DEALER-MANAGER COMPENSATION. (i) The Company agrees to pay to you a sales commission of 6.5% of the sales price for each Share sold (except for 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.” In lieu of reimbursement of specific expenses, and as compensation for acting as the managing dealer, you will also receive, subject to the limitations described herein and in the Prospectus, a managing dealer fee equal to 3.5% of the sale price from the 150,000,000 Shares offered on a “best efforts” basis, of which such fee 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. No sales commissions or dealer manager fees will be paid in connection with common stock sold under the Company’s distribution reinvestment plan. Single Purchasers (as defined below) purchasing more than $250,000 worth of Shares (25,000 Shares) will be entitled to a reduced Share purchase price and a reduction in selling commissions payable in connection with the purchase of such Shares reduced by the amount of the share purchase price discount. The total share purchase price will be cumulatively reduced for each share purchased in the total volume ranges set forth in the table below. Amount of Single Purchaser’s Investment Purchase price per Share for incremental Share in discount range Maximum Commission Per Share $1,000 - $250,000 $10.00 $0.65 $250,001 - $500,000 $9.90 $0.55 $500,001 - $750,000 $9.70 $0.40 $750,001 - $1,000,000 $9.60 $0.30 $1,000,001 - $5,000,000 $9.50 $0.20 Any reduction from the amount of selling commissions otherwise payable to you and reallowable to a Soliciting Dealer in respect of a purchaser’s subscription will be credited to the purchaser in the form of additional whole Shares purchased net of commissions. No fractional Shares will be issued. As to sales of Shares which are entitled to the above described volume discounts, the Company will pay the reduced selling commissions set forth above. Selling commissions for purchases of $5,000,000 or more will, in the Company’s sole discretion, be reduced to $0.20 per Share or less, but in no event will the proceeds to the Company from the sale of such Shares be less than $9.20 per Share (except for Shares sold to affiliates of the Company at a price of $9.00 per share, which is the purchase price per Share net of any selling commissions and organization and offering expenses). In the event of a sale of $5,000,000 or more, the Company will supplement the Prospectus in the manner described in the Prospectus under the section “Volume Discounts”. Certain subscriptions may be combined for the purpose of 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. As used herein, the term “Single Purchaser” will include (i) any person or entity, or persons or entities, acquiring Shares as joint purchasers; (ii) all profit-sharing, pension and other retirement trusts maintained by a given corporation, partnership or other entity; (iii) all funds and foundations maintained by a given corporation partnership or other entity; and (iv) all profit-sharing, pension and other retirement trusts and all funds or foundations over which a designated bank or other trustee, person or entity (except an investment advisor registered under the Investment Advisors Act of 1940) exercises discretionary authority with respect to an investment in the Company. The investor must xxxx the “Additional Investment” space on the Subscription Agreement Signature Page, and set forth the basis for the discount and identity the orders to be combined in order for subscriptions to be combined. The Company is not responsible for failing to combine subscriptions, where the investor fails to xxxx the “Additional Investment” space. If the Subscription Agreements for the subscriptions 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 subscriptions 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 subscriptions 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. 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 shall be payable in connection with the sale of Shares to employees and associates of the Company and its Affiliates, the Advisor, affiliates of the Advisor, the Dealer Manager or the Soliciting Dealers. Volume discounts will not be available to California residents to the extent that such discounts do not comply with the provisions of Rule 260.145.51 adopted pursuant to the California Corporate Securities Law of 1968, which provides that volume discounts can be made available to California residents only in accordance with the following conditions: (i) there can be no variance in the net proceeds to the Company from the sale of the Shares to difference purchasers of the same offering; (ii) all purchasers of the Shares must be informed of the availability of quantity discounts; (iii) the same volume discounts must be allowed to all purchasers of Shares which are part of the offering; (iv) the minimum amount of shares as to which volume discounts are allowed cannot be less than $10,000; (v) the variance in the price of the shares must result solely from a different range of commissions, and all discounts must be based on a uniform scale of commissions; and (vi) no discounts are allowed to any group of purchasers. Accordingly, volume discounts for California residents will be available in accordance with the foregoing table of uniform discount levels based on dollar volume of shares purchased, but no discounts are allowed to any group of purchasers, and no subscriptions may be aggregated as part of a combined order for purposes of determining the number of Shares issued.
Appears in 1 contract
Samples: Dealer Manager Agreement (American Realty Capital Trust, Inc.)
DEALER-MANAGER COMPENSATION. (i) The Company agrees to pay to you a sales selling commission of 6.57.5%, of which 7% may be reallowed by you to the Soliciting Dealers, of the sales price for each Share sold (except for Special Sales) from the 150,000,000 250,000,000 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. In lieu of reimbursement of specific expenses, and as compensation for acting as the managing dealer, you will also receive, subject to the limitations described herein and in the Prospectus, a managing dealer fee marketing contribution (equal to 3.52.5%) and due diligence expense allowance (equal to 0.5%), both aggregating 3% of the sale price from the 150,000,000 250,000,000 Shares offered on a “"best efforts” basis" basis (except for certain Special Sales), some portion of which such fee may be retained or reallowed by you, subject to federal and state securities laws, you to the Soliciting Dealers. Subject to certain conditions and exceptions explained below, effective June 1, 2004, investors making an initial cash investment of at least $250,010.00 through the same Soliciting Dealer who sold the Shares, as described more fully in the Soliciting Dealers Agreement. No sales commissions or dealer manager fees will be paid in connection with common stock sold under the Company’s distribution reinvestment plan. Single Purchasers (as defined below) purchasing more than $250,000 worth of Shares (25,000 Shares) will be entitled to a reduced Share purchase price and receive a reduction in of the 7% reallowable selling commissions commission payable in connection with the purchase of such those Shares reduced by in accordance with the following schedule: Amount of Selling Amount of Purchaser's Investment 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 share purchase price discount. The total share purchase price will be cumulatively reduced for each share purchased in the total volume ranges set forth in the table below. Amount of Single Purchaser’s Investment Purchase price per Share for incremental Share in discount range Maximum Commission Per Share $1,000 - $250,000 $10.00 $0.65 $250,001 - $500,000 $9.90 $0.55 $500,001 - $750,000 $9.70 $0.40 $750,001 - $1,000,000 $9.60 $0.30 $1,000,001 - $5,000,000 $9.50 $0.20 Any reduction from the amount of selling commissions otherwise payable to you and reallowable to a Soliciting Dealer in respect of a purchaser’s subscription volume discounts received will be credited to the purchaser investor in the form of additional whole Shares purchased net of commissions. No shares or fractional Shares will be issued. As to sales of Shares which are entitled to the above described volume discounts, the Company will pay the reduced selling commissions set forth aboveshares. Selling commissions will not be paid on any such whole shares or fractional shares issued for a volume discount. To the extent reasonably practicable, purchases of $5,000,000 or more will, in the Company’s sole discretion, be reduced to $0.20 per Share or less, but in no event will the proceeds to the Company from the sale of such Shares be less than $9.20 per Share (except for Shares sold to affiliates of the Company at a price of $9.00 per share, which is the purchase price per Share net of any selling commissions and organization and offering expenses). In the event of a sale of $5,000,000 or more, the Company will supplement the Prospectus in the manner described in the Prospectus under the section “Volume Discounts”. Certain subscriptions 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 discount, and for determining commissions payable to you and reallowable to Soliciting Dealers Dealers, so long as all such combined purchases are made through the same Soliciting Dealer and approved by the Company. As used herein, The Company will combine subscriptions made in the term “Single Purchaser” will include (i) any person or entity, or persons or entities, acquiring Shares as joint purchasers; (ii) all profit-sharing, pension and Offering with other retirement trusts maintained subscriptions in the Offering by a given corporationpurchaser for the purpose of computing amounts invested. Purchases by spouses will 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 will 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, partnership provided that if the investment decisions are made by an independent investment adviser, that investment adviser may not have any direct or other entity; (iii) all funds and foundations maintained by a given corporation partnership or other entity; and (iv) all profitindirect beneficial interest in any of the Tax-sharing, pension and other retirement trusts and all funds or foundations over which a designated bank or other trustee, person or entity (except an investment advisor registered under the Investment Advisors Act of 1940) exercises discretionary authority with respect Exempt Entities whose purchases are sought to an investment in the Companybe combined. The investor must xxxx the “"Additional Investment” " space on the Subscription Agreement Signature Page, and set forth the basis for the discount and identity the orders to be combined Page in order for subscriptions purchases to be combined. The Company is not responsible for failing to combine subscriptionspurchases, where the investor fails to xxxx the “"Additional Investment” " space. 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, if you are investing $50,000 with us today, but had previously invested $240,000, these amounts can be combined to reach the $250,010 breakpoint, which will entitle you to a lower sales commission on your current $50,000 investment. If the Subscription Agreements for the subscriptions 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-pro rata basis. If the Subscription Agreements for the subscriptions 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 subscriptions purchases are combined for purposes of the volume discount will be credited only on a pro-pro rata basis based on the amount of the investment of each Tax-Exempt Entity and their combined purchases. In 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 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 available to a purchaser after the purchaser's initial purchase and the amount of additional Shares that may be obligated credited to forthwith return to a purchaser as a result of 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 returnedcombination of purchases. 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 '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 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 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. 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. 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 DealersDealers 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. Volume discounts will not be available Any subsequent purchases of Shares by investors who initially purchased Shares net of the 7.5% selling commission are limited to California residents a maximum discount of 5% of the public offering price per Share. Certain subscribers to the extent that 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 $0.15 per Share will be payable by the Company to the Dealer Manager as selling commissions due upon subscription, of which $0.10 per share may be reallowed to the participating Soliciting Dealer by the Dealer Manager. For each of the six years following such discounts do not comply 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 the provisions of Rule 260.145.51 adopted respect to Shares sold pursuant to the California Corporate Securities Law of 1968Deferred Commission Option, which provides that volume discounts can amounts will be made available deducted from and paid out of cash distributions otherwise payable to California residents only in accordance with such stockholders holding such Shares, and may be reallowed to the following conditions: (i) there can be no variance in participating Soliciting Dealer by the Dealer Manager. The net proceeds to the Company from will not be affected by the sale election of the Shares to difference purchasers of the same offering; (ii) all purchasers of the Shares must be informed of the availability of quantity discounts; (iii) the same volume discounts must be allowed to all purchasers of Shares which are part of the offering; (iv) the minimum amount of shares as to which volume discounts are allowed cannot be less than $10,000; (v) the variance in the price of the shares must result solely from a different range of commissions, Deferred Commission Option. Under this arrangement and all discounts must be based on a uniform scale $10.00 per Share deemed value for each Share issued, a stockholder electing the Deferred Commission Option will pay a 1.5% selling commission, of commissions; and (vi) no discounts are allowed to any group of purchasers. Accordingly, volume discounts for California residents which 1% will be available in accordance with the foregoing table reallowed, upon subscription, rather than a 7.5% selling commission, of uniform discount levels based on dollar volume of shares purchased, but no discounts are allowed to any group of purchaserswhich 7% will be reallowed, 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 subscriptions may deductions will be aggregated 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 part of a combined order for purposes of determining the to those particular Shares. The number of Shares issued, if any, for a volume discount, will be determined as described above in Section 2.4 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 $.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.
Appears in 1 contract
DEALER-MANAGER COMPENSATION. (i) The Company agrees to pay to you a sales selling commission of 6.57.5% of the sales price for each Share sold (except for Special Sales) from the 150,000,000 250,000,000 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. In lieu of reimbursement of specific expenses, and as compensation for acting as the managing dealer, you will also receive, subject to the limitations described herein and in the Prospectus, a managing dealer fee marketing contribution (equal to 3.52.5%) and due diligence expense allowance (equal to 0.5%), both aggregating 0.5% of the sale price from the 150,000,000 250,000,000 Shares offered on a “"best efforts” basis" basis (except for certain Special Sales), some portion of which such fee may be retained or reallowed by you, subject to federal and state securities laws, you to the Soliciting Dealers. Subject to certain conditions and exceptions explained below, investors making an initial cash investment of at least $3,000 through the same Soliciting Dealer who sold the Shares, as described more fully in the Soliciting Dealers Agreement. No sales commissions or dealer manager fees will be paid in connection with common stock sold under the Company’s distribution reinvestment plan. Single Purchasers (as defined below) purchasing more than $250,000 worth of Shares (25,000 Shares) will be entitled to a reduced Share purchase price and may receive a reduction in of the customary 7.5% selling commissions commission payable in connection with the purchase of such those Shares reduced by in accordance with the following schedule: Amount of Selling Maximum Volume Amount of Purchaser's Commission Per Discount Investment Share From To 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 share purchase price discount. The total share purchase price will be cumulatively reduced for each share purchased in the total volume ranges set forth in the table below. Amount of Single Purchaser’s Investment Purchase price per Share for incremental Share in discount range Maximum Commission Per Share $1,000 - $250,000 $10.00 $0.65 $250,001 - $500,000 $9.90 $0.55 $500,001 - $750,000 $9.70 $0.40 $750,001 - $1,000,000 $9.60 $0.30 $1,000,001 - $5,000,000 $9.50 $0.20 Any reduction from the amount of selling commissions otherwise payable to you and reallowable to a Soliciting Dealer in respect of a purchaser’s subscription volume discounts received will be credited to the purchaser investor in the form of additional whole Shares purchased net of commissions. No shares or fractional Shares will be issued. As to sales of Shares which are entitled to the above described volume discounts, the Company will pay the reduced selling commissions set forth aboveshares. Selling commissions will not be paid on any such whole shares or fractional shares issued for purchases of $5,000,000 or more will, in the Company’s sole discretion, be reduced to $0.20 per Share or less, but in no event will the proceeds to the Company from the sale of such Shares be less than $9.20 per Share (except for Shares sold to affiliates of the Company at a price of $9.00 per share, which is the purchase price per Share net of any selling commissions and organization and offering expenses). In the event of a sale of $5,000,000 or more, the Company will supplement the Prospectus in the manner described in the Prospectus under the section “Volume Discounts”volume discount. Certain subscriptions 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 discount, and for determining commissions payable to you and reallowable to Soliciting Dealers Dealers, so long as all such combined purchases are made through the same Soliciting Dealer and approved by the Company. As used herein, the term “Single Purchaser” will include (i) any person or entity, or persons or entities, acquiring Shares as joint purchasers; (ii) all profit-sharing, pension and other retirement trusts maintained by a given corporation, partnership or other entity; (iii) all funds and foundations maintained by a given corporation partnership or other entity; and (iv) all profit-sharing, pension and other retirement trusts and all funds or foundations over which a designated bank or other trustee, person or entity (except an investment advisor registered under the Investment Advisors Act of 1940) exercises discretionary authority with respect to an investment A purchaser may combine subscriptions made in the CompanyOffering with other subscriptions in the Offering 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 xxxx the “"Additional Investment” " space on the Subscription Agreement Signature Page, and set forth the basis for the discount and identity the orders to be combined Page in order for subscriptions purchases to be combined. The Company is not responsible for failing to combine subscriptionspurchases, where the investor fails to xxxx the “"Additional Investment” " space. If the Subscription Agreements for the subscriptions 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-pro rata basis. If the Subscription Agreements for the subscriptions 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 subscriptions purchases are combined for purposes of the volume discount will be credited only on a pro-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 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 '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 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 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. 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. 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 DealersDealers 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. Volume discounts will not be available Any subsequent purchases of Shares by investors who initially purchased Shares net of the 7.5% selling commission are limited to California residents a maximum discount of 5% of the public offering price per Share. Certain subscribers to the extent that 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 8 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 discounts do not comply 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 the provisions of Rule 260.145.51 adopted respect to Shares sold pursuant to the California Corporate Securities Law of 1968Deferred Commission Option, which provides that volume discounts can amounts will be made available deducted from and paid out of cash distributions otherwise payable to California residents only in accordance with such stockholders holding such Shares, and may be reallowed to the following conditions: (i) there can be no variance in participating Soliciting Dealer by the Dealer Manager. The net proceeds to the Company from will not be affected by the sale election of the Shares to difference purchasers of the same offering; (ii) all purchasers of the Shares must be informed of the availability of quantity discounts; (iii) the same volume discounts must be allowed to all purchasers of Shares which are part of the offering; (iv) the minimum amount of shares as to which volume discounts are allowed cannot be less than $10,000; (v) the variance in the price of the shares must result solely from a different range of commissions, Deferred Commission Option. Under this arrangement and all discounts must be based on a uniform scale of commissions; $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 7.5% selling commission, and (vi) no discounts are allowed an amount equal to any group of purchasers. Accordingly, volume discounts up to a 1.08% selling commission per year thereafter for California residents up to the next six years which will be available deducted from and paid by the Company out of cash distributions otherwise payable to such stockholder. As in accordance with any volume discount situation, selling commissions are not paid on any Shares issued for a volume discount. Therefore, when the foregoing table of uniform discount levels based deferred commission option is used, no deductions will be made for deferred commission obligations from cash distributions payable on dollar the Shares issued for a volume of shares purchaseddiscount, but no discounts are allowed because there will not be any deferred commission obligation as to any group of purchasers, and no subscriptions may be aggregated as part of a combined order for purposes of determining the 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 $.65 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 6.5% 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.
Appears in 1 contract
DEALER-MANAGER COMPENSATION. (i) The Company agrees to pay to you a sales selling commission of 6.57.5%, of which 7% may be reallowed by you to the Soliciting Dealers, of the sales price for each Share sold (except for Special Sales) from the 150,000,000 250,000,000 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. In lieu of reimbursement of specific expenses, and as compensation for acting as the managing dealer, you will also receive, subject to the limitations described herein and in the Prospectus, a managing dealer fee marketing contribution (equal to 3.52.5%) and due diligence expense allowance (equal to 0.5%), both aggregating 3% of the sale price from the 150,000,000 250,000,000 Shares offered on a “"best efforts” basis" basis (except for certain Special Sales), some portion of which such fee may be retained or reallowed by you, subject to federal and state securities laws, you to the Soliciting Dealers. Subject to certain conditions and exceptions explained below, investors making an initial cash investment of at least $3,000 through the same Soliciting Dealer who sold the Shares, as described more fully in the Soliciting Dealers Agreement. No sales commissions or dealer manager fees will be paid in connection with common stock sold under the Company’s distribution reinvestment plan. Single Purchasers (as defined below) purchasing more than $250,000 worth of Shares (25,000 Shares) will be entitled to a reduced Share purchase price and may receive a reduction in of the 7% reallowable selling commissions commission payable in connection with the purchase of such those Shares reduced by in accordance with the following schedule: Amount of Selling Amount of Purchaser's Investment 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 share purchase price discount. The total share purchase price will be cumulatively reduced for each share purchased in the total volume ranges set forth in the table below. Amount of Single Purchaser’s Investment Purchase price per Share for incremental Share in discount range Maximum Commission Per Share $1,000 - $250,000 $10.00 $0.65 $250,001 - $500,000 $9.90 $0.55 $500,001 - $750,000 $9.70 $0.40 $750,001 - $1,000,000 $9.60 $0.30 $1,000,001 - $5,000,000 $9.50 $0.20 Any reduction from the amount of selling commissions otherwise payable to you and reallowable to a Soliciting Dealer in respect of a purchaser’s subscription volume discounts received will be credited to the purchaser investor in the form of additional whole Shares purchased net of commissions. No shares or fractional Shares will be issued. As to sales of Shares which are entitled to the above described volume discounts, the Company will pay the reduced selling commissions set forth aboveshares. Selling commissions will not be paid on any such whole shares or fractional shares issued for purchases of $5,000,000 or more will, in the Company’s sole discretion, be reduced to $0.20 per Share or less, but in no event will the proceeds to the Company from the sale of such Shares be less than $9.20 per Share (except for Shares sold to affiliates of the Company at a price of $9.00 per share, which is the purchase price per Share net of any selling commissions and organization and offering expenses). In the event of a sale of $5,000,000 or more, the Company will supplement the Prospectus in the manner described in the Prospectus under the section “Volume Discounts”volume discount. Certain subscriptions 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 discount, and for determining commissions payable to you and reallowable to Soliciting Dealers Dealers, so long as all such combined purchases are made through the same Soliciting Dealer and approved by the Company. As used herein, the term “Single Purchaser” will include (i) any person or entity, or persons or entities, acquiring Shares as joint purchasers; (ii) all profit-sharing, pension and other retirement trusts maintained by a given corporation, partnership or other entity; (iii) all funds and foundations maintained by a given corporation partnership or other entity; and (iv) all profit-sharing, pension and other retirement trusts and all funds or foundations over which a designated bank or other trustee, person or entity (except an investment advisor registered under the Investment Advisors Act of 1940) exercises discretionary authority with respect to an investment A purchaser may combine subscriptions made in the CompanyOffering with other subscriptions in the Offering 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 xxxx the “"Additional Investment” " space on the Subscription Agreement Signature Page, and set forth the basis for the discount and identity the orders to be combined Page in order for subscriptions purchases to be combined. The Company is not responsible for failing to combine subscriptionspurchases, where the investor fails to xxxx the “"Additional Investment” " space. If the Subscription Agreements for the subscriptions 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-pro rata basis. If the Subscription Agreements for the subscriptions 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 subscriptions purchases are combined for purposes of the volume discount will be credited only on a pro-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 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 '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 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 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. 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. 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 DealersDealers 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. Volume discounts will not be available Any subsequent purchases of Shares by investors who initially purchased Shares net of the 7.5% selling commission are limited to California residents a maximum discount of 5% of the public offering price per Share. Certain subscribers to the extent that 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 $0.15 per Share will be payable by the Company to the Dealer Manager as selling commissions due upon subscription, of which $0.10 per share may be reallowed to the participating Soliciting Dealer by the Dealer Manager. For each of the six years following such discounts do not comply 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 the provisions of Rule 260.145.51 adopted respect to Shares sold pursuant to the California Corporate Securities Law of 1968Deferred Commission Option, which provides that volume discounts can amounts will be made available deducted from and paid out of cash distributions otherwise payable to California residents only in accordance with such stockholders holding such Shares, and may be reallowed to the following conditions: (i) there can be no variance in participating Soliciting Dealer by the Dealer Manager. The net proceeds to the Company from will not be affected by the sale election of the Shares to difference purchasers of the same offering; (ii) all purchasers of the Shares must be informed of the availability of quantity discounts; (iii) the same volume discounts must be allowed to all purchasers of Shares which are part of the offering; (iv) the minimum amount of shares as to which volume discounts are allowed cannot be less than $10,000; (v) the variance in the price of the shares must result solely from a different range of commissions, Deferred Commission Option. Under this arrangement and all discounts must be based on a uniform scale $10.00 per Share deemed value for each Share issued, a stockholder electing the Deferred Commission Option will pay a 1.5% selling commission, of commissions; and (vi) no discounts are allowed to any group of purchasers. Accordingly, volume discounts for California residents which 1% will be available in accordance with the foregoing table reallowed, upon subscription, rather than a 7.5% selling commission, of uniform discount levels based on dollar volume of shares purchased, but no discounts are allowed to any group of purchaserswhich 7% will be reallowed, 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 subscriptions may deductions will be aggregated 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 part of a combined order for purposes of determining the 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 $.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.
Appears in 1 contract
DEALER-MANAGER COMPENSATION. (i) The Company agrees to pay to you a sales selling commission of 6.57% of the sales price for each Share sold (except for 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.” In lieu of reimbursement of specific expenses, and as compensation for acting as the managing dealer, you will also receive, ," subject to the limitations described herein below, as well as to offer to issue and in the Prospectussell to you for a purchase price of $.0008 per Soliciting Dealer Warrant, a managing dealer fee equal to 3.5% of the sale price one Soliciting Dealer Warrant for every 25 Shares sold from the 150,000,000 Shares offered on a “"best efforts” " basis, of which such fee 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. No sales commissions or dealer manager fees ; provided, however, that the Company will be paid not issue more than 6,000,000 Warrants in connection with common stock sold under the Company’s distribution reinvestment planOffering of the Shares. Single Purchasers In lieu of reimbursement of specific expenses, you will also receive, subject to the limitations described herein and in the Prospectus, a marketing contribution (as defined 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) purchasing more than , investors making an initial cash investment of at least $250,000 worth of Shares (25,000 Shares) will be entitled to a reduced Share purchase price and 250,010 through the same Soliciting Dealer may receive a reduction in of the customary 7% selling commissions commission payable in connection with the purchase of such those Shares reduced by in accordance with the following schedule: Amount of Purchaser's Investment ---------------------------------------------------- Amount of Selling Volume Maximum Commission Per 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 share purchase price discount. The total share purchase price will be cumulatively reduced for each share purchased in the total volume ranges set forth in the table below. Amount of Single Purchaser’s Investment Purchase price per Share for incremental Share in discount range Maximum Commission Per Share $1,000 - $250,000 $10.00 $0.65 $250,001 - $500,000 $9.90 $0.55 $500,001 - $750,000 $9.70 $0.40 $750,001 - $1,000,000 $9.60 $0.30 $1,000,001 - $5,000,000 $9.50 $0.20 Any reduction from the amount of selling commissions otherwise payable to you and reallowable to a Soliciting Dealer in respect of a purchaser’s subscription volume discounts received will be credited to the purchaser investor in the form of additional whole Shares purchased net of commissions. No shares or fractional Shares will be issued. As to sales of Shares which are entitled to the above described volume discounts, the Company will pay the reduced selling commissions set forth aboveshares. Selling commissions will not be paid on any such whole shares or fractional shares issued for purchases of $5,000,000 or more will, in the Company’s sole discretion, be reduced to $0.20 per Share or less, but in no event will the proceeds to the Company from the sale of such Shares be less than $9.20 per Share (except for Shares sold to affiliates of the Company at a price of $9.00 per share, which is the purchase price per Share net of any selling commissions and organization and offering expenses). In the event of a sale of $5,000,000 or more, the Company will supplement the Prospectus in the manner described in the Prospectus under the section “Volume Discounts”volume discount. Certain subscriptions 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 discount, and for determining commissions payable to you and reallowable to Soliciting Dealers Dealers, so long as all such combined purchases are made through the same Soliciting Dealer and approved by the Company. As used herein, the term “Single Purchaser” will include (i) any person or entity, or persons or entities, acquiring Shares as joint purchasers; (ii) all profit-sharing, pension and other retirement trusts maintained by a given corporation, partnership or other entity; (iii) all funds and foundations maintained by a given corporation partnership or other entity; and (iv) all profit-sharing, pension and other retirement trusts and all funds or foundations over which a designated bank or other trustee, person or entity (except an investment advisor registered under the Investment Advisors Act of 1940) exercises discretionary authority with respect to an investment 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 xxxx mark the “"Additional Investment” " space on the Subscription Agreement Agreexxxx Signature Page, and set forth the basis for the discount and identity the orders to be combined Page in order for subscriptions purchases to be combined. The Company is not responsible for failing to combine subscriptionspurchases, where the investor fails to xxxx mark the “"Additional Investment” " space. If the Subscription thx Xxbscription Agreements for the subscriptions 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-pro rata basis. If the Subscription Agreements for the subscriptions 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 subscriptions purchases are combined for purposes of the volume discount will be credited only on a pro-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 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 '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 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 Affiliates of the Advisor, the Dealer Manager or the Soliciting Dealers. Volume discounts will not be available their respective officers and employees and certain of their affiliates who request and are entitled to California residents to the extent that such discounts do not comply with the provisions of Rule 260.145.51 adopted pursuant to the California Corporate Securities Law of 1968, which provides that volume discounts can be made available to California residents only in accordance with the following conditions: (i) there can be no variance in the net proceeds to the Company from the sale of the Shares to difference purchasers of the same offering; (ii) all purchasers of the Shares must be informed of the availability of quantity discounts; (iii) the same volume discounts must be allowed to all purchasers of Shares which are part of the offering; (iv) the minimum amount of shares as to which volume discounts are allowed cannot be less than $10,000; (v) the variance in the price of the shares must result solely from a different range of commissions, and all discounts must be based on a uniform scale of commissions; and (vi) no discounts are allowed to any group of purchasers. Accordingly, volume discounts for California residents will be available in accordance with the foregoing table of uniform discount levels based on dollar volume of shares purchased, but no discounts are allowed to any group of purchasers, and no subscriptions may be aggregated as part of a combined order for purposes of determining the number of Shares issueddiscount.
Appears in 1 contract
Samples: Dealer Manager Agreement (Inland Retail Real Estate Trust Inc)
DEALER-MANAGER COMPENSATION. (i) The Company agrees to pay to you a sales selling commission of 6.57.5%, of which 7% may be reallowed by you to the Soliciting Dealers, of the sales price for each Share sold (except for Special Sales) from the 150,000,000 250,000,000 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. In lieu of reimbursement of specific expenses, and as compensation for acting as the managing dealer, you will also receive, subject to the limitations described herein and in the Prospectus, a managing dealer fee marketing contribution (equal to 3.52.5%) and due diligence expense allowance (equal to 0.5%), both aggregating 3% of the sale price from the 150,000,000 250,000,000 Shares offered on a “"best efforts” basis" basis (except for certain Special Sales), some portion of which such fee may be retained or reallowed by you, subject to federal and state securities laws, you to the Soliciting Dealers. Subject to certain conditions and exceptions explained below, effective June 1, 2004, investors making an initial cash investment of at least $250,010.00 through the same Soliciting Dealer who sold the Shares, as described more fully in the Soliciting Dealers Agreement. No sales commissions or dealer manager fees will be paid in connection with common stock sold under the Company’s distribution reinvestment plan. Single Purchasers (as defined below) purchasing more than $250,000 worth of Shares (25,000 Shares) will be entitled to a reduced Share purchase price and receive a reduction in of the 7% reallowable selling commissions commission payable in connection with the purchase of such those Shares reduced by in accordance with the following schedule: Amount of Selling Amount of Purchaser's Investment 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 share purchase price discount. The total share purchase price will be cumulatively reduced for each share purchased in the total volume ranges set forth in the table below. Amount of Single Purchaser’s Investment Purchase price per Share for incremental Share in discount range Maximum Commission Per Share $1,000 - $250,000 $10.00 $0.65 $250,001 - $500,000 $9.90 $0.55 $500,001 - $750,000 $9.70 $0.40 $750,001 - $1,000,000 $9.60 $0.30 $1,000,001 - $5,000,000 $9.50 $0.20 Any reduction from the amount of selling commissions otherwise payable to you and reallowable to a Soliciting Dealer in respect of a purchaser’s subscription volume discounts received will be credited to the purchaser investor in the form of additional whole Shares purchased net of commissions. No shares or fractional Shares will be issued. As to sales of Shares which are entitled to the above described volume discounts, the Company will pay the reduced selling commissions set forth aboveshares. Selling commissions will not be paid on any such whole shares or fractional shares issued for a volume discount. To the extent reasonably practicable, purchases of $5,000,000 or more will, in the Company’s sole discretion, be reduced to $0.20 per Share or less, but in no event will the proceeds to the Company from the sale of such Shares be less than $9.20 per Share (except for Shares sold to affiliates of the Company at a price of $9.00 per share, which is the purchase price per Share net of any selling commissions and organization and offering expenses). In the event of a sale of $5,000,000 or more, the Company will supplement the Prospectus in the manner described in the Prospectus under the section “Volume Discounts”. Certain subscriptions 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 discount, and for determining commissions payable to you and reallowable to Soliciting Dealers Dealers, so long as all such combined purchases are made through the same Soliciting Dealer and approved by the Company. As used herein, The Company will combine subscriptions made in the term “Single Purchaser” will include (i) any person or entity, or persons or entities, acquiring Shares as joint purchasers; (ii) all profit-sharing, pension and Offering with other retirement trusts maintained subscriptions in the Offering by a given corporationpurchaser for the purpose of computing amounts invested. Purchases by spouses will 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 will 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, partnership provided that if the investment decisions are made by an independent investment adviser, that investment adviser may not have any direct or other entity; (iii) all funds and foundations maintained by a given corporation partnership or other entity; and (iv) all profitindirect beneficial interest in any of the Tax-sharing, pension and other retirement trusts and all funds or foundations over which a designated bank or other trustee, person or entity (except an investment advisor registered under the Investment Advisors Act of 1940) exercises discretionary authority with respect Exempt Entities whose purchases are sought to an investment in the Companybe combined. The investor must xxxx the “"Additional Investment” " space on the Subscription Agreement Signature Page, and set forth the basis for the discount and identity the orders to be combined Page in order for subscriptions purchases to be combined. The Company is not responsible for failing to combine subscriptionspurchases, where the investor fails to xxxx the “"Additional Investment” " space. 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, if you are investing $50,000 with us today, but had previously invested $240,000, these amounts can be combined to reach the $250,010 breakpoint, which will entitle you to a lower sales commission on your current $50,000 investment. If the Subscription Agreements for the subscriptions 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-pro rata basis. If the Subscription Agreements for the subscriptions 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 subscriptions purchases are combined for purposes of the volume discount will be credited only on a pro-pro rata basis based on the amount of the investment of each Tax-Exempt Entity and their combined purchases. In 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 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 available to a purchaser after the purchaser's initial purchase and the amount of additional Shares that may be obligated credited to forthwith return to a purchaser as a result of 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 returnedcombination of purchases. 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 '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 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 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. 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. 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 DealersDealers 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. Volume discounts will not be available Any subsequent purchases of Shares by investors who initially purchased Shares net of the 7.5% selling commission are limited to California residents a maximum discount of 5% of the public offering price per Share. Certain subscribers to the extent that 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 $0.15 per Share will be payable by the Company to the Dealer Manager as selling commissions due upon subscription, of which $0.10 per share may be reallowed to the participating Soliciting Dealer by the Dealer Manager. For each of the six years following such discounts do not comply 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 the provisions of Rule 260.145.51 adopted respect to Shares sold pursuant to the California Corporate Securities Law of 1968Deferred Commission Option, which provides that volume discounts can amounts will be made available deducted from and paid out of cash distributions otherwise payable to California residents only in accordance with such stockholders holding such Shares, and may be reallowed to the following conditions: (i) there can be no variance in participating Soliciting Dealer by the Dealer Manager. The net proceeds to the Company from will not be affected by the sale election of the Shares to difference purchasers of the same offering; (ii) all purchasers of the Shares must be informed of the availability of quantity discounts; (iii) the same volume discounts must be allowed to all purchasers of Shares which are part of the offering; (iv) the minimum amount of shares as to which volume discounts are allowed cannot be less than $10,000; (v) the variance in the price of the shares must result solely from a different range of commissions, Deferred Commission Option. Under this arrangement and all discounts must be based on a uniform scale $10.00 per Share deemed value for each Share issued, a stockholder electing the Deferred Commission Option will pay a 1.5% selling commission, of commissions; and (vi) no discounts are allowed to any group of purchasers. Accordingly, volume discounts for California residents which 1% will be available in accordance with the foregoing table reallowed, upon subscription, rather than a 7.5% selling commission, of uniform discount levels based on dollar volume of shares purchased, but no discounts are allowed to any group of purchaserswhich 7% will be reallowed, 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 subscriptions may deductions will be aggregated 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 part of a combined order for purposes of determining the to those particular Shares. The number of Shares issued, if any, for a volume discount, will be determined as described above in Section 2.4 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 $.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.
Appears in 1 contract
DEALER-MANAGER COMPENSATION. (i) The Company agrees to pay to you a sales selling commission of 6.57.5% of the sales price for each Share sold (except for Special Sales) from the 150,000,000 250,000,000 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. In lieu of reimbursement of specific expenses, and as compensation for acting as the managing dealer, you will also receive, subject to the limitations described herein and in the Prospectus, a managing dealer fee marketing contribution (equal to 3.52.5%) and due diligence expense allowance (equal to 0.5%), both aggregating 0.5% of the sale price from the 150,000,000 250,000,000 Shares offered on a “"best efforts” basis" basis (except for certain Special Sales), some portion of which such fee may be retained or reallowed by you, subject to federal and state securities laws, you to the Soliciting Dealers. Subject to certain conditions and exceptions explained below, investors making an initial cash investment of at least $3,000 through the same Soliciting Dealer who sold the Shares, as described more fully in the Soliciting Dealers Agreement. No sales commissions or dealer manager fees will be paid in connection with common stock sold under the Company’s distribution reinvestment plan. Single Purchasers (as defined below) purchasing more than $250,000 worth of Shares (25,000 Shares) will be entitled to a reduced Share purchase price and may receive a reduction in of the customary 7.5% selling commissions commission payable in connection with the purchase of such those Shares reduced by in accordance with the following schedule: Amount of Selling Maximum Volume Amount of Purchaser's Commission Per Discount Investment Share From To 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 share purchase price discount. The total share purchase price will be cumulatively reduced for each share purchased in the total volume ranges set forth in the table below. Amount of Single Purchaser’s Investment Purchase price per Share for incremental Share in discount range Maximum Commission Per Share $1,000 - $250,000 $10.00 $0.65 $250,001 - $500,000 $9.90 $0.55 $500,001 - $750,000 $9.70 $0.40 $750,001 - $1,000,000 $9.60 $0.30 $1,000,001 - $5,000,000 $9.50 $0.20 Any reduction from the amount of selling commissions otherwise payable to you and reallowable to a Soliciting Dealer in respect of a purchaser’s subscription volume discounts received will be credited to the purchaser investor in the form of additional whole Shares purchased net of commissions. No shares or fractional Shares will be issued. As to sales of Shares which are entitled to the above described volume discounts, the Company will pay the reduced selling commissions set forth aboveshares. Selling commissions will not be paid on any such whole shares or fractional shares issued for purchases of $5,000,000 or more will, in the Company’s sole discretion, be reduced to $0.20 per Share or less, but in no event will the proceeds to the Company from the sale of such Shares be less than $9.20 per Share (except for Shares sold to affiliates of the Company at a price of $9.00 per share, which is the purchase price per Share net of any selling commissions and organization and offering expenses). In the event of a sale of $5,000,000 or more, the Company will supplement the Prospectus in the manner described in the Prospectus under the section “Volume Discounts”volume discount. Certain subscriptions 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 discount, and for determining commissions payable to you and reallowable to Soliciting Dealers Dealers, so long as all such combined purchases are made through the same Soliciting Dealer and approved by the Company. As used herein, the term “Single Purchaser” will include (i) any person or entity, or persons or entities, acquiring Shares as joint purchasers; (ii) all profit-sharing, pension and other retirement trusts maintained by a given corporation, partnership or other entity; (iii) all funds and foundations maintained by a given corporation partnership or other entity; and (iv) all profit-sharing, pension and other retirement trusts and all funds or foundations over which a designated bank or other trustee, person or entity (except an investment advisor registered under the Investment Advisors Act of 1940) exercises discretionary authority with respect to an investment A purchaser may combine subscriptions made in the CompanyOffering with other subscriptions in the Offering 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 xxxx the “"Additional Investment” " space on the Subscription Agreement Signature Page, and set forth the basis for the discount and identity the orders to be combined Page in order for subscriptions purchases to be combined. The Company is not responsible for failing to combine subscriptionspurchases, where the investor fails to xxxx the “"Additional Investment” " space. If the Subscription Agreements for the subscriptions 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-pro rata basis. If the Subscription Agreements for the subscriptions 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 subscriptions purchases are combined for purposes of the volume discount will be credited only on a pro-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 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 '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 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 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. 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. 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 DealersDealers 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. Volume discounts will not be available Any subsequent purchases of Shares by investors who initially purchased Shares net of the 7.5% selling commission are limited to California residents a maximum discount of 5% of the public offering price per Share. Certain subscribers to the extent that 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 discounts do not comply 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 the provisions of Rule 260.145.51 adopted respect to Shares sold pursuant to the California Corporate Securities Law of 1968Deferred Commission Option, which provides that volume discounts can amounts will be made available deducted from and paid out of cash distributions otherwise payable to California residents only in accordance with such stockholders holding such Shares, and may be reallowed to the following conditions: (i) there can be no variance in participating Soliciting Dealer by the Dealer Manager. The net proceeds to the Company from will not be affected by the sale election of the Shares to difference purchasers of the same offering; (ii) all purchasers of the Shares must be informed of the availability of quantity discounts; (iii) the same volume discounts must be allowed to all purchasers of Shares which are part of the offering; (iv) the minimum amount of shares as to which volume discounts are allowed cannot be less than $10,000; (v) the variance in the price of the shares must result solely from a different range of commissions, Deferred Commission Option. Under this arrangement and all discounts must be based on a uniform scale of commissions; $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 7.5% selling commission, and (vi) no discounts are allowed an amount equal to any group of purchasers. Accordingly, volume discounts up to a 1.08% selling commission per year thereafter for California residents up to the next six years which will be available deducted from and paid by the Company out of cash distributions otherwise payable to such stockholder. As in accordance with any volume discount situation, selling commissions are not paid on any Shares issued for a volume discount. Therefore, when the foregoing table of uniform discount levels based deferred commission option is used, no deductions will be made for deferred commission obligations from cash distributions payable on dollar the Shares issued for a volume of shares purchaseddiscount, but no discounts are allowed because there will not be any deferred commission obligation as to any group of purchasers, and no subscriptions may be aggregated as part of a combined order for purposes of determining the 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 $.65 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 6.5% 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.
Appears in 1 contract
DEALER-MANAGER COMPENSATION. (i) The Company agrees to pay to you a sales selling commission of 6.57.5%, of which 7% may be reallowed by you to the Soliciting Dealers, of the sales price for each Share sold (except for Special Sales) from the 150,000,000 250,000,000 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. In lieu of reimbursement of specific expenses, and as compensation for acting as the managing dealer, you will also receive, subject to the limitations described herein and in the Prospectus, a managing dealer fee marketing contribution (equal to 3.52.5%) and due diligence expense allowance (equal to 0.5%), both aggregating 3% of the sale price from the 150,000,000 250,000,000 Shares offered on a “"best efforts” basis" basis (except for certain Special Sales), some portion of which such fee may be retained or reallowed by you, subject to federal and state securities laws, you to the Soliciting Dealers. Subject to certain conditions and exceptions explained below, investors making an initial cash investment of at least $250,010.00 through the same Soliciting Dealer who sold the Shares, as described more fully in the Soliciting Dealers Agreement. No sales commissions or dealer manager fees will be paid in connection with common stock sold under the Company’s distribution reinvestment plan. Single Purchasers (as defined below) purchasing more than $250,000 worth of Shares (25,000 Shares) will be entitled to a reduced Share purchase price and may receive a reduction in of the 7% reallowable selling commissions commission payable in connection with the purchase of such those Shares reduced by in accordance with the following schedule: Amount of Selling Amount of Purchaser's Investment 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 share purchase price discount. The total share purchase price will be cumulatively reduced for each share purchased in the total volume ranges set forth in the table below. Amount of Single Purchaser’s Investment Purchase price per Share for incremental Share in discount range Maximum Commission Per Share $1,000 - $250,000 $10.00 $0.65 $250,001 - $500,000 $9.90 $0.55 $500,001 - $750,000 $9.70 $0.40 $750,001 - $1,000,000 $9.60 $0.30 $1,000,001 - $5,000,000 $9.50 $0.20 Any reduction from the amount of selling commissions otherwise payable to you and reallowable to a Soliciting Dealer in respect of a purchaser’s subscription volume discounts received will be credited to the purchaser investor in the form of additional whole Shares purchased net of commissions. No shares or fractional Shares will be issued. As to sales of Shares which are entitled to the above described volume discounts, the Company will pay the reduced selling commissions set forth aboveshares. Selling commissions will not be paid on any such whole shares or fractional shares issued for purchases of $5,000,000 or more will, in the Company’s sole discretion, be reduced to $0.20 per Share or less, but in no event will the proceeds to the Company from the sale of such Shares be less than $9.20 per Share (except for Shares sold to affiliates of the Company at a price of $9.00 per share, which is the purchase price per Share net of any selling commissions and organization and offering expenses). In the event of a sale of $5,000,000 or more, the Company will supplement the Prospectus in the manner described in the Prospectus under the section “Volume Discounts”volume discount. Certain subscriptions 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 discount, and for determining commissions payable to you and reallowable to Soliciting Dealers Dealers, so long as all such combined purchases are made through the same Soliciting Dealer and approved by the Company. As used herein, the term “Single Purchaser” will include (i) any person or entity, or persons or entities, acquiring Shares as joint purchasers; (ii) all profit-sharing, pension and other retirement trusts maintained by a given corporation, partnership or other entity; (iii) all funds and foundations maintained by a given corporation partnership or other entity; and (iv) all profit-sharing, pension and other retirement trusts and all funds or foundations over which a designated bank or other trustee, person or entity (except an investment advisor registered under the Investment Advisors Act of 1940) exercises discretionary authority with respect to an investment A purchaser may combine subscriptions made in the CompanyOffering with other subscriptions in the Offering 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 xxxx the “"Additional Investment” " space on the Subscription Agreement Signature Page, and set forth the basis for the discount and identity the orders to be combined Page in order for subscriptions purchases to be combined. The Company is not responsible for failing to combine subscriptionspurchases, where the investor fails to xxxx the “"Additional Investment” " space. If the Subscription Agreements for the subscriptions 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-pro rata basis. If the Subscription Agreements for the subscriptions 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 subscriptions purchases are combined for purposes of the volume discount will be credited only on a pro-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 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 '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 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 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. 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. 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 DealersDealers 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. Volume discounts will not be available Any subsequent purchases of Shares by investors who initially purchased Shares net of the 7.5% selling commission are limited to California residents a maximum discount of 5% of the public offering price per Share. Certain subscribers to the extent that 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 $0.15 per Share will be payable by the Company to the Dealer Manager as selling commissions due upon subscription, of which $0.10 per share may be reallowed to the participating Soliciting Dealer by the Dealer Manager. For each of the six years following such discounts do not comply 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 the provisions of Rule 260.145.51 adopted respect to Shares sold pursuant to the California Corporate Securities Law of 1968Deferred Commission Option, which provides that volume discounts can amounts will be made available deducted from and paid out of cash distributions otherwise payable to California residents only in accordance with such stockholders holding such Shares, and may be reallowed to the following conditions: (i) there can be no variance in participating Soliciting Dealer by the Dealer Manager. The net proceeds to the Company from will not be affected by the sale election of the Shares to difference purchasers of the same offering; (ii) all purchasers of the Shares must be informed of the availability of quantity discounts; (iii) the same volume discounts must be allowed to all purchasers of Shares which are part of the offering; (iv) the minimum amount of shares as to which volume discounts are allowed cannot be less than $10,000; (v) the variance in the price of the shares must result solely from a different range of commissions, Deferred Commission Option. Under this arrangement and all discounts must be based on a uniform scale $10.00 per Share deemed value for each Share issued, a stockholder electing the Deferred Commission Option will pay a 1.5% selling commission, of commissions; and (vi) no discounts are allowed to any group of purchasers. Accordingly, volume discounts for California residents which 1% will be available in accordance with the foregoing table reallowed, upon subscription, rather than a 7.5% selling commission, of uniform discount levels based on dollar volume of shares purchased, but no discounts are allowed to any group of purchaserswhich 7% will be reallowed, 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 subscriptions may deductions will be aggregated 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 part of a combined order for purposes of determining the 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 $.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.
Appears in 1 contract
DEALER-MANAGER COMPENSATION. (i) The Company agrees to pay to you a sales selling commission of 6.57% of the sales price for each Share sold (except for 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.” In lieu of reimbursement of specific expenses, and as compensation for acting as the managing dealer, you will also receive, ," subject to the limitations described herein below, as well as to offer to issue and in the Prospectussell to you for a purchase price of $.0008 per Soliciting Dealer Warrant, a managing dealer fee equal to 3.5% of the sale price one Soliciting Dealer Warrant for every 25 Shares sold from the 150,000,000 Shares offered on a “"best efforts” " basis, of which such fee 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. No sales commissions or dealer manager fees ; provided, however, that the Company will be paid not issue more than 6,000,000 Warrants in connection with common stock sold under the Company’s distribution reinvestment planOffering of the Shares. Single Purchasers In lieu of reimbursement of specific expenses, you will also receive, subject to the limitations described herein and in the Prospectus, a marketing contribution (as defined 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) purchasing more than , investors making an initial cash investment of at least $250,000 worth of Shares (25,000 Shares) will be entitled to a reduced Share purchase price and 250,010 through the same Soliciting Dealer may receive a reduction in of the customary 7% selling commissions commission payable in connection with the purchase of such those Shares reduced by 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 share purchase price discount. The total share purchase price will be cumulatively reduced for each share purchased in the total volume ranges set forth in the table below. Amount of Single Purchaser’s Investment Purchase price per Share for incremental Share in discount range Maximum Commission Per Share $1,000 - $250,000 $10.00 $0.65 $250,001 - $500,000 $9.90 $0.55 $500,001 - $750,000 $9.70 $0.40 $750,001 - $1,000,000 $9.60 $0.30 $1,000,001 - $5,000,000 $9.50 $0.20 Any reduction from the amount of selling commissions otherwise payable to you and reallowable to a Soliciting Dealer in respect of a purchaser’s subscription volume discounts received will be credited to the purchaser investor in the form of additional whole Shares purchased net of commissions. No shares or fractional Shares will be issued. As to sales of Shares which are entitled to the above described volume discounts, the Company will pay the reduced selling commissions set forth aboveshares. Selling commissions will not be paid on any such whole shares or fractional shares issued for purchases of $5,000,000 or more will, in the Company’s sole discretion, be reduced to $0.20 per Share or less, but in no event will the proceeds to the Company from the sale of such Shares be less than $9.20 per Share (except for Shares sold to affiliates of the Company at a price of $9.00 per share, which is the purchase price per Share net of any selling commissions and organization and offering expenses). In the event of a sale of $5,000,000 or more, the Company will supplement the Prospectus in the manner described in the Prospectus under the section “Volume Discounts”volume discount. Certain subscriptions 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 discount, and for determining commissions payable to you and reallowable to Soliciting Dealers Dealers, so long as all such combined purchases are made through the same Soliciting Dealer and approved by the Company. As used herein, the term “Single Purchaser” will include (i) any person or entity, or persons or entities, acquiring Shares as joint purchasers; (ii) all profit-sharing, pension and other retirement trusts maintained by a given corporation, partnership or other entity; (iii) all funds and foundations maintained by a given corporation partnership or other entity; and (iv) all profit-sharing, pension and other retirement trusts and all funds or foundations over which a designated bank or other trustee, person or entity (except an investment advisor registered under the Investment Advisors Act of 1940) exercises discretionary authority with respect to an investment 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 xxxx the “"Additional Investment” " space on the Subscription Agreement Signature Page, and set forth the basis for the discount and identity the orders to be combined Page in order for subscriptions purchases to be combined. The Company is not responsible for failing to combine subscriptionspurchases, where the investor fails to xxxx the “"Additional Investment” " space. If the Subscription Agreements for the subscriptions 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-pro rata basis. If the Subscription Agreements for the subscriptions 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 subscriptions purchases are combined for purposes of the volume discount will be credited only on a pro-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 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 '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 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 Affiliates of the Advisor, the Dealer Manager or the Soliciting Dealers. Volume discounts will not be available their respective officers and employees and certain of their affiliates who request and are entitled to California residents to the extent that such discounts do not comply with the provisions of Rule 260.145.51 adopted pursuant to the California Corporate Securities Law of 1968, which provides that volume discounts can be made available to California residents only in accordance with the following conditions: (i) there can be no variance in the net proceeds to the Company from the sale of the Shares to difference purchasers of the same offering; (ii) all purchasers of the Shares must be informed of the availability of quantity discounts; (iii) the same volume discounts must be allowed to all purchasers of Shares which are part of the offering; (iv) the minimum amount of shares as to which volume discounts are allowed cannot be less than $10,000; (v) the variance in the price of the shares must result solely from a different range of commissions, and all discounts must be based on a uniform scale of commissions; and (vi) no discounts are allowed to any group of purchasers. Accordingly, volume discounts for California residents will be available in accordance with the foregoing table of uniform discount levels based on dollar volume of shares purchased, but no discounts are allowed to any group of purchasers, and no subscriptions may be aggregated as part of a combined order for purposes of determining the number of Shares issueddiscount.
Appears in 1 contract
Samples: Dealer Manager Agreement (Inland Retail Real Estate Trust Inc)
DEALER-MANAGER COMPENSATION. (i) The Company agrees to pay to you a sales selling commission of 6.57.5%, of which 7% may be reallowed by you to the Soliciting Dealers, of the sales price for each Share sold (except for Special Sales) from the 150,000,000 250,000,000 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. In lieu of reimbursement of specific expenses, and as compensation for acting as the managing dealer, you will also receive, subject to the limitations described herein and in the Prospectus, a managing dealer fee marketing contribution (equal to 3.52.5%) and due diligence expense allowance (equal to 0.5%), both aggregating 3% of the sale price from the 150,000,000 250,000,000 Shares offered on a “best efforts” basisbasis (except for certain Special Sales), some portion of which such fee may be retained or reallowed by you, subject to federal and state securities laws, you to the Soliciting Dealers. Subject to certain conditions and exceptions explained below, investors making an initial cash investment of at least $3,000 through the same Soliciting Dealer who sold the Shares, as described more fully in the Soliciting Dealers Agreement. No sales commissions or dealer manager fees will be paid in connection with common stock sold under the Company’s distribution reinvestment plan. Single Purchasers (as defined below) purchasing more than $250,000 worth of Shares (25,000 Shares) will be entitled to a reduced Share purchase price and receive a reduction in of the 7% reallowable selling commissions commission payable in connection with the purchase of such those Shares reduced by in accordance with the following schedule: Amount of Selling Volume Discount Amount of Purchaser’s Investment Maximum Commission Per Share From To 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 share purchase price discount. The total share purchase price will be cumulatively reduced for each share purchased in the total volume ranges set forth in the table below. Amount of Single Purchaser’s Investment Purchase price per Share for incremental Share in discount range Maximum Commission Per Share $1,000 - $250,000 $10.00 $0.65 $250,001 - $500,000 $9.90 $0.55 $500,001 - $750,000 $9.70 $0.40 $750,001 - $1,000,000 $9.60 $0.30 $1,000,001 - $5,000,000 $9.50 $0.20 Any reduction from the amount of selling commissions otherwise payable to you and reallowable to a Soliciting Dealer in respect of a purchaser’s subscription volume discounts received will be credited to the purchaser investor in the form of additional whole Shares purchased net of commissions. No shares or fractional Shares will be issued. As to sales of Shares which are entitled to the above described volume discounts, the Company will pay the reduced selling commissions set forth aboveshares. Selling commissions will not be paid on any such whole shares or fractional shares issued for a volume discount. To the extent reasonably practicable, purchases of $5,000,000 or more will, in the Company’s sole discretion, be reduced to $0.20 per Share or less, but in no event will the proceeds to the Company from the sale of such Shares be less than $9.20 per Share (except for Shares sold to affiliates of the Company at a price of $9.00 per share, which is the purchase price per Share net of any selling commissions and organization and offering expenses). In the event of a sale of $5,000,000 or more, the Company will supplement the Prospectus in the manner described in the Prospectus under the section “Volume Discounts”. Certain subscriptions 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 discount, and for determining commissions payable to you and reallowable to Soliciting Dealers Dealers, so long as all such combined purchases are made through the same Soliciting Dealer and approved by the Company. As used herein, The Company will combine subscriptions made in the term “Single Purchaser” will include (i) any person or entity, or persons or entities, acquiring Shares as joint purchasers; (ii) all profit-sharing, pension and other retirement trusts maintained Offering by a given corporation, partnership or purchaser with other entity; (iii) all funds and foundations maintained by a given corporation partnership or other entity; and (iv) all profit-sharing, pension and other retirement trusts and all funds or foundations over which a designated bank or other trustee, person or entity (except an investment advisor registered under the Investment Advisors Act of 1940) exercises discretionary authority with respect to an investment subscriptions in the CompanyOffering for the purpose of computing amounts invested. Purchases by spouses will 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 will only be combined 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 whose purchases are sought to be combined. The investor must xxxx the “Additional Investment” space on the Subscription Agreement Signature Page, and set forth the basis for the discount and identity the orders to be combined Page in order for subscriptions purchases to be combined. The Company is not responsible for failing to combine subscriptionspurchases, where the investor fails to xxxx the “Additional Investment” space. If the Subscription Agreements for the subscriptions 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-pro rata basis. If the Subscription Agreements for the subscriptions 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 subscriptions purchases are combined for purposes of the volume discount will be credited only on a pro-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 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 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 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. 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. 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 DealersDealers 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. Volume discounts will not be available Any subsequent purchases of Shares by investors who initially purchased Shares net of the 7.5% selling commission are limited to California residents a maximum discount of 5% of the public offering price per Share. Certain subscribers to the extent that 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 $0.15 per Share will be payable by the Company to the Dealer Manager as selling commissions due upon subscription, of which $0.10 per share may be reallowed to the participating Soliciting Dealer by the Dealer Manager. For each of the six years following such discounts do not comply 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 the provisions of Rule 260.145.51 adopted respect to Shares sold pursuant to the California Corporate Securities Law of 1968Deferred Commission Option, which provides that volume discounts can amounts will be made available deducted from and paid out of cash distributions otherwise payable to California residents only in accordance with such stockholders holding such Shares, and may be reallowed to the following conditions: (i) there can be no variance in participating Soliciting Dealer by the Dealer Manager. The net proceeds to the Company from will not be affected by the sale election of the Shares to difference purchasers of the same offering; (ii) all purchasers of the Shares must be informed of the availability of quantity discounts; (iii) the same volume discounts must be allowed to all purchasers of Shares which are part of the offering; (iv) the minimum amount of shares as to which volume discounts are allowed cannot be less than $10,000; (v) the variance in the price of the shares must result solely from a different range of commissions, Deferred Commission Option. Under this arrangement and all discounts must be based on a uniform scale $10.00 per Share deemed value for each Share issued, a stockholder electing the Deferred Commission Option will pay a 1.5% selling commission, of commissions; and (vi) no discounts are allowed to any group of purchasers. Accordingly, volume discounts for California residents which 1% will be available in accordance with the foregoing table reallowed, upon subscription, rather than a 7.5% selling commission, of uniform discount levels based on dollar volume of shares purchased, but no discounts are allowed to any group of purchaserswhich 7% will be reallowed, 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 subscriptions may deductions will be aggregated 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 part of a combined order for purposes of determining the to those particular Shares. The number of Shares issued, if any, for a volume discount, will be determined as described above in Section 2.4 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 $.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.
Appears in 1 contract
Samples: Inland Western Retail (Inland Western Retail Real Estate Trust Inc)
