HINES REAL ESTATE INVESTMENT TRUST,
INC.
Up to $750,000,000 in Shares of Preferred Stock
SELECTED DEALER AGREEMENT
Hines Real Estate
Investments, Inc., as the dealer manager (“Dealer
Manager”) for Hines Real Estate Investment Trust, Inc.
(“Company”), a Maryland corporation, invites you
(“Dealer”) to participate in the distribution of shares
of preferred stock (“Shares”) of the Company subject to
the following terms:
I. Dealer
Manager Agreement
The Dealer Manager
and the Company have entered into that certain Dealer Manager
Agreement dated
, 20___, in the form attached as Exhibit “A” hereto
(the “Dealer Manager Agreement”). By your execution and
acceptance of this Selected Dealer Agreement, you will become one
of the Dealers referred to in such Dealer Manager Agreement between
the Company and the Dealer Manager and will be entitled and subject
to all of the provisions of the Dealer Manager Agreement, including
but not limited to, the representations and warranties and the
indemnification obligations contained in such Dealer Manager
Agreement, including specifically the provisions of
Section 4.4 of such Dealer Manager Agreement wherein each
Dealer, upon the execution of this Selected Dealer Agreement,
severally agrees to indemnify and hold harmless the Company, the
Dealer Manager and each officer and director thereof, and each
person, if any, who controls the Company and the Dealer Manager
within the meaning of the Securities Act of 1933, as amended
(“Securities Act”), or the Securities Exchange Act of
1934, as amended (“Exchange Act”), for the matters set
forth in said Section 4.4 of the Dealer Manager Agreement.
Such indemnification obligations shall survive the termination of
this Selected Dealer Agreement and the Dealer Manager Agreement.
Except as otherwise specifically stated herein, all terms used in
this Selected Dealer Agreement have the meanings provided in the
Dealer Manager Agreement. The Shares are being offered solely
through broker-dealers who are members of the Financial Industry
Regulatory Authority (“FINRA”).
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
Selected Dealer Agreement shall be deemed or construed to make
Dealer an employee, agent, representative or partner of the Dealer
Manager or the Company, and Dealer is not authorized to act for the
Dealer Manager or the Company or to make any representations except
as set forth in the Prospectus and Authorized Sales
Materials.
Those persons who
purchase Shares will be instructed by Dealer to make their checks
payable to “Hines Real Estate Investment Trust, Inc.”
or “Hines REIT,” or as otherwise instructed by Dealer
in the event Dealer follows other procedures. Any Dealer receiving
a check not conforming to such instructions shall return such check
directly to such subscriber not later than the end of the next
business day following its receipt. Checks received by the Dealer
which conform to the foregoing instructions shall be transmitted
for deposit pursuant to one of the methods in this Article II.
Transmittal of received investor funds will be made in accordance
with the following procedures:
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 the Dealer to the Company for
deposit.
Where, pursuant to
the Dealer’s internal supervisory procedures, final and
internal supervisory review is conducted at a different location,
checks will be transmitted by the end of the next business day
following receipt by the Dealer to the office of the Dealer
conducting such final internal supervisory review (“Final
Review Office”). The Final Review Office will in turn
transmit by the end of the next business day following receipt by
the Final Review Office such checks to the Company for
deposit.
Except as
otherwise provided in the “Plan of Distribution”
section of the Prospectus, up to $700,000,000 in Shares shall be
offered to the public at the offering price set forth in the
Prospectus, and up
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to $50,000,000
in Shares shall be offered pursuant to the Company’s dividend
reinvestment plan at the offering price set forth in the
Prospectus. 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 $2,500 is required.
Except as otherwise indicated in the Prospectus, additional
investments may be made in minimal increments of at least $50.00.
The Shares are nonassessable.
Except as
otherwise provided in the “Plan of Distribution”
section of the Prospectus, a Dealer’s selling commission
applicable to the Shares sold by such Dealer which it is authorized
to sell hereunder is up to 7.0% of the gross proceeds of Shares
sold by such Dealer in the primary offering and accepted and
confirmed by the Company, which commission will be payable by the
Dealer Manager. No selling commissions shall be paid with respect
to Shares issued and sold pursuant to the Company’s dividend
reinvestment plan. With respect to Shares sold to certain
investors, selling commissions may be reduced as provided in the
“Plan of Distribution” section of the Prospectus. The
Company may revise the amount of selling commissions applicable to
Shares sold in the Offering in its discretion. In the event of any
such change in the amount of selling commissions, the Dealer
Manager shall notify the Dealer in writing of such change, in which
event this Selected Dealer Agreement shall be deemed amended to the
extent required to reflect such change in the amount of selling
commissions. For these purposes, Shares shall be deemed to be
“sold” if and only if a transaction has closed with a
subscriber for Shares pursuant to all applicable offering and
subscription documents, the Company has accepted the subscription
agreement of such subscriber, and such Shares have been fully paid
for. The Dealer affirms that the Dealer Manager’s liability
for commissions payable is limited solely to the proceeds of
commissions receivable from the Company, 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. In addition, as set forth in the
Prospectus, the Dealer Manager may, in its sole discretion, reallow
a portion of its dealer manager fee to Dealers participating in the
Offering of Shares as a marketing fee, in an amount up to 1.5% of
the gross proceeds of Shares sold by Dealer in the primary
offering; and may pay out of a portion of its dealer manager fee up
to 1% of the gross proceeds of Shares sold by Dealer in the primary
offering to defray other distribution and marketing-related costs
and expenses, such as costs associated with attending or sponsoring
conferences, technology costs, and other distribution and
marketing-related costs and expenses of such Dealer. As set forth
in Section 3.3 of the Dealer Manager Agreement, the Dealer
Manager may reimburse the Dealers up to 0.5% of gross proceeds
raised in the Offering for bona fide out-of-pocket itemized and
detailed due diligence expenses. The Dealer Manager shall have the
right to require the Dealer to provide a detailed and itemized
invoice as a condition to the reimbursement of any such due
diligence expenses. The terms and conditions for payment of the
fees and/or reimbursement arrangements shall be specified in
Schedule I to this Selected Dealer Agreement. The Dealer shall
have the responsibility for disclosing to investors the terms of
any such selling commissions, marketing fee or other reimbursement
or payment and any preferential treatment provided to the Dealer
Manager in connection therewith, if applicable and to the extent
required.
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, the payments provided for on
Schedule I to this Selected Dealer Agreement, if any, and
Dealer’s indemnity referred to in Section 4 of the
Dealer Manager Agreement, and that the Company is not liable or
responsible for such payments to the Dealer.
V. Applicability
of Indemnification
Each of the Dealer
and Dealer Manager hereby acknowledges and agrees that it will be
subject to the obligations set forth in, and entitled to the
benefits of all the provisions of, the Dealer Manager Agreement,
including but not limited to, the representations and warranties
and the indemnification obligations contained in such Dealer
Manager Agreement, including specifically the provisions of
Section 4.3 and Section 4.4 of the Dealer Manager
Agreement. Such indemnification obligations shall survive the
termination of this Selected Dealer Agreement and the Dealer
Manager Agreement.
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With respect to
Commission Sales, payments of selling commissions will be made by
the Dealer Manager to you within 30 days of the receipt by the
Dealer Manager of the gross commission payments from the
Company.
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
an executed Subscription Agreement and the required payment for the
Shares may be rejected. Issuance of the Shares will be made only
after actual receipt of payment therefor. 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, 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 or other payment
theretofore paid with respect to such order within 30 days
thereafter and, failing to do so, the Dealer Manager shall have the
right to offset amounts owed against future commissions or other
payments due and otherwise payable to said Dealer.
VIII. Prospectus
and Authorized Sales Materials
Dealer is not
authorized or permitted to give, and will not give, any information
or make any representation (written or oral) concerning the Shares,
except as set forth in the Prospectus and any Authorized Sales
Materials. The Dealer Manager shall promptly notify Dealers of any
supplement or amendment to the Prospectus or the Authorized Sales
Materials. The Dealer Manager will supply Dealer with reasonable
quantities of the Prospectus, any supplements thereto and any
amended Prospectus, as well as any Authorized Sales Materials, for
delivery to investors, and Dealer will deliver a copy of the
Prospectus and all supplements thereto and any amended Prospectus
to each investor to whom an offer is made prior to or
simultaneously with the first solicitation of an offer to sell the
Shares to an investor. The Dealer agrees that it will not send or
give any Authorized Sales Materials 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 Authorized
Sales Materials. Dealer agrees that it will not show or give to any
investor or prospective investor or reproduce any material or
writing which is supplied to it by the Dealer Manager and marked
“broker-dealer use only” or otherwise bearing a legend
denoting that it is not to be used in connection with the 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 supplied to it by the Company or the Dealer Manager bearing
a legend which states that such material may not be used in
connection with the offer or sale of the Shares or any other
securities. Dealer further agrees that it will not use in
connection with the offer or sale of Shares any materials or
writings which have not been previously authorized or approved by
the Dealer Manager. Each Dealer agrees to furnish a copy of any
revised preliminary Prospectus to each person to whom it has
furnished a copy of any previous preliminary Prospectus, and
further agrees that it will itself mail or otherwise deliver all
preliminary and final Prospectuses required for compliance with the
provisions of Rule 15c2-8 under the Exchange Act. Regardless
of the termination of this Selected Dealer Agreement, Dealer will
deliver a Prospectus in transactions in the Shares for a period of
40 days from the effective date of the Registration Statement
or such longer period as may be required by the Exchange Act. On
becoming a Dealer, and in offering and selling Shares, Dealer
agrees to comply with all the applicable requirements under the
Securities Act and the Exchange Act.
IX. License
and Association Membership
A. Dealer’s
acceptance of this Selected Dealer Agreement constitutes a
representation to the Company and the Dealer Manager that Dealer is
a properly registered broker-dealer under the Exchange Act, is duly
licensed as a broker-dealer and 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 with FINRA. This Selected Dealer Agreement shall
automatically terminate if Dealer (1) ceases to be a member in
good standing with FINRA, (2) is subject to a FINRA
suspension, or (3) its registration as a broker-dealer under
the Exchange Act is terminated or suspended. Dealer agrees to
notify the Dealer
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Manager
immediately in writing if Dealer (a) ceases to be a member in
good standing with FINRA, (b) is subject to a FINRA
suspension, or (c) its registration as a broker-dealer under
the Exchange Act is terminated or suspended. Dealer hereby agrees
to abide by all applicable FINRA rules, including NASD Conduct
Rules, specifically including, but not limited to, NASD
Rules 2420, 2730, 2740 and 2750.
B. Dealer
Manager represents and warrants that it is currently, and at all
times while performing its functions under this Selected Dealer
Agreement will be, a properly registered broker-dealer under the
Exchange Act and under state securities laws to the extent
necessary to perform the duties described in this Selected Dealer
Agreement, and that it is a member in good standing with FINRA. The
Dealer Manager agrees to notify Dealer immediately in writing if it
ceases to be a member in good standing with FINRA, is subject to a
FINRA suspension, or its registration as a broker-dealer under the
Exchange Act is terminated or suspended. The Dealer Manager hereby
agrees to abide by all applicable FINRA rules, including NASD
Conduct Rules, specifically including, but not limited to, NASD
Rules 2420, 2730, 2740 and 2750.
X. Anti-Money
Laundering Compliance Programs
Dealer’s
acceptance of this Selected Dealer Agreement constitutes a
representation to the Company and the Dealer Manager that Dealer
has established and implemented an anti-money laundering compliance
program and customer identification program (“AML
Program”) in accordance with applicable FINRA rules,
including NASD Conduct Rules, SEC Rules and the Bank Secrecy Act,
Title 31 U.S.C. Sections 5311-5355, as amended by the USA
PATRIOT Act, and related regulations (31 C.F.R. Part 103),
specifically including, but not limited to, 31 U.S.C. 5318(h)
(Anti-Money Laundering Programs) requiring financial institutions,
including securities broker-dealers, to establish anti-money
laundering programs reasonably expected to detect and cause the
reporting of suspicious transactions in connection with the sale of
Shares of the Company and 31 C.F.R. 103.122 (Customer
Identification Programs for broker-dealers) (the “AML
Rules”). In addition, Dealer represents that it has
established and implemented a program for compliance with Executive
Order 13224 and all regulations and programs administered by the
Treasury Department’s Office of Foreign Assets Control
(“OFAC Program”), and will continue to maintain its AML
and OFAC Programs consistent with AML Rules and OFAC requirements
during the term of this Selected Dealer Agreement. Upon request by
the Dealer Manager at any time, Dealer hereby agrees to
(A) furnish a copy of its AML Program and OFAC Program to the
Dealer Manager for review, and (B) furnish a copy of the
findings and any remedial actions taken in connection with
Dealer’s most recent independent testing of its AML Program
and/or its OFAC Program.
The Dealer Manager
shall have the right, upon reasonable notice to Dealer, but not the
obligation, to audit and/or monitor Dealer’s AML Program and
OFAC Program. In any such event, Dealer agrees to cooperate with
the Dealer Manager’s auditing and monitoring of
Dealer’s AML Program and its OFAC Program by providing, upon
request, information, records, data and exception reports related
to any customers of Dealer purchasing Shares in the Company
(“Dealer’s Customers”). Such documentation could
include, among other things, copies of: Dealer’s AML Program
and its OFAC Program; documents maintained pursuant to
Dealer’s AML Program and its OFAC Program related to
Dealer’s Customers; any suspicious activity reports filed
related to Dealer’s Customers; audits and any exception
reports related to Dealer’s AML activities; and any other
files maintained related to Dealer’s Customers. In the event
that such documents reflect, in the opinion of the Dealer Manager,
a potential violation of Dealer Manager’s AML or OFAC
requirements, Dealer will permit the Dealer Manager to further
inspect relevant books and records related to Dealer’s
Customers and/or Dealer’s compliance with AML or OFAC
requirements. Notwithstanding the foregoing, Dealer shall not be
required to provide to Dealer Manager any documentation that, in
Dealer’s reasonable judgment, would cause Dealer to lose the
benefit of attorney-client privilege or other privilege which
Dealer would be entitled to assert relating to the discoverability
of documents in any civil or criminal proceedings. Dealer hereby
represents that it is currently in compliance with all AML Rules
and all OFAC requirements, specifically including, but not limited
to, the Customer Identification Program requirements under 31
C.F.R. 103.122. Dealer hereby agrees: (A) to perform and carry
out, on behalf of both the Dealer Manager and the Company, the
Customer Identification Program requirements in accordance with 31
C.F.R. 103.122 and applicable Securities and Exchange Commission
(“SEC”), FINRA, including NASD, and Treasury Department
Rules thereunder, and (B) to provide an annual certification
to the Dealer Manager that, as of the date of such certification,
(1) it has implemented and is continuing to implement its AML
Program and its OFAC Program, (2) its AML Program and
its
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OFAC Program
are consistent with the AML Rules and OFAC requirements, and
(3) it is currently in compliance with all AML Rules and OFAC
requirements, specifically including, but not limited to, the
Customer Identification Program requirements under 31 C.F.R.
103.122.
XI. Limitation
of Offer; Suitability
Dealer will offer
Shares only to persons who meet the suitability standards set forth
in the Prospectus or in any suitability letter or memorandum sent
to it by the Company 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 make every reasonable effort to determine that
the purchase of the Shares is a suitable and appropriate investment
for each purchaser of the Shares pursuant to a subscription
agreement solicited by Dealer and will comply with the requirements
imposed upon it by the Prospectus, the Securities Act, the Exchange
Act, applicable Blue Sky laws, and all applicable FINRA rules,
including NASD Conduct Rules, as well as all other applicable rules
and regulations relating to suitability of investors and prospectus
delivery requirements, including without limitation, the provisions
of Article III.C. and Article III.E.1. of the Statement
of Policy Regarding Real Estate Investment Trusts of the North
American Securities Administrators Association, Inc. Nothing
contained in this Selected Dealer Agreement shall be construed to
impose upon the Company or the Dealer Manager the responsibility of
assuring that prospective investors meet the suitability standards
set forth in the Prospectus, or to relieve Dealer from the
responsibility of assuring that prospective investors meet the
suitability standards in accordance with the terms and provisions
of the Prospectus.
Dealer further
represents, warrants and covenants to the Dealer Manager that
neither Dealer, nor any person associated with Dealer, shall offer
or sell Shares in any jurisdiction except to investors who satisfy
the investor suitability standards and minimum investment
requirements under the most restrictive of the following:
(A) applicable provisions of the Prospectus;
(B) applicable laws of the jurisdiction of which such investor
is a resident; or (C) applicable FINRA rules, including NASD
Conduct Rules. Dealer agrees to ensure that, in recommending or
otherwise facilitating a purchase, sale or exchange of Shares to an
investor, each Dealer, or person associated with Dealer, shall have
reasonable grounds to believe, on the basis of information obtained
from the investor (and thereafter maintained in the manner and for
the period provided in such Rules) concerning his age, investment
objectives, investment experience, income, net worth, other
investments, financial situation and needs, and any other
information known to Dealer, or person associated with Dealer, that
(1) the investor is in a financial position appropriate to
enable him to benefit from an investment in the Shares based upon
the investor’s investment objectives and overall portfolio
structure; (2) the investor has a fair market net worth
sufficient to bear the economic risk inherent in an investment in
Shares in the amount proposed, including loss, and lack of
liquidity of such investment; (3) that the investor has an
apparent understanding of the fundamental risks of an investment in
Shares, the lack of liquidity of the Shares, the background and
qualifications of the sponsor, the Advisor to the Company and their
affiliates, and the tax consequences of an investment in the
Shares; and (4) an investment in Shares is a suitable and
appropriate investment for the investor. Dealer further represents,
warrants and covenants that Dealer, or a person associated with
Dealer, will make every reasonable effort to determine the
suitability and appropriateness of an investment in Shares of each
proposed investor by reviewing documents and records disclosing the
basis upon which the determination as to suitability was reached as
to each purchaser of Shares pursuant to a subscription solicited by
Dealer, whether such documents and records relate to accounts which
have been closed, accounts which are currently maintained, or
accounts hereafter established. Dealer agrees to retain such
documents and records in Dealer’s records for a period of at
least six years from the date of the applicable sale of Shares and
to make such documents and records available to (a) the Dealer
Manager and the Company upon request, and (b) to
representatives of the SEC, FINRA and applicable state securities
administrators upon Dealer’s receipt of an appropriate
request for such documents from any such agency. Dealer shall not
purchase any Shares for a discretionary account without obtaining
the prior written approval of Dealer’s customer and his or
her signature on a Subscription Agreement.
XII. Due
Diligence; Adequate Disclosure
Prior to offering
the Shares for sale, Dealer shall have conducted an inquiry such
that Dealer has reasonable grounds to believe, based on information
made available to Dealer by the Company or the
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Dealer Manager
through the Prospectus or other materials, that all material facts
are adequately and accurately disclosed and provide a basis for
evaluating a purchase of Shares. In determining the adequacy of
disclosed facts pursuant to the foregoing, each Dealer may obtain,
upon request, information on material facts relating at a minimum
to the following: (A) items of compensation; (B) physical
properties; (C) tax aspects; (D) financial stability and
experience of the Company and its Advisor; (E) conflicts and
risk factors; and (F) other pertinent reports.
Notwithstanding
the foregoing, each Dealer may rely upon the results of an inquiry
conducted by an independent third party retained for that purpose
or another Dealer, provided that: (A) such Dealer has
reasonable grounds to believe that such inquiry was conducted with
due care by said independent third party or such other Dealer;
(B) the results of the inquiry were provided to Dealer with
the consent of the other Dealer conducting or directing the
inquiry; and (C) no Dealer that participated in the inquiry is
an affiliate of the Company.
Prior to the sale
of the Shares, each Dealer shall inform each prospective purchaser
of Shares of pertinent facts relating to the Shares including
specifically the lack of liquidity and lack of marketability of the
Shares during the term of the investment.
XII. Compliance
with Record Keeping Requirements
Dealer agrees to
comply with the record keeping requirements of the Exchange Act,
including but not limited to, Rules 17a-3 and 17a-4
promulgated under the Exchange Act. Dealer further agrees to keep
such records with respect to each customer who purchases Shares,
his suitability and the amount of Shares sold and to retain such
records for such period of time as may be required by the SEC, any
state securities commission, FINRA or the Company.
Each party hereby
agrees to promptly provide to the other party copies of any written
or otherwise documented complaints from customers of Dealer
received by such party relating in any way to the Offering
(including, but not limited to, the manner in which the Shares are
offered by the Dealer Manager or Dealer), the Shares or the
Company.
XV. Effectiveness;
Termination; Amendment
This Selected
Dealer Agreement shall become effective upon the execution hereof
by Dealer and receipt of such executed Selected Dealer Agreement by
the Dealer Manager; provided, however, that in the event of the
execution of this Selected Dealer Agreement prior to the time that
the Registration Statement, as defined in the Dealer Manager
Agreement, becomes effective with the SEC, this Selected Dealer
Agreement shall not become effective prior to the Registration
Statement becoming effective with the SEC and shall instead become
effective simultaneously with the effectiveness of the Registration
Statement.
Dealer will
immediately 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. The Dealer Manager or
the Dealer may terminate this Selected Dealer Agreement by written
notice. Such termination shall be effective 48 hours after the
mailing of such notice. This Selected Dealer Agreement and the
exhibits and schedules hereto shall constitute the entire agreement
of the parties and shall supersede all prior agreements, if any,
between the parties hereto.
This Selected
Dealer Agreement may be amended at any time by the Dealer Manager
upon providing 30 days’ written notice to the Dealer,
provided that any such amendment shall be deemed accepted and
agreed to by Dealer upon placing an order for the sale of Shares
after Dealer has received such notice.
Each of the Dealer
Manager and Dealer hereby agree to abide by and comply with
(i) the privacy standards and requirements of the
Gramm-Leach-Bliley 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.
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All notices will
be in writing and will be duly given to the Dealer Manager when
mailed to the attention of Robert F. Muller, Jr., President, Hines
Real Estate Investments, Inc. at 2800 Post Oak Boulevard,
Suite 4700, Houston, Texas 77056-6118, and to Dealer when
mailed to the address specified by Dealer herein.
XVIII.
Attorneys’ Fees, Applicable Law and Venue
In any action to
enforce the provisions of this Selected Dealer Agreement or to
secure damages for its breach, the prevailing party shall recover
its costs and
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