto, as the Dealer
Manager may reasonably request. The Company 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: (a) the Prospectus in preliminary and final form and every form
of supplemental or amended Prospectus; and (b) the Authorized Sales Materials.
2.3 Blue Sky Qualifications. The Company will use its commercially reasonable efforts
to qualify the Offered Shares for offering and sale under, or to establish the exemption of the
offering and sale of the Offered Shares from qualification or registration under, the applicable
state securities or “blue sky” laws of each of the 50 states, the District of Columbia, Guam,
Puerto Rico and the Virgin Islands (such jurisdictions in which qualifications or exemptions for
the offer and sale of the Offered Shares are in effect as of a relevant date are referred to herein
as the “Qualified Jurisdictions”) and to maintain such qualifications or exemptions in
effect throughout the Offering. In connection therewith, the Company will prepare and file all
such post-sales filings or reports as may be required by the securities regulatory authorities in
the Qualified Jurisdictions in which the Offered Shares have been sold, provided that the Dealer
Manager shall have provided the Company with any information required for such filings or reports
that is in the Dealer Manager’s possession. The Company will furnish to the Dealer Manager a blue
sky memorandum, prepared and updated from time to time by counsel to the Company, naming the
Qualified Jurisdictions. The Company will notify the Dealer Manager promptly following a change in
the status of the qualification or exemption of the Offered Shares in any jurisdiction in any
respect. The Company will file and obtain
10
clearance of the Authorized Sales Material to the extent required by applicable Securities Act
Regulations and state securities laws.
2.4 Rule 158. The Company will timely file such reports pursuant to the Exchange Act
as are necessary in order to make generally available to its stockholders as soon as practicable an
earnings statement for the purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the Securities Act.
2.5 Material Disclosures. 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 the
Company, the Prospectus would include an untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein, in light of the circumstances under which
they are made, not misleading, the Company will promptly notify the Dealer Manager thereof (unless
the information shall have been received from the Dealer Manager) and the Dealer Manager and the
Participating Dealers shall suspend the offering and sale of the Offered Shares in accordance with
Section 4.13 hereof until such time as the Company, in its sole discretion (a) instructs the Dealer
Manager to resume the offering and sale of the Offered Shares and (b) has prepared any required
supplemental or amended Prospectus as shall be necessary to correct such statement or omission and
to comply with the requirements of the Securities Act.
2.6 Reporting Requests. The Company will comply with the requirements of the Exchange
Act relating to the Company’s obligation to file and, as applicable, deliver to its stockholders
periodic reports including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K.
2.7 No Manipulation of Market for Securities. The Company will not take, directly or
indirectly, any action designed to cause or to result in, or that might reasonably be expected to
constitute, the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Offered Shares in violation of federal or state securities
laws.
2.8 Use of Proceeds. The Company will apply the proceeds from the sale of the Offered
Shares as stated in the Prospectus in all material respects.
2.9 Transfer Agent. The Company will engage and maintain, at its expense, a registrar
and transfer agent for the Offered Shares.
3. Payment of Expenses and Fees.
3.1 Company Expenses. Subject to the limitations described below, the Company agrees
to pay all costs and expenses incident to the Offering, whether or not the transactions
contemplated hereunder are consummated or this Agreement is terminated, including expenses, fees
and taxes in connection with: (a) the registration fee, the preparation and filing of the
Registration Statement (including without limitation financial statements, exhibits, schedules and
consents), the Prospectus, and any amendments or supplements thereto, and the printing and
furnishing of copies of each thereof to the Dealer Manager and to Participating Dealers (including
costs of mailing and shipment); (b) the preparation, issuance and delivery of certificates, if any,
for the Offered Shares, including any stock or other transfer taxes
11
or duties payable upon the sale of the Offered Shares; (c) all fees and expenses of the
Company’s legal counsel, independent public or certified public accountants and other advisors; (d)
the qualification of the Offered Shares for offering and sale under state laws in the states,
including the Qualified Jurisdictions, that the Company shall designate as appropriate and the
determination of their eligibility for sale under state law as aforesaid and the printing and
furnishing of copies of blue sky surveys; (e) filing for review by FINRA of all necessary documents
and information relating to the Offering and the Offered Shares (including the reasonable legal
fees and filing fees and other disbursements of counsel relating thereto); (f) the fees and
expenses of any transfer agent or registrar for the Offered Shares and miscellaneous expenses
referred to in the Registration Statement; (g) all costs and expenses incident to the travel and
accommodation of the Advisor’s personnel, and the personnel of any sub-advisor designated by the
Advisor and acting on behalf of the Company, in making road show presentations and presentations to
Participating Dealers and other broker-dealers and financial advisors with respect to the offering
of the Offered Shares; and (h) the performance of the Company’s other obligations hereunder.
Notwithstanding the foregoing, the Company shall not directly pay, or reimburse the Advisor for,
the costs and expenses described in this Section 3.1 if the payment or reimbursement of such
expenses would cause the aggregate of the Company’s “organization and offering expenses” as defined
by FINRA Rule 2810 (including the Company expenses paid or reimbursed pursuant to this Section 3.1,
all items of underwriting compensation including Dealer Manager expenses described in Section 3.2
and due diligence expenses described in Section 3.3) to exceed 15.0% of the gross proceeds from the
sale of the Primary Shares.
3.2 Dealer Manager Expenses. In addition to payment of the Company expenses, the
Company shall reimburse the Dealer Manager as provided in the Prospectus for certain costs and
expenses incident to the Offering, to the extent permitted pursuant to prevailing rules and
regulations of FINRA, including expenses, fees and taxes incurred in connection with: (a) legal
counsel to the Dealer Manager, including fees and expenses incurred prior to the Effective Date;
(b) customary travel, lodging, meals and reasonable entertainment expenses incurred in connection
with the Offering; (c) attendance at broker-dealer sponsored conferences, educational conferences
sponsored by the Company, industry sponsored conferences and informational seminars; and (d)
customary promotional items; provided, however, that, no costs and expenses shall be reimbursed by
the Company pursuant to this Section 3.2 which would cause the total underwriting compensation paid
in connection with the Offering to exceed 10% of the gross proceeds from the sale of the Primary
Shares, excluding reimbursement of bona fide due diligence expenses as provided under Section 3.3.
3.3 Due Diligence Expenses. In addition to reimbursement as provided under Section
3.2, the Company shall also reimburse the Dealer Manager for reasonable bona fide due diligence
expenses incurred by the Dealer Manager or any Participating Dealer; provided, however, that no due
diligence expenses shall be reimbursed by the Company pursuant to this Section 3.3 which would
cause the aggregate of all Company expenses described in Section 3.1, all underwriting compensation
paid to the Dealer Manager and any Participating Dealer and the due diligence expenses paid
pursuant to this Section 3.3 to exceed 15.0% of the gross proceeds from the sale of the Primary
Shares. Such due diligence expenses may include travel, lodging, meals and other reasonable
out-of-pocket expenses incurred by the Dealer Manager or any Participating Dealer and their
personnel when visiting the Company’s offices or properties to
12
verify information relating to the Company or its properties. The Dealer Manager or any
Participating Dealer shall provide a detailed and itemized invoice to the Company for any such due
diligence expenses.
4. Representations, Warranties and Covenants of Dealer Manager. The Dealer Manager
hereby represents and warrants to, and covenants and agrees with the Company and the Operating
Partnership as of the date hereof and at all times during the Offering Period as that term is
defined below (provided that, to the extent representations and warranties are given only as of a
specified date or dates, the Dealer Manager only makes such representations and warranties as of
such date or dates) as follows:
4.1 Good Standing of the Dealer Manager. The Dealer Manager is a corporation duly
organized and validly existing under the laws of the State of Delaware, with full power and
authority to conduct its business and to enter into this Agreement and to perform the transactions
contemplated hereby; this Agreement has been duly authorized, executed and delivered by the Dealer
Manager and is a legal, valid and binding agreement of the Dealer Manager enforceable against the
Dealer Manager in accordance with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, and
by general equitable principles, and except to the extent that the enforceability of the indemnity
provisions and the contribution provisions contained in Sections 7 and 8 of this Agreement,
respectively, may be limited under applicable securities laws.
4.2 Compliance with Applicable Laws, Rules and Regulations. The Dealer Manager
represents to the Company that (a) it is a member of FINRA in good standing, and (b) it and its
employees and representatives who will perform services hereunder have all required licenses and
registrations to act under this Agreement. With respect to its participation and the participation
by each Participating Dealer in the offer and sale of the Offered Shares (including, without
limitation any resales and transfers of Offered Shares), the Dealer Manager agrees, and, by virtue
of entering into the Participating Dealer Agreement, each Participating Dealer shall have agreed,
to comply with any applicable requirements of the Securities Act and the Exchange Act, applicable
state securities or blue sky laws, and FINRA Conduct Rules, specifically including, but not in any
way limited to, Conduct Rules 2340, 2420, 2730, 2740, 2750 and 2810 therein.
4.3 AML Compliance. The Dealer Manager represents to the Company that it has
established and implemented anti-money laundering compliance programs in accordance with applicable
law, including applicable FINRA Conduct Rules, Exchange Act Regulations and 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
Offered Shares. The Dealer Manager further represents that it is currently in compliance with all
AML Rules, specifically including, but not limited to, the Customer Identification Program
requirements under Section 326 of the Money Laundering Abatement Act, and the Dealer Manager hereby
covenants to remain in compliance with such requirements and shall, upon request by the Company,
provide a certification to the
13
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.
4.4 Accuracy of Information. The Dealer Manager represents and warrants to the
Company, the Operating Partnership and each person that signs the Registration Statement that the
information under the caption “Plan of Distribution” in the Prospectus and all other information
furnished to the Company by the Dealer Manager in writing expressly for use in the Registration
Statement, any preliminary prospectus, the Prospectus, or any amendment or supplement thereto, 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.
4.5 Suitability.
(a) The Dealer Manager will offer Primary 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 jurisdictions in which it is advised in writing
by the Company that the Primary Shares are qualified for sale or that such qualification is not
required. Notwithstanding the qualification of the Primary Shares for sale in any respective
jurisdiction (or the exemption therefrom), the Dealer Manager represents, warrants and covenants
that it will not offer Primary Shares and will not permit any of its registered representatives to
offer Primary Shares in any jurisdiction unless both the Dealer Manager and such registered
representative are duly licensed to transact securities business in such jurisdiction. In offering
Primary Shares, the Dealer Manager will comply with the provisions of the FINRA Conduct Rules, as
well as all other applicable rules and regulations relating to suitability of investors, including
without limitation, the provisions of Section III.C. of the Statement of Policy Regarding Real
Estate Investment Trusts of the North American Securities Administrators Association, Inc. (the
“NASAA REIT Guidelines”).
(b) The Dealer Manager further represents, warrants and covenants that neither the Dealer
Manager, nor any person associated with the Dealer Manager, shall offer or sell Primary Shares in
any jurisdiction except to investors who satisfy the investor suitability standards and minimum
investment requirements under all of the following: (i) applicable provisions of the Prospectus;
(ii) applicable laws of the jurisdiction of which such investor is a resident; (iii) applicable
FINRA Conduct Rules; and (iv) the provisions of Section III.C. of the NASAA REIT Guidelines. The
Dealer Manager agrees to ensure that, in recommending the purchase, sale or exchange of Primary
Shares to an investor, the Dealer Manager, or a person associated with the Dealer Manager, shall
have reasonable grounds to believe, on the basis of information obtained from the investor (and
thereafter maintained in the manner and for the period required by the Commission, any state
securities commission, FINRA or the Company) concerning the investor’s age, investment objectives,
other investments, financial situation and needs, and any other information known to the Dealer
Manager, or person associated with the Dealer Manager, that (i) the investor is or will be in a
financial position appropriate to enable the investor to realize to a significant extent the
benefits described in the Prospectus, including the tax benefits to the extent they are a
significant aspect of the Company, (ii) the investor has a fair
14
market net worth sufficient to sustain the risks inherent in an investment in Primary Shares
in the amount proposed, including loss and potential lack of liquidity of such investment, and
(iii) an investment in Primary Shares is otherwise suitable for such investor. The Dealer Manager
further represents, warrants and covenants that the Dealer Manager, or a person associated with the
Dealer Manager, will make every reasonable effort to determine the suitability and appropriateness
of an investment in Primary Shares of each proposed investor solicited by a person associated with
the Dealer Manager by reviewing documents and records disclosing the basis upon which the
determination as to suitability was reached as to each such proposed investor, whether such
documents and records relate to accounts which have been closed, accounts which are currently
maintained, or accounts hereafter established. The Dealer Manager agrees to retain such documents
and records in the Dealer Manager’s records for a period of six years from the date of the
applicable sale of Primary Shares, to otherwise comply with the record keeping requirements
provided in Section 4.6 below and to make such documents and records available to (i) the Company
upon request, and (ii) representatives of the Commission, FINRA and applicable state securities
administrators upon the Dealer Manager’s receipt of an appropriate document subpoena or other
appropriate request for documents from any such agency. The Dealer Manager shall not purchase any
Primary Shares for a discretionary account without obtaining the prior written approval of the
Dealer Manager’s customer and such customer’s completed and executed Subscription Agreement (as
defined in Section 6 herein).
4.6 Recordkeeping. The Dealer Manager 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. The Dealer Manager further agrees to keep such records with respect to
each customer who purchases Primary Shares, the customer’s suitability and the amount of Primary
Shares sold, and to retain such records for such period of time as may be required by the
Commission, any state securities commission, FINRA or the Company.
4.7 Customer Information. The Dealer Manager shall:
(a) abide by and comply with (i) the privacy standards and requirements of the GLB Act; (ii)
the privacy standards and requirements of any other applicable federal or state law; and (iii) its
own internal privacy policies and procedures, each as may be amended from time to time;
(b) refrain from the use or disclosure of nonpublic personal information (as defined under the
GLB Act) of all customers who have opted out of such disclosures except as necessary to service the
customers or as otherwise necessary or required by applicable law; and
(c) 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 from the Participating Dealers (the “List”) to identify customers that have
exercised their opt-out rights. In the event either party uses or discloses nonpublic personal
information of any customer for purposes other than servicing the customer, or as otherwise
required by applicable law, that party will consult the List to determine whether the affected
customer has exercised his or her opt-out rights. Each party understands that it is
15
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.
4.8 Resale of Offered Shares. The Dealer Manager agrees, and each Participating
Dealer shall have agreed, to comply and shall comply with any applicable requirements with respect
to its and each Participating Dealer’s participation in any resales or transfers of the Offered
Shares. In addition, the Dealer Manager agrees, and each Participating Dealer shall have agreed,
that should it or they assist with the resale or transfer of the Offered Shares, it and each
Participating Dealer will fully comply with all applicable FINRA rules and any other applicable
federal or state laws.
4.9 Blue Sky Compliance. The Dealer Manager shall cause the Primary Shares to be
offered and sold only in the Qualified Jurisdictions. No Primary Shares shall be offered or sold
for the account of the Company in any other states or foreign jurisdictions.
4.10 Distribution of Prospectuses. The Dealer Manager is familiar with Rule 15c2-8
under the Exchange Act, relating to the distribution of preliminary and final Prospectuses, and
confirms that it has complied and will comply therewith.
4.11 Authorized Sales Materials. The Dealer Manager shall use and distribute in
conjunction with the offer and sale of any Offered Shares only the Prospectus and the Authorized
Sales Materials.
4.12 Materials for Broker-Dealer Use Only. 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 offers
or sales or the Offered Shares.
4.13 Suspension or Termination of Offering. The Dealer Manager agrees, and will
require that each of the Participating Dealers agree, to suspend or terminate the offering and sale
of the Primary Shares upon request of the Company at any time and to resume offering and sale of
the Primary Shares upon subsequent request of the Company.
5. Sale of Primary Shares.
5.1 Exclusive Appointment of Dealer Manager. The Company hereby appoints the Dealer
Manager as its exclusive agent and managing dealer during the period commencing with the date
hereof and ending on the termination date of the Offering (the “Termination Date”)
described in the Prospectus (the “Offering Period”) to solicit, and to cause Participating
Dealers to solicit, purchasers of the Primary Shares at the purchase price to be paid in accordance
with, and otherwise upon the other terms and conditions set forth in, the Prospectus, and the
Dealer Manager agrees to use its best efforts to procure purchasers of the Primary Shares during
the Offering Period. The Primary Shares offered and sold through the Dealer Manager under this
Dealer Manager Agreement shall be offered and sold only by the Dealer Manager and, at the Dealer
Manager’s sole option, by any Participating Dealers whom the Dealer Manager may retain, each of
which shall be members of FINRA in good standing, pursuant to an executed Participating Dealer
Agreement with such Participating Dealer. The
16
Dealer Manager hereby accepts such agency and agrees to use its best efforts to sell the
Primary Shares on said terms and conditions.
5.2 Compensation.
(a) Selling Commissions. Subject to volume discounts and other special circumstances
described in or otherwise provided in the “Plan of Distribution” section of the Prospectus or this
Section 5.2, the Company will pay to the Dealer Manager selling commissions in the amount of 7.0%
of the gross proceeds of the Primary Shares sold, which commissions may be reallowed in whole or in
part to the Participating Dealer who sold the Offered Shares giving rise to such commissions, as
described more fully in the Participating Dealer Agreement entered into with such Participating
Dealer; provided, however, that no commissions described in this clause (a) shall be payable in
respect of the purchase of Primary Shares sold: (i) through an investment advisory representative
affiliated with a Participating Dealer who is paid on a fee-for-service basis by the investor; (ii)
by a Participating Dealer (or such Participating Dealer’s registered representative), in its
individual capacity, or by a retirement plan of such Participating Dealer (or such Participating
Dealer’s registered representative), or (iii) by an officer, director or employee of the Company,
the Advisor or their respective affiliates. The Company will not pay to the Dealer Manager any
selling commissions in respect of the purchase of any DRIP Shares.
(b) Dealer Manager Fee. The Company will pay to the Dealer Manager a dealer manager
fee in the amount of 3.0% of the gross proceeds from the sale of the Primary Shares (the
“Dealer Manager Fee”), a portion of which may be reallowed to Participating Dealers (as
described more fully in the Participating Dealer Agreement entered into with such Participating
Dealer), which reallowance, if any, shall be determined by the Dealer Manager in its discretion
based on factors including, but not limited to, the number of shares sold by such Participating
Dealer, the assistance of such Participating Dealer in marketing the Offering and due diligence
expenses incurred, and the extent to which similar fees are reallowed to participating
broker-dealers in similar offerings being conducted during the Offering Period; provided, however,
that no Dealer Manager Fee shall be payable in respect of the purchase of Shares by an officer,
director or employee of the Company, the Advisor or their respective affiliates.
(c) Friends and Family Program. As described in the Prospectus, the Dealer Manager
agrees to sell up to 5.0% of the Primary Shares to certain persons identified by the Company. The
purchase price for Shares under this program will be at the public offering price, net of selling
commissions or Dealer Manager Fees. The Dealer Manager agrees to work together with the Company to
implement this program and to execute sales under the program according to the procedures agreed
upon by the Dealer Manager and the Company.
5.3 Obligations to Participating Dealers. The Company will not be liable or
responsible to any Participating Dealer for direct payment of commissions or any reallowance of the
Dealer Manager Fee to such Participating Dealer, it being the sole and exclusive responsibility of
the Dealer Manager for payment of commissions or any reallowance of the Dealer Manager Fee to
Participating Dealers. Notwithstanding the above, the Company, in its sole discretion, may act as
agent of the Dealer Manager by making direct payment of
17
commissions or reallowance of the Dealer Manager Fee to such Participating Dealers without
incurring any liability therefor.
6. Submission of Orders.
(a) Each person desiring to purchase Primary Shares in the Offering will be required to
complete and execute a subscription agreement in the form attached as an appendix to the Prospectus
(the “Subscription Agreement”) and to deliver to the Dealer Manager or Participating
Dealer, as the case may be (the “Processing Broker-Dealer”), such completed Subscription
Agreement, together with a check, draft, wire or money order (hereinafter referred to as an
“instrument of payment”) in the amount of $10.00 per Share, or such discounted purchase
price per Share that may apply based upon the available discounts specified in the Prospectus.
There shall be a minimum initial purchase by any one purchaser of $1,000 of Primary Shares (except
as otherwise indicated in the Prospectus, or in any letter or memorandum from the Company to the
Dealer Manager). Minimum subsequent purchases of Primary Shares shall be $100 per transaction.
Until such time as the Company has received and accepted subscriptions for at least $2,000,000 in
Primary Shares (the “Minimum Offering”) and released the proceeds from such subscriptions
from the Escrow Account (or such greater amount as may be applicable in respect of any greater
escrow in respect of subscribers from any state), those persons who purchase Primary Shares will be
instructed by the Processing Broker-Dealer to make their checks
payable to “CommerceWest Bank, NA,
as Escrow Agent for TNP Strategic Retail Trust, Inc.” Thereafter, those persons who purchase
Primary Shares will be instructed by the Processing Broker-Dealer to make their checks payable to
“TNP Strategic Retail Trust, Inc.”
(b) The Processing Broker-Dealer receiving a Subscription Agreement and instrument of payment
not conforming to the foregoing instructions shall return such Subscription Agreement and
instrument of payment directly to such subscriber not later than the end of the second business day
following receipt by the Processing Broker-Dealer of such materials. Subscription Agreements and
instruments of payment received by the Processing Broker-Dealer which conform to the foregoing
instructions shall be transmitted for deposit pursuant to one of the following methods:
(i) where, pursuant to the internal supervisory procedures of the Processing
Broker-Dealer, internal supervisory review is conducted at the same location at which
Subscription Agreements and instruments of payment are received from subscribers, then, by
noon of the next business day following receipt by the Processing Broker-Dealer, the
Processing Broker-Dealer will transmit the Subscription Agreements and instruments of
payment to the Escrow Agent or, after the Minimum Offering has been obtained, to the Company
or to such other account or agent as directed by the Company; and
(ii) where, pursuant to the internal supervisory procedures of the Processing
Broker-Dealer, final internal supervisory review is conducted at a different location (the
“Final Review Office”), Subscription Agreements and instruments of payment will be
transmitted by the Processing Broker-Dealer to the Final Review Office by noon of the next
business day following receipt by the Processing Broker-Dealer. The Final Review Office
will in turn by noon of the next business day following receipt by
18
the Final Review Office, transmit such Subscription Agreements and instruments of
payment to the Escrow Agent or, after the Minimum Offering has been obtained, to the Company
or to such other account or agent as directed by the Company.
(c) Notwithstanding the foregoing, with respect to any Offered Shares to be purchased by a
custodial account, the Processing Broker-Dealer shall cause the custodian of such account to
deliver a completed Subscription Agreement and instrument of payment for such account directly to
the Escrow Agent. The Processing Broker-Dealer shall furnish to the Escrow Agent with each
delivery of instruments of payment a list of the subscribers showing the name, address, tax
identification number, state of residence, amount of Offered Shares subscribed for, and the amount
of money paid.
7. Indemnification.
7.1 Indemnified Parties Defined. For the purposes of this Section 7, an entity’s
“Indemnified Parties” shall include such entity’s officers, directors, employees, members,
partners, affiliates, agents and representatives, and each person, if any, who controls such entity
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.
7.2 Indemnification of the Dealer Manager and Participating Dealers. The Company and
the Operating Partnership, jointly and severally, will indemnify, defend (subject to Section 7.6)
and hold harmless the Dealer Manager and the Participating Dealers, and their respective
Indemnified Parties, from and against any losses, claims (including the reasonable cost of
investigation), damages or liabilities, joint or several, to which such Participating Dealers or
the Dealer Manager, or their respective Indemnified 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) in whole or in part,
any material inaccuracy in a representation or warranty contained herein by either the Company or
the Operating Partnership, any material breach of a covenant contained herein by either the Company
or the Operating Partnership, or any material failure by either the Company or the Operating
Partnership to perform its obligations hereunder or to comply with state or federal securities laws
applicable to the Offering, or (b) any untrue statement or alleged untrue statement of a material
fact contained (i) in any Registration Statement or any post-effective amendment thereto or in the
Prospectus or any amendment or supplement to the Prospectus or (ii) in any Authorized Sales
Materials or (iii) in 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 Offered Shares for sale under
the securities laws of any jurisdiction or based upon written information furnished by the Company
or the Operating Partnership under the securities laws thereof (any such application, document or
information being hereinafter called a “Blue Sky Application”), or (c) the omission or
alleged omission to state a material fact required to be stated in the Registration Statement or
any post-effective amendment thereof or in the Prospectus or any amendment or supplement to the
Prospectus or necessary to make the statements therein not misleading, and the Company and the
Operating Partnership will reimburse each Participating Dealer or the Dealer Manager, and their
respective Indemnified Parties, for any legal or other expenses reasonably incurred by such
Participating Dealer or the Dealer Manager, and their
19
respective Indemnified Parties, in connection with investigating or defending such loss,
claim, damage, liability or action; provided, however, that the Company or the Operating
Partnership 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 either (x) to the Company or the Operating Partnership by the Dealer Manager or (y) to
the Company, the Operating Partnership or the Dealer Manager by or on behalf of any Participating
Dealer, in each case expressly for use in the Registration Statement or any post-effective
amendment thereof, or the Prospectus or any such amendment thereof or supplement thereto. This
indemnity agreement will be in addition to any liability which either the Company or the Operating
Partnership may otherwise have.
Notwithstanding the foregoing, as required by Section II.G. of the NASAA REIT Guidelines, the
indemnification and agreement to hold harmless provided in this Section 7.2 is further limited to
the extent that no such indemnification by the Company or the Operating Partnership of a
Participating Dealer or the Dealer Manager, or their respective Indemnified Parties, shall be
permitted under this Agreement for, or arising out of, an alleged violation of federal or state
securities laws, unless one or more of the following conditions are met: (a) there has been a
successful adjudication on the merits of each count involving alleged securities law violations as
to the particular indemnitee; (b) such claims have been dismissed with prejudice on the merits by a
court of competent jurisdiction as to the particular indemnitee; or (c) a court of competent
jurisdiction approves a settlement of the claims against the particular 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 Commission 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.
7.3 Dealer Manager Indemnification of the Company and the Operating Partnership. The
Dealer Manager will indemnify, defend and hold harmless the Company and the Operating Partnership,
their respective Indemnified Parties and each person who has signed the Registration Statement,
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 (including the reasonable cost of investigation), damages or liabilities (or actions
in respect thereof) arise out of or are based upon (a) in whole or in part, any material inaccuracy
in a representation or warranty contained herein by the Dealer Manager, any material breach of a
covenant contained herein by the Dealer Manager, or any material failure by the Dealer Manager to
perform its obligations hereunder or (b) any untrue statement or any alleged untrue statement of a
material fact contained (i) in any Registration Statement or any post-effective amendment thereto
or in the Prospectus or any amendment or supplement to the Prospectus or (ii) in any Authorized
Sales Materials or (iii) any Blue Sky Application, or (c) the omission or alleged omission to state
a material fact required to be stated in the Registration Statement or any post-effective amendment
thereof or in the Prospectus or any amendment or supplement to the Prospectus or necessary to make
the statements therein not misleading, provided, however, that in each case described in clauses
(b) and (c) to the extent, but only to the extent, that such untrue statement or omission was made
in reliance upon and in conformity with written information furnished to the Company or the
Operating Partnership by the Dealer Manager specifically for use with reference to the Dealer
Manager in the preparation
20
of the Registration Statement or any such post-effective amendments thereof or the Prospectus
or any such amendment thereof or supplement thereto, or (d) any use of sales literature by the
Dealer Manager not authorized or approved by the Company or any use of “broker-dealer use only”
materials with members of the public concerning the Offered Shares by the Dealer Manager, or (e)
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 Offered Shares,
or (f) any material violation by the Dealer Manager of this Agreement, or (g) any failure by the
Dealer Manager 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
Regulations and the USA PATRIOT Act, or (h) any other failure by the Dealer Manager to comply with
applicable FINRA or Exchange Act Regulations. The Dealer Manager will reimburse the aforesaid
parties in connection with investigation or defense of such loss, claim, damage, liability or
action. This indemnity agreement will be in addition to any liability which the Dealer Manager may
otherwise have.
7.4 Participating Dealer Indemnification of the Company and the Operating Partnership.
By virtue of entering into the Participating Dealer Agreement, each Participating Dealer severally
will agree to indemnify, defend and hold harmless the Company, the Operating Partnership, the
Dealer Manager, each of their respective Indemnified Parties, and each person who signs the
Registration Statement, from and against any losses, claims, damages or liabilities to which the
Company, the Operating Partnership, the Dealer Manager, or any of their respective Indemnified
Parties, or any person who signed the Registration Statement, may become subject, under the
Securities Act or otherwise, as more fully described in the Participating Dealer Agreement.
7.5 Action Against Parties; Notification. Promptly after receipt by any indemnified
party under this Section 7 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
7, 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 (subject to Section 7.6)
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.
7.6 Reimbursement of Fees and Expenses. An indemnifying party under Section 7 of this
Agreement shall be obligated to reimburse an indemnified party for reasonable legal and other
expenses as follows:
21
(a) In the case of the Company and/or the Operating Partnership indemnifying the Dealer
Manager, the advancement of Company funds to the Dealer Manager for legal expenses and other costs
incurred as a result of any legal action for which indemnification is being sought shall be
permissible (in accordance with Section II.G. of the NASAA REIT Guidelines) only if all of the
following conditions are satisfied: (i) the legal action relates to acts or omissions with respect
to the performance of duties or services on behalf of the Company; (ii) the legal action is
initiated by a third party who is not a stockholder of the Company or the legal action is initiated
by a stockholder of the Company acting in his or her capacity as such and a court of competent
jurisdiction specifically approves such advancement; and (iii) the Dealer Manager undertakes to
repay the advanced funds to the Company, together with the applicable legal rate of interest
thereon, in cases in which the Dealer Manager is found not to be entitled to indemnification.
(b) In any case of indemnification other than that described in Section 7.6(a) above, 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 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. Contribution.
(a) If the indemnification provided for in Section 7 hereof is for any reason unavailable to
or insufficient to hold harmless an indemnified party in respect of any losses, liabilities,
claims, damages or expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Operating Partnership, the Dealer Manager and the
Participating Dealer, respectively, from the offering of the Primary Shares pursuant to this
Agreement and the relevant Participating Dealer Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative fault of the
Company and the Operating Partnership, the Dealer Manager and the Participating Dealer,
respectively, in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.
22
(b) The relative benefits received by the Company and the Operating Partnership, the Dealer
Manager and the Participating Dealer, respectively, in connection with the offering of the Primary
Shares pursuant to this Agreement and the relevant Participating Dealer Agreement shall be deemed
to be in the same respective proportion as the total net proceeds from the offering of the Primary
Shares pursuant to this Agreement and the relevant Participating Dealer Agreement (before deducting
expenses), received by the Company, and the total selling commissions and Dealer Manager Fees
received by the Dealer Manager and the Participating Dealer, respectively, in each case as set
forth on the over of the Prospectus bear to the aggregate initial public offering price of the
Primary Shares as set forth on such cover.
(c) The relative fault of the Company and the Operating Partnership, the Dealer Manager and
the Participating Dealer, respectively, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact related to information supplied by the Company or the Operating
Partnership, or by the Dealer Manager or by the Participating Dealer, respectively, and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(d) The Company, the Operating Partnership, the Dealer Manager and the Participating Dealer
(by virtue of entering into the Participating Dealer Agreement) agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata allocation or by
any other method of allocation which does not take account of the equitable contributions referred
to above in this Section 8. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section 8 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission or alleged omission.
(e) Notwithstanding the provisions of this Section 8, the Dealer Manager and the Participating
Dealer shall not be required to contribute any amount by which the total price at which the Primary
Shares sold to the public by them exceeds the amount of any damages which the Dealer Manager and
the Participating Dealer have otherwise been required to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission.
(f) No party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any party who was not guilty of such
fraudulent misrepresentation.
(g) For the purposes of this Section 8, the Dealer Manager’s officers, directors, employees,
members, partners, agents and representatives, and each person, if any, who controls the Dealer
Manager within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution of the Dealer Manager, and each officers, directors,
employees, members, partners, agents and representatives of the Company and the Operating
Partnership, respectively, each officer of the Company who signed the Registration Statement and
each person, if any, who controls the Company or the Operating Partnership, within the meaning of
Section 15 of the Securities Act or Section 20 of the
23
Exchange Act shall have the same rights to contribution of the Company and the Operating
Partnership, respectively. The Participating Dealers’ respective obligations to contribute
pursuant to this Section 8 are several in proportion to the number of Primary Shares sold by each
Participating Dealer and not joint.
9. Survival of Provisions. The respective agreements, representations and warranties
of the Company, the Operating Partnership, and the Dealer Manager set forth in this Agreement shall
remain operative and in full force and effect until the Termination Date regardless of: (a) any
investigation made by or on behalf of the Dealer Manager or any Participating Dealer or any person
controlling the Dealer Manager or any Participating Dealer or by or on behalf of the Company, the
Operating Partnership or any person controlling the Company; and (b) the delivery of payment for
the Offered Shares. Following the termination of this Agreement, this Agreement will become void
and there will be no liability of any party to any other party hereto, except for obligations under
Sections 7, 8, 9, 10, 12, 13, 14 and 16, all of which will survive the termination of this
Agreement.
10. Applicable Law; Venue. This Agreement was executed and delivered in, and its
validity, interpretation and construction shall be governed by the laws of, the State of
California; provided however, that causes of action for violations of federal or state securities
laws shall not be governed by this Section 10. Venue for any action brought hereunder shall lie
exclusively in Irvine, California.
11. Counterparts. This 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.
12. Entire Agreement. This Agreement and the Exhibit attached hereto constitute the
entire agreement among the parties and supersede any prior understanding, whether written or oral,
prior to the date hereof with respect to the Offering.
13. Successors and Amendment.
13.1 Successors. This Agreement shall inure to the benefit of and be binding upon the
Dealer Manager and the Company and the Operating Partnership and their respective successors and
permitted assigns and shall inure to the benefit of the Participating Dealers to the extent set
forth in Sections 1 and 5 hereof. Nothing in this Agreement is intended or shall be construed to
give to any other person any right, remedy or claim, except as otherwise specifically provided
herein.
13.2 Assignment. Neither the Company or Operating Partnership, nor the Dealer Manager
may assign or transfer any of such party’s rights or obligations under this Agreement without the
prior written consent of the Dealer Manager, on the one hand, or the Company and the Operating
Partnership, acting together, on the other hand.
13.3 Amendment. This Agreement may be amended only by the written agreement of the
Dealer Manager, the Company and the Operating Partnership.
24
14. Term and Termination.
14.1 Termination; General. This Agreement may be terminated by either party upon 60
calendar days’ written notice to the other party in accordance with Section 16 below. In any case,
this Agreement shall expire at the close of business on the Termination Date.
14.2 Dealer Manager Obligations Upon Termination. The Dealer Manager, upon the
expiration or termination of this Agreement, shall (a) promptly deposit any and all funds, if any,
in its possession which were received from investors for the sale of Offered Shares into the
appropriate account designated by the Company for the deposit of investor funds, (b) promptly
deliver to the Company all records and documents in its possession which relate to the Offering and
are not designated as dealer copies, (c) provide a list of all purchasers and broker-dealers with
whom the Dealer Manager has initiated oral or written discussions regarding the Offering, and (d)
notify Participating Dealers of such termination. 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 an orderly transfer of management of the Offering to a party designated by the Company.
14.3 Company Obligations Upon Termination. Upon expiration or termination of this
Agreement, the Company shall pay to the Dealer Manager all
(a) earned but unpaid compensation and (b) reimbursement
for all incurred, accountable expenses to which the Dealer Manager
is or becomes entitled under Section 5 hereof at such time as such compensation becomes payable.
15. Confirmation. The Company hereby agrees and assumes the duty to confirm on its
behalf and on behalf of dealers or brokers who sell the Offered Shares all orders for purchase of
Offered Shares accepted by the Company. Such confirmations will comply with the rules of the
Commission and FINRA, and will comply with applicable laws of such other jurisdictions to the
extent the Company is advised of such laws in writing by the Dealer Manager.
16. Notices. Any notice, approval, request, authorization, direction or other
communication under this Agreement shall be deemed given (a) when delivered personally, (b) on the
first business day after delivery to a national overnight courier service, (c) upon receipt of
confirmation if sent via facsimile, or (d) on the fifth business day after deposited in the United
States mail, properly addressed and stamped with the required postage, registered or certified
mail, return receipt requested, in each case to the intended recipient at the address set forth
below:
If to the Company:
|
TNP Strategic Retail Trust, Inc. | |
0000 Xxxx Xxxxxx, Xxxxx 000 | ||
Xxxxxx, Xxxxxxxxxx 00000 | ||
Facsimile: (000)-000-0000 | ||
Attention: Xxxxx X. Worcaster | ||
If to the Operating Partnership:
|
TNP Strategic Retail Operating Partnership, LP | |
c/o TNP Strategic Retail Trust, Inc., General Partner |
25
0000 Xxxx Xxxxxx, Xxxxx 000 | ||
Xxxxxx, Xxxxxxxxxx 00000 | ||
Facsimile: (000)-000-0000 | ||
Attention: Xxxxx X. Xxxxxxxxx | ||
If to the Dealer Manager:
|
TNP Securities, LLC | |
0000 Xxxx Xxxxxx, Xxxxx 000 | ||
Xxxxxx, Xxxxxxxxxx 00000 | ||
Facsimile: (000) 000-0000 | ||
Attention: Xxxxx X. Xxxxxxxxx |
Any party may change its address specified above by giving the other party notice of such
change in accordance with this Section 16.
[SIGNATURES ON FOLLOWING PAGE]
26
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, | ||||||||||
“COMPANY” | ||||||||||
TNP STRATEGIC RETAIL TRUST, INC. | ||||||||||
By: | /s/ Xxxxx X. Xxxxxxxxx | |||||||||
Name: | Xxxxx X. Xxxxxxxxx | |||||||||
Title: | Chief Financial Officer, Treasurer and Secretary | |||||||||
“OPERATING PARTNERSHIP” | ||||||||||
TNP STRATEGIC RETAIL OPERATING PARTNERSHIP, LP | ||||||||||
By: | TNP Strategic Retail Trust, Inc. | |||||||||
its General Partner | ||||||||||
By: | /s/ Xxxxx X. Xxxxxxxxx | |||||||||
Name: | Xxxxx X. Xxxxxxxxx | |||||||||
Title: | Chief Financial Officer, Treasurer and Secretary |
Accepted and agreed as of the date first above written: | ||||||
“DEALER MANAGER” | ||||||
TNP SECURITIES, LLC | ||||||
By: |
/s/ Xxxx X. Xxxxxx | |||||
Name: | Xxxx X. Xxxxxx | |||||
Title: | President |
EXHIBIT A
FORM OF PARTICIPATING DEALER AGREEMENT
Up to $1,100,000,000 in Shares of Common Stock, $0.01 par value per share
FORM OF PARTICIPATING DEALER AGREEMENT
Dated:
, 2009
Ladies and Gentlemen:
Subject to the terms described herein, TNP Securities, LLC, as the dealer manager (the
“Dealer Manager”) for TNP Strategic Retail Trust, Inc., a Maryland corporation (the
“Company”), invites you (“Participating Dealer”) to participate in the
distribution, on a “best efforts basis,” of up to $1,100,000,000 in shares of common stock of the
Company, $0.01 par value per share (the “Common Stock”) to the public (the
“Offering”), of which amount: (i) up to $100,000,000 in shares of Common Stock are being
offered pursuant to the Company’s distribution reinvestment plan for a purchase price of $9.50 per
share (the “DRIP Shares”); and (ii) up to $1,000,000,000 in shares of Common Stock (the
“Primary Shares” and together with the DRIP Shares, the “Offered Shares”), are
being offered at a purchase price of $10.00 per share (subject in certain circumstances to
discounts based upon the volume of shares purchased and for certain categories of purchasers).
Notwithstanding the foregoing, the Company has reserved the right to reallocate the Offered Shares
between the Primary Shares and the DRIP Shares.
A
registration statement on Form S-11 (File No. 333-154975) has been prepared by the Company in
accordance with applicable requirements of the Securities Act of 1933, as amended (the
“Securities Act”), and the applicable rules and regulations of the Securities and Exchange
Commission (the “Commission”) promulgated thereunder (the “Securities Act
Regulations”), for the registration of the Offered Shares. Such registration statement, which
includes a preliminary prospectus, was filed with the Commission on
November 4, 2008. The Company has
prepared and filed such amendments thereto, if any, and such amended prospectus, if any, as may
have been required to the date hereof, and will file such additional amendments and supplements
thereto as may hereafter be required. Copies of such registration statement and each amendment
thereto have been or will be delivered to Participating Dealer. The prospectus, as amended or
supplemented, on file with the Commission at the Effective Date (as defined below) of the
registration statement (including financial statements, exhibits and all other documents related
thereto filed as a part thereof or incorporated therein), is hereinafter referred to as the
“Prospectus,” except that if the Prospectus is amended or supplemented after the Effective Date,
the term “Prospectus” shall refer to the Prospectus as amended or supplemented to date, and if the
Prospectus filed by the Company pursuant to Rule 424(b) or 424(c) of the Securities Act Regulations
shall differ from the Prospectus on file at the time the registration statement or any
post-effective amendment to the registration statement shall become effective, the term
“Prospectus” shall refer to the Prospectus filed pursuant to either Rule 424(b) or 424(c) of the
Securities Act Regulations from and after the date on which it shall have been filed with the
Commission. As used in this agreement, the term “Registration Statement” means the Registration
Statement, as amended through the date hereof, except that, if the Company files any post-effective
amendments to the Registration Statement, “Registration Statement” shall refer to the Registration
Statement as so amended by the last post-effective amendment declared
effective, and the term “Effective Date” means the applicable date upon which the Registration
Statement or any post-effective amendment thereto is or was first declared effective by the
Commission.
I. Dealer Manager Agreement. The Company is the sole general partner of TNP Strategic
Retail Operating Partnership, LP, a Delaware limited partnership that serves as the Company’s
operating partnership subsidiary (the “Operating Partnership”). The Dealer Manager has
entered into a Dealer Manager Agreement with the Company and the Operating Partnership dated ,
2009 (the “Dealer Manager Agreement”). Upon effectiveness of this Participating Dealer
Agreement (this “Agreement”), you will become one of the Participating Dealers referred to
in the Dealer Manager Agreement.
II. Sale of Shares. Participating Dealer hereby agrees to use its best efforts to
sell the Primary Shares for cash on the terms and conditions stated in the Prospectus. Nothing in
this Agreement shall be deemed or construed to make Participating Dealer an employee, agent,
representative, or partner of the Dealer Manager, the Company or the Operating Partnership, and
Participating Dealer is not authorized to act for the Dealer Manager, the Company or the Operating
Partnership or to make any representations on their behalf except as set forth in the Prospectus
and any printed sales literature or other materials prepared by the Company or TNP Strategic Retail
Advisor, LLC, a Delaware limited liability company that serves as the Company’s advisor pursuant to
the terms of an advisory agreement (the “Advisor”), provided that the use of said sales
literature and other materials has been approved for use by the Company in writing and all
appropriate regulatory agencies (the “Authorized Sales Materials”).
III. Submission of Orders. Each person desiring to purchase Primary Shares in the
Offering will be required to complete and execute a subscription agreement (“Subscription
Agreement”) in the form attached as an Appendix to the Prospectus and to deliver to
Participating Dealer such completed Subscription Agreement, together with a check, draft, wire or
money order (hereinafter referred to as an “instrument of payment”) in the amount of $10.00 per
Share, or such discounted purchase price per Share that may apply based upon the available
discounts specified in the Prospectus. There shall be a minimum initial purchase by any one
purchaser of $1,000 in Primary Shares. Any Subscription Agreement and instrument of payment not conforming
to the foregoing instructions shall be returned to such subscriber not later than the end of the
second business day following receipt by Participating Dealer of such materials. Subscription
Agreements and instruments of payment received by the Participating Dealer which conform to the
foregoing instructions shall be transmitted for deposit pursuant to one of the following methods:
(a) where, pursuant to Participating Dealer’s internal supervisory procedures, internal
supervisory review is conducted at the same location at which Subscription Agreements and
instruments of payment are received from subscribers, then, by noon of the next business day
following receipt by Participating Dealer, Participating Dealer will transmit the Subscription
Agreements and instrument of payment to the Escrow Agent (as defined below) or, after the Company
has received and accepted subscriptions for at least $2,000,000 in Primary Shares (the “Minimum
Offering”), to the Company or to such other account or agent as directed by the Company; and
2
(b) where, pursuant to Participating Dealer’s internal supervisory procedures, final internal
supervisory review is conducted at a different location (the “Final Review Office”), then
Subscription Agreements and instruments of payment will be transmitted by Participating Dealer to
the Final Review Office by noon of the next business day following receipt by Participating
Dealer. The Final Review Office will in turn, by noon of the next business day following
receipt by the Final Review Office, transmit such Subscription Agreements and instrument of payment
to the Escrow Agent or, after the Minimum Offering has been obtained, to the Company or to such
other account or agent as directed by the Company.
(c) Participating Dealer understands that the Company and/or the Dealer Manager reserves the
unconditional right to reject any order for any or no reason.
(d) Notwithstanding the foregoing, with respect to any Primary Shares to be purchased by a
custodial account, the Participating Dealer shall cause the custodian of such account to deliver a
completed Subscription Agreement and instrument of payment for such account directly to the Escrow
Agent. The Participating Dealer shall furnish to the Escrow Agent with each delivery of
instruments of payment a list of the subscribers showing the name, address, tax identification
number, state of residence, amount of Primary Shares subscribed for, and the amount of money paid.
(e) Participating Dealer hereby agrees to be bound by the terms of the Escrow Agreement, dated
July 9, 2009 (the “Escrow Agreement”), by and among CommerceWest Bank, NA, as escrow agent (the
“Escrow Agent”), the Dealer Manager and the Company.
IV. Participating Dealer’s Compensation.
(a) Subject to volume discounts and other special circumstances described in or as otherwise
provided in the “Plan of Distribution” section of the Prospectus, Participating Dealer’s selling
commission applicable to the total public offering price of Primary Shares sold by Participating
Dealer which it is authorized to sell hereunder is 7.0% of the gross proceeds from the Primary
Shares sold by it and accepted and confirmed by the Company, which commission will be paid by the
Dealer Manager. For these purposes, a “sale of Primary Shares” shall occur if and only if a
Subscription Agreement is accepted by the Company and the Company has thereafter distributed the
commission to the Dealer Manager in connection with such transaction. Participating Dealer hereby
waives any and all rights to receive payment of commissions due until such time as the Dealer
Manager is in receipt of the commission from the Company. Participating Dealer affirms that the
Dealer Manager’s liability for commissions payable to Participating Dealer is limited solely to the
commissions received by the Dealer Manager from the Company associated with Participating Dealer’s
sale of Primary Shares.
(b) In addition, as set forth in the Prospectus, the Dealer Manager, in its sole discretion,
may reallow a portion of the dealer manager fee described in the Prospectus (the “Dealer
Manager Fee”) to Participating Dealer as marketing fees or to defray other distribution-related
expenses. Such reallowance, if any, shall be determined by the Dealer Manager in its sole
discretion based on factors including, but not limited to, the number of Primary Shares sold by
Participating Dealer, the assistance of Participating Dealer in marketing the Offering and due
diligence expenses incurred, the extent to which similar fees are reallowed to participating
3
broker-dealers in similar offerings being conducted during the Offering and the level of
services that the Participating Dealer performs in connection with the distribution of the Primary
Shares, including ministerial, record-keeping, sub-accounting, stockholder services and other
administrative services; provided, however, that Participating Dealer will not be entitled to
receive Dealer Manager Fees which would cause the aggregate amount of selling commissions, Dealer
Manager Fees and all other forms of underwriting compensation (as defined in accordance with
applicable FINRA rules) received by the Dealer Manager and all Participating Dealers to exceed
10.0% of the gross proceeds raised from the sale of Primary Shares in the Offering. The Dealer
Manager’s reallowance of Dealer Manager Fees to Participating Dealer shall be described in Schedule
1 to this Agreement.
(c) Participating Dealer acknowledges and agrees that no selling commissions or Dealer Manager
Fees will be paid in respect of the sale of any DRIP Shares.
(d) The parties hereby agree that the foregoing selling commissions and Dealer Manager Fees
are not in excess of the usual and customary distributors’ or sellers’ commission received in the
sale of securities similar to the Primary Shares, that Participating Dealer’s interest in the
offering is limited to such selling commissions and Dealer Manager Fees from the Dealer Manager and
Participating Dealer’s indemnity referred to in Section XII below, and that the Company is not
liable or responsible for the direct payment of such selling commissions and Dealer Manager Fees to
Participating Dealer. In addition, as set forth in the Prospectus, the Dealer Manager will
reimburse Participating Dealer for reasonable bona fide due diligence expenses incurred by
Participating Dealer. Such due diligence expenses may include travel, lodging, meals and other
reasonable out-of-pocket expenses incurred by Participating Dealer and its personnel when visiting
the Company’s offices or properties to verify information relating to the Company or its
properties. Participating Dealer shall provide a detailed and itemized invoice for any such due
diligence expenses.
V. Payment.
(a) Payments of selling commissions will be made by the Dealer Manager (or by the Company as
the agent of the Dealer Manager, as provided in the Dealer Manager Agreement) to Participating
Dealer within 30 days of the receipt by the Dealer Manager of the gross commission payments from
the Company.
(b) Participating Dealer, in its sole discretion, may authorize Dealer Manager (or the Company
as the agent of the Dealer Manager, as provided in the Dealer Manager Agreement) to deposit selling
commissions, Dealer Manager Fees and other payments due to it pursuant to this Agreement directly
to its bank account. If Participating Dealer so elects, Participating Dealer shall provide such
deposit authorization and instructions in Schedule 2 to this Agreement.
VI. Right to Reject Orders or Cancel Sales. All orders, whether initial or
additional, are subject to acceptance by and shall only become effective upon confirmation by the
Company and/or the Dealer Manager, which reserves the right to reject any order for any or no
reason. Orders not accompanied by the required instrument of payment for the Primary Shares may be
rejected. Issuance and delivery of the Primary Shares will be made only after actual receipt of
4
payment therefor. In the event an order is rejected, canceled or rescinded for any reason,
Participating Dealer agrees to return to the Dealer Manager any selling commissions or Dealer
Manager Fees theretofore paid with respect to such order, and, if Participating Dealer fails to so
return any such selling commissions, the Dealer Manager shall have the right to offset amounts owed
against future commissions or Dealer Manager Fees due and otherwise payable to Participating
Dealer.
VII. Prospectus and Authorized Sales Materials. Participating Dealer is not
authorized or permitted to give, and will not give, any information or make any representation
(written or oral) concerning the Offered Shares except as set forth in the Prospectus and the
Authorized Sales Materials. The Dealer Manager will supply Participating Dealer with reasonable
quantities of the Prospectus (including any supplements thereto), as well as any Authorized Sales
Materials, for delivery to investors, and Participating Dealer will deliver a copy of the
Prospectus (including all supplements thereto) to each investor to whom an offer is made prior to
or simultaneously with the first solicitation of an offer to sell the Primary Shares to an
investor. Participating Dealer agrees that it will not send or give any supplements to the
Prospectus or any Authorized Sales Materials to any investor unless it has previously sent or given
a Prospectus and all supplements thereto to that investor or has simultaneously sent or given a
Prospectus and all supplements thereto with such Prospectus supplement or Authorized Sales
Materials. Participating Dealer agrees that it will not show or give to any investor or reproduce
any material or writing which is supplied to it by the Dealer Manager and marked “broker-dealer use
only” or otherwise bearing a legend denoting that it is not to be used in connection with the offer
or sale of Offered Shares to members of the public. Participating Dealer agrees that it will not
use in connection with the offer or sale of Offered Shares any materials or writings which have not
been previously approved by the Company other than the Prospectus and the Authorized Sales
Materials. Participating Dealer agrees to furnish a copy of any revised preliminary Prospectus to
each person to whom it has furnished a copy of any previous preliminary Prospectus, and further
agrees that it will itself mail or otherwise deliver all preliminary and final Prospectuses
required for compliance with the provisions of Rule 15c2-8 under the Securities Exchange Act of
1934, as amended (the “Exchange Act”).
VIII. License and Association Membership. Participating Dealer’s acceptance of this
Agreement constitutes a representation to the Company and the Dealer Manager that Participating
Dealer is a properly registered or licensed broker-dealer, duly authorized to sell Primary Shares
under Federal and state securities laws and regulations in all states where it offers or sells
Primary Shares, and that it is a member in good standing of FINRA. Participating Dealer represents
and warrants that it is currently licensed as a broker-dealer in the jurisdictions identified on
Schedule 3 to this Agreement and that its independent contractors and registered representatives
have the appropriate licenses(s) to offer and sell the Primary Shares in such jurisdictions. This
Agreement shall automatically terminate if Participating Dealer ceases to be a member in good
standing of FINRA, or with the securities commission of the state in which Participating Dealer’s
principal office is located. Participating Dealer agrees to notify the Dealer Manager immediately
if Participating Dealer ceases to be a member in good standing of FINRA or with the securities
commission of any state in which Participating Dealer is currently registered or licensed. The
Participating Dealer also hereby agrees to abide by the Rules of Fair Practice of FINRA and to
comply with Rules 2340, 2420, 2730, 2740, 2750 and 2810 of the FINRA Conduct Rules.
5
IX. Anti-Money Laundering Compliance Programs.
(a) Participating Dealer’s acceptance of this Agreement constitutes a representation to the
Company and the Dealer Manager that Participating Dealer has established and implemented an
anti-money laundering compliance program (“AML Program”) in accordance with applicable law,
including applicable FINRA Rules, rules promulgated by the Commission (the “Commission
Rules”) and the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act (USA PATRIOT Act) of 2001, as amended by the USA Patriot
Improvement and Reauthorization Act of 2005 (the “USA PATRIOT Act”), specifically
including, but not limited to, Section 352 of the International Money Laundering Abatement and
Anti-Terrorist Financing Act of 2001 (the “Money Laundering Abatement Act” and together
with the USA PATRIOT Act, the “AML Rules”), reasonably expected to detect and cause the
reporting of suspicious transactions in connection with the sale of Primary Shares. Participating
Dealer’s acceptance of this Agreement also constitutes a representation to the Company and the
Dealer Manager that as of the date hereof, Participating Dealer is in compliance with all AML
Rules, specifically including, but not limited to, the Customer Identification Program requirements
under Section 326 of the Money Laundering Abatement Act. Participating Dealer covenants that it
will perform all activities it is required to perform by applicable AML Rules and its AML Program
with respect to all customers on whose behalf Participating Dealer submits orders to the Company.
To the extent permitted by applicable law, Participating Dealer will share information with the
Dealer Manager and the Company for purposes of ascertaining whether a suspicious activity report is
warranted with respect to any suspicious transaction involving the purchase or intended purchase of
Primary Shares.
(b) Upon request by the Dealer Manager at any time, Participating Dealer hereby agrees to (i)
furnish a written copy of its AML Program to the Dealer Manager for review, and (ii) furnish a copy
of the findings and any remedial actions taken in connection with Participating Dealer’s most
recent independent testing of its AML Program. Participating Dealer further represents that it is
currently in compliance with all AML Rules, specifically including, but not limited to, the
Customer Identification Program requirements under Section 326 of the Money Laundering Abatement
Act, and Participating Dealer hereby covenants to remain in compliance with such requirements and
shall, upon request by the Dealer Manager, provide a certification to Dealer Manager that, as of
the date of such certification, (i) its AML Program is consistent with the AML Rules, (ii) it has
continued to implement its AML Program, and (iii) it is currently in compliance with all AML Rules,
specifically including, but not limited to, the Customer Identification Program requirements under
Section 326 of the Money Laundering Abatement Act.
X. Limitation of Offer; Suitability.
(a) Participating Dealer will offer Primary Shares only to persons who meet the suitability
standards set forth in the Prospectus and any suitability letter or memorandum sent to it by the
Company or the Dealer Manager and will only make offers to persons in the jurisdictions in which it
is advised in writing by the Company or the Dealer Manager that the Primary Shares are qualified
for sale or that such qualification is not required (the “Qualified Jurisdictions”).
Notwithstanding the qualification of the Primary Shares for sale in any
6
respective jurisdiction (or the exemption therefrom), Participating Dealer represents,
warrants and covenants that it will not offer Primary Shares and will not permit any of its
registered representatives to offer Primary Shares in any jurisdiction unless both Participating
Dealer and such registered representative are duly licensed to transact securities business in such
jurisdiction. In offering Primary Shares, Participating Dealer will comply with the provisions of
the Rules of Fair Practice set forth in the FINRA Manual, as well as all other applicable rules and
regulations relating to suitability of investors, including without limitation, the provisions of
Section III.C. of the Statement of Policy Regarding Real Estate Investment Trusts of the North
American Securities Administrators Association, Inc. (the “NASAA REIT Guidelines”).
(b) Participating Dealer further represents, warrants and covenants that neither Participating
Dealer, nor any person associated with Participating Dealer, shall offer or sell Primary Shares in
any jurisdiction except to investors who satisfy the investor suitability standards and minimum
investment requirements under all of the following: (i) applicable provisions of the Prospectus;
(ii) applicable laws of the jurisdiction of which such investor is a resident; (iii) applicable
FINRA Conduct Rules; and (iv) the provisions of Section III.C. of the NASAA REIT Guidelines.
Participating Dealer agrees to ensure that, in recommending the purchase, sale or exchange of
Primary Shares to an investor, Participating Dealer, or a person associated with Participating
Dealer, shall have reasonable grounds to believe, on the basis of information obtained from the
investor (and thereafter maintained in the manner and for the period required by the Commission,
any state securities commission, FINRA or the Company) concerning such investor’s age, investment
objectives, other investments, financial situation and needs, and any other information known to
Participating Dealer, or person associated with Participating Dealer, that (i) the investor is or
will be in a financial position appropriate to enable the investor to realize to a significant
extent the benefits described in the Prospectus, including the tax benefits to the extent they are
a significant aspect of the Offered Shares, (ii) the investor has a fair market net worth
sufficient to sustain the risks inherent in an investment in Primary Shares in the amount proposed,
including loss and lack of liquidity of such investment, and (iii) an investment in Primary Shares
is otherwise suitable for such investor. Participating Dealer further represents, warrants and
covenants that Participating Dealer, or a person associated with Participating Dealer, will make
every reasonable effort to determine the suitability and appropriateness of an investment in
Primary Shares of each proposed investor solicited by a person associated with Participating Dealer
by reviewing documents and records disclosing the basis upon which the determination as to
suitability was reached as to each such proposed investor, whether such documents and records
relate to accounts which have been closed, accounts which are currently maintained, or accounts
hereafter established. Participating Dealer agrees to retain such documents and records in
Participating Dealer’s records for a period of six years from the date of the applicable sale of
Primary Shares, to otherwise comply with the record keeping requirements provided in Section XIV
below and to make such documents and records available to (i) the Dealer Manager and the Company
upon request, and (ii) representatives of the Commission, FINRA and applicable state securities
administrators upon Participating Dealer’s receipt of an appropriate document subpoena or other
appropriate request for documents from any such agency. Participating Dealer shall not purchase
any Primary Shares for a discretionary account without obtaining the prior written approval of
Participating Dealer’s customer and such customer’s completed and executed Subscription Agreement.
7
XI. Due Diligence; Adequate Disclosure. Prior to offering the Primary Shares for
sale, Participating Dealer shall have conducted an inquiry such that Participating Dealer has
reasonable grounds to believe, based on information made available to Participating Dealer by the
Company or the Dealer Manager through the Prospectus or other materials, that all material facts
are adequately and accurately disclosed and provide a basis for evaluating a purchase of Primary
Shares. Notwithstanding the foregoing, Participating Dealer may rely upon the results of an
inquiry conducted by an independent third party retained for that purpose. Prior to the sale of
the Primary Shares, Participating Dealer shall inform each prospective purchaser of Primary Shares
of pertinent facts relating to the Primary Shares including specifically the risks related to
limitations on liquidity and marketability of the Primary Shares during the term of the investment
but shall not, in any event, make any representation on behalf of the Company or the Operating
Partnership except as set forth in the Prospectus and any Authorized Sales Materials.
XII. Indemnification. For the purposes of this Section XII, an entity’s
“Indemnified Parties” shall include such entity’s officers, directors, employees, members,
partners, affiliates, agents and representatives, and each person, if any, who controls such entity
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.
(a) Participating Dealer agrees to indemnify, defend and hold harmless the Company, the
Operating Partnership, the Dealer Manager, each of their respective Indemnified Parties, and each
person who signs the Registration Statement, from and against any losses, claims, damages or
liabilities to which the Company, the Operating Partnership, the Dealer Manager, or any of their
respective Indemnified Parties, or any person who signed the Registration Statement, may become
subject, under the Securities Act or otherwise, insofar as such losses, claims (including the
reasonable cost of investigation), damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) in whole or in part, any material inaccuracy in a representation or
warranty by Participating Dealer, any material breach of a covenant by Participating Dealer, or any
material failure by Participating Dealer to perform its obligations hereunder, or (ii) any untrue
statement or alleged untrue statement of a material fact contained (1) in any Registration
Statement or any post-effective amendment thereto or the Prospectus or any amendment or supplement
to the Prospectus or (2) in any Authorized Sales Materials or (3) in any application to qualify the
Offered Shares for the offer and sale under the applicable state securities or “blue sky” laws of
any state or jurisdiction, or (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 or in
the Prospectus or any amendment or supplement to the Prospectus or necessary to make statements
therein not misleading, provided, however, that in each case described in clauses (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, the Operating Partnership
or the Dealer Manager by Participating Dealer specifically for use with reference to Participating
Dealer in the Registration Statement or any such post-effective amendments thereof or the
Prospectus or any such amendment thereof or supplement thereto, or (iv) any use of sales literature
by Participating Dealer not authorized or approved by the Company or use of “broker-dealer use
only” materials with members of the public concerning the Offered Shares by Participating Dealer or
Participating Dealer’s representatives or agents, or (v) any untrue statement made by Participating
Dealer or its representatives or agents or omission to state a fact necessary in order to make the
statements made, in light of the circumstances under which they were made, not misleading in
connection
8
with the offer and sale of the Offered Shares, or (vi) any material violation of this
Agreement by Participating Dealer, or (vii) any failure of Participating Dealer to comply with
applicable laws governing money laundry abatement and anti-terrorist financing efforts in
connection with the Offering, including applicable FINRA Rules, Commission Rules and the USA
PATRIOT Act, or (viii) any other failure by Participating Dealer to comply with applicable FINRA
rules or Commission Rules or any other applicable Federal or state laws in connection with the
Offering. Participating Dealer will reimburse the aforesaid parties in connection with
investigation or defense of such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which Participating Dealer may otherwise have.
(b) Promptly after receipt by any indemnified party under this Section XII of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section XII, notify in writing the indemnifying
party of the commencement thereof and the omission to so notify the indemnifying party 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 (subject to Section XII (c) below) incurred by such indemnified party in
defending itself, except for such expenses incurred after the indemnifying party has deposited
funds sufficient to effect the settlement, with prejudice, of the claim in respect of which
indemnity is sought. Any such indemnifying party shall not be liable to any such indemnified party
on account of any settlement of any claim or action effected without the consent of such
indemnifying party.
(c) An indemnifying party under this Section XII of this Agreement shall pay all legal fees
and expenses of the indemnified party in the defense of such claims or actions; provided, however,
that the indemnifying party shall not be obligated to pay legal expenses and fees to more than one
law firm in connection with the defense of similar claims arising out of the same alleged acts or
omissions giving rise to such claims notwithstanding that such actions or claims are alleged or
brought by one or more parties against more than one indemnified party. If such claims or actions
are alleged or brought against more than one indemnified party, then the indemnifying party shall
only be obliged to reimburse the expenses and fees of the one law firm that has been participating
by a majority of the indemnified parties against which such action is finally brought; and in the
event a majority of such indemnified parties is unable to agree on which law firm for which
expenses or fees will be reimbursable by the indemnifying party, then payment shall be made to the
first law firm of record representing an indemnified party against the action or claim. Such law
firm shall be paid only to the extent of services performed by such law firm and no reimbursement
shall be payable to such law firm on account of legal services performed by another law firm.
XIII. Contribution.
(a) If the indemnification provided for in Section XII hereof is for any reason unavailable to
or insufficient to hold harmless an indemnified party in respect of any losses,
9
liabilities, claims, damages or expenses referred to therein, then each indemnifying party
shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Operating Partnership, the Dealer
Manager and Participating Dealer, respectively, from the offering of the Primary Shares pursuant to
this Agreement and the Dealer Manager Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of the Company and
the Operating Partnership, the Dealer Manager and Participating Dealer, respectively, in connection
with the statements or omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
(b) The relative benefits received by the Company and the Operating Partnership, the Dealer
Manager and Participating Dealer, respectively, in connection with the offering of the Primary
Shares pursuant to this Agreement shall be deemed to be in the same respective proportion as the
total net proceeds from the sale of the Primary Shares (before deducting expenses) received by the
Company, and the total selling commissions and Dealer Manager Fees received by the Dealer Manager
and Participating Dealer, respectively, in each case as set forth on the cover of the Prospectus
bear to the aggregate initial public offering price of the Primary Shares as set forth on such
cover.
(c) The relative fault of the Company and the Operating Partnership, the Dealer Manager and
Participating Dealer, respectively, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact related to information supplied by the Company or the Operating
Partnership, or by the Dealer Manager or by Participating Dealer, respectively, and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(d) The Company, the Operating Partnership, the Dealer Manager and Participating Dealer agree
that it would not be just and equitable if contribution pursuant to this Section XIII were
determined by pro rata allocation or by any other method of allocation which does not take account
of the equitable contributions referred to above in this Section XIII. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to
above in this Section XIII shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission or alleged omission.
(e) Notwithstanding the provisions of this Section XIII, the Dealer Manager and Participating
Dealer shall not be required to contribute any amount by which the total amount of selling
commissions and Dealer Manager Fees received by them exceeds the amount of any damages which the
Dealer Manager and Participating Dealer have otherwise been required to pay by reason of any untrue
or alleged untrue statement or omission or alleged omission.
10
(f) No party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any party who was not guilty of such
fraudulent misrepresentation.
(g) For the purposes of this Section XIII, the Dealer Manager’s officers, directors,
employees, members, partners, agents and representatives, and each person, if any, who controls the
Dealer Manager within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution of the Dealer Manager, and each officers, directors,
employees, members, partners, agents and representatives of the Company and the Operating
Partnership, respectively, each officer of the Company who signed the Registration Statement and
each person, if any, who controls the Company or the Operating Partnership, within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution of the Company and the Operating Partnership, respectively. Participating Dealer’s
obligations to contribute pursuant to this Section XIII are several in proportion to the number of
Primary Shares sold by Participating Dealer and not joint.
XIV. Compliance with Record Keeping Requirements. Participating Dealer agrees to
comply with the record keeping requirements of the Exchange Act, including but not limited to,
Rules 17a-3 and 17a-4 promulgated under the Exchange Act. Participating Dealer further agrees to
keep such records with respect to each customer who purchases Primary Shares, his suitability and
the amount of Primary Shares sold, and to retain such records for such period of time as may be
required by the Commission, any state securities commission, FINRA or the Company.
XV. Customer Complaints. Participating Dealer hereby agrees to provide to the Dealer
Manager promptly upon receipt by Participating Dealer copies of any written or otherwise documented
customer complaints received by Participating Dealer relating in any way to the Offering
(including, but not limited to, the manner in which the Primary Shares are offered by Participating
Dealer), the Offered Shares or the Company.
XVI. Effective Date. This Agreement will become effective upon the last date it is
signed by either party hereto.
XVII. Termination; Amendment.
(a) Participating Dealer will immediately suspend or terminate its offer and sale of Primary
Shares upon the request of the Company or the Dealer Manager at any time and will resume its offer
and sale of Primary Shares hereunder upon subsequent request of the Company or the Dealer Manager.
Any party may terminate this Agreement by written notice pursuant to Section XX below. This
Agreement and the exhibits and schedules hereto are the entire agreement of the parties and
supersedes all prior agreements, if any, between the parties hereto relating to the subject matter
hereof.
(b) This Agreement may be amended at any time by the Dealer Manager by written notice to
Participating Dealer, and any such amendment shall be deemed accepted by Participating Dealer upon
placing an order for sale of Primary Shares after it has received such notice.
11
XVIII. Assignment. Participating Dealer shall have no right to assign this Agreement
or any of Participating Dealer’s rights hereunder or to delegate any of Participating Dealer’s
obligations. Any purported assignment or delegation by Participating Dealer shall be null and
void. The Dealer Manager shall have the right to assign any or all of its rights and obligations
under this Agreement by written notice, and Participating Dealer shall be deemed to have consented
to such assignment by execution hereof. Dealer Manager shall provide written notice of any such
assignment to Participating Dealer.
XIX. Privacy Laws. The Dealer Manager and Participating Dealer (each referred to
individually in this Section XIX as a “party”) agree as follows:
(a) Each party agrees to abide by and comply with (i) the privacy standards and requirements
of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 (“GLB Act”); (ii) the privacy standards and
requirements of any other applicable Federal or state law; and (iii) its own internal privacy
policies and procedures, each as may be amended from time to time;
(b) Each party agrees to refrain from the use or disclosure of nonpublic personal information
(as defined under the GLB Act) of all customers who have opted out of such disclosures except as
necessary to service the customers or as otherwise necessary or required by applicable law; and
(c) Each party shall be responsible for determining which customers have opted out of the
disclosure of nonpublic personal information by periodically reviewing and, if necessary,
retrieving a list of such customers (the “List”) as provided by each to identify customers
that have exercised their opt-out rights. In the event either party uses or discloses nonpublic
personal information of any customer for purposes other than servicing the customer, or as
otherwise required by applicable law, that party will consult the List to determine whether the
affected customer has exercised his or her opt-out rights. Each party understands that each is
prohibited from using or disclosing any nonpublic personal information of any customer that is
identified on the List as having opted out of such disclosures.
XX. Notice. All notices will be in writing and deemed given (a) when delivered
personally, (b) on the first business day after delivery to a national overnight courier service,
(c) upon receipt of confirmation if sent via facsimile, or (d) on the fifth business day after
deposit in the United States mail, properly addressed and stamped with the required postage,
registered or certified mail, return receipt requested, to the Dealer Manager at: 0000 Xxxx Xxxxxx,
Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, 949-833-8252, Attention: , and to Participating Dealer at the
address specified by Participating Dealer on the signature page hereto.
XXI. Attorneys’ Fees, Applicable Law and Venue.
In any action to enforce the provisions of this Agreement or to secure damages for its breach,
the prevailing party shall recover its costs and reasonable attorney’s fees. This Agreement shall
be construed under the laws of the State of California. Venue for any action (including
arbitration) brought hereunder shall lie exclusively in Irvine, California.
[SIGNATURES ON FOLLOWING PAGES]
12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on its behalf
by its duly authorized agent.
“DEALER MANAGER” | ||||||||
TNP SECURITIES, LLC | ||||||||
By: | ||||||||
Name: | ||||||||
Title: | ||||||||
We have read the foregoing Agreement and we hereby accept and agree to the terms and
conditions therein set forth. We hereby represent that the jurisdictions identified below
represent a true and correct list of all jurisdictions in which we are registered or licensed as a
broker or dealer and are fully authorized to sell securities, and we agree to advise you of any
change in such list during the term of this Agreement.
1. Identity of Participating Dealer:
Full Legal Name:
Type of Entity: |
||
Organized in the State of: |
||
Tax Identification Number: |
||
FINRA/CRD Number: |
||
2. Any notice under this Agreement will be deemed given pursuant to Section XX hereof when
delivered to Participating Dealer as follows:
Company Name: | ||||
Attention to: | ||||
(Name) | ||||
(Title) | ||||
Street Address: | ||||
City, State and Zip Code: | ||||
Telephone No.: ( ) | ||||
Facsimile No.: ( ) | ||||
Email Address: | ||||
Accepted and agreed as of the date below: | ||||||
“PARTICIPATING DEALER” | ||||||
(Print Name of Participating Dealer) |
||||||
By: |
||||||
Name: | ||||||
Title: | ||||||
Date: | ||||||
SCHEDULE 1
TO
PARTICIPATING DEALER AGREEMENT WITH
TNP SECURITIES, LLC
TO
PARTICIPATING DEALER AGREEMENT WITH
TNP SECURITIES, LLC
NAME OF ISSUER: TNP STRATEGIC RETAIL TRUST, INC.
NAME OF PARTICIPATING DEALER: |
||||
SCHEDULE TO AGREEMENT DATED: |
||||
As marketing fees and to defray other distribution-related expenses, the Dealer Manager will pay
___basis points of the gross cash proceeds on all sales generated by Participating Dealer
pursuant to Section IV of this Participating Dealer Agreement. These amounts are in addition to
the selling commissions provided for in Section IV of this Participating Dealer Agreement and
will be due and payable at the same time as the selling commissions, as more fully described in
Section V hereof.
“DEALER MANAGER” | ||||||||||
TNP SECURITIES, LLC | ||||||||||
By: | ||||||||||
Name: | ||||||||||
Title: | ||||||||||
“PARTICIPATING DEALER” | ||||||||
(Print Name of Participating Dealer) |
||||||||
By: | ||||||||
Name: | ||||||||
Title: | ||||||||
SCHEDULE 2
TO
PARTICIPATING DEALER AGREEMENT WITH
TNP SECURITIES, LLC
TO
PARTICIPATING DEALER AGREEMENT WITH
TNP SECURITIES, LLC
NAME OF ISSUER: TNP STRATEGIC RETAIL TRUST, INC.
NAME OF PARTICIPATING DEALER: |
||||
SCHEDULE TO AGREEMENT DATED: |
||||
Participating Dealer hereby authorizes the Dealer Manager or its agent to deposit selling
commissions, reallowances and other payments due to it pursuant to the Participating Dealer
Agreement to its bank account specified below. This authority will remain in force until
Participating Dealer notifies the Dealer Manager in writing to cancel it. In the event that the
Dealer Manager deposits funds erroneously into Participating Dealer’s account, the Dealer Manager
is authorized to debit the account with no prior notice to Participating Dealer for an amount not
to exceed the amount of the erroneous deposit.
Bank Name: |
||||
Bank Address: |
||||
Bank Routing Number: | ||||
Account Number: | ||||
“PARTICIPATING DEALER” | ||||||
(Print Name of Participating Dealer) |
||||||
By: |
||||||
Name: | ||||||
Title: | ||||||
Date: | ||||||
SCHEDULE 3
TO
PARTICIPATING DEALER AGREEMENT WITH
TNP SECURITIES, LLC
TO
PARTICIPATING DEALER AGREEMENT WITH
TNP SECURITIES, LLC
Participating Dealer represents and warrants that it is currently licensed as a broker-dealer
in the following jurisdictions:
o
|
Alabama | o | Nebraska | |||
o
|
Alaska | o | Nevada | |||
o
|
Arizona | o | New Hampshire | |||
o
|
Arkansas | o | New Jersey | |||
o
|
California | o | New Mexico | |||
o
|
Colorado | o | New York | |||
o
|
Connecticut | o | North Carolina | |||
o
|
Delaware | o | North Dakota | |||
o
|
District of Columbia | o | Ohio | |||
o
|
Florida | o | Oklahoma | |||
o
|
Georgia | o | Oregon | |||
o
|
Hawaii | o | Pennsylvania | |||
o
|
Idaho | o | Puerto Rico | |||
o
|
Illinois | o | Rhode Island | |||
o
|
Indiana | o | South Carolina | |||
o
|
Iowa | o | South Dakota | |||
o
|
Kansas | o | Tennessee | |||
o
|
Kentucky | o | Texas | |||
o
|
Louisiana | o | Utah | |||
o
|
Maine | o | Vermont | |||
o
|
Maryland | o | Virgin Islands | |||
o
|
Massachusetts | o | Virginia | |||
o
|
Michigan | o | Washington | |||
o
|
Minnesota | o | West Virginia | |||
o
|
Mississippi | o | Wisconsin | |||
o
|
Missouri | o | Wyoming | |||
o
|
Montana |