Document:

exv10w2

 

Exhibit 10.2

INDEMNIFICATION AGREEMENT

     This INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into this                      day of
                                        ,
2005 by and between Landwin REIT, Inc., a Maryland corporation (the “Company”),
and                      (the “Indemnitee”).

RECITALS

     WHEREAS, it is essential to the Company to retain and attract as directors and officers the
most capable persons available;

     WHEREAS, the Indemnitee is a director and/or officer of the Company;

     WHEREAS, both the Company and the Indemnitee recognize the increased risk of litigation and
other claims being asserted against directors and officers of companies in today’s environment;

     WHEREAS, the Company’s Articles of Incorporation (the “Charter”) provide that the Company will
indemnify its directors and officers subject to the conditions set forth
under Maryland law and other conditions set forth in the Charter, and will advance expenses
in connection therewith, and the Indemnitee’s willingness to serve as a director and/or officer of
the Company is based in part on the Indemnitee’s reliance on such provisions;

     WHEREAS, the Maryland General Corporation Law (the “Maryland Statute”) expressly recognizes
that the indemnification provisions of the Maryland Statute are not exclusive of any other rights
to which a person seeking indemnification may be entitled under the Charter or Bylaws of the
Company, a resolution of stockholders or directors, an agreement or otherwise, and this Agreement
is being entered into pursuant to and in furtherance of the Charter and Bylaws, as permitted by the
Maryland Statute and as authorized by the Charter and the Board of Directors of the Company (the
“Board”); and

     WHEREAS, in recognition of the Indemnitee’s need for substantial protection against personal
liability in order to enhance the Indemnitee’s continued service to the Company in an effective
manner, and the Indemnitee’s reliance on the aforesaid provisions of the Charter, and in part to
provide the Indemnitee with specific contractual assurance that the protection promised by such
provisions will be available to the Indemnitee (regardless of, among other things, any amendment to
or revocation of such provisions or any change in the composition of the Board or any acquisition
or business combination transaction relating to the Company), the Company wishes to provide in this
Agreement for the indemnification of and the advancement of expenses to the Indemnitee as set forth
in this Agreement and, to the extent insurance is maintained, for the continued coverage of the
Indemnitee under the Company’s directors’ and officers’ liability insurance policies, if any.

     NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and
agreements contained herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

 

     1. Indemnification.

          (a) In accordance with the provisions of subsection (b) of this Section 1, the Company shall
hold harmless and indemnify the Indemnitee against any and all reasonable expenses, liabilities and
losses (including, without limitation, investigation expenses and expert witnesses’ and attorneys’
fees and expenses, judgments, penalties, fines, ERISA excise taxes and amounts paid or to be paid
in settlement) actually incurred by the Indemnitee (net of any related insurance proceeds or other
amounts received by the Indemnitee or paid by or on behalf of the Company on the Indemnitee’s
behalf), in connection with any action, suit, arbitration or proceeding (or any inquiry or
investigation, whether brought by or in the right of the Company or otherwise, that the Indemnitee
in good faith believes might lead to the institution of any such action, suit, arbitration or
proceeding), whether civil, criminal, administrative or investigative, or any appeal therefrom, in
which the Indemnitee is a party, is threatened to be made a party, is a witness or is participating
(a “Proceeding”) based upon, arising from, relating to or by reason of the fact that Indemnitee is,
was, shall be or shall have been a director and/or officer of the Company or is or was serving,
shall serve, or shall have served at the request of the Board of Directors of the Company as a
director, officer, partner, trustee, employee or agent (“Affiliate Indemnitee”) of another foreign
or domestic corporation or non-profit corporation, cooperative, partnership, joint venture, trust
or other incorporated or unincorporated enterprise (each, a “Company Affiliate”).

          (b) In providing the foregoing indemnification, the Company shall, with respect to a
Proceeding, hold harmless and indemnify the Indemnitee, if all of the following conditions are met:

	(i)	 	The Indemnitee has determined, in good faith, that the course of conduct that
caused the loss or liability was in the best interests of the Company.
	 
	(ii)	 	The Indemnitee was acting on behalf of or performing services for the Company.
	 
	(iii)	 	Such liability or loss was not the result of (A) negligence or misconduct, in
the case that the Indemnitee is a Director (other than an Independent Director), the
Advisor or an Affiliate of the Advisor or (B) gross negligence or willful misconduct,
in the case that the Indemnitee is an Independent Director.
	 
	(iv)	 	Such indemnification or agreement to hold harmless is recoverable only out of
the Company’s net assets and not from the Company’s stockholders.

          (c) Notwithstanding anything to the contrary contained in paragraph (a) or (b) above,
the Company shall not provide indemnification for any loss, liability or expense arising
from or out of an alleged violation of federal or state securities laws by Indemnitee 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 material securities law
violations as to the Indemnitee; (ii) such claims have been dismissed with prejudice on the
merits by a court of competent jurisdiction as to the Indemnitee; or (iii) a court of
competent jurisdiction approves a settlement of the claims against the Indemnitee and finds
that indemnification of the settlement and the related costs should be made, and the court
considering the request for indemnification has been advised of the position of the
Securities and Exchange Commission and of the published position of any state securities
regulatory authority in which Securities were offered or sold as to indemnification for
violations of securities laws.

          (d) Without limiting the generality of the foregoing, the Indemnitee shall be entitled to the
rights of indemnification provided in this Section 1 for any expenses actually incurred in any
Proceeding initiated by or in the right of the Company unless the Indemnitee shall have been
adjudged to be liable to the Company.

          (e) If the Indemnitee is entitled under this Agreement to indemnification by the Company for
some or a portion of the Indemnified Amounts (as hereinafter defined) but not, however, for all of
the total amount thereof, the Company shall nevertheless indemnify the Indemnitee for the portion
thereof to which Indemnitee is entitled.

          (f) Notwithstanding anything herein to the contrary, if the Indemnitee (or Affiliate
Indemnitee) is unwilling to accept a settlement offer (the “Settlement Offer”) with respect to any
Proceeding, under which settlement offer no civil or criminal liability (or presumption of civil or
criminal liability) is imposed on the Indemnitee (or Affiliate Indemnitee) and the Company has
agreed in writing to pay all costs and expenses associated therewith, then

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the Company’s indemnification obligations hereunder with respect to such Proceeding shall
terminate, provided that Indemnitee shall still be entitled to receive all rights provided, and
amounts payable, under the Settlement Offer.

     2. Other Indemnification Arrangements. The Maryland Statute, the Charter and the
Bylaws of the Company permit the Company to purchase and maintain insurance or furnish similar
protection or make other arrangements, including, without limitation, providing a trust fund letter
of credit or surety bond (collectively, the “Indemnity Arrangements”) on behalf of the Indemnitee
against any liability asserted against him or incurred by or on behalf of him in such capacity as a
director or officer of the Company or as an Affiliate Indemnitee, or arising out of his status as
such, whether or not the Company would have the power to indemnify him against such liability under
the provisions of this Agreement or under the Maryland Statute, as it may then be in effect. The
purchase, establishment and maintenance of any such Indemnification Arrangement shall not in any
way limit or affect the rights and obligations of the Company or of the Indemnitee under this
Agreement except as expressly provided herein, and the execution and delivery of this Agreement by
the Company and the Indemnitee shall not in any way limit or affect the rights and obligations of
the Company or the other party or parties thereto under any such Indemnification Arrangement. All
amounts payable by the Company pursuant to this Section 2 and Section 1 hereof are herein referred
to as “Indemnified Amounts.”

     3. Advance Payment of Indemnified Amounts.

          (a) The Indemnitee hereby is granted the right to receive in advance of a final,
non-appealable judgment or other final adjudication of a Proceeding (a “Final Determination”) the
amount of any and all expenses, including, without limitation, investigation expenses, expert
witness and attorneys’ fees and other expenses expended or incurred by the Indemnitee in connection
with any Proceeding or otherwise expended or incurred by the Indemnitee (such amounts so expended
or incurred being referred to as “Advanced Amounts”)
if all of the following conditions are satisfied:

	(i)	 	the proceeding relates to acts or omissions with respect to the performance of
duties or services on behalf of the Company;
	 
	(ii)	 	the Indemnitee provides the Company with written affirmation of the
Indemnitee’s good faith belief that the Indemnitee has met the standard of conduct
necessary for indemnification by the Company set forth in this agreement;
	 
	(iii)	 	the legal proceeding was initiated by a third party who is not a stockholder
or, if by a stockholder of the Company acting in his or her capacity as such, a court
of competent jurisdiction approves such advancement; and
	 
	(iv)	 	the Indemnitee provides the Company with a written agreement to repay the
amount paid or reimbursed by the Company, together with the applicable legal rate of
interest thereon, if it is ultimately determined that the Indemnitee did not comply
with the requisite standard of conduct and is not entitled to indemnification. Any
indemnification payment or reimbursement of expenses will be furnished in accordance
with the procedures in Section 2-418(e) of the Maryland Statute or any successor
statute.

          (b) In making any written request for Advanced Amounts, the Indemnitee shall submit to the
Company a schedule setting forth in reasonable detail the dollar amount expended or incurred and
expected to be expended. Each such listing shall be supported by the bill, agreement or other
documentation relating thereto, each of which shall be appended to the schedule as an exhibit. In
addition, before the Indemnitee may receive Advanced Amounts from the Company, the Indemnitee shall
provide to the Company (i) a written affirmation of the Indemnitee’s good faith belief that the
applicable standard of conduct required for indemnification by the Company has been satisfied by
the Indemnitee and (ii) a written undertaking by or on behalf of the Indemnitee to repay the
Advanced Amount if it shall ultimately be determined that the Indemnitee has not satisfied any
applicable standard of conduct. The written undertaking required from the Indemnitee shall be an
unlimited general obligation of the Indemnitee but need not be secured. The Company shall pay to
the Indemnitee all Advanced Amounts within ten (10) business days after receipt by the Company of
all information and documentation required to be provided by the Indemnitee pursuant to this
subsection (b).

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     4. Procedure for Payment of Indemnified Amounts.

          (a) To obtain indemnification under this Agreement, the Indemnitee shall submit to the Company
a written request for payment of the appropriate Indemnified Amounts, including with such request
such documentation and information as is reasonably available to the Indemnitee and reasonably
necessary to determine whether and to what extent the Indemnitee is entitled to indemnification.
The Secretary of the Company shall, promptly upon receipt of such a request for indemnification,
advise the Board in writing that the Indemnitee has requested indemnification.

          (b) The Company shall pay the Indemnitee the appropriate Indemnified Amounts unless it is
established that the Indemnitee has not met any applicable standard
of conduct set forth in this agreement. For purposes of determining whether the Indemnitee is
entitled to Indemnified Amounts, in order to deny indemnification to the Indemnitee the Company has
the burden of proof in establishing that the Indemnitee did not meet the applicable standard of
conduct. In this regard, a termination of any Proceeding by judgment, order or settlement does not
create a presumption that the Indemnitee did not meet the requisite standard of conduct; provided,
however, that the termination of any criminal proceeding by conviction, or a pleading of
nolo contendere or its equivalent, or an entry of an order of probation prior to
judgment, creates a rebuttable presumption that the Indemnitee did not meet the applicable standard
of conduct.

          (c) Any determination that the Indemnitee has not met the applicable standard of conduct
required to qualify for indemnification shall be made (i) either by the Board by a majority vote of
a quorum consisting of directors who were not parties of such action, suit or proceeding or (ii) by
independent legal counsel (who may be the outside counsel regularly employed by the Company),
provided that the manner in which (and, if applicable, the counsel by which) the right to
indemnification is to be determined shall be approved in advance in writing by both the highest
ranking executive officer of the Company who is not party to such action (sometimes hereinafter
referred to as the “Senior Officer”) and by the Indemnitee. In the event that such parties are
unable to agree on the manner in which any such determination is to be made, such determination
shall be made by independent legal counsel retained by the Company especially for such purpose,
provided that such counsel be approved in advance in writing by both the Senior Officer and the
Indemnitee and, provided further, that such counsel shall not be outside counsel regularly employed
by the Company. The fees and expenses of counsel in connection with making said determination
contemplated hereunder shall be paid by the Company, and if requested by such counsel, the Company
shall give such counsel an appropriate written agreement with respect to the payment of their fees
and expenses and such other matters as may be reasonably requested by counsel.

          (d) The Company will use its best efforts to conclude as soon as practicable any required
determination pursuant to subsection (c) above and promptly will advise the Indemnitee in writing
with respect to any determination that the Indemnitee is or is not entitled to indemnification,
including a description of any reason or basis for which indemnification has been denied. Payment
of any applicable Indemnified Amounts will be made to the Indemnitee within ten (10) days after any
determination of the Indemnitee’s entitlement to indemnification.

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          (e) Notwithstanding the foregoing, the Indemnitee may, at any time sixty (60) days after a
claim for Indemnified Amounts has been filed with the Company (or upon receipt of written notice
that a claim for Indemnified Amounts has been rejected, if earlier) and before three (3) years
after a claim for Indemnified Amounts has been filed, petition a court of competent jurisdiction to
determine whether the Indemnitee is entitled to indemnification under the provisions of this
Agreement, and such court shall thereupon have the exclusive authority to make such determination
unless and until such court dismisses or otherwise terminates such action without having made such
determination. The court shall, as petitioned, make an independent determination of whether the
Indemnitee is entitled to indemnification as provided under this Agreement, irrespective of any
prior determination made by the Board or independent counsel. If the court shall determine that
the Indemnitee is entitled to indemnification as to any claim, issue or matter involved in the
Proceeding with respect to which there has been no prior determination pursuant to this Agreement
or with respect to which there has been a prior determination that the Indemnitee was not entitled
to indemnification hereunder, the Company shall pay all expenses (including attorneys’ fees)
actually incurred by the Indemnitee in connection with such judicial determination.

     5. Agreement Not Exclusive; Subrogation Rights, etc.

          (a) This Agreement shall not be deemed exclusive of and shall not diminish any other rights
the Indemnitee may have to be indemnified or insured or otherwise protected against any liability,
loss or expense by the Company, any subsidiary of the Company or any other person or entity under
any charter, bylaws, law, agreement, policy of insurance or similar protection, vote of
stockholders or directors, disinterested or not, or otherwise, whether or not now in effect, both
as to actions in the Indemnitee’s official capacity, and as to actions in another capacity while
holding such office. The Company’s obligations to make payments of Indemnified Amounts hereunder
shall be satisfied to the extent that payments with respect to the same Proceeding (or part
thereof) have been made to or for the benefit of the Indemnitee by reason of the indemnification of
the Indemnitee pursuant to any other arrangement made by the Company for the benefit of the
Indemnitee.

          (b) In the event the Indemnitee shall receive payment from any insurance carrier or from the
plaintiff in any Proceeding against the Indemnitee in respect of Indemnified Amounts after payments
on account of all or part of such Indemnified Amounts have been made by the Company pursuant
hereto, the Indemnitee shall promptly reimburse to the Company the amount, if any, by which the sum
of such payment by such insurance carrier or such plaintiff and payments by the Company or pursuant
to arrangements made by the Company to Indemnitee exceeds such Indemnified Amounts; provided,
however, that such portions, if any, of such insurance proceeds that are required to be reimbursed
to the insurance carrier under the terms of its insurance policy, such as deductible or
co-insurance payments, shall not be deemed to be payments to the Indemnitee hereunder. In
addition, upon payment of Indemnified Amounts hereunder, the Company shall be subrogated to the
rights of the Indemnitee receiving such payments (to the extent thereof) against any insurance
carrier (to the extent permitted under such insurance policies) or plaintiff in respect of such
Indemnified Amounts, and the Indemnitee shall execute and deliver any and all instruments and
documents and perform any and all other acts or deeds which the Company deems necessary or
advisable to secure such rights. Such right of

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subrogation shall be terminated upon receipt by the Company of the amount to be reimbursed by
the Indemnitee pursuant to the first sentence of this subsection (b).

     6. Insurance Coverage. In the event that the Company maintains directors’ and
officers’ liability insurance to protect itself and any director or officer of the Company against
any expense, liability or loss, such insurance shall cover the Indemnitee to at least the same
extent as any other director or officer of the Company.

     7. Establishment of Trust. The Company may, in its sole discretion, create a trust
(the “Trust”) for the benefit of the Indemnitee and, to the extent such Trust has been created,
from time to time upon written request of Indemnitee shall fund the Trust in an amount sufficient
to satisfy any and all Indemnified Amounts (including Advanced Amounts) which are actually paid or
which Indemnitee reasonably determines from time to time may be payable by the Company under this
Agreement. The amount or amounts to be deposited in the Trust pursuant to the foregoing funding
obligation shall be determined by the independent legal counsel appointed under Section 4 hereof.
If the Trust is established, the terms thereof shall provide that (i) the Trust shall not be
revoked or the principal thereof invaded without the written consent of the Indemnitee; (ii) the
trustee of the Trust (the “Trustee”) shall advance, within ten (10) business days of a request by
the Indemnitee, any and all Advanced Amounts to the Indemnitee (and the Indemnitee hereby agrees to
reimburse the Trust under the circumstances which the Indemnitee would be required to reimburse the
Company under Section 3(b)(ii) hereof); the Company shall continue to fund the Trust from time to
time in accordance with the funding obligations set forth above; (iv) the Trustee shall promptly
pay to the Indemnitee all Indemnified Amounts for which the Indemnitee shall be entitled to
indemnification pursuant to this Agreement; and (v) all unexpended funds in the Trust shall revert
to the Company upon a final determination by a court of competent jurisdiction in a final decision
from which there is no further right of appeal that the Indemnitee has been fully indemnified under
the terms of this Agreement. The Trustee shall be chosen by the Indemnitee. Nothing in this
Section 7 shall relieve the Company of any of its obligations under this Agreement.

     8. Continuation of Indemnity. All agreements and obligations of the Company contained
herein shall continue during the period the Indemnitee is a director or officer of the Company (or
is serving at the request of the Company as an Affiliate Indemnitee) and shall continue thereafter
so long as the Indemnitee shall be subject to any possible Proceeding by reason of the fact that
the Indemnitee was a director or officer of the Company or was serving in any other capacity
referred to herein.

     9. Successors; Binding Agreement. This Agreement shall be binding on and shall inure
to the benefit of and be enforceable by the Company’s successors and assigns and by the
Indemnitee’s personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. The Company shall require any successor or assignee (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company, by written agreement in form and substance reasonably
satisfactory to the Company and to the Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be required to perform
if no such succession or assignment had taken place.

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     10. Enforcement. The Company has entered into this Agreement and assumed the
obligations imposed on the Company hereby in order to induce the Indemnitee to act as a director or
officer, as the case may be, of the Company, and acknowledge that the Indemnitee is relying upon
this Agreement in continuing in such capacity. In the event the Indemnitee is required to bring
any action to enforce rights or to collect moneys due under this Agreement and is successful in
such action, the Company shall reimburse the Indemnitee for all of the Indemnitee’s fees and
expenses in bringing and pursuing such action. The Indemnitee shall be entitled to the advancement
of Indemnified Amounts to the full extent contemplated by Section 3 hereof in connection with such
proceeding.

     11. Separability. Each of the provisions of this Agreement is a separate and distinct
agreement independent of the others, so that if any provision hereof shall be held to be invalid or
unenforceable for any reason, such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof, which other provisions shall remain in full force
and effect.

     12. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such modification, waiver or discharge is approved by the Board and agreed to in
writing signed by the Indemnitee and either the Chairman of the Board or the Chief Executive
Officer of the Company or another officer of the Company specifically designated by the Board. No
waiver by either party at any time of any breach by the other party of, or of compliance with, any
condition or provision of this Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same time or at any prior or
subsequent times. No agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. The validity, interpretation, construction, and performance of this
Agreement shall be governed by the laws of the State of Maryland, without giving effect to the
principles of conflicts of laws thereof. The Indemnitee may bring an action seeking resolution of
disputes or controversies arising under or in any way related to this Agreement in the state or
federal court jurisdiction in which the Indemnitee resides or in which his place of business is
located, and in any related appellate courts, and the Company consents to the jurisdiction of such
courts and to such venue.

     13. Notices. For the purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by United States registered mail, return receipt requested, postage prepaid, as
follows: (i) if to the Indemnitee, at the address set forth below the Indemnitee’s name on the
signature page hereof, and (ii) if to the Company:

	 	 	 
	 

	 	17200 Ventura Boulevard
	 

	 	Suite 206
	 

	 	Encino, California 91316
	 

	 	Attention: Corporate Secretary

or to such other address as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.

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     14. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together shall constitute one and the same
instrument.

     15. Effectiveness. This Agreement shall be effective as of the date it is executed.

[Signature Page Follows]

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     IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the
day and year first above written.

	 	 	 	 	 	 	 
	 	 	LANDWIN REIT, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Martin Landis	 	 
	 

	 	 	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	INDEMNITEE	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

9exv10w3

 

EXHIBIT 10.3

SUBSCRIPTION ESCROW AGREEMENT

THIS SUBSCRIPTION ESCROW AGREEMENT (this “Escrow Agreement”), dated as of                     , is
entered into by and between Landwin REIT, Inc. (the “Company”) and Wells Fargo Bank, National
Association, as Escrow Agent (the “Escrow Agent”).

WHEREAS, the Company intends to raise cash funds from investors (the “Investors”) pursuant to a
public offering (the “Offering”) of not less than $50,000,000 (the “Minimum Amount”) nor more than
$250,000,000 (the “Maximum Amount”) of common stock, par value $0.01 per share of the Company (the
“Securities”), for which each Investor will pay $10.00 per share.

WHEREAS, the Company desires to deposit funds contributed by the Investors with the Escrow Agent,
to be held for the benefit of the Investors and the Company until such time as subscriptions for
the Minimum Amount of the Securities, have been deposited into escrow or otherwise in accordance
with the terms of this Escrow Agreement.

WHEREAS, the Escrow Agent is willing to accept appointment as Escrow Agent only for the expressed
duties outlined herein.

NOW, THEREFORE, in consideration of the premises set forth above and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

1. Proceeds to be Escrowed. On or before the first date of the Offering, the Company shall
establish an escrow account with the Escrow Agent (the “Escrow Account”). All funds received from
Investors in payment for the Securities (“Investor Funds”) will be delivered to the Escrow Agent
within three (3) business days following the day upon which the Company determines to accept the
subscription, and shall, upon receipt by the Escrow Agent, be retained in escrow by the Escrow
Agent and invested as stated below. During the term of this Escrow Agreement, the Company shall
cause all checks received by and made payable to it in payment for the Securities to be endorsed in
favor of the Escrow Agent and delivered to the Escrow Agent for deposit in the Escrow Account.

Escrow Agent shall have no duty to make any disbursement, investment or other use of Investor Funds
until and unless it has collected funds. In the event that any checks deposited in the Escrow
Account prove uncollectible after the funds represented thereby have been released by the Escrow
Agent, then the Company shall promptly reimburse the Escrow Agent for any and all costs incurred
for such, upon request, and the Escrow Agent shall deliver the returned checks to the Company. The
Escrow Agent shall be under no duty or responsibility to enforce collection of any check delivered
to it hereunder.

2. Identity of Subscribers. A copy of the Offering document is attached as Exhibit A [to be
provided by Company]. The Company shall furnish to the Escrow Agent with each delivery of Investor
Funds, a list of the Investors who have paid for the Securities showing the name,

 

 

address, tax identification number, amount of Securities subscribed for and the amount paid. The
information comprising the identity of Investors shall be provided to the Escrow Agent in the
format set forth in the List of Investors, attached as Exhibit B. All Investor Funds so
deposited shall not be subject to any liens or charges by the Company or the Escrow Agent, or
judgments or creditors’ claims against the Company, until released to the Company as hereinafter
provided. The Company understands and agrees that the Company shall not be entitled to any
Investor Funds on deposit in the Escrow Account and no such funds shall become the property of the
Company, or any other entity except as released to the Company pursuant to Section 3. The Escrow
Agent will not use the information provided to it by the Company for any purpose other than to
fulfill its obligations as Escrow Agent. The Company and the Escrow Agent will treat all Investor
information as confidential. The Escrow Agent shall not be required to accept any Investor Funds
which are not accompanied by the information on the List of Investors.

3. Disbursement of Funds. In the event the Escrow Agent receives written notice from the Company
that the Company intends to reject an Investor’s subscription, the Escrow Agent shall pay to the
applicable Investor(s), within a reasonable time not to exceed ten (10) business days after
receiving notice of the rejection, by first class United States Mail at the address appearing on
the List of Investors, or at such other address as shall be furnished to the Escrow Agent by the
Investor in writing, all sums paid by the Investor for Securities, together with the interest
earned on such Investor Funds. Once the Escrow Agent is in receipt of collected Investor Funds
totaling at least the Minimum Amount, the Escrow Agent shall notify the Company of same in writing.
Thereafter, once the Escrow Agent is in receipt of additional collected Investor Funds in an amount
which, when added to the Minimum Amount, would equal $250,000,000 the Escrow Agent shall notify the
Company of same in writing. Additionally, at the end of the third business day following the
Termination Date (as defined in Section 4), the Escrow Agent shall notify the Company of the amount
of the Investor Funds received. If the Minimum Amount or more is obtained at any time before the
Termination Date and the Company has delivered a written notice signed by two officers of the
Company, stating that it has received and accepted subscriptions for the Minimum Amount, then the
Escrow Agent shall pay out the Investor Funds and all earnings thereon when and as directed by the
officers of the Company. If the Minimum Amount has not been obtained and delivered before the
Termination Date, the Escrow Agent shall, within a reasonable time following the Termination Date,
but in no event more than ten (10) business days after the Termination Date, refund to each
Investor by first class United States Mail at the address appearing on the List of Investors, or at
such other address as shall be furnished to the Escrow Agent by the Investor in writing, all sums
paid by the Investor for Securities, together with the interest earned on such funds in the Escrow
Account, and shall then notify the Company in writing of such refunds. The Company may extend the
Offering once the Minimum Amount has been received by the Escrow Agent by giving written notice to
the Escrow Agent, until the earlier of (i) such time as the Company has received the Maximum
Amount, or (ii) the one year anniversary of this Escrow Agreement. The Company agrees that it
shall not extend the Offering in contravention of the terms of the Offering documents.

4. Term of Escrow. The “Termination Date” shall be the earlier of (i) the date on which Investor
Funds totaling the Minimum Amount are received by the Escrow Agent; provided that the Company may
extend this date by 60 days upon written notice to the Escrow Agent; provided however, that in all
events this escrow shall terminate not later than the one year anniversary of

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the date of this Escrow Agreement; (ii) the date the Escrow Agent receives written notice from the
Company that it is abandoning the sale of the Securities; (iii) the date the Escrow Agent receives
notice from the Securities and Exchange Commission or any other federal or state regulatory
authority that a stop or similar order has been issued with respect to the Offering document and
has remained in effect for at least twenty (20) days or (iv) the date the Escrow Agent institutes
an interpleader action. After the Termination Date the Company shall not deposit, and the Escrow
Agent shall not accept, any additional amounts representing payments by prospective Investors.

5. Duty and Liability of the Escrow Agent. The sole duty of the Escrow Agent shall be to receive
Investor Funds and hold them subject to release, in accordance herewith, and the Escrow Agent shall
be under no duty to determine whether the Company is complying with requirements of this Escrow
Agreement, the Offering or applicable law in tendering the Investor Funds to the Escrow Agent. No
other agreement entered into between the parties, or any of them, shall be considered as adopted or
binding, in whole or in part, upon the Escrow Agent notwithstanding that any such other agreement
may be referred to herein or deposited with the Escrow Agent or the Escrow Agent may have knowledge
thereof, and the Escrow Agent’s rights and responsibilities shall be governed solely by this Escrow
Agreement. The Escrow Agent shall not be responsible for or be required to enforce any of the
terms or conditions of any Offering document or other agreement between the Company and any other
party. The Escrow Agent may conclusively rely upon and shall be protected in acting upon any
statement, certificate, notice, request, consent, order or other document believed by it to be
genuine and to have been signed or presented by the proper party or parties. The Escrow Agent shall
have no duty or liability to verify any such statement, certificate, notice, request, consent,
order or other document, and its sole responsibility shall be to act only as expressly set forth in
this Escrow Agreement. Concurrent with the execution of this Escrow Agreement, the Company shall
deliver to the Escrow Agent an authorized signers form in the form of Exhibit C to this Escrow
Agreement. The Escrow Agent shall be under no obligation to institute or defend any action, suit
or proceeding in connection with this Escrow Agreement unless first indemnified to its
satisfaction. The Escrow Agent may consult counsel of its own choice with respect to any question
arising under this Escrow Agreement and the Escrow Agent shall not be liable for any action taken
or omitted in good faith upon advice of such counsel. The Escrow Agent shall not be liable for any
action taken or omitted by it in good faith except to the extent that a court of competent
jurisdiction determines that the Escrow Agent’s gross negligence or willful misconduct was the
primary cause of loss. The Escrow Agent is acting solely as escrow agent hereunder and owes no
duties, covenants or obligations, fiduciary or otherwise, to any other person by reason of this
Escrow Agreement, except as otherwise stated herein, and no implied duties, covenants or
obligations, fiduciary or otherwise, shall be read into this Escrow Agreement against the Escrow
Agent. In the event of any disagreement between any of the parties to this Escrow Agreement, or
between any of them and any other person, including any Investor, resulting in adverse claims or
demands being made in connection with the matters covered by this Escrow Agreement, or in the event
that the Escrow Agent is in doubt as to what action it should take hereunder, the Escrow Agent may,
at its option, refuse to comply with any claims or demands on it, or refuse to take any other
action hereunder, so long as such disagreement continues or such doubt exists, and in any such
event, the Escrow Agent shall not be or become liable in any way or to any person for its failure
or refusal to act, and the Escrow Agent shall be

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entitled to continue so to refrain from acting until (i) the rights of all interested parties shall
have been fully and finally adjudicated by a court of competent jurisdiction, or (ii) all
differences shall have been adjudged and all doubt resolved by agreement among all of the
interested persons, and the Escrow Agent shall have been notified thereof in writing signed by all
such persons. Notwithstanding the foregoing, the Escrow Agent may in its discretion obey the order,
judgment, decree or levy of any court, whether with or without jurisdiction and the Escrow Agent is
hereby authorized in its sole discretion to comply with and obey any such orders, judgments,
decrees or levies. In the event that any controversy should arise with respect to this Escrow
Agreement the Escrow Agent shall have the right, at its option, to institute an interpleader action
in any court of competent jurisdiction to determine the rights of the parties. In no event shall
the Escrow Agent be liable, directly or indirectly, for any special, indirect or consequential
losses or damages of any kind whatsoever (including without limitation lost profits), even if the
Escrow Agent has been advised of the possibility of such losses or damages and regardless of the
form of action. The parties agree that the Escrow Agent has no role in the preparation of the
Offering documents, has not reviewed any such documents and makes no representations or warranties
with respect to the information contained therein or omitted therefrom. The Escrow Agent shall
have no obligation, duty or liability with respect to compliance with any federal or state
securities, disclosure or tax laws concerning the Offering documents or the issuance, offering or
sale of the Securities. The Escrow Agent shall have no duty or obligation to monitor the
application and use of the Investor Funds once transferred to the Company, that being the sole
obligation and responsibility of the Company.

6. Escrow Agent’s Fee. The Escrow Agent shall be entitled to compensation for its services as
stated in the fee schedule attached hereto as Exhibit D, which compensation shall be paid by the
Company. The fee agreed upon for the services rendered hereunder is intended as full compensation
for the Escrow Agent’s services as contemplated by this Escrow Agreement; provided, however, that
in the event that the conditions for the disbursement of funds under this Escrow Agreement are not
fulfilled, or the Escrow Agent renders any material service not contemplated in this Escrow
Agreement, or there is any assignment of interest in the subject matter of this Escrow Agreement,
or any material modification hereof, or if any material controversy arises hereunder, or the Escrow
Agent is made a party to any litigation pertaining to this Escrow Agreement, or the subject matter
hereof, then the Escrow Agent shall be reasonably compensated for such extraordinary services and
reimbursed for all costs and expenses, including reasonable attorney’s fees, occasioned by any
delay, controversy, litigation or event, and the same shall be recoverable from the Company.

7. Investment of Proceeds. The Investor Funds shall be deposited in the Escrow Account. The
Escrow Agent is hereby directed to invest all funds received under this Escrow Agreement, including
principal and interest in cash or the Wells Fargo Advantage Funds [insert name of fund] Money
Market Fund Service Class Shares designated in writing in the form of Exhibit E to this Escrow
Agreement. The Escrow Agent shall invest the Investor Funds in alternative investments in
accordance with written instructions as may from time to time be provided to the Escrow Agent and
signed by the Company. In the absence of written investment instructions from the Company, the
Escrow Agent is hereby directed to invest the Investor Funds in cash. Any interest
received by the Escrow Agent with respect to the Investor Funds, including

4

 

reinvested interest shall become part of the Investor Funds, and shall be disbursed pursuant to
Section 3. The Company agrees that, for tax reporting purposes, all interest or other taxable
income earned on the Investor Funds shall be reportable in the amount and to whom such interest was
disbursed..

The Escrow Agent shall be entitled to sell or redeem any such investments as necessary to make any
payments or distributions required under this Escrow Agreement. The Escrow Agent shall have no
responsibility or liability for any loss which may result from any investment made pursuant to this
Escrow Agreement, or for any loss resulting from the sale of such investment. The parties
acknowledge that the Escrow Agent is not providing investment supervision, recommendations, or
advice.

The Company shall provide the Escrow Agent with certified tax identification numbers by furnishing
appropriate IRS forms W-9 or W-8 or other forms and documents that the Escrow Agent may reasonably
request. The Company understands that if such tax reporting documentation is not so certified to
the Escrow Agent, the Escrow Agent may be required by the Internal Revenue Code of 1986, as
amended, to withhold a portion of any interest or other income earned on the Investor Funds
pursuant to this Escrow Agreement.

The Company agrees to indemnify and hold the Escrow Agent harmless from and against any taxes,
additions for late payment, interest, penalties and other expenses that may be assessed against the
Escrow Agent on or with respect to any payment or other activities under this Escrow Agreement
unless any such tax, addition for late payment, interest, penalties and other expenses shall be
determined by a court of competent jurisdiction to have been caused by the Escrow Agent’s gross
negligence or willful misconduct. The terms of this Section shall survive the termination of this
Escrow Agreement and the resignation or removal of the Escrow Agent.

8. Notices. All notices, requests, demands, and other communications under this Escrow Agreement
shall be in writing and shall be deemed to have been duly given (a) on the date of service if
served personally on the party to whom notice is to be given, (b) on the day of transmission if
sent by facsimile/email transmission to the facsimile number/email address given below, and
telephonic confirmation of receipt is obtained promptly after completion of transmission, (c) on
the day after delivery to Federal Express or similar overnight courier or the Express Mail service
maintained by the United States Postal Service, or (d) on the fifth day after mailing, if mailed to
the party to whom notice is to be given, by first class mail, registered or certified, postage
prepaid, and properly addressed, return receipt requested, to the party as follows:

If to the Company:

Landwin REIT, Inc.

Attn: President

17200 Ventura Blvd., Suite 206

Encino, CA 91316

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If to Escrow Agent:

                                        

                                        

Any party may change its address for purposes of this Section by giving the other party written
notice of the new address in the manner set forth above.

9. Indemnification of Escrow Agent: The Company hereby indemnifies and holds harmless the Escrow
Agent from and against, any and all loss, liability, cost, damage and expense, including, without
limitation, reasonable counsel fees, which the Escrow Agent may suffer or incur by reason of any
action, claim or proceeding brought against the Escrow Agent arising out of or relating in any way
to this Escrow Agreement or any transaction to which this Escrow Agreement relates unless such
action, claim or proceeding is determined by a court of competent jurisdiction to be the result of
the gross negligence or willful misconduct of the Escrow Agent. The terms of this Section shall
survive the termination of this Escrow Agreement and the resignation or removal of the Escrow
Agent.

10. Successors and Assigns. Except as otherwise provided in this Escrow Agreement, no party hereto
shall assign this Escrow Agreement or any rights or obligations hereunder without the prior written
consent of the other parties hereto and any such attempted assignment without such prior written
consent shall be void and of no force and effect. This Escrow Agreement shall inure to the benefit
of and shall be binding upon the successors and permitted assigns of the parties hereto. Any
corporation or association into which the Escrow Agent may be converted or merged, or with which it
may be consolidated, or to which it may sell or transfer all or substantially all of its corporate
trust business and assets as a whole or substantially as a whole, or any corporation or association
resulting from any such conversion, sale, merger, consolidation or transfer to which the Escrow
Agent is a party, shall be and become the successor Escrow Agent under this Escrow Agreement and
shall have and succeed to the rights, powers, duties, immunities and privileges as its predecessor,
without the execution or filing of any instrument or paper or the performance any further act.

11. Governing Law; Jurisdiction. This Escrow Agreement shall be construed, performed, and enforced
in accordance with, and governed by, the internal laws of the State of California, without giving
effect to the principles of conflicts of laws thereof.

12. Severability. In the event that any part of this Escrow 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 Escrow
Agreement shall remain in full force and effect.

13. Amendments; Waivers. This Escrow Agreement may be amended or modified, and any of the terms,
covenants, representations, warranties, or conditions hereof may be waived, only by a written
instrument executed by the parties hereto, or in the case of a waiver, by the party waiving
compliance. Any waiver by any party of any condition, or of the breach of any provision, term,
covenant, representation, or warranty contained in this Escrow Agreement, in any one or more

6

 

instances, shall not be deemed to be nor construed as further or continuing waiver of any such
condition, or of the breach of any other provision, term, covenant, representation, or warranty of
this Escrow Agreement. The Company agrees that any requested waiver, modification or amendment of
this Escrow Agreement shall be consistent with the terms of the Offering.

14. Entire Agreement. This Escrow Agreement contains the entire understanding among the parties
hereto with respect to the escrow contemplated hereby and supersedes and replaces all prior and
contemporaneous agreements and understandings, oral or written, with regard to such escrow.

15. Section Headings. The section headings in this Escrow Agreement are for reference purposes only
and shall not affect the meaning or interpretation of this Escrow Agreement.

16. Counterparts. This Escrow Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which shall constitute the same instrument.

17. Resignation. The Escrow Agent may resign upon 30 days advance written notice to the parties
hereto. If a successor escrow agent is not appointed within the 30-day period following such
notice, the Escrow Agent may petition any court of competent jurisdiction to name a successor
escrow agent or interplead the Investor Funds with such court, whereupon the Escrow Agent’s duties
hereunder shall terminate.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be executed the day and
year first set forth above.

LANDWIN REIT, INC.

	 	 	 	 	 
	By:

	 	 	 	 
	 	 	 	 	 
	Its:
	 	 	 	 
	 	 	 	 	 

Wells Fargo Bank, National Association, as Escrow Agent

	 	 	 	 	 
	By:

	 	 	 	 
	 	 	 	 	 
	Its:
	 	 	 	 
	 	 	 	 	 
	Date:
	 	 	 	 
	 	 	 	 	 

  8

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