Document:

ex10_1.htm

Exhibit 10.1

AGREEMENT

THIS AGREEMENT (“Agreement”) is made as of February 22, 2011 between JAY NADEL (“Nadel”), an individual having an address at 20 Academy Lane, Demarest, New Jersey 07627, and LAPOLLA INDUSTRIES, INC., a Delaware corporation (“Company”) having a principal address at Intercontinental Business Park, 15402 Vantage Parkway East, Suite 322, Houston, Texas  77032.

WHEREAS, the Company desires to retain the services of Nadel, and Nadel agrees to be retained by the Company, upon the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties hereto, each intending to be legally bound hereby, agree as follows:

	
  

	
1.

	
Terms and Conditions of Engagement.

(a)           Engagement. Nadel shall perform such consulting and advisory services, within Nadel’s area of expertise, as may be requested by the Chairman (“Chairman”) of the Board of Directors of the Company (“Board”) or the Company, in consultation with the Chairman and President/CEO, from time to time.  Such services may include but not necessarily be limited to, business development and planning, assisting management on strategic initiatives and other items as requested by the Chairman or the Company in consultation with the Chairman from time to time.  Nadel shall report to the Chairman and will primarily perform services from  New Jersey.

(b)           Contractor Relationship. The parties acknowledge and agree that Nadel is an independent contractor to the Company, not an employee of the Company.  Nadel is not an agent of the Company and shall have no right to bind the Company.  Nadel shall not be treated for any purposes as an employee of the Company.  The Company will report all payments to be made hereunder on Form 1099 as payments to Nadel for independent contracting services, and will not report any compensation on Form W-2 to Nadel.  Nadel is solely responsible for payment of all taxes and charges of a similar nature, including federal, state and local taxes arising out of payments received by him under this Agreement.  In addition, Nadel shall not be entitled to, eligible for, or receive any benefit or participate in any benefit program provided, established or maintained by the Company for the benefit of its eligible employees, other than any such benefit to which Nadel may be entitled in his capacity as a member of the Board.  This is a contract for Nadel’s personal services.  The Company shall have no right to control the manner or means by which Nadel performs services hereunder; however, Nadel shall perform his services with a level of care, skill, and diligence that a prudent professional acting in a like capacity and familiar with such matters would use.

	
  

	
2.

	
Compensation and Benefits.

(a)           Compensation.  As compensation for the services to be rendered under this Agreement, Company shall pay Nadel Sixteen Thousand Six Hundred and Sixty-Seven  Dollars ($16,667) per month.

(b)           Stock Grants.  As additional compensation for the services to be rendered under this Agreement, as of the Effective Date: (i) the Company will issue to Nadel Two Million One Hundred Thousand (2,100,000) shares of the common stock of the Company, $0.01 par value per share; and (ii) Richard J. Kurtz (“Kurtz”) will issue to Nadel an additional Two Million Nine Hundred Thousand (2,900,000) shares of the common stock of the Company, $0.01 par value per share (collectively, the “Shares”).  As provided in the attached Exhibit “A”, the Shares shall vest on a pro-rata basis on the last day of each calendar month during the period commencing February 22, 2011 and ending January 31, 2014, with an additional pro-rata number of shares vesting on February 21, 2014.

Notwithstanding the foregoing, upon the occurrence of one of the following, the Shares shall become immediately 100% vested: (i) a Change in Control (as defined below); (ii)  the Company ceases to be a fully reporting company with the Securities and Exchange Commission; or (iii) the Company’s termination of this Agreement for reasons unrelated to Nadel’s failure to perform services hereunder in the contemplated manner.

However, in the event that Nadel elects to terminate this Agreement or the Company elects to terminate the Agreement as a result of Nadel’s failure to perform services hereunder in the contemplated manner, Nadel shall forfeit and return to the Company any Shares that have not vested in accordance with this Section as of the effective date of the termination of this Agreement.

  

  

  

The Company agrees that following the issuance of the Shares, the interests of Nadel as a shareholder of the Company will not be diluted below his then current percentage ownership interest in the total outstanding capital stock of the Company, except as a result of  the issuance of shares of stock (i) in exchange for a capital investment in the Company; or (ii) pursuant to the grant of awards under the Company’s Equity Incentive Plan, effective as of July 12, 2005 (amended May 1, 2008).

For purposes of this Agreement, “Change in Control” means an Ownership Change Event (as defined below) or series of related Ownership Change Events (collectively, a “Transaction”) in which the stockholders of the Company immediately before the Transaction do not retain immediately after the Transaction, direct or indirect beneficial ownership of fifty percent (50%) or more of the total combined voting power of the outstanding voting securities of the Company, or in the event of an Ownership Change Event, the entity to which the assets of the Company were transferred.  An “Ownership Change Event” shall be deemed to have occurred if any of the following occurs with respect to the Company: (i) the direct or indirect sale or exchange by the stockholders of the Company of all or substantially all of the voting stock of the Company; (ii) a merger or consolidation in which the Company is a party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company (other than a sale, exchange or transfer to one or more subsidiaries of the Company); or (iv) a liquidation or dissolution of the Company.  The sole exception to a Change in Control and an Ownership Change Event as described above shall be any Change in Control or Ownership Change Event that may result from the death or incapacity of Kurtz wherein his interest is transferred to his heirs only.  In such event, for the purposes hereof, no Change in Control or Ownership Change Event shall be deemed to have occurred.

(c)           Restrictions on Transfer of Shares.  The Shares may not be sold, exchanged, assigned, transferred, pledged, encumbered or otherwise disposed of by Nadel, unless the Shares have become vested as provided for in this Agreement and as otherwise provided by applicable law; provided, however, that Nadel’s rights with respect to such Shares may be transferred by will or pursuant to the laws of descent and distribution.  Any purported transfer or encumbrance in violation of the provisions of this Agreement shall be void, and the other party to any such purported transaction shall not obtain any rights to or interest in such Shares.  Nadel acknowledges that the certificates representing the Shares shall bear one or more of the following restrictive legends:

(i)           “THESE SECURITIES HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR THE SECURITIES LAWS OF ANY STATE.  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION AND QUALIFICATION UNDER THE ACT AND SUCH LAWS IN NOT REQUIRED.”; and

(ii)           Any legend required by applicable state law.

(d)           Additional Stock Grants.  By the second anniversary of the Effective Date, the Chairman shall evaluate Nadel’s contributions to the Company in the course of performing services under this Agreement and, if appropriate, recommend to the Board that additional shares  of the common stock of the Company, $0.01 par value per share, be issued to Nadel, commensurate with his contributions to the Company hereunder.  Nadel will work toward building the Company’s value to Two Hundred Million Dollars ($200,000,000).

(e)           Business Expenses.  The Company shall reimburse Nadel for his reasonable business expenses incurred in connection with the performance of services under this Agreement.  Nadel shall provide documentation of such expenses as may be reasonably requested by the Company.

3.             Effective Date.  This Agreement shall become effective on February 22, 2011 (“Effective Date”).

4.            Confidential Information.  Nadel shall, from time to time, have access to confidential information relating to the business of the Company and its subsidiaries.  During the period in which Nadel is performing services under this Agreement and at all times thereafter, Nadel shall not communicate or knowingly divulge any such confidential information that he may obtain during his service for the Company to any other person, firm or corporation, except to the minimum extent necessary in the course of Nadel’s service for the Company or with the prior written consent of the Company, or to defend his own rights or as required by applicable law or regulation or the order of a court or other governmental body having jurisdiction over such matter; provided, however, that Nadel shall have no obligation to maintain in confidence any information that is or becomes publicly available other than as a result of Nadel’s violation of this Section 4 or any information of a type not otherwise considered confidential by persons engaged in the business conducted by the Company or any of its subsidiaries.

5.             Non-Competition.  During the period in which Nadel performs services under this Agreement and for a period of twelve (12) months thereafter, Nadel shall not, without the prior written consent of the Company, directly or indirectly, render services of a business, professional or commercial nature (whether for compensation or otherwise) to any person or entity competitive with the business engaged in by the Company or any of its subsidiaries, or serve as an officer, director, employee, partner, member, owner, consultant or independent contractor in any entity which is competitive with the business engaged in by the Company or any of its subsidiaries.  Nadel acknowledges that the restrictions contained in this Section 5 of this Agreement are fair and reasonable to protect the legitimate interests of the Company, are not unreasonably burdensome to Nadel, and are supported by adequate consideration.  Notwithstanding the foregoing, Nadel shall not be prohibited from owning as an investor less than five percent (5%) of any publicly traded corporation that is in competition with the Company.

  

  

  

6.             Non-Disparagement.  During the period in which Nadel performs services under this Agreement and at all times thereafter, neither the Company nor Nadel shall make or authorize any person to make or allow any statement or take any action, public or private, that would disparage or criticize the other party, including, for example, the other party’s character and/or services; provided, however, that nothing contained in this Section 6 shall preclude the Company or Nadel from making any truthful statement in good faith that is required by any applicable law or regulation or the order of a court or other governmental body.

7.             Termination. Either party may terminate this Agreement at any time, upon ninety (90) days prior written notice to the other party.

8.             Board Service.  The parties acknowledge that, independent of the arrangement contemplated under this Agreement, Nadel currently serves as a member of the Board and, effective February 22, 2011, will serve as Vice Chairman of the Board.  The parties agree that the services contemplated under this Agreement and the compensation to be paid to Nadel for such services, are separate and apart from, and independent of, Nadel’s responsibilities as a Board member and the compensation paid to him in such capacity, which as of the current date consists of cash compensation of Two Thousand Five Hundred Dollars ($2,500) per quarter.  Notwithstanding any other provision of this Agreement, any equity compensation, including but not necessarily limited to stock options and restricted stock, previously granted by the Company to Nadel pursuant to the Equity Incentive Plan effective as of July 12, 2005, as amended, or any other plan or arrangement of the Company, or any agreement pursuant thereto, shall remain in full force and effect as existing prior to the signing of this Agreement.

9.             Notice.  All notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed certified or registered mail, return receipt requested, postage prepaid, to the address given above, or to such other address as either party may have furnished to the other in accordance herewith, except that notice of change of address shall be effective only upon receipt.

10.          Applicable Law; Venue.  This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, without reference to rules relating to conflicts of laws.  Nadel and the Company each unconditionally and irrevocably consent to the exclusive jurisdiction and venue of the Superior Court of the State of New Jersey, Bergen County and the United States District Court for the District of New Jersey as the sole venue for any suit, action or proceeding arising out of or relating to this Agreement, and Nadel and the Company each hereby unconditionally and irrevocably waive any objection to venue in any such court or the right to assert that any such court is an inconvenient forum, and agree that service of any summons, complaint, notice or other process relating to such suit, action or other proceeding may be effected in the manner provided in Section 9 hereof.  Nadel and the Company each hereby unconditionally and irrevocably waive the right to a trial by jury in any such action, suit or other proceeding.

11.           Successors; Binding Agreement. This Agreement shall be binding upon any successor to all or substantially all of the business and/or assets of the Company. This Agreement shall inure to the benefit of and be enforceable by Nadel and his personal or legal representatives, executors, estate, trustees, administrators, successors, heirs, distributees, devisees and legatees.  Nadel may not delegate his duties under this Agreement without the prior written consent of the Company.  Notwithstanding the foregoing, Nadel may assign this Agreement and any rights hereunder, but not his obligations to perform personal services under it, to an entity wholly owned by him without the consent of the Company.

12.           Entire Agreement; Modification. This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral.  No provision of this Agreement may be waived, modified, amended or discharged unless such waiver, modification, amendment or discharge is agreed to in writing and signed by Nadel and such officer of the Company as may be specifically designated by the Company. No waiver by either party to this Agreement at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

 

13.           Legal Representation.  The parties acknowledge that they were each represented by independent outside legal counsel in connection with the preparation and negotiation of this Agreement.

  

  

  

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have hereunto executed this Agreement as of the day and year first written above.

	  	  	
LAPOLLA INDUSTRIES, INC.

	  	  	  
	  	  	  
	  	
By:  

	
/s/  Richard J. Kurtz, Chairman of the Board

	  	  	
 Richard J. Kurtz, Chairman

	  	  	  
	  	  	  
	  	  	
 /s/  Jay C. Nadel

	  	  	
Jay Nadel

  

  

  

EXHIBIT A TO AGREEMENT BETWEEN JAY NADEL

AND LAPOLLA INDUSTRIES, INC.

As of February 22, 2011

	
Vesting Date

	
No. of Additional Shares Vesting on  date indicated

	
2/28/2011

	
    31,934

	
3/31/2011

	
   141,423

	
4/30/2011

	
   136,861

	
5/31/2011

	
   141,423

	
6/30/2011

	
   136,861

	
7/31/2011

	
   141,423

	
8/31/2011

	
   141,423

	
9/30/2011

	
   136,861

	
10/31/2011

	
   141,423

	
11/30/2011

	
   136,861

	
12/31/2011

	
   141,423

	
1/31/2012

	
   141,423

	
2/29/2012

	
   132,299

	
3/31/2012

	
   141,423

	
4/30/2012

	
   136,861

	
5/31/2012

	
   141,423

	
6/30/2012

	
   136,861

	
7/31/2012

	
   141,423

	
8/31/2012

	
   141,423

	
9/30/2012

	
   136,861

	
10/31/2012

	
   141,423

	
11/30/2012

	
   136,861

	
12/31/2012

	
   141,423

	
1/31/2013

	
   141,423

	
2/28/2013

	
   127,737

	
3/31/2013

	
   141,423

	
4/30/2013

	
   136,861

	
5/31/2013

	
   141,423

	
6/30/2013

	
   136,861

	
7/31/2013

	
   141,423

	
8/31/2013

	
   141,423

	
9/30/2013

	
   136,861

	
10/31/2013

	
   141,423

	
11/30/2013

	
   136,861

	
12/31/2013

	
   141,423

	
1/31/2014

	
   141,423

	
2/14/2014

	
     95,815Exhibit
10.1

 

FORM OF

 

SUBSCRIPTION ESCROW AGREEMENT

THIS SUBSCRIPTION ESCROW AGREEMENT dated as of ___, 2010 (this “Agreement”), is entered into among Realty Capital Securities, LLC (the “Dealer Manager”), American Realty Capital Trust III, 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 200,000 (the “Minimum Amount”) nor more than 100,000,000 shares of common stock, par value $0.01 of the Company (the “Securities”), pursuant to the registration statement on Form S-11 of the Company
(No. 333-170298) (as amended, the “Offering Document”) a copy of which is attached as Exhibit A hereto.

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 foregoing and of the mutual covenants and agreements contained herein, the parties hereto, intending to be legally bound, hereby 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 to be invested in accordance with Section 7 hereof entitled “ESCROW ACCOUNT FOR THE BENEFIT OF INVESTORS FOR COMMON STOCK OF AMERICAN REALTY CAPITAL TRUST III, INC.” (including such abbreviations as are required for the Escrow Agent’s systems) (the “Escrow
Account”).  All funds received from subscribers of Securities (“Investors”, which term shall also include Pennsylvania Investors and Tennessee Investors unless the context otherwise requires) in payment for the Securities (“Investor Funds”) will be delivered to the Escrow Agent within one (1) business day following the day upon which such Investor Funds are received by the Company or its agents, and shall, upon receipt by the Escrow Agent, be retained in escrow by the Escrow Agent and invested as stated herein. During the term of this Agreement, the Company or its agents 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.

Proceeds received from Pennsylvania Investors shall be accounted for separately in a subaccount entitled “Escrow Account for the Benefit of Pennsylvania Investors for American Realty Capital Trust III, Inc.” (including such abbreviations as are required for the Escrow Agent’s systems) (the “Pennsylvania Escrow Account”), until such Pennsylvania Escrow Account has closed pursuant to Section 4.  The Company shall, and shall cause its agents to, cooperate with the Escrow Agent in separately accounting for Investor Funds from Pennsylvania Investors 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.

 

 

 

 

 

Proceeds received from Tennessee Investors shall be accounted for separately in a subaccount entitled “Escrow Account for the Benefit of Tennessee Investors for American Realty Capital Trust III, Inc.” (including such abbreviations as are required for the Escrow Agent’s systems) (the “Tennessee Escrow Account,” and together with the Escrow Account and the Pennsylvania Escrow Account, the “ARCT III Escrow Accounts”), until such Tennessee Escrow Account has closed pursuant to Section 5.  The Company shall, and shall cause its agents to, cooperate with the Escrow Agent in separately accounting for Investor Funds from Tennessee Investors in the Tennessee Escrow Account, and the Escrow Agent shall be entitled to rely upon information provided by the Company or its agents in this regard.

The Escrow Agent shall have no duty to make any disbursement, investment or other use of Investor Funds until and unless it has good and collected funds.  If any checks deposited in the ARCT III Escrow Accounts are returned or 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.  The Escrow Agent reserves the right to deny, suspend or terminate participation by an Investor to the extent the Escrow Agent deems it advisable or necessary to comply with applicable laws or to eliminate practices that are not consistent with the purposes of the Offering.

2.           Investors. Investors (including Pennsylvania and Tennessee Investors) will be instructed by the Dealer Manager or any soliciting dealers to remit the purchase price in the form of checks (hereinafter “instruments of payment”) payable to the order of, or funds wired in favor of, “WELLS FARGO BANK, NA, ESCROW AGENT FOR AMERICAN REALTY CAPITAL TRUST III, INC.”  Any checks made payable to a party other than the Escrow Agent shall be returned to the soliciting dealer who submitted the check.  By 12:00
p.m. (Noon) the next business day after receipt of instruments of payment from the Offering, the Company or the Dealer Manager shall furnish the Escrow Agent with a list of the Investors who have paid for the Securities showing the name, address, tax identification number, the amount of Securities subscribed for purchase, the amount paid and whether such Investors are Pennsylvania Investors or Tennessee Investors.  The information comprising the identity of Investors shall be provided to the Escrow Agent in substantially the format set forth in the “List of Investors” attached hereto as Exhibit B.  The Escrow Agent shall be entitled to conclusively rely upon the List of Investors in determining whether Investors are Pennsylvania Investors or Tennessee Investors, and shall have no duty to independently determine or verify the same.

When Soliciting Dealer’s internal supervisory procedures are conducted at the site at which the subscription agreement and check were initially received by Soliciting Dealer from the subscriber, Soliciting Dealer shall transmit the subscription agreement and check to the Escrow Agent by the end of the next business day following receipt of the check and subscription agreement. When, pursuant to Soliciting Dealer’s internal supervisory procedures, Soliciting Dealer’s final internal supervisory procedures are conducted at a different location (the “Final Review Office”), Soliciting Dealer shall transmit the check and subscription agreement to the Final Review Office by the end of the next
business day following Soliciting Dealer’s receipt of the subscription agreement and check. The Final Review Office will, by the end of the next business day following its receipt of the subscription agreement and check, forward both the subscription agreement and check to the Escrow Agent. If any subscription agreement solicited by Soliciting Dealer is rejected by the Dealer Manager or the Company, then the subscription agreement and check will be returned to the rejected subscriber within ten (10) business days from the date of rejection.

 

 

2

 

 

All Investor Funds deposited in the ARCT III Escrow Accounts 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 and unless 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 ARCT III Escrow Accounts and no such funds shall become the property of the Company, or any other entity except as released to the Company pursuant to Sections 3, 4 or 5 hereto. 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.  Once the Escrow Agent is in receipt of good and collected Investor Funds totaling at least the Minimum Amount from Investors (excluding funds from Pennsylvania and Tennessee Investors), 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 6), the Escrow Agent shall notify the Company of the amount of the Investor Funds
received.  If the Minimum Amount has been obtained on or before the Termination Date, the Escrow Agent shall promptly notify the Company and, upon receiving acknowledgement of such notice and written instructions from the Company’s President or Chief Financial Officer to disburse the Investor Funds, the Escrow Agent shall disburse to the Company, by check or wire transfer, the funds in the Escrow Account, except for amounts payable by the Company to the Escrow Agent pursuant to Exhibit D to this Agreement that remain outstanding.  The Escrow Agent agrees that funds in the Escrow Account shall not be released to the Company until and unless the Escrow Agent receives written instructions to release the funds from the Company’s President or Chief Financial Officer.

If the Minimum Amount has not been obtained prior to the Termination Date, the Escrow Agent shall promptly following the Termination Date, but in no event more than thirty (30) days after the Termination Date, refund to each Investor by check, funds deposited in the Escrow Account, or shall return the instruments of payment delivered to Escrow Agent if such instruments have not been processed for collection prior to such time, directly to each Investor at the address provided on the List of Investors. Included in the remittance shall be a proportionate share of the income earned in the account allocable to each Investor’s investment in accordance with the terms
and conditions specified herein, except that in the case of Investors who have not provided an executed Form W-9 or substitute Form W-9 (or the applicable substitute Form W-8 for foreign investors), the Escrow Agent shall withhold the applicable percentage of the earnings attributable to those Investors in accordance with IRS regulations. Notwithstanding the foregoing, the Escrow Agent shall not be required to remit any payments until funds represented by such payments have been collected by Escrow Agent.

 

 

3

 

 

If 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 provided on the List of Investors, or at such other address as shall be furnished to the Escrow Agent by the Investor in writing, all collected sums paid by the Investor for Securities and received by the Escrow Agent, together with the interest earned on such Investor Funds (determined in accordance with the terms and conditions
specified herein).

4.           Disbursement of Proceeds for Pennsylvania Investors.   Notwithstanding the foregoing, proceeds from Pennsylvania Investors will not count towards meeting the Minimum Amount for purposes of Section 3.  Proceeds received from Pennsylvania Investors will not be released from the Pennsylvania Escrow Account until the Pennsylvania Minimum Amount is obtained.  If the Pennsylvania Minimum Amount is obtained at any time prior to the Termination Date, the
Escrow Agent shall promptly notify the Company and, upon receiving acknowledgement of such notice and written instructions from the Company’s President or Chief Financial Officer, the Escrow Agent shall disburse to the Company, by check or wire transfer, the funds in the Pennsylvania Escrow Account, except for amounts payable by the Company to the Escrow Agent pursuant to Exhibit D to this Agreement that remain outstanding.  The Escrow Agent agrees that funds in the Pennsylvania Escrow Account shall not be released to the Company until and unless the Escrow Agent receives written instructions to release the funds from the Company’s President or Chief Financial Officer.

If the Pennsylvania Minimum Amount has not been obtained prior to the Termination Date, the Escrow Agent shall, within a reasonable time following the Termination Date, but in no event more than thirty (30) days after the Termination Date, refund to each Pennsylvania Investor by check funds deposited in the Pennsylvania Escrow Account, or shall return the instruments of payment delivered to Escrow Agent if such instruments have not been processed for collection prior to such time, directly to each Pennsylvania Investor at the address provided on the List of Investors. Included in the remittance shall be a proportionate share of the income earned in the account allocable to each Pennsylvania Investor’s
investment in accordance with the terms and conditions specified herein, except that in the case of Investors who have not provided an executed Form W-9 or substitute Form W-9, the Escrow Agent shall withhold the applicable percentage of the earnings attributable to those Investors in accordance with IRS regulations. Notwithstanding the foregoing, the Escrow Agent shall not be required to remit any payments until funds represented by such payments have been collected by Escrow Agent.

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 in writing 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 Securities providing for total purchase proceeds from all nonaffiliated sources that equal or exceed the Pennsylvania Minimum Amount, the Escrow Agent shall promptly notify the Company. Thereafter, the Company or its agents
shall send to each Pennsylvania Investor by certified mail within ten (10) calendar days after the end of the Initial Escrow Period a notification substantially in the form of Exhibit F.  If, pursuant to such notification, a Pennsylvania Investor requests the return of his or her Investor Funds within ten (10) calendar days after receipt of the notification (the “Request Period”), the Escrow Agent shall promptly refund directly to each Pennsylvania Investor the collected funds deposited in the Pennsylvania Escrow Account on behalf of such Pennsylvania Investor or shall return the instruments of payment delivered, but not yet processed for collection prior to such time, to the address provided on the List of Investors, upon which the
Escrow Agent shall be entitled to rely, together with interest income earned as determined in accordance with the terms and conditions specified herein (which interest shall be paid within five business days after the first business day of the succeeding month). Notwithstanding the above, if the Escrow Agent has not received an executed Form W-9 or substitute Form W-9 for such Pennsylvania Investor, the Escrow Agent shall thereupon remit an amount to such Pennsylvania Investor 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 Investor Funds (determined in accordance with the terms and conditions specified herein) attributable to such Pennsylvania Investor. However, the Escrow Agent shall not be required to remit such payments until the Escrow
Agent has collected funds represented by such payments.

 

 

4

 

 

              The Investor Funds of Pennsylvania Investors who do not request the return of their Investor 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 above with respect to the Initial Escrow Period for each Successive Escrow Period until the occurrence of the earliest of (i) the
Termination Date, (ii) the receipt and acceptance by the Company of subscriptions for the purchase of Securities with total purchase proceeds that equal or exceed the Pennsylvania Minimum Amount and the disbursement of the Pennsylvania Escrow Account on the terms specified herein, and (iii) all funds held in the Pennsylvania Escrow Account having been returned to the Pennsylvania Investors in accordance with the provisions hereof.

5.           Disbursement of Proceeds for Tennessee Investors.   Notwithstanding the foregoing, proceeds from Tennessee Investors will not count towards meeting the Minimum Amount for purposes of Section 3.  Proceeds received from Tennessee Investors will not be released from the Tennessee Escrow Account until the Tennessee Minimum Amount is obtained.  If the Tennessee Minimum Amount is obtained at any time prior to the Termination Date, the Escrow Agent shall
promptly notify the Company and, upon receiving acknowledgement of such notice and written instructions from the Company’s President or Chief Financial Officer, the Escrow Agent shall disburse to the Company, by check or wire transfer, the funds in the Tennessee Escrow Account, except for amounts payable by the Company to the Escrow Agent pursuant to Exhibit D to this Agreement that remain outstanding.  The Escrow Agent agrees that funds in the Tennessee Escrow Account shall not be released to the Company until and unless the Escrow Agent receives written instructions to release the funds from the Company’s President or Chief Financial Officer.

If the Tennessee Minimum Amount has not been obtained prior to the Termination Date, the Escrow Agent shall, within a reasonable time following the Termination Date, but in no event more than thirty (30) days after the Termination Date, refund to each Tennessee Investor by check funds deposited in the Tennessee Escrow Account, or shall return the instruments of payment delivered to Escrow Agent if such instruments have not been processed for collection prior to such time, directly to each Tennessee Investor at the address provided on the List of Investors. Included in the remittance shall be a proportionate share of the income earned in the account allocable to each Tennessee Investor’s investment in
accordance with the terms and conditions specified herein, except that in the case of Investors who have not provided an executed Form W-9 or substitute Form W-9, the Escrow Agent shall withhold the applicable percentage of the earnings attributable to those Investors in accordance with IRS regulations. Notwithstanding the foregoing, the Escrow Agent shall not be required to remit any payments until funds represented by such payments have been collected by Escrow Agent.

 

 

5

 

 

6.           Term of Escrow. The “Termination Date” shall be the earliest of:  (i) the close of business on [ ______, 20 __ ], the one year anniversary of the date the Offering Document was declared effective by the Securities and Exchange Commission; (ii) all funds held in the ARCT III Escrow Accounts are distributed to the Company or to Investors pursuant to Section 3, for Pennsylvania Investors, Section 4 and
for Tennessee Investors, Section 5 and the Company has informed the Escrow Agent in writing to close each of the ARCT III Escrow Accounts; (iii) the date the Escrow Agent receives written notice from the Company that it is abandoning the sale of the Securities; and (iv) 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.  After the Termination Date the Company and its agents shall not deposit, and the Escrow Agent shall not accept, any additional amounts representing payments by prospective Investors.

7.           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 or the Dealer Manager is complying with requirements of this Agreement, the Offering or applicable securities or other laws 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, including specifically but without limitation any Offering Documents (including the subscription agreement and exhibits thereto), and the Escrow Agent’s rights and responsibilities shall be governed solely by this Agreement.  The Escrow Agent shall not be responsible for or be required to enforce any of the terms or conditions of any Offering Document (including the subscription agreement and exhibits thereto) 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 Agreement. Concurrent with the execution of this Agreement, the Company and the Dealer Manager shall deliver to the Escrow Agent an authorized signers form in the forms of Exhibit C and Exhibit C-1 to this Agreement.  The Escrow Agent shall be under no obligation to institute or defend any action, suit or proceeding in connection with this 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 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 Agreement, except as otherwise stated herein, and no implied duties, covenants or obligations, fiduciary or otherwise, shall be read into this Agreement against the Escrow Agent.  If any disagreement between any of the parties to this 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 Agreement, or if 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, 

 

 

6

 

 

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 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.  If any controversy should arise with respect to this 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 (including the subscription agreement and exhibits thereto) 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 (including the subscription agreement and exhibits thereto) 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.

8.           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 Agreement; provided, however, that if the conditions for the disbursement of funds under this Agreement are not fulfilled, or
the Escrow Agent renders any material service not contemplated in this Agreement, or there is any assignment of interest in the subject matter of this 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 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.  The Company’s obligations under this Section 8 shall survive the resignation or removal of the Escrow Agent and the assignment or termination of this
Agreement.

 

7

 

 

9.           Investment of Investor Funds. The Investor Funds shall be deposited in the ARCT III Escrow Accounts in accordance with Section 3, for Pennsylvania Investors, Section 4 and Tennessee Investors, Section 5.  The Escrow Agent is hereby directed to invest all funds received under this Agreement, including principal and interest in, the Wells Fargo Bank Money Market Deposit Account, as directed in writing in the form of Exhibit E to this 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 to the contrary, the Escrow Agent is hereby directed to invest the Investor Funds in the Wells Fargo Bank Money Market Deposit Account.  Notwithstanding the foregoing, Investor Funds shall not be invested in anything other than “Short Term Investments” in compliance with Rule 15c2-4 of the Securities Exchange Act of 1934, as amended.  The following are not permissible investments:  (a) money market mutual funds; (b) corporate debt or equity securities; (c) repurchase agreements; (d) banker’s acceptance; (e)
commercial paper; and (f) municipal securities.  Any interest received by the Escrow Agent with respect to the Investor Funds, including reinvested interest shall become part of the Investor Funds, and shall be disbursed pursuant to Section 3, for Pennsylvania Investors, Section 4 and Tennessee Investors, Section 5.

 

The Escrow Agent shall be entitled to sell or redeem any such investments as necessary to make any payments or distributions required under this Agreement.  The Escrow Agent shall have no responsibility or liability for any loss which may result from any investment made pursuant to this 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 on the date of this Agreement shall provide the Escrow Agent with a certified tax identification number by furnishing appropriate IRS form W-9 or W-8 (or substitute Form W-9 or W-8) and other forms and documents that the Escrow Agent may reasonably request, including without limitation a tax form for each Investor.  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 Agreement.  For tax reporting purposes, all interest and other income from investment
of the Investor Funds shall, as of the end of each calendar year and to the extent required by the Internal Revenue Service, be reported as having been earned by the party to whom such interest or other income is distributed, in the year in which it is distributed.

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 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 Agreement and the resignation or removal of the Escrow Agent.

10.           Notices.  All notices, requests, demands, and other communications under this 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 bearing an authorized signature to the facsimile number/email address given below, and written 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:

 

8

 

 

If to the Company:

405 Park Avenue

New York, New York 10022

Fax: (212) 421-5799

Attention:  Edward M. Weil, Jr., Executive Vice President and Secretary

Attention:  Brian S. Block, Executive Vice President and Chief Financial Officer

with a copy to:

Proskauer Rose LLP

1585 Broadway

New York, New York 10036

Fax: (212) 969-2900

Attention: Peter M. Fass, Esq.

Attention:  Steven Fishman, Esq.

 

If to the Dealer Manager:

Realty Capital Securities, LLC

Three Copley Place

Suite 3300

Boston, MA 02116

Attention:  Louisa Quarto, President

with a copy to:

Proskauer Rose LLP

1585 Broadway

New York, New York 10036

Fax: (212) 969-2900

Attention: Peter M. Fass, Esq.

and:

American Realty Capital Trust III, Inc.

405 Park Avenue

New York, New York 10022

Fax: (212) 421-5799

Attention:  Edward M. Weil, Jr., Executive Vice President and Secretary

Attention:  Brian S. Block, Executive Vice President and Chief Financial Officer

 

9

 

If to Escrow Agent:

Wells Fargo Bank, National Association

45 Broadway, 14th Floor

New York, NY  10006

Fax: (212) 509-1716

Attention:  Matt Sherman

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.

11.           Indemnification of Escrow Agent. The Company and the Dealer Manager hereby jointly and severally indemnify, defend and hold harmless the Escrow Agent from and against, any and all loss, liability, cost, damage and expense, including, without limitation, reasonable counsel fees and expenses, 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 Agreement or any transaction to which this Agreement relates unless such loss,
liability, cost, damage or expense is finally determined by a court of competent jurisdiction to have been primarily caused by the willful misconduct of the Escrow Agent.  The terms of this Section shall survive the termination of this Agreement and the resignation or removal of the Escrow Agent.

12.           Successors and Assigns. Except as otherwise provided in this Agreement, no party hereto shall assign this 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 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 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.

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

14.           Severability. If 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.

 

10

 

 

15.           Amendments; Waivers. This 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 Agreement, in any one or more 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 Agreement.  The Company and the Dealer Manager agree that any requested waiver, modification or amendment of this Agreement shall be consistent with the terms of the Offering.

16.           Entire Agreement. This Agreement contains the entire agreement and 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.

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

18.           Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart signature pages or in counterparts, each of which shall be deemed an original, but all of which shall constitute the same instrument.

19.           Resignation. The Escrow Agent may resign upon 30 days’ advance written notice to the parties hereto. If a successor escrow agent is not appointed by the Company 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 may interplead the Investor Funds with such court, whereupon the Escrow Agent’s duties hereunder shall terminate.

20.           References to Escrow Agent.  Other than the Offering Document (including the subscription agreement and exhibits thereto) and any amendments thereof or supplements thereto, no printed or other matter in any language (including, without limitation, notices, reports and promotional material) which mentions the Escrow Agent’s name or the rights, powers, or duties of the Escrow Agent shall be issued by the Company or the Dealer Manager, or on the Company’s or the Dealer Manager’s behalf, unless the Escrow Agent
shall first have given its specific written consent thereto.  Notwithstanding the foregoing, any amendment or supplement to the Offering Document (including the subscription agreement and exhibits thereto) that revises, alters, modifies, changes or adds to the description of the Escrow Agent or its rights, powers or duties hereunder shall not be issued by the Company or the Dealer Manager, or on the Company’s or Dealer Manager’s behalf, unless the Escrow Agent has first given specific written consent thereto.

 

21.           Patriot Act Compliance; OFAC Search Duties.  The Company shall provide to Escrow Agent upon the execution of this Agreement any documentation requested and any information reasonably requested by the Escrow Agent to comply with the USA Patriot Act of 2001, as amended from time to time.  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.

 

[Signature page follows]

 

 

11

 

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

AMERICAN REALTY CAPITAL TRUST III, INC.

 

	
By:

	  	  
	  	
Name: 

	
Nicholas S. Schorsch

	  
	  	
Title:

	
Chief Executive Officer

	  

 

REALTY CAPITAL SECURITIES, LLC

 

	
By:

	  	  
	  	
Name: 

	
Louisa Quarto

	  
	  	
Title:

	
President

	  

 

WELLS FARGO BANK, NATIONAL

ASSOCIATION, as Escrow Agent

 

	
By:

	  	  
	  	
Name: 

	  	  
	  	
Title:

	  	  

 

12

 

Exhibit A

Copy of Offering Document

 

13

 

Exhibit B

List of Investors

Pursuant to the Escrow Agreement dated as of ____, 2010, among Realty Capital Securities, LLC, American Realty Capital Trust III, Inc. (the “Company”), and Wells Fargo Bank, National Association (the “Escrow Agent”), the Company hereby certifies that the following Investors have paid money for the purchase of shares of the Company’s common stock, par value $0.01 (“Securities”), and the money has been deposited with the Escrow Agent:

 

	
1. 

	
Name of Investor 

Address 

Tax Identification Number 

Amount of Securities subscribed for 

Amount of money paid and deposited with Escrow Agent 

Is Investor a resident of Pennsylvania (Yes or No)? 

Is Investor a resident of Tennessee (Yes or No)?

 

	
2. 

	
Name of Investor 

Address 

Tax Identification Number 

Amount of Securities subscribed for 

Amount of money paid and deposited with Escrow Agent 

Is Investor a resident of Pennsylvania (Yes or No)? 

Is Investor a resident of Tennessee (Yes or No)?

 

Dated: _____________________________

REALTY CAPITAL SECURITIES, LLC

 

	
By:

	  	 
	  	
Name: 

	
Louisa Quarto

	 
	  	
Title:

	
President

	 

 

14

 

Exhibit C

CERTIFICATE AS TO AUTHORIZED SIGNATURES

 

Account Name:

Account Number:

 

The specimen signatures shown below are the specimen signatures of the individuals who have been designated as Authorized Representatives of American Realty Capital Trust III, Inc. and are authorized to initiate and approve transactions of all types for the above-mentioned account on behalf of American Realty Capital Trust III, Inc.

	
Name/Title

	
Specimen Signature

	
Nicholas S. Schorsch

Chief Executive Officer

	
_______________________________

Signature

	  	  
	
William M. Kahane

President and Treasurer

	
_______________________________

Signature

	  	  
	
Brian Block

Executive Vice President and Chief Financial Officer

	
_______________________________

Signature

	  	  
	
Edward M. Weil, Jr.

Executive Vice President and Secretary

	
_______________________________

Signature

	  	  

 

 

15

 

 

Exhibit C-1

CERTIFICATE AS TO AUTHORIZED SIGNATURES

 

Account Name:

Account Number:

 

The specimen signatures shown below are the specimen signatures of the individuals who have been designated as Authorized Representatives of Realty Capital Securities, LLC and are authorized to initiate and approve transactions of all types for the above-mentioned account on behalf of Realty Capital Securities, LLC

 

	
Name/Title

 

	
Specimen Signature

	
Louisa Quarto

President

	
_______________________________

Signature

	  	  
	
Kamal Jafarnia

Executive Vice President and Chief Compliance Officer

	
_______________________________

Signature

 

16

 

Exhibit D

 

ESCROW FEES AND EXPENSES

	
Acceptance Fee

	  	  
	
Review escrow agreement, establish account

	  	
$3,000

	
DST Agency Engagement (if applicable)

	  	
$250

	  	  	  
	
Annual Fees

	  	  
	
Annual Escrow Agent

	  	
$2,500

	
BAI Files

	  	
$50 per month

	
Outgoing Wire Transfer

	  	
$15 each

	
Daily Recon File to Transfer Agent

	  	
$2.50 per Bus Day

	
Web Exchange Access

	  	
$15 per month

	
Overnight Delivery/Mailings

	  	
$16.50 each

	
IRS Tax Reporting

	  	
$10 per 1099

 

Fees specified are for the regular, routine services contemplated by the Escrow Agreement, and any additional or extraordinary services, including, but not limited to disbursements involving a dispute or arbitration, or administration while a dispute, controversy or adverse claim is in existence, will be charged based upon time required at the then standard hourly rate. In addition to the specified fees, all expenses related to the administration of the Escrow Agreement (other than normal overhead expenses of the regular staff) such as, but not limited to, travel, postage, shipping, courier, telephone, facsimile, supplies, legal fees, accounting fees, etc., will be reimbursable.

 

Acceptance fee and first year Annual Escrow Agent fee will be payable at the initiation of the escrow.  Thereafter, the Annual Escrow Agent fees will be billed in advance and transactional fees will be billed in arrears. Other fees and expenses will be billed as incurred.

 

 

17

 

 

Exhibit E

Agency and Custody Account Direction

For Cash Balances

Wells Fargo Bank Money Market Deposit Accounts

Direction to use the following Wells Fargo Bank Money Market Deposit Accounts for Cash Balances for the escrow account (the “Account”) created under the Escrow Agreement to which this Exhibit E is attached.

You are hereby directed to deposit, as indicated below, or as we shall direct further in writing from time to time, all cash in the Account in the following money market deposit account of Wells Fargo Bank, National Association (“Bank”):

Wells Fargo Bank Money Market Deposit Account (“MMDA”)

 

[.]

     

We acknowledge that we have full power to direct investments in the Account.

We understand that we may change this direction at any time and that it shall continue in effect until revoked or modified by us by written notice to you.

	  	
American Realty Capital Trust III, Inc.

	  	  	  
	 	By:	 
	 	 	Signature
	 	 	 
	 	 	 
	 	 	Date

 

 

18

 

Exhibit F

[Form of Notice to Pennsylvania Investors]

You have tendered a subscription to purchase shares of common stock of American Realty Capital 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 $75,000,000 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 Investors 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, Wells Fargo Bank, National Association at 45 Broadway, 14th Floor, New York, NY  10006, Attn:  Matt Sherman.

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

 

	  	 	
Signature:

	  
	 	 	 	 
	  	 	
Name:

	  
	  	 	
 

	
(please print)

	 	 	 	 
	  	 	
Date:

	  
	 	 	 	 
	
Please send the subscription refund to:

	 	  	  
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

19

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