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Exhibit 1.2
Form of Soliciting Dealers Agreement
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INLAND REAL ESTATE CORPORATION
[FORM OF]
SOLICITING DEALERS AGREEMENT
Ladies and Gentlemen:
We have entered into an agreement (the "Dealer Manager Agreement")
which is a part hereof and attached hereto, with Inland Real Estate Corporation,
a Maryland corporation (the "Company"), under which we have agreed to use our
best efforts to solicit subscriptions for the shares of Common Stock (the
"Shares") in the Company. The Company is offering to the public an aggregate
maximum of up to 25,000,000 Shares at a price of $11 per Share on a "best
efforts" basis; up to 2,000,000 Shares issued pursuant to the Distribution
Reinvestment Program at a price of $10.45 per Share; up to 433,370 Shares
issuable on exercise of warrants issued in Prior Offerings; and 625,000 warrants
(and shares issuable on exercise of the warrants) which are issuable in certain
circumstances in connection with the sale of Shares (as defined in the
Prospectus) (the "Offering"). Unless otherwise defined, capitalized terms used
herein shall have the same meaning as in the Registration Statement.
In connection with the performance of our obligations under Section 2
of the Dealer Manager Agreement, we are authorized to use the services of
securities dealers who are members of the National Association of Securities
Dealers, Inc. (the "Soliciting Dealers") to solicit subscriptions. You are
hereby invited to become a Soliciting Dealer and, as such, to use your best
efforts to solicit subscribers for Shares, in accordance with the following
terms and conditions:
1. A registration statement (the "Registration Statement") with respect
to the 25,000,000 Shares has been filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"), and has become effective. The 25,000,000 Shares and the Offering are
more particularly described in the enclosed prospectus (the "Prospectus") which
is part of the Registration Statement. Additional copies of the Prospectus will
be supplied to you in reasonable quantities upon request. We will also provide
you with reasonable quantities of any supplemental literature prepared by the
Company in connection with the offering of the Shares.
2. Solicitation and other activities by the Soliciting Dealers
hereunder shall be undertaken only in accordance with the Dealer Manager
Agreement, this Agreement, the Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the applicable rules and regulations of the
Commission, the Blue Sky Survey hereinafter referred to and the Conduct Rules of
the National Association of Securities Dealers, Inc. (the "NASD"), specifically
including, but not in any way limited to, Rules 2440, 2730, 2740, and 2750. In
offering the sale of Shares to any person, each Soliciting Dealer shall have
reasonable grounds to believe (based on such information as the investment
objectives, other investments, financial situation and needs of the person or
any other information known by you after due inquiry) that: (i) such person is
or will be in a financial position appropriate to enable such person to realize
to a significant extent the benefits described in the Prospectus and has a net
worth sufficient to sustain the risks inherent in the program, including loss of
investment and lack of liquidity; (ii) the purchase of the Shares is otherwise
suitable for such person, and each Soliciting Dealer shall maintain records
disclosing the basis upon which each Soliciting Dealer determined the
suitability of any persons offered Shares; and (iii) such person has
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either: (a) a minimum annual gross income of $45,000 and a net worth (exclusive
of home, home furnishings and automobiles) of $45,000; or (b) a net worth
(determined with the foregoing exclusions) of $150,000.
If the investor is a resident of California, the investor must have
either: (i) a net worth (excluding home, home furnishings and automobiles) of
$225,000; or (ii) a minimum annual gross income of $60,000 and a net worth
(exclusive of home, home furnishings and automobiles) of $60,000.
If the investor is a resident of Maine, the investor must have either:
(i) a net worth (excluding home, home furnishings and automobiles) of $200,000;
or (ii) a minimum annual gross income of $50,000 and a net worth (exclusive of
home, home furnishings and automobiles) of $50,000.
If the investor is a resident of Massachusetts, the investor must have
either: (i) a net worth (excluding home, home furnishings and automobiles) of
$225,000; or (ii) a minimum annual gross income of $60,000 and a net worth
(exclusive of home, home furnishings and automobiles) of $60,000.
If the investor is a resident of Tennessee, the investor must have
either: (i) a net worth (excluding home, home furnishings and automobiles) of
$225,000; or (ii) a minimum annual gross income of $60,000 and a net worth
(exclusive of home, home furnishings and automobiles) of $60,000.
Each Soliciting Dealer agrees: (i) to deliver to each person who
subscribes for the Shares, a Prospectus, as then supplemented or amended, prior
to the tender of his subscription agreement (the "Subscription Agreement"); (ii)
to comply promptly with the written request of any person for a copy of the
Prospectus during the period between the effective date of the Registration
Statement and the later of the termination of the distribution of the Shares or
the expiration of 40 days after the first date upon which the Shares were
offered to the public; (iii) deliver in accordance with applicable law or as
prescribed by any state securities administrator to any person a copy of any
document included within the Registration Statement, including delivering the
Articles and Bylaws (as each is defined in the Prospectus) to investors residing
in the States of Mississippi and Ohio; and (iv) to maintain in its files for at
least six years, documents disclosing the basis upon which the de termination of
suitability was reached as to each purchaser of Shares.
3. Subject to the terms and conditions set forth herein and in the
Dealer Manager Agreement, the Company shall pay to you a selling commission of
up to 7% per Share for all Shares sold for which you have acted as Soliciting
Dealer pursuant to this Agreement. Soliciting Dealers will also receive, subject
to applicable federal and state securities laws, one Soliciting Dealer Warrant
for each 40 Shares sold by such Soliciting Dealer during the Offering (the
"Soliciting Dealer Warrants") which warrants will be reallowed from the Dealer
Manager from the warrants issued to it by the Company. The Company will not
issue more than 625,000 of these warrants in connection with the Offering of the
Shares. The Soliciting Dealer Warrants will be issued quarterly commencing 60
days after the date on which Shares are first sold pursuant to the Offering. The
Dealer Manager will not transfer and the Company will not issue Soliciting
Dealer Warrants to Soliciting Dealers registered in Minnesota, Nebraska, South
Carolina, Tennessee or Texas in
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connection with the sale of Shares to residents of Minnesota, Nebraska, South
Carolina, Tennessee or Texas, respectively. All Shares sold by the Company,
other than through the Distribution Reinvestment Program except Shares sold to
residents of the above-referenced states, will be included in the computation of
the number of Shares sold to determine the number of Soliciting Dealer Warrants
to be issued. The holder of a Soliciting Dealer Warrant will be entitled to
purchase one Share from the Company at a price of $13.20 (120%) of the public
offering price per Share) during the time period beginning one year from the
date the Soliciting Dealer Warrants are issued and ending April ___, 2003 (the
"Exercise Period"). If a Soliciting Dealer Warrant has not been exercised by the
end of the Exercise Period, it will terminate and the holder thereof will have
no further rights thereunder. Soliciting Dealers should consult their tax
advisors regarding the income tax aspects of receiving the Soliciting Dealer
Warrants.
Investors purchasing at least $220,000 worth of Shares (20,000 Shares)
will be entitled to a reduction in selling commissions in accordance with the
following schedule:
Amount of Maximum Commission
Purchaser's Investment Per Share
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From To
$ 220,000 $ 499,999 5.5%
500,000 999,999 4.0
1,000,000 1,999,999 2.5
2,000,000 and over 1.0
Any reduction from the amount otherwise payable to you in respect of a
subscription will be credited to such purchaser in the form of additional whole
Shares or fractional Shares purchased net of commissions.
Subscriptions for Shares in the Company may be combined: (i) with
subscriptions in this Offering or (ii) with subscriptions from any of the
Company's prior offerings, for the purpose of crediting a purchaser with
additional Shares and determining commissions reallowable to you so long as all
such purchases are made through you and approved by the Company. Additionally,
subscriptions of persons holding as joint tenants or tenants in common may be
combined for purposes of computing amounts invested. Subscriptions from
tax-exempt entities may be combined in computing accounts invested only if they
each have the same person who exercises investment discretion. The Subscription
Agreement Signature Page (as such term is defined in the Prospectus) must
indicate that subscriptions are to be combined. The Company cannot be held
responsible for failing to properly combine subscriptions.
You (and other Soliciting Dealers) also may receive up to an additional
2.5% per Share sold by you as a marketing contribution and due diligence expense
allowance fee.
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Employees and associates of the Company and its Affiliates will be
permitted to purchase Shares net of sales commissions.
Notwithstanding the foregoing, it is understood and agreed that no
commission shall be payable with respect to particular Shares if the Company
rejects a proposed subscriber's Subscription Agreement.
4. We reserve the right to notify you by telegram or by other means of
the number of Shares reserved for sale by you. Such Shares will be reserved for
sale by you until the time spe cified in our notification to you. Sales of any
reserved Shares after the time specified in the notification to you or any
requests for additional Shares will be subject to rejection in whole or in part.
5. Payments for Shares shall be made by checks payable to "LNB, Escrow
Agent for IREC" and forwarded together with a copy of the Subscription
Agreement, which is attached as Exhibit I to the Prospectus, executed by the
subscriber, to Inland Securities Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, not later than noon of the next business day after receipt of
such Subscription Agreement and check (when your internal supervisory procedures
are completed at the site at which the Subscription Agreement and check were
received by you) or, when your internal supervisory procedures are performed at
a different location (the "Final Review Office"), you shall transmit the check
and Subscription Agreement to the Final Review Office by the end of the next
business day following your receipt of the Subscription Agreement and check. The
Final Review Office will, by the end of the next business day following its
receipt of the Subscription Agreement and check, forward both to the Dealer
Manager as processing broker-dealer. If any Subscription Agreement solicited by
you is rejected by the Company, the Subscription Agreement and check will be
forwarded to the Escrow Agent for prompt return to the rejected subscriber.
6. We will inform you as to the jurisdictions in which we have been
advised by the Company that the Shares have been qualified for sale or are
exempt under the respective securities or "blue sky" laws of such jurisdictions;
but we have not assumed and will not assume any obligation or responsibility as
to your right to act as a broker with respect to the Shares in any such
jurisdiction. You agree that you will not make any offers except in states in
which we may advise you that the Offering has been qualified or is exempt and
further agree to assure that each person to whom you sell Shares (at both the
time of the initial purchase as well as at the time of any subsequent purchases)
meets any special suitability standards which apply to sales in a particular
jurisdiction, as described in the Blue Sky Survey and the Subscription
Agreement. Neither we nor the Company assume any obligation or responsibility in
respect of the qualification of the Shares covered by the Prospectus under the
laws of any jurisdiction or your qualification to act as a broker with respect
to the Shares in any jurisdiction. The Blue Sky Survey which has been or will be
furnished to you indicates the jurisdictions in which it is believed that the
offer and sale of Shares covered by the Prospectus is exempt from, or requires
action under, the applicable blue sky or securities laws thereof, and what
action, if any, has been taken with respect thereto.
It is understood and agreed that under no circumstances will you, as a
Soliciting Dealer, engage in any activities hereunder in any jurisdiction in
which you may not lawfully so engage or
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in any activities in any jurisdiction with respect to the Shares in which you
may lawfully so engage unless you have complied with the provisions hereof.
7. Neither you nor any other person is authorized by the Company or by
us to give any information or make any representations in connection with this
Agreement or the offer of Shares other than those contained in the Prospectus,
as then amended or supplemented, or any sales literature approved by us and the
Company. You agree not to publish, circulate or otherwise use any other
advertisement or solicitation material without our prior written approval. You
are not authorized to act as our agent in any respect, and you agree not to act
as such agent and not to purport to act as such agent.
8. We shall have full authority to take such action as we may deem
advisable with respect to all matters pertaining to the Offering or arising
thereunder. We shall not be under any lia bility (except for our own want of
good faith and for obligations expressly assumed by us hereunder) for or in
respect of the validity or value of or title to, the Shares; the form of, or the
statements contained in, or the validity of, the Registration Statement, the
Prospectus or any amendment or supplement thereto, or any other instrument
executed by Inland Real Estate Advisory Services, Inc., the Company's advisor
(the "Advisor"), the Company or by others; the form or validity of the Dealer
Manager Agreement or this Agreement; the delivery of the Shares; the performance
by the Advisor, the Company or by others of any agreement on its or their part;
the qualification of the Shares for sale under the laws of any jurisdiction; or
any matter in connection with any of the foregoing; provided, however, that
nothing in this paragraph shall be deemed to relieve the Company or the
undersigned from any liability imposed by the Act. No obligations on the part of
the Company or the undersigned shall be implied or inferred herefrom.
9. Under the Dealer Manager Agreement, the Company has agreed to
indemnify you and us and each person, if any, who controls you or us, in certain
instances and against certain liabilities, including liabilities under the Act
in certain circumstances. You agree to indemnify the Company and each person who
controls it as provided in the Dealer Manager Agreement and to indemnify us to
the extent and in the manner that you agree to indemnify the Company in such
Dealer Manager Agreement.
10. Each Soliciting Dealer hereby authorizes and ratifies the execution
and delivery of the Dealer Manager Agreement by us as Dealer Manager for
ourselves and on behalf of the Soliciting Dealers and authorizes us to agree to
any variation of its terms or provisions and to execute and deliver any
amendment, modification or supplement thereto. Each Soliciting Dealer hereby
agrees to be bound by all provisions of the Dealer Manager Agreement relating to
Soliciting Dealers. Each Soliciting Dealer also authorizes us to exercise, in
our discretion, all the authority or discretion now or hereafter vested in us by
the provisions of the Dealer Manager Agreement and to take all such action as we
may believe desirable in order to carry out the provisions of the Dealer Manager
Agreement and of this Agreement.
11. This Agreement, except for the provisions of Sections 8 and 9
hereof, may be terminated at any time by either party hereto by two days' prior
written notice to the other party and, in all events, this Agreement shall
terminate on the termination date of the Dealer Manager Agreement, except for
the provisions of Sections 8 and 9 hereof.
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12. Any communications from you should be in writing addressed to us at
Inland Securities Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇. Any notice from us to you shall be deemed to have
been duly given if mailed, telegraphed or delivered by overnight courier to you
at your address shown below.
13. Nothing herein contained shall constitute the Soliciting Dealers or
any of them as an association, partnership, limited liability company,
unincorporated business or other separate entity.
14. Prior to offering the Shares for sale, each Soliciting Dealer shall
have conducted an inquiry such that you have reasonable grounds to believe,
based on information made available to you by the Company or the Advisor 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
Soliciting Dealer may obtain, upon request, information on material facts
relating at a minimum to the following:
(1) items of compensation;
(2) physical properties;
(3) tax aspects;
(4) financial stability and experience of the Company and
the Advisor;
(5) conflicts and risk factors; and
(6) appraisals and other pertinent reports.
Notwithstanding the foregoing, each Soliciting Dealer may rely upon the results
of an inquiry conducted by another Soliciting Dealer, provided that:
(i) such Soliciting Dealer has reasonable grounds to believe
that such inquiry was conducted with due care;
(ii) the results of the inquiry were provided to you with the
consent of the Soliciting Dealer conducting or directing the
inquiry; and
(iii) no Soliciting Dealer that participated in the inquiry is
an affiliate of the Company.
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Prior to the sale of the Shares, each Soliciting Dealer shall inform the
prospective purchaser of all pertinent facts relating to the liquidity and
marketability of the Shares during the term of the investment.
If the foregoing is in accordance with your understanding, please sign
and return the attached duplicate. Your indicated acceptance thereof shall
constitute a binding agreement between you and us.
Very truly yours,
INLAND SECURITIES CORPORATION
By:
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Title:
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, 1998
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We confirm our agreement to act as a Soliciting Dealer pursuant to all
the terms and conditions of the above Soliciting Dealer Agreement and the
attached Dealer Manager Agreement. We hereby represent that we will comply with
the applicable requirements of the Act and the Exchange Act and the published
Rules and Regulations of the Commission thereunder, and applicable blue sky or
other state securities laws. We confirm that we are a member in good standing of
the NASD. We hereby represent that we will comply with the Conduct Rules of the
NASD and all rules and regulations promulgated by the NASD.
Dated: , 199
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Name of Soliciting Dealer
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Address of Soliciting Dealer
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Federal Identification Number
By:
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Authorized Signature
Kindly have checks representing commissions forwarded as follows (if different
than above):
(Please type or print)
Name of Firm:
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Address:
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Street
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City
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State and Zip Code
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(Area Code) Telephone No.
Attention:
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