AMENDMENT OF DEALER MANAGER AGREEMENT BY AND BETWEEN COLE CORPORATE INCOME TRUST, INC. AND COLE CAPITAL CORPORATION
Exhibit 1.2
AMENDMENT OF DEALER MANAGER AGREEMENT
BY AND BETWEEN
XXXX CORPORATE INCOME TRUST, INC.
AND
XXXX CAPITAL CORPORATION
BY AND BETWEEN
XXXX CORPORATE INCOME TRUST, INC.
AND
XXXX CAPITAL CORPORATION
This Amendment (the “Amendment”) of the Dealer Manager Agreement, dated February 10, 2011 (the
“Agreement”), by and between Xxxx Corporate Income Trust, Inc., a Maryland corporation (the
“Company”), and Xxxx Capital Corporation, an Arizona corporation (the “Dealer Manager”), is made as
of May 20, 2011. All capitalized terms not defined herein shall have the meanings assigned to them
in the Agreement.
1. Section 3.5 of the Agreement is hereby amended by the addition of the following provision
at the end of that Section:
In addition, notwithstanding the provisions of Section 3.3 above, no commissions,
payments or amounts whatsoever will be paid to the Dealer Manager with respect to sales
of Shares to Ohio residents unless or until the gross proceeds of the Shares sold in the
Offering (including sales made to residents of other jurisdictions) have reached a
minimum of $15,000,000 (the “Ohio Minimum Offering”) and are disbursed to the Company
pursuant to the Escrow Agreement. Until the Ohio Minimum Offering is reached,
investments from Ohio residents will be held in escrow. If the Ohio Minimum Offering is
not obtained prior to the termination of the Offering, the investments from Ohio
residents will be returned to them in accordance with the Escrow Agreement.
2. The form of Selected Dealer Agreement attached as Exhibit A to the Agreement is hereby
replaced in its entirety with the form of Selected Dealer Agreement attached as Exhibit A to this
Amendment.
3. Except as specifically amended hereby, the Agreement shall remain in full force and effect.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first above
written:
| XXXX CORPORATE INCOME TRUST, INC. |
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| By: | /s/ Xxxxxxxxxxx X. Xxxx | |||
| Xxxxxxxxxxx X. Xxxx | ||||
| Chairman, President and Chief Executive Officer |
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| XXXX CAPITAL CORPORATION |
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| By: | /s/ Xxxx X. Xxxxx | |||
| Xxxx X. Xxxxx | ||||
| President | ||||
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EXHIBIT A
XXXX CORPORATE INCOME TRUST, INC.
Up to 300,000,000 Shares of Common Stock
SELECTED DEALER AGREEMENT
Ladies and Gentlemen:
Xxxx Capital Corporation, as the dealer manager (“Dealer Manager”) for Xxxx Corporate Income
Trust, Inc. (the “Company”), a Maryland corporation, invites you (the “Dealer”) to participate in
the distribution of shares of common stock (“Shares”) of the Company subject to the following
terms:
The Dealer Manager has entered into that certain Dealer Manager Agreement with the Company
dated February 10, 2011, as amended, in the form attached hereto as Exhibit A (the “Dealer
Manager Agreement”). The terms of the Dealer Manager Agreement relating to the Dealer are
incorporated herein by reference as if set forth verbatim and except as otherwise specifically
stated herein, all terms used in this Agreement have the meanings provided in the Dealer Manager
Agreement. By your acceptance of this Agreement, you 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 the indemnification provisions contained in
Sections 4.2 and 4.4 of the Dealer Manager Agreement. The Shares are offered solely through
broker-dealers who are members of the Financial Industry Regulatory Authority, Inc. (“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 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 or the Company to supplement the Prospectus
(“supplemental information”).
II. Submission of Orders
Those persons who purchase Shares shall make their checks payable, prior to the time the
Company reaches the Minimum Offering, to “UMB Bank, N.A., Agent for Xxxx Corporate Income Trust,
Inc.” or a recognizable contraction or abbreviation thereof, including but not limited to “UMB
Bank, N.A., f/b/o Corporate Income Trust” or, in the event that the purchase is made using Joint
Subscription
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Agreement, “UMB Bank, N.A., Agent for Xxxx REIT” or a recognizable contraction or abbreviation
thereof. After the Company reaches the Minimum Offering, checks should be made payable to “Xxxx
Corporate Income Trust, Inc.” or, alternatively, “Corporate Income Trust” or, in the event that the
purchase is made using a Joint Subscription Agreement, “Xxxx REIT.” Checks received by the Dealer
that conform to the foregoing instructions shall be transmitted for deposit as set forth below.
The Dealer Manager may authorize Dealer, if Dealer is a “$250,000 broker-dealer”, to instruct its
customers to make its checks for Shares subscribed for payable directly to the Dealer, in which
case the Dealer will collect the proceeds of the subscriber’s checks and issue a check made payable
in the manner described above for the aggregate amount of the subscription proceeds. Transmittal
of received investor funds will be made in accordance with the following procedures:
| (a) | If the Dealer conducts its internal supervisory procedures at the location where subscription documents and checks are initially received, the Dealer shall conduct its suitability review of the transaction and if the transaction is suitable and the paperwork is in good order forward (i) the subscription documents to the Dealer Manager and (ii) the checks to the Escrow Agent by the end of the next business day following receipt of the subscription documents and the check, prior to the completion of the Minimum Offering. After completion of the Minimum Offering, the Company may instruct the Dealer to forward paperwork in good order and the check directly to the Company. | ||
| (b) | If the internal supervisory procedures are to be performed at a different location (the “Final Review Office”), the subscription documents and check must be transmitted to the Final Review Office by the end of the next business day following receipt by the Dealer of the subscription documents and check. The Final Review Office will, by the end of the next business day following receipt by the Final Review Office of the subscription documents and check, conduct its suitability review of the transaction and if the transaction is suitable and the paperwork is in good order forward (i) the subscription documents to the Dealer Manager and (ii) the checks to the Escrow Agent by the end of the next business day following receipt of the subscription documents and the check, prior to the completion of the Minimum Offering. After completion of the Minimum Offering, the Company may instruct the Dealer to forward paperwork in good order and the check directly to the Company. |
III. Pricing
Except for discounts described in or as otherwise provided in the “Plan of Distribution”
section of the Prospectus, 250,000,000 Shares shall be offered to the public at the offering price
of $10.00 per Share, and up to 50,000,000 Shares will be offered pursuant to the Company’s
distribution reinvestment plan at $9.50 per share until such time as the Company’s board of
directors determines a reasonable estimate of the value of the Company’s Shares. Thereafter, the
per share offering price under the Company’s distribution reinvestment plan will be the most recent
estimated value per share as determined by the Company’s board of directors as described in the
“Summary of Distribution Reinvestment Plan” section of the Prospectus. The Company reserves the
right to reallocate the Shares included in the Offering between those offered to the public and
those offered pursuant to the distribution reinvestment plan. 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 250 Shares is required. Except as otherwise indicated in the
Prospectus, additional investments may be made in cash in minimal increments of at least 100
Shares. The Shares are nonassessable. The Dealer hereby agrees to place any order for the full
purchase price.
IV. Dealers’ Commissions
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Except for discounts described in or as otherwise provided in the “Plan of Distribution”
section of the Prospectus, the Dealer’s selling commission applicable to the total public offering
price of Shares sold by Dealer which it is authorized to sell hereunder is 7.0% of the gross
proceeds of Shares sold by it and accepted and confirmed by the Company (there is no selling
commissions for Shares sold pursuant to the Company’s distribution reinvestment plan), which
commission 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. Notwithstanding the foregoing, purchasers
will have five days from the date of their respective subscription agreements to cancel their
purchases and therefore a sale of the Shares shall not be deemed completed until such five business
day period has expired. 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 out of its dealer manager fee a marketing fee and its due diligence expense
reimbursement portion of the dealer manager fee, based on such factors as the number of Shares sold
by such participating Dealer, the assistance of such Dealer in marketing the offering of Shares,
and bona fide conference fees incurred.
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(a)(i) of the Escrow Agreement. Until the Minimum Offering is obtained,
investments will be held in escrow and, if the Minimum Offering is not obtained, investments will
be returned to the investors in accordance with the Prospectus. In addition, Dealer acknowledges
and agrees that no commissions, payments or amount whatsoever will be paid to the Dealer with
respect to sales of the Shares to Pennsylvania residents unless or until the gross proceeds of such
sales are disbursed to the Company pursuant to Section 3(a)(ii) of the Escrow Agreement. Until the
Pennsylvania Minimum Offering is obtained, investments from Pennsylvania residents will be held in
escrow and, if the Pennsylvania Minimum Offering is not obtained, Pennsylvania residents may
request a return of their funds in accordance with the Prospectus. Similarly, Dealer acknowledges
and agrees that no commissions, payments or amount whatsoever will be paid to the Dealer with
respect to sales of the Shares to Tennessee residents unless or until the gross proceeds of such
sales are disbursed to the Company pursuant to Section 3(a)(iii) of the Escrow Agreement. Until
the Tennessee Minimum Offering is obtained, investments from Tennessee residents will be held in
escrow and, if the Tennessee Minimum Offering is not obtained prior to the termination of the
Offering, the investments from Tennessee residents will be returned to them in accordance with the
Escrow Agreement. Dealer further acknowledges and agrees that no commissions, payments or amount
whatsoever will be paid to the Dealer with respect to sales of the Shares to Ohio residents unless
or until the gross proceeds of such sales are disbursed to the Company pursuant to Section 3(a)(iv)
of the Escrow Agreement. Until the Ohio Minimum Offering is obtained, investments from Ohio
residents will be held in escrow and, if the Ohio Minimum Offering is not obtained prior to the
termination of the Offering, the investments from Ohio residents will be returned to them in
accordance with the Escrow Agreement.
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 the Company is not liable or responsible for the direct payment of such commission to
the Dealer, and that Dealer’s interest in the offering is limited to such commission from the
Dealer Manager and to the Dealer’s indemnity rights referred to in Section 4 of the Dealer Manager
Agreement.
Dealer acknowledges that the Company expects to reimburse its advisor an amount equal to
approximately 0.95% of the gross proceeds of the Shares sold in the Offering, excluding proceeds
from the distribution reinvestment plan, for underwriting expenses not covered by the selling
commissions and
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dealer manager fee set forth in Section 3.3 of the Dealer Manager Agreement, and that the
Company expects its sponsor to pay an amount equal to approximately 0.05% of the gross proceeds of
the Shares sold in the Offering, excluding proceeds from the distribution reinvestment plan, for
additional underwriting expenses without reimbursement by the Company. In no event will such
payments exceed an amount equal to 1.0% of the gross proceeds of the Shares sold in the Offering,
excluding proceeds from the distribution reinvestment plan, and in no event will total underwriting
compensation exceed 10.0% of the gross proceeds of the Shares sold in the Offering, excluding
proceeds from the distribution reinvestment plan.
Dealer acknowledges that the Dealer Manager intends to pay transaction-based compensation to
the Dealer Manager’s wholesalers in connection with sales of Shares, and that such
transaction-based compensation may, and likely will, be different from the amount of
transaction-based compensation the Dealer Manager will pay its wholesalers in connection with sales
of securities offered by other Xxxx-sponsored real estate investment programs. Such compensation
may provide a disproportionate incentive for the Dealer Manager’s wholesalers to recommend that
Dealer distribute the Shares in addition to or in lieu of securities offered by other
Xxxx-sponsored real estate investment programs, or to recommend that Dealer distribute securities
offered by other Xxxx-sponsored real estate investment programs in addition to or in lieu of the
Shares.
V. Payment
Payments of selling commissions will be made by the Dealer Manager (or by the Company as agent
of the Dealer Manager as provided in the Dealer Manager Agreement) to Dealer within 30 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 has
satisfied its obligation for paying selling commissions. The Company may rely on and use the
preceding acknowledgement as a defense against any claim by Dealer for selling commissions that the
Company pays to Dealer Manager but that Dealer Manager fails to remit to Dealer. Purchasers will
have five days from the date of their respective subscription agreements to cancel their purchases.
If, for any reason, a purchase is cancelled, the Dealer shall promptly return to the Company any
selling commission it has received with respect to such purchase.
VI. Right to Reject Orders or Cancel Sales
All orders, whether initial or additional, are subject to acceptance by and shall only become
effective upon confirmation by the Company, which reserves the right to reject any order for any or
no reason. Orders not accompanied by a Subscription Agreement/Signature Page and the required
check in payment for the Shares may be rejected. 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 or cancelled for any reason,
the Dealer agrees to return to the Dealer Manager any commission theretofore paid with respect to
such order.
VII. Prospectus and Supplemental Information
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 any supplemental
information provided by the Company or Dealer Manager. The Dealer Manager will supply Dealer with
reasonable quantities of the Prospectus, any amendments or supplements thereto, as well as any
supplemental information, for delivery to investors, and Dealer will deliver a copy of the
Prospectus and all supplements and amendments thereto to each investor to whom an offer is made
prior to or
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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 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 which is supplied to it by
the Dealer Manager and marked “broker-dealer only,” or otherwise bearing a legend denoting that it
is not to be used in connection with the sale of Shares to any prospective investor. Dealer agrees
that it will not use in connection with the offer or sale of Shares any material or writing which
relates to another company 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 any
securities other than the company to which it relates. 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 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, as amended (the “Exchange
Act”). 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 rules and regulations
thereunder. 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.
VIII. License and Association Membership
Dealer’s acceptance of this Agreement constitutes a representation to the Company and the
Dealer Manager that Dealer is (1) a properly registered broker-dealer under the Securities Exchange
Act of 1934 and any applicable state securities laws, or a broker-dealer exempt from such
registration, and (2) is a member in good standing of FINRA and each other securities
self-regulatory organization of which it is a member. This Agreement shall automatically terminate
if the Dealer ceases to be a member in good standing of FINRA or such other self-regulatory
organization. Dealer agrees to notify the Dealer Manager immediately if Dealer ceases to be a
member in good standing of FINRA or any other such self-regulatory organization. The Dealer
Manager also hereby agrees to comply with the Conduct Rules of FINRA, including but not limited to
Rules 2730, 2740, 2420 and 2750.
IX. Anti-Money Laundering Compliance Programs
Dealer represents to the Company and the Dealer Manager that Dealer has established and
implemented anti-money laundering compliance programs in accordance with applicable law, including
applicable FINRA rules, SEC rules and the USA PATRIOT Act of 2001, reasonably designed to detect
and cause the reporting of suspicious transactions in connection with the sale of Shares of the
Company.
X. Limitation of Offer
Dealer will offer Shares only to persons who meet the financial qualifications set forth in
the Prospectus and will only make offers to persons in the states in which it is advised in writing
by the Company or the Dealer Manager that the Shares are qualified for sale or that such
qualification is not required. In offering Shares, Dealer will comply with all applicable
provisions of the FINRA Rules including those rules relating to suitability of recommendations, 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.
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In accordance with Section 11 of the Dealer Manager Agreement, the Dealer Manager shall be
responsible for determining if a purchaser meets the following initial suitability standards: a net
worth of at least $250,000 (exclusive of the value of the purchaser’s home, furnishings and
automobiles) or an annual gross income of at least $70,000 and a net worth of at least $70,000
(exclusive of the value of the purchaser’s home, furnishings and automobiles), and any applicable
state specific suitability standards set forth in the Prospectus. In making this determination,
the Dealer Manager shall be entitled to rely on the Dealer and/or information provided by the
purchasers. The Dealer shall make every reasonable effort to determine that the purchase of the
Shares is a suitable and appropriate investment for each purchaser based on information provided by
such purchaser to the Dealer including such purchaser’s age, investment objectives, investment
experience, income, net worth, financial situation, and other investments held by such purchaser.
In making its determination, the Dealer will consider, based on the information provided by the
purchaser whether the purchaser: meets the state specific minimum income and net worth standards
set forth in the Suitability Standards section of the Prospectus for purchasers resident in those
states; can reasonably benefit from an investment in the Shares based on his overall investment
objectives and portfolio structure; is able to bear the economic risk of the investment based on
his overall financial situation; and has an apparent understanding of the fundamental risks of an
investment in the Shares, the risk that he may lose his entire investment, the lack of liquidity
of the Shares, the restrictions on transferability of the Shares, the background and qualifications
of the Company’s advisor, and the tax, including ERISA, consequences of an investment in the
Shares. The Dealer agrees to maintain records for at least six (6) years of the information used
to determine that an investment in the Shares is suitable and appropriate for each such purchaser.
XI. Termination
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, including the terms of the Dealer Manager Agreement relating to the Dealer
incorporated by reference in this Agreement, is the entire agreement of the parties and supersedes
all prior agreements, if any, between the parties hereto relating to the subject matter hereof.
This Agreement may be amended at any time by the Dealer Manager by written notice to the
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.
XII. 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 Xxxxx-Xxxxx-Xxxxxx Act of 1999 (“GLB Act”), (ii) the privacy standards and requirements of any other applicable Federal or state law, and (iii) its own internal privacy policies and procedures, each as may be amended from time to time. | ||
| (b) | Each party agrees to refrain from the use or disclosure of nonpublic personal information (as defined under the GLB Act) of all customers who have opted out of such disclosures except as necessary to service the customers or as otherwise necessary or required by applicable law; and |
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| (c) | Each party shall be responsible for determining which customers have opted out of the disclosure of nonpublic personal information by periodically reviewing and, if necessary, retrieving a list of such customers (the “List”) as provided by each to identify customers that have exercised their opt-out rights. In the event either party uses or discloses nonpublic personal information of any customer for purposes other than servicing the customer, or as otherwise required by applicable law, that party will consult the List to determine whether the affected customer has exercised his or her opt-out rights. Each party understands that each is prohibited from using or disclosing any nonpublic personal information of any customer that is identified on the List as having opted out of such disclosures. |
XIII. Notice
All notices will be in writing and will be duly given to the Dealer Manager when sent via
overnight express delivery service to 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000,
and to Dealer when sent via overnight express delivery service to the address specified by Dealer
herein.
XIV. Arbitration, Attorneys’ Fees, Applicable Law and Venue
In the event of a dispute between the Parties arising out of or related to this Agreement,
such dispute shall be submitted to arbitration before FINRA in Phoenix, Arizona, in accordance with
FINRA industry arbitration rules. Any award shall be final and binding between the Parties and
judgment thereon may be entered in any court of competent jurisdiction.
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 Arizona and shall take effect when signed by Dealer and
countersigned by the Dealer Manager. Venue for any action (including arbitration) brought
hereunder shall lie exclusively in Phoenix, Arizona.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on its behalf
by its duly authorized agent.
| THE DEALER MANAGER: XXXX CAPITAL CORPORATION |
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| By: | ||||
| Xxxx X. Xxxxx, President | ||||
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EXHIBIT A
Dealer Manager Agreement
Attached on CD-Rom in
Due Diligence package.
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We have read the foregoing Agreement and we hereby accept and agree to the terms and conditions
therein set forth. We hereby represent that the list below of jurisdictions in which we are
registered or licensed as a broker or dealer and are fully authorized to sell securities is true
and correct, and we agree to advise you of any change in such list during the term of this
Agreement.
1. Identity of Dealer:
Name: «CONTACT_COMPANY_NAME»
| Type of entity: | (corporation, partnership, proprietorship, etc.) |
| Organized in the State of: |
| Licensed as broker-dealer in the following States: |
| Tax I.D. #: |
2. Person to receive notice pursuant to Section XIII:
| Name: |
Company: «CONTACT_COMPANY_NAME»
Address: «CONTACT_FULLMAILINGADDRESS»
| Telephone No.: |
| Facsimile No.: |
| Email Address: |
AGREED TO AND ACCEPTED BY THE DEALER:
«CONTACT_COMPANY_NAME»
| By: | Signature |
| Name: |
| Title: |
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