Exhibit 1.1
BOSTON CAPITAL REAL ESTATE INVESTMENT TRUST, INC.
Up to 105,000,000 Shares of Common Stock/$1,050,000,000
DEALER-MANAGER AGREEMENT
___________ __, 2005
Boston Capital Securities, Inc.
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Dear Sirs:
Boston Capital Real Estate Investment Trust, Inc., a Maryland corporation
(the "Company"), is registering with the Securities and Exchange Commission (the
"Commission") for public sale (the "Offering") a maximum of 105,000,000 shares
of its Common Stock, $.001 par value per share (the "Shares"), to be issued and
sold for an aggregate purchase price of $1,050,000,000 (100,000,000 shares to be
offered to the public and 5,000,000 shares to be offered pursuant to the
Company's dividend reinvestment plan). The Shares are to be sold for a per share
cash purchase price of $10.00, and the minimum purchase by any one person is 100
shares except as otherwise indicated in the Prospectus or in any letter or
memorandum from the Company to Boston Capital Securities, Inc. (the
"Dealer-Manager").
The Company hereby authorizes and appoints, subject to the terms and
conditions of this Agreement, the Dealer-Manager to organize a group of
soliciting dealers (the "Soliciting Dealers"), consisting of brokers and
dealers, who shall be members in good standing of the National Association of
Securities Dealers, Inc. (the "NASD"), to solicit purchasers of the Shares.
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Dealer-Manager that:
(a) The Company has filed with the Commission a Registration Statement on
Form S-11, Registration No. 333-108426 and a related preliminary
prospectus for the registration of the Shares under the Securities Act
of 1933, as amended (the "1933 Act"), and has filed such amendments
thereto and such amended preliminary prospectuses as may have been
required as of the date hereof. Such registration statement as amended
and the amended prospectus on file with the Commission at the time the
registration statement becomes effective are herein called the
"Registration Statement" and the "Prospectus" respectively, except
that (A) if the Company files a post-effective amendment to such
registration statement, then the term "Registration Statement" shall,
from and after the declaration of the effectiveness of such
post-effective amendment, refer to such registration statement as
amended by such post-effective amendment, and the term "Prospectus"
shall refer to the amended prospectus then on file with the
Commission, and (B) if the prospectus filed by the Company pursuant to
either Rule 424(b) or (c) of the rules and regulations of the
Commission under the 1933 Act (the "Regulations") shall differ from
the prospectus on file at the time the Registration Statement or the
most recent post-effective amendment thereto, if any, shall have
become effective, the term "Prospectus" shall refer to such prospectus
filed pursuant to either Rule 424(b) or (c), as the case may be, from
and after the date on which it shall have been filed. The Commission
has not issued any order preventing or suspending the use of any
preliminary prospectus or the Prospectus.
(b) The Company at the Offering's closing date (or at each of its closing
dates if the Offering shall have more than one closing) will be duly
organized and legally existing as a corporation pursuant to the laws
of the State of Maryland with full power and authority to conduct
business as described in the Prospectus; the Company has the power and
authority to enter into and perform this Agreement; the execution and
delivery of this Agreement by the Company has been duly and validly
authorized by all necessary action; the execution and delivery of this
Agreement, the fulfillment of its terms and consummation of the
transactions contemplated hereunder do not and will not conflict with
or constitute a breach or default under any other agreement, indenture
or instrument by which the Company is bound, or any law, regulation or
order applicable to the Company or its respective properties; this
Agreement constitutes the valid and binding agreement of the Company,
enforceable against it in accordance with its terms.
(c) At the time the Registration Statement initially becomes effective and
at the time that any post-effective amendment thereto becomes
effective, the Registration Statement and the Prospectus, and at each
closing date the Prospectus, will comply with the provisions of the
1933 Act and the Regulations; at the time the Registration Statement
initially becomes effective and at the time that any post-effective
amendment thereto becomes effective the Registration Statement will
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; and at the time the
Registration Statement or an amendment thereto becomes effective, and
the Prospectus at each closing date, will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading;
provided, however, that the representations and warranties in this
paragraph shall not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by the
Dealer-Manager expressly for use in the Registration Statement or the
Prospectus. Every contract or other document
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required by the 1933 Act or the Regulations to be filed as an exhibit
to the Registration Statement has been so filed.
(d) Any supplemental sales literature or advertisement, regardless of how
labeled or described, used in addition to the Prospectus in connection
with the Offering which is furnished or approved by the Company
("Authorized Sales Literature") shall, to the extent required, be
filed with and approved by the appropriate securities agencies and
bodies.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE DEALER-MANAGER.
The Dealer-Manager hereby represents, warrants and agrees with the Company
that:
(a) Solicitation and other activities by the Dealer-Manager hereunder
shall be undertaken only in accordance with this Agreement, the 1933
Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and the applicable rules and regulations of the Commission and any
other applicable securities or blue sky laws and regulations. The
Dealer-Manager agrees that through the termination date of the
Offering indicated in the Prospectus (the "Termination Date") it will
not use or authorize the use of any solicitation material other than
the Prospectus and Authorized Sales Literature.
(b) The Dealer-Manager is a broker-dealer registered with the Commission
and with each state in which it intends to make an offer (but not
necessarily in each state in which a Soliciting Dealer may make an
offer); it is, and will remain until the Termination Date, a member in
good standing of the NASD and agrees to comply with the provisions and
applicable rules and regulations relating to the suitability of
investors, including, without limitation, the provisions of Article
III.C of the Statement of Policy Regarding Real Estate Investment
Trusts of the North American Securities Administrators Association,
Inc. (the "NASAA Guidelines"); and each sales representative of the
Dealer-Manager making offers or sales of Shares is properly licensed
in each such jurisdiction where he intends to so act. The
Dealer-Manager acknowledges that it has reviewed the Prospectus and
Authorized Sales Literature and has determined that the suitability
standards are fully disclosed and are consistent with the NASAA
Guidelines. In recommending to a potential investor the purchase, sale
or transfer of Shares the Dealer-Manager shall:
(i) have reasonable grounds to believe, on the basis of
information obtained from the investor concerning his investment
objectives, other investments, financial situation and needs, and
any other information known by the Dealer-Manager or an
associated person, that:
(A) the investor has a fair market net worth sufficient to
sustain the risks inherent in an investment in the Company,
including loss of investment and lack of liquidity; and
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(B) the Company is otherwise suitable for the investor; and
(ii) will maintain in its files documents disclosing the basis
upon which the determination of suitability was reached as to
each investor.
The Dealer-Manager hereby represents that it will communicate to each
of its sales agents, representatives and other appropriate persons
associated with it the above-referenced suitability standards, and the
Dealer-Manager shall require each Soliciting Dealer that it may engage
to acknowledge compliance with the NASAA Guidelines. Furthermore, the
Dealer-Manager shall not execute any transaction in the Company in a
discretionary account without prior written approval of the
transaction by the potential investor.
(c) The Dealer-Manager shall provide a copy of the Prospectus to each
prospective investor to whom the Dealer-Manager shall directly effect
a sale of Shares at the time of such sale of Shares to such
prospective investor. It shall not, in connection with the offer and
sale of Shares, give any information or make representations, nor
shall it authorize others to give any information or make
representations, other than such information and representations as
are contained in the Prospectus or in any Authorized Sales Literature.
(d) Each Soliciting Dealer engaged by the Dealer-Manager will be a
broker-dealer registered with the Commission and with each state in
which it intends to make an offer, will be a member in good standing
of the NASD and will agree to comply with the NASAA Guidelines, and
each sales representative employed by a Soliciting Dealer who makes
offers or sales of Shares will be properly licensed to sell securities
in the jurisdictions where such representative makes offers or sales.
(e) The Dealer-Manager will promptly deliver to the Company any
subscription documents received by it and will promptly deliver all
checks executed by or delivered on behalf of prospective investors to
Boston Private Bank & Trust Company (the "Escrow Agent") for deposit
in the escrow account in accordance with Section 8 hereof.
(f) Prior to participating in the offer and sale of the Shares, the
Dealer-Manager shall have reviewed the Prospectus and will have
reasonable grounds to believe that all material facts are adequately
and accurately disclosed and provide a basis for evaluating the
Company. In determining the adequacy of the disclosed facts, the
Dealer-Manager shall obtain written information on material facts
relating at a minimum to the following, if relevant in view of the
nature of the Offering:
(i) items of compensation;
(ii) physical properties;
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(iii) tax aspects;
(iv) the Company's conflicts and risk factors; and
(v) appraisals and other pertinent reports.
Prior to executing a purchase transaction in the Company, the
Dealer-Manager or a person associated with it shall inform the
prospective investor of all pertinent facts relating to the liquidity
and marketability of an investment in the Shares.
(g) The Dealer-Manager represents that it has not engaged, and agrees that
it will not engage, in any activity with respect to the Shares in
violation of the 1934 Act, including Rule 10b-6 thereunder.
(h) Neither the Dealer-Manager nor any other person is authorized by the
Company to give any information or make any representations in
connection with this Agreement or the Offering other than those
contained in the Prospectus and any Authorized Sales Literature
furnished to the Dealer-Manager or authorized for use by the Company.
Without limiting the generality of the foregoing, the Dealer-Manager
will not publish, circulate or otherwise use any other advertisement
or solicitation material without the prior written approval of the
Company.
(i) The Dealer-Manager will require that each of the Soliciting Dealers
retained by it enter into a soliciting dealer agreement similar in
form to the one attached hereto as Exhibit A (a "Soliciting Dealer
Agreement").
(j) On becoming a Soliciting Dealer and in soliciting purchasers of the
Shares, the Dealer-Manager agrees to comply with the terms and
conditions imposed on the Soliciting Dealers pursuant to the
Soliciting Dealer Agreement.
(k) The blue sky survey for the Company indicates or will indicate the
jurisdictions where it is believed that offers and sales of the Shares
may be made under the applicable state securities laws and
regulations. In effecting offers or sales in a jurisdiction, the
Dealer-Manager will comply with all special conditions and limitations
imposed by such jurisdiction, as set forth in the blue sky survey for
the Company. If the blue sky survey for the Company is not enclosed
herewith, it will be made available to the Dealer-Manager at a later
date. In no circumstances will the Dealer-Manager engage in any
activities as a Soliciting Dealer hereunder in any jurisdiction (a)
which is not listed in the blue sky survey as a jurisdiction where
offers and sales of Shares may be made under the blue sky or
securities laws of such jurisdiction or (b) in which the
Dealer-Manager may not lawfully so engage. The blue sky survey shall
not be considered Authorized Sales Literature.
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SECTION 3. COMPENSATION OF DEALER-MANAGER.
(a) Except as provided in the "Selling and Escrow Arrangements" section of
the Prospectus, as compensation for the securities of the
Dealer-Manager hereunder, the Company will pay to the Dealer-Manager a
selling commission of seven per cent (7%) of the gross proceeds of the
Shares sold and a dealer-manager fee in the amount of two per cent
(2.0%) of the gross proceeds of the Shares sold.
(b) The Dealer-Manager may re-allow all or any part of the selling
commission and up to one and one half percent (1.5%) of the
dealer-manager fee for which the Dealer-Manager was reimbursed by the
Company in respect of the Shares in the Company sold by such
Soliciting Dealer.
(c) No subscription shall be effective unless and until the subscription
payment is accepted by the Company, and the Company reserves the right
in its sole discretion to reject any subscription payment submitted.
In the event that a sale of Shares for which one of the Soliciting
Dealers engaged by the Dealer-Manager has solicited a subscription
shall not occur, for whatever reason, no dealer-manager fee or selling
commission with respect to such Shares shall be paid to the
Dealer-Manager or such Soliciting Dealer.
SECTION 4. MUTUAL COVENANTS.
In the event that any party hereto shall learn of any circumstances or
facts, the existence of which causes such party to believe that such
circumstances or facts (i) render the Prospectus inaccurate or misleading as to
any material facts or (ii) should otherwise be disclosed in a supplement or
amendment to the Prospectus or any Authorized Sales Literature, such party will
promptly bring such circumstances or facts to the attention of each party
hereto. If, in the opinion of any party hereto or of counsel for any party
hereto, such circumstances or facts should be set forth in an amendment or
supplement to the Prospectus or to any Authorized Sales Literature, the Company
shall cause such amendment or supplement to be prepared promptly and shall make
available to the Dealer-Manager sufficient copies thereof for its own use and/or
distribution to the Soliciting Dealers.
SECTION 5. TERMINATION.
This Agreement may be terminated by written or telegraphic notice to the
Dealer-Manager from the Company, or upon the expiration or termination of the
Offering; provided, however, that such termination shall not relieve the Company
of the obligation to pay when due all fees payable to the Dealer-Manager
hereunder or the obligations of any of the parties hereto referred to under
Section 7 hereof.
SECTION 6. LIABILITY OF PARTIES.
Nothing herein contained shall constitute the Dealer-Manager, the
Soliciting Dealers and the Company as an association, partnership,
unincorporated business or other
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separate entity, nor shall anything herein contained render the Company liable
for the obligations of any of the Soliciting Dealers. The Company shall not be
under any liability to any Soliciting Dealer or any other person for any act or
omission or any matter connected with this Agreement or the Company, except for
obligations expressly assumed by an association, partnership, unincorporated
business or other separate entity in this Agreement.
SECTION 7. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless the Dealer-Manager and
each Soliciting Dealer from and against any and all losses, claims,
damages or liabilities, joint or several, to which the Dealer-Manager
and any Soliciting Dealer may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon a breach or
alleged breach by the Company of any of its representations and
warranties or upon an untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and the Company will reimburse the Dealer-Manager and each
such Soliciting Dealer for any legal or other expenses (including, but
not limited to, reasonable attorneys' fees) reasonably incurred by the
Dealer-Manager and such Soliciting Dealer in connection with
investigating or defending any such claim or action instituted against
the Dealer-Manager or any such Soliciting Dealer, whether or not
resulting in any liability.
The indemnity agreement in this Section 7(a) will be in addition to
any liability which the Company may otherwise have and shall extend
upon the same terms and conditions to each person, if any, who
controls the Dealer-Manager and any Soliciting Dealer within the
meaning of the 1933 Act or 1934 Act, or is a registered representative
of such Dealer-Manager or Soliciting Dealer.
(b) The Dealer-Manager and each Soliciting Dealer will indemnify and hold
harmless the Company from and against any and all losses, claims,
damages or liabilities to which the Company may become subject insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) the failure or alleged
failure by the Dealer-Manager and/or such Soliciting Dealer to perform
fully and to act in compliance with the provisions of this Agreement
or the Soliciting Dealer Agreement, or (ii) any untrue statement or
alleged untrue statement of any material fact made by the
Dealer-Manager or such Soliciting Dealer to any offeree or purchaser
of any of Shares (other than any statement contained in the Prospectus
or any Authorized Sales Literature, or any amendment or supplement
thereto), or (iii) any omission or alleged omission by the
Dealer-Manager or such Soliciting Dealer to state to any offeree or
purchaser of any Shares a material fact
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necessary in order to make the statements made to such offeree or
purchaser not misleading in light of the circumstances under which
they were made (other than any such material fact omitted from the
Prospectus, or any amendment or supplement thereto), and will
reimburse any legal or other expenses (including, but not limited to,
reasonable attorneys' fees) reasonably incurred by the Company in
connection with investigating or defending any such claim or action,
whether or not resulting in any liability.
The indemnity agreement in this Section 7(b) will be in addition to
any liability which the Dealer-Manager and/or such Soliciting Dealer
may otherwise have and shall extend upon the same terms and conditions
to each person signing the Registration Statement on behalf of the
Company and each person, if any, who controls the Company within the
meaning of the 1933 Act or the 1934 Act.
(c) No person shall be liable under the indemnity agreements contained
under Sections 7(a) and (b) hereof unless the person requesting
indemnification shall have notified such indemnifying party within ten
(10) business days after the summons or other first legal process
giving notice of the nature of the claim shall have been served upon
the indemnified party, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under
this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying
party will not relieve him or it from any liability which he or it may
have to any indemnified party otherwise than under this Section 7. In
case any such action is brought against any indemnified party and he
or it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that he or it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such
indemnified party of his or its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified
party under this Section 7 for any legal or other expenses, in each
case subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of investigation.
(d) If the right to indemnification provided for in paragraphs (a), (b) or
(c) of this Section 7 would by its terms be available to a person
hereunder (collectively, the "Indemnified Parties" and individually,
an "Indemnified Party"), but is held to be unavailable by a court of
competent jurisdiction for any reason other than because of the terms
of such indemnification provision, then the Company, the
Dealer-Manager and the Soliciting Dealers (collectively, the
"Indemnifying Parties" and individually, an "Indemnifying Party")
shall contribute to the aggregate of such losses, claims, damages and
liabilities as are contemplated in those paragraphs (including, but
not limited to, any investigation, legal and other expenses incurred
in connection with, and any
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amount paid in settlement of, any claim, action, suit or proceeding)
in the ratio in which the proceeds of the Offering of Shares have been
actually received by each such Indemnifying Party. For purposes of the
preceding sentence, proceeds paid to an Indemnifying Party hereunder
and subsequently paid to another Indemnifying Party or Indemnifying
Parties pursuant to this Agreement or otherwise, shall be deemed
received by the last of such Indemnifying Parties to whom or to which
such proceeds were paid. However, the right of contribution described
in the preceding sentences is subject to the following limitations:
(i) In no case shall any Indemnifying Party and the persons who
control such Indemnifying Party within the meaning of
applicable state and federal securities laws be required to
contribute any amount in excess of the aggregate Offering
proceeds actually received by it and them (determined as
described above); and
(ii) No person guilty of fraudulent misrepresentation within the
meaning of Section 11(f) of the 1933 Act shall be entitled
to contribution from any person who was not guilty of such
fraudulent misrepresentation.
Any Indemnified Party entitled to contribution will, promptly after
receipt of such notice of commencement of any action, suit, proceeding
or claim against him or it in respect of which a claim for
contribution may be made against another Indemnifying Party or
Indemnifying Parties, notify such other Indemnifying Party or
Indemnifying Parties. Failure to so notify such other Indemnifying
Party or Indemnifying Parties shall not relieve such other
Indemnifying Party or Indemnifying Parties from any other obligation
it or they may have hereunder or otherwise. If such other Indemnifying
Party or Indemnifying Parties are so notified, such other Indemnifying
Party or Indemnifying Parties shall be entitled to participate in the
defense of such action, suit, proceeding or claim at its or their own
expense or in accordance with arrangements satisfactory to all parties
who may be required to contribute. After notice from such other
Indemnifying Party or Indemnifying Parties to the Indemnified Party
entitled to contribution of its or their election to assume its or
their own defense, the Indemnifying Party or Indemnifying Parties so
electing shall not be liable for any legal or other expenses of
litigation subsequently incurred by the Indemnified Party entitled to
contribution in connection with the defense thereof, other than the
reasonable costs of investigation. No person shall be required to
contribute with respect to any action or claim settled without his or
its consent.
(e) Notwithstanding any of the foregoing provisions of this Section 7, the
Company shall in no event provide indemnification of the Directors,
Advisors or Affiliates and any person acting as a broker-dealer for
the Company for any liability or loss suffered by such Directors,
Advisors or Affiliates and any person acting as a broker-dealer, nor
shall it provide that such Directors,
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Advisors or Affiliates and any person acting as a broker-dealer be
held harmless for any loss or liability suffered by the Company, nor
shall it provide any contribution to such persons unless all of the
conditions set forth in Section II.G of the NASAA Guidelines in effect
as of the date of this Agreement are met, and any such indemnification
or contribution shall be limited to the extent permitted by said
Section II.G.
SECTION 8. TRANSFER OF FUNDS.
The Dealer-Manager shall either directly, or through each Soliciting
Dealer, instruct subscribers to make their checks payable to Boston Private Bank
& Trust Company Escrow Account. If the Dealer-Manager receives a check not
conforming to the foregoing instructions it shall return such check directly to
such subscriber not later than the end of the next business day following its
receipt. Checks received by the Dealer-Manager which conform to the foregoing
instructions shall be transmitted for deposit by the Dealer-Manager as soon as
practicable to the Escrow Agent, but in any event by noon of the second business
day following receipt by the Dealer-Manager.
SECTION 9. NOTICES.
Any notice hereunder shall be in writing or by telegram and if to the
Dealer-Manager shall be deemed to have been duly given if delivered or sent to
the Dealer-Manager at the address to which this letter is addressed, and if to
the Company, if delivered or sent to it c/o Boston Capital Corporation at ▇▇▇
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SECTION 10. PARTIES IN INTEREST.
The Agreement herein set forth is intended solely for the benefit of the
Dealer-Manager, each Soliciting Dealer and the Company (and, to the extent
provided in Section 7 hereof certain parties associated therewith), and their
respective successors and assigns, and no other person shall acquire or have any
right by virtue of this Agreement, and the term "successors and assigns" as used
herein shall not include any subscriber or purchaser, as such, of Shares.
SECTION 11. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of The Commonwealth of Massachusetts.
SECTION 12. AMENDMENT.
This Agreement may be amended by an agreement in writing signed by the
parties hereto.
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SECTION 13. CONFIRMATION.
Please confirm your agreement to become the Dealer-Manager under the terms
and conditions herein set forth by signing and returning the confirmation on the
enclosed duplicate copy of this letter to us at the above address.
Very truly yours,
BOSTON CAPITAL REAL ESTATE
INVESTMENT TRUST, INC.
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
President
Confirmed: BOSTON CAPITAL SECURITIES, INC.
_______________, 2005 By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
President
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EXHIBIT A TO
DEALER-MANAGER AGREEMENT
BOSTON CAPITAL REAL ESTATE INVESTMENT TRUST, INC.
Up to 105,000,000 Shares of Common Stock/$1,050,000,000
SOLICITING DEALER AGREEMENT
_____________ ___, 2005
Dear Sir or Madam:
Boston Capital Real Estate Investment Trust, Inc., a Maryland corporation
(the "Company"), is registering with the Securities and Exchange Commission (the
"Commission") for public sale (the "Offering") a maximum of 105,000,000shares of
its Common Stock, $.001 par value per share (the "Shares"), to be issued and
sold for an aggregate purchase price of $1,050,000,000 (100,000,000 shares to be
offered to the public and 5,000,000 shares to be offered pursuant to the
Company's dividend reinvestment plan). The Shares are to be sold for a per share
cash purchase price of $10.00, and the minimum purchase by any one person is 100
shares except as otherwise indicated in the Prospectus or in any letter or
memorandum from the Company to Boston Capital Services, Inc. (the
"Dealer-Manager").
The undersigned Dealer Manager has entered into a Dealer-Manager Agreement
(the "Dealer-Manager Agreement") with the Company pursuant to which the
Dealer-Manager has agreed to use its best efforts to form and manage a group of
securities dealers (the "Soliciting Dealers") consisting of brokers and dealers
who shall be members in good standing of the National Association of Securities
Dealers, Inc. (the "NASD"), for the purpose of soliciting purchasers of the
Shares. You are invited to become one of the Soliciting Dealers and, by your
confirmation hereof, you agree to act in such capacity and to use your best
efforts, in accordance with the following terms and conditions, to obtain
purchasers of Shares.
SECTION 1. SOLICITATION.
You hereby agree to solicit, as an independent contractor and not as the
agent of the Dealer-Manager or the Company, persons acceptable to the Company
who will acquire Shares. In connection with the execution of this Agreement and
your solicitation of purchasers of the Shares, you hereby acknowledge that no
subscriptions for Shares will be effective unless and until accepted by the
Company and hereby covenant, represent and warrant to the Dealer-Manager and the
Company as follows:
(a) Solicitation and other activities by you hereunder shall be undertaken
only in accordance with this Agreement, the Securities Act of 1933, as
amended (the "1933 Act") and the applicable rules and regulations of
the Commission.
(b) You hereby acknowledge receipt of copies of the Prospectus describing
the terms of the Offering and the Shares offered thereby, including
the Subscription Agreement as an attachment thereto. Additional copies
of the Prospectus will be supplied in reasonable quantities upon your
request. Neither you nor any other person is authorized by the Company
to give any information or make any representations in connection with
this Agreement or the Offering of the Shares other than those
contained in the Prospectus and other authorized solicitation material
furnished by the Company or the Dealer-Manager ("Authorized Sales
Literature"). Without limiting the generality of the foregoing, you
agree not to publish, circulate or otherwise use any other
advertisement or solicitation material other than Authorized Sales
Literature. Further, you agree that should you distribute any
Authorized Sales Literature to prospective purchasers, such
distribution shall be accompanied or preceded by the Prospectus as
then currently in effect.
(c) You represent that you have not engaged, and agree that you will not
engage, in any activity in respect of the Shares in violation of the
Securities Exchange Act of 1934, as amended (the "1934 Act"),
including Rule l0b-6 thereunder.
(d) In recommending to a potential investor the purchase of Shares, you or
someone associated with you shall have reasonable grounds to believe,
on the basis of information obtained from the potential investor
concerning his investment objectives, other investments, financial
situation and needs, and any other information known by you or such
person associated with you, that:
(i) The potential investor has a net worth sufficient to sustain
the risks inherent in an investment in the Company, including
loss of investment and lack of liquidity; and
(ii) The Company is otherwise suitable for such potential investor.
You further agree to provide the Dealer-Manager with all the
information you obtained to determine a potential investor's
suitability.
(e) You agree to instruct subscribers to make their checks payable to
▇▇▇▇▇▇▇▇▇▇ Bank & Trust Escrow Account. Any Soliciting Dealer
receiving a check not conforming to the foregoing instructions shall
return such check directly to such subscriber no later than the end of
the next business day following its receipt. Checks received by
Soliciting Dealers which conform to the foregoing instructions shall
be transmitted to the Dealer-Manager with accompanying subscription
documents pursuant to one of the following methods:
(i) Where, pursuant to a Soliciting Dealer's internal supervisory
procedures, internal supervisory review is conducted at the same
location at which subscription documents and checks are received,
such checks will be transmitted by noon of the next business day
following receipt by the Soliciting Dealer; and
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(ii) Where, pursuant to a Soliciting Dealer's internal supervisory
procedures, final internal supervisory review is conducted at a
different location, checks will be transmitted by noon of the
next business day following receipt by the Soliciting Dealer to
the office of the Soliciting Dealer conducting such final
internal supervisory review (the "Final Review Office"). The
Final Review Office will in turn transmit such checks for deposit
to the Escrow Agent by noon of the next business day following
receipt thereof by the Final Review Office.
The Dealer-Manager will forward all checks to the Escrow Agent as soon
as practicable following processing. In conjunction with all of the
foregoing procedures, investor checks and subscription documentation
delivered on Saturdays, Sundays and holidays will be treated as not
having been received until the first business day thereafter.
(f) You will maintain in your files documents disclosing the basis upon
which the determination of suitability was reached as to each
potential investor. You hereby represent that you will communicate to
each of your sales agents, representatives and other appropriate
persons associated with you the above-referenced suitability
standards. Notwithstanding the provisions of this Section 1, you shall
not execute any transaction in the Company in a discretionary account
without prior written approval of the transaction by the potential
investor.
(g) Prior to participating in the Offering, you or a person associated
with you shall have reasonable grounds to believe, based on
information made available to you or such person by the Company
through the Prospectus or other materials, that all material facts are
adequately and accurately disclosed and provide a basis for evaluating
the Company.
(h) In determining the adequacy of disclosed facts pursuant to Section
1(g) hereof, you or a person associated with you shall obtain
information on material facts relating at a minimum to the following,
if relevant in view of the nature of the Company:
(i) items of compensation;
(ii) physical properties;
(iii) tax aspects;
(iv) the Company's conflicts and risk factors; and
(v) appraisals and other pertinent reports.
(i) For purposes of Sections 1(g) and 1(h) hereof, you or a person
associated with you may rely upon the results of an inquiry conducted
by another member or members of the NASD, provided that:
3
(i) You or such person associated with you has reasonable grounds
to believe that such inquiry was conducted with due care;
(ii) The results of the inquiry were provided to you or such person
associated with you with the consent of the NASD member or
members conducting or directing the inquiry; and
(iii) No NASD member that participated in the inquiry is a sponsor of
the Company or an affiliate of such a sponsor.
(j) Prior to executing a purchase transaction in the Company, you or a
person associated with you shall inform the prospective investor of
all pertinent facts relating to the liquidity and marketability of an
investment in the Shares.
(k) You shall not, directly or indirectly, pay or award any finder's fees,
commissions or other compensation to any person engaged by a potential
investor for investment advice as an inducement for such advisor to
advise the purchase of Shares; provided, however, that normal sales
commissions payable to a duly registered broker-dealer or other
properly licensed person, who is a member of the NASD, for selling
Shares shall not be prohibited hereby.
(l) You shall comply with all rules and regulations relating to the
suitability of investors including, without limitation, the provisions
of Article III.C of the Statement of Policy Regarding Real Estate
Investment Trusts of the North American Securities Administrators
Association, Inc.
(m) So long as the Shares have not been listed on a national securities
exchange or market, you shall, in recommending the purchase, sale or
transfer of Shares to an investor, (i) inform such investor of all
pertinent facts relating to the liquidity and marketability of Shares;
and (ii) have reasonable grounds to believe, based on information
obtained from the investor, that an investment in the Shares is
suitable for such investor.
SECTION 2. COMPENSATION OF SOLICITING DEALERS.
Except as provided in the "Selling and Escrow Arrangements" section of the
Prospectus, as compensation for the services of the Soliciting Dealers
hereunder, the Dealer-Manager will re-allow, as a selling commission, a portion
of the funds received by it from the Company as a selling commission in an
amount up to seven per cent (7%) of the purchase price for each Share sold to a
subscriber through such Soliciting Dealer's efforts with respect to the Company.
In addition, the Dealer-Manager may re-allow to the Soliciting Dealers hereunder
a portion of the funds received by it from the Company as a dealer-manager fee
in an amount up to one and one half percent (1.5%) of the purchase price for
each Share sold to a subscriber though such Soliciting Dealer's efforts with
respect to the Company. A Soliciting Dealer shall be entitled to the foregoing
compensation only if (i) the insertion of such Soliciting Dealer's name has been
made in the Subscription Agreement relating to the subscriber's Shares, (ii) an
account executive from
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such Soliciting Dealer has executed the certification contained in Part 8 of the
subscriber's Subscription Agreement, (iii) such Soliciting Dealer has executed
this Agreement in the form hereof and delivered it to the Dealer-Manager, and
(iv) the subscriber is admitted as a stockholder for the number of Shares
indicated in his Subscription Agreement.
SECTION 3. BLUE SKY AND SECURITIES LAWS.
The Dealer-Manager assumes no obligation or responsibility in respect of
the qualification of the Shares under the laws of any jurisdiction. The blue sky
survey for the Company indicates or will indicate the jurisdictions where it is
believed that offers and sales of the Shares may be effected under the
applicable blue sky or state securities laws. In effecting offers or sales in a
jurisdiction, you will comply with all special conditions and limitations
imposed by such jurisdiction, as set forth in the blue sky survey for the
Company. If the blue sky survey for the Company is not enclosed herewith, it
will be made available to you at a later date. In no circumstances will you, as
a Soliciting Dealer, engage in any activities hereunder in any jurisdiction (a)
which is not listed in the blue sky survey as a jurisdiction where offers and
sales of the Shares may be effected under the blue sky or state securities laws
of such jurisdiction or (b) in which you may not lawfully so engage. The blue
sky survey shall not be considered Authorized Sales Literature.
SECTION 4. TERMINATION.
This Agreement may be terminated by written notice sent or delivered to you
by the Dealer-Manager, or upon the expiration or termination of the Offering of
Shares, provided, however, that such termination shall not relieve the
Dealer-Manager of the obligation to pay when due all fees payable to you
hereunder or its obligations referred to under Section 6 hereof, and shall not
relieve you of any obligation or any liability under this Agreement, and all
representations and warranties shall survive the termination of this Agreement.
SECTION 5. LIABILITY OF THE PARTIES.
Nothing herein contained shall constitute the Dealer-Manager, the
Soliciting Dealers and the Company as an association, partnership,
unincorporated business or other separate entity, nor shall anything herein
contained render the Dealer-Manager or the Company liable for the obligations of
any of the Soliciting Dealers. Neither the Dealer-Manager nor the Company shall
be under any liability to any Soliciting Dealer or any other person for any act
or omission or any matter connected with this Agreement or the Company, except
for obligations expressly assumed by an association, partnership, unincorporated
business or other separate entity in this Agreement.
SECTION 6. INDEMNIFICATION.
Under the Dealer-Manager Agreement, a copy of which is included as an
Exhibit to the Registration Statement, the Company has agreed to indemnify and
hold harmless various parties, including each Soliciting Dealer and any party
who controls such Soliciting Dealer within the meaning of the 1933 Act and the
1934 Act, from certain liabilities, and the Dealer-Manager and the Soliciting
Dealers have similarly agreed to indemnify the Company and certain associated
parties. The indemnification provisions of the Dealer-
5
Manager Agreement are attached hereto as Exhibit A. In executing the
Dealer-Manager Agreement, to which the form of this Soliciting Dealer Agreement
is attached as Exhibit A, the Dealer-Manager acted as the representative of each
of the Soliciting Dealers, and the Soliciting Dealers shall thus be deemed to be
in privity of contract with the Company. By your acceptance hereof, you ratify
the action of the Dealer-Manager in executing the Dealer-Manager Agreement on
your behalf. Furthermore, you hereby indemnify the Dealer-Manager and hold it
harmless for any losses, claims, damages, costs and other expenses (including
reasonable attorneys' fees and costs) incurred by the Dealer-Manager as a result
of your violation or breach of the terms (including your covenants,
representations and warranties), conditions and obligations of this Agreement.
The Dealer-Manager hereby agrees to indemnify each Soliciting Dealer and hold it
harmless for any losses, claims, damages, costs and other expenses (including
reasonable attorneys' fees and costs) reasonably incurred by a Soliciting Dealer
as a result of the Dealer-Manager's violation or breach of the terms (including
its representations and warranties under the Dealer-Manager Agreement) of this
Agreement.
(a) Notwithstanding any of the foregoing provisions of this Section 6, the
Company shall in no event provide indemnification of the Directors,
Advisors or Affiliates and any person acting as a broker-dealer for
the Company for any liability or loss suffered by such Directors,
Advisors or Affiliates and any person acting as a broker-dealer, nor
shall it provide that such Directors, Advisors or Affiliates and any
person acting as a broker-dealer be held harmless for any loss or
liability suffered by the Company, nor shall it provide any
contribution to such persons unless all of the conditions set forth in
Section II.G of the NASAA Guidelines in effect as of the date of this
Agreement are met, and any such indemnification or contribution shall
be limited to the extent permitted by said Section II.G.
SECTION 7. NOTICES.
Any notice hereunder shall be in writing and, if to you as a Soliciting
Dealer, shall be deemed to have been duly given if delivered or sent to you at
the address set forth below, and if to the Dealer-Manager, if delivered or sent
to us at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 8. PARTIES IN INTEREST.
The Agreement herein set forth is intended solely for the benefit of each
Soliciting Dealer, the Dealer-Manager and the Company (and to the extent
provided in Section 6 hereof certain parties associated therewith, and their
successors and assigns), and no other person shall acquire or have any right by
virtue of this Agreement, and the terms "successors and assigns," as used
herein, shall not include any subscriber for or purchasers of the Shares, as
such.
SECTION 9. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of The Commonwealth of Massachusetts.
6
SECTION 10. AMENDMENT.
This Agreement may be amended by an agreement in writing signed by all of
the parties hereto.
7
SECTION 11. CONFIRMATION.
Please confirm your agreement to become one of the Soliciting Dealers under
the terms and conditions herein set forth by signing and returning the
confirmation on the enclosed duplicate copy of this letter to the undersigned
Boston Capital Services, Inc., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
Very truly yours,
BOSTON CAPITAL SERVICES, INC.
By:
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
President
SOLICITING DEALER
------------------------------
Print Name
CONFIRMED By:
---------------------------------
Authorized Signature
___________________ , 2003 Address of Soliciting Dealer:
------------------------------------
▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇▇▇▇▇ Zip Code
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Commission Officer:
----------------------------------
Due Diligence Officer:
----------------------------------
Marketing Officer:
----------------------------------
----------------------------------
----------------------------------
Note: If applicable, please enclose lists of Branch Offices, Branch Managers and
Registered Representatives.
9
EXHIBIT A TO
SOLICITING DEALER AGREEMENT
SECTION 7. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless the Dealer-Manager and
each Soliciting Dealer from and against any and all losses, claims,
damages or liabilities, joint or several, to which the Dealer-Manager
and any Soliciting Dealer may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon a breach
or alleged breach by the Company of any of its representations and
warranties or upon an untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and the Company will reimburse the Dealer-Manager and
each such Soliciting Dealer for any legal or other expenses
(including, but not limited to, reasonable attorneys' fees)
reasonably incurred by the Dealer-Manager and such Soliciting Dealer
in connection with investigating or defending any such claim or
action instituted against the Dealer-Manager or any such Soliciting
Dealer, whether or not resulting in any liability.
The indemnity agreement in this Section 7(a) will be in addition to
any liability which the Company may otherwise have and shall extend
upon the same terms and conditions to each person, if any, who
controls the Dealer-Manager and any Soliciting Dealer within the
meaning of the 1933 Act or 1934 Act, or is a registered
representative of such Dealer-Manager or Soliciting Dealer.
(b) The Dealer-Manager and each Soliciting Dealer will indemnify and hold
harmless the Company from and against any and all losses, claims,
damages or liabilities to which the Company may become subject
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) the failure or
alleged failure by the Dealer-Manager and/or such Soliciting Dealer
to perform fully and to act in compliance with the provisions of this
Agreement or the Soliciting Dealer Agreement, or (ii) any untrue
statement or alleged untrue statement of any material fact made by
the Dealer-Manager or such Soliciting Dealer to any offeree or
purchaser of any of Shares (other than any statement contained in the
Prospectus or any Authorized Sales Literature, or any amendment or
supplement thereto), or (iii) any omission or alleged omission by the
Dealer-Manager or such Soliciting Dealer to state to any offeree or
purchaser of any Shares a material fact necessary in order to make
the statements made to such offeree or purchaser not misleading in
light of the circumstances under
10
which they were made (other than any such material fact omitted from
the Prospectus, or any amendment or supplement thereto), and will
reimburse any legal or other expenses (including, but not limited to,
reasonable attorneys' fees) reasonably incurred by the Company in
connection with investigating or defending any such claim or action,
whether or not resulting in any liability.
The indemnity agreement in this Section 7(b) will be in addition to
any liability which the Dealer-Manager and/or such Soliciting Dealer
may otherwise have and shall extend upon the same terms and
conditions to each person signing the Registration Statement on
behalf of the Company and each person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act.
(c) No person shall be liable under the indemnity agreements contained
under Sections 7(a) and (b) hereof unless the person requesting
indemnification shall have notified such indemnifying party within
ten (10) business days after the summons or other first legal process
giving notice of the nature of the claim shall have been served upon
the indemnified party, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under
this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying
party will not relieve him or it from any liability which he or it
may have to any indemnified party otherwise than under this Section
7. In case any such action is brought against any indemnified party
and he or it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate
therein and, to the extent that he or it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of his or its election
so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section 7 for any legal
or other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation.
(d) If the right to indemnification provided for in paragraphs (a), (b)
or (c) of this Section 7 would by its terms be available to a person
hereunder (collectively, the "Indemnified Parties" and individually,
an "Indemnified Party"), but is held to be unavailable by a court of
competent jurisdiction for any reason other than because of the terms
of such indemnification provision, then the Company, the
Dealer-Manager and the Soliciting Dealers (collectively, the
"Indemnifying Parties" and individually, an "Indemnifying Party")
shall contribute to the aggregate of such losses, claims, damages and
liabilities as are contemplated in those paragraphs (including, but
not limited to, any investigation, legal and other expenses incurred
in connection with, and any amount paid in settlement of, any claim,
action, suit or proceeding) in the
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ratio in which the proceeds of the Offering of Shares have been
actually received by each such Indemnifying Party. For purposes of
the preceding sentence, proceeds paid to an Indemnifying Party
hereunder and subsequently paid to another Indemnifying Party or
Indemnifying Parties pursuant to this Agreement or otherwise, shall
be deemed received by the last of such Indemnifying Parties to whom
or to which such proceeds were paid. However, the right of
contribution described in the preceding sentences is subject to the
following limitations:
(i) In no case shall any Indemnifying Party and the persons who
control such Indemnifying Party within the meaning of
applicable state and federal securities laws be required to
contribute any amount in excess of the aggregate Offering
proceeds actually received by it and them (determined as
described above); and
(ii) No person guilty of fraudulent misrepresentation within the
meaning of Section 11(f) of the 1933 Act shall be entitled
to contribution from any person who was not guilty of such
fraudulent misrepresentation.
Any Indemnified Party entitled to contribution will, promptly after receipt of
such notice of commencement of any action, suit, proceeding or claim against him
or it in respect of which a claim for contribution may be made against another
Indemnifying Party or Indemnifying Parties, notify such other Indemnifying Party
or Indemnifying Parties. Failure to so notify such other Indemnifying Party or
Indemnifying Parties shall not relieve such other Indemnifying Party or
Indemnifying Parties from any other obligation it or they may have hereunder or
otherwise. If such other Indemnifying Party or Indemnifying Parties are so
notified, such other Indemnifying Party or Indemnifying Parties shall be
entitled to participate in the defense of such action, suit, proceeding or claim
at its or their own expense or in accordance with arrangements satisfactory to
all parties who may be required to contribute. After notice from such other
Indemnifying Party or Indemnifying Parties to the Indemnified Party entitled to
contribution of its or their election to assume its or their own defense, the
Indemnifying Party or Indemnifying Parties so electing shall not be liable for
any legal or other expenses of litigation subsequently incurred by the
Indemnified Party entitled to contribution in connection with the defense
thereof, other than the reasonable costs of investigation. No person shall be
required to contribute with respect to any action or claim settled without his
or its consent.
(e) Notwithstanding any of the foregoing provisions of this Section 7,
the Company shall in no event provide indemnification of the
Directors, Advisors or Affiliates and any person acting as a
broker-dealer for the Company for any liability or loss suffered by
such Directors, Advisors or Affiliates and any person acting as a
broker-dealer, nor shall it provide that such Directors, Advisors or
Affiliates and any person acting as a broker-dealer be held harmless
for any loss or liability suffered by the Company, nor shall it
provide any contribution to such persons unless all of the conditions
set forth in Section II.G of the NASAA Guidelines in effect as of the
date of this Agreement
12
are met, and any such indemnification or contribution shall be
limited to the extent permitted by said Section II.G.
13