Document:

exv10w5

Exhibit 10.5

FORM OF ESCROW AGREEMENT 

     THIS ESCROW AGREEMENT (this “Agreement”) made and entered into as of this
______ day of ____________, 2010 by and among CM Securities, LLC a Nevada limited
liability company (the “Dealer Manager”), CM REIT, Inc., a Maryland Corporation (the
“Company”), UMB Bank, N.A., as escrow agent, a national banking association organized and
existing under the laws of the United States of America (the “Escrow Agent”) and DST
Systems, Inc., a Massachusetts corporation (the “Transfer Agent”). This Agreement shall be
effective as of the effective date of the Company’s registration statement filed with the
Securities and Exchange Commission containing the Prospectus (hereinafter defined) (the
“Effective Date”).

RECITALS

     WHEREAS, the Company proposes to offer and sell, on a best efforts basis through the Dealer
Manager and selected broker-dealers (the “Participating Dealers”) up to 900,000 shares of
common stock (excluding the shares of its common stock to be offered and sold pursuant to the
Company’s distribution reinvestment plan) of the Company (the “Shares”) to investors (the
“Offering”) pursuant to a prospectus as amended from time to time and filed with the
Securities and Exchange Commission as a part of the Company’s registration statement on Form S-11
(File No. 333-156434 (the “Prospectus”), at an initial purchase price of $10.00 per share.

     WHEREAS, the Company has agreed that the subscription price paid by subscribers for shares
will be refunded to such subscribers if payment from persons who are not affiliated with the
Company for an aggregate of at least $2.5 million in Shares (such amount, the “Minimum
Offering”) has not been raised on or before _________, 20___(the “Outside Date”),
which is one year from the Effective Date.

     WHEREAS, the Company desires to establish an escrow account (the “Escrow Account”) as
further described herein in which funds received from subscribers will, except as otherwise
specified herein, be deposited, and the Escrow Agent is willing to serve as escrow agent for such
Escrow Account upon the terms and conditions herein set forth and the Transfer Agent is willing to
serve as the record keeper upon the terms and conditions set forth herein.

     WHEREAS, deposits received from residents of the State of Pennsylvania (the “Pennsylvania
Subscribers”) will remain in the Escrow Account until the conditions of Section 3 hereof have
been met.

     WHEREAS, the Escrow Agent desires to engage the Transfer Agent to receive and facilitate
subscriptions into and out of the Escrow Account as further described herein upon the terms and
conditions herein set forth between and among the Company, the Escrow Agent and the Transfer
Agent, and the Transfer Agent is willing to do so.

 

 

     WHEREAS, in order to subscribe for Shares during the Escrow Period (as defined below), a
subscriber must deliver an executed subscription agreement in substantially the form of Appendix C
to the Prospectus together with the full amount of its subscription: (i) by check, draft or money
order made payable to the order of UMB Bank, N.A., as Escrow Agent for CM REIT, Inc., in U.S.
dollars or (ii) by draft, wire transfer of immediately available funds or Automated ClearingHouse
(ACH) in U.S. dollars transmitted directly to the Escrow Account in accordance with the
instructions provided in Section 11(2) (collectively, the “Payment”).

AGREEMENT

     NOW, THEREFORE, the Dealer Manager, the Company and Escrow Agent agree to the terms of this
Agreement as follows:

1. Establishment of Escrow Account; Escrow Period. On or prior to the commencement of the
Offering, the Company shall establish the Escrow Account with the Escrow Agent, which shall be
entitled “Escrow Account for the Benefit of Subscribers to Shares of CM REIT, Inc.” This Agreement
shall be effective on the Effective Date and the Company shall notify the Transfer Agent and the
Escrow Agent of the Effective Date. All monies deposited in the Escrow Account are hereinafter
referred to as “Escrowed Funds.” During the Escrow Period, the Company will cause the
Dealer Manager and the Participating Dealers to instruct subscribers to make checks for
subscriptions payable to the order of “UMB Bank, N.A., as Escrow Agent for CM REIT, Inc.” Except
as otherwise set forth herein for the Pennsylvania Subscribers, the “Escrow Period” shall
commence upon the effectiveness of this Agreement and shall continue until the earlier of (i) the
date upon which the Escrow Agent receives confirmation from the Company and the Dealer Manager that
the Company has raised the Minimum Offering, (ii) the Outside Date, or (iii) the termination of the
Offering by the Company prior to the receipt of the Minimum Offering. Any payments received prior
to the time, if any, that the Escrowed Funds are deliverable to the Company pursuant to the
provisions of Section 2(c) below that are made payable to a party other than the Escrow Agent shall
be returned to the Soliciting Dealer who submitted the Payment. After the Escrow Period, except as
otherwise required for Pennsylvania Subscribers, the Escrow Agent shall promptly return to the
Transfer Agent for deposit into an account designated by the Company any Payments received by the
Escrow Agent or deposited into the Escrow Agent’s account, pursuant to Section 2(c) below.

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2. Operation of the Escrow.

(a) Deposits into the Escrow Account. The Transfer Agent will transmit all monies
received from subscribers for the payment of Shares to the Escrow Agent, for deposit in the
Escrow Account, by noon of the next Business Day immediately following the day the Transfer
Agent received such monies. Until such time that the Escrowed Funds are deliverable to the
Company pursuant to the provisions of Section 2(c) below, the Transfer Agent will maintain a
written account of each sale, which account shall set forth, among other things, the following
information: (i) the subscriber’s name and address, (ii) the number of Shares purchased by
such subscriber, and (iii) the amount paid by such subscriber for such Shares. The Company,
the Escrow Agent and the Transfer Agent are aware and understand that, during such Escrow
Period, none of them is entitled to any funds received into the Escrow Account, and no amounts
deposited in the Escrow Account shall become the property of the Company, the Escrow Agent or
the Transfer Agent, or be subject to the debts or offsets of the Company, the Escrow Agent or
the Transfer Agent. As used in this Agreement, the term “Business Day” means any day
except Saturday, Sunday or a day on which commercial banks in New York, New York or Kansas
City, Missouri are not closed in respect of a federal or state holiday.

     (b) Collection Procedure.

	 	(i)	 	The Transfer Agent is hereby instructed by the Company to
forward each Payment to the Escrow Agent for collection by
noon of the next Business Day immediately following the
day the Transfer Agent received such Payment.
	 
	 	(ii)	 	The Escrow Agent is hereby instructed by the Company to forward each
Payment for Federal Reserve Bank clearing and upon collection of the
proceeds of each Payment, to deposit the collected proceeds into the
Escrow Account.
	 
	 	(iii)	 	The Escrow Agent will timely notify the Transfer Agent of any
Payment returned unpaid. The Transfer Agent in turn will promptly
notify the Company of any Payment returned unpaid. Any Payment
returned unpaid to the Escrow Agent shall be returned to the
Transfer Agent and then in turn to the Dealer that submitted the
Payment. In such cases, the Transfer Agent will promptly notify the
Company of such return.

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	 	(iv)	 	In the event that the Company or any agent acting on behalf of the
Company rejects any subscription for Shares and the funds for such
subscription have already been collected by the Escrow Agent, the
Escrow Agent shall, upon receipt from the Company or the Transfer
Agent of written notice of such rejection, promptly issue a refund
payment to the Transfer Agent to be returned to the rejected or
withdrawing subscriber. If the Escrow Agent has not yet collected
funds for such subscription but has submitted such subscription for
clearing, the Escrow Agent shall promptly issue a payment in the
amount of such Payment to the Transfer Agent to be returned to the
rejected or withdrawing subscriber only after the Escrow Agent has
cleared such funds. If the Escrow Agent has not yet submitted the
Payment relating to the subscription of the rejected or withdrawing
subscriber, the Escrow Agent shall promptly remit such Payment to the
Transfer Agent to be returned to the drawer of the Payment submitted
by or on behalf of the subscriber.
	 
	 	(v)	 	In the event that money is deposited into the Escrow Account in error,
the Escrow Agent shall, upon receipt from the Transfer Agent of
written notice of such deposit in error, promptly issue a refund
payment to the Transfer Agent to be returned to the appropriate party
only after the Payment has cleared.

(c) Distribution of the Escrowed Funds to the Company. If at any time on or prior to
the Outside Date, the Minimum Offering has been raised, then upon the happening of such event,
the Escrowed Funds shall remain in the Escrow Account until the Escrow Agent receives written
direction provided by the Company instructing the Escrow Agent to deliver the amount of such
Escrowed Funds as the Company shall direct (other than any funds, together with any interest
thereon, received from Pennsylvania Subscribers which cannot be released until the conditions
of Section 3 have been met). An affidavit or certification from an officer of the Company to
the Escrow Agent and Transfer Agent stating that at least the Minimum Offering has been timely
raised, shall constitute sufficient evidence for the purpose of this Agreement that such event
has occurred (the “Break Escrow Affidavit”). The Affidavit shall indicate (i) the date
on which the Minimum Offering was raised and (ii) the actual total number of Shares sold as of
such date.

(d) Distribution of the Escrowed Funds to the Subscribers. If the Escrow Agent has
not received a Break Escrow Affidavit on or prior to the Outside Date, the Transfer Agent
shall provide the Escrow Agent the information needed to return the principal amount of the
funds in the Escrow Account, together with any interest thereon, to each respective
subscriber, and the Escrow Agent shall promptly create and dispatch checks and wires drawn on
the Escrow Account to return

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the principal amount of the funds in the Escrow Account, together with any interest thereon,
without deduction, penalty or expense, to the respective subscribers, and the Escrow Agent
shall notify the Company and the Dealer Manager of its distribution of the Escrowed Funds.
The subscription payments returned to each subscriber (including those, if any, returned to
Pennsylvania Subscribers pursuant to Section 3) shall be free and clear of any and all claims
of the Company or any of its creditors.

3. Distribution of the Funds from Pennsylvania Subscribers.

(a) Notwithstanding anything to the contrary herein, disbursements of funds paid by
Pennsylvania Subscribers may only be distributed in compliance with the provisions of this
Section 3. Irrespective of any disbursement of funds from the Escrow Account pursuant to
Section 2 hereof, the Escrow Agent will continue to place deposits from the Pennsylvania
Subscribers into the Escrow Account, until such time as the Company notifies the Escrow Agent
in writing that total subscriptions (including amounts in the Escrow Account previously
disbursed as directed by the Company and the amounts then held in the Escrow Account) equal or
exceed $50 million, whereupon the Escrow Agent shall disburse to the Company, at the Company’s
request the principal amount of the funds from the Pennsylvania Subscribers received by the
Escrow Agent for accepted subscriptions, together with any and all interest earned thereon.

(b) If the Company has not received total subscriptions of at least $50 million within 120
days of the date the Company first receives a subscription from a Pennsylvania Subscriber (the
“Initial Escrow Period”), the Company shall notify each Pennsylvania Subscriber by
certified mail or any other means (whereby receipt of delivery is obtained) of the right of
Pennsylvania Subscribers to have their investment returned to them. If, pursuant to such
notice, a Pennsylvania Subscriber requests the return of his or her subscription funds within
ten (10) days after receipt of the notification (the “Request Period”), the Escrow Agent shall
promptly refund within fifteen (15) calendar days after receipt of such Pennsylvania
Subscriber’s request, with a pro rata share of any interest earned thereon and without
deduction, directly to each Pennsylvania Subscriber the funds deposited in the Escrow Account
on behalf of the Pennsylvania Subscriber.

(c) The funds of Pennsylvania Subscribers who do not request the return of their funds within
the Request Period shall remain in the Escrow Account for successive 120-day escrow periods
(each a “Successive Escrow Period”), each commencing automatically upon the
termination of the prior Successive Escrow Period, and the Company and Escrow Agent shall
follow the notification and payment procedure set forth in Section 3(b) above with respect to
the

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Initial Escrow Period for each Successive Escrow Period, until the occurrence of the earliest
of (i) the termination of the offering by the Company prior to the receipt of $50 million of
total subscriptions, (ii) the receipt and acceptance by the Company of total subscriptions
that equal or exceed $50 million and the disbursement of the Escrow Account on the terms
specified in this Section 3, or (iii) all funds held in the Escrow Account that were paid by
Pennsylvania Subscribers having been returned to the Pennsylvania Subscribers in accordance
with the provisions hereof.

(d) If the Company has not received total subscriptions of at least $50 within 365 days after
the Outside Date, all funds in the Escrow Account that were contributed by Pennsylvania
Subscribers will be promptly returned in full to such Pennsylvania Subscribers, together with
their pro rata share of any interest earned thereon pursuant to instructions made by the
Company, upon which the Escrow Agent may conclusively rely.

4. Escrowed Funds. Upon receipt of the funds received from subscribers to the Offering, the
Escrow Agent shall hold the Escrowed Funds in escrow pursuant to the terms of this Agreement. All
Escrowed Funds shall be invested and reinvested in bank accounts or bank money market accounts and
any other investments permitted under Rule 15c2-4 of the Securities Exchange Act of 1934, as
amended, at the direction of the Company. All Escrowed Funds shall at all times be placed in
interest-bearing accounts.

     The Escrow Agent shall be entitled to sell or redeem any such investment as necessary to make
any distributions required under this Agreement and shall not be liable or responsible for any loss
resulting from any such sale or redemption.

     Income, if any, resulting from the investment of the funds received from subscribers to the
Offering shall be distributed according to this Agreement.

     The Escrow Agent shall provide to the Company monthly statements (or more frequently as
reasonably requested by the Company) on the account balance of the Escrow Account and the activity
in the account since the last report.

5. Duties of the Escrow Agent. The Escrow Agent shall have no duties or responsibilities
other than those expressly set forth in this Agreement, and no implied duties or obligations shall
be read into this Agreement against the Escrow Agent. The Escrow Agent is not a party to, or bound
by, any other agreement among the other parties hereto, and the Escrow Agent’s duties shall be
determined solely by reference to this Agreement. The Escrow Agent shall have no duty to enforce
any obligation of any person, other than as provided herein. The Escrow Agent shall be under no
liability to anyone by reason of any failure on the part of any party hereto or any maker, endorser
or other signatory of any document or any other person to perform such person’s obligations under
any such document.

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6. Liability of the Escrow Agent and the Transfer Agent; Indemnification. The Escrow Agent
acts hereunder as a depository only. The Escrow Agent is not responsible or liable in any manner
for the sufficiency, correctness, genuineness or validity of this Escrow Agreement or with respect
to the form of execution of the same. Each of the Escrow Agent and the Transfer Agent shall not be
liable for any action taken or omitted by it, or any action suffered by it to be taken or omitted,
in good faith, and in the exercise of its own best judgment, and may rely conclusively and shall be
protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel
(including counsel chosen by the Escrow Agent or the Transfer Agent), statement, instrument, report
or other paper or document (not only as to its due execution and the validity and effectiveness of
its provisions, but also as to the truth and acceptability of any information therein contained)
which is believed by the Escrow Agent or the Transfer Agent to be genuine and to be signed or
presented by the proper person(s); provided, however, the Transfer Agent and Escrow Agent shall be
liable for damages arising out of their negligence, willful default or misconduct under this
Agreement. Each of the Escrow Agent and the Transfer Agent shall not be held liable for any error
in judgment made in good faith by an officer or employee of either unless it shall be proved that
the Escrow Agent or the Transfer Agent, as appropriate, was grossly negligent or reckless in
ascertaining the pertinent facts or acted intentionally in bad faith. The Escrow Agent shall not be
bound by any notice of demand, or any waiver, modification, termination or rescission of this
Agreement or any of the terms hereof, unless evidenced by a writing delivered to the Escrow Agent
signed by the proper party or parties and, if the duties or rights of the Escrow Agent are
affected, unless it shall give its prior written consent thereto.

     Either of the Escrow Agent and the Transfer Agent may consult legal counsel and shall exercise
reasonable care in the selection of such counsel, in the event of any dispute or question as to the
construction of any provisions hereof or its duties hereunder, and it shall incur no liability and
shall be fully protected in acting in accordance with the reasonable opinion or instructions of
such counsel.

     Each of the Escrow Agent and the Transfer Agent shall not be responsible, may conclusively
rely upon and shall be protected, indemnified and held harmless by the Company, for the sufficiency
or accuracy of the form of, or the execution, validity, value or genuineness of any document or
property received, held or delivered by it hereunder, or of the signature or endorsement thereon,
or for any description therein; nor shall the Escrow Agent or the Transfer Agent be responsible or
liable in any respect on account of the identity, authority or rights of the persons executing or
delivering or purporting to execute or deliver any document, property or this Agreement.

     In the event that either the Escrow Agent or the Transfer Agent shall become involved in any
arbitration or litigation relating to the funds received from subscribers to the Offering, each is
authorized to comply with any decision reached through such arbitration or litigation.

The Company, hereby agrees to indemnify both the Escrow Agent and the Transfer Agent for, and to
hold it harmless against any loss, liability or expense incurred in connection herewith without
gross negligence, recklessness or willful misconduct on the part of either of the Escrow Agent or
the Transfer Agent, including without limitation legal or other fees arising out of or in
connection with its entering into this Agreement and carrying out its duties hereunder, including
without limitation the costs and

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expenses of defending itself against any claim of liability in the premises or any action for
interpleader. Neither the Escrow Agent, nor the Transfer Agent, shall be under any obligation to
institute or defend any action, suit, or legal proceeding in connection herewith, unless first
indemnified and held harmless to its satisfaction in accordance with the foregoing, except that
neither shall be indemnified against any loss, liability or expense arising out of its own gross
negligence, recklessness or willful misconduct. Such indemnity shall survive the termination or
discharge of this Agreement or resignation of the Escrow Agent.

7. The Escrow Agent’s Fee. Escrow Agent shall be entitled to fees and expenses for its
regular services as Escrow Agent as set forth in Exhibit A. Additionally, Escrow Agent is
entitled to reasonable fees for extraordinary services and reimbursement of any reasonable out of
pocket and extraordinary costs and expenses related to its obligations as Escrow Agent under this
Agreement, including, but not limited to, reasonable attorneys’ fees. All of the Escrow Agent’s
compensation, costs and expenses shall be paid by the Company.

8. Security Interests. No party to this Escrow Agreement shall grant a security interest in
any monies or other property deposited with the Escrow Agent under this Escrow Agreement, or
otherwise create a lien, encumbrance or other claim against such monies or borrow against the same.

9. Dispute. In the event of any disagreement between the undersigned or the person or
persons named in instructions given pursuant to this Agreement, or any other person, resulting in
adverse claims and demands being made in connection with or for any papers, money or property
involved herein, or affected hereby, the Escrow Agent shall be entitled to refuse to comply with
any demand or claim, as long as such disagreement shall continue, and in so refusing to make any
delivery or other disposition of any money, papers or property involved or affected hereby, the
Escrow Agent shall not be or become liable to the undersigned or to any person named in such
instructions for its refusal to comply with such conflicting or adverse demands, and the Escrow
Agent shall be entitled to refuse and refrain to act until: (a) The rights of the adverse claimants
shall have been fully and finally adjudicated in a court of competent jurisdiction over the parties
and money, papers and property involved herein or affected hereby, or (b) All differences shall
have been adjusted by agreement and the Escrow Agent shall have been notified thereof in writing,
signed by all the interested parties.

10. Resignation of Escrow Agent. Escrow Agent may resign or be removed, at any time, for
any reason, by written notice of its resignation or removal to the proper parties at their
respective addresses as set forth herein, at least 60 days before the date specified for such
resignation or removal to take effect; upon the effective date of such resignation or removal:

     (a) All cash and other payments and all other property then held by the Escrow Agent
hereunder shall be delivered by it to such successor escrow agent as may be designated in
writing by the Company, whereupon the Escrow Agent’s obligations hereunder shall cease and
terminate;

     (b) If no such successor escrow agent has been designated by such date, all obligations
of the Escrow Agent hereunder shall, nevertheless, cease and terminate, and the Escrow Agent’s
sole responsibility thereafter shall be to keep all property then held by it and to deliver
the same to a person designated in writing by the Company or in accordance with the directions of a
final order or judgment of a court of competent jurisdiction.

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     (c) Further, if no such successor escrow agent has been designated by such date, the
Escrow Agent may petition any court of competent jurisdiction for the appointment of a
successor agent; further the Escrow Agent may pay into such court all monies and property
deposited with Escrow Agent under this Agreement.

11. Notices. All notices, demands and requests required or permitted to be given under the
provisions hereof must be in writing and shall be deemed to have been sufficiently given, upon
receipt, if (i) personally delivered, (ii) sent by telecopy and confirmed by phone or (iii) mailed
by registered or certified mail, with return receipt requested, delivered to the addresses set
forth below, or to such other address as a party shall have designated by notice in writing to the
other parties in the manner provided by this paragraph:

	 	 	 

	(1) If to Company:

	 	CM REIT, Inc.
	 
	 	 
	 

	 	1291 W. Galleria Drive, Suite 200
	 
	 	 
	 

	 	Henderson, Nevada 89014
	 
	 	 
	 

	 	Attention: Stacy M. Riffe
	 
	 	 
	 

	 	Telephone: (702) 739-9090
	 
	 	 
	 

	 	Facsimile:
	 
	 	 
	 
	 	 
	 

	 	Company Wire Instructions:
	 
	 	 
	 

	 	To be provided by the Company
	 
	 	 
	 
	 	 
	(2) If to the Escrow Agent:

	 	UMB Bank, N.A.
	 
	 	 
	 

	 	1010 Grand Blvd., 4th Floor
	 
	 	 
	 

	 	Mail Stop: 1020409
	 
	 	 
	 

	 	Kansas City, Missouri 64106

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	 	Attention: Lara Stevens,
	 
	 	 
	 

	 	Corporate Trust
	 
	 	 
	 

	 	Telephone: (816) 860-3017
	 
	 	 
	 

	 	Facsimile: (816) 860-3029
	 
	 	 
	 
	 	 
	 

	 	Escrow Agent Wiring Instructions:
	 
	 	 
	 

	 	UMB Bank, N.A.
	 
	 	 
	 

	 	ABA Routing Number: 101000695
	 
	 	 
	 

	 	Account Number: To be provided by UMB Bank, N.A.
	 
	 	 
	 

	 	Account Name: Escrow Account for the Benefit of
Subscribers to Shares of CM REIT, Inc.
	 
	 	 
	 
	 	 
	 

	 	Checks Payable Information:
	 
	 	 
	 

	 	UMB Bank, N.A., as Escrow Agent for CM REIT, Inc.
	 
	 	 
	 

	 	Attention: Lara Stevens, Corporate Trust
	 
	 	 
	 

	 	1010 Grand Boulevard, 4th Floor
	 
	 	 
	 

	 	M/S 1020409
	 
	 	 
	 

	 	Kansas City, Missouri 64106
	 
	 	 
	 
	 	 
	(3) If to Dealer Manager:

	 	CM Securities, LLC
	 
	 	 
	 

	 	1291 W. Galleria Drive, Suite 200
	 
	 	 
	 

	 	Henderson, Nevada 89014
	 
	 	 
	 

	 	Attention: Todd B. Parriott
	 
	 	 
	 

	 	Telephone: (702) 739-9090
	 
	 	 
	 

	 	Facsimile:

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	(4) If to Transfer Agent:

	 	DST Systems, Inc.
	 
	 	 
	 

	 	430 West 7th Street
	 
	 	 
	 

	 	Kansas City, Missouri 64105
	 
	 	 
	 

	 	Attention:
	 
	 	 
	 

	 	Facsimile: (___) ___

12. Governing Law. This Agreement shall be construed and enforced in accordance with the
laws of the State of Missouri without regard to the principles of conflicts of law.

13. Binding Effect; Benefit. This Agreement shall be binding upon and inure to the benefit
of the permitted successors and assigns of the parties hereto.

14. Modification. This Agreement may be amended, modified or terminated at any time by a
writing executed by the Dealer Manager, the Company, the Escrow Agent and the Transfer Agent.

15. Assignability. This Agreement shall not be assigned by the Escrow Agent without the
Company’s prior written consent.

16. Counterparts. This Agreement may be executed in one or more counterparts, each of which
will be deemed an original, but all of which together will constitute one and the same instrument.
Copies, telecopies, facsimiles, electronic files and other reproductions of original executed
documents shall be deemed to be authentic and valid counterparts of such original documents for all
purposes, including the filing of any claim, action or suit in the appropriate court of law.

17. Headings. The section headings contained in this Agreement are inserted for convenience
only, and shall not affect in any way, the meaning or interpretation of this Agreement.

18. Severability. This Agreement constitutes the entire agreement among the parties and
supersedes all prior and contemporaneous agreements and undertakings of the parties in connection
herewith. No failure or delay of any party hereto in exercising any right, power or remedy may be,
or may be deemed to be, a waiver thereof; nor may any single or partial exercise of any right,
power or remedy preclude any other or further exercise of any right, power or remedy. In the event
that any one or more of the provisions contained in this Agreement, shall, for any reason, be held
to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by
law, such invalidity, illegality or unenforceability shall not affect any other provision of this
Agreement.

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19. Earnings Allocation; Tax Matters; Patriot Act Compliance; OFAC Search Duties. The
Company or its agent shall be responsible for all tax reporting under this Escrow Agreement. 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. The Dealer Manager shall provide
a copy of each subscription check in order that the Escrow Agent, or its agent, may perform such
OFAC search.

20. Miscellaneous. This Agreement shall not be construed against the party preparing it,
and shall be construed without regard to the identity of the person who drafted it or the party who
caused it to be drafted and shall be construed as if all parties had jointly prepared this
Agreement and it shall be deemed their joint work product, and each and every provision of this
Agreement shall be construed as though all of the parties hereto participated equally in the
drafting hereof; and any uncertainty or ambiguity shall not be interpreted against any one party.
As a result of the foregoing, any rule of construction that a document is to be construed against
the drafting party shall not be applicable.

21. Third Party Beneficiaries. The Transfer Agent shall be a third party beneficiary under
this Agreement, entitled to enforce any rights, duties or obligations owed to it under this
Agreement notwithstanding the terms of any other agreements between the Transfer Agent and any
Party hereto.

22. Termination of the Escrow Agreement. This Agreement, except for Sections 6 and 10
hereof, which shall continue in effect, shall terminate upon written notice from the Company to the
Escrow Agent. Unless otherwise provided, final termination of this Agreement shall occur on the
date that all funds held in the Escrow Account are distributed either (a) to the Company or to
subscribers and the Company has informed the Escrow Agent in writing to close the Escrow Account or
(b) to a successor escrow agent upon written instructions from the Company.

23. Relationship of Parties. The Dealer Manager and the Company are unaffiliated with the
Escrow Agent and the Transfer Agent, and this Agreement does not create any partnership or joint
venture among either the Dealer Manager or the Company and the Escrow Agent or the Transfer Agent.

24. Licenses and Qualifications. From and after the Effective Date, the Transfer Agent and
Escrow Agent shall obtain, and continue to maintain until the termination of this Agreement, any
and all required licenses and qualifications necessary or desirable to perform the services and
obligations contemplated by this Agreement.

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[SIGNATURE PAGES FOLLOW]

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     IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed by their duly
authorized representatives as of the date first written hereinabove.

	 	 	 	 	 
	 	DEALER MANAGER:

CM SECURITIES, LLC

 	 
	 	By:  	 	 
	 
	 	Name:  	 	 
	 
	 	Title:  	 	 
	 
	 	COMPANY:

CM REIT, INC.

 	 
	 	By:  	 	 
	 
	 	Name:  	 	 
	 
	 	Title:  	 	 

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	 	ESCROW AGENT:

UMB BANK, N.A.

 	 
	 	By:  	 	 
	 
	 	Name:  	 	 
	 
	 	Title:  	 	 
	 
	 	TRANSFER AGENT:

DST SYSTEMS, INC.

 	 
	 	By:  	 	 
	 
	 	Name:  	 	 
	 
	 	Title:  	 	 

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EXHIBIT A

ESCROW FEES AND EXPENSES

	 	 	 	 	 

	Acceptance Fee
	 	 	 	 
	 
	 	 	 	 
	Review escrow agreement and establish account
	 	$	3,000	 
	 
	 	 	 	 
	 
	 	 	 	 
	Annual Fee
	 	 	 	 
	 
	 	 	 	 
	Maintain account
	 	$	3,000	 
	 
	 	 	 	 
	 
	 	 	 	 
	Transaction Fees
	 	 	 	 
	 
	 	 	 	 
	(a) per outgoing wire transfer
	 	$	35.00	 
	 
	 	 	 	 
	(b) per Form 1099 (Int., B or Misc.)
	 	$	10.00	*
	 
	 	 	 	 
	(c) per investment purchase, sale or settlement
	 	$	35.00	**

 

			
	*	 	Not anticipated to be charged
	 
	**	 	Excludes money market mutual fund transactions

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 and first year annual fees will be payable at the initiation of the escrow
and annual fees will be payable in advance thereafter. Other fees and expenses will be billed as
incurred.

- 16 -

 

EXHIBIT B

Form of Subscriber List

- 17 -exv10w1

 Exhibit 10.1

April 22, 2010

Mr. C. Andrew Smith

13627 Comely Lane

Houston, Texas 77079

     Re:   Employment as Chief Financial Officer

Dear Andy:

     I am writing to formalize our offer to join Global Industries, Ltd. (“Global” or “the
Company”) as its Chief Financial Officer. In this position, you will report to John Reed, Chief
Executive Officer. As agreed, you will commence employment with Global on or about April 26, 2010.
Terms and conditions of your employment will be as outlined below.

A. Standard Compensation

     1. Base Compensation

     In your position as Chief Financial Officer, your base annual salary will be $325,000. At
Global, salary payments are made twice per month. At Global, Base Compensation is reviewed
annually by the Compensation Committee.

     2. Annual Bonus Incentive Plan

     As an executive of the Company, you will be eligible for participation in an Annual Bonus
Incentive Plan (“Bonus Plan”). For 2010, your target-level participation in the Bonus Plan will be
fifty-five (55%) percent of your base salary if performance goals are achieved at the Target level.
Achievement of goals at the Maximum level will result in an award of up to 200% with Threshold
performance set at 50% of the Target. Payment of this bonus will be in Global common stock with
target bonus opportunity converted to stock at $7.05/share.

     3. Equity Awards

     As an executive with the Company, you are eligible for awards of stock-based compensation.
Generally, such awards are made in February following approval by the Board of Directors. While
the number of shares granted and the components of our equity award program may vary, our annual
program for 2010 consists of performance shares earned based upon results versus goals over a
two-year performance cycle. However, as you start your Chief Financial Officer position with the
Company, a special equity-based Employment Incentive award consisting of Restricted Stock and Stock
Options has been approved by the Board. (Details of

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11490 Westheimer • Suite 400 • Houston, Texas 77077 • (281) 529-7979 • Fax # (281) 529-7980

 

 

			
	Mr. C. Andrew Smith 

April 22, 2010

Page 2
	 	

the Employment Incentive award are outlined below.) Assuming that the Board follows prior
practice, you can anticipate another regular equity award in February 2011.

     Effective on the date you commence employment, you will be granted a Target of 44,000
Performance Units. The number of shares that you may earn under the Performance Unit award will
depend on actual results compared to performance goals that were established by the Compensation
Committee at its meeting on February 24, 2010. All members of Global’s management team have the
same performance goals. The award has three basic performance levels: threshold, target and
maximum. Based on the actual performance against the goals, your actual award can range from zero
to 200%. Of course, if the threshold level of performance is not achieved you will not have earned
any shares of stock and the award will expire.

     4. Benefits

     The Company offers a variety of employee benefits designed to protect you and your dependants
from financial loss due to sickness, disability or death. A summary of executive level benefits is
attached. Our most current informational brochure on benefits will be forwarded to your attention.
Eligibility for welfare benefits will commence on June 1, 2010.

     5. Paid Time Off (PTO)

     Twenty (20) days per year. For 2010, your pro-rated PTO will be fifteen (15) days. Paid Time
Off covers all excused absences from work such as vacation and/or absence due to illness. PTO does
not apply to holidays, jury duty, military leave, or funeral leave.

B. Employment Incentive

     1. Restricted Shares

     Effective on the date you commence employment, you will be awarded 50,000 restricted shares of
Company stock. Assuming your continued employment with the Company, fifty (50%) percent of these
shares will vest on the third anniversary of your employment with the remaining fifty (50%) percent
vesting on the fifth year after you begin service as Chief Financial Officer. A stock agreement
will be forwarded to you shortly after you have commenced employment with the Company.

     2. Stock Options

     Effective on the date you commence employment, you will be granted options to purchase 50,000
shares of Global common stock at the closing market price on that date. Subject to your continued
employment, the options are valid for ten (10) years, taxable when executed with 33% annual vesting
over three (3) years per the terms and conditions of the Stock Option Agreement. A Stock Option
Agreement detailing its terms and conditions will be forwarded to you shortly after you have
commenced employment with the Company.

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	Mr. C. Andrew Smith 

April 22, 2010

Page 3
	 	

C. Change-In-Control Agreement

     As a senior executive, you will be provided a Change-In-Control Agreement in a standard format
as approved by the Board of Directors. A copy is attached.

     Pursuant to this Agreement, in the event of a Change-In-Control transaction, all outstanding
stock options and restricted shares will vest immediately and performance share units will be
deemed earned at the Target level. In addition, if your employment is terminated without cause or
you resign with good reason following a Change-In-Control, you will receive a lump sum payment
equal to three (3) times your base salary and target bonus as well as other benefits as outlined in
the agreement. Please review the attached agreement for additional details.

D. Stock Ownership Guidelines

     The Compensation Committee of the Board of Directors has implemented share ownership
guidelines for all Executives. These new ownership guidelines require that all Executives hold at
least one (1) times their annual base salary in market value (i.e., number of shares times stock
price) of Global Industries stock within five (5) years. The Board believes this share ownership
guideline will visibly link executive fortunes with those of shareholders of the long term. In
order to assist you in reaching the targeted level of ownership, the Board has included the
following in their definition of shares owned: shares held outright and unvested Restricted stock.
Please contact Dave Sheil, Senior Vice President, Human Resources for further information regarding
your specific guideline.

E. Pre-Employment Physical Examination & Other Pre-Employment Requirements

     If you accept employment with the Company offered in this Letter of Appointment, you
understand that you will be required to successfully complete a physical examination. This offer
of employment is conditional upon the satisfactory completion of a background check and drug and
alcohol screening.

F. Choice of Law

All claims, disputes and controversies, including, but not limited to, personal injury, illness or
death claims, working condition controversies, termination, discrimination, harassment, civil
rights violations, wages and payment disputes, arising out of or relating to your employment or
otherwise which you, your legal representatives, spouse, estate, children and/or statutory
beneficiaries have or may come to have against your employer, its parents, subsidiaries, affiliates
or related entities, or their agents or representatives, or against the customer for whom the work
is being performed or its partners, joint venturers, parents, subsidiaries, affiliates and related
entities, contractors and subcontractors, or against any vessel owned, operated or chartered by any
of such persons or entities, which cannot be resolved by mutual agreement shall be finally decided
by arbitration utilizing a single arbitrator in accordance with the rules then in effect for the
resolution of employment disputes by the American Arbitration Association. The
arbitration

Initials _________

 

 

shall be conducted in Houston, Texas or in such other location as shall be
mutually agreed by the parties. The decision of the arbitrator shall be final, binding and
enforceable in any court of competent jurisdiction, and there shall be no appeal from the
arbitrators decision except as specifically provided by laws applicable to arbitral awards. All
statutes of limitation that would otherwise be applicable shall apply to any arbitration proceeding
conducted hereunder. Should any portion of this arbitration agreement be unenforceable under
applicable law for any reason, all other portions of this agreement shall be unaffected by the
presence of the unenforceable portion or portions, and the unenforceable portion or portions of the
agreement shall automatically be modified but only to the extent necessary to render those portions
valid and enforceable under applicable law. To the maximum extent practicable, an arbitration
proceeding hereunder shall be concluded within one-hundred eighty (180) days of the filing of the
dispute with the American Arbitration Association. To the extent permitted by applicable law, the
arbitrator shall have the power to award recovery of all costs and fees (including, without
limitation, reasonable attorneys’ fees, administrative fees, and arbitrators’ fees) to the
prevailing party. The parties agree to keep all disputes and arbitration proceedings strictly
confidential, except for disclosures required by applicable law.

     Should you have any questions, please do not hesitate to contact either Dave Sheil or myself
at (281) 529-7979.

Sincerely,

Global Industries , Ltd.

John B. Reed

	 	 	 	 

	Accepted: 

	/s/ C. Andrew Smith

	 	Date: April 22, 2010

 

 

Executive Benefits Summary

     The following benefits will be provided to you as part of your overall compensation package.

     Medical

     If you and your family are enrolled in Global’s medical insurance plan, you will be reimbursed
100% for your deductible, office visit co-payments, and co-insurance payments under our current
medical plan through a supplemental medical plan. Prescription co-pays are also reimbursed.
Charges that are considered “above usual and customary” will not be reimbursed. Benefits paid
under this plan will not be considered taxable income.

     You are free to use any provider in or out of the Company approved network. However, we
encourage you to use network providers whenever possible to avoid incurring charges considered
“above usual and customary” for which you would not be reimbursed as well as creating a significant
cost to the Company. If you do choose to utilize the services of a non-PPO provider, please be
aware that you may be asked to pay in full at the time of service. While these amounts will be
refunded to you, if you utilize a PPO provider you should only be asked to pay the $15 co-pay at
the time services are rendered.

     Dental

     You will be reimbursed 100% of the $50 calendar year deductible, and 20% and/or 50% of
co-payments for dental service charges up to the plan annual maximum of $1,000. Charges that are
“above usual and customary” will not be considered for payment under either plan. Benefits paid
under this plan will not be considered taxable income. You are free to use any dental provider.
If your dental provider does not file claims for you, initial claims should be filed with the
Company’s Benefits Administrator.

     While the Company is paying the cost of the executive dental coverage, you will be required to
pay monthly dental insurance premiums for both yourself and dependents who are participating in
this benefit.

     Supplemental Life/AD&D

     In addition to the one (1) times base in life insurance you will receive from the Company, you
will be provided with an additional $100,000 of life insurance at no cost.

     Long Term Disability

     You will be provided with Long-Term Disability coverage at no cost. If it should become
necessary for you to utilize this coverage, any benefits paid to you would be considered taxable
income.

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