EXHIBIT 1.1
INLAND RETAIL REAL ESTATE TRUST, INC.
150,000,000
SHARES OF COMMON STOCK
$.01 PAR VALUE PER SHARE
DEALER MANAGER AGREEMENT
JUNE 6, 2002
Inland Securities Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies/Gentlemen:
Inland Retail Real Estate Trust, Inc. (the "Company"), a Maryland
corporation, is qualified as a real estate investment trust (a "REIT") under
federal income tax laws. The Company was formed on September 3, 1998, and is
governed by the Bylaws, as amended (the "Bylaws") and the Articles of
Incorporation, as amended (the "Articles") in the form incorporated by reference
into the Registration Statement, as described in Section 1(a) hereof (such
Bylaws and Articles being hereinafter referred to as the "Organizational
Documents"). The advisor to the Company is Inland Retail Real Estate Advisory
Services, Inc., an Illinois corporation (the "Advisor").
The Company is offering (i) on a "best efforts" basis up to
150,000,000 shares of common stock, $.0l par value per share (the "Shares") for
a purchase price of $10.00 per Share with a minimum initial investment of $3,000
($1,000 in the case of tax-exempt investors, except for residents of the State
of Iowa where Individual Retirement Accounts must have a minimum investment of
$3,000, and for residents of the State of Minnesota where Individual Retirement
Accounts and qualified plan accounts must have a minimum investment of $2,000),
(ii) 6,000,000 warrants which may be issued to you or to Soliciting Dealers (as
defined below) (the "Soliciting Dealer Warrants") and the 6,000,000 Shares
issuable on exercise of the Soliciting Dealer Warrants and (iii) up to
12,000,000 Shares for a purchase price of $9.50 per Share for issuance through
the Company's distribution reinvestment program, all upon the other terms and
conditions set forth in the Prospectus, as described in Section 1(a) hereof (the
"Offering"). The subscribers, each of whom will be required to enter into a
subscription agreement substantially similar to the form of the Subscription
Agreement attached as Appendix C to the Prospectus (the "Subscription
Agreement"),
will, upon acceptance of their subscriptions by and in the discretion of the
Company, become stockholders of the Company (the "Stockholders").
1. REPRESENTATION AND WARRANTIES OF THE COMPANY. The Company hereby
represents, warrants and agrees with you that:
(a) Registration Statement and Prospectus. A registration
statement (File 333- 85666) on Form S-11 with respect to an aggregate
of 168,000,000 Shares, plus 6,000,000 Soliciting Dealer Warrants (the
"Warrants") (which are issuable in certain circumstances in connection
with the sale of the Shares), and such 168,000,000 Shares include
6,000,000 Shares issuable on exercise of the Warrants and 12,000,000
Shares issuable pursuant to the Company's distribution reinvestment
program, has been prepared by the Company pursuant to the Securities
Act of 1933, as amended (the "Act"), and the rules and regulations
(the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder and has been filed with the
Commission under the Act; one or more amendments to such registration
statement have been or may be so prepared and filed. As used in this
Agreement, the term "Registration Statement" means such registration
statement in the form in which it becomes effective, the term
"Effective Date" means the date upon which the Registration Statement
is or was first declared effective by the Commission and the term
"Prospectus" means the prospectus in the form constituting a part of
the Registration Statement as well as in the form first filed with the
Commission pursuant to its Rule 424 after the Registration Statement
becomes effective. The Commission has not issued any stop order
suspending the effectiveness of the Registration Statement and no
proceedings for that purpose have been instituted or are pending
before or threatened by the Commission under the Act.
(b) Compliance with the Act. From the time the Registration
Statement becomes effective and at all times subsequent thereto up to
and including the Termination Date (as defined in Section 2(c)
hereof):
(i) the Registration Statement, the Prospectus and any
amendments or supplements thereto will contain all statements which
are required to be stated therein by the Act and the Rules and
Regulations and will comply in all material respects with the Act and
the Rules and Regulations; and
(ii) neither the Registration Statement nor the Prospectus
nor any amendment or supplement thereto will at any such time include
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make
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the statements therein, in light of the circumstances under which they
were made, not misleading.
(c) No Subsequent Material Events. Subsequent to the respective
dates as of which information is given in the Registration Statement
and Prospectus and prior to the Termination Date, except as
contemplated in the Prospectus or as disclosed in a supplement or
amendment thereto or in the periodic financial statements of the
Company, the Company has not and will not have:
(i) incurred any material liabilities or obligations, direct
or contingent; or
(ii) entered into any material transaction, not in the
ordinary course of business and, except as so disclosed, there has not
been and will not be any material adverse change in the financial
position or results of operations of the Company.
(d) Corporation Status. The Company is a corporation duly formed
and validly existing under the General Corporation Law of Maryland.
(e) Authorization of Agreement. This Agreement has been duly and
validly authorized, executed and delivered by or on behalf of the
Company and constitutes the valid and binding agreement of the Company
enforceable in accordance with its terms (except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws of the United States,
any state or any political subdivision thereof which affect creditors'
rights generally or by equitable principles relating to the
availability of remedies). The performance of this Agreement, the
consummation of the transactions contemplated herein and the
fulfillment of the terms hereof, do not and will not result in a
breach of any of the terms and provisions of, or constitute a default
under, any statute, indenture, mortgage, deed of trust, voting trust
agreement, note, lease or other agreement or instrument to which the
Company is a party or by which the Company or its property is bound,
or under any rule or regulation or order of any court or other
governmental agency or body with jurisdiction over the Company or any
of its properties; and no consent, approval, authorization or order of
any court or governmental agency or body has been or is required for
the performance of this Agreement or for the consummation of the
transactions contemplated hereby (except as have been obtained under
the Act, from the National Association of Securities Dealers, Inc.
(the "NASD") or as may be required under state securities or blue sky
laws in connection with the offer and sale of the Shares or under the
laws of states in which the
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Company may own real properties in connection with its qualification
to transact business in such states or as may be required by
subsequent events which may occur).
(f) Pending Actions. There is no material action, suit or
proceeding pending or, to the knowledge of the Company, threatened, to
which the Company is a party, before or by any court or governmental
agency or body which adversely affects the Offering of the Shares.
(g) Required Filings. There are no contracts or other documents
required to be filed by the Act or the Rules and Regulations of the
Commission thereunder as exhibits to the Registration Statement which
have not been so filed.
(h) Federal Income Tax Laws. The Corporation has obtained an
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ stating that, under existing
federal income tax laws and regulations, assuming the Company acts as
described in the "Federal Income Tax Considerations" section of the
Prospectus and timely files the requisite elections, counsel is of the
opinion that the Company has been organized in conformity with the
requirements for qualification as a REIT beginning with its taxable
year ending December 31, 1999, and that its prior, current and
anticipated methods of operation (as described in the Prospectus and
represented by management) has enabled and should enable it to satisfy
the REIT Requirements (as defined in the Prospectus).
(i) Independent Public Accountants. To the best of the Company's
knowledge, the accountants who have certified certain financial
statements appearing in the Prospectus are independent public
accountants within the meaning of the Act and the Rules and
Regulations.
(j) Escrow Agreement. The Company has entered into an escrow
agreement (the "Escrow Agreement") with Inland Securities Corporation,
Oak Brook, Illinois (the "Dealer Manager"), and LaSalle Bank National
Association, Chicago, Illinois (the "Escrow Agent"), in the form
included as an exhibit to the Registration Statement, which provides
for the establishment of an escrow account (the "Escrow Account").
During the period commencing with the Effective Date and ending on the
Termination Date, the Company will deposit subscribers funds in the
Escrow Account as described in Section 2 below.
(k) Sales Literature. In addition to and apart from the
Prospectus, the Company may use certain supplemental sales material in
connection with the Offering of the Shares. This material, prepared
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by the Advisor, would consist of a brochure describing the Advisor and
its Affiliates and the objectives of the Company and may also contain
pictures and summary descriptions of properties similar to those to be
acquired by the Company that Affiliates of the Company have previously
acquired. This material may also include pictures and summary
descriptions of properties similar to those to be acquired by the
Company, as well as a brochure, audiovisual materials and tape
presentations highlighting and explaining various features of the
Offering, properties of prior real estate programs and real estate
investments in general; and articles and publications concerning real
estate. Business reply cards, introductory letters and seminar
invitation forms may be sent to Soliciting Dealers (as hereinafter
defined) and prospective investors. These materials shall be
hereinafter referred to collectively as the "sales literature." No
person has been authorized to prepare for, or furnish to, a
prospective investor, any sales literature other than: (i) that
described herein; and (ii) so-called "tombstone" newspaper
advertisements/solicitations of interest, limited to identifying the
Offering and the location of sources of further information. Use of
any sales literature is conditioned upon filing with and, if required,
clearance by appropriate regulatory agencies (including, without
limitation, the NASD and any state securities regulator or
commissioner). Such clearance (if provided), however, does not
indicate that the regulatory agency allowing the use of the materials
has passed on the merits of the Offering or the adequacy or accuracy
of the sales materials. Except as described herein, the Company has
not authorized the use of other supplemental literature or sales
material in connection with this Offering. Although it is believed
that the information contained in the sales literature or sales
material will not conflict with any of the information set forth in
the Prospectus, the sales literature will not purport to be complete,
and should not be considered as a part of the Prospectus, or as
incorporated in the Prospectus by reference, or as forming the basis
of the Offering.
(l) Authorization of the Shares. The Company has an authorized
and outstanding capitalization as set forth in the Registration
Statement and Prospectus. The sale of the Shares has been duly and
validly authorized by the Company, and when subscriptions for the
Shares have been accepted by the Company as contemplated in the
Prospectus and the Shares have been issued to the respective
subscribers, the Shares will represent ownership in the Company and
will conform to the description thereof contained in the Prospectus.
Stockholders have no preemptive rights to purchase or subscribe for
securities of the Company, and the Shares are not convertible or
subject to redemption at the option of the Company. The Shares are
entitled to one vote per Share and do not have
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cumulative voting rights. Subject to the rights of the holders of any
class of capital stock of the Company having any preference or
priority over the Shares, the Stockholders are entitled to
distributions in such amounts as may be declared by the Board of
Directors from time to time out of funds legally available for such
payments and, in the event of liquidation, to share ratably in any
assets of the Company remaining after payment in full of all creditors
and provisions for any liquidation preferences on any outstanding
preferred stock ranking prior to the Shares.
2. OFFERING AND SALE OF THE SHARES. On the basis of the
representations, warranties and agreements herein contained, and subject to the
terms and conditions herein set forth, the Company hereby appoints you as its
exclusive Dealer Manager to solicit and to cause other dealers (as described in
Section 2 (a) hereof) to solicit subscriptions for the Shares at the
subscription price to be paid and otherwise upon the other terms and conditions
set forth in the Prospectus and in the Subscription Agreement, and you agree to
use your best efforts as such Dealer Manager to procure subscribers for the
Shares, during the period commencing with the Effective Date and ending on the
Termination Date (the "Offering Period"). The number of Shares, if any, to be
reserved for sale by each Soliciting Dealer may be decided by the mutual
agreement, from time to time, of you and the Company. In the absence of such
mutual agreement, the Company shall, subject to the provisions of Section 2(b)
hereof accept Subscription Agreements based upon a first come, first accepted
reservation or other similar method.
(a) Soliciting Dealers. The Shares offered and sold through you
under this Agreement shall be offered and sold only by you and, at
your sole option, any other securities dealers whom you may retain
(collectively the "Soliciting Dealers"), each of whom are members of
the NASD, executing agreements with you substantially in the form of
the Soliciting Dealers Agreement attached hereto as Exhibit A.
(b) Subscription Agreements and Subscribers' Funds. Each person
desiring to purchase Shares through you or any other Soliciting Dealer
will be required to complete and execute the Subscription Agreement
and to deliver such document to you or such Soliciting Dealer,
together with a check payable to the order of "LBNA/Escrow Agent for
IRRET" in the amount of $10 per Share.
Each Soliciting Dealer shall forward any such Subscription
Agreement and check to you not later than noon of the next business
day after receipt of such Subscription Agreement, if the Soliciting
Dealer conducts its internal supervisory procedures at the location
where the Subscription Agreement and check were initially received.
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When such internal supervisory procedures are to be performed at a
different location (the "Final Review Office"), the Subscription
Agreement and check must be transmitted to the Final Review Office by
the end of the next business day following receipt of the Subscription
Agreement and check by the Soliciting Dealer. The Final Review Office
will, by the next business day following receipt of the Subscription
Agreement and check, forward both the Subscription Agreement and check
to you as processing broker-dealer in order that you may complete your
review of the documentation and process the Subscription Agreement and
check. The Company will have representatives available to review the
Subscription Agreement at your location in order to determine whether
it wishes to accept the proposed purchaser as a Stockholder, it being
understood that the Company reserves the unconditional right to reject
the tender of any Subscription Agreement and check (exclusive of the
Company's distribution reinvestment program). Any check received by
you directly or as processing broker-dealer from the Soliciting
Dealers will, in all cases, be forwarded to the Escrow Agent as soon
as practicable, but in any event by the end of the second business day
following receipt by you of the Subscription Agreement and check. The
Company will promptly notify you or the Soliciting Dealer, as
appropriate, of any rejection, and you shall send the check and the
Subscription Agreement to the Escrow Agent with directions to promptly
return the check and the Subscription Agreement to the rejected
subscriber. All subscription funds may be deposited directly with the
Company.
Nothing contained in this Section 2 shall be construed to impose
upon the Company the responsibility of assuring that prospective
purchasers meet the suitability standards contained in the Prospectus
or to relieve you or any of the Soliciting Dealers of the
responsibility of complying with the Rules of the NASD.
(c) Termination of the Offering. The Offering Period will
terminate on a date on or before one year from the date of the
Prospectus (subject to requalification in certain states, the Company
may extend the Offering Period from time to time, but in no event for
longer than two years from the date of the Prospectus), subject in any
event to the Company's right to terminate the Offering at any time
(the "Termination Date") and the proceeds will be applied as set forth
in the Prospectus.
(d) Dealer-Manager Compensation.
(i) The Company agrees to pay to you a selling commission of
7% of the sales price for each Share sold (except for
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Special Sales) from the 150,000,000 Shares offered on a "best efforts"
basis, as set forth in the Prospectus under the caption "Plan of
Distribution," subject to the limitations described below, as well as
to offer to issue and sell to you for a purchase price of $.0008 per
Soliciting Dealer Warrant, one Soliciting Dealer Warrant for every 25
Shares sold from the 150,000,000 Shares offered on a "best efforts"
basis, of which such compensation may be retained or reallowed by you,
subject to federal and state securities laws, to the Soliciting Dealer
who sold the Shares, as described more fully in the Soliciting Dealers
Agreement; provided, however, that the Company will not issue more
than 6,000,000 Warrants in connection with the Offering of the Shares.
In lieu of reimbursement of specific expenses, you will also receive,
subject to the limitations described herein and in the Prospectus, a
marketing contribution (equal to 2%) and due diligence expense
allowance (equal to 0.5%), both aggregating 2.5% of the sale price
from the 150,000,000 Shares offered on a "best efforts" basis (except
for certain Special Sales), some portion of which may be reallowed by
you to the Soliciting Dealers.
Subject to certain conditions and exceptions explained
below, investors making an initial cash investment of at least
$250,010 through the same Soliciting Dealer may receive a reduction of
the customary 7% selling commission payable in connection with the
purchase of those Shares in accordance with the following schedule:
Amount of Purchaser's Investment Maximum
Amount of Selling -------------------------------- Commission Per
Volume Discount From To Share
----------------- ----------- ----------- --------------
1% $ 250,010 $500,000 6%
2% $ 500,010 $1,000,000 5%
3% $ 1,000,010 $2,500,000 4%
4% $ 2,500,010 $5,000,000 3%
5% $ 5,000,010 $10,000,000 2%
6% $10,000,010 more than 1%
$10,000,010
Any reduction in the amount of the selling commissions in
respect of volume discounts received will be credited to the investor
in the form of additional whole shares or fractional shares. Selling
commissions will not be paid on any such whole shares or fractional
shares issued for a volume discount.
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Certain purchases may be combined for the purpose of
qualifying for a volume discount and crediting a purchaser or
purchasers with additional Shares for the above described volume
discount, and for determining commissions payable to you and
reallowable to Soliciting Dealers, so long as all such combined
purchases are made through the same Soliciting Dealer and approved by
the Company. A purchaser may combine subscriptions made in the
Offering with other subscriptions in the Offering or with
subscriptions from the Company's initial public offering pursuant to
its registration statement declared effective by the Commission on
February 11, 1999 and its subsequent public offering pursuant to its
registration statement declared effective by the Commission on
February 1, 2001, for the purpose of computing amounts invested.
Purchases by spouses may also be combined and purchases by any
investor may be combined with other purchases of Shares to be held as
a joint tenant or a tenant in common by such investor with others for
purposes of computing amounts invested. Purchases by Tax-Exempt
Entities may only be combined with purchases by other Tax-Exempt
Entities for purposes of computing amounts invested only if investment
decisions are made by the same Person, provided that if the investment
decisions are made by an independent investment adviser, that
investment adviser may not have any direct or indirect beneficial
interest in any of the Tax-Exempt Entities whose purchases are sought
to be combined. The investor must ▇▇▇▇ the "Additional Investment"
space on the Subscription Agreement Signature Page in order for
purchases to be combined. The Company is not responsible for failing
to combine purchases, where the investor fails to ▇▇▇▇ the "Additional
Investment" space.
If the Subscription Agreements for the purchases to be
combined are submitted at the same time, then the additional Shares to
be credited to the purchasers as a result of such combined purchases
will be credited on a pro rata basis. If the Subscription Agreements
for the purchases to be combined are not submitted at the same time,
then any additional Shares to be credited as a result of such combined
purchases will be credited to the last component purchase, unless the
Company is otherwise directed in writing at the time of such
submission; except however, the additional Shares to be credited to
any Tax-Exempt Entities whose purchases are combined for purposes of
the volume discount will be credited only on a pro rata basis based on
the amount of the investment of each Tax-Exempt Entity and their
combined purchases.
Notwithstanding the preceding paragraphs, in no event shall
any investor receive a discount greater than 5% on any purchase
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of Shares if such investor already owns, or may be deemed to already
own, any Shares. This restriction may limit the amount of the volume
discount available to a purchaser after the purchaser's initial
purchase and the amount of additional Shares that may be credited to a
purchaser as a result of the combination of purchases.
In the event the dollar amount of commissions paid for such
combined purchases exceeds the maximum commissions for such combined
purchases (taking the volume discount into effect), you will be
obligated to forthwith return to the Company any excess commissions
received. The Company may adjust any future commissions due to you for
any such excess commissions that have not been returned.
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,
which it may do for any reason or for no reason, as set forth in the
form of Subscription Agreement. In addition, no selling commission,
Marketing Contribution or Due Diligence Expense Allowance shall be
payable in connection with the sale of Shares directly by the Company,
in connection with the performance of services, to employees and
associates of the Company and its Affiliates, the Advisor, Affiliates
of the Advisor, the Dealer Manager or their respective officers and
employees and certain of their affiliates who request and are entitled
to such discount.
(ii) All selling commissions payable to you will be paid on
a weekly basis, substantially concurrently with the acceptance of a
subscriber as a Stockholder by the Company, in an amount equal to the
selling commissions payable with respect to such Shares; provided
however, the Company reserves the right, at its sole discretion, to
change the frequency of the payment of such commissions to a monthly
basis.
(iii) Certain other Special Sales shall be effected directly
by the Company and not pursuant to this Agreement, and no selling
commission shall be payable in connection with such Special Sales,
including sales to one or more Soliciting Dealers and their respective
officers and employees and certain of their respective affiliates who
request and are entitled to purchase Shares net of selling
commissions. Furthermore, no selling commission shall be payable on
the Shares credited to an investor as a result of a volume discount or
on sales of Shares to certain investors whose contracts for investment
advisory and related brokerage services include a fixed or "wrap" fee
feature. The term "Special Sales" shall have the meaning ascribed to
it in the Prospectus. The Marketing Contribution and Due Diligence
Expense
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Allowance will, however, be allowed and paid with respect to those
sales which are "Special Sales" solely by virtue of (a) the presence
of a contract for investment advisory and related brokerage services
with the proposed investor/subscriber which includes a fixed or "wrap"
fee feature, (b) being sales to the Soliciting Dealers and their
respective officers and employees and certain of their respective
affiliates who request and are entitled to purchase Shares net of
selling commissions, and (c) being sales of Shares which are entitled
to a volume discount, including the Shares credited to an investor as
a result of a volume discount. Any subsequent purchases of Shares by
investors who initially purchased Shares net of the 7% selling
commission are limited to a maximum discount of 5% of the public
offering price per Share.
(iv) Certain subscribers to the Company's Shares may agree
with their participating Soliciting Dealer and the Dealer Manager to
have selling commissions due with respect to the purchase of their
Shares paid over a period of up to six years pursuant to a deferred
commission option arrangement (the "Deferred Commission Option"), as
more fully explained, and subject to the conditions set forth, under
the section "Plan of Distribution--Deferred Commission Option" in the
Company's Prospectus, which section is incorporated by reference
herein. Stockholders electing the Deferred Commission Option will be
required to pay a total of $9.40 per Share purchased upon
subscription, rather than $10.00 per Share, with respect to which
$0.10 per Share will be payable by the Company to the Dealer Manager
as selling commissions due upon subscription, which may be reallowed
to the participating Soliciting Dealer by the Dealer Manager. For each
of the six years following such subscription on a date or dates to be
determined by the Dealer Manager, $0.10 per Share will be paid by the
Company to the Dealer Manager as deferred selling commissions with
respect to Shares sold pursuant to the Deferred Commission Option,
which amounts will be deducted from and paid out of cash distributions
otherwise payable to such stockholders holding such Shares, and may be
reallowed to the participating Soliciting Dealer by the Dealer
Manager. The net proceeds to the Company will not be affected by the
election of the Deferred Commission Option. Under this arrangement and
based on a $10.00 per Share deemed value for each Share issued, a
stockholder electing the Deferred Commission Option will pay a 1%
selling commission upon subscription, rather than a 7% selling
commission, and an amount equal to up to a 1% selling commission per
year thereafter for up to the next six years which will be deducted
from and paid by the Company out of cash distributions otherwise
payable to such stockholder.
As in any volume discount situation, selling commissions are
not paid on any Shares issued for a volume discount. Therefore,
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when the deferred commission option is used, no deductions will be
made for deferred commission obligations from cash distributions
payable on the Shares issued for a volume discount, because there will
not be any deferred commission obligation as to those particular
Shares. The number of Shares issued, if any, for a volume discount,
will be determined as described above in Section 2(d)(i) of the
Agreement.
At such time, if any, that the Company's Shares are listed
on a national securities exchange or included for quotation on a
national market system, or such listing or inclusion is reasonably
anticipated to occur at any time prior to the satisfaction of the
remaining deferred commission obligations, the Company shall
accelerate all outstanding payment obligations under the Deferred
Commission Option. The amount of the remaining selling commissions due
shall be deducted and paid by the Company out of cash distributions
otherwise payable to such Stockholders during the time period prior to
any such listing of the Shares for trading on a national securities
exchange or inclusion for quotation on a national market system;
provided that, in no event may the Company withhold in excess of $0.60
per Share in the aggregate during the six-year period following the
subscription. The maximum amount that may be withheld and the maximum
number of years for which selling commissions may be deferred will be
lower when the volume discount provisions are also applicable and less
than 6% of the selling commissions are deferred. To the extent that
the cash distributions during such time period are insufficient to
satisfy the remaining deferred selling commissions due, the
obligations of the Company and the Company's Stockholders to make any
further payments of deferred selling commissions under the Deferred
Commission Option shall terminate and the Dealer Manager (and
participating Soliciting Dealers if the deferred selling commissions
are reallowed to them by the Dealer Manager) will not be entitled to
receive any further portion of the unpaid deferred selling commissions
following any such listing for trading or inclusion for quotation of
the Shares.
3. COVENANTS OF THE COMPANY. The Company covenants and agrees with
you as follows:
(a) Registration Statement. The Company will use its best
efforts to cause the Registration Statement and any subsequent
amendments thereto to become effective as promptly as possible and
will not, at any time after the Effective Date, file any amendment to
the Registration Statement or supplement to the Prospectus of which
you shall not previously have been advised and furnished a copy at a
reasonable time prior to the proposed filing or to which you shall
have
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reasonably objected or which is not, to the best of the Company's
knowledge in compliance with the Act and the Rules and Regulations.
The Company will prepare and file with the Commission and will use its
best efforts to cause to become effective as promptly as possible:
(i) any amendments to the Registration Statement or
supplements to the Prospectus which may be required pursuant to the
undertakings in the Registration Statement; and
(ii) upon your reasonable request any amendments to the
Registration Statement or supplements to the Prospectus which, in the
opinion of you or your counsel, may be necessary or advisable in view
of the requirements of the Act and the Rules and Regulations in
connection with the offer and sale of the Shares during the Offering
Period.
(b) SEC Orders. As soon as the Company is advised or obtains
knowledge thereof, it will advise you of any request made by the
Commission for amending the Registration Statement, supplementing the
Prospectus or for additional information, or of the issuance by the
Commission of any stop order or of any other order preventing or
suspending the use of the Prospectus or the institution of any
proceedings for that purpose, and will use its best efforts to prevent
the issuance of any such order and, if any such order is issued, to
obtain the removal thereof as promptly as possible.
(c) Blue Sky Qualifications. The Company will use its best
efforts to qualify the Shares for offering and sale under the
securities or blue sky laws of such jurisdictions as you may
reasonably request and to make such applications, file such documents
and furnish such information as may be reasonably required for that
purpose. The Company will, at your request, furnish you copies of all
material documents and correspondence sent to or received from such
jurisdictions (including, but not limited to, summaries of telephone
calls and copies of telegrams) and will promptly advise you as soon as
the Company obtains knowledge thereof to the effect that the Shares
are qualified for offering and sale in each such jurisdiction. The
Company will promptly advise you of any request made by the securities
administrators of each such jurisdiction for revising the Registration
Statement or the Prospectus or for additional information or of the
issuance by such securities administrators of any stop order
preventing or suspending the use of the Prospectus or of the
institution of any proceedings for that purpose, and will use its best
efforts to prevent the issuance of any such order and if any such
order is issued, to obtain the removal thereof as promptly as
possible. The Company will furnish you with a Blue Sky Survey dated as
of the
13
Effective Date, which will be supplemented to reflect changes or
additions to the information disclosed in such survey.
(d) Amendments and Supplements. If at any time when a Prospectus
relating to the Shares is required to be delivered under the Act, any
event shall have occurred to the knowledge of the Company as a result
of which the Prospectus as then amended or supplemented would include
any untrue statement of a material fact, or omit to state a material
fact necessary to make the statements therein not misleading in light
of the circumstances existing at the time it is so required to be
delivered to a subscriber, or if it is necessary at any time to amend
the Registration Statement or supplement the Prospectus relating to
the Shares to comply with the Act, the Company will promptly notify
you thereof and will prepare and file with the Commission an amendment
or supplement which will correct such statement or effect such
compliance.
(e) Copies of Registration Statement. The Company will furnish
you copies of the Registration Statement (only one of which need be
signed and need include all exhibits), the Prospectus and all
amendments and supplements thereto, including any amendment or
supplement prepared after the Effective Date, and such other
information with respect to the Company as you may from time to time
reasonably request, in each case as soon as available and in such
quantities as you may reasonably request.
(f) Qualification to Transact Business. The Company will take
all steps necessary to ensure that at all times the Company will be
validly existing as a Maryland corporation and will be qualified to do
business in all jurisdictions in which the conduct of its business
requires such qualification and where such qualification is required
under local law.
(g) Authority to Perform Agreements. The Company undertakes to
obtain all consents, approvals, authorizations or orders of any court
or governmental agency or body which are required for the performance
of this Agreement and under the Organizational Documents or the
consummation of the transactions contemplated hereby and thereby,
respectively, or the conducting by the Company of the business
described in the Prospectus.
(h) Copies of Reports. The Company will use its best efforts to
furnish to you as promptly as shall be practicable the following:
(i) a copy of each report or general communication (whether
financial or otherwise) sent to the Stockholders;
14
(ii) a copy of each report (whether financial or otherwise)
filed with the Commission; and
(iii) such other information as you may from time to time
reasonably request regarding the financial condition and operations of
the Company including, but not limited to, copies of operating
statements of properties acquired by the Company.
(i) Use of Proceeds. The Company will apply the proceeds from
the sale of the Shares as stated in the Prospectus or, if for any
reason whatsoever all or a portion of the proceeds of the Offering are
not applied or committed for use as stated within 12 months of the
Termination Date, the Company shall promptly return those proceeds
from the sale of the Shares not so applied or committed as stated in
the Prospectus, with interest, to the subscribers, each subscriber
sharing in the return in the ratio that the number of the Shares owned
by such subscriber bears to the total number of the Shares owned by
all subscribers.
(j) Organization and Offering Expenses. In no event shall the
total of the organizational expenses and expenses of the Offering to
be paid directly by the Company exceed 15% of the gross proceeds of
the Offering.
4. COVENANTS OF THE DEALER MANAGER. You covenant and agree with the
Company on your behalf and on behalf of the Soliciting Dealers as follows:
(a) Compliance with Laws. With respect to your participation and
the participation by each Soliciting Dealer in the offer and sale of
the Shares (including, without limitation any resales and transfers of
Shares), you agree, and each Soliciting Dealer agrees, to comply and
shall comply with any applicable requirements of the Act, the
Securities Exchange Act of 1934, as amended, and the published rules
and regulations of the Commission thereunder, and the applicable state
securities or blue sky laws, and the Rules of the NASD, specifically
including, but not in any way limited to, Rules 2440, 2730, 2740, and
2750 therein. In particular, you agree not to deliver the sales
literature (as defined above) to any person prior to the Effective
Date and, after the Effective Date, not to deliver the sales
literature to any person unless the sales literature is accompanied or
preceded by the Prospectus. In addition, you shall, in accordance with
applicable law or as prescribed by any state securities administrator,
provide or cause Soliciting Dealers to provide to any prospective
investor copies of any prescribed document which is part of the
Registration Statement. If you intend to use electronic delivery means
in the
15
distribution of the Prospectus to any person, you represent and agree
that you will comply with all appropriate procedures in compliance
with requirements of the Commission.
With respect to your and each Soliciting Dealer's participation
in any resales or transfers of the Shares, you agree, and each
Soliciting Dealer agrees, to comply and shall comply with any
applicable requirements as set forth above. In addition, you and each
Soliciting Dealer agree that should you or they assist with the resale
or transfer of the Shares, you and each Soliciting Dealer will fulfill
the obligations pursuant to Sections 3(b) and 4(d) of Rule 2810 of the
Rules of the NASD.
(b) No Additional Information. In offering the Shares for sale,
you and each Soliciting Dealer shall not give or provide any
information or make any representation other than those contained in
the Prospectus, the sales literature or any other document provided to
you for such purpose by the Company.
(c) Sales of Shares. You and each Soliciting Dealer shall
solicit purchases of the Shares only in the jurisdictions in which you
and such Soliciting Dealer are legally qualified to so act and in
which you and each Soliciting Dealer have been advised by the Company
that such solicitations can be made.
(d) Subscription Agreement. Subscriptions will be submitted by
you and each Soliciting Dealer to the Company only on the form which
is included as Appendix C to the Prospectus or as such form of
Subscription Agreement may be revised by the Company. You and each
Soliciting Dealer understand and acknowledge that the Subscription
Agreement must be executed by the subscriber. In addition, you and
each Soliciting Dealer shall ensure that no Subscription Agreement is
presented to the Company for acceptance until at least five (5)
business days after the date on which the subscriber received the
Prospectus.
(e) Suitability. In offering the Shares to any person, you and
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 has the
capability of understanding the fundamental aspects of the Company,
which capacity may be evidenced by the following: (A) the nature of
employment experience; (B) educational level achieved; (C) access to
advice from qualified sources, such as attorneys, accountants and tax
advisors; and (D) prior experience with investments of a similar
nature;
16
(ii) such person has apparent understanding of: (A) the fundamental
risks and possible financial hazards of this type of investment; (B)
the lack of liquidity of this investment; (C) the Advisor's role in
directing or managing the investment; and (D) the tax consequences of
the investment; and (iii) such person has the financial capability to
invest in the Company and you or each Soliciting Dealer (as the case
may be) shall maintain records disclosing the basis upon which you and
each Soliciting Dealer determined the suitability of any persons
offered Shares. Notwithstanding the foregoing, you and each Soliciting
Dealer shall have reasonable grounds to believe that such person has
either: (a) a minimum annual gross income of $45,000 and a minimum net
worth (exclusive of home, home furnishing and automobiles) of $45,000;
or (b) a minimum net worth (determined with the foregoing exclusions)
of $150,000. Suitability standards are higher in certain states as set
forth in the Subscription Agreement and the Prospectus. You and/or the
Soliciting Dealers shall maintain, for at least six years, a record of
the information obtained to determine that an investor meets the
suitability standards imposed on the offer and sale of the Shares
(both at the time of the initial subscription and at the time of any
additional subscriptions) and a representation of the investor that
the investor is investing for the investor's own account or, in lieu
of such representation, information indicating that the investor for
whose account the investment was made met the suitability standards.
(f) Due Diligence. Prior to offering the Shares for sale, you
and 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 through the Prospectus or other
materials, that all material facts are adequately and accurately
disclosed and provide a basis for evaluating the purchase of the
Shares. In determining the adequacy of disclosed facts pursuant to the
foregoing, you and each Soliciting Dealer may obtain, upon request,
information on material facts relating at a minimum to the following:
(1) items of compensation;
(2) Company properties;
(3) tax aspects;
(4) conflicts and risk factors; and
(5) appraisals and other pertinent reports.
17
Notwithstanding the foregoing, you and 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 or the Advisor.
(g) Offering Price Adjustment. If, after the Effective Date, the
Company shall adjust the initial purchase price of $10.00 per Share
for the 150,000,000 Shares to be offered for sale on a "best efforts"
basis in the Offering, you agree (and each Soliciting Dealer agrees)
that the total of all compensation payable to the Dealer Manager as
provided in Section 2(d) above, shall be adjusted proportionally. In
no event shall the total of all such compensation paid to you and to
all Soliciting Dealers (i.e., the aggregate of the selling commission
and the marketing contribution and due diligence expense allowance)
exceed nine and one-half percent (9.5%) of the total of all
subscription proceeds received by the Company.
Prior to the sale of the Shares, you and 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.
5. EXPENSES. The Company agrees with you that, whether or not the
transactions contemplated in this Agreement are consummated, the Company will
pay all actual fees and expenses incident to the performance of its obligations
under this Agreement, including, but not limited to:
(a) the Commission's registration fee;
(b) expenses of printing the Registration Statement, the
Prospectus and any amendment or supplement thereto and the expense of
furnishing to you copies of the Registration Statement, the Prospectus
and any amendment or supplement thereto as herein provided;
(c) fees and expenses of its and your accountants and counsel in
connection with the Offering contemplated by this Agreement;
18
(d) fees and expenses incurred in connection with any required
filing with the NASD;
(e) all of your expenses in connection with the Offering,
subject to the limitations contained in the Prospectus, including, but
not limited to, the travel expenses and similar expenses of your
employees and personnel incurred in connection with the Offering; and
(f) expenses of qualifying the Shares for offering and sale
under state blue sky and securities laws, and expenses in connection
with the preparation and printing of the Blue Sky Survey.
In no event, however, will the total of: (a) the selling commissions
paid to you (which you may reallow to the Soliciting Dealers) and (b) the
marketing contribution and due diligence expense allowance paid to you (which
you may reallow to the Soliciting Dealers) and (c) the value attributable to the
Soliciting Dealer Warrants, exceed ten and one-half percent (10.5%) of the gross
proceeds of the Offering.
6. CONDITIONS OF OBLIGATIONS. Your obligations hereunder shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained in Section 1 hereof, the accuracy of the statements of the
Company made pursuant to the provisions hereof, to the performance by the
Company of its covenants, agreements and obligations contained in Sections 3 and
5 hereof, and to the following additional conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement shall have become effective not later than 5:00 p.m.,
Chicago, Illinois time, on the day following the date of this
Agreement, or such later time and date as you and the Company shall
have agreed; no stop order suspending the effectiveness of the
Registration Statement shall have been issued by the Commission and,
to the best knowledge of the Company or you, no proceedings for that
purpose shall have been instituted, threatened or contemplated by the
Commission; and any request by the Commission for additional
information (to be included in the Registration Statement or
Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of you or your counsel.
(b) Accuracy of Registration Statement. You shall not have
advised the Company that the Registration Statement or the Prospectus,
or any amendment or any supplement thereto, in the reasonable opinion
of you or your counsel, contains any untrue statement of fact which is
material, or omits to state a fact which is material and is required
to be stated therein or is necessary to make the statements therein
not misleading.
19
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless you, each
Soliciting Dealer and each person, if any, who controls you or any
Soliciting Dealer within the meaning of the Act (collectively, the
"Indemnified Parties"), against any and all loss, liability, claim,
damage and expense whatsoever caused by any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus or any amendment or supplement
thereto, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Such indemnification shall be subject to the provisions of
Sections 7(b) and (c) of this Agreement.
The Company shall not provide indemnification for any liability
or loss suffered by you, nor shall it provide that you be held
harmless for any liability suffered by the Company unless all of the
following conditions are met: (i) the party seeking indemnification
has determined, in good faith, that its course of conduct, if such
course of conduct caused the loss or liability, was in the best
interests of the Company; (ii) the person seeking indemnification was
acting on behalf of or performing services on behalf of the Company;
(iii) such liability or loss was not the result of negligence or
misconduct on the part of the party seeking indemnification or the
Indemnified Party; and (iv) such indemnification or agreement to be
held harmless is recoverable only out of the assets of the Company and
not from the Stockholders.
In no case shall the Company be liable under this indemnity
agreement with respect to any claim made against any of the
Indemnified Parties unless the Company shall have been notified in
writing (in the manner provided in Section 10 hereof) of the nature of
the claim within a reasonable time after the assertion thereof; but
the failure to so notify the Company shall not relieve the Company
from any liability which the Company would have incurred otherwise
than on account of this indemnity agreement. The Company shall be
entitled to participate, at its own expense, in the defense of, or if
it so elects within a reasonable time after receipt of such notice, to
assume the defense of any claim or suit for which any of the
Indemnified Parties seek indemnification hereunder. If the Company
elects to assume said defense, such defense shall be conducted by
counsel chosen by it and reasonably satisfactory to the Indemnified
Parties.
20
In the event that the Company elects to assume the defense of any
such suit and retains such counsel, the Company shall not be liable
under this Section 7 to the Indemnified Parties in the suit for any
legal or other expenses subsequently incurred by the Indemnified
Parties, and the Indemnified Parties shall bear the fees and expenses
of any additional counsel retained by the Indemnified Parties unless:
(A) the employment of counsel by the Indemnified Party has been
authorized by the Company; or (B) the Company shall not in fact have
employed counsel to assume the defense of such action, in either of
which events such fees and expenses shall be borne by the Company.
The Company may advance amounts to the Indemnified Parties for
legal and other expenses and costs incurred as a result of any legal
action for which indemnification is being sought only if all of the
following conditions are satisfied: (i) the legal action relates to
acts or omissions with respect to the performance of duties or
services by one or more Indemnified Parties for or on behalf of the
Company; (ii) the legal action is initiated by a third party who is
not a Stockholder and a court of competent jurisdiction specifically
approves such advancement; and (iii) the Indemnified Parties receiving
such advances undertake to repay the advanced funds to the Company,
together with the applicable legal rate of interest thereon, in cases
in which such Indemnified Parties are thereafter found not to be
entitled to indemnification.
Notwithstanding the foregoing provisions of this Section 7, the
Company will not be liable in any such case to the extent that any
loss, liability, claim, damage or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of you or any
Soliciting Dealer for use in the preparation of the Registration
Statement (or any amendment thereof) or the Prospectus (or any
supplement thereto). The foregoing indemnity agreement is subject to
the further condition that, insofar as it relates to any untrue
statement, alleged untrue statement, omission or alleged omission made
in the Prospectus but eliminated or remedied in any amendment or
supplement thereto, such indemnity agreement shall not inure to your
benefit or to any Soliciting Dealer from whom the person asserting any
loss, liability, claim, damage or expense purchased the Shares which
are the subject thereof (or to the benefit of any person who controls
you or any Soliciting Dealer), if a copy of the Prospectus as so
amended or supplemented was not sent or given to such person at or
prior to the time the subscription of such person was accepted by the
Company; but only if a copy of the Prospectus (as so amended or
supplemented) had been supplied by the Company to you or any
21
Soliciting Dealer prior to such acceptance. This indemnity agreement
will be in addition to any liability which the Company may otherwise
have.
(b) The indemnification and agreement to hold harmless provided
in subparagraph (a) of this Section 7 is further limited to the extent
that no such indemnification by the Company of you or a Soliciting
Dealer shall be permitted under this Agreement for or arising out of
an alleged violation of federal or state securities laws unless one or
more of the following conditions are met: (i) there has been a
successful adjudication on the merits of each count involving alleged
securities law violations by you or any Soliciting Dealer and a court
of competent jurisdiction has approved indemnification of the
litigation costs; (ii) such claims against you or any Soliciting
Dealer have been dismissed with prejudice on the merits by a court of
competent jurisdiction as to the particular indemnitee and the court
has approved indemnification of the litigation costs; or (iii) a court
of competent jurisdiction approves a settlement of the claims against
you or any Soliciting Dealer and finds that indemnification of the
settlement and related costs should be made and the court considering
the request has been advised of the position of the Commission and of
the published positions of the Tennessee Securities Division and any
other state securities regulatory authority in which securities of the
Company were offered and sold respecting the availability and/or
propriety of indemnification for securities law violations.
(c) You and each Soliciting Dealer agree to indemnify and hold
harmless the Company, and each person, if any, who controls the
Company within the meaning of the Act and any controlling person of
the Company: (i) to the same extent as in the foregoing indemnity from
the Company to you and each Soliciting Dealer, but only with reference
to statements or omissions based upon the information relating to you
or any Soliciting Dealer furnished in writing by you or such
Soliciting Dealer or on your or their behalf for use in the
Registration Statement or the Prospectus, or any amendment or
supplement thereto; and (ii) for any violation by you or any
Soliciting Dealer in the sale of the Shares of any applicable state or
federal law or any rule, regulation or instruction thereunder,
provided that such violation is not committed in reliance on any
violation by the Company of such law, rule, regulation or instruction.
You and each Soliciting Dealer further agree to indemnify and
hold harmless the Company and any controlling person of the Company
against any losses, liabilities, claims, damages or expenses to which
the Company or any such controlling person may become subject under
the securities or blue sky laws of any jurisdiction insofar
22
as such losses, liabilities, claims, damages or expenses (or actions,
proceedings or investigations in respect thereof) arise by reason of a
sale of the Shares through the efforts of you (with respect to sales
effected without the assistance of a Soliciting Dealer) or a
Soliciting Dealer (with respect to sales effected by such Soliciting
Dealer) which is effected other than in accordance with the Blue Sky
Survey supplied to you by the Company (a "NonPermitted Sale"), whether
such NonPermitted Sale is caused by a sale in a jurisdiction other
than those specified in the Blue Sky Survey, by a sale in a
jurisdiction in which you or the Soliciting Dealer is not registered
to sell the Shares or which results in a sale in a jurisdiction in
excess of the number of Shares permitted to be sold in such
jurisdiction, and will reimburse the Company or any such controlling
person for any legal fees, monetary penalties or other expenses
reasonably incurred by any of them in connection with investigating,
curing or defending against any such losses, liabilities, claims,
damages, actions, proceedings or investigations. This indemnity
agreement will be in addition to any liability which you or any
Soliciting Dealer may otherwise have.
(d) The notice provisions contained in Section 7(a) hereof,
relating to notice to the Company, shall be equally applicable to you
and each Soliciting Dealer if the Company or any controlling person of
the Company seeks indemnification pursuant to Section 7(c) hereof. In
addition, you and each Soliciting Dealer may participate in the
defense, or assure the defense, of any such suit so sought under
Section 7(c) hereof and have the same rights and privileges as the
Company enjoys with respect to such suits under Section 7(a) hereof.
8. TERMINATION OF THIS AGREEMENT. This Agreement may be terminated
by you in the event that the Company shall have materially failed to comply with
any of the material provisions of this Agreement on its part to be performed at
or prior to the Effective Date or if any of the representations, warranties,
covenants or agreements of the Company herein contained shall not have been
materially complied with or satisfied within the times specified.
In any case, this Agreement shall terminate at the close of business
on the Termination Date. Termination of this Agreement pursuant to this Section
8 shall be without liability of any party to any other party other than as
provided in Sections 5 and 7 hereof, which shall survive such termination.
9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement or
contained in certificates of the Company submitted pursuant hereto shall remain
operative and in full force and effect, regardless of any investigation
23
made by or on behalf of you or any person who controls you, or by or on behalf
of the Company, and shall survive the Termination Date.
10. NOTICES. All communications hereunder shall be in writing and, if
sent to you, shall be mailed by registered mail or delivered, telefacsimilied or
telegraphed and confirmed in writing to Inland Securities Corporation, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
President) and, if sent to the Company, shall be mailed by registered mail or
delivered, telefacsimilied or telegraphed and confirmed in writing to Inland
Retail Real Estate Trust, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, (Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President).
11. REFERENCE TO INLAND SECURITIES CORPORATION. All references herein
to Inland Securities Corporation or the Dealer Manager hereunder shall be deemed
to include all successors and assigns of Inland Securities Corporation.
12. PARTIES. This Agreement shall inure to the benefit of and be
binding upon you, the Company and the successors and assigns of you and the
Company. This Agreement and the conditions and provisions hereof, are intended
to be and shall be for the sole and exclusive benefit of the parties hereto and
their respective successors and controlling persons, and for the benefit of no
other person, firm or corporation, and the term "successors and assigns," as
used herein, shall not include any purchaser of Shares as such.
13. APPLICABLE LAW. This Agreement and any disputes relative to the
interpretation or enforcement hereto shall be governed by and construed under
the internal laws, as opposed to the conflicts of laws provisions, of the State
of Illinois.
14. EFFECTIVENESS OF AGREEMENT. This Agreement shall become effective
at 5:00 p.m., Chicago, Illinois time, on the Effective Date, or at such earlier
time as you and the Company agree.
15. NOT A SEPARATE ENTITY. Nothing contained herein shall constitute
you and/or the Soliciting Dealers or any of them an association, partnership,
limited liability company, unincorporated business or other separate entity.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
24
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return it to us, whereupon this instrument will
become a binding agreement between you and the Company in accordance with its
terms.
Inland Retail Real Estate Trust, Inc.,
a Maryland corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title: Chairman
------------------------------------
Accepted as of the date
first above written:
Inland Securities Corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Title: President
---------------------------
25
EXHIBIT A TO DEALER MANAGER AGREEMENT
INLAND RETAIL REAL ESTATE TRUST, INC.
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 Retail Real Estate
Trust, Inc., 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 150,000,000 Shares at a price of $10 per Share on a
"best efforts" basis, up to 12,000,000 Shares issued pursuant to the Company's
distribution reinvestment program at a price of $9.50 per Share and 6,000,000
warrants issuable to us and to you (the "Soliciting Dealer Warrants") (and
Shares issuable on exercise of the Soliciting Dealer Warrants) which are
issuable in certain circumstances in connection with the sale of Shares (the
"Offering").
In connection with the performance of our obligations under Section 2
of the Dealer Manager Agreement, we are authorized to retain 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 168,000,000 Shares and the Soliciting Dealer Warrants 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
168,000,000 Shares, the Soliciting Dealer Warrants 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 and may be provided to you
in electronic version by us or by the Company. We will also provide you with
reasonable quantities of any supplemental literature prepared by the Company in
connection with the offering of the Shares (the "Offering").
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 Rules of the
National Association of Securities Dealers, Inc. (the "NASD"), specifically
including, but not in any way limited to, NASD 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 either: (a) a minimum annual gross income of $45,000 and a
minimum net worth (exclusive of home, home furnishings and automobiles) of
$45,000; or (b) a minimum net worth (determined with the foregoing exclusions)
of $150,000.
If the investor is a resident of Michigan, Iowa, Massachusetts,
Missouri, Oregon or Tennessee, the investor must have either: (i) a minimum net
worth (excluding home, home furnishings and automobiles) of $225,000; or (ii) a
minimum annual gross income of $60,000 and a minimum 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 minimum net worth (excluding home, home furnishings and automobiles) of
$200,000; or (ii) a minimum annual gross income of $50,000 and a minimum net
worth (exclusive of home, home furnishings and automobiles) of $50,000.
In addition, if the investor is a resident of Kansas, Ohio or
Pennsylvania, the investment may not exceed 10% of the investor's liquid net
worth.
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) to deliver in accordance with applicable law or as
prescribed by any state securities administrator to any person a copy of any
prescribed document included within the Registration Statement; 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. If any such Soliciting Dealer intends to use electronic delivery means
in distributing the Prospectus to any person, such Soliciting Dealer represents
and agrees that it will comply with all appropriate procedures in compliance
with requirements of the Commission.
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
7% of the price paid per Share for all Shares sold (except for Special Sales)
from the 150,000,000 Shares offered on a "best efforts" basis 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 25 Shares sold by such Soliciting Dealer
during the Offering (the "Warrants"), which Warrants will be reallowed from the
Inland Securities Corporation, as the dealer manager (the "Dealer Manager"),
from the Warrants issued and sold to it by the Company for a purchase price of
$.0008 per Warrant. The Company will not issue more than 6,000,000 of the
Warrants in connection with the Offering of the Shares. The Warrants will be
issued quarterly commencing 60 days after the date on which Shares are first
sold pursuant to the Offering. In making a request that the Company or the
Dealer Manager transfer Warrants, you hereby represent that the transfer of such
Warrants to you is permissible and proper under applicable state securities laws
for sales of Shares to residents of the appropriate state(s). All Shares sold by
the Company in the Offering, other than through the distribution reinvestment
program will be included in the computation of the number of Shares sold
2
to determine the number of Soliciting Dealer Warrants to be issued. The holder
of a Warrant will be entitled to purchase one Share from the Company at a price
of $12 (or 120% of the public offering price per Share, if the then current
offering price of Shares in the Offering is higher than $10 per Share) during
the time period beginning one year from the date of the first issuance of any of
the Soliciting Dealer Warrants and ending five years from the date of such first
issuance (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 and/or
exercising the Soliciting Dealer Warrants.
Subject to certain conditions and exceptions explained below,
investors making an initial cash investment of at least $250,010 through the
same Soliciting Dealer may receive a reduction of the customary 7% selling
commission payable in connection with the purchase of those Shares in accordance
with the following schedule:
Amount of Purchaser's Investment
Amount of Selling ---------------------------------------- Maximum Commission
Volume Discount From To Per Share
----------------- ----------- --------------------- ------------------
1% $ 250,010 $500,000 6%
2% $ 500,010 $1,000,000 5%
3% $ 1,000,010 $2,500,000 4%
4% $ 2,500,010 $5,000,000 3%
5% $ 5,000,010 $10,000,000 2%
6% $10,000,010 more than $10,000,010 1%
Any reduction in the amount of the selling commissions in respect of
volume discounts received will be credited to the investor in the form of
additional whole shares or fractional shares. Selling commissions will not be
paid on any such whole shares or fractional shares issued for a volume discount.
The agreement between the subscriber and the Soliciting Dealer as to
the method of effecting the volume discount and the amount of the volume
discount must be set forth in writing in an instrument satisfactory in form and
substance to the Company and to the Dealer Manager.
Certain purchases may be combined for the purpose of qualifying for a
volume discount and crediting a purchaser or purchasers with additional Shares
for the above described volume discount, and for determining commissions
reallowable to you, so long as all such combined purchases are made through you
and approved by the Company. A purchaser may combine subscriptions made in the
Offering with other subscriptions in the Offering or with subscriptions from the
Company's initial public offering pursuant to its registration statement
declared effective by the Commission on February 11, 1999 and its subsequent
public offering pursuant to its registration statement declared effective by the
Commission on February 1, 2001, for the purpose of computing amounts invested.
Purchases by spouses may be combined and purchases by any investor may be
combined with other purchases of Shares to be held as joint tenants or a tenant
in common by such investor with others for purposes of computing amounts
invested. Purchases by tax-exempt entities may only be combined with purchases
by other tax-exempt entities for purposes of computing amounts invested only if
3
investment decisions are made by the same Person, provided that if the
investment decisions are made by an independent investment adviser, that
investment adviser may not have any direct or indirect beneficial interest in
any of the tax-exempt entities whose purchases are sought to be combined. The
investor must ▇▇▇▇ the "Additional Investment" space on the Subscription
Agreement Signature Page in order for purchases to be combined. The Company is
not responsible for failing to combine purchases, where the investor fails to
▇▇▇▇ the "Additional Investment" space.
If the Subscription Agreements for the purchases to be combined are
submitted at the same time, then the additional Shares to be credited to the
purchasers as a result of such combined purchases will be credited on a pro rata
basis. If the Subscription Agreements for the purchases to be combined are not
submitted at the same time, then any additional Shares to be credited as a
result of such combined purchases will be credited to the last component
purchase, unless the Company is otherwise directed in writing at the time of
such submission; except however, the additional Shares to be credited to any
Tax-Exempt Entities whose purchases are combined for purposes of the volume
discount will be credited only on a pro rata basis based on the amount of the
investment of each Tax-Exempt Entity and their combined purchases.
Notwithstanding the preceding paragraphs, in no event shall any
investor receive a discount greater than 5% on any purchase of Shares if such
investor already owns, or may be deemed to already own, any Shares. This
restriction may limit the amount of the volume discount available to a purchaser
after the purchaser's initial purchase and the amount of additional Shares that
may be credited to a purchaser as a result of the combination of purchases.
In the event the dollar amount of commissions paid for such combined
purchases exceeds the maximum commissions for such combined purchases (taking
the volume discount into effect), you will be obligated to forthwith return to
the Dealer Manager (for credit to the Company) any excess commissions received.
The Dealer Manager may adjust any future commissions due to you for any such
excess commissions that have not been returned.
You (and other Soliciting Dealers) also may receive an amount equal to
a maximum of an additional 1.5% of the price per Share for all Shares sold
(except for certain Special Sales) from the 150,000,000 Shares offered on a
"best efforts" basis for which you have acted as Soliciting Dealer hereunder, as
a sales credit (as described in the following paragraph) (equal to 1%) and due
diligence expense allowance (equal to 0.5%). However, except to the extent set
forth below, such amounts will only be paid to a Soliciting Dealer for actual
marketing and due diligence expenses. Furthermore, you (and other Soliciting
Dealers) will not be paid any portion of the wholesaling fees paid in connection
with the Offering. Such wholesaling fees and the sales credit described in the
following paragraph are included within the maximum Marketing Contribution.
You (and other Soliciting Dealers) who sell more than a predetermined
number of Shares (to be determined by the Dealer Manager annually on a calendar
year basis) shall be entitled to receive a sales credit in the amount of 1% of
the price of all Shares sold by that Soliciting Dealer, which amount(s) shall be
paid quarterly, in arrears, upon first reaching the predetermined annual
threshold and each quarter thereafter during the calendar year in which the
Soliciting Dealer is credited with additional sales. Certain marketing and due
diligence expenses such as Soliciting Dealer conferences and due diligence fees
may be advanced to a Soliciting Dealer and later deducted from that Soliciting
4
Dealer's sales credit. Any sales credit shall be deducted from the maximum
Marketing Contribution, which may otherwise be reallowable to the Soliciting
Dealer.
You (and other Soliciting Dealers) may reallow any portion of the
above sales credit to its registered representatives as is permitted under
applicable law and regulations including, without limitation, the federal and
any applicable state securities laws, any rules and/or regulations thereunder
and the rules and regulations of the NASD.
In connection with the performance of services, employees, Directors
and associates of the Company and its Affiliates, the Advisor, Affiliates of the
Advisor, the Dealer Manager and their respective officers and employees and
certain of their affiliates will be permitted to purchase Shares, as Special
Sales, net of selling commissions, the Marketing Contribution and the Due
Diligence Expense Allowance, and you shall not be entitled to receive any
compensation attributable to any such purchase(s).
Certain other Special Sales shall be effected directly by the Company
and not pursuant to this Agreement, and no selling commission shall be payable
in connection with such Special Sales, including sales to one or more Soliciting
Dealers and their respective officers and employees and certain of their
respective affiliates who request and are entitled to purchase Shares net of
selling commissions. Furthermore, no selling commission shall be payable on the
Shares credited to an investor as a result of a volume discount or on sales of
Shares to certain investors whose contracts for investment advisory and related
brokerage services include a fixed or "wrap" fee feature. The term "Special
Sales" shall have the meaning ascribed to it in the Prospectus. The Marketing
Contribution and Due Diligence Expense Allowance will, however, be allowed and
paid with respect to those sales which are "Special Sales" solely by virtue of
(a) the presence of a contract for investment advisory and related brokerage
services with the proposed investor/subscriber which includes a fixed or "wrap"
fee feature, (b) being sales to the Soliciting Dealers and their respective
officers and employees and certain of their respective affiliates who request
and are entitled to purchase Shares net of selling commissions, and (c) being
sales of Shares which are entitled to a volume discount, including the Shares
credited to an investor as a result of a volume discount. Any subsequent
purchases of Shares by investors who initially purchased Shares net of the 7%
selling commission are limited to a maximum discount of 5% of the public
offering price per Share.
Your compensation may also be adjusted in the manner set forth in
Section 4(g) of the Dealer Manager Agreement.
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, which it may do, as
provided in the form of Subscription Agreement for any reason or for no reason.
Accordingly, you shall have no authority to issue a confirmation (pursuant to
Exchange Act Rule 10b-10) to any subscriber; such authority residing solely in
us, as the Dealer Manager and processing broker-dealer.
Certain subscribers to the Company's Shares may agree with their
participating Soliciting Dealer and the Dealer Manager to have selling
commissions due with respect to the purchase of their Shares paid over a period
of up to six years pursuant to a deferred commission option arrangement
5
(the "Deferred Commission Option"), as more fully explained, and subject to the
conditions set forth, under the section "Plan of Distribution--Deferred
Commission Option" in the Company's Prospectus, which section is incorporated by
reference herein. Stockholders electing the Deferred Commission Option will be
required to pay a total of $9.40 per Share purchased upon subscription, rather
than $10.00 per Share, with respect to which $0.10 per Share will be payable by
the Company to the Dealer Manager as selling commissions due upon subscription,
which may be reallowed to the participating Soliciting Dealer by the Dealer
Manager. For each of the six years following such subscription on a date or
dates to be determined by the Dealer Manager, $0.10 per Share will be paid by
the Company to the Dealer Manager as deferred selling commissions with respect
to Shares sold pursuant to the Deferred Commission Option, which amounts will be
deducted from and paid out of cash distributions otherwise payable to such
stockholders holding such Shares, and may be reallowed to the participating
Soliciting Dealer by the Dealer Manager. The net proceeds to the Company will
not be affected by the election of the Deferred Commission Option. Under this
arrangement and based on a $10.00 per Share deemed value for each Share issued,
a stockholder electing the Deferred Commission Option will pay a 1% selling
commission upon subscription, rather than a 7% selling commission, and an amount
equal to up to a 1% selling commission per year thereafter for up to the next
six years which will be deducted from and paid by the Company out of cash
distributions otherwise payable to such stockholder.
As in any volume discount situation, selling commissions are not paid
on any Shares issued for a volume discount. Therefore, when the deferred
commission option is used, no deductions will be made for deferred commission
obligations from cash distributions payable on the Shares issued for a volume
discount, because there will not be any deferred commission obligation as to
those particular Shares. The number of Shares issued, if any, for a volume
discount, will be determined as described above in Section 2(d)(i) of the
Agreement.
At such time, if any, that the Company's Shares are listed on a
national securities exchange or included for quotation on a national market
system, or such listing or inclusion is reasonably anticipated to occur at any
time prior to the satisfaction of the remaining deferred commission obligations,
the Company shall accelerate all outstanding payment obligations under the
Deferred Commission Option. The amount of the remaining selling commissions due
shall be deducted and paid by the Company out of cash distributions otherwise
payable to such Stockholders during the time period prior to any such listing of
the Shares for trading on a national securities exchange or inclusion for
quotation on a national market system; provided that, in no event may the
Company withhold in excess of $0.60 per Share in the aggregate during the
six-year period following the subscription. The maximum amount that may be
withheld and the maximum number of years for which selling commissions may be
deferred will be lower when the volume discount provisions are also applicable
and less than 6% of the selling commissions are deferred. To the extent that the
cash distributions during such time period are insufficient to satisfy the
remaining deferred selling commissions due, the obligations of the Company and
the Company's Stockholders to make any further payments of deferred selling
commissions under the Deferred Commission Option shall terminate and the Dealer
Manager (and participating Soliciting Dealers if the deferred selling
commissions are reallowed to them by the Dealer Manager) will not be entitled to
receive any further portion of the unpaid deferred selling commissions following
any such listing for trading or inclusion for quotation of the Shares.
6
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
"LBNA/Escrow Agent for IRRET" and forwarded together with a copy of the
Subscription Agreement, which is attached as Appendix C to the Prospectus or
such other form of Subscription Agreement as may be revised by the Company,
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 the Subscription Agreement and check 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 and/or dealer 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 assumes 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 and/or
dealer 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
7
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 liability (except for (i) our own lack of
good faith and (ii) 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 Retail 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. You hereby authorize and ratify the execution and delivery of the
Dealer Manager Agreement by us as Dealer Manager for ourselves and on behalf of
the Soliciting Dealers (including you) and authorize 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. You also authorize 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 actions 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, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President. Any notice from us to you
shall be deemed to have been duly given if mailed, communicated by telegraph or
telefacsimile or delivered by overnight courier to you at your address shown
below.
8
13. Nothing herein contained shall constitute the undersigned, you,
the other 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, you 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 and
agreement, please sign and return the attached duplicate of this Agreement. Your
indicated acceptance thereof shall constitute a binding agreement between you
and us.
Very truly yours,
INLAND SECURITIES CORPORATION
By:
-------------------------------------
Title:
------------------------------------
____________ ___, 2002
9
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 Rules of the NASD and
all rules and regulations promulgated by the NASD.
Dated: ____________ ___, 2002
-----------------------------------------------
Name of Soliciting Dealer
-----------------------------------------------
Federal Identification Number
By:
------------------------------------
Authorized Signature
Kindly have checks representing commissions forwarded as follows (if different
than above):
(Please type or print)
Name of Firm:
---------------------------------------
Address:
--------------------------------------------
Street
--------------------------------------------
City
--------------------------------------------
State and Zip Code
--------------------------------------------
(Area Code) Telephone No.
Attention:
-------------------------------------------
10