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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 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
determination 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 or Texas in connection with
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the sale of Shares to residents of Minnesota, Nebraska, South Carolina 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 ____________, 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 $220,000 worth of Shares (20,000 Shares)
will be entitled to a reduction in selling commissions in accordance with the
following schedule:
Amount of Maximum Commission
Purchaser's Investment Per Share
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From To
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$ 220,000 $ 499,999 5.5 %
500,000 999,999 4.0
1,000,000 and over 2.5
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 may be combined 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. 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.
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.
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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 specified 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, 0000 Xxxxxxxxxxx Xxxx, Xxx Xxxxx,
Xxxxxxxx 00000, 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 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
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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 liability (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.
12. Any communications from you should be in writing addressed to
us at Inland Securities Corporation, 0000 Xxxxxxxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxx
00000, Attention: Xx. Xxxxxx Xxxxxx. 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.
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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.
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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