EXHIBIT 1.2
INLAND SECURITIES CORPORATION
SOLICITING DEALERS AGREEMENT
((DD_CONTACT))
((BD))
((SUITE))
((ADDRESS))
((CITY)),((STA))((ZIP))
Dear((XXX)):
We have entered into an agreement, which is a part hereof and attached
hereto, with Inland American Real Estate Trust, Inc., a Maryland corporation
(the "Company"), under which we have agreed to use our best efforts to solicit
subscriptions for shares of the Company's common stock (the "Dealer Manager
Agreement"). The Company is offering an aggregate maximum of up to 500,000,000
Shares at a price of $10.00 per Share on a "best efforts" basis and up to
40,000,000 Shares issued pursuant to the Company's distribution reinvestment
plan at a price of $9.50 per Share (collectively, the "Offering"). Capitalized
terms used but not defined herein shall have the meanings set forth in the
Prospectus as defined in the Dealer Manager Agreement.
In connection with performing our obligations under 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. (each, a
"Soliciting Dealer") 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 Shares has been filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), and has
become effective. The 540,000,000 Shares and the Offering are more particularly
described in 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 or approved by the Company for use in the
Offering.
2. (a) You may undertake solicitation and other activities only in
accordance with the Dealer Manager Agreement, this Soliciting Dealer 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"), including, but not limited
to, NASD Rules 2440, 2710, 2730, 2740, 2750 and 2810. In offering the Shares to
any person, you must have reasonable grounds to believe after due inquiry that:
(i) the person has the capability of understanding the
fundamental aspects of the Company from either the person's: (A) employment
experience; (B) educational level; (C) access to advice from qualified sources,
such as attorneys, accountants and tax advisors; or (D) prior experience with
investments of a similar nature; (ii) the person has apparent understanding of:
(A) the fundamental risks and possible financial hazards of this type of
investment; (B) the risk that the person may lose the entire investment; (C) the
lack of liquidity of this investment; (D) the restrictions on transferability of
Shares; (E) the background and qualification of the Company's sponsor and its
Business Manager; and (F) the tax consequences of the investment; (iii) the
person can reasonably benefit from an investment in the Company based upon the
person's overall investment objectives and portfolio structure; (iv) the person
is able to bear the economic risk of the investment based on the person's
overall financial situation; and (v) such other information as we may reasonably
request. You shall maintain records disclosing the basis upon which you
determined the suitability of any persons offered Shares. Further, you shall
have reasonable grounds to believe the person satisfies the higher of the
following suitability standards: (1)(a) a minimum annual gross income of at
least $45,000 and a minimum net worth (excluding home, home furnishings and
automobiles) of at least $45,000; or (b) a minimum net worth of at least
$150,000 (excluding home, home furnishings and automobiles); or (2) the
suitability standards set forth in the Subscription Agreement attached as
APPENDIX C to the Prospectus (the "Subscription Agreement") and the Prospectus
for investors residing in certain states. You 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 from 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 satisfied the suitability standards;
(b) If the investor is a resident of Alaska, California, Kansas,
Massachusetts, Michigan, Missouri, North Carolina, Oregon or Tennessee, the
investor must have either: (i) a minimum net worth (excluding home, home
furnishings and automobiles) of at least $225,000; or (ii) a minimum annual
gross income of at least $60,000 and a minimum net worth (excluding home, home
furnishings and automobiles) of at least $60,000;
(c) 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 at
least $200,000; or (ii) a minimum annual gross income of at least $50,000 and a
minimum net worth (excluding home, home furnishings and automobiles) of at least
$50,000;
(d) If the investor is a resident of New Hampshire, the investor must have
either: (i) a minimum net worth (excluding home, home furnishings and
automobiles) of at least $250,000; or (ii) a minimum net gross income of at
least $50,000 and a minimum net worth of at least $125,000;
(e) If the investor is a resident of South Carolina, the investor must
have either: (i) a minimum net worth (excluding home, home furnishings and
automobiles) of at least $150,000; or (ii) a minimum annual gross income of at
least $65,000 and a minimum net worth of at least $65,000;
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(f) In addition to the requirements set forth in SECTIONS 2(a) through 2
(e) hereof, if the investor is a resident of Kansas, Missouri, Nebraska, Ohio or
Pennsylvania, the investor's investment in the Shares may not exceed ten percent
(10%) of the investor's liquid net worth, which may be defined as the remaining
balance of cash and other assets easily converted to cash, after subtracting the
investor's total liabilities from its total assets; and
(g) You shall: (i) deliver to each person who subscribes for the Shares, a
Prospectus, as then supplemented or amended, prior to the tender of his or her
Subscription Agreement; (ii) 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 ninety (90) days after the first
date upon which the Shares were offered to the public; (iii) deliver, in
accordance with applicable law or as prescribed by any state securities
administrator, to any person a copy of any prescribed document included within
the Registration Statement; and (iv) maintain in your files for at least six
years, documents disclosing the basis upon which you determined the suitability
of each purchaser of Shares. If you intend to electronically deliver the
Prospectus to any person, you shall comply with all requirements promulgated by
the Commission for electronic delivery.
3. (a) Subject to the terms and conditions set forth herein and in the
Dealer Manager Agreement, we shall pay to you a selling commission equal to
seven percent (7.0%) of the price paid per Share for all Shares sold (except for
Special Sales (as defined below)) on a "best efforts" basis for which you have
acted as Soliciting Dealer pursuant to this Agreement. Any selling commission
earned by you shall be payable to you by us solely from the proceeds of selling
commissions paid to us by the Company for the sale of its Shares, and will not
be paid until any and all commissions payable by the Company to us have been
received by us.
(b) Notwithstanding the provisions set forth above, with respect to
investors making an initial cash investment or, in the aggregate, combined
additional investments of at least $250,000 through you as Soliciting Dealer, we
shall pay your selling commissions in accordance with the following schedule:
Amount of Selling
Commission Amount of Purchaser's Investment Maximum Reallowable
Volume Discount From To Commission Per Share
---------------------------- -------------------------- ----------------------------- --------------------------
1% $ 250,000 $ 499,999 6%
2% $ 500,000 $ 999,999 5%
3% $ 1,000,000 $ 2,499,999 4%
4% $ 2,500,000 $ 4,999,999 3%
5% $ 5,000,000 $ 9,999,999 2%
6% $ 10,000,000 and over 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 with any fractional Shares being rounded up to the nearest whole
number. Selling commissions will not be paid on any Shares in respect of a
volume discount.
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(c) (i) To the extent reasonably practicable, you shall combine purchases
for the purpose of qualifying for a volume discount and crediting a purchaser or
purchasers with additional Shares for the above described volume discount;
provided that all combined purchases are made through you and approved by the
Company. For these purposes, the Company will combine subscriptions made in the
Offering by the same purchaser with other subscriptions in the Offering for the
purpose of computing amounts invested. Purchases by spouses will 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. Purchases by tax-exempt entities
will be combined only with purchases by other tax-exempt entities for purposes
of computing amounts invested 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 who seek to combine
purchases. The investor must xxxx 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 if the investor
fails to xxxx the "Additional Investment" space.
(ii) In the case of subsequent investments or combined investments, a volume
discount will be given only on the portion of the subsequent or combined
investment that caused the investment to exceed the breakpoint. For example, a
person investing $50,000 who previously invested $240,000 may combine these
amounts to reach the $250,000 breakpoint entitling the person to a lower sales
commission on the $50,000 investment. 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 the 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 the combined purchases will be credited to
the last component purchase unless the Company is otherwise directed in writing
at the time of the 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.
(d) Notwithstanding the above, in no event shall any investor receive a
discount greater than five percent (5.0%) on any purchase of Shares if the
investor owns, or may be deemed to own, any Shares prior to subscribing. This
restriction may limit the amount of the volume discount after the purchaser's
initial purchase and the amount of additional Shares that may be credited to a
purchaser as a result of combining purchases.
(e) (i) You also may receive a marketing contribution in an amount equal
to a maximum of one and one-half percent (1.5%) of the price per Share for all
Shares sold on a "best efforts" basis for which you have acted as Soliciting
Dealer hereunder. We may advance to you certain marketing expenses for items
such as Soliciting Dealer conferences. Any such advances will be later deducted
from any marketing contribution that may otherwise be paid to you. You may
reallow all or any portion of the marketing contribution to any of your
registered representatives to the extent permitted under
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applicable law and regulations including federal and state securities laws, any
rules or regulations thereunder and the rules and regulations of the NASD.
(ii) We or the Company will also reimburse you for all actual expenses
incurred in connection with your due diligence investigation of the Company or
the Offering up to one-half percent (0.5%) of the sale price of the Shares
offered on a "best efforts" basis for bona fide due diligence expenses incurred
by you.
(f) Employees, directors and associates of the Company and its affiliates,
the Business Manager and its Affiliates, us and their and our 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 of these purchase(s).
Further, certain other Special Sales will be effected directly by the
Company and not pursuant to this Agreement, and no selling commission shall be
payable in connection with these Special Sales. For purposes of this Agreement,
"Special Sales" shall mean a sale of Shares: (i) 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; (ii) Shares credited to an investor as a result of a volume
discount; or (iii) sales of Shares to certain investors whose contracts for
investment advisory and related brokerage services include a fixed or "wrap" fee
feature. The marketing contribution and due diligence expense allowance will,
however, be paid and may be reallowed in respect of any Special Sales. The
volume discount on any subsequent purchase of Shares by investors who initially
purchase Shares net of the selling commission shall be limited to a maximum
discount equal to five percent (5.0%) of the public offering price per Share.
Notwithstanding the foregoing, no commission shall be payable on any
subscription rejected by the Company. Accordingly, the authority to issue a
confirmation (pursuant to Exchange Act Rule 10b-10) resides solely in us, in our
capacity as the Dealer Manager and processing broker-dealer.
4. We reserve the right to notify you by telegram or by other means of
the number of Shares reserved for sale by you. These Shares will be reserved for
sale by you until the time specified in our notice to you. Sales of any reserved
Shares after the time specified in the notice or any requests for additional
Shares will be subject to rejection in whole or in part.
5. Payments for Shares must be made by check payable to "LBNA/Escrow
Agent for IARETI" and forwarded together with a copy of the Subscription
Agreement or such other form of subscription agreement as may be revised by the
Company executed by the subscriber, to Inland Securities Corporation, 0000
Xxxxxxxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxx 00000, not later than noon of the next
business day after receipt of the Subscription Agreement and check if your
internal supervisory procedures are completed at the site at which the
Subscription Agreement and check were received by you. If 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
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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 us 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 LaSalle Bank N.A., Chicago,
Illinois, 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 the jurisdictions;
provided, however that neither we nor the Company has assumed, and will not
assume, any obligation or responsibility as to your qualification or your right
to act as a broker or dealer with respect to the Shares in any jurisdiction. You
shall not make any offers except in states in which we may advise you that the
Offering has been qualified or is exempt. The blue sky survey that 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. Under no circumstances
shall 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 shall not publish, circulate or otherwise use any other
advertisement or solicitation material without our prior written approval. You
are not authorized to act as our agent in any respect, and you shall neither act
as our agent nor purport to act as our agent.
8. We shall have full authority to take any action we may deem advisable
with respect to all matters pertaining to the Offering or arising thereunder. We
shall not be liable to you for any loss, liability, claim, damage or expense
whatsoever except for obligations expressly assumed by us hereunder; provided
further, that nothing in this paragraph shall be deemed to relieve the
undersigned from any liability imposed by the Act.
9. You shall comply with all applicable federal and state regulations
regarding customer and consumer privacy, including Title V of the
Xxxxx-Xxxxx-Xxxxxx Act. Privacy provisions of the Xxxxx-Xxxxx-Xxxxxx Act limit
disclosure of customer information to uses required by law, regulation or rule,
or uses consistent with the purposes for which this information was disclosed in
this Agreement. "Customer information" is defined as any information contained
on a customer's application and includes all nonpublic personal information
about a customer provided or shared by the Company, us and you.
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Subject to the provisions of the Xxxxx-Xxxxx-Xxxxxx Act, you shall
establish and maintain safeguards against the unauthorized access, destruction,
loss or alteration of customer information in your control. In the event of any
improper disclosure of customer information, the party responsible for the
improper disclosure agrees to immediately notify the other party hereto of such
disclosure.
10. You shall comply with U.S. Department of Treasury regulations
(outlined in the Patriot Act) that require reasonable efforts to verify the
identity of new customers, maintain customer records, and check the names of new
customers against a government terrorist list. Further, you shall provide the
Financial Crimes Enforcement Network with information regarding: (a) the
identity of a specified individual or organization; (b) account number; (c) all
identifying information provided by the account holder; and (d) the date and
type of transaction, upon request. You shall manually monitor account activity
to identify patterns of unusual size or volume, geographic factors, and any of
the other "red flags" described in the Patriot Act as potential signals of money
laundering or terrorist financing. The Company and we reserve the right to
reject account applications from new customers who fail to provide necessary
account information or who intentionally provide misleading information.
11. 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 the
Dealer Manager Agreement.
12. 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. You hereby agree 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.
13. This Agreement, except for the provisions of SECTION 8 and SECTION 11
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 SECTION 8 and SECTION 11 hereof, each of which shall terminate
seven (7) years from the date hereof.
14. All notices or other communications required or permitted hereunder
shall be in writing and shall be deemed given or delivered: (i) when delivered
personally or by commercial messenger; (ii) one business day following deposit
with a recognized overnight courier service, provided such deposit occurs prior
to the deadline imposed by such service for overnight delivery; (iii) when
transmitted, if sent by facsimile copy, provided confirmation of receipt is
received by sender and such notice is sent by an
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additional method provided hereunder, in each case above provided such
communication is addressed to the intended recipient thereof as set forth below:
IF TO THE DEALER MANAGER, TO: Inland Securities Corporation
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WITH COPIES TO: Xxxxxxx & Xxxxxxxx Ltd.
000 X. Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IF TO THE SOLICITING DEALER, TO:
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15. Nothing herein contained shall constitute you, the Soliciting
Dealers or any of them as an association, partnership, limited liability
company, unincorporated business or other separate entity.
16. 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 its affiliates 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, you may obtain, upon
request, information on material facts relating at a minimum to the following:
(a) items of compensation;
(b) Company properties;
(c) tax aspects;
(d) financial stability and experience of the Company and the Business
Manager;
(e) conflicts and risk factors; and
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(f) appraisals and other pertinent reports.
Notwithstanding the foregoing, you may rely upon the results of an inquiry
conducted by another Soliciting Dealer, provided that:
(i) the other Soliciting Dealer has reasonable grounds to believe
that the inquiry was conducted with due care;
(ii) the results of the inquiry were provided to you with the
consent of the other 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, you shall inform the prospective purchaser
of all pertinent facts relating to the liquidity and marketability of the
Shares.
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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: Xxxxxxx X. Xxxxxx
Title: Vice President, Administration
Date:___________________________________________
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 applicable rules
and regulations of the Commission thereunder, and applicable blue sky or other
state securities laws including the rules and regulations thereunder. We confirm
that we are a member in good standing of the NASD and represent that we will
comply with the rules and regulations promulgated by the NASD.
Dated:______________________________
Name of Soliciting Dealer: ___________________________________________________
Federal Employer Identification Number: ______________________________________
By:___________________________________ ______________________________________
Authorized Signature Please print Name and Title
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: __________________________________________________
