EX-10.7 ESCROW AGREEMENT






Exhibit
10.7



ESCROW AGREEMENT




UMB Bank, N.A.

1010 Grand Blvd., 4th Floor

Mail Stop: 1020409

Kansas City, MO 64106




     Re: Cole Credit Property Trust III, Inc. 


Ladies and Gentlemen:



COLE CREDIT PROPERTY TRUST III, INC., a Maryland corporation (the “Company”), will issue in
a public offering (the “Offering”) shares of its common stock (the “Stock”)
pursuant to a registration statement on Form S-11 filed by the Company with the Securities and
Exchange Commission. Cole Capital Corporation, an Arizona corporation (the “Dealer
Manager”), will act as dealer manager for the offering of the Stock. The Company is entering
into this agreement to set forth the terms on which UMB BANK, N.A. (the “Escrow Agent”),
will, except as otherwise provided herein, hold and disburse the proceeds from subscriptions for
the purchase of the Stock in the Offering until such time as: (i) in the case of subscriptions
received from all nonaffiliates of the Company, the Company has received subscriptions for Stock
resulting in a total of 250,000 shares ($2,375,000) of common stock sold in the offering (the
“Required Capital”); and (ii) in the case of subscriptions received from residents of
Pennsylvania (“Pennsylvania Subscribers”), the Company has received subscriptions for Stock
from nonaffiliates of the Company resulting in total minimum capital raised of $124,000,000 (the
“Pennsylvania Required Capital”).



The Company hereby appoints UMB Bank, N.A. as Escrow Agent for purposes of holding the proceeds
from the subscriptions for the Stock, on the terms and conditions hereinafter set forth:



1. Until such time as the Company has received subscriptions for Stock resulting in total minimum
capital raised equal to the Required Capital and such funds are disbursed from the Escrow Account
(as defined below) in accordance with paragraph 3(a) hereof, persons subscribing to purchase the
Stock (the “Subscribers”) will be instructed by the Dealer Manager or any soliciting
dealers to remit the purchase price in the form of checks, drafts, wires, Automated Clearing House
(ACH) or money orders (hereinafter “instruments of payment”) payable to the order of “UMB
Bank, N.A., Agent for Cole Credit Property Trust III, Inc.” or a recognizable contractor or
abbreviation thereof, including but not limited to, “UMB Bank, N.A., f/b/o for CCPT III.” After
subscriptions are received resulting in total minimum capital raised equal to the Required Capital
and such funds are disbursed from the Escrow Account in accordance with paragraph 3(a) hereof,
subscriptions shall continue to be so submitted unless otherwise instructed by the Dealer Manager.
Any checks, drafts or money orders received made payable to a party other than the Escrow Agent (or
after the Required Capital is received, made payable to a party other than the party designated by
the Dealer Manager) shall be returned to the soliciting dealer who submitted the check, draft or
money order. Within one (1) business day after receipt of instruments of payment from the
Offering, the Dealer Manager, the Company or their respective agents will (a) send to the Escrow
Agent: each Subscriber’s name, address, number of shares purchased, and purchase price remitted,
and (b) Escrow Agent will deposit the instruments of payment from such Subscribers, into an
interest-bearing deposit account entitled “Escrow Account for the Benefit of Subscribers for Common
Stock of Cole Credit Property Trust III, Inc.” (the “Escrow Account”), which deposit shall
occur within one (1) business day after the Escrow Agent’s receipt of the instrument of payment,
until such Escrow Account has closed pursuant to paragraph 3(a) hereof. Instruments of payment
received from Pennsylvania Subscribers (as


 









 






identified as such by the Company) shall be accounted for separately in a subaccount entitled
“Escrow Account for the Benefit of Pennsylvania Subscribers for CCPT III” (the “Pennsylvania
Escrow Account”), until such Pennsylvania Escrow Account has closed pursuant to paragraph 3(a)
hereof. Each of the Escrow Account and the Pennsylvania Escrow Account will be established and
maintained in such a way as to permit the interest income calculations described in paragraph 7.
The Company shall, and shall cause its agents to, cooperate with the Escrow Agent in separately
accounting for Pennsylvania subscription proceeds in the Pennsylvania Escrow Account, and the
Escrow Agent shall be entitled to rely upon information provided by the Company or its agents in
this regard.



2. The Escrow Agent agrees to promptly process for collection the instruments of payment upon
deposit into the Escrow Account or the Pennsylvania Escrow Account, as applicable. Deposits shall
be held in the Escrow Account or the Pennsylvania Escrow Account until such funds are disbursed in
accordance with paragraph 3 hereof. Prior to disbursement of the funds deposited in the Escrow
Account or the Pennsylvania Escrow Account, such funds shall not be subject to claims by creditors
of the Company, the Dealer Manager, any soliciting dealer or any of their respective affiliates.
If any of the instruments of payment are returned to the Escrow Agent for nonpayment prior to
receipt of the Required Capital or, in connection with subscriptions from Pennsylvania Subscribers,
the Pennsylvania Required Capital, the Escrow Agent shall promptly notify the Dealer Manager and
the Company in writing via mail, email or facsimile of such nonpayment, and is authorized to debit
the Escrow Account or the Pennsylvania Escrow Account, as applicable in the amount of such returned
payment as well as any interest earned on the amount of such payment.



3. (a) (i) Subject to the provisions of subparagraphs 3(b)-3(f) below, once the collected
funds in the Escrow Account are an amount equal to or greater than the Required Capital, the Escrow
Agent shall promptly notify the Company and instruct the Dealer Manager, or its agent, to deliver
an executed IRS Form W-9 for each Subscriber and, upon receiving written instruction from the
Company, (A) disburse to the Company, by check, ACH or wire transfer, the funds in the Escrow
Account representing the gross purchase price for the Stock, and (B) within five business days
after the first business day of the succeeding month, disburse to the Subscribers or the Company,
as applicable, any interest thereon pursuant to the provisions of subparagraph 3(f). After such
time the Escrow Account shall remain open and the Company shall continue to cause subscriptions for
the Stock that are not to be deposited in the Pennsylvania Escrow Account to be deposited therein
until the Company informs the Escrow Agent in writing to close the Escrow Account, and thereafter
any subscription documents and instruments of payment received by the Escrow Agent from Subscribers
other than Pennsylvania Subscribers shall be forwarded directly to the Company. For purposes of
this Agreement, the term “collected funds” shall mean all funds received by the Escrow Agent that
have cleared normal banking channels and are in the form of cash or cash equivalent. After the
satisfaction of the aforementioned provisions of this paragraph 3(a)(i), in the event the Company
receives subscriptions made payable to the Escrow Agent (other than subscriptions that are to be
deposited in the Pennsylvania Escrow Account), subscription proceeds may continue to be received in
this account generally, but to the extent such proceeds shall not be subject to escrow due to the
satisfaction of the aforementioned provisions of this paragraph 3(a)(i), such proceeds are not
subject to this Escrow Agreement and at the instruction of the Company to the Escrow Agent shall be
transferred from the Escrow Account or deposited directly into, as the case may be, a commercial
deposit account in the name of the Company with the Escrow Agent (the “Deposit Account”) that has
been previously established by the Company, unless otherwise directed by the Company. The Company
hereby covenants and agrees that it shall do all things necessary in order to establish the Deposit
Account, which shall be subject to the Escrow Agent’s usual account guidelines and regulations,
prior to its use. No provisions of this Escrow Agreement shall apply to the Deposit Account.




         (ii) regardless of any release of funds from, or the closing of, the Escrow Account, the
Company, the Dealer Manager and soliciting dealers shall continue to forward instruments of payment



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received from Pennsylvania Subscribers for deposit into the Pennsylvania Escrow Account to the
Escrow Agent until such time as the Company notifies the Escrow Agent in writing that total
subscription proceeds (including the amount then in the Pennsylvania Escrow Account) equal or
exceed the Pennsylvania Required Capital. Within five days after receipt by the Escrow Agent of
such notice, the Escrow Agent shall instruct the Dealer Manager, or its agent, to deliver an
executed IRS Form W-9 for each Pennsylvania Subscriber and (A) disburse to the Company, by check,
ACH or wire transfer, the funds then in the Pennsylvania Escrow Account representing the gross
purchase price for the Stock, and (B) within five business days after the first business day of the
succeeding month, disburse to the Pennsylvania Subscribers or the Company, as applicable, any
interest thereon pursuant to the provisions of subparagraph 3(f). Following such disbursements,
the Escrow Agent shall close the Pennsylvania Escrow Account, and thereafter any instruments of
payment received by the Escrow Agent from Pennsylvania Subscribers shall not be subject to this
Escrow Agreement and shall be deposited directly into the Escrow Account or the Deposit Account, as
instructed in writing by the Company pursuant to subparagraph 3(a)(i) above.



     (b) Within four business days of the close of business on the date that is one year following
commencement of the Offering (the “Expiration Date”), the Escrow Agent shall promptly
notify the Company if it is not in receipt of evidence of deposits for the purchase of Stock
providing for aggregate offering proceeds that equal or exceed the Required Capital (from all
sources but exclusive of any funds received from subscriptions for Stock from entities which the
Company has notified the Escrow Agent are affiliated with the Company). Within ten days following
the date of such notice, the Escrow Agent shall promptly return directly to each Subscriber the
collected funds deposited in the Escrow Account and the Pennsylvania Escrow Account on behalf of
such Subscriber (unless earlier disbursed in accordance with paragraph 3(c)), or shall return the
instruments of payment delivered, but not yet processed for collection prior to such time, in
either case, together with interest income (which interest shall be paid within five business days
after the first business day of the succeeding month) in the amounts calculated pursuant to
paragraph 7 for each Subscriber at the address provided by the Dealer Manager or the Company to the
Escrow Agent, which the Escrow Agent shall be entitled to rely upon. Notwithstanding the above, in
the event the Escrow Agent has not received an executed IRS Form W-9 at such time for each
Subscriber, the Escrow Agent shall remit an amount to the Subscribers in accordance with the
provisions hereof, withholding the applicable percentage for backup withholding required by the
Internal Revenue Code, as then in effect, from any interest income on subscription proceeds
(determined in accordance with paragraph 7) attributable to each Subscriber for whom the Escrow
Agent does not possess an executed IRS Form W-9. However, the Escrow Agent shall not be required
to remit any payments until the Escrow Agent has collected funds represented by such payments.



     (c) Notwithstanding subparagraphs 3(a) and 3(b) above, if the Escrow Agent is not in receipt
of evidence of subscriptions accepted on or before the close of business on such date that is 120
days after commencement of the Offering (the Company will notify the Escrow Agent of the
commencement date of the Offering) (the “Initial Escrow Period”), and instruments of
payment dated not later than that date, for the purchase of Stock providing for total purchase
proceeds from all nonaffiliated sources that equal or exceed the Pennsylvania Required Capital, the
Escrow Agent shall promptly notify the Company. Thereafter, the Company shall send to each
Pennsylvania Subscriber by certified mail within ten (10) calendar days after the end of the
Initial Escrow Period a notification in the form of Exhibit A. If, pursuant to such notification,
a Pennsylvania Subscriber requests the return of his or her subscription funds within ten (10)
calendar days after receipt of the notification (the “Request Period”), the Escrow Agent
shall promptly refund directly to each Pennsylvania Subscriber the collected funds deposited in the
Pennsylvania Escrow Account on behalf of such Pennsylvania Subscriber or shall return the
instruments of payment delivered, but not yet processed for collection prior to such time, to the
address provided by the Dealer Manager or the Company or their respective agents to the Escrow
Agent, which the Escrow Agent shall be entitled to rely upon, together with interest income (which
interest shall be paid within five



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business days after the first business day of the succeeding month) in the amounts calculated
pursuant to paragraph 7. Notwithstanding the above, if the Escrow Agent has not received an
executed IRS Form W-9 is for such Pennsylvania Subscriber, the Escrow Agent shall thereupon remit
an amount to such Pennsylvania Subscriber in accordance with the provisions hereof, withholding the
applicable percentage for backup withholding required by the Internal Revenue Code, as then in
effect, from any interest income earned on subscription proceeds (determined in accordance with
paragraph 7) attributable to such Pennsylvania Subscriber. However, the Escrow Agent shall not be
required to remit such payments until the Escrow Agent has collected funds represented by such
payments.



     (d) The subscription funds of Pennsylvania Subscribers who do not request the return of their
subscription funds within the Request Period shall remain in the Pennsylvania Escrow Account for
successive 120-day escrow periods (a “Successive Escrow Period”), each commencing
automatically upon the termination of the prior Successive Escrow Period, and the Company and
Escrow Agent shall follow the notification and payment procedure set forth in subparagraph 3(c)
above with respect to the Initial Escrow Period for each Successive Escrow Period until the
occurrence of the earliest of (i) the Expiration Date, (ii) the receipt and acceptance by the
Company of subscriptions for the purchase of Stock with total purchase proceeds that equal or
exceed the Pennsylvania Required Capital and the disbursement of the Pennsylvania Escrow Account on
the terms specified herein, or (iii) all funds held in the Pennsylvania Escrow Account having been
returned to the Pennsylvania Subscribers in accordance with the provisions hereof.



     (e) If the Company rejects any subscription for which the Escrow Agent has collected funds,
the Escrow Agent shall, upon the written request of the Company, promptly issue a refund to the
rejected Subscriber at the address provided by the Dealer Manager or the Company, which the Escrow
Agent shall be entitled to rely upon. If the Company rejects any subscription for which the Escrow
Agent has not yet collected funds but has submitted the Subscriber’s check for collection, the
Escrow Agent shall promptly return the funds in the amount of the Subscriber’s check to the
rejected Subscriber, at the address provided by the Dealer Manager or the Company or their
respective agents, which the Escrow Agent shall be entitled to rely upon, after such funds have
been collected. If the Escrow Agent has not yet submitted a rejected Subscriber’s check for
collection, the Escrow Agent shall promptly remit the Subscriber’s check directly to the
Subscriber.



     (f) At any time after funds are disbursed upon the Company’s acceptance of subscriptions
pursuant to subparagraph 3(a) above on the fifth business day following the first business day of
the next succeeding month following the date of such acceptance, the Escrow Agent shall promptly
provide directly to each Subscriber the amount of the interest payable to the Subscribers; provided
that the Escrow Agent is in possession of such Subscriber’s executed IRS Form W-9. In the event an
executed IRS Form W-9 is not received for each Subscriber the Escrow Agent shall remit an amount to
the Subscribers in accordance with the provisions hereof, withholding the applicable percentage for
backup withholding required by the Internal Revenue Code, as then in effect, from any interest
income on subscription proceeds (determined in accordance with paragraph 7) attributable to those
Subscribers for whom the Escrow Agent does not possess an executed IRS Form W-9. However, the
Escrow Agent shall not be required to remit any payments until the Escrow Agent has collected funds
represented by such payments. The forgoing notwithstanding, interest, if any, earned on accepted
subscription proceeds will be payable to a Subscriber only if the Subscriber’s funds have been held
in escrow by the Escrow Agent for at least 35 days; interest, if any, earned on accepted
subscription proceeds of Subscribers’ funds held less than 35 days will be payable to the Company.



     In the event that instruments of payment are returned for nonpayment, the Escrow Agent is
authorized to debit the Escrow Account or the Pennsylvania Escrow Account, as applicable, in
accordance with paragraph 2 hereof.



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4. The Escrow Agent shall provide to the Company monthly statements (or more frequently as
reasonably requested by the Company, which includes, without limitation, if such amounts are not
available to the Company at least daily pursuant to the “TrustDirect” program) on the account
balance in each of the Escrow Account and the Pennsylvania Escrow Account, and the activity in such
accounts since the last report. The Escrow Agent will provide access to its “TrustDirect” program
to allow the Company to view account balances for the Escrow Account and the Pennsylvania Account
at any time.



5. Prior to the disbursement of funds deposited in the Escrow Account or the Pennsylvania Escrow
Account in accordance with the provisions of paragraph 3 hereof, the Escrow Agent shall invest all
of the funds deposited as well as earnings and interest derived therefrom in the Escrow Account or
the Pennsylvania Escrow Account, as applicable, in the “Short-Term Investments” specified below at
the written direction of the Company, unless the costs to the Company for the making of such
investment are reasonably expected to exceed the anticipated interest earnings from such investment
in which case the funds and interest thereon shall remain in the respective escrow account until
the balance in the respective escrow account reaches the minimum amount necessary for the
anticipated interest earnings from such investment to exceed the costs to the Company for the
making of such investment, as determined by the Company based upon applicable interest rates.




     “Short-Term Investments” include obligations of, or obligations guaranteed by, the United
States government or bank money-market accounts or certificates of deposit of national or state
banks that have deposits insured by the Federal Deposit Insurance Corporation (including
certificates of deposit of any bank acting as a depository or custodian for any such funds) which
mature on or before the Expiration Date, unless such instrument cannot be readily sold or otherwise
disposed of for cash by the Expiration Date without any dissipation of the offering proceeds
invested. Without limiting the generality of the foregoing, Exhibit B hereto sets forth
specific Short-Term Investments that shall be deemed permissible investments hereunder.


The following securities are not permissible investments:





     (a) money market funds;




     (b) corporate equity or debt securities;




     (c) repurchase agreements;



     (d) bankers’ acceptances;



     (e) commercial paper; and



     (f) municipal securities.



It is hereby expressly agreed and stipulated by the parties hereto that the Escrow Agent shall not
be required to exercise any discretion hereunder and shall have no investment or management
responsibility and, accordingly, shall have no duty to, or liability for its failure to, provide
investment recommendations or investment advice to the parties hereto. It is the intention of the
parties hereto that the Escrow Agent shall never be required to use, advance or risk its own funds
or otherwise incur financial liability in the performance of any of its duties or the exercise of
any of its rights and powers hereunder.



6. The Escrow Agent is entitled to rely upon written instructions received from the Company or the
Dealer Manager or their respective agents, unless the Escrow Agent has actual knowledge that such
instructions are not valid or genuine; provided that, if in the Escrow Agent’s opinion, any
instructions from the Company or the Dealer Manager or their respective agents are unclear, the
Escrow Agent may request clarification from the Company or the Dealer Manager or their respective
agents, as applicable, prior to taking any action, and if such instructions continue to be unclear,
the Escrow Agent may rely upon written instructions from the Company’s legal counsel in
distributing or continuing to hold any


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funds. However, the Escrow Agent shall not be required to disburse any funds attributable to
instruments of payment that have not been processed for collection, until such funds are collected
and then shall disburse such funds in compliance with the disbursement instructions from the
Company or the Dealer Manager or their respective agents.



7. If the Offering terminates prior to receipt of the Required Capital, or one or more Pennsylvania
Subscribers elects to have his or her subscription returned in accordance with paragraph 3,
interest income earned on subscription proceeds deposited in the Escrow Account (the “Escrow
Income”), or the Pennsylvania Escrow Account (the “Pennsylvania Escrow Income”), as
applicable, shall be remitted to Subscribers to the address provided by the Dealer Manager or the
Company to the Escrow Agent, which the Escrow Agent shall be entitled to rely upon, or to the
Company if the applicable Subscriber’s funds have been held in escrow by the Escrow Agent for less
than 35 days, in accordance with paragraph 3 and without any deductions for escrow expenses. The
Company shall reimburse the Escrow Agent for all escrow expenses. If the Escrow Agent remits
interest income pursuant to this Agreement, the Escrow Agent shall be responsible for any necessary
federal tax reporting associated with such income; provided, however, that the Escrow Agent shall
not be responsible for any other tax reporting associated with this Agreement. The Escrow Agent
shall remit all such Escrow Income and Pennsylvania Escrow Income in accordance with paragraph 3.
If the Company chooses to leave the Escrow Account open after receiving the Required Capital then
it shall make regular acceptances of subscriptions therein, but no less frequently than monthly,
and the Escrow Income from the last such acceptance shall be calculated and remitted to the
Subscribers or the Company, as applicable, pursuant to the provisions of paragraph 3(d).



8. The Escrow Agent shall receive compensation from the Company as set forth in Exhibit C
attached hereto, which such Exhibit C is hereby incorporated by reference.



9. In performing any of its duties hereunder, the Escrow Agent shall not incur any liability to
anyone for any damages, losses, or expenses, except for willful misconduct, breach of trust, or
gross negligence. Accordingly, the Escrow Agent shall not incur any such liability with respect to
any action taken or omitted (a) in good faith upon advice of the Escrow Agent’s counsel given with
respect to any questions relating to the Escrow Agent duties and responsibilities under this
Agreement, or (b) in reliance upon any instrument, including any written instrument or instruction
provided for in this Agreement, not only as to its due execution and validity and effectiveness of
its provisions but also as to the truth and accuracy of information contained therein, which the
Escrow Agent shall in good faith believe to be genuine, to have been signed or presented by a
proper person or persons and to conform to the provisions of this Agreement.



10. The Company hereby agrees to indemnify and hold the Escrow Agent harmless against any and all
losses, claims, damages, liabilities, and expenses, including reasonable attorneys’ fees and
disbursements, that may be imposed on or incurred by the Escrow Agent in connection with acceptance
of appointment as the Escrow Agent hereunder, or the performance of the duties hereunder, including
any litigation arising from this Agreement or involving the subject matter hereof, except where
such losses, claims, damages, liabilities, and expenses result from willful misconduct, breach of
trust, or gross negligence.



11. In the event of a dispute between the parties hereto sufficient in the Escrow Agent’s
discretion to justify doing so, the Escrow Agent shall be entitled to tender into the registry or
custody of any court of competent jurisdiction all money or property in its hands under this
Agreement, together with such legal pleadings as deemed appropriate, and thereupon be discharged
from all further duties and liabilities under this Agreement. In the event of any uncertainty as to
the duties hereunder, the Escrow Agent may refuse to act under the provisions of this Agreement
pending order of a court of competent jurisdiction and shall have no liability to the Company or to
any other person as a result of such action. Any such legal action


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may be brought in such court, as the Escrow Agent shall determine to have jurisdiction thereof.
The filing of any such legal proceedings shall not deprive the Escrow Agent of its compensation
earned prior to such filing.



12. All communications and notices required or permitted by this Agreement shall be in writing and
shall be deemed to have been given when delivered personally or by messenger or by overnight
delivery service or when received via telecopy or other electronic transmission, in all cases
addressed to the person for whom it is intended at such person’s address set forth below or to such
other address as a party shall have designated by notice in writing to the other party in the
manner provided by this paragraph:





     (a) if to the Company:




           Cole Credit Property Trust III, Inc.

           2555 E. Camelback Road, Suite 400

           Phoenix, Arizona 85016

           Fax: (602) 778-8780

           Attention: D. Kirk McAllaster, Jr.




     (b) if to the Dealer Manager:




           Cole Capital Corporation

           2555 E. Camelback Road, Suite 400

           Phoenix, Arizona 85016

           Fax: (602) 778-8780

           Attention: Marc T. Nemer, Esq.




     (c) if to the Escrow Agent:




           UMB Bank, N.A.

           Corporate Trust Department M/S 1020409

           1010 Grand Blvd., 4th Floor

           Mail Stop: 1020409

           Kansas City, MO 64106

           Attention: Lara Stevens


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 parties.



13. This Agreement shall be governed by the laws of the State of Arizona as to both interpretation
and performance without regard to the conflict of laws rules thereof.



14. The provisions of this Agreement shall be binding upon the legal representatives, successors,
and assigns of the parties hereto.



15. The Company and the Dealer Manager hereby acknowledge that UMB Bank, N.A. is serving as Escrow
Agent only for the limited purposes herein set forth, and hereby agree that they will not represent
or imply that, by serving as Escrow Agent hereunder or otherwise, have investigated the
desirability or advisability of investment in the Company or have approved, endorsed, or passed
upon the merits of the Stock or the Company, nor shall they use the name of the Escrow Agent in any
manner whatsoever in connection with the offer or sale of the Stock other than by acknowledgment
that is has agreed to serve as Escrow Agent for the limited purposes herein set forth.




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16. This Agreement and any amendment hereto may be executed by the parties hereto in one or more
counterparts, each of which shall be deemed to be an original.



17. Except as otherwise required for subscription funds received from Pennsylvania Subscribers as
provided herein, in the event that the Dealer Manager receives instruments of payment after the
Required Capital has been received and the proceeds of the Escrow Account have been distributed to
the Company, the Escrow Agent is hereby authorized to deposit such instruments of payment within
one (1) business day to any deposit account as directed by the Company. The application of said
funds into a deposit account or to forward such funds directly to the Company, in either case
directed by the Company shall be a full acquittance to the Escrow Agent, who shall not be
responsible for the application of said funds thereafter.



18. The Escrow Agent shall be bound only by the terms of this Escrow Agreement and shall not be
bound by or incur any liability with respect to any other agreements or understanding between any
other parties, whether or not the Escrow Agent has knowledge of any such agreements or
understandings.



19. Indemnification provisions set forth herein shall survive the termination of this Agreement.



20. In the event that any part of this Agreement is declared by any court or other judicial or
administrative body to be null, void, or unenforceable, said provision shall survive to the extent
it is not so declared, and all of the other provisions of this Agreement shall remain in full force
and effect.



21. Unless otherwise provided in this Agreement, final termination of this Escrow Agreement shall
occur on the date that all funds held in the Escrow Account and the Pennsylvania Escrow Account are
distributed either (a) to the Company or to Subscribers and the Company has informed the Escrow
Agent in writing to close the Escrow Account and the Pennsylvania Escrow Account pursuant to
paragraph 3 hereof or (b) to a successor escrow agent upon written instructions from the Company.



22. Neither the Escrow Agent, nor its agents, shall have responsibility for accepting, rejecting,
or approving subscriptions. The Escrow Agent, or its agent, shall complete an OFAC search, in
compliance with its policy and procedures, of each subscription check and shall inform the Company
if a subscription check fails the OFAC search. The Dealer Manager shall provide a copy of each
subscription check in order that the Escrow Agent, or its agent, may perform such OFAC search.



23. This Agreement shall not be modified, revoked, released, or terminated unless reduced to
writing and signed by all parties hereto, subject to the following paragraph.



If, at any time, any attempt is made to modify this Agreement in a manner that would increase the
duties and responsibilities of the Escrow Agent or to modify this Agreement in any manner which the
Escrow Agent shall deem undesirable, or at any other time, the Escrow Agent may resign by providing
written notice to the Company and until (a) the acceptance by a successor escrow agent as shall be
appointed by the Company; or (b) thirty (30) days after such written notice has been given,
whichever occurs sooner, the Escrow Agent’s only remaining obligation shall be to perform its
duties hereunder in accordance with the terms of the Agreement.



24. The Escrow Agent may resign at any time from its obligations under this Escrow Agreement by
providing written notice to the Company. Such resignation shall be effective on the date specified
in such notice, which shall be not less than thirty (30) days after such written notice has been
given. The Escrow Agent shall have no responsibility for the appointment of a successor escrow
agent.




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     25. The Escrow Agent may be removed for cause by the Company by written notice to the Escrow Agent
effective on the date specified in such written notice. The removal of the Escrow Agent shall not
deprive the Escrow Agent of its compensation earned prior to such removal.



     26. The Company shall provide to Escrow Agent any documentation and information reasonably
requested by the Escrow Agent for it to comply with the USA Patriot Act of 2001, as amended from
time to time.









[Signature page follows]














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Agreed to as of the 16th day of September, 2008.




	 	 	 	 	 
	 	COLE CREDIT PROPERTY TRUST III, INC.


 	 
	 	By:  	/s/ D. Kirk McAllaster, Jr.
 	 
	 	 	D. Kirk McAllaster, Jr. 	 
	 	 	Executive Vice President and

Chief Financial Officer

 	 
	 
	 	COLE CAPITAL CORPORATION


 	 
	 	By:  	/s/ Marc T. Nemer 	 
	 	 	Marc T. Nemer 	 
	 	 	President, Secretary and Treasurer 	 
	 


The terms and conditions contained above are hereby accepted and agreed to by:




UMB Bank, N.A. as Escrow Agent




	 	 	 	 	 
	 	 	 
	By:  	/s/ Ralph Neighbors 	 
	Name:  	Ralph Neighbors 	 
	Title:  	Vice
President 	 



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EXHIBIT A




[Form of Notice to Pennsylvania Subscribers]



You have tendered a subscription to purchase shares of common stock of Cole Credit Property Trust
III, Inc. (the “Company”). Your subscription is currently being held in escrow. The guidelines of
the Pennsylvania Securities Commission do not permit the Company to accept subscriptions from
Pennsylvania residents until an aggregate of $124,000,000 of gross offering proceeds have been
received by the Company. The Pennsylvania guidelines provide that until this minimum amount of
offering proceeds is received by the Company, every 120 days during the offering period
Pennsylvania Subscribers may request that their subscription be returned.



If you wish to continue your subscription in escrow until the Pennsylvania minimum subscription
amount is received, nothing further is required.



If you wish to terminate your subscription for the Company’s common stock and have your
subscription returned please so indicate below, sign, date, and return to the Escrow Agent, UMB
Bank, N.A.



I hereby terminate my prior subscription to purchase shares of common stock of Cole Credit Property
Trust III, Inc. and request the return of my subscription funds. I certify to Cole Credit Property
Trust III, Inc. that I am a resident of Pennsylvania.




	 	 	 	 	 
	 	 	 	Signature:	 
	 
	 	 	 	Name:	 
	 	 	 	 	        (please
print)
	 
	 	 	 	Date:	 




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EXHIBIT B




PERMISSIBLE ESCROW INVESTMENTS





			
	(i)	 	Bank accounts;
	(ii)	 	Bank money-market accounts;
	(iii)	 	Short time certificates of deposit issued by a bank; and
	(iv)	 	Short-term securities issued or guaranteed by the U.S. government






 









 








EXHIBIT C




ESCROW FEES AND EXPENSES