<PAGE> 1
As filed with the Securities and Exchange Commission on July 16, 1997.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report: July 11, 1997
(Date of earliest event reported)
INLAND REAL ESTATE CORPORATION
(Exact name of registrant as specified in the charter)
Maryland 333-26701 36-3953261
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
2901 Butterfield Road
Oak Brook, Illinois 60521
(Address of Principal Executive Offices)
(630) 218-8000
(Registrant's telephone number including area code)
n/a
(Former name or former address, if changed since last report)
<PAGE> 2
Item 5. Other Events
On May 5, 1997, the Board of Directors of Inland Real Estate Corporation
(the "Company") approved a resolution to amend the Company's Second Articles of
Amendment and Restatement, as amended to increase the number of authorized
shares of common stock, par value $0.01 per share, from 24.0 million to 100.0
million. This resolution was approved by the stockholders on June 17, 1997 at
the Company's annual meeting and was filed with the Secretary of State of
Maryland on July 11, 1997.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
1.1 Dealer Manager Agreement by and between Inland Real
Estate Corporation and Inland Securities Corporation dated July
14, 1997.
1.2 Warrant Purchase Agreement dated July 14, 1997.
3.1 Articles of Amendment to Second Articles of Amendment and
Restatement.
10.1 Escrow Agreement between Inland Real Estate
Corporation and LaSalle National Bank, N.A.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Inland Real Estate Corporation
(Registrant)
By: /s/ Kelly Tucek
----------------------------
Kelly Tucek
Chief Financial and Accounting Officer
Date: July 16, 1997
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EXHIBIT 1.1
DEALER MANAGER AGREEMENT
<PAGE> 2
INLAND REAL ESTATE CORPORATION
21,875,000
SHARES OF COMMON STOCK
$.01 PAR VALUE
DEALER MANAGER AGREEMENT
July 14, 1997
Inland Securities Corporation
2901 Butterfield Road
Oak Brook, Illinois 60521
Ladies/Gentlemen:
Inland Real Estate Corporation (the "Company"), a Maryland corporation, is
qualified as a real estate investment trust (a "REIT") under federal income tax
laws. The Company was formed on May 12, 1994 and is governed by the Bylaws, as
amended (the "Bylaws") and the Second Articles of Amendment and Restatement, as
amended (the "Articles") in the form included as Exhibits to the Registration
Statement, as described in Section 1(a) hereof (such Bylaws and Articles being
hereinafter referred to as the "Organizational Documents"). The advisor to the
Company is Inland Real Estate Advisory Services, Inc., an Illinois corporation
(the "Advisor"). Unless otherwise defined, capitalized terms used herein shall
have the same meaning as in the Registration Statement on Form S-11.
The Company is offering on a "best efforts" basis up to 20,000,000 shares
of common stock, $.01 par value per share (the "Shares") for a purchase price
of $10.00 per Share with a minimum initial investment of $3,000 ($1,000 in the
case of tax-exempt investors, except for residents of the State of Iowa where
Individual Retirement Accounts must have a minimum investment of $3,000, and
for residents of the State of Minnesota where Individual Retirement Accounts
and qualified plan accounts must have a minimum investment of $2,000), 875,000
Soliciting Dealer Warrants and the Shares issuable on exercise of the
Soliciting Dealer Warrants and up to 1,000,000 Shares for a purchase price of
$9.50 per Share for issuance through the Distribution Reinvestment Program, all
upon the other terms and conditions set forth in the Prospectus, as described
in Section 1(a) hereof. The subscribers, each of whom will be required to
enter into a subscription agreement substantially similar to the form of
Subscription Agreement (the "Subscription Agreement") attached as Exhibit I to
the Prospectus, will, upon acceptance of their subscriptions by and in the
discretion of the Company, become stockholders of the Company (the
"Stockholders").
1. Representation and Warranties of the Company. The Company hereby
represents, warrants and agrees with you that:
(a) Registration Statement and Prospectus. A registration
statement (File No. 333-26701) on Form S-11 with respect to 21,875,000
Shares, including warrants (and shares issuable on exercise of the
warrants) which are issuable in certain circumstances in connection with
sale of the Shares and Shares issuable pursuant to the Company's
Distribution Reinvestment Program has been prepared by the Company
pursuant to the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "Rules and Regula-
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tions") of the Securities and Exchange Commission (the "Commission")
thereunder and has been filed with the Commission under the Act; one or
more amendments to such registration statement have been or may be so
prepared and filed. As used in this Agreement, the term "Registration
Statement" means such registration statement in the form in which it
becomes effective, the term "Effective Date" means the date upon which the
Registration Statement is or was first declared effective by the
Commission and the term "Prospectus" means the prospectus in the form
constituting a part of the Registration Statement as well as in the form
first filed with the Commission pursuant to its Rule 424 after the
Registration Statement becomes effective. The Commission has not issued
any stop order suspending the effectiveness of the Registration Statement
and no proceedings for that purpose have been instituted or are pending
before or threatened by the Commission under the Act.
(b) Compliance with the Act. From the time the Registration
Statement becomes effective and at all times subsequent thereto up to and
including the Termination Date (as defined in Section 2(c) hereof):
(i) the Registration Statement, the Prospectus and any
amendments or supplements thereto will contain all statements which
are required to be stated therein by the Act and the Rules and
Regulations and will comply in all material respects with the Act
and the Rules and Regulations; and
(ii) neither the Registration Statement nor the Prospectus nor
any amendment or supplement thereto will at any such time include
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
(c) No Subsequent Material Events. Subsequent to the respective
dates as of which information is given in the Registration Statement and
Prospectus and prior to the Termination Date, except as contemplated in
the Prospectus or as disclosed in a supplement or amendment thereto or in
the periodic financial statements of the Company, the Company has not and
will not have:
(i) incurred any material liabilities or obligations, direct or
contingent; or
(ii) entered into any material transaction, not in the ordinary
course of business and, except as so disclosed, there has not
been and will not be any material adverse change in the financial
position or results of operations of the Company.
(d) Corporation Status. The Company is a corporation duly formed and
validly existing under the Maryland General Corporation Law (the "MGCL").
(e) Authorization of Agreement. This Agreement has been duly and
validly authorized, executed and delivered by or on behalf of the Company
and constitutes the valid and binding agreement of the Company enforceable
in accordance with its terms (except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar
laws of the United States, any state or any political subdivision thereof
which affect creditors' rights generally or by equitable principles
relating to the availability of remedies); the performance of this
Agreement and the Organizational Documents and the consummation of the
transactions contemplated herein and therein, respectively, and the
fulfillment of the terms hereof and thereof, respectively, do not and will
not result in a breach of any of the terms and provisions of, or
constitute a default under, any statute, indenture, mortgage, deed of
trust, voting trust
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agreement, note, lease or other agreement or instrument to which the
Company is a party or by which the Company or its property is bound, or
under any rule or regulation or order of any court or other governmental
agency or body with jurisdiction over the Company or any of its
properties; and no consent, approval, authorization or order of any court
or governmental agency or body has been or is required for the performance
of this Agreement or by the Organizational Documents, or for the
consummation of the transactions contemplated hereby and thereby,
respectively (except as have been obtained under the Act, from the
National Association of Securities Dealers, Inc. (the "NASD") or as may be
required under state securities or blue sky laws in connection with the
offer and sale of the Shares or under the laws of states in which the
Company may own real properties in connection with its qualification to
transact business in such states or as may be required by subsequent
events which may occur).
(f) Pending Actions. There is no material action, suit or proceeding
pending or, to the knowledge of the Company, threatened, to which the
Company is a party, before or by any court or governmental agency or body
which adversely affects the offering of the Shares.
(g) Required Filings. There are no contracts or other documents
required to be filed by the Act or the Rules and Regulations of the
Commission thereunder as exhibits to the Registration Statement which have
not been so filed.
(h) Federal Income Tax Laws. The Corporation has obtained an opinion
of Shefsky & Froelich Ltd. stating that, under existing federal income
tax laws and regulations, assuming the Company acts as described in the
"Federal Income Tax Considerations" section of the Prospectus and timely
files the requisite elections, counsel is of the opinion that the Company
has been organized in conformity with the requirements for qualification
as a REIT beginning with its taxable year ending December 31, 1995 and
that its prior, current and anticipated methods of operation (as described
in the Prospectus and represented by management) has enabled and should
enable it to satisfy the REIT Requirements (as defined in the Prospectus).
(i) Independent Public Accountants. To the best of the Company's
knowledge, the accountants who have certified certain financial statements
appearing in the Prospectus are independent public accountants within the
meaning of the Act and the Rules and Regulations.
(j) Escrow Agreement. The Company has entered into an escrow
agreement (the "Escrow Agreement") with Inland Securities Corporation, Oak
Brook, Illinois (the "Dealer Manager"), and LaSalle National Bank, N.A.,
Chicago, Illinois (the "Escrow Agent"), in the form included as an exhibit
to the Registration Statement, which provides for the establishment of an
escrow account (the "Escrow Account"). During the period commencing with
the Effective Date and ending on the Termination Date, the Company will
deposit subscribers funds in the Escrow Account as described in Section 2
below.
(k) Sales Literature. In addition to and apart from the Prospectus,
the Company may use certain supplemental sales material in connection with
the offering of the Shares. This material, prepared by the Advisor, would
consist of a brochure describing the Advisor and its Affiliates and the
objectives of the Company and may also contain pictures and summary
descriptions of properties similar to those to be acquired by the Company
that Affiliates of the Company have previously acquired. This material
may also include pictures and summary descriptions of properties similar
to those to be acquired by the Company, as well as a brochure,
audio-visual materials and tape presentations highlighting and explaining
various features of the Offering, properties of prior real estate programs
and real estate investments in general; and articles
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<PAGE> 5
and publications concerning real estate. Business reply cards,
introductory letters and seminar invitation forms may be sent to
Soliciting Dealers (as hereinafter defined) and prospective investors.
These materials shall be hereinafter referred to collectively as the
"sales literature." No person has been authorized to prepared for, or
furnish to, a prospective investor any sales literature other than: (i)
that described herein; and (ii) newspaper advertisements or solicitations
of interested limited to identifying the Offering and the location of
sources of further information. Use of any sales literature is
conditioned upon filing with and, if required, clearance by appropriate
regulatory agencies. Such clearance (if provided), however, does not
indicate that the regulatory agency allowing the use of the materials has
passed on the merits of the Offering or the adequacy or accuracy of the
sales materials. Except as described herein, the Company has not
authorized the use of other supplemental literature or sales material in
connection with this Offering. Although it is believed that the
information contained in the sales literature will not conflict with any
of the information set forth in the Prospectus, the sales literature will
not purport to be complete, and should not be considered as a part of the
Prospectus, or as incorporated in the Prospectus by reference, or as
forming the basis of the Offering.
(l) Authorization of the Shares. The Company has an authorized and
outstanding capitalization as set forth in the Registration Statement and
Prospectus. The sale of the Shares has been duly and validly authorized
by the Company, and when subscriptions for the Shares have been accepted
by the Company as contemplated in the Prospectus and the Shares have been
issued to the respective subscribers, the Shares will represent ownership
in the Company and will conform to the description thereof contained in
the Prospectus. Stockholders have no preemptive rights to purchase or
subscribe for securities of the Company, and the Shares are not
convertible or subject to redemption at the option of the Company. The
Shares are entitled to one vote per Share and do not have cumulative
voting rights. Subject to the rights of the holders of any class of
capital stock of the Company having any preference or priority over the
Shares, the Stockholders are entitled to distributions in such amounts as
may be declared by the Board of Directors from time to time out of funds
legally available for such payments and, in the event of liquidation, to
share ratably in any assets of the Company remaining after payment in full
of all creditors and provisions for any liquidation preferences on any
outstanding preferred stock ranking prior to the Shares.
2. Offering and Sale of the Shares. On the basis of the representations,
warranties and agreements herein contained, and subject to the terms and
conditions herein set forth, the Company hereby appoints you as its exclusive
Dealer Manager to solicit and to cause other dealers (as described in
subparagraph (a) below) to solicit subscriptions for the Shares at the
subscription price and upon the other terms and conditions set forth in the
Prospectus and in the Subscription Agreement, and you agree to use your best
efforts as such Dealer Manager to procure subscribers for the Shares, during
the period commencing with the Effective Date and ending on the Termination
Date (the "Offering Period"). The number of Shares, if any, to be reserved for
sale by each Soliciting Dealer may be decided by the mutual agreement, from
time to time, of you and the Company. In the absence of such mutual agreement,
the Company shall, subject to the provisions of Section 2(b) hereof, accept
Subscription Agreements based upon a first-come, first accepted reservation or
other similar method.
(a) Soliciting Dealers. The Shares offered and sold through you
under this Agreement shall be offered and sold only by you and, at your
sole option, any other securities dealers (collectively the "Soliciting
Dealers"), each of whom are members of the NASD, executing agreements with
you substantially in the form of the Soliciting Dealers Agreement attached
hereto as Exhibit A.
(b) Subscription Agreements and Subscribers' Funds. Each person
desiring to purchase Shares through you or any other Soliciting Dealer
will be required to complete and execute the Subscription
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Agreement and to deliver such document to you or such Soliciting
Dealer, together with a check payable to the order of "LNB, Escrow Agent
for IREC" in the amount of $10 per Share.
Each Soliciting Dealer shall forward any such Subscription Agreement
and check to you not later than noon of the next business day after
receipt of such Subscription Agreement, if the Soliciting Dealer conducts
its internal supervisory procedures at the location where the Subscription
Agreement and check were initially received. When such internal
supervisory procedures are performed at a different location (the "Final
Review Office"), the Subscription Agreement and check must be transmitted
to the Final Review Office by the end of the next business day following
receipt of the Subscription Agreement and check by the Soliciting Dealer.
The Final Review Office will, by the next business day following receipt
of the Subscription Agreement and check, forward both to you as processing
broker-dealer in order that you may complete your review of the
documentation and process the Subscription Agreement and check. The
Company will have representatives available to review the Subscription
Agreement at your location in order to determine whether it wishes to
accept the proposed purchaser as a Stockholder, it being understood that
the Company reserves the unconditional right to reject the tender of any
Subscription Agreement and to reject all tenders after the Shares have
been sold (exclusive of the Company's distribution reinvestment program).
Any check received by you directly or as processing broker-dealer from the
Soliciting Dealers will, in all cases, be forwarded to the Escrow Agent as
soon as practicable, but in any event by the end of the second business
day following receipt by you of the Subscription Agreement and check. The
Company will promptly notify you or the Soliciting Dealer of any
rejection, and you shall send the check and the Subscription Agreement to
the Escrow Agent with directions to promptly return both to the rejected
subscriber. All subscription funds may be deposited directly with the
Company.
Nothing contained in this Section 2 shall be construed to impose upon
the Company the responsibility of assuring that prospective purchasers
meet the suitability standards contained in the Prospectus or to relieve
you or any of the Soliciting Dealers of the responsibility of complying
with the Conduct Rules of the NASD.
(c) Termination of the Offering. The Offering Period will terminate
on a date on or before one year from the date of the Prospectus (subject
to requalification in certain states, the Company may extend the Offering
Period from time to time, but no event for longer than two years from the
date of the original Prospectus), subject in any event to the Company's
right to terminate the Offering at any time (the "Termination Date") and
the proceeds will be applied as set forth in the Prospectus.
(d) Dealer-Manager Compensation.
(i) The Company agrees to pay to you a sales commission of up
to 7% of the sales price (or up to $.70) for each Share sold, as set
forth in the Prospectus under the caption "Plan of Distribution,"
subject to the limitation described below, as well as one Soliciting
Dealer Warrant for every 40 Shares sold, of which such compensation
may be retained or reallowed, subject to federal and state
securities laws, to the Soliciting Dealer who sold the Shares as
described more fully in the Soliciting Dealers Agreement; provided,
however, that Soliciting Dealer Warrants will not be issued and you
will not transfer these warrants to Soliciting Dealers in connection
with the sale of Shares to residents of the States of Minnesota,
Nebraska, South Carolina and Texas and provided further that the
Company will not issue more than 875,000 warrants in connection with
the Offering of the Shares. You will also receive a marketing
contribution and due diligence expense allowance fee equal to 2.5%
of the sale price, some portion of which may be reallowed to the
Soliciting Dealers.
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Investors purchasing at least $250,000 worth of Shares (25,000
Shares) will be entitled to a reduction in selling commissions in
accordance with the following schedule:
<TABLE>
<CAPTION>
Maximum
Commission
Amount of Purchaser's Investment Per Share
-------------------------------- ----------
From To
<S> <C> <C>
$250,000 $499,999 5.5%
500,000 999,999 4.0
1,000,000 and over 2.5
</TABLE>
Any reduction from the amount 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 or fractional Shares purchased
net of commissions.
Subscriptions may be combined for the purpose of
crediting a purchaser with additional Shares and determining
commissions payable to you and reallowable to Soliciting
Dealers so long as all such purchases are made through the
same Soliciting Dealer and approved by the Company.
Tax-exempt entities may be combined in computing amounts
invested only if they each have the same person who exercises
investment discretion. The Subscription Agreement Signature
Page must indicate that subscriptions are to be combined. The
Company cannot be held responsible for failing to properly
combine subscriptions.
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.
(ii) All sales commissions payable to you will be paid on
a monthly basis, substantially concurrently with the
acceptance of a subscriber as a Stockholder by the Company, in
an amount equal to the sales commissions payable with respect
to such Shares.
3. Covenants of the Company. The Company covenants and agrees with
you as follows:
(a) Registration Statement. The Company will use its best
efforts to cause the Registration Statement and any subsequent
amendments thereto to become effective as promptly as possible and
will not, at any time after the Effective Date of the Registration
Statement, file any amendment to the Registration Statement or
supplement to the Prospectus of which you shall not previously have
been advised and furnished a copy at a reasonable time prior to the
proposed filing or to which you shall have reasonably objected or
which is not, to the best of the Company's knowledge, in compliance
with the Act and the Rules and Regulations; the Company will prepare
and file with the Commission and will use its best efforts to cause
to become effective as promptly as possible:
(i) any amendments to the Registration Statement or
supplements to the
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Prospectus which may be required pursuant to the undertakings
in the Registration Statement; and
(ii) upon your reasonable request, any amendments to the
Registration Statement or supplements to the Prospectus which,
in the opinion of you or your counsel, may be necessary or
advisable in view of the requirements of the Act and the Rules
and Regulations in connection with the offer and sale of the
Shares during the Offering Period.
(b) SEC Orders. As soon as the Company is advised or obtains
knowledge thereof, it will advise you of any request made by the
Commission for amending the Registration Statement, supplementing
the Prospectus or for additional information, or of the issuance by
the Commission of any stop statement or of any order preventing or
suspending the use of the Prospectus or the institution of any
proceedings for that purpose, and will use its best efforts to
prevent the issuance of any such order and, if any such order is
issued, to obtain the removal thereof as promptly as possible.
(c) Blue Sky Qualifications. The Company will use its best
efforts to qualify the Shares for offering and sale under the
securities or blue sky laws of such jurisdictions as you may
reasonably request and to make such applications, file such
documents and furnish such information as may be reasonably required
for that purpose. The Company will, at your request, furnish you
copies of all material documents and correspondence sent to or
received from such jurisdictions (including, but not limited to,
summaries of telephone calls and copies of telegrams) and will
promptly advise you as soon as the Company obtains knowledge thereof
when the Shares are qualified for offering and sale in each such
jurisdiction. The Company will promptly advise you of any request
made by the securities administrators of each such jurisdiction for
revising the Registration Statement or the Prospectus or for
additional information or of the issuance by such securities
administrators of any stop order preventing or suspending the use of
the Prospectus or of the institution of any proceedings for that
purpose, and will use its best efforts to prevent the issuance of
any such order and if any such order is issued, to obtain the
removal thereof as promptly as possible. The Company will furnish
you with a Blue Sky Survey dated as of the Effective Date, which
will be supplemented to reflect changes or additions to the
information disclosed in such survey.
(d) Amendments and Supplements. If at any time when a
Prospectus relating to the Shares is required to be delivered under
the Act, any event shall have occurred to the knowledge of the
Company as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact,
or omit to state a material fact necessary to make the statements
therein not misleading in light of the circumstances existing at the
time it is so required to be delivered to a subscriber, or if it is
necessary at any time to amend the Registration Statement or
supplement the Prospectus relating to the Shares to comply with the
Act, the Company will promptly notify you thereof and will prepare
and file with the Commission an amendment or supplement which will
correct such statement or effect such compliance.
(e) Copies of Registration Statement. The Company will furnish
you copies of the Registration Statement (only one of which need be
signed and need include all exhibits), the Prospectus and all
amendments and supplements thereto, including any amendment or
supplement prepared after the Effective Date, and such other
information with respect to the Company as you may from time to time
reasonably request, in each case as soon as available and in such
quantities
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<PAGE> 9
as you may reasonably request.
(f) Qualification to Transact Business. The Company will take
all steps necessary to ensure that at all times the Company will be
validly existing as a corporation and will be qualified to do
business in all jurisdictions in which the conduct of its business
requires such qualification and where such qualification is required
under local law.
(g) Authority to Perform Agreements. The Company undertakes to
obtain all consents, approvals, authorizations or orders of any
court or governmental agency or body which are required for the
performance of this Agreement and under the Organizational
Documents or the consummation of the transactions contemplated
hereby and thereby, respectively, or the conducting by the Company
of the business described in the Prospectus.
(h) Copies of Reports. The Company will use its best efforts
to furnish to you as promptly as shall be practicable the following:
(i) a copy of each report or general communication
(whether financial or otherwise) sent to the Stockholders;
(ii) a copy of each report (whether financial or
otherwise) filed with the Commission; and
(iii) such other information as you may from time to time
reasonably request regarding the financial condition and
operations of the Company including, but not limited to,
copies of operating statements of properties acquired by the
Company.
(i) Use of Proceeds. The Company will apply the proceeds from
the sale of the Shares as stated in the Prospectus or, if for any
reason whatsoever all or a portion of the proceeds of the Offering
are not applied or committed for use as stated within 12 months of
the Termination Date, the Company shall promptly return those
proceeds from the sale of the Shares not so applied or committed as
stated in the Prospectus to the subscribers, each subscriber sharing
in the return in the ratio that the number of the Shares owned by
such subscriber bears to the total number of the Shares owned by all
subscribers.
(j) Organization and Offering Expenses. In no event shall the
total of the organizational expenses and expenses of the Offering to
be paid directly by the Company exceed 15% of the gross proceeds of
the Offering.
4. Covenants of the Dealer Manager. You covenant and agree with the
Company on your behalf and on behalf of the Soliciting Dealers as follows:
(a) Compliance with Laws. With respect to your participation
and the participation by each Soliciting Dealer in the offer and
sale of the Shares (including, without limitation, any resales and
transfers of Shares), you agree, and each Soliciting Dealer agrees,
to comply and shall comply with any applicable requirements of the
Act, the Securities Exchange Act of 1934, as amended, and the
published rules and regulations of the Commission thereunder, and
the applicable state securities or blue sky laws, the Conduct Rules
of the NASD, specifically including, but not in any way limited
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<PAGE> 10
to, Rules 2440, 2730, 2740, and 2750 therein. In particular, you agree
not to deliver the sales literature to any person prior to the
Effective Date and, after the Effective Date, not to deliver the
sales literature to any person unless the sales literature is
accompanied or preceded by the Prospectus. In addition, you shall,
in accordance with applicable law or any state securities
administrator, provide or cause Soliciting Dealers to provide to any
prospective investor copies of any document which is part of the
Registration Statement; including, without limitation, the Articles
and Bylaws to investors resident in the States of Mississippi or
Ohio.
With respect to your and each Soliciting Dealer's participation
in any resales or transfers of the Shares, you agree, and each
Soliciting Dealer agrees, to comply and shall comply with any
applicable requirements, as set forth above. In addition, you and each
Soliciting Dealer agree that should you or they assist with the resale
or transfer of the Shares, you and each Soliciting Dealer will fulfill
the obligations pursuant to Sections 3(b) and 4(d) of Rule 2810 of the
Conduct Rules of the NASD.
(b) No Additional Information. In offering the Shares for
sale, you and each Soliciting Dealer shall not give or provide any
information or make any representation other than those contained in
the Prospectus, the sales literature or any other document provided
to you for such purpose by the Company.
(c) Sales of Shares. You and each Soliciting Dealer shall
solicit purchases of the Shares only in the jurisdictions in which
you and such Soliciting Dealer are legally qualified to so act and
in which you and each Soliciting Dealer have been advised by the
Company that such solicitations can be made.
(d) Subscription Agreement. Subscriptions will be submitted by
you and each Soliciting Dealer to the Company only on the form which
is included in Exhibit I to the Prospectus. You and each Soliciting
Dealer understand and acknowledge that the Subscription Agreement
must be executed and initialed by the subscriber.
(e) Suitability. In offering the Shares to any person, you and
each Soliciting Dealer shall have reasonable grounds to believe
(based on such information as the investment objectives, other
investments, financial situation and needs of the person or any
other information known by you after due inquiry) that: (i) such
person has the capability of understanding the fundamental aspects
of the Company, which capacity may be evidenced by the following:
(A) the nature of employment experience; (B) educational level
achieved; (C) access to advice from qualified sources, such as
attorneys, accountants and tax advisors; and (D) prior experience
with investments of a similar nature; (ii) such person has apparent
understanding of: (A) the fundamental risks and possible financial
hazards of this type of investment; (B) the lack of liquidity of
this investment; (C) the Advisor's role in directing or managing the
investment; and (D) the tax consequences of the investment; and
(iii) such person has the financial capability to invest in the
Company and you or each Soliciting Dealer (as the case may be) shall
maintain records disclosing the basis upon which you and each
Soliciting Dealer determined the suitability of any persons offered
Shares. Notwithstanding the foregoing, you and each Soliciting
Dealer shall have reasonable grounds to believe that such person has
either: (a) a minimum annual gross income of $45,000 and a net
worth (exclusive of home, home furnishing and automobiles) of
$45,000; or (b) a net worth (determined with the foregoing
exclusions) of $150,000. Suitability standards may be higher in
certain states as
10
<PAGE> 11
set forth in the Subscription Agreement. You and/or the
Soliciting Dealers shall maintain, for at least six years, a record of
the information obtained to determine that an investor meets the
suitability standards imposed on the offer and sale of the Shares (both
at the time of the initial subscription and at the time of any
additional subscriptions) and a representation of the investor that the
investor is investing for the investor's own account or, in lieu of
such representation, information indicating that the investor for whose
account the investment was made met the suitability standards.
(f) Due Diligence. Prior to offering the Shares for sale, you
and each Soliciting Dealer shall have conducted an inquiry such that
you have reasonable grounds to believe, based on information made
available to you by the Company through the Prospectus or other
materials, that all material facts are adequately and accurately
disclosed and provide a basis for evaluating the purchase of the
Shares. In determining the adequacy of disclosed facts pursuant to
the foregoing, you and each Soliciting Dealer may obtain, upon
request, information on material facts relating at a minimum to the
following:
(1) items of compensation;
(2) Company properties;
(3) tax aspects;
(4) conflicts and risk factors; and
(5) appraisals and other pertinent reports.
Notwithstanding the foregoing, you and each Soliciting Dealer may rely
upon the results of an inquiry conducted by another Soliciting Dealer,
provided that:
(i) such Soliciting Dealer has reasonable grounds to believe
that such inquiry was conducted with due care;
(ii) the results of the inquiry were provided to you with the
consent of the Soliciting Dealer conducting or directing the
inquiry; and
(iii) no Soliciting Dealer that participated in the inquiry is
an affiliate of the Company or the Advisor.
Prior to the sale of the Shares, you and each Soliciting Dealer shall
inform the prospective purchaser of all pertinent facts relating to the
liquidity and marketability of the Shares during the term of the
investment.
5. Expenses. The Company agrees with you that, whether or not the
transactions contemplated in this Agreement are consummated, the Company
will pay all fees and expenses incident to the performance of its
obligations under this Agreement, including, but not limited to:
(a) the Commission's registration fee;
(b) expenses of printing the Registration Statement, the
Prospectus and any amendment or supplement thereto and the expense
of furnishing to you copies of the Registration Statement, the
Prospectus and any amendment or supplement thereto as herein
provided;
11
<PAGE> 12
(c) fees and expenses of its and your accountants and counsel
in connection with the Offering contemplated by this Agreement;
(d) fees and expenses incurred in connection with any required
filing with the NASD;
(e) all of your expenses in connection with the Offering
subject to the limitations contained in the Prospectus, including,
but not limited to, the salaries, fringe benefits, travel expenses
and similar expenses of your employees and personnel incurred in
connection with the Offering; and
(f) expenses of qualifying the Shares for offering and sale
under state blue sky and securities laws, and expenses in connection
with the preparation and printing of the Blue Sky Survey.
In no event, however, will the total of: (a) the selling commissions
paid to the Soliciting Dealers; (b) the marketing contribution and due
diligence expense allowance fee paid to the Soliciting Dealers; and (c)
reimbursement of certain expenses to be paid to Soliciting Dealers for
special incentive marketing programs as described in the Prospectus,
exceed 10.5% of the gross proceeds of the Offering.
6. Conditions of Obligations. Your obligations hereunder shall be
subject to the accuracy of the representations and warranties on the part
of the Company contained in Section 1 hereof, the accuracy of the
statements of the Company made pursuant to the provisions hereof, to the
performance by the Company of its covenants, agreements and obligations
contained in Sections 3 and 5 hereof, and to the following additional
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement shall have become effective not later than 5:00 p.m.,
Chicago, Illinois time, on the day following the date of this
Agreement, or such later time and date as you and the Company shall
have agreed; no stop order suspending the effectiveness of the
Registration Statement shall have been issued and, to the best
knowledge of the Company or you, no proceedings for that purpose
shall have been instituted, threatened or contemplated by the
Commission; and any request by the Commission for additional
information (to be included in the Registration Statement or
Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of you or your counsel.
(b) Accuracy of Registration Statement. You shall not have
advised the Company that the Registration Statement or the Prospectus,
or any amendment or any supplement thereto, in the reasonable opinion
of you or your counsel, contains any untrue statement of fact which is
material, or omits to state a fact which is material and is required to
be stated therein or is necessary to make the statements therein not
misleading.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless you, each
Soliciting Dealer and each person, if any, who controls you or any
Soliciting Dealer within the meaning of the Act (collectively, the
"Indemnified Parties"), against any and all loss, liability, claim,
damage and expense whatsoever caused by any untrue statement or
alleged untrue statement of a material fact
12
<PAGE> 13
contained in the Registration Statement, the Prospectus or any
amendment or supplement thereto, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading. Such indemnification shall be
subject to the provisions of Sections 7(b) and (c) of this Agreement.
The Company shall not provide indemnification for any liability
or loss suffered by you, nor shall it provide that you be held
harmless for any loss or liability suffered by the Company unless
all of the following conditions are met: (i) the party seeking
indemnification has determined, in good faith, that its course of
conduct, if such course of conduct caused the loss or liability, was
in the best interest of the Company; (ii) the other person seeking
indemnification was acting on behalf of or performing services on
the part of the Company; (iii) such liability or loss was not the
result of negligence or misconduct on the part of the indemnified
party; and (iv) such indemnification or agreement to be held
harmless is recoverable only out of the assets of the Company and
not from the Stockholders.
In no case shall the Company be liable under this indemnity
agreement with respect to any claim made against any of the
Indemnified Parties unless the Company shall be notified in writing
(as provided in Section 10) of the nature of the claim within a
reasonable time after the assertion thereof, but failure to so
notify the Company shall not relieve the Company from any liability
which the Company may have incurred otherwise than on account of
this indemnity agreement. The Company shall be entitled to
participate, at its own expense, in the defense of, or if it so
elects within a reasonable time after receipt of such notice, to
assume the defense of any claim or suit for which the Indemnified
Parties seek indemnification hereunder. If the Company elects to
assume the defense, such defense shall be conducted by counsel
chosen by it and reasonably satisfactory to the Indemnified Parties.
In the event that the Company elects to assume the defense of any
such suit and retain such counsel, the Company shall not be liable
to the Indemnified Parties in the suit under this Section 7 for any
legal or other expenses subsequently incurred by the Indemnified
Parties, and the Indemnified Parties shall bear the fees and expenses
of any additional counsel thereafter retained by the Indemnified
Parties unless: (A) the employment of counsel by the Indemnified Party
has been authorized by the Company; or (B) the Company shall not in
fact have employed counsel to assume the defense of such action, in
any of which events such fees and expenses shall be borne by the
Company.
The Company may advance amounts to the Indemnified Parties for
legal and other expenses and costs incurred as a result of any legal
action for which indemnification is being sought only if all of the
following conditions are satisfied: (i) the legal action relates to
acts or omissions with respect to the performance of duties or
services by the indemnified party for or on behalf of the Company;
(ii) the legal action is initiated by a third party who is not a
Stockholder and a court of competent jurisdiction specifically
approves such advancement; and (iii) the Indemnified Parties
receiving such advances undertake to repay the advanced funds to the
Company, together with the applicable legal rate of interest
thereon, in cases in which such Indemnified Parties are found not to
be entitled to indemnification.
Notwithstanding the foregoing provisions of this Section 7, the
Company will not be liable in any such case to the extent that any
loss, liability, claim, damage or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission made
13
<PAGE> 14
in reliance upon and in conformity with written information
furnished to the Company by or on behalf of you or any Soliciting
Dealer specifically for use with reference to you or such Soliciting
Dealer in the preparation of the Registration Statement (or any
amendment thereof) or the Prospectus (or any supplement thereto). The
foregoing indemnity agreement is subject to the condition that, insofar
as it relates to any untrue statement, alleged untrue statement,
omission or alleged omission made in the Prospectus but eliminated or
remedied in any amendment or supplement thereto, such indemnity
agreement shall not inure to your benefit or any Soliciting Dealer from
whom the person asserting any loss, liability, claim, damage or expense
purchased the Shares which are the subject thereof (or to the benefit
of any person who controls you or any Soliciting Dealer), if a copy of
the Prospectus as so amended or supplemented was not sent or given to
such person at or prior to the time the subscription of such person was
accepted by the Company but only if a copy of the Prospectus (as so
amended or supplemented) has been supplied by the Company to you or any
Soliciting Dealer prior to such acceptance. This indemnity agreement
will be in addition to any liability which the Company may otherwise
have.
(b) The Company agrees to indemnify and hold harmless you and
the Soliciting Dealers in the manner and to the extent provided in
subparagraph (a) of this Section 7; provided, however, that no such
indemnification by the Company of you or a Soliciting Dealer shall
be permitted under this Agreement from or out of an alleged
violation of federal or state securities laws unless one or more of
the following conditions are met: (i) there has been a successful
adjudication on the merits of each count involving alleged
securities law violations by you or any Soliciting Dealer and a
court of competent jurisdiction has approved indemnification of the
litigation costs; (ii) such claims against you or any Soliciting
Dealer have been dismissed with prejudice on the merits by a court
of competent jurisdiction as to the particular indemnitee and the
court has approved indemnification of the litigation costs; or (iii)
a court of competent jurisdiction approves a settlement of the
claims against you or any Soliciting Dealer and finds that
indemnification of the settlement and related costs should be made
and the court considering the request has been advised of the
position of the Commission and of the published positions of the
Tennessee Securities Division and any other state securities
regulatory authority in which securities of the Company were offered
and sold as to indemnification for securities law violations.
(c) You and each Soliciting Dealer agree to indemnify and hold
harmless the Company, and each person, if any, who controls the
Company within the meaning of the Act and any controlling person of
the Company: (i) to the same extent as in the foregoing indemnity
from the Company to you and each Soliciting Dealer but only with
reference to statements or omissions based upon the information
relating to you or any Soliciting Dealer furnished in writing by you
or such Soliciting Dealer or on your or their behalf expressly for
use in the Registration Statement or the Prospectus, or any
amendment or supplement thereto; and (ii) for any violation by you
or any Soliciting Dealer, in the sale of the Shares, of any
applicable state or federal law or any rule, regulation or
instruction thereunder, provided that such violation is not in
reliance on any violation by the Company of such law, rule,
regulation or instruction.
You and each Soliciting Dealer further agree to indemnify and
hold harmless the Company and any controlling person of the Company
against any losses, liabilities, claims, damages or expenses to
which the Company or any such controlling person may become subject
under the securities or blue sky laws of any jurisdiction insofar as
such losses, liabilities, claims, damages or expenses (or actions,
proceedings or investigations in respect thereof) arise by reason of
a sale of
<PAGE> 15
the Shares through the efforts of you (with respect to sales
effected without the assistance of a Soliciting Dealer) or a Soliciting
Dealer (with respect to sales effected by such Soliciting Dealer) which
is effected other than in accordance with the Blue Sky Survey supplied
to you by the Company (a "Non-Permitted Sale"), whether such
Non-Permitted Sale is caused by a sale in a jurisdiction other than
those specified in the Blue Sky Survey, by a sale in a jurisdiction in
which you or the Soliciting Dealer is not registered to sell the Shares
or which results in a sale in a jurisdiction in excess of the number of
Shares permitted to be sold in such jurisdiction, and will reimburse
the Company or any such controlling person for any legal fees, monetary
penalties or other expenses reasonably incurred by any of them in
connection with investigating, curing or defending against any such
losses, liabilities, claims, damages, actions, proceedings or
investigations. This indemnity agreement will be in addition to any
liability which you or any Soliciting Dealer may otherwise have.
(d) The notice provisions contained in Section 7(a) hereof,
relating to notice to the Company, shall be equally applicable to
you and each Soliciting Dealer if the Company or any controlling
person of the Company seeks indemnification pursuant to Section 7(c)
hereof. In addition, you and each Soliciting Dealer may participate
in the defense, or assure the defense, of any such suit so brought
under Section 7(c) hereof and have the same rights and privileges as
the Company enjoys with respect to such suits under Section 7(a)
hereof.
8. Termination of this Agreement. This Agreement may be terminated
by you in the event that the Company shall have materially failed to
comply with any of the material provisions of this Agreement on its part
to be performed at or prior to the Effective Date or if any of the
representations, warranties, covenants or agreements of the Company herein
contained shall not have been materially complied with or satisfied within
the times specified.
In any case, this Agreement shall terminate at the close of business
on the Termination Date. Termination of this Agreement pursuant to this
Section 8 shall be without liability of any party to any other party other
than as provided in Sections 5 and 7 hereof which shall survive such
termination.
9. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement
or contained in certificates of the Company submitted pursuant hereto
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of you or any person who controls you,
or by or on behalf of the Company and shall survive the Termination Date.
10. Notices. All communications hereunder shall be in writing and,
if sent to you, shall be mailed by registered mail or delivered or
telegraphed and confirmed in writing to Inland Securities Corporation,
2901 Butterfield Road, Oak Brook, Illinois 60523, (Attention: Ms. Brenda
Gujral) and, if sent to the Company, shall be mailed by registered mail or
delivered or telegraphed and confirmed in writing to Inland Real Estate
Corporation, 2901 Butterfield Road, Oak Brook, Illinois 60523 (Attention:
Ms. Roberta S. Matlin).
11. Reference to Inland Securities Corporation. All references
herein to Inland Securities Corporation or the Dealer Manager hereunder
shall be deemed to include all successors and assigns of Inland Securities
Corporation.
15
<PAGE> 16
12. Parties. This Agreement shall inure to the benefit of and be
binding upon you, the Company and its successors and assigns. This Agreement
and the conditions and provisions hereof, are intended to be and shall be for
the sole and exclusive benefit of the parties hereto and their respective
successors and controlling persons, and for the benefit of no other person,
firm or corporation, and the term "successors and assigns," as used herein,
shall not include any purchaser of Shares as such.
13. Applicable Law. This Agreement and any disputes relative thereto
shall be governed by and construed under the internal laws, as opposed to the
conflicts of laws provisions, of the State of Illinois.
14. Effectiveness of Agreement. This Agreement shall become effective
at 5:00 p.m., Chicago, Illinois time, on the Effective Date, or at such
earlier time as you and the Company agree.
15. Not a Separate Entity. Nothing contained herein shall constitute
you and/or the Soliciting Dealers or any of them an association, partnership,
limited liability company, unincorporated business or other separate entity.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return it to us, whereupon this instrument will
become a binding agreement between you and the Company in accordance with its
terms.
Inland Real Estate Corporation, Inc., a
Maryland corporation
By: /s/ Roberta S. Matlin
---------------------
Title: Vice President
Accepted as of the date
first above written:
Inland Securities Corporation
By:/s/ Brenda Gail Gujral
----------------------
Title: President
16
<PAGE> 1
EXHIBIT 1.2
WARRANT PURCHASE AGREEMENT
<PAGE> 2
INLAND REAL ESTATE CORPORATION
21,875,000 Shares of Common Stock
$.01 Par Value
WARRANT PURCHASE AGREEMENT
July 14, 1997
This Warrant Purchase Agreement (the "Agreement") is made by and between
Inland Real Estate Corporation, a Maryland corporation (the "Company"), and
Inland Securities Corporation, an Illinois corporation (the "Warrantholder").
The Company hereby agrees to issue and sell, and the Warrantholder agrees
to purchase, for the price of $.0008 per warrant, warrants as hereinafter
described (the "Soliciting Dealer Warrants") to purchase one share of the
Company's Common Stock, $.01 par value (the "Shares") for each 40 Shares sold
by the Dealer Manager and/or Soliciting Dealers, up to a maximum of 500,000
Soliciting Dealer Warrants. The price per Share at which the Soliciting Dealer
Warrants are exercisable and the number of Shares purchasable per Soliciting
Dealer Warrant are subject to adjustment pursuant to Section 8 hereof. The
Soliciting Dealer Warrants are being purchased in connection with a "best
efforts" offering of 20,000,000 Shares (the "Offering"), pursuant to that
certain Dealer Manager Agreement (the "Dealer Manager Agreement"), dated July
14, 1997 between the Company and the Warrantholder as the Dealer Manager and a
representative of the Soliciting Dealers who may receive warrants. Unless
otherwise defined, capitalized terms used herein shall have the same meaning as
in the Registration Statement on Form S-11.
The issuance of the Soliciting Dealer Warrants shall occur quarterly
commencing 60 days after the date on which Shares are first sold pursuant to
the Offering and such issuances shall be subject to the terms and conditions
set forth in the Dealer Manager Agreement.
In consideration of the foregoing and for the purpose of defining the
terms and provisions of the Soliciting Dealer Warrants and the respective
rights and obligations thereunder, the Company and the Warrantholder, for value
received, hereby agree as follows:
1. FORM AND TRANSFERABILITY OF SOLICITING DEALER WARRANTS.
(a) REGISTRATION. The Soliciting Dealer Warrant(s) shall be numbered
and shall be registered on the books of the Company when issued.
(b) FORM OF SOLICITING DEALER WARRANTS. The text and form of the
Soliciting Dealer Warrant and of the Election to Purchase shall be
substantially as set forth in Exhibit "A" and Exhibit "B" respectively,
attached hereto and incorporated herein. The price per Share (the "Warrant
Price") and the number of Shares issuable upon exercise of the Soliciting
Dealer Warrants are subject to adjustment upon the occurrence of certain
events, all as hereinafter provided. The Soliciting Dealer Warrants shall be
dated as of the date of signature thereof by the Company either upon initial
issuance or upon division, exchange, substitution or transfer.
(c) TRANSFER. The Soliciting Dealer Warrants shall be transferable
only on the books of the Company maintained at its principal office or that
of its designated transfer agent, if designated, upon delivery thereof duly
endorsed by the Warrantholder or by its duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment
or authority to transfer. Upon any registration of transfer, the Company
shall execute and deliver a new Soliciting Dealer Warrant to the person
entitled thereto. Assignments or transfers shall
<PAGE> 3
be made pursuant to the form of Assignment attached as Exhibit "C" hereto.
(d) LIMITATIONS ON TRANSFER OF SOLICITING DEALER WARRANT. The
Soliciting Dealer Warrants shall not be sold, transferred, assigned, exchanged
or hypothecated (collectively a "Transfer") by the Warrantholder, except to:
(i) one or more persons, each of whom on the date of transfer is an officer and
director of the Warrantholder or an officer and director or partner of a
successor to the Warrantholder as provided in clause (iv) of this Subsection
(d); (ii) a partnership or partnerships, all of the partners of which are a
Warrantholder and one or more persons, each of whom on the date of transfer is
an officer (including an officer-director) of a Warrantholder or an officer
(including an officer-director) or partner of a successor to a Warrantholder;
(iii) broker-dealer firms which have executed, and are not then in default of,
a "Soliciting Dealers Agreement" entered into with the Dealer Manager (the
"Selling Group") and one or more persons, each of whom on the date of transfer
is an officer or partner of a member of the Selling Group or an officer
(including an officer-director) or partner of a successor to a member of the
Selling Group; provided that the Dealer Manager may not Transfer Soliciting
Dealer Warrants to members of the Selling Group in connection with the sale of
Shares to residents of the States of Minnesota, Nebraska, South Carolina or
Texas; (iv) a successor to a Warrantholder through merger or consolidation; (v)
a purchaser of all or substantially all of a Warrantholder's assets; or (vi)
stockholders of a Warrantholder or the stockholders or partners of its
transferee in the event of liquidation or dissolution of a Soliciting Dealer;
provided, however, that commencing one year from the date of issuance, a
Transfer may be made to a third party solely for the purpose of immediate
exercise of the Soliciting Dealer Warrant and sale of the underlying Shares by
such third party. The Soliciting Dealer Warrant may be divided or combined,
upon written request to the Company by the Warrantholder, into a certificate or
certificates representing the right to purchase the same aggregate number of
shares.
Unless the context indicates otherwise, the term "Warrantholder" shall
include any transferee of the Soliciting Dealer Warrant, and the term
"Warrant" shall include any and all Soliciting Dealer Warrants outstanding
pursuant to this Agreement, including those evidenced by a certificate or
certificates issued upon division, exchange, substitution or transfer
pursuant to this Agreement.
(e) EXCHANGE OR ASSIGNMENT OF SOLICITING DEALER WARRANT. Any
Soliciting Dealer Warrant certificate may be assigned or exchanged without
expense for another certificate or certificates entitling the Warrantholder to
purchase a like aggregate number of Shares as the certificate or certificates
surrendered then entitled such Warrantholder to purchase. Any Warrantholder
desiring to exchange a Soliciting Dealer Warrant certificate shall make a
request in writing delivered to the Company, and shall surrender, properly
endorsed, the certificate evidencing the Soliciting Dealer Warrant to be so
assigned or exchanged. Thereupon, the Company shall execute and deliver to the
person entitled thereto a new Soliciting Dealer Warrant certificate as so
requested.
Any Warrantholder desiring to assign a Soliciting Dealer Warrant shall make
such request in writing delivered to the Company, and shall surrender, properly
endorsed, the certificate evidencing the Soliciting Dealer Warrant to be so
assigned, with an instrument of assignment duly executed accompanied by proper
evidence of assignment, succession or authority to transfer, and funds
sufficient to pay any transfer tax, whereupon the Company shall, without
charge, execute and deliver a new Soliciting Dealer Warrant certificate in the
name of the assignee named in such instrument of assignment and the original
Soliciting Dealer Warrant certificate shall promptly be canceled.
(f) Notwithstanding any provision in this Agreement to the contrary,
the Dealer Manager will not transfer and the Company will not issue
Soliciting Dealer Warrants to Soliciting Dealers registered in Minnesota,
Nebraska, South Carolina or Texas selling Shares to residents of Minnesota,
Nebraska, South Carolina or Texas, respectively.
2
<PAGE> 4
2. TERMS AND EXERCISE OF SOLICITING DEALER WARRANTS.
(a) EXERCISE PERIOD. Subject to the terms of this Agreement, the
Warrantholder shall have the right to purchase one Share from the Company at
a price of $12 (120% of the offering price per Share) during the time period
beginning one year from the date the Soliciting Dealer Warrants are issued
and ending on July 13, 2002 (the "Exercise Period"), or if any such date is a
day on which banking institutions are authorized by law to close, then on the
next succeeding day which shall not be such a day, to purchase from the
Company up to the number of fully paid and nonassessable Shares which the
Warrantholder may at the time be entitled to purchase pursuant to the
Soliciting Dealer Warrant, a form of which is attached hereto as Exhibit "A."
(b) METHOD OF EXERCISE. The Soliciting Dealer Warrant shall be
exercised by surrender to the Company, at its principal office in Oak Brook,
Illinois or at the office of the Company's stock transfer agent, if any, or at
such other address as the Company may designate by notice in writing to the
Warrantholder at the address of the Warrantholder appearing on the books of the
Company, of the certificate evidencing the Soliciting Dealer Warrant to be
exercised, together with the form of Election to Purchase, included as Exhibit
"B" hereto, duly completed and signed, and upon payment to the Company of the
Warrant Price (as determined in accordance with the provisions of Sections 7
and 8 hereof), for the number of Shares with respect to which such Soliciting
Dealer Warrant is then exercised together with all taxes applicable upon such
exercise. Payment of the aggregate Warrant Price shall be made in cash or by
certified check or cashier's check, payable to the order of the Company. A
Soliciting Dealer Warrant may not be exercised if the Shares to be issued upon
the exercise of the Soliciting Dealer Warrant have not been registered (or be
exempt from registration) in the state of residence of the holder of the
Soliciting Dealer Warrant or if a Prospectus required under the laws of such
state cannot be delivered to the buyer on behalf of the Company. In addition,
holders of Soliciting Dealer Warrants may not exercise the Soliciting Dealer
Warrant to the extent such exercise will cause them to exceed the ownership
limits set forth in the Company's Second Articles of Amendment and
Restatement, as amended. If any Soliciting Dealer Warrant has not been
exercised by the end of the Exercise Period, it will terminate and the
Warrantholder will have no further rights thereunder.
(c) PARTIAL EXERCISE. The Soliciting Dealer Warrants shall be
exercisable, at the election of the Warrantholder, either in full or from
time to time in part and, in the event that the Soliciting Dealer Warrant is
exercised with respect to less than all of the Shares specified therein at
any time prior to the Termination Date, a new certificate evidencing the
remaining Soliciting Dealer Warrants shall be issued by the Company.
(d) SHARE ISSUANCE UPON EXERCISE. Upon such surrender of the
Soliciting Dealer Warrant certificate and payment of such Warrant Price, the
Company shall issue and cause to be delivered with all reasonable dispatch to
the Warrantholder in such name or name as the Warrantholder may designate in
writing, a certificate of certificates for the number of full Shares so
purchased upon the exercise of the Soliciting Dealer Warrant, together with
cash, as provided in Section 9 hereof, with respect to any fractional Shares
otherwise issuable upon such surrender. Such certificate or certificates
shall be deemed to have been issued and any person so designated to be named
therein shall be deemed to have become a holder of such Shares as of the
close of business on the date of the surrender of the Soliciting Dealer
Warrant and payment of the Warrant Price, as hereinafter defined,
notwithstanding that the certificates representing such Shares shall not
actually have been delivered or that the stock transfer books of the Company
shall then be closed.
3. MUTILATED OR MISSING SOLICITING DEALER WARRANT.
In case the certificate or certificates evidencing the Soliciting Dealer
Warrant shall be mutilated, lost,
3
<PAGE> 5
stolen or destroyed, the Company shall, at the request of the Warrantholder,
issue and deliver in exchange and substitution for and upon cancellation of the
mutilated certificate of certificates, or in lieu of and in substitution for
the certificate or certificates lost, stolen or destroyed, a new Soliciting
Dealer Warrant certificate or certificates of like tenor and date and
representing an equivalent right or interest, but only upon receipt of evidence
satisfactory to the Company of such loss, theft or destruction of such
Soliciting Dealer Warrant, and of reasonable bond of indemnity, if requested,
also satisfactory in form and amount and at the applicant's cost.
4. RESERVATION OF SHARES.
There has been reserved, and the Company shall at all times keep
reserved so long as the Soliciting Dealer Warrant remains outstanding, out of
its authorized Common Stock, such number of Shares as shall be subject to
purchase under the Soliciting Dealer Warrant.
5. LEGEND ON SOLICITING DEALER WARRANT SHARES.
Each certificate for Shares initially issued upon exercise of the
Soliciting Dealer Warrant, unless at the time of exercise such Shares are
registered with the Securities and Exchange Commission (the "Commission"),
under the Securities Act of 1933, as amended (the "Act"), shall bear the
following legend:
NO SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION OF THESE SHARES SHALL BE
MADE EXCEPT PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT REGISTRATION IS NOT REQUIRED.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon
completion of a public distribution pursuant to a registration statement under
the Act of the securities represented thereby) shall also bear the above legend
unless, in the opinion of such counsel as shall be reasonably approved by the
Company, the securities represented thereby need no longer be subject to such
restrictions.
6. PAYMENT OF TAXES.
The Company shall pay all documentary stamp taxes, if any, attributable
to the initial issuance of the Shares; provided, however, that the Company
shall not be required to pay any tax or taxes which may be payable with respect
to any secondary transfer of the Soliciting Dealer Warrant or the Shares.
7. WARRANT PRICE.
The price per Share at which Shares shall be purchasable on the exercise
of the Soliciting Dealer Warrant shall be $12 (the "Warrant Price").
8. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES.
The number and kind of securities purchasable upon the exercise of the
Soliciting Dealer Warrant and the Warrant Price shall be subject to adjustment
from time to time upon the happening of certain events, as follows:
(a) In case the Company shall: (i) pay a dividend in Common Stock or
make a distribution in Common
4
<PAGE> 6
Stock; (ii) subdivide its outstanding Common Stock; (iii) combine its
outstanding Common Stock into a smaller number of shares of Common Stock, or
(iv) issue by reclassification of its Common Stock other securities of the
Company, the number and kind of securities purchasable upon the exercise of the
Soliciting Dealer Warrant immediately prior thereto shall be adjusted so that
the Warrantholder shall be entitled to receive the number and kind of
securities of the Company which it would have owned or would have been entitled
to receive after the happening of any of the events described above had the
Soliciting Dealer Warrant been exercised immediately prior to the happening of
such event or any record date with respect thereto. Any adjustment made
pursuant to this Subsection (a) shall become effective on the effective date of
such event retroactive to the record date, if any, for such event.
(b) No adjustment in the number of securities purchasable hereunder
shall be required unless such adjustment would require an increase or decrease
of at least one percent (1%) in the number of securities (calculated to the
nearest full Share thereof) then purchasable upon the exercise of the
Soliciting Dealer Warrant or, if the Soliciting Dealer Warrant is not then
exercisable, the number of securities purchasable upon the exercise of the
Soliciting Dealer Warrant on the first date thereafter that the Soliciting
Dealer Warrant becomes exercisable; provided, however, that any adjustment
which by reason of this Subsection (b) is not required to be made immediately
shall be carried forward and taken into account in any subsequent adjustment.
(c) Whenever the number of Shares purchasable upon the exercise of
the Soliciting Dealer Warrant is adjusted as herein provided, the Warrant
Price shall be adjusted by multiplying such Warrant Price immediately prior
to such adjustment by a fraction, of which the numerator shall be the number
of Shares purchasable upon the exercise of the Soliciting Dealer Warrant
immediately prior to such adjustment, and of which the denominator shall be
the number of Shares so purchasable immediately thereafter.
(d) For the purpose of this Section 8, the term "Common Stock" shall
mean: (i) the class of stock designated as the Common Stock of the Company
at the date of this Agreement; or (ii) any other class of stock resulting
from successive changes or reclassification of such Common Stock consisting
solely of changes in par value, or from par value to no par value, or from no
par value to par value. In the event that at any time, as a result of an
adjustment made pursuant to this Section 8, the Warrantholder shall become
entitled to purchase any shares of the Company other than Common Stock,
thereafter the number of such other shares so purchasable upon the exercise
of the Soliciting Dealer Warrant and the Warrant Price shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Shares contained in this
Section 8.
(e) Whenever the number of Shares and/or securities purchasable upon
the exercise of the Soliciting Dealer Warrant or the Warrant Price is
adjusted as herein provided, the Company shall cause to be promptly mailed to
the Warrantholder by first class mail, postage prepaid, notice of such
adjustment setting forth the number of Shares and/or securities purchasable
upon the exercise of the Soliciting Dealer Warrant or the Warrant Price after
such adjustment, a brief statement of the facts requiring such adjustment and
the computation by which such adjustment was made.
(f) In case of any reclassification, capital reclassification,
capital reorganization or other change in the outstanding shares of Common
Stock of the Company (other than a change in par value, or from par value to no
par value, or from no par value to par value, or as a result of an
issuance of Common Stock by way of dividend or other distribution, or of a
subdivision or combination of the Common Stock), or in case of any
consolidation or merger of the Company with or into another corporation or
entity (other than a merger with a subsidiary in which merger the Company is
the continuing corporation and which does not result in any reclassification,
capital reorganization or other change in the outstanding shares of Common
Stock of the Company) as a result of which the holders of the
5
<PAGE> 7
Company's Common Stock become holders of other shares of securities of the
Company or of another corporation or entity, or such holders receive cash or
other assets, or in case of any sale or conveyance to another corporation of
the property, assets or business of the Company as an entirety or substantially
as an entirety, the Company or such successor or purchasing corporation, as the
case may be, shall execute with the Warrantholder an agreement that the
Warrantholder shall have the right thereafter upon payment for the Warrant
Price in effect immediately prior to such action to purchase upon the exercise
of the Soliciting Dealer Warrant the kind and number of securities and property
which it would have owned or have been entitled to have received after the
happening of such reclassification, capital reorganization, change in the
outstanding shares of shares of Common Stock of the Company, consolidation,
merger, sale or conveyance had the Soliciting Dealer Warrant been exercised
immediately prior to such action.
The agreement referred to in this Subsection (f) shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 8. The provisions of this Subsection
(f) shall similarly apply to successive reclassification, capital
reorganizations, changes in the outstanding shares of Common Stock of the
Company, consolidations, mergers, sales or conveyances.
(g) Except as provided in this Section 8, no adjustment with
respect to any dividends shall be made during the term of the Soliciting
Dealer Warrant or upon the exercise of the Soliciting Dealer Warrant.
(h) No adjustments shall be made in connection with the public sale
and issuance of the Shares pursuant to the Dealer Manager Agreement or the
sale or issuance of Shares upon the exercise of the Soliciting Dealer
Warrant.
(i) Irrespective of any adjustments in the Warrant Price or the
number or kind of securities purchasable upon the exercise of the Soliciting
Dealer Warrant, the Soliciting Dealer Warrant certificate or certificates
theretofore or thereafter issued may continue to express the same price or
number or kind of securities stated in the Soliciting Dealer Warrant
initially issuable pursuant to this Agreement.
9. FRACTIONAL INTEREST.
The Company shall not be required to issue fractional Shares or
securities upon the exercise of the Soliciting Dealer Warrant. If any such
fractional Share would, except for the provisions of this Section 9, be
issuable upon the exercise of the Soliciting Dealer Warrant (or specified
portion thereof), the Company may, at its election, pay an amount in cash equal
to the then current market price multiplied by such fraction. For purposes of
this Agreement, the term "current market price" shall mean: (a) if the Shares
are traded in the over-the-counter market and not on the Nasdaq National Market
("NNM") or on any national securities exchange, the average between the per
share closing bid and asked prices of the Shares for the 30 consecutive trading
days immediately preceding the date in questions, as reported by the NNM or an
equivalent generally accepted reporting service; or (b) if the Shares are
traded on the NNM or on a national securities exchange, the average for the 30
consecutive trading days immediately preceding the date in question of the
daily per share closing prices of the Shares on the NNM or on the principal
national stock exchange on which it is listed, as the case may be. The closing
price referred to in clause (b) above shall be the last reported sales price
or, in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices on the NNM or on the principal national
securities exchange on which the Shares are then listed, as the case may be.
If the Shares are not publicly traded, then the "current market price" shall
mean $10 for the first three years following the termination of the Offering.
6
<PAGE> 8
10. NO RIGHTS AS STOCKHOLDER; NOTICES OF WARRANTHOLDER.
Nothing contained in this Agreement or in the Soliciting Dealer Warrant
shall be construed as conferring upon the Warrantholder or its transferee any
rights as a stockholder of the Company, either at law or in equity, including
the right to vote, receive dividends, consent or notices as a stockholder with
respect to any meeting of stockholders for the election of directors of the
Company or for any other matter.
11. REGISTRATION OF SOLICITING DEALER WARRANTS AND SHARES
PURCHASABLE THEREUNDER.
The Soliciting Dealer Warrants and the Shares purchasable thereunder
are being registered as part of the Offering. At the same time, the Company
also is registering certain Soliciting Dealer Warrants (and the Shares
purchasable thereunder) which were to be but have not been issued to the
Warrantholder in connection with Shares sold in the Prior Offerings. The
Company undertakes to make additional filings with the Commission to the extent
required to keep the Shares issuable pursuant to the Soliciting Dealer Warrants
referenced in this Section 11 registered through July 13, 2002.
12. INDEMNIFICATION.
In the event of the filing of any registration statement with respect
to the Soliciting Dealer Warrants or the Shares pursuant to Section 11 above,
the Company and the Warrantholder (and/or selling Warrantholder or such holder
of Shares, as the case may be), shall agree to indemnify and hold harmless the
other to the same extent and in the same manner as provided in the Dealer
Manager Agreement.
13. CONTRIBUTION.
In order to provide for just and equitable contribution under the Act
in any case in which: (a) the Warrantholder or any holder of Shares makes a
claim for indemnification pursuant to Section 12 hereof, but it is judicially
determined (by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right to appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that the express provisions of Section 12 hereof
provide for indemnification in such case; or (b) contribution under the Act may
be required on the part of the Warrantholder or any holder of Shares, the
Company and the Warrantholder, or such holder of Shares, shall agree to
contribute to the aggregate losses, claims, damages or liabilities to which
they may be subject (which shall, for all purposes of this Agreement,
including, but not limited to, all costs of defense and investigation and all
attorneys' fees), in either such case (after contribution from others) on the
basis of relative fault as well as any other relevant equitable considerations
in the same manner as provided by the parties in the Dealer Manager Agreement.
14. NOTICES.
Any notice given pursuant to this Agreement by the Company or by the
Warrantholder shall be in writing and shall be deemed to have been duly given
if delivered or mailed by certified mail, return receipt requested:
7
<PAGE> 9
(a) If to the Warrantholder, addressed to:
Inland Securities Corporation
2901 Butterfield Road
Oak Brook, Illinois 60523
(b) If to the Company, addressed to:
Inland Real Estate Corporation
2901 Butterfield Road
Oak Brook, Illinois 60523
Each party hereto may, from time to time, change the address to which
notices to it are to be delivered or mailed hereunder by notice in accordance
herewith to the other party.
15. PARTIES IN INTEREST.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company, the Warrantholder and, to the extent
expressed, any holder of Shares, any person controlling the Company or the
Warrantholder or any holder of Shares, directors of the Company, nominees for
directors (if any) named in the Prospectus, or officers of the Company who have
signed the registration statement, any legal or equitable right, remedy or
claim under this Agreement, and this Agreement shall be for the sole an
exclusive benefit of the aforementioned parties.
16. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the benefit
of the parties listed in Section 15 above shall bind and inure to the benefit
of their respective executors, administrators, successors and assigns
hereunder; provided, however, that the rights of the Warrantholder or holder of
Shares shall be assignable only to those persons and entities specified in
Section 1, Subsection (d) hereof, in which event such assignee shall be bound
by each of the terms and conditions of this Agreement.
17. MERGER OR CONSOLIDATION OF THE COMPANY.
The Company shall not merge or consolidate with or into any other
corporation or sell all or substantially all of its property to another
corporation, unless it complies with the provisions of Section 8, Subsection
(f).
18. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All statements contained in any schedule, exhibit, certificate or other
instrument delivered by or on behalf of the parties hereto, or in connection
with the transactions contemplated by this Agreement, shall be deemed to be
representations and warranties hereunder. Notwithstanding any investigations
made by or on behalf of the parties to this Agreement, all representations,
warranties and agreements made by the parties to this Agreement or pursuant
hereto shall survive.
19. CHOICE OF LAW.
8
<PAGE> 10
This Agreement and the rights of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of Illinois,
including all matters of construction, validity, performance and enforcement,
and without giving effect to the principles of conflict of laws.
20. JURISDICTION.
The parties submit to the jurisdiction of the Courts of the State of
Illinois or a Federal Court empaneled in the State of Illinois for the
resolution of all legal disputes arising under the terms of this Agreement.
21. ENTIRE AGREEMENT.
Except as provided herein, this Agreement, including exhibits, contains
the entire agreement of the parties, and supersedes all existing negotiations,
representations or agreements and all other oral, written or other
communications between them concerning the subject matter of this Agreement.
22. SEVERABILITY.
If any provision of this Agreement is unenforceable, invalid or violates
applicable law, such provision shall be deemed stricken and shall not affect
the enforceability of any other provisions of this Agreement.
23. CAPTIONS.
The captions in this Agreement are inserted only as a matter of
convenience and for reference and shall not be deemed to define, limit, enlarge
or describe the scope of this Agreement or the relationship of the parties, and
shall not affect this Agreement or the construction of any provisions herein.
24. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which shall together constitute
one and the same instrument.
9
<PAGE> 11
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
Inland Real Estate Corporation,
a Maryland corporation
By: /s/ Roberta S. Matlin, Vice President
-------------------------------------
Inland Securities Corporation,
an Illinois corporation
By: /s/ Brenda Gail Gujral, President
---------------------------------
10
<PAGE> 12
EXHIBIT A
INLAND REAL ESTATE CORPORATION
SOLICITING DEALER WARRANT NO. ______
NO SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION OF THIS WARRANT
OR THE SHARES PURCHASABLE HEREUNDER SHALL BE MADE EXCEPT
PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OF 1933 AS
AMENDED, OR PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER THAT REGISTRATION IS NOT REQUIRED. TRANSFER OF
THIS WARRANT IS ALSO RESTRICTED BY THAT CERTAIN WARRANT
PURCHASE AGREEMENT DATED AS OF JULY 14, 1997 A COPY OF WHICH
IS AVAILABLE FROM THE ISSUER.
WARRANT TO PURCHASE ________________ SHARES OF COMMON STOCK OF
INLAND REAL ESTATE CORPORATION
Exercisable commencing on ___________, 199__
Void after 5:00 P.M. Central Standard Time on July 13, 2002
(the "Exercise Closing Date").
THIS CERTIFIES that, for value received, _________________________ (the
"Warrantholder"), or registered assigns, is entitled, subject to the terms and
conditions set forth in this Warrant (the "Warrant"), to purchase from Inland
Real Estate Corporation, a Maryland corporation (the "Company"), ________ fully
paid and nonassessable Shares of common stock (the "Shares") of the Company at
any time during the period commencing on ___________, 199__ and continuing up
to 5:00 P.M. central standard time on July 13, 2002 at $12 per Share, and is
subject to all the terms thereof, including the limitations on transferability
as set forth in that certain Warrant Purchase Agreement between Inland
Securities Corporation and the Company dated July 14, 1997.
THIS WARRANT may be exercised by the holder thereof, in whole or in
part, by the presentation and surrender of this Warrant with the form of
Election to Purchase duly executed, with signature(s) guaranteed, at the
principal office of the Company (or at such other address as the Company may
designate by notice to the holder hereof at the address of such holder
appearing on the books of the Company), and upon payment to the Company of the
purchase price in cash or by certified check or bank cashier's check. The
Shares so purchased shall be deemed to be issued to the holder hereof as the
record owner of such Shares as of the close of business on the date on which
this Warrant shall have been surrendered and payment made for such Shares. The
Shares so purchased shall be registered to the holder (and, if requested,
certificates issued) promptly after this Warrant shall have been so exercised
and unless this Warrant has expired or has been exercised, in full, a new
Warrant identical in form, but representing the number of Shares with respect
to which this Warrant shall not have been exercised, shall also be issued to
the holder hereof.
NOTHING CONTAINED herein shall be construed to confer upon the holder
of this Warrant, as such, any of the rights of a Stockholder of the Company.
14
<PAGE> 13
Inland Real Estate Corporation,
a Maryland corporation
By: _________________________________
_________________________________
Name and Title
2
<PAGE> 14
EXHIBIT B
INLAND REAL ESTATE CORPORATION
ELECTION TO PURCHASE
SOLICITING DEALER WARRANT
Inland Real Estate Corporation
2901 Butterfield Road
Oak Brook, Illinois 60523
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the attached warrant (the "Warrant"), to purchase
thereunder ____ shares of the common stock of Inland Real Estate Corporation
(the "Shares") provided for therein and hereby tenders $_________ ($12.00 per
Share) in payment of the actual exercise price thereof, and requests that the
Shares be issued in the name of
_________________________________________________________________________
(Please Print Name, Address and SSN or EIN of Stockholder below)
_________________________________________________________________________
and, if said number of Shares shall not be the total possible number of Shares
purchasable hereunder, that a new Warrant certificate for the balance of the
Shares purchasable under the attached Warrant certificate be registered in the
name of the undersigned Warrantholder or his assignee as indicated below and
delivered at the address state below:
Dated: ____________________
Name of Warrantholder or Assignee: ______________________________________
(Please Print)
Address: ________________________________________________________________
_________________________________________________________________________
Signature: ______________________________________________________________
<PAGE> 15
EXHIBIT C
INLAND REAL ESTATE CORPORATION
SOLICITING DEALER WARRANT
ASSIGNMENT
(To be signed only upon assignment of the Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
_________________________________________________________________________
(Please Print Name, Address and SSN or EIN of Assignee Below)
_________________________________________________________________________
the attached Participating Dealer Warrant No. ____, to purchase ________
shares of common stock of Inland Real Estate Corporation (the "Company"),
hereby irrevocably constituting and appointing the Company and/or its transfer
agent as its attorney to transfer said Warrant on the books of the Company,
with full power of substitution.
Dated: ____________
________________________________________
Signature of Registered Holder
Signature Guaranteed:
________________________________________
Note: The above signature must
correspond with the name as written upon
the face of the attached Warrant
certificate in every particular respect,
without alteration, enlargement or any
change whatever, unless this Warrant has
been duly assigned.
<PAGE> 1
EXHIBIT 3.1
ARTICLES OF AMENDMENT
<PAGE> 2
EXHIBIT 3.1
INLAND REAL ESTATE CORPORATION
ARTICLES OF AMENDMENT
OF
SECOND ARTICLES OF AMENDMENT AND RESTATEMENT
Inland Real Estate Corporation (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of
the State of Maryland, DOES HEREBY CERTIFY:
FIRST: That on May 5th, 1997, the Board of Directors of the Corporation
duly adopted the following resolutions setting forth a proposed amendment to
the Corporation's Second Articles of Amendment and Restatement, as amended,
increasing the number of authorized shares of common stock, par value $0.01 per
share, from 24,000,000 shares to 100,000,000 shares and maintaining the amount
of authorized preferred stock at its current level of 6,000,000 shares,
declaring the amendment to be advisable and directing that it be submitted for
action thereon by the stockholders of the Company. The resolution setting
forth the proposed amendment is as follows:
RESOLVED, that Article VI, Section 1 of the Second Articles of
Amendment and Restatement, as amended, of this Corporation is hereby
amended to delete the first and second sentence and substitute in its
entirety the following:
The total number of shares of stock which the Company has authority to
issue is 106,000,000 shares of which 100,000,000 shares are shares of
common stock, $0.01 par value per share ("Common Stock") and 6,000,000
shares are shares of preferred stock, $0.01 par value per share
("Preferred Stock"). The aggregate par value of the shares of
authorized Common Stock and Preferred Stock is $1,000,000 and $60,000,
respectively.
SECOND: The description, as amended, of each class, including the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption are not changed by this amendment.
THIRD: This amendment of the Second Articles of Amendment and
Restatement, as amended, as hereinabove set forth has been duly advised by
the Board of Directors and approved by the Stockholders of the Company.
INLAND REAL ESTATE CORPORATION
By: /s/ Robert D. Parks
-----------------------
Robert D. Parks
Its: President
--------------------
Witness:
By: /s/ Kelly Tucek
------------------------
Kelly Tucek
Title: Secretary
----------------------
THE UNDERSIGNED, Robert D. Parks of Inland Real Estate Corporation, who
executed on behalf of said
<PAGE> 3
corporation the foregoing Articles of Amendment, of which this certificate is
made a part, hereby acknowledges, in the name and on behalf of said
corporation, the foregoing Articles of Amendment to be the corporate act of
said corporation and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect to
the approval thereof are true in all material respects, under the penalties of
perjury.
/s/ Robert D. Parks
-----------------------
Robert D. Parks
<PAGE> 1
EXHIBIT 10.1
ESCROW AGREEMENT
<PAGE> 2
EXHIBIT 10.1
ESCROW AGREEMENT
THIS AGREEMENT is made and entered into as of the 14th day of July, 1997,
by and among INLAND REAL ESTATE CORPORATION, a Maryland corporation (the
"Company"), INLAND SECURITIES CORPORATION, an Illinois Corporation (the "Dealer
Manager"), and LASALLE NATIONAL BANK, N.A., CHICAGO, ILLINOIS (the "Escrow
Agent"). Unless otherwise defined, capitalized terms used herein shall have
the same meaning as in the Registration Statement on Form S-11.
1. The Company does hereby open this escrow and Escrow Agent's sole
concern and duties shall be as specifically set forth herein:
1.1 From time to time during the course of this escrow, in
connection with the Company's offering (the "Offering") of up to
20,000,000 shares of Common Stock on a "best efforts" basis (the
"Shares") (exclusive of Shares offered and sold pursuant to the
Company's distribution reinvestment program), Escrow Agent will receive
from subscribers deposits to be held in escrow in accordance with the
terms hereof. All such funds received by Escrow Agent shall be placed
into an interest-bearing account entitled "Inland Real Estate
Corporation Escrow Account" (the "Escrow Account").
2. All deposits from each subscriber shall be accompanied by a
subscription agreement, stating among other things, subscriber name, current
address and investment amount.
3. Checks deposited in the Escrow Account from the various subscribers
shall be made payable to "LNB, Escrow Agent for IREC."
4. All parties understand and are aware that all funds received during
the course of the escrow and deposited in the Escrow Account must clear the
normal banking channels prior to the release of any funds.
5. The Company understands that it is not entitled to any funds
received into escrow in the event of cancellation of the Offering and in such
event, deposits shall be returned to the subscribers.
6. Subscribers named in any subscription for Shares clearly understand
that this is an impound escrow between the Company, the Dealer Manager, and the
Escrow Agent and that they are not a party to this escrow.
7. All documents, including any instrument necessary for the
negotiation or other transfer of escrow assets, deposited simultaneously with
the execution of this Agreement are approved by the Company, and the Escrow
Agent shall not be obligated to inquire as to the form, manner of execution or
validity of these documents or any document hereafter deposited pursuant to the
provisions hereof, nor shall the Escrow Agent be obligated to inquire as to the
identity, authority or rights of the persons executing the same. The Escrow
Agent shall be liable under this Agreement only for its failure to exercise due
care in the performance of its duties expressly set forth in this Agreement.
The Escrow Agent shall have a lien on all securities, monies and documents
deposited in this escrow by each subscriber to secure Escrow Agent's reasonable
compensation and expenses and for judgments, attorneys' fees and other
liabilities which the Escrow Agent may incur or sustain by reason of this
escrow, and the undersigned agrees to pay to Escrow Agent, upon demand, amounts
to satisfy all such liabilities, fees and expenses. In case of conflicting
demands upon it, the Escrow Agent may withhold performance of this escrow until
such time as the conflicting demands shall have been withdrawn or the rights of
the respective parties shall have been settled by court adjudication,
arbitration, joint order or otherwise.
<PAGE> 3
8. Commencing with the date the Securities and Exchange Commission
declares the Company's Registration Statement on Form S-11 effective (the
"Effective Date"), and ending on the Termination Date (the "Offering Period"),
the Escrow Agent shall disburse (i) to the Dealer Manager on a monthly basis,
subject to the terms and conditions of the Dealer Manager Agreement dated July
14, 1997 between the Company and the Dealer Manager (the "Dealer Manager
Agreement"), up to 7% of the sales price ($.70 based on the $10.00 sales price)
for each Share sold by the Dealer Manager; and (ii) the remainder of any funds
received by the Escrow Agent to the Company on a monthly basis, or otherwise in
accordance with the Company's written request, and any funds held in escrow
shall be invested by the Escrow Agent, subject to paragraph 9 hereof, in such
instruments as the Company may direct. Upon termination of the Offering, which
shall occur not later than 12 months after the Effective Date, provided however
that, subject to requalification in certain states, the Company may extend the
Offering Period from time to time, but in no event more than two years after
the Effective Date (the "Termination Date"), all amounts theretofore
undistributed shall be distributed to the Company and to the Dealer Manager,
and this escrow shall close and be consummated in its entirety.
9. The funds deposited herein shall be invested in federally insured
bank accounts (e.g., savings accounts), short-term certificates of deposit
issued by a bank, short-term securities issued or guaranteed by the United
States government and any other investments permitted under Rule 15c2-4 of the
Securities Exchange Act of 1934, as amended, at the direction of the Company.
The interest on such investments shall, on a monthly basis while subscribers'
deposits remain in escrow and, if all conditions herein are met, when such
deposits are disbursed to the Company, be disbursed by the Escrow Agent to the
Company in accordance with paragraph 8 hereof.
10. Any notices which are required or desired to be given hereunder to
the parties hereto shall be in writing and may be given by mailing the same to
the address indicated below (or to such other address as either of the parties
may have theretofore substituted therefor by written notification to the other
party hereto), by registered or certified United States mail, postage prepaid.
For all purposes hereof, any notice so mailed by the Escrow Agent shall be
treated as though served upon the party to whom it was mailed at the time it is
deposited in the United States mail by the Escrow Agent whether or not such
party thereafter actually receives such notice. Notices to the Escrow Agent
shall be in writing and shall not be deemed to be given until actually received
by the Escrow Agent's trust department. Whenever under the terms hereof the
time for giving a notice or performing an act falls upon a Saturday, Sunday or
bank holiday, such time shall be extended to the Escrow Agent's next business
day.
11. The Escrow Agent, when acting as the Escrow Agent, undertakes to
perform only such duties as are expressly set forth herein and the Escrow Agent
shall not be subject to, nor obliged to recognize, any other agreement between,
or direction or instruction of, the Company even though reference thereto may
be made herein; provided, however, this Agreement may be amended at any time or
times by an instrument in writing signed by the Company, the Dealer Manager and
Escrow Agent. In the event the Escrow Agent becomes involved in or is
threatened with litigation by reason hereof, it is hereby authorized to and may
deposit with the clerk of a court of competent jurisdiction any and all funds
held by it pursuant hereto, and thereupon the Escrow Agent shall stand fully
relieved and discharged of any further duties hereunder.
12. If any property subject hereto is at any time attached, garnished
or levied upon, under any court order, or in case the payment, assignment,
transfer, conveyance or delivery of any such property shall be stayed or
enjoined by any court order, or in any case any order, judgment or decree shall
be made or entered by any court affecting such property, or any part thereof,
then in any of such events, the Escrow Agent is authorized, in its sole
discretion, to rely upon and comply with any such order, writ, judgment or
decree, which it is advised by legal counsel of its own choosing is binding
upon it, and if it complies with any such order, writ, judgment or decree, it
shall not be liable to any of the parties hereto or to any other person, firm
or corporation by reason of such compliance, even though
<PAGE> 4
such order, writ, judgment or decree may be subsequently reversed, modified,
annulled, set aside or vacated.
13. This Agreement shall be construed, enforced and administered in
accordance with the internal laws, as opposed to the conflicts of laws
provisions, of the State of Illinois.
14. The Escrow Agent shall be entitled to reasonable fees in connection
with this Escrow, which fees shall be payable by the Company.
15. The Escrow Agent may resign by giving five days written notice by
registered or first class mail sent to the undersigned at its address herein
set forth; and, thereafter, shall deliver all remaining deposits in said escrow
upon the written and signed order of the undersigned. If no such notice is
received by the Escrow Agent within 30 days after mailing such notice it is
unconditionally and irrevocably authorized and empowered to send any and all
items deposited hereunder by registered mail to the respective depositors
thereof or, at its sole option, to deliver such deposited items to the
respective depositors.
<PAGE> 5
16. Any notice required to be given hereunder by any of the parties
hereto shall be addressed as follows:
If to the Company:
Inland Real Estate Corporation
2901 Butterfield Road
Oak Brook, Illinois 60523
If to the Dealer Manager:
Inland Securities Corporation
2901 Butterfield Road
Oak Brook, Illinois 60523
If to Escrow Agent:
LaSalle National Bank, N.A.
135 South LaSalle Street
Chicago, Illinois 60603
Attn: Corporate Trust Department
* * *
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
INLAND REAL ESTATE CORPORATION
By: /s/ Roberta S. Matlin
---------------------
Title: Vice President
INLAND SECURITIES CORPORATION
By: /s/ Brenda Gail Gujral
----------------------
Title: President
LASALLE NATIONAL BANK, N.A.
CHICAGO, IL
By: /s/ Margaret Muir
-----------------
Title: Assistant Vice President
