UP TO 175,000,000 SHARES OF COMMON STOCK DEALER MANAGER AGREEMENT
▇▇▇▇▇▇ VALIDUS MISSION CRITICAL REIT,
INC.
UP TO 175,000,000 SHARES OF COMMON
STOCK
____________,
2009
SC
Distributors, LLC
▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
▇▇▇▇▇▇
Validus Mission Critical REIT, Inc., a Maryland corporation (the “Company”), is
registering $1,737,000,000 in shares of its common stock, $.01 par value per
share (the “Shares”), for sale to
the public (the “Offering”), of which
(i) $1,500,000,000 in Shares are intended to be offered pursuant to the
primary offering and (ii) $237,500,000 in Shares are intended to be offered
pursuant to the Company’s distribution reinvestment plan (the “DRIP”). The
Company reserves the right to reallocate the Shares being offered between the
primary offering and the DRIP. Except as described in the Prospectus (as defined
below) or in Section 5.1 hereof, the Shares are to be sold pursuant to the
primary offering for a cash price of $10.00 per Share and the Shares are to be
sold pursuant to the DRIP for $9.50 per Share.
The
Company hereby appoints SC Distributors, LLC, a Delaware corporation (the “Dealer Manager”), as
its exclusive agent and principal distributor during the Offering Period (as
defined below) for the purpose of selling for cash, on a best efforts basis, the
Shares through such securities dealers that the Dealer Manager may retain
(individually, a “Dealer” and
collectively, the “Dealers”), all of
whom shall be members of the Financial Industrial Regulation Authority, Inc.
(“FINRA”), pursuant to a Participating Broker-Dealer Agreement in the form
attached to this Agreement as Exhibit A (the “Participating Broker-Dealer
Agreement”). The Dealer Manager may also sell Shares for cash directly to
its own clients and customers subject to the terms and conditions stated in the
Prospectus. The Dealer Manager hereby accepts such agency and distributorship
and agrees to use its best efforts to sell the Shares on said terms and
conditions, commencing promptly following the Effective
Date (as defined in Section 1.1) in jurisdictions in which the Shares are
registered or qualified for sale or in which such offering is otherwise
permitted.
The term
“Offering
Period” shall mean that period during which Shares may be offered for
sale, commencing on the date the Registration Statement (as defined below) was
filed with the Securities Exchange Commission (“SEC”), during which period
offers and sales of the Shares shall occur continuously unless and until the
Offering is terminated as provided in Section 11 hereof, except that the Dealer
Manager and the Dealers shall immediately suspend or terminate the offering of
the Shares, in total or in any state or states, upon request of the Company at
any time and shall resume offering the Shares upon subsequent request of the
Company. The Offering Period shall in all events terminate upon the sale of all
of the Shares. Upon termination of the Offering Period, the Dealer Manager’s
agency and this Agreement shall terminate without obligation on the part of the
Dealer Manager or the Company except as set forth in this
Agreement.
In
connection with the sale of Shares, the Company hereby agrees with you, the
Dealer Manager, as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY. As an inducement to the Dealer Manager to enter into
this Agreement, the Company represents and warrants to the Dealer Manager
that:
1.1 The
Company has prepared and filed with the SEC a registration statement on Form
S-11 for the registration of the Shares under the Securities Act of 1933, as
amended (the “Securities Act”), and
the applicable rules and regulations of the SEC promulgated thereunder (the
“Securities Act Rules
and Regulations”). Copies of such registration statement as initially
filed and each amendment thereto have been or will be delivered to the Dealer
Manager. The registration statement on Form S-11 and the prospectus contained
therein, as finally amended at the effective date of the registration statement
(the “Effective
Date”), are respectively hereinafter referred to as the “Registration
Statement” and the “Prospectus,” except
that if the Company files a prospectus or prospectus supplement pursuant to Rule
424(b) under the Securities Act, or if the Company files a post-effective
amendment to the Registration Statement, the term “Prospectus” includes the
prospectus filed pursuant to Rule 424(b) and any prospectus included in
such post-effective amendment. The term “Preliminary
Prospectus” as used herein shall mean a preliminary prospectus related to
the Shares as contemplated by Rule 430 or Rule 430A of the Securities Act Rules
and Regulations included at any time as part of the Registration
Statement.
1.2 On the date that any
Preliminary Prospectus was filed with the SEC, on the Effective Date, on the
date of the Prospectus, on the date the Minimum Offering (as defined in Section
5.1 hereof) is obtained and when any post-effective amendment to the
Registration Statement becomes effective or any amendment or supplement to the
Prospectus is filed with the SEC, the Registration Statement and the Prospectus,
including the financial statements contained therein, complied or will comply
with the Securities Act and the Securities Act Rules and Regulations. On the
Effective Date, the Registration Statement did not or will not, as the case may
be, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. On the date of the Prospectus, as amended or supplemented,
as applicable, and on the date the Minimum Offering is obtained, the Prospectus
did not or will not, as the case may be, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the foregoing provisions of this Section 1.2 will not extend to such
statements contained in or omitted from the Registration Statement or the
Prospectus, as amended or supplemented, as are primarily within the knowledge of
the Dealer Manager or any of the Dealers or are based upon information furnished
by the Dealer Manager in writing to the Company specifically for inclusion
therein.
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1.3 No
order preventing or suspending the use of the Prospectus has been issued and no
proceedings for that purpose are pending, threatened, or, to the knowledge of
the Company, contemplated by the SEC; and to the knowledge of the Company, no
order suspending the offering of the Shares in any jurisdiction has been issued
and no proceedings for that purpose have been instituted or threatened or are
contemplated.
1.4 The
Company intends to use the funds received from the sale of the Shares as set
forth in the Prospectus.
1.5 The
Company has been duly organized and is validly existing as a corporation under
the laws of the state of Maryland, with the full power and authority to conduct
its business as described in the Prospectus, and has full legal right, power and
authority to enter into this Agreement and to perform the transactions
contemplated hereby, except to the extent that the
enforceability of the indemnity and contribution provisions contained in Section
6 of this Agreement may be limited under applicable securities
laws.
1.6 The
execution and delivery of this Agreement, the consummation of the transactions
herein contemplated and the compliance with the terms of this Agreement by the
Company will not conflict with or constitute a default or violation under any
charter, by-law, indenture, mortgage, deed of trust, lease, rule, regulation,
writ, injunction or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company, except to the
extent that the enforceability of the indemnity and contribution provisions
contained in Section 6 of this Agreement may be limited under applicable
securities laws.
1.7 No
consent, approval, authorization or other order of any governmental authority is
required in connection with the execution or delivery by the Company of this
Agreement or the issuance and sale by the Company of the Shares, except such as
may be required under the Securities Act or the securities laws of certain
states, if any, that the Company identifies to the Dealer Manager.
1.8 The
Shares have been duly authorized and validly issued and upon payment
therefore will be
fully paid and nonassessable and will conform to the description thereof
contained in the Prospectus.
1.9 There
are no actions, suits or proceedings pending or to the knowledge of the Company,
threatened against the Company at law or in equity or before or by any federal
or state commission, regulatory body or administrative agency or other
governmental body, domestic or foreign, which will have a material adverse
effect on the business or property of the Company.
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2. REPRESENTATIONS
AND WARRANTIES OF THE DEALER MANAGER.
As an
inducement to the Company to enter into this Agreement, the Dealer Manager
represents and warrants to the Company that:
The
Dealer Manager is, and during the term of this Agreement will be, a member of
FINRA in good standing and a broker-dealer registered as such under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) and
under the securities laws of the states in which the Shares are to be offered
and sold. The Dealer Manager and its employees and representatives possess all
required licenses and registrations to act under this Agreement. The Dealer
Manager will comply with all applicable laws, rules, regulations and
requirements of the Securities Act, the Exchange Act, other federal securities
laws, state securities laws and the rules of FINRA, specifically including, but
not in any way limited to, FINRA Conduct Rules 2340, 2420, 2730, 2740 and 2750.
Each Dealer and each salesperson acting on behalf of the Dealer Manager or a
Dealer will be registered with FINRA and duly licensed by each state regulatory
authority in each jurisdiction in which it or he will offer and sell
Shares.
The
Dealer Manager was duly organized and is validly existing as a limited liability
company in good standing under the laws of the State of Delaware, and has full
legal right, power and authority to enter into this Agreement and to perform the
transactions contemplated hereby, and the Dealer Manager has duly authorized,
executed and delivered this Agreement.
2.1 This
Agreement, when executed by the Dealer Manager, will have been duly authorized
and will be a valid and binding agreement of the Dealer Manager, enforceable in
accordance with its terms, except to the extent that the enforceability of the
indemnity and contribution provisions contained in Section 6 of this Agreement
may be limited under applicable securities laws.
2.2 The
execution and delivery of this Agreement, the consummation of the transactions
herein contemplated and the compliance with the terms of this Agreement by the
Dealer Manager will not conflict with or constitute a default or violation under
any charter, by-law, contract, indenture, mortgage, deed of trust, lease, rule,
regulation, writ, injunction or decree of any government,
governmental instrumentality or court, domestic or foreign, having jurisdiction
over the Dealer Manager.
2.3 No
consent, approval, authorization or other order of any governmental authority is
required in connection with the execution, delivery or performance by the Dealer
Manager of this Agreement.
2.4 The
Dealer Manager represents and warrants to the Company and each person that signs
the Registration Statement that the information under the caption “Plan of
Distribution” in the Prospectus and all other information furnished to the
Company by the Dealer Manager in writing expressly for use in the Registration
Statement, any
Preliminary Prospectus, or the Prospectus, 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.
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2.5 The
Dealer Manager has reasonable grounds to believe, based on information made
available to it by the Company, that the Prospectus discloses all material facts
adequately and accurately and provides an adequate basis for evaluating an
investment in the Shares.
3. COVENANTS OF THE
COMPANY. The Company covenants and agrees with the Dealer
Manager that:
3.1 It
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. It will
similarly furnish to the Dealer Manager and others designated by the Dealer
Manager as many copies as the Dealer Manager may reasonably request in
connection with the offering of the Shares of: (a) the Prospectus ;
(b) this Agreement; and (c) any other printed sales literature or
other materials (provided that the use of said sales literature and other
materials have been first approved for use by the Company and all appropriate
regulatory agencies). It also will furnish to the Dealer Manager and
its designees copies of any material deemed necessary by the Dealer Manager and
commercially reasonable for the Company to furnish, for due diligence purposes
in connection with the Offering.
3.2 It
will furnish such information and execute and file such documents as may be
necessary for the Company to qualify the Shares for offer and sale under the
securities laws of such jurisdictions as the Dealer Manager may reasonably
designate and will file and make in each year such statements and reports as may
be required. The Company will furnish to the Dealer Manager a copy of such
papers filed by the Company in connection with any such
qualification.
3.3 It
will: (a) furnish copies of any proposed amendment or supplement of the
Registration Statement or the Prospectus to the Dealer Manager; (b) file
every amendment or supplement to the Registration Statement or the Prospectus
that may be required by the SEC or any state securities administration; and
(c) if at any time the SEC shall issue any stop order suspending the
effectiveness of the Registration Statement or any state securities
administration shall issue any order or take other action to suspend or enjoin
the sale of the Shares, it will promptly notify the Dealer Manager and will use
its best efforts to obtain the lifting of such order or to prevent such other
action at the earliest possible time.
3.4 If
at any time when a Prospectus is required to be delivered under the Securities
Act any event occurs as a result of which, in the opinion of either the Company
or the Dealer Manager, the Prospectus would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, the Company will promptly notify the
Dealer Manager thereof (unless the information shall have been received from the
Dealer Manager) and will effect the preparation of an amendment or supplement to
the Prospectus that will correct such statement or omission.
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3.5 It
will comply with all requirements imposed upon it by the Securities Act, the
Securities Act Rules and Regulations, the Exchange Act and the applicable rules
and regulations of the SEC promulgated thereunder (the “Exchange Act Rules and
Regulations” and collectively with the Securities Act Rules and
Regulations, the “Rules and
Regulations”), and by all state securities laws and regulations of those
states in which an exemption has been obtained or qualification of the Shares
has been effected, to permit the continuance of offers and sales of the Shares
in accordance with the provisions hereof and of the
Prospectus. It will not allow its officers, directors or
employees to be involved in the securities distribution activities of the Dealer
Manager, including but not limited to written, oral or electronic communication
with Dealers or associated persons of Dealers without the express consent,
invitation or instruction of the Dealer Manager, which will not be unreasonably
withheld. All securities distribution activities and the
relationships with Dealers and associated persons of Dealers are the exclusive
property and dominion of the Dealer Manager. The Company acknowledges
that the identity and contact information of the Dealers and associated persons
of Dealers are the exclusive property of the Dealer Manager and that upon the
expiration or termination of this Agreement the Company shall return to the
Dealer Manager and delete from all of its Stockholder and other systems any
information, including but not limited to identity or contact information, about
Dealers or associated persons of Dealers.
3.6 All
expenses incident to the performance of the Company’s obligations under this
Agreement, including (a) the preparation, filing and printing of the
Registration Statement as originally filed and of each amendment thereto,
(b) the preparation, printing and delivery to the Dealer Manager of this
Agreement, the Participating Broker-Dealer Agreement and such other documents as
may be required in connection with the offering, sale, issuance and delivery of
the Shares, (c) the fees and disbursements of the Company’s counsel,
accountants and other advisers, (d) the fees and expenses related to the
review of the terms and fairness of the Offering by FINRA, (e) the fees and
expenses related to the qualification of the Shares under the securities laws in
accordance with the provisions of Section 3.2 hereof, including the fees and
disbursements of counsel in connection with the preparation of any “blue sky”
survey and any supplement thereto, (f) the printing and delivery to the
Dealer Manager of copies of the Prospectus, (g) the fees and expenses of
any registrar, transfer agent or paying agent in connection with the Shares and
(h) the costs and expenses of the Company relating to investor
presentations undertaken in connection with the marketing of the offering of the
Shares, including, without limitation, expenses associated with the production
of slides and graphics, fees and expenses of any consultants engaged in
connection with presentations with the prior approval of the Company, and travel
and lodging expenses of the representatives of the Company and any such
consultants, will be paid for by the Company or, to the extent such expenses
exceed 1.25% of the gross offering proceeds received by the Company in the
primary offering, by ▇▇▇▇▇▇/Validus Advisors, LLC, a Delaware limited liability
company and the Company’s advisor (the “Advisor”).
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3.7 It
will deliver to the Dealer Manager copies of each written communication
delivered to the holders of Shares (“Stockholders”),
including but not limited to reports as described in the Prospectus under
“Reports to Stockholders,” at the time that such communications are furnished to
the Stockholders, and such other information concerning the Company as the
Dealer Manager may reasonably request from time to time.
4. COVENANTS OF THE DEALER
MANAGER. The Dealer Manager covenants and agrees with the
Company that:
4.1 In
connection with the offer and sale of the Shares, the Dealer Manager will comply
with all requirements imposed upon it by the Securities Act, the Exchange Act,
the Rules and Regulations or other federal regulations applicable to the
Offering, the sale of Shares or its activities and by all applicable state
securities laws and regulations and the rules of FINRA, as from time to time in
effect, and by this Agreement, including the obligation to deliver a copy of the
Prospectus as required by the Securities Act, the Exchange Act or the Rules and
Regulations. The Dealer Manager will not make any sales of the Shares in any jurisdiction unless and until it has been advised that the Shares
are either registered in accordance with, or exempt from, the securities and
other laws applicable thereto.
4.2 The
Dealer Manager will make no representations concerning the Offering except as
set forth in the Prospectus.
4.3 The
Dealer Manager will provide the Company with such information relating to the
offer and sale of the Shares by it as may be requested to enable the Company to
prepare such reports of sale as may be required to be filed under applicable
federal or state securities laws.
4.4 All
engagements of the Dealers will be evidenced by a Participating Broker-Dealer
Agreement, except when the Dealer Manager obtains the prior written consent of
the Company. When Dealers are used in this Offering, the Dealer Manager will use
commercially reasonable efforts to cause such Dealers to comply with all their
respective obligations pursuant to the Participating Broker-Dealer
Agreement.
4.5 The
Dealer Manager will provide each prospective investor with a copy of the
Prospectus and any supplements thereto during the course of the Offering and
prior to the sale. The Company may also provide the Dealer Manager with certain
supplemental sales material to be used by the Dealer Manager and the Dealers in
connection with the solicitation of purchasers of the Shares. In the event the
Dealer Manager elects to use such supplemental sales material, the Dealer
Manager agrees that such material shall not be used in connection with the
solicitation of purchasers of the Shares unless accompanied or preceded by the
Prospectus, as then currently in effect, and as it may be amended or
supplemented in the future. The Dealer Manager agrees that it will not use any
sales materials in conjunction with the offer and sale of the Shares, other than
those either provided to the Dealer Manager by the Company or approved by the
Company for use in the Offering. The use of any other sales material is
expressly prohibited.
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4.6 The
Dealer Manager will comply in all material respects with the subscription
procedures and “Plan of Distribution” set forth in the Prospectus.
4.7 The
Dealer Manager agrees to be bound by the terms of an escrow agreement among UMB
Bank, N.A., as escrow agent (the “Escrow Agent”), the
Dealer Manager and the Company, in a form reasonably acceptable to the parties
thereto, as such agreement may be amended from time to time.
5. COMPENSATION
OF DEALER MANAGER.
5.1 Except
as may be provided in the “Plan of Distribution” section of the Prospectus, as
compensation for the services rendered by the Dealer Manager, the Company agrees
that it will pay to the Dealer Manager a selling commission equal to 7.0% of the
$10.00 per Share cash price for Shares sold in the primary offering plus a
dealer manager fee of 2.75% of the $10.00 per Share cash price for Shares sold
in the primary offering; provided however, that the Company, the Dealer Manager
and/or a Dealer may agree to reduce or eliminate selling commissions and/or
dealer manager fees, as applicable, generally or with respect to a particular
investment to accommodate a prospective investor or a Dealer.
No
selling commissions will be paid, and the per Share cash price shall be reduced
to $9.30, in connection with Shares sold in the primary offering in the event
that the investor has engaged the services of a registered
investment adviser or other financial advisor, paid on a fee-for-service or
assets under management basis by the investor.
No
selling commissions will be paid, and the per Share cash price shall be reduced
to $9.30, in connection with Shares sold to (i) retirement plans of
participating Dealers, (ii) participating Dealers in their individual
capacities, or (iii) IRAs and qualified plans of their registered
representatives or any one of their registered representatives in their
individual capacities.
Selling
commissions or dealer manager fee will be reduced, and the per Share cash price
shall be adjusted accordingly to no lower than $9.36, where the Dealer Manager
and/or a participating Dealer agree to reduce or eliminate selling commissions
and/or dealer manager fees, as applicable, generally or with respect to a
particular investment to accommodate a prospective investor or participating
Dealer.
No
selling commissions, dealer manager fees or other organizational and offering
expenses will be paid in connection with Shares sold under the
DRIP.
Notwithstanding
the foregoing, no commissions, payments or amounts whatsoever will be paid to
the Dealer Manager under this Section 5.1 unless or until the gross proceeds of
the Shares sold are disbursed to the Company pursuant to Section 3 of the Escrow
Agreement (the “Minimum Offering”).
Until the Minimum Offering is reached, investments will be held in escrow. If
the Minimum Offering is not obtained within the time periods specified in the
Prospectus, investments will be returned to the investors in accordance with the
Prospectus.
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The
Company will not be liable or responsible to any Dealer for direct payment of
commissions to such Dealer, it being the sole and exclusive responsibility of
the Dealer Manager for payment of commissions to Dealers.
In accordance with FINRA Rule
5110(f)(2)(D), no compensation payments will be made by the Company to the
Dealer Manager or any other member, or their respective associated persons, if
the offering of securities is not completed according to the terms of this
Agreement, other than reimbursement of reasonable out-of-pocket accountable
expenses actually incurred by the Dealer Manager or other member, or their
respective associated persons, under normal circumstances.
5.2 Notwithstanding
anything to the contrary contained herein, in the event that the Company pays
any commission to the Dealer Manager for sale by a Dealer of one or more Shares
and the subscription is rescinded as to one or more of the Shares covered by
such subscription, the Company shall decrease the next payment of commissions or
other compensation otherwise payable to the Dealer Manager by the Company under
this Agreement by an amount equal to the commission rate established in Section
5.1 of this Agreement, multiplied by the number of Shares as to which the
subscription is rescinded. In the event that no payment of commissions or other
compensation is due to the Dealer Manager after such withdrawal occurs, the
Dealer Manager shall pay the amount specified in the preceding sentence to the
Company within ten (10) days following receipt of
notice by the Dealer Manager from the Company stating the amount owed as a
result of rescinded subscriptions.
5.3 In
no event shall the total aggregate underwriting compensation payable to the
Dealer Manager and any Dealers participating in the Offering, including, but not
limited to, selling commissions and the dealer manager fee, exceed 10.0% of
gross offering proceeds in the aggregate at the termination of the
Offering.
6. INDEMNIFICATION.
6.1 The
Company will indemnify and hold harmless (to the extent permitted by the
Company’s charter) the Dealers and the Dealer Manager, their officers
and directors and each person, if any, who controls such Dealer or Dealer
Manager within the meaning of Section 15 of the Securities Act (the “Indemnified Persons”)
from and against any losses, claims, damages or liabilities (“Losses”), joint or
several, to which such Indemnified Persons may become subject, under the
Securities Act or otherwise, insofar as such Losses (or actions in respect
thereof) arise out of or are based upon (a) any untrue statement or alleged
untrue statement of a material fact contained (i) in the Registration
Statement or any post-effective amendment thereto or in the Prospectus or
(ii) 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 Shares for sale under the securities laws of any
jurisdiction or based upon written information furnished by the Company under
the securities laws thereof (any such application, document or information being
hereinafter called a “Blue Sky
Application”), or (b) the omission or alleged
omission to state in the Registration Statement (including the Prospectus as a
part thereof) or any post-effective amendment thereto or in any Blue Sky
Application a material fact required to be stated therein or necessary to make
the statements therein not misleading, or (c) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, if used prior to the Effective Date, or in the Prospectus or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The Company will
reimburse each Indemnified Person for any legal or other expenses reasonably
incurred by such Indemnified Person, in connection with investigating or
defending such Loss. Notwithstanding the foregoing provisions of this Section
6.1, the Company will not be liable in any such case to the extent that any such
Loss or expense 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 (x) to the Company by the
Dealer Manager or (y) to the Company or the
Dealer Manager by or on behalf of any Dealer specifically for use in the
preparation of the Registration Statement or any such post-effective amendment
thereto, any such Blue Sky Application or any such Preliminary Prospectus or the
Prospectus, and, further, the Company will not be liable in any such case if it
is determined that such Dealer or the Dealer Manager was at fault in connection
with the Loss, expense or action. Notwithstanding the foregoing, the Company
shall not indemnify or hold harmless an Indemnified Person for any Losses or
expenses arising from or out of an alleged violation of federal or state
securities laws by such party 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 Indemnified Person, (b) such claims have been
dismissed with prejudice on the merits by a court of competent jurisdiction as
to the particular Indemnified Person and (c) a court of competent
jurisdiction approves a settlement of the claims against a particular
Indemnified Person and finds that indemnification of the settlement and the
related costs should be made, and the court considering the request for
indemnification has been advised of the position of the SEC and of the published
position of any state securities regulatory authority in which securities of the
Company were offered or sold as to indemnification for violations of securities
laws.
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6.2 The
Dealer Manager will indemnify and hold harmless the Company, each director of
the Company (including any person named in the Registration Statement, with his
consent, as about to become a director), each other person who has signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act (each a “Company Indemnitee”),
from and against any Losses to which any of the Company Indemnitees may become
subject, under the Securities Act or otherwise, insofar as such Losses (or
actions in respect thereof) arise out of or are based upon (a) any untrue statement of a
material fact contained (i) in the Registration
Statement (including the Prospectus as a part thereof) or any post-effective
amendment thereto or (ii) any Blue Sky Application,
or (b) the omission to
state in the Registration Statement (including the Prospectus as a part thereof)
or any post-effective amendment thereto or in any Blue Sky Application a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (c) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, if used prior to the Effective Date, or in the Prospectus or the
omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein in the light of
the circumstances under which they were made not misleading, in the case of each
of clauses (a)-(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 by or on behalf of the Dealer Manager specifically for use with
reference to the Dealer Manager in the preparation of the Registration Statement
or any such post-effective amendments thereto or any such Blue Sky Application
or any such Preliminary Prospectus or the Prospectus, or (d) any unauthorized use of
sales materials or use of unauthorized verbal representations concerning the
Shares by the Dealer Manager. The Dealer Manager will reimburse the aforesaid
parties for any legal or other expenses reasonably incurred by them in
connection with investigating or defending such Loss, expense or action. This
indemnity agreement will be in addition to any liability that the Dealer Manager
may otherwise have.
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6.3 Each
Dealer severally will indemnify and hold harmless the Company, the Dealer
Manager, each of their directors (including any person named in the Registration
Statement, with his consent, as about to become a director), each other person
who has signed the Registration Statement and each person, if any, who controls
the Company and the Dealer Manager within the meaning of Section 15 of the
Securities Act (each, a “Dealer Indemnified
Person”) from and against any Losses to which a Dealer Indemnified Person
may become subject, under the Securities Act or otherwise, insofar as such
Losses (or actions in respect thereof) arise out of or are based upon (a) any untrue statement or
alleged untrue statement of a material fact contained (i) in the Registration
Statement (including the Prospectus as a part thereof) or any post-effective
amendment thereto or (ii) in any Blue Sky
Application, or (b) the omission or alleged
omission to state in the Registration Statement (including the Prospectus as a
part thereof) or any post-effective amendment thereto or in any Blue Sky
Application a material fact required to be stated therein or necessary to make
the statements therein not misleading, or (c) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, if used prior to the Effective Date, or in the Prospectus or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, in the
case of each of clauses (a)-(c) to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company or the Dealer Manager by or on behalf of
such Dealer specifically for use with reference to such Dealer in the
preparation of the Registration Statement or any such post-effective amendments
thereto or any such Blue Sky Application or any such Preliminary Prospectus, or
(d) any unauthorized
use of sales materials or use of unauthorized verbal representations concerning
the Shares by such Dealer or Dealer’s representatives or agents in violation of
Section VII of the Participating Broker-Dealer Agreement or otherwise. Each such
Dealer will reimburse each Dealer Indemnified Person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such Loss, expense or action. This indemnity agreement will be in
addition to any liability that such Dealer may otherwise have.
11
6.4 Promptly
after receipt by an indemnified party under this Section 6 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 6,
notify in writing the indemnifying party of the commencement thereof. The
failure of an indemnified party so to notify the indemnifying party will relieve
the indemnifying party from any liability under this Section 6 as to the
particular item for which indemnification is then being sought, but not from any other liability that it may have to any indemnified
party. In case any such action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to participate in the defense thereof,
with separate counsel. Such participation shall not relieve such indemnifying
party of the obligation to reimburse the indemnified party for reasonable legal
and other expenses (subject to Section 6.5) 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. Any indemnified party shall not be bound to perform or
refrain from performing any act pursuant to the terms of any settlement of any
claim or action effected without the consent of such indemnified
party.
6.5 The
indemnifying party 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 selected by a majority of the indemnified parties against which
such action is finally brought; and in the event a majority of such indemnified
parties is unable to agree on which law firm for which expenses or fees will be
reimbursable by the indemnifying party, then payment shall be made to the first
law firm of record representing an indemnified party against the action or
claim. Such law firm shall be paid only to the extent of services performed by
such law firm and no reimbursement shall be payable to such law firm on account
of legal services performed by another law firm.
7. SURVIVAL
OF PROVISIONS.
7.1 The
respective agreements, representations and warranties of the Company and the
Dealer Manager set forth in this Agreement shall remain operative and in full
force and effect regardless of (a) any investigation made by
or on behalf of the Dealer Manager or any Dealer or any person controlling the
Dealer Manager or any Dealer or by or on behalf of the Company or any person
controlling the Company, and (b) the acceptance of any
payment for the Shares.
12
7.2 The
obligations of the Company to pay the Dealer Manager pursuant to Section 5.1 of
this Agreement, and the provisions of Section 5.2, Sections 6 through 10 and
Sections 12 and 17 of this Agreement shall survive the termination of this
Agreement.
8. APPLICABLE
LAW. This Agreement was executed and delivered in, and its
validity, interpretation and construction shall be governed by, the laws of the
State of Florida; provided, however, that causes of action for violations of
federal or state securities laws shall not be governed by this
section.
9. 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.
10.1 This
Agreement shall inure to the benefit of and be binding upon the Dealer Manager
and the Company and their respective successors and permitted assigns. 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.
10.2 The
Dealer Manager may assign its rights, obligations and interests hereunder to a
qualified assignee upon prior written notice to the Company.
10.3 This
Agreement may only be amended by the written agreement of the Dealer Manager and
the Company.
11. TERM.
11.1 Any
party to this Agreement shall have the right to terminate this Agreement on 60
days’ written notice.
11.2 In
any case, this Agreement shall terminate at the close of business on the
effective date that the Offering terminates.
11.3 In
addition to any other obligations of the Company that survive the expiration or
termination of this Agreement, the Company, upon expiration or termination of
this Agreement, shall pay to the Dealer Manager all commissions and fees to
which the Dealer Manager is or becomes entitled under Section 5.1 of this
Agreement at such time or times as such commissions and fees become payable
pursuant to this Agreement.
12. CONFIRMATION. The
Company hereby agrees and assumes the duty to confirm on its behalf and on
behalf of Dealers and the Dealer Manager all orders for purchase of Shares
accepted by the Company. Such confirmations will comply with the rules of the
SEC and ▇▇▇▇▇.
▇▇
▇▇. SUITABILITY
OF INVESTORS; COMPLIANCE WITH PRIVACY AND ANTI-MONEY LAUNDERING
REGULATIONS.
13.1 The
Dealer Manager will offer Shares, and in its agreements with Dealers will
require that the Dealers offer Shares, only to persons who meet the financial
qualifications set forth in the Prospectus or in any suitability letter or
memorandum sent to it by the Company and will only make offers to persons in the
states in which it is advised in writing that the Shares are qualified for sale
or that such qualification is not required. In offering Shares, the Dealer
Manager will comply, and in its agreements with Dealers, the Dealer Manager will
require that the Dealers comply, with the provisions of all applicable rules and
regulations relating to suitability of investors, including without limitation,
the provisions of Article III.C. of the Statement of Policy Regarding Real
Estate Investment Trusts of the North American Securities Administrators
Association, Inc. (the “NASAA Guidelines”).
In making the determinations as to suitability required by the NASAA Guidelines,
the Dealer Manager may rely on representations from (i) investment advisers who
are not affiliated with a Dealer or (ii) banks acting as trustees
or fiduciaries. With respect to the maintenance of records required by the NASAA
Guidelines, the Company agrees that the Dealer Manager can satisfy its
obligation by contractually requiring such information to be maintained by the
investment advisers or banks discussed in the preceding sentence.
13.2 The
Company, the Dealer Manager and each Dealer shall: (x) abide by and comply with
(i) the privacy
standards and requirements of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ 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; and (y) refrain from the use or
disclosure of nonpublic personal information (as defined under the GLB Act) of
all customers.
13.3 The
Company, the Dealer Manager and each Dealer agree to comply with the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (the “USA Patriot Act”) and any applicable U.S.
Department of Treasury regulations issued thereunder that require reasonable
efforts to verify the identity of new customers, maintain customer records, and
check the names of new customers against the list of Specially Designated
Nationals and Blocked Persons. In addition, the Company, the Dealer Manager, and
each Dealer agree to comply with all Executive Orders and federal regulations
administered by the U.S. Department of Treasury Department’s Office of
Foreign Asset Control. Further, the Dealer Manager agrees, upon receipt of an
“information request” issued under Section 314 (a) of the USA Patriot Act, to
provide the Financial Crimes Enforcement Network with information regarding:
(i) the identity of a
specified individual or organization; (ii) account number; (iii) all identifying
information provided by the account holder; and (iv) the date and type of
transaction. The Dealer Manager from time to time will monitor account activity
to identify patterns of unusual size or volume, geographic factors, and any
other potential signals of suspicious activity, including possible money
laundering or terrorist financing. The Company reserves the right to reject
account applications from new customers who fail to provide necessary account
information or who intentionally provide misleading information.
14
14. SUBMISSION
OF ORDERS.
14.1 Those
persons who purchase Shares will be instructed by the Dealer Manager or the
Dealer to make their checks payable, prior to the time the Company reaches the
Minimum Offering, to “UMB Bank, N.A., Agent for ▇▇▇▇▇▇ Validus Mission Critical
REIT, Inc.” or “UMB Bank, N.A., Agent for CVREIT.” After the Company
reaches the Minimum Offering, checks should be payable to “▇▇▇▇▇▇ Validus
Mission Critical REIT, Inc.” or “CVREIT.” The Dealer Manager may
authorize certain Dealers that have “net capital,” as defined in the applicable
federal securities regulations, of $250,000 or more, to instruct their customers
to make their checks for Shares subscribed for payable directly to the Dealer.
In such case, the Dealer will collect the proceeds of the subscribers’ checks
and issue a check made payable to the order of the Company for the aggregate
amount of the subscription proceeds or wire such funds to the Escrow Agent. The
Dealer Manager and any Dealer receiving a check prior to the time that the
Minimum Offering is obtained that does not conform to the foregoing instructions
shall promptly return such check directly to such subscriber. Checks received by
the Dealer Manager or Dealer that conform to the foregoing instructions shall be
transmitted for deposit pursuant to one of the methods described in this Section
14 and in accordance with the requirements set forth in Rule 15c2-4 promulgated
under the Exchange Act.
14.2 If
the Dealer Manager or any Dealer receives a check that is made payable to the
Escrow Agent after the Minimum Offering is obtained, the Dealer Manager shall
deposit such check with the Escrow Agent for payment to the Company at its
request.
14.3 It
is understood and agreed that the Company reserves the right in its sole
discretion to refuse to sell any of the Shares to any person. A sale of a Share
shall be deemed to be completed if and only if (i) the Company has received a
properly completed and executed subscription documents, together with payment of
the full purchase price of each purchased Share, from or on behalf of an
investor who satisfies the applicable suitability standards and minimum purchase requirements set forth in the Registration
Statement as determined by the Dealer Manager in accordance with the provisions
of this Agreement and (ii) the Company has accepted
such subscription.
15. SEVERABILITY. If
any portion of this Agreement shall be held invalid or inoperative, then so far
as is reasonable and possible the remainder of this Agreement shall be
considered valid and operative and effect shall be given to the intent
manifested by the portion held invalid or inoperative.
16. NOTICES. All
communications hereunder, except as herein otherwise specifically provided,
shall be sufficiently given or made if sent by hand delivery, national
commercial courier service for next day delivery, United States mail,
first-class, postage prepaid, addressed or sent by facsimile. Notice
delivered by hand or by commercial courier shall be effective at the time of
delivery. Notice deposited by mail shall be effective 48 hours after such
deposit. Notice delivered by facsimile shall be effective at the time evidenced
on the written confirmation of delivery:
15
|
▇▇▇▇▇▇
Validus Mission Critical REIT, Inc.
▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇,
Chief
Executive Officer
|
|
|
With a copy
to:
|
▇▇▇▇▇▇
Validus Mission Critical REIT, Inc.
▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇▇▇▇▇,
Chief Operating Officer
|
|
If to the Dealer
Manager:
|
SC
Distributors, LLC
▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile
No.: (___) ___________
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
|
Any party
may change its address specified above by giving the other party notice of such
change in accordance with this Section 16.
17. DELAY. Except as
expressly provided otherwise in this Agreement, neither the failure nor any
delay on the part of any party to this Agreement to exercise any right, remedy,
power or privilege under this Agreement shall operate as a waiver thereof, nor
shall a waiver of any right remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power, or privilege
with respect to any subsequent occurrence.
18. NO
PARTNERSHIP. Nothing in this Agreement shall be construed or
interpreted to constitute the Dealer Manager as in association with or in
partnership with the Company, and instead, this Agreement only shall constitute
the Dealer Manager as a broker-dealer authorized by the Company to sell and to
manage the sale by others of the Shares according to the terms set forth in the
Registration Statement, the Prospectus or this Agreement.
19. NO THIRD PARTY
BENEFICIARIES. Except as expressly provided otherwise in this
Agreement, no provision of this Agreement is intended to be for the benefit of
any person or entity not a party to this Agreement, and no third party shall be
deemed to be a beneficiary of any provision of this Agreement. Further, no third
party shall, by virtue of any provision of this Agreement, have a right of
action or an enforceable remedy against either party to this
Agreement.
20. ENTIRE
AGREEMENT. This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof. This Agreement may not be modified or
amended other than by an agreement in writing.
16
[SIGNATURE
PAGE FOLLOWS]
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,
▇▇▇▇▇▇
Validus Mission Critical REIT, Inc.
By:
_______________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Executive Officer
Accepted
and agreed as of the date first above written.
SC
Distributors, LLC
By:
_______________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President
[SIGNATURE
PAGE TO DEALER MANAGER AGREEMENT]
17
▇▇▇▇▇▇ VALIDUS MISSION CRITICAL REIT,
INC.
Up to 175,000,000 Shares of Common
Stock
PARTICIPATING BROKER-DEALER
AGREEMENT
Ladies and
Gentlemen:
SC Distributors, LLC, a Delaware limited
liability company, as the dealer manager (“Dealer
Manager”) for ▇▇▇▇▇▇
Validus Mission Critical REIT, Inc., a Maryland corporation (the “Company”), invites you (“Dealer”) to participate in the distribution of
shares of common stock (“Shares”) of the Company subject to the
following terms. Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Dealer Manager Agreement between the Dealer Manager
and the Company dated _________________, 2010 in the form attached hereto as
Exhibit “A” (the “Dealer Manager
Agreement”).
By Dealer’s acceptance of this
Agreement, Dealer will become one of the Dealers referred to in the Dealer
Manager Agreement and will be entitled and subject to the terms and conditions
of the Dealer Manager Agreement, including, but not limited to, Section 6.3
of the Dealer Manager Agreement wherein the Dealers severally agree to indemnify
and hold harmless the Dealer Indemnified Persons.
Dealer hereby agrees to use its best
efforts to sell the Shares for cash on the terms and conditions stated in the
Prospectus. Nothing in this Agreement shall be deemed or construed to make
Dealer an employee, agent, representative or partner of the Dealer Manager or of
the Company, and Dealer is not authorized to act for the Dealer Manager or the
Company or to make any representations on their behalf except as set forth in
the Prospectus and such other printed information furnished to Dealer by the
Dealer Manager to supplement the Prospectus (“Supplemental
Information”).
II. Submission
of Orders
Dealer hereby agrees to solicit, as an
independent contractor and not as the agent of the Dealer Manager or of the
Company (or their affiliates), persons acceptable to the Company to purchase the
Shares pursuant to the subscription agreement in the form attached to the
Prospectus and in accordance with the terms of the Prospectus. Dealer hereby
agrees to diligently make inquiries as required by this Agreement, as set forth
in the Prospectus, and as required by all applicable laws of all prospective
investors in order to ascertain whether a purchase of the Shares is suitable for
each such investor.
Those persons who purchase Shares will
be instructed by the Dealer to make their checks payable to “UMB Bank, N.A.,
agent for ▇▇▇▇▇▇ Validus Mission Critical REIT, Inc.” or “UMB, Bank, N.A., agent
for CVREIT” or after the Company reaches its minimum offering, to “▇▇▇▇▇▇
Validus Mission Critical REIT, Inc.” or “CVREIT.” Checks received by the Dealer
which conform to the foregoing instructions shall be transmitted for deposit
pursuant to one of the following methods:
1. Where, pursuant to the Dealer’s internal
supervisory procedures, internal supervisory review is conducted at the same
location at which subscription documents and checks are received from
subscribers, checks will be transmitted by the end of the next business day
following receipt by Dealer for deposit to the Company.
2. Where, pursuant to the Dealer’s internal
supervisory procedures, final internal supervisory review is conducted at a
different location, checks will be transmitted by the end of the next business
day following receipt by Dealer to the office of the Dealer conducting such
final internal supervisory review (the “Final Review
Office”). The Final Review Office will in turn
by the end of the next business day following receipt by the Final Review
Office, transmit such checks for deposit to the escrow agent or the Company, as
applicable.
III. Pricing
Except as described in the Prospectus,
150,000,000 Shares shall be offered to the public at the offering price of
$10.00 per Share, payable in cash pursuant to the primary offering and up to
25,000,000 Shares will be offered pursuant to the Company’s distribution
reinvestment plan at the higher of 95% of the estimated value of a share of the
Company’s common stock, as estimated by the Company’s board of directors, or
$9.50 per Share. Except as otherwise indicated in the Prospectus or
in any letter or memorandum sent to the Dealer by the Company or Dealer Manager,
a minimum initial purchase of 200 Shares, or generally, $2,000, is
required. Except as otherwise indicated in the Prospectus, additional
investments may be made in cash in minimal increments of at least
$500. The Shares are nonassessable.
Except for discounts described in or as
otherwise provided in the “Plan of Distribution” section of the Prospectus,
Dealer’s selling commission applicable to the total public offering price of
Shares sold in the primary offering by Dealer that it is authorized to sell
hereunder is 7.0% of the gross proceeds of the Shares sold by it and accepted
and confirmed by the Company, which commissions will be paid by the Dealer
Manager. For these purposes, a “sale of Shares” shall occur if and
only if a transaction has closed with a securities purchaser pursuant to all
applicable offering and subscription documents and the Company has thereafter
distributed the commission to the Dealer Manager in connection with such
transaction. The Dealer affirms that the Dealer Manager’s liability for
commissions payable is limited solely to the proceeds of commissions receivable
associated therewith, and the 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.
No selling commissions will be paid, and
the per Share cash price shall be reduced to $9.30, in connection with Shares
sold to (i) retirement plans of Dealer, (ii) Dealer in its individual
capacity, (iii) IRAs and qualified plans of Dealer’s registered
representatives or (iv) any one of Dealer’s registered representatives in
their individual capacities.
No selling commissions or a dealer
manager fee will be paid in connection with Shares sold under the
DRIP.
Except as otherwise provided herein, all
expenses incurred by Dealer in the performance of Dealer’s obligations
hereunder, including, but not limited to, expenses related to the Offering and
any attorneys’ fees, shall be at Dealer’s sole cost and expense, and the
foregoing shall apply notwithstanding the fact that the Offering is not
consummated for any reason.
In addition, as set forth in the
Prospectus, the Dealer Manager may, in its sole discretion, reallow all or a
portion of the dealer manager fee to a Dealer. The Dealer Manager
will also reimburse bona fide due diligence expenses of a Dealer. Reimbursement
requests for accountable bona fide due diligence expenses must be made by Dealer
within six months of the date of sale of Shares or such requests will not be
honored by the Dealer Manager.
Dealer acknowledges and agrees that no
commissions, payments or amount whatsoever will be paid to the Dealer unless or
until the gross proceeds of the Shares sold are disbursed to the Company
pursuant to Section 3 of the Escrow Agreement. Until the Required
Capital, as defined in the Escrow Agreement, is obtained, investments will be
held in escrow and, if the Required Capital is not obtained, investments will be
returned to the investors in accordance with the Prospectus.
The parties hereby agree that the
foregoing commission is not in excess of the usual and customary distributors’
or sellers’ commission received in the sale of securities similar to the Shares,
that Dealer’s interest in the Offering is limited to such commission from the
Dealer Manager and Dealer’s indemnity referred to in Section 6 of the
Dealer Manager Agreement, and that the Company is not liable or responsible for
the direct payment of such commission to the Dealer.
Payments of selling commissions will be
made by the Dealer Manager to Dealer within 10 days of the receipt by the
Dealer Manager of the gross commission payments from the Company. Dealer
acknowledges that if the Company pays selling commissions to the Dealer Manager,
the Company is relieved of any obligation for selling commissions to Dealer. The
Company may rely on and use the preceding acknowledgment as a defense against
any claim by Dealer for selling commissions Company pays to Dealer Manager but
that Dealer Manager fails to remit to Dealer.
VI. Covenants of
Dealer
Prior to participating in the Offering,
Dealer will have reasonable grounds to believe, based on information made
available to Dealer by the Dealer Manager and/or the Company through the
Prospectus, that all material facts are adequately and accurately disclosed in
the Prospectus and provide a basis for evaluating an investment in the Company
and the Shares.
Dealer agrees not to rely upon the
efforts of the Dealer Manager, which is affiliated with the Company, in
determining whether the Company has adequately and accurately disclosed all
material facts upon which to provide a basis for evaluating the Company to the
extent required by federal or state laws or the Financial Industry Regulatory
Authority (“FINRA”). Dealer further agrees to conduct its
own investigation to make that determination independent of the efforts of the
Dealer Manager.
Dealer agrees to retain in its records
and make available to the Dealer Manager and to the Company for a period of at
least six (6) years following the termination of the Offering, information
establishing that each investor who purchases the Shares solicited by Dealer is
within the permitted class of investors under the requirements of the
jurisdiction in which such purchaser is a resident and the suitability standards
set forth in the Prospectus and the subscription agreement.
Dealer agrees that, prior to accepting a
subscription for the Shares, it will inform the prospective investor of all
pertinent facts relating to the illiquidity and lack of marketability of the
Shares, as appropriate, during the term of the investment.
Dealer hereby undertakes and agrees to
comply with all obligations applicable to Dealer under all applicable laws,
rules and regulations, including those set forth by FINRA. In soliciting persons
to acquire the Shares, Dealer further agrees to comply with any applicable
requirements of the Securities Act, the Exchange Act, other applicable federal
securities laws, applicable state securities laws, the rules and regulations
promulgated thereunder and the rules of FINRA and, in particular, Dealer agrees
that it will not give any information or make any representations other than
those contained in the Prospectus and in any supplemental sales literature
furnished to Dealer by the Dealer Manager for use in making such
solicitations.
VII. 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, which reserves the right to reject any order.
Orders not accompanied by a Subscription Signature Page and the required check
in payment for the Shares may be rejected. Issuance and delivery of the Shares
will be made only after actual receipt of payment therefore. If any check is not
paid upon presentment, or if the Company is not in actual receipt of
clearinghouse funds or cash, certified or cashier’s check or the equivalent in
payment for the Shares within 15 days of sale, the Company reserves the
right to cancel the sale without notice. In the event an order is rejected,
canceled or rescinded for any reason, the Dealer agrees to return to the Dealer
Manager any commission theretofore paid with respect to such
order.
Dealer is not authorized or permitted to
give, and will not give, any information or make any representation concerning
the Shares except as set forth in the Prospectus and the Supplemental
Information. The Dealer Manager will supply Dealer with reasonable quantities of
the Prospectus, as well as any Supplemental Information, for delivery to
investors, and Dealer will deliver a copy of the Prospectus as required by the
Securities Act, the Exchange Act, and the Rules and Regulations. The Dealer
agrees that it will not send or give any Supplemental Information to an investor
unless it has previously sent or given a Prospectus to that investor or has
simultaneously sent or given a Prospectus with such Supplemental Information.
Dealer agrees that it will not show or give to any investor or prospective
Investor or reproduce any material or writing that is supplied to it by the
Dealer Manager and marked “dealer only” or otherwise bearing a legend denoting
that it is not to be used in connection with the sale of Shares to members of
the public. Dealer agrees that it will not use in connection with the offer or
sale of Shares any material or writing that relates to another company supplied
to it by the Company or the Dealer Manager bearing a legend that states that
such material may not be used in connection with the offer or sale of any
securities of the Company. Dealer further agrees that it will not use in
connection with the offer or sale of Shares any materials or writings that have
not been previously approved by the Dealer Manager. Each Dealer agrees, if the
Dealer Manager so requests, 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.
Regardless of the termination of this Agreement, Dealer will deliver a
Prospectus in transactions in the Shares for a period of 90 days from the
effective date of the Registration Statement or such longer period as may be
required by the Exchange Act or the Exchange Act Rules and Regulations
thereunder.
IX. License and
Association Membership
Dealer’s acceptance of this Agreement
constitutes a representation to the Company and the Dealer Manager that Dealer
is a broker-dealer properly registered with the SEC, duly authorized to sell
Shares under federal and state securities laws and regulations and in all states
where it offers or sells Shares, and that it is a member in good standing of
FINRA. This Agreement shall automatically terminate if the Dealer ceases to be a
member in good standing of such association. Dealer agrees to notify the Dealer
Manager immediately if Dealer ceases to be a member in good
standing.
X. Anti-Money
Laundering Compliance Programs
Dealer’s acceptance of this Agreement
constitutes a representation to the Company and the Dealer Manager that Dealer
has established and implemented anti-money laundering compliance programs in
accordance with FINRA Rule 3011, Section 352 of the Money Laundering
Abatement Act and Sections 103.19, 103.35, and 103.122 of the regulations
of the U.S. Treasury Department, and is in compliance with all Executive Orders
and Federal Regulations administered by the U.S. Treasury Department’s Office of
Foreign Assets Control. Further, Dealer agrees, upon receipt of an “information
request” issued under Section 314 (a) of the USA Patriot Act to
provide the Financial Crimes Enforcement Network with information regarding:
(i) the identity of a specified individual or organization;
(ii) account number; (iii) all identifying information provided by the
account holder; and (4) the date and type of transaction. The Dealer
Manager from time to time will monitor account activity to identify patterns of
unusual size or volume, geographic factors, and any other potential signals of
suspicious activity, including possible money laundering or terrorist financing.
The Company and the Dealer Manager reserve the right to reject account
applications from new customers who fail to provide necessary account
information or who intentionally provide misleading
information.
Dealer will offer Shares only to persons
who meet the financial qualifications set forth in the Prospectus or in any
suitability letter or memorandum sent to it by the Company or the Dealer Manager
and will only make offers to persons in the states in which it is advised in
writing that the Shares are qualified for sale or that such qualification is not
required. In offering Shares, Dealer will comply with the provisions of the
rules and requirements of FINRA, as well as all other applicable rules and
regulations relating to 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.
XII. Termination,
Amendment and Assignment
Dealer will suspend or terminate its
offer and sale of Shares upon the request of the Company or the Dealer Manager
at any time and will resume its offer and sale of Shares hereunder upon
subsequent request of the Company or the Dealer Manager. Any party may terminate
this Agreement by written notice. Such termination shall be effective 48 hours
after the mailing of such notice. This Agreement and the exhibits hereto are the
entire agreement of the parties and supersede all prior agreements, if any,
relating to the subject matter hereof between the parties
hereto.
This Agreement may be amended at any
time by the Dealer Manager by written notice to Dealer, and any such amendment
shall be deemed accepted by Dealer upon placing an order for sale of Shares
after he has received such notice. The Dealer Manager may assign its rights,
obligations and interests hereunder to a qualified assignee upon prior written
notice to Dealer.
XIII. Privacy
Laws
The Dealer Manager and Dealer (each
referred to individually in this section as “party”) agree as
follows:
A. Each party agrees to abide by and comply
with (i) the privacy standards and requirements of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Act of 1999 (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. Each party agrees to refrain from the
use or disclosure of nonpublic personal information (as defined under the GLB
Act) of all customers.
XIV. Confidentiality of
Due Diligence Information
Dealer understands that the Company,
Dealer Manager or third party due diligence providers may from time to time
furnish Dealer with certain information which is non-public, confidential or
proprietary in nature (the “Due Diligence
Information”) in connection
with its due diligence obligations under FINRA rules and the federal securities
laws. Dealer agrees that the Due Diligence Information will be kept
confidential and shall not, without our prior written consent, be disclosed by
Dealer, or by Dealer’s affiliates, agents, representatives or employees, in any
manner whatsoever, in whole or in part, and shall not be used by Dealer, its
agents, representatives or employees, other than in connection with Dealer’s due
diligence evaluation of the Offering. Dealer agrees to reveal the Due
Diligence Information only to its affiliates, agents, representatives and
employees who need to know the Due Diligence Information for the purpose of the
due diligence evaluation. Further, Dealer and its affiliates, agents,
representatives and employees will not disclose to any person the fact that the
Due Diligence Information has been made available to it.
The term Due Diligence Information shall
not include information which (i) is already in Dealer’s possession or in the
possession of Dealer’s parent corporation or affiliates, provided that such
information is not known by Dealer to be subject to another confidentiality
agreement with or other obligation of secrecy to the Company or another party;
(ii) is or becomes generally available to the public other than as a result of a
disclosure by Dealer, its affiliates, or their respective directors, officers,
employees, agents, advisors and representatives in violation of this agreement;
(iii) becomes available to Dealer or its affiliates on a non-confidential basis
from a source other than the Company or its advisors, provided that such source
is not known by Dealer or its affiliates to be bound by a confidentiality
agreement with or other obligation of secrecy to the Company or another party;
or (iv) is independently developed by Dealer or by its affiliates without use of
the Due Diligence Information.
Dealer agrees that its obligation of
non-disclosure, non-use and confidentiality of the Due Diligence Information as
set forth herein shall terminate two (2) years after the date on which the Due
Diligence Information is received by Dealer.
XV.
Notice
All notices or other communications
required or permitted hereunder shall be in writing and shall be deemed given or
delivered: (i) when delivered personally or by commercial messenger;
(ii) one business day following deposit with a recognized overnight courier
service, provided such deposit occurs prior to the deadline imposed by such
service for overnight delivery; (iii) when transmitted, if sent by
facsimile copy, provided confirmation of receipt is received by sender and such
notice is sent by an additional method provided hereunder, in each case above
provided such communication is addressed to the intended recipient thereof as
set forth below:
If to the Dealer Manager:
SC Distributors,
LLC
▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ( )
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
If to Dealer, to the address or
facsimile number and address specified by Dealer on the signature page
hereto.
XVI. Attorney’s Fees and
Applicable Law
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 Florida and shall take effect when
signed by Dealer and countersigned by the Dealer Manager.
We have read the foregoing Agreement and
we hereby accept and agree to the terms and conditions set forth
therein.
[SIGNATURE PAGE
FOLLOWS]
▇▇▇▇▇▇ Validus Mission Critical REIT,
Inc.
Participating Broker-Dealer
Agreement
[SIGNATURE PAGE]
We have read the foregoing Agreement and
we hereby accept and agree to the terms and conditions set forth
therein.
Dealer
Name: __________________________________________
(as shown in FINRA records)
Attention: __________________________________________
Address: __________________________________________
__________________________________________
City: __________________________________________
State: ___________ Zip Code: ______________________
Telephone No.: __________________________________________
Facsimile
No.: __________________________________________
E-mail: __________________________________________
AGREED TO AND ACCEPTED BY THE
DEALER:
By:
__________________________
Signature
__________________________
Printed Name
__________________________
Title
AGREED TO AND ACCEPTED
BY
THE DEALER MANAGER:
SC DISTRIBUTORS, LLC
By:
_____________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President