Document:

Hartman XXI

  FORM OF ESCROW AGREEMENT
 THIS ESCROW AGREEMENT dated as of      , 2016 (this “Agreement”), is entered into among D.H. Hill Securities LLLP (the “Dealer Manager”), Hartman vREIT XXI, Inc. (the “Company”) and UMB Bank, N.A., as escrow agent (the “Escrow Agent”).
 WHEREAS, the Company intends to raise funds from Investors (as defined below) pursuant to a public offering (the “Offering”) of the sale of shares of common stock, par value $0.01 per share (the “Securities”) by offering and selling:  (a) up to $250,000,000 in shares of the Securities at an initial offering price of $10.00 per share; and (b) up to $19,000,000 in shares of the Securities pursuant to the Company’s distribution reinvestment plan (the “DRIP”), at an initial offering price of $9.50 per share, pursuant to the registration statement on Form S-11 of the Company (File No. 333-207711) (as amended, the “Registration Statement”);
 WHEREAS, the Company has agreed that the subscription price paid by Investors (as defined below) for Securities promptly will be refunded to such Investors if at least $1,000,000 of gross offering proceeds, including Securities sold to directors and officers of the Company, Hartman vREIT XXI Inc., and their respective affiliates, but excluding proceeds received from Kansas Investors (as defined below) prior to the Kansas Minimum Offering (as defined below) having been satisfied (the “Minimum Offering”), has not been raised from the sale of shares of the Company’s common stock within one year from the date that the U.S. Securities and Exchange Commission (the “SEC”) declares the Registration Statement effective;
 WHEREAS, the Company desires to establish an escrow account with the Escrow Agent for funds contributed by the Investors with the Escrow Agent in accordance with the Registration Statement, to be held for the benefit of the Investors and the Company until such time as (i) in the case of subscriptions received from residents of Kansas (“Kansas Investors”), the aggregate amount of subscriptions for Securities received from all Investors equal, in the aggregate, $5,000,000 (the “Kansas Minimum Offering”), and (ii)  in the case of subscriptions received from all other Investors, aggregate subscriptions received from all other Investors equals the Minimum Offering, in each case in accordance with the terms and subject to the conditions of this Agreement; and
 WHEREAS, the Escrow Agent is willing to accept appointment as escrow agent only for the express duties set forth 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 date on which the Offering commences, the Company shall establish an escrow account with the Escrow Agent to be invested in accordance with Section 8 hereof (including such abbreviations as are required for the Escrow Agent’s systems) (the “Escrow Account”).  This Agreement shall be effective as of the date the Registration Statement is declared effective by the SEC.  Except as otherwise set forth herein for Kansas Investors, the escrow period shall commence upon the effectiveness of this Agreement and shall continue until the Termination Date (as defined in Section 5) (the “Escrow Period”).
 All checks, wire transfers and other funds received from persons submitting subscriptions for the purchase of Securities (“Investors”, which term shall also include Kansas 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 
 

 

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 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 for favor of the Escrow Agent and delivered to the Escrow Agent for deposit in the Escrow Account.
 The Company shall, and shall cause its agents to, cooperate with the Escrow Agent in separately accounting for Investor Funds from Kansas Investors in the 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 Escrow Account 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. During the Escrow Period, Investors will be instructed by the Dealer Manager or any soliciting dealers retained by the Dealer Manager in connection with the Offering (the “Soliciting Dealers”) to remit the purchase price in the form of checks payable to the order of, or funds wired in favor of, “UMB Bank, N.A., as escrow agent for Hartman vREIT XXI, Inc.” Notwithstanding the foregoing, however, Kansas Investors shall continue to make checks payable to the order of “UMB Bank, N.A., as escrow agent for Hartman vREIT XXI, Inc.” until, respectively, the Kansas Minimum Offering is raised. Any checks made payable to a party other than the Escrow Agent shall be returned to the Dealer Manager or Soliciting Dealer that submitted the check. By 12:00 p.m. (EST) of the next business day following the receipt of instruments of payment from the Offering, the Company or the Dealer Manager, as applicable, 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 Kansas 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 A (the “List of Investors”). The Escrow Agent shall be entitled to conclusively rely upon the List of Investors in determining whether Investors are Kansas Investors and shall have no duty to independently determine or verify the same.
 When a Soliciting Dealer’s internal supervisory procedures are conducted at the site at which the subscription agreement and the check for the purchase of Securities were initially received by Soliciting Dealer from the subscriber, such Soliciting Dealer shall transmit the subscription agreement and such check to the Escrow Agent by the end of the next business day following receipt of the check for the purchase of Securities and subscription agreement. When, pursuant to such Soliciting Dealer’s internal supervisory procedures, such Soliciting Dealer’s final internal supervisory procedures are conducted at a different location (the “Final Review Office”), such Soliciting Dealer shall transmit the check for the purchase of Securities and subscription agreement to the Final Review Office by noon of the next business day following Soliciting Dealer’s receipt of the subscription agreement and the check for the purchase of Securities. The Final Review Office will, by the end of the next business day following its receipt of the subscription agreement and the check for the purchase of Securities, forward both the subscription agreement and such check to the Escrow Agent. If any subscription agreement solicited by a Soliciting Dealer is rejected by the Dealer Manager or the Company, then the subscription agreement and check for the purchase of Securities will be returned to the rejected subscriber within ten (10) business days from the date of rejection.
 

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 All Investor Funds deposited in the Escrow Account 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 Escrow Account and no such funds shall become the property of the Company, or any other entity except as released to the Company pursuant to Sections 3 or 4 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 hereunder. 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 proceeds from the sale of Securities equal the Minimum Offering (excluding proceeds received from Kansas Investors prior to the satisfaction of the Kansas Minimum Offering), the Company shall notify the Escrow Agent of the same in writing. Further, if the Minimum Offering has not been sold on or prior to the Termination Date (as defined in Section 5), the Company shall notify the Escrow Agent in writing of such. At the end of the third business day following the Termination Date, the Escrow Agent shall notify the Company of the amount of the Investor Funds received. If the Minimum Offering 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 Chief Executive Officer, President or Chief Financial Officer to disburse the Investor Funds, subject to Section 4, 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 B 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 Chief Executive Officer, President or Chief Financial Officer.
 If the Company notifies the Escrow Agent in writing that the Minimum Offering has not been obtained prior to the Termination Date, the Escrow Agent shall promptly following the Termination Date, but in no event more than ten (10) business 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 Internal Revenue Service (“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 the Escrow Agent.
 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 Kansas Investors. Proceeds received from Kansas Investors will not be released from the Escrow Account until the Kansas Minimum Offering is obtained. If the Kansas 
 

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 Minimum Offering 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 Chief Executive Officer, President or Chief Financial Officer, the Escrow Agent shall disburse to the Company, by check or wire transfer, the funds in the Escrow Account representing proceeds from Kansas Investors, except for amounts payable by the Company to the Escrow Agent pursuant to Exhibit B to this Agreement that remain outstanding. The Escrow Agent agrees that the Kansas Minimum Offering 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 Chief Executive Officer, President or Chief Financial Officer.
 If the Kansas Minimum Offering has not been obtained prior to the Termination Date, upon written instructions from the Company’s Chief Executive Officer, President or Chief Financial Officer, the Escrow Agent shall, within ten (10) business days of receipt of such request, refund to each Kansas 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 Kansas 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 Kansas Investor’s investment in accordance with the terms and conditions specified herein, except that in the case of Kansas 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 Kansas 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.  Term of Escrow. The “Termination Date,” shall be the earliest of: (i) the close of business on________________, 2017, the one-year anniversary of the date the Registration Statement was initially declared effective by the SEC, if the Minimum Offering has not been obtained prior to such date; (ii) the date on which all funds held in the Escrow Account are distributed to the Company or to Investors pursuant to Section 3, or to Kansas Investors pursuant to Section 4 and the Company has informed the Escrow Agent in writing to close the Escrow Account; (iii) the date the Escrow Agent receives written notice from the Company that it is abandoning the sale of the Securities or that the Offering is terminating; and (iv) the date the Escrow Agent receives notice from the SEC or any other federal regulatory authority that a stop or similar order has been issued with respect to the Registration Statement and has remained in effect for at least twenty (20) days.
 6.  Duty and Liability 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 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, the Registration Statement or any other document relating to the Offering (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 the Registration Statement or any other document relating to the Offering (including the 
 

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 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. 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, 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 hereto agree that the Escrow Agent has no role in the preparation of the Registration Statement or any other document related to the Offering (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 Registration Statement or any other document related to the Offering (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.  
 7.  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 B, which compensation shall be paid by the Company. The 
 

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 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 (i) the conditions for the disbursement of funds under this Agreement are not fulfilled, (ii) the Escrow Agent renders any material service not contemplated in this Agreement, (iii) there is any assignment of interest in the subject matter of this Agreement, (iv) there is any material modification hereof, (v) if any material controversy arises hereunder, or (vi) 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 7 shall survive the resignation or removal of the Escrow Agent and the assignment or termination of this Agreement.
 8.  Investment of Investor Funds. The Investor Funds shall be deposited in the Escrow Account in accordance with Section 1. The Escrow Agent is hereby directed to invest all funds received under this Agreement, including principal and interest in UMB Money Market Special, a 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, or for Kansas Investors, pursuant to Section 4.
 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.
 On or prior to the date of this Agreement, the Company shall provide the Escrow Agent with a certified tax identification number by furnishing an 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 IRS, 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.
 9.  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 
 

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 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:
 If to the Company:
 Hartman vREIT XXI Inc.2909 Hillcroft, Suite 420Houston TX 77057Telephone: (713) 467-2222Facsimile: (713) 973-8912
 If to the Dealer Manager:
 D.H. Hill Securities LLP1543 Green Oak PlaceSuite 100Kingwood TX 77339Telephone: (832) 644-1852Facsimile: (866) 559-7977
 If to Escrow Agent:
 UMB Bank, N.A.1010 Grand Blvd., 4th FloorMail Stop: 1020409Kansas City, Missouri 64106Attention: Lara Stevens, Corporate TrustTelephone: (816) 860-3017Facsimile: (816) 860-3029Email: lara.stevens@umb.com
 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.
 10.  Indemnification of Escrow Agent. The Company and the Dealer Manager hereby agree to 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 gross negligence or 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.
 

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 11. 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. 
 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 of 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 Missouri, without giving effect to the principles of conflicts of laws thereof.
 14.  Severability. If any provision 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.
 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. The parties hereto agree that the transactions described herein may be conducted and related documents may be stored by electronic means. 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.
 

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 19.  Resignation. The 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 30 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;
 (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 or may pay into court all monies and property deposited with the Escrow Agent under this Agreement.
 The terms of this Section shall survive the termination of the Escrow Agreement and the resignation or removal of the Escrow Agreement.
 20.  References to Escrow Agent. Other than the Registration Statement, any of the other documents related to the Offering (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 Registration Statement or any other document related to the Offering (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 the Escrow Agent upon the execution of this Agreement any documentation requested and any information reasonably requested by the Escrow Agent to comply with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended from time to time. The Escrow Agent, or its agent, shall complete a search with the Office of Foreign Assets Control (“OFAC Search”), in compliance with its policy and procedures, of each subscription check for the purchase of Securities and shall inform the Company if a subscription check for the purchase of Securities 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.
 

 

 

 [Signature page follows]
 

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

 Hartman vREIT XXI, Inc.
 

 ________________________________ 
 By: Louis T Fox III
 Title: Chief Financial Officer
 

 D.H. Hill Securities LLLP
 

 ____________________
 By: Kenneth Wade 
 Title: 
 

 

 UMB BANK, N.A., as Escrow Agent
 

 

 

 By: _____________________________
 Name:  
 Title:
 

 

 

 

 LEGAL02/36242854v4
 
 Exhibit A
 

 List of Investors
 

 Pursuant to the Escrow Agreement dated as of                     , 2016, among Hartman vREIT XXI, Inc. (the “Company”), D.H. Hill Securities LLLP (the “Dealer Manager”) and UMB Bank, N.A. (the “Escrow Agent”), the Company or its agents 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 Kansas (Yes or No)?
 

 Is Investor (i) an officer or director of the Company; (ii) an officer or director of Hartman XXI Advisors, LLC; or (iii) an affiliate of either (i) or (ii)? (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 Kansas (Yes or No)? 
 

 Is Investor (i) an officer or director of the Company; (ii) an officer or director of Hartman XXI Advisors, LLC; or (iii) an affiliate of either (i) or (ii)? (Yes or No)?
 

 

 Dated:
 _________________________
 

  
 __________________________________
  
 By:  ___________________________
 Name:
 Title:
  
 

 

 

 LEGAL02/36242854v4
 
 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
                          $15.00        
 (b)
 overnight Fed Ex
                          $16.50
 (c)
 IRS Tax Reporting (if applicable) per 1099
                          $10.00
 (d)
 Miscellaneous Expenses 6% of Annual Fee
	   
	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

   
 

 	 	 	 	
	 *
	 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. 
 

 

 

 

 LEGAL02/36242854v4Exhibit

SEPARATION AGREEMENT AND RELEASE OF ALL CLAIMS
This Separation Agreement and Release of all Claims ( “Agreement”) is entered into by and between IEC Electronics Corporation (“Company”), a Delaware corporation having its principal office at 105 Norton Street, Newark, New York, and W. Barry Gilbert (the “Executive” or “you”), an individual residing at __________.
1.Termination.  You agree that your termination from the Company was effective at the close of business on February 6, 2015 (the “Separation Date”), and that your employment in all capacities with the Company was terminated.  

2.Final Compensation and Benefits.  You acknowledge and agree that you have received your regular wages and employment-related benefits through the Separation Date, all of which were paid in accordance with the Company’s regular payroll schedule and benefit policies and practices.  You acknowledge and agree that your payment for employment-related benefits through the Separation Date included payment for all of your accrued and unused vacation time.  You acknowledge and agree that you have also received reimbursement of any appropriately documented expenses that were incurred but unpaid up through the Separation Date that were a result of conducting business activities on behalf of the Company.  You received and may retain such wages and employment-related benefits described in this Paragraph 2 even if you decide not to sign this Agreement.  You acknowledge and agree that the payments you received that are described in this Paragraph 2 are all wages and employment-related benefits due to you based on your employment with the Company.  

3.Termination of Compensation and Benefits.  
a)    You acknowledge and agree that all of your compensation and employment-related benefits ended on the Separation Date or the last day of the month in which your employment ended, depending upon the benefit.  
b)    You acknowledge and agree that you forfeited all rights under any of IEC Electronics Corporation’s  short-term cash incentive plans or long-term stock incentive plans as of the Separation Date, and that all equity compensation awards granted to you by the Company or any of its affiliates that remained outstanding and unvested as of the Separation Date terminated effective as of the Separation Date and were forfeited without consideration.
4.Separation Benefits.  In consideration of your acceptance of the terms of this Agreement, including but not limited to the obligations imposed by Paragraphs 8 and 9 of this Agreement and the Release of All Claims contained in Paragraph 5 of this Agreement, and provided you have signed this Agreement and the revocation period set forth in Paragraph 18 has expired with no revocation, the Company will provide you with the separation benefits described in this Paragraph 4.

a)The Company will pay a separation pay benefit in the total amount of One Million Fifty Thousand Dollars ($1,050,000).  This separation pay benefit will be paid as follows, subject to applicable tax withholding, with each payment to be made in accordance with written payment/wiring instructions from you, to be provided upon your execution of this Agreement:

(i)        No later than the first business day following the Effective Date of this Agreement, as defined in Paragraph 18 below, the Company will pay a lump sum cash payment of Five Hundred Thousand Dollars ($500,000).   
(ii)       Within sixty (60) days of the Effective Date of this Agreement, as defined in Paragraph 18 below, the Company will make an additional payment of Two Hundred Thousand Dollars ($200,000).
(iii)    On the one-year anniversary of the Effective Date of this Agreement, as defined in Paragraph 18 below, the Company will make an additional payment of One Hundred Thousand Dollars ($100,000).
(iv)    On the two-year anniversary of the Effective Date of this Agreement, as defined in Paragraph 18 below, the Company will make an additional payment of One Hundred Thousand Dollars ($100,000).
(v)    On the three-year anniversary of the Effective Date of this Agreement, as defined in Paragraph 18 below, the Company will make an additional payment of Seventy Five Thousand Dollars ($75,000).
(vi)    On the four-year anniversary of the Effective Date of this Agreement, as defined in Paragraph 18 below, the Company will make an additional payment of Seventy Five Thousand Dollars ($75,000).
b)    On or before the Effective Date of this Agreement, as defined in Paragraph 18 below, the Company shall execute and transmit to your counsel a Confession of Judgment (the “Judgment”) in the form attached as Exhibit A hereto for the purpose of securing the payment described in Paragraph 4(a) above.  Your counsel will hold the Confession of Judgment in escrow until such time as the amount due and owing under Paragraph 4(a) above is paid in full, at which time the Confession of Judgment will be deemed null and void and of no effect and returned to counsel for the Company.  Solely in the event that the Company does not timely pay any of the payments set forth in Paragraph 4(a) above, your counsel may proceed to file, enter, and enforce the  Judgment, in which case the Company shall receive a credit for any payments made.
c)    In the event of a Change in Control of the Company prior to the four-year anniversary of the Effective Date of this Agreement, all payments remaining due pursuant to Paragraph 4(a) above shall become due and payable within thirty (30) days of said Change in Control.  For purposes of this Agreement, “Change in Control” means:  (i) a sale of all or substantially all of the Company’s assets; or (ii) any “Exchange Act Person” becomes the owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities.  A Change in Control shall not be deemed to occur (solely because the level of ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding.  “Exchange Act Person” means any natural person, entity or “group” (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), except that “Exchange Act Person” shall not include (i) the Company or any affiliate of the Company, (ii) any employee benefit plan of the Company or any affiliate of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any affiliate of the Company, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) an entity owned, directly or indirectly, by the shareholders of the 

Company in substantially the same proportions as their ownership of stock of the Company; or (v) any natural person, entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date of this Agreement, is the owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities.
d)    In the event that the Company receives an inquiry from a future prospective employer, the Company will only disclose the position you held and the duration of your employment, unless you authorize in writing that additional information to be disclosed.
e)    The Company makes no representations to you regarding the taxability and/or tax implications of this Agreement.  You are solely responsible for any tax consequences associated with the payments made pursuant to this Agreement, regardless of whether the Company should have contributed and withheld taxes from the amounts paid (including Social Security and Medicare).  You agree to indemnify and reimburse the Company for any and all taxes, contributions, withholdings, fees, assessments, interest, costs, penalties and other charges that may be imposed by the Internal Revenue Service, the New York State Tax Department or any other federal, state or local taxing authority solely by reason of the payments made pursuant to this Agreement, the amount or absence of withholdings and deductions made from such payments, any non-payment or late payment of taxes due with respect to such payments, and for the tax reporting of such payments, and you alone assume all liability for all such amounts.  
f)    You agree that you are not entitled to any compensation or benefits of any kind or description from the Company, its successors, assigns, affiliates or related companies, or from or under any employee benefit plan or fringe benefit plan sponsored by the Company, its successors, assigns, affiliates or related companies, including any compensation or benefits set forth in the Amended and Restated Employment Agreement between you and the Company  dated as of December 16, 2013 (the “Employment Agreement”), other than as described in this Agreement, and except for your vested rights (if any) under the IEC Electronics Savings & Security Plan, as reflected on your most recent participant account statement and adjusted for investment earnings and losses and expenses since that date.  You acknowledge and agree that the payments made pursuant to this Agreement are not considered eligible compensation for purposes of the IEC Electronics Savings & Security Plan or any other compensation, employee benefit plan or fringe benefit plan.
5.Release Of All Claims Against Company.

a)    By signing this Agreement you agree that you are releasing and waiving your right to bring any legal claim of any nature against the Company arising from conduct or events that took place before you signed this Agreement.  The claims you are giving up include, but are not limited to, claims related, directly or indirectly, to ownership interests in the Company (except as might be determined by a court or other legal authority as part of a legal action related to the value of common shares, in which you belong to a recovering group or class, but in which you are not a named plaintiff or class representative), your employment relationship with the Company, including your separation from employment, and any claims you may have under the Employment Agreement.  This Agreement is intended to be interpreted in the broadest possible manner to include all actual or potential legal claims you may have against the Company (except as expressly provided otherwise in Paragraph 5(e)), including, but not limited to, all claims that you asserted or could have asserted in the arbitration proceeding you filed against the Company by way of the Statement of Claim captioned W. Barry Gilbert v. IEC Electronics Corp. dated June 24, 2015 (the “Arbitration”).

b)    Specifically, you agree that you are fully and forever giving up all of your legal rights and claims against the Company, whether or not presently known to you, arising from conduct or events occurring before you signed this Agreement.  You agree that the legal rights and claims you are waiving include all rights and claims under, as amended, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967 (the “ADEA”), the Older Workers Benefit Protection Act of 1990 (the “OWBPA”), the Rehabilitation Act of 1973, the Civil Rights Acts of 1866 and 1991, the Americans With Disabilities Act of 1990 (the “ADA”), the Genetic Information Nondiscrimination Act of 2008 (“GINA”), the Equal Pay Act of 1963, the Family and Medical Leave Act of 1993 (“FMLA”), the Employee Retirement Income Security Act of 1974 (“ERISA”), the New York Human Rights Law and any similar federal, state or local statute, regulation, order or common law.  You specifically agree that you are releasing claims of discrimination, harassment and/or retaliation based upon age, race, color, sex, sexual orientation or preference, marital status, religion, national origin, citizenship, veteran status, disability, genetic predisposition or carrier status and other legally protected categories and/or activities.
c)    You also agree that the legal rights and claims you are giving up include your legal rights and claims under the anti-retaliation provisions of the Sarbanes-Oxley Act, 18 U.S.C. § 1514A and the Dodd-Frank Act, 12 U.S.C. § 5567 and/or legal rights and claims under the federal Worker Adjustment and Retraining Notification Act  of 1989 (“WARN”), the New York Worker Adjustment and Retraining Notification Act (“NY WARN”), the New York Labor Law (except unemployment insurance and minimum wage claims), the New York Business Corporation Law, and any similar federal, state or local statute, regulation, order or common law.  You agree that the legal rights and claims you are giving up include all common law rights and claims, such as a breach of express or implied contract, tort (whether negligent or intentional), wrongful discharge, constructive discharge, infliction of emotional distress, defamation, promissory estoppel, and any claim for fraud, omission or misrepresentation, breach of express or implied duties, or violation of public policy or policies, practices, or procedures of the Company.  
d)    You further agree that you are giving up and releasing any damages or relief of whatever nature or description, including, but not limited to, compensatory damages, punitive damages, liquidated damages, penalties, interest, and equitable forms of relief, as well as any claim for attorney’s fees or costs, which may arise from any of the claims waived, discharged or released in this Paragraph 5.
e)    The claims you are giving up and releasing do not include your vested rights, if any, under any qualified retirement plan in which you participate, and your COBRA, unemployment insurance and workers’ compensation rights, if any.  Nothing in this Agreement shall be construed to constitute a waiver of:  (i) any claims you may have against the Company that arise from conduct or events that occur after the date that you sign this Agreement; (ii) your right to file an administrative charge with any governmental agency alleging employment discrimination or challenging the validity of this release of all claims; (iii) your right to participate in any administrative or court investigation, hearing or proceeding; or (iv) any other right that you cannot waive as a matter of law.  You agree, however, to waive and release any right to receive any individual remedy or to recover any individual monetary or non-monetary damages as a result of any administrative charge, complaint or lawsuit filed by you or anyone on your behalf.  In addition, the release of all claims set forth in this Agreement does not affect your rights as expressly created by this Agreement, and does not limit your ability to enforce this Agreement or to challenge the enforceability of this Agreement.  
f)    You agree that the release of all claims described in this Paragraph 5 applies not only to the Company, but also to the Company’s predecessors, successors and their past, current and future parents, subsidiaries, related entities, and all of their members, shareholders, officers, directors, agents, attorneys, employees, and assigns.

6.Company Release Of All Claims Against Gilbert.  

a)    By signing this Agreement, the Company agrees that it is releasing and waiving its right to bring any legal claim of any nature against you The claims the Company is giving up include, but are not limited to, claims related, directly or indirectly, to your employment relationship with the Company, including your separation from employment.  This Agreement is intended to be interpreted in the broadest possible manner to include all actual or potential legal claims the Company may have against you.
b)    Specifically, the Company agrees that it is fully and forever giving up all of its legal rights and claims against you, whether or not presently known to it, that are based on events occurring before the Company signs this Agreement.  The Company agrees that the legal rights and claims it is waiving include rights and claims under federal, state or local statute, regulations, orders or common law, including breach of express or implied contract, tort (whether negligent or intentional), wrongful discharge, constructive discharge, infliction of emotional distress, defamation, promissory estoppel, and any claim for fraud, omission or misrepresentation, breach of express or implied duties, or violation of public policy or policies, practices, or procedures of the Company.  
c)    The Company further agrees that it is giving up and releasing any damages or relief of whatever nature or description, including, but not limited to, compensatory damages, punitive damages, penalties, interest, and equitable forms of relief, as well as any claim for attorney’s fees or costs, which may arise from any of the claims waived, discharged or released in this Paragraph 6.
(d)    Nothing in this release shall be construed to constitute a waiver of any right that the Company cannot waive as a matter of law.
7.No Pending Action.  You represent that, as of the date that you sign this Agreement, you have not filed any charge, complaint, arbitration, proceeding, or action in any forum against the Company other than the Arbitration.  This Agreement may be used as a complete defense in the future if you bring a lawsuit based on any claim that you have released.  Simultaneous with the execution of this Agreement, you also agree to execute a stipulation discontinuing the Arbitration with prejudice and on the merits, in the form attached as Exhibit B, and that you will deliver the executed stipulation to the Company’s counsel along with an executed copy of this Agreement.  Within three (3) days after the Effective Date of this Agreement, the Company shall file the stipulation with the arbitrator. 

8.No Derogatory Statements/Communications or Operational Interference.  

a)    You agree that you will not directly or indirectly make, or cause to be made, any written or oral statement or other communication that is derogatory or disparaging to the Company or the Company’s predecessors, successors or their past, current or future parents, subsidiaries, related entities, or any of their members, shareholders, officers, directors, agents, attorneys, employees, or assigns.  The inclusion of specific individuals in this provision (including, but not limited to, shareholders, officers, directors, agents, attorneys and employees) to protect them from derogatory or disparaging remarks is a material term of this Agreement and intended to make such individuals third-party beneficiaries of this particular provision of the Agreement, with all applicable rights to enforce its terms in the event of a violation.  You also agree that you will not directly or indirectly initiate any communications with any directors, shareholders, or employees of the Company regarding the business or operations of the Company, except as required to perform the requirements set forth in this Agreement, as required to perform services on behalf of a new employer, or as otherwise expressly requested by the Company or required by applicable law.

b)    The Company agrees that the members of its Board of Directors and its Senior Management, to be defined as any employee with the Title of Senior Vice-President or above, will not directly or indirectly make, or cause to be made, any written or oral statement or other communication that is derogatory or disparaging to you.  Communications between the individuals listed above and/or with their attorneys shall not violate this provision.
c)    Nothing in this Agreement is intended to or shall prevent or limit the parties from providing testimony or information in response to a valid subpoena, court order, regulatory request or other judicial, administrative or legal process or otherwise as required by law.  The parties agree that they will notify the other party in writing as promptly as practicable after receiving any request for testimony or information regarding the other party in response to a subpoena, court order, regulatory request or other judicial, administrative or legal process or otherwise as required by law, regarding the anticipated testimony or information to be provided and at least fourteen (14) days prior to providing such testimony or information (or, if such notice is not possible under the circumstances, with as much prior notice as is possible).
d)    Nothing in this Agreement shall prohibit you from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation.  You do not need prior authorization of the Company to make any such reports or disclosures and you are not required to notify the Company that you have made such reports or disclosures.
9.Confidentiality of Agreement.  

a)    Both parties agree to keep the terms of this Agreement, all documents relating to this Agreement, and the benefit being paid under it, completely confidential.  Both parties shall not disclose any information concerning the existence or terms of this Agreement or provide a copy of this Agreement to anyone, except as follows:  (i) to the extent necessary to report income to appropriate taxing authorities;  (ii) to communicate with their attorneys, their investment or financial advisors or their accountants as necessary for obtaining legal and/or financial planning advice (in which case such person or entity shall be informed of the confidential nature of this Agreement);  (iii) in response to a judicial order or subpoena issued by a state or federal court or governmental agency or any other order of a court of competent jurisdiction or a discovery request pursuant to established Rules of Civil Procedure in a civil action in state or federal court or in response to any other discovery request or deposition question made or posed.  
b)    Nothing herein precludes either party from apprising any attorney, court, administrative agency or governmental body of the existence and/or terms of this Agreement in order to enforce this Agreement, to challenge the enforceability of this Agreement and/or to support an argument that a claim/defense is barred by reason of the waivers and releases contained herein or to counter any such argument.
c)    Nothing in this Agreement shall prohibit either party from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation.  You do not need prior authorization of the Company to make any such reports 

or disclosures and you are not required to notify the Company that you have made such reports or disclosures.
d)    Nothing in this Agreement shall prohibit the Company from disclosing the terms of the Agreement and the Agreement itself in filings with the Securities Exchange Commission.
10.Remedies.  In the event that either party breaches any of  its obligations under this Agreement, the other party may, at its option,  seek monetary damages, a court order requiring compliance with this Agreement, or other legal and equitable remedies as appropriate.  A court, jury, and/or agency of competent jurisdiction shall determine the nature, extent and value of any damages caused by a breach of this Agreement, including whether a breach of this Agreement requires the return of some or all of the benefits provided under Paragraph 4 above and/or the discontinuance of the Company’s remaining obligations under this Agreement. In addition to any other rights either party may have at law or in equity, it shall have the right to seek enforcement of this Agreement in an action at law or in equity and, in such an action to enforce this Agreement, it shall have the right to  seek  reasonable legal fees, costs and expenses, to the extent permitted by law and to the extent that such recovery does not result in the invalidation of this Agreement.

11.No Admission of Liability.  You agree that neither any payment under this Agreement, nor any term or condition of it, shall be construed by either you or the Company, at any time, as an admission of liability or wrongdoing by the Company.

12.Binding Nature.  This Agreement shall bind, be transferable to, and/or be enforceable by or against, the Company’s successors and assigns, now and in the future.  This Agreement shall also bind, be transferable to and/or be enforceable by or against, all persons who might assert a legal right or claim on your behalf, such as your heirs, personal representatives and assigns, now and in the future. 

13.Governing Law/Interpretation/Legal Proceedings.  

a)    This Agreement shall be governed, construed, and interpreted, and the rights of you and the Company shall be determined in accordance with New York law, without regard to its conflicts of laws principles, except to the extent that the law of the United States governs any matter set forth herein, in which case such Federal law shall govern.  
b)    Disputes arising under it shall be heard exclusively by the state or federal courts located in Monroe County, New York.  Neither party waives any right it may have to remove such an action to the United States District Court with jurisdiction over Monroe County, New York.  
c)    The parties further agree that, whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions, which shall be fully severable and given full force and effect.  However, in the event you or anyone on your behalf takes legal action asserting claims released through this Agreement, and the Release of All Claims in Paragraph 5 of this Agreement or any portion thereof is determined by any court or agency of competent jurisdiction to be unenforceable for any reason, then the Company shall have the option to rescind this entire Agreement, and immediately recover from you any payments made pursuant to Paragraph 4 above, or to require that you execute another release that is legal and enforceable, without further consideration, payments or compensation.

		
	14.
	Scope of Agreement.  

a)    You agree that no promise, inducement or other agreement not expressly contained or referred to in this Agreement has been made conferring any benefit upon you.  You also agree that this Agreement contains the entire agreement between the Company and you regarding your termination and supersedes and renders null and void any and all prior or contemporaneous oral or written understandings, statements, representations or promises, including, but not limited to, the Employment Agreement and any other agreement regarding compensation, benefits, or severance. 
b)    Notwithstanding the foregoing, you acknowledge that nothing set forth herein shall alter in any manner your continuing obligations pursuant to the provisions contained in the Employment Agreement regarding Cooperation (Article 11) and Restrictive Covenants (Article 12), and you agree that such continuing obligations survive the termination of your employment with the Company and continue to be binding upon you after the Separation Date.  
15.Voluntary Agreement.  You agree that you are voluntarily signing this Agreement, that you have not been pressured into agreeing to its terms and that you have enough information to decide whether to sign it.  If, for any reason, you believe that this Agreement is not entirely voluntary, or if you believe that you do not have enough information, then you should not sign this Agreement.

16.Attorney Consultation.  You are advised to consult with an attorney of your choice before signing this Agreement.  By signing this Agreement, you acknowledge that you have had an opportunity to do so.

17.Period to Consider Agreement.  You represent and warrant that the Company has given you a reasonable period of time, of at least twenty-one (21) days, to consider all the terms of this Agreement and for the purpose of consulting with an attorney.  A draft of this Agreement was first given to your attorney on February 24, 2016.  If you execute this Agreement prior to the expiration of the 21-day period, you represent and warrant that you have freely and willingly elected to do so. 

18.Revocation Period; Effective Date.  After you have accepted this Agreement, you will have an additional 7 calendar days in which to revoke your acceptance.  If you do not revoke your acceptance, then the 8th day after the date of your signature will be the “Effective Date” of the Agreement, and you may not thereafter revoke it.  To revoke this Agreement, you agree to send written notice to:   Jeffrey Schlarbaum, Chief Executive Officer, IEC Electronics Corporation, 105 Norton Street, Newark, New York, 14513.  You acknowledge and agree that if you exercise your right to revoke this Agreement, your termination of employment will remain effective on the Separation Date and you will not be entitled to the separation benefits in Paragraph 4.

[SIGNATURES ON FOLLOWING PAGE]

IN WITNESS WHEREOF, the Executive and the Company by its duly authorized agent, have hereunder executed this Agreement and intend to be legally bound by its provisions.        
        
		
	W. Barry Gilbert
	IEC Electronics Corporation, on behalf of itself and its subsidiaries and affiliates        

/s/ W. B. Gilbert                        (By) /s/ Jeffrey T. Schlarbaum
                                    
Date:   3/8   , 2016                        Name: Jeffrey T. Schlarbaum    

Date:   Mar. 11   , 2016

STATE OF NEW YORK)
COUNTY OF MONROE) ss:

On the 8 day of March, 2016, before me, the undersigned, personally appeared W. Barry Gilbert, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in the capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument. 
                            
  /s/ Diane Dickson        
NOTARY PUBLIC

STATE OF NEW YORK)
COUNTY OF WAYNE ) ss:

On the 11 day of March, 2016, before me, the undersigned, personally appeared 
Jeffrey T. Schlarbaum  personally known to me or proved to me on the basis of 
satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in the capacity, and that by his/her signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument and he/she is a CEO of IEC Electronics Corporation, 
described in, and who, on behalf of IEC Electronics Corporation and its subsidiaries and affiliates, executed the within instrument.  

  /s/ Christi L. Rollo        
NOTARY PUBLIC

    

	
			
	State of New York
Supreme Court                        County of Wayne
	 
	Confession of Judgment

	

W. Barry Gilbert,

Plaintiff,

v.

IEC Electronics Corp.

Defendant.
	 

State of New York    )
County of ________ )  ss:

Jeffrey Schlarbaum, being duly sworn, deposes and says:  
1.I am the Chief Executive Officer of IEC Electronics Corporation (“IEC”), a New York corporation with a principal office in Wayne County, New York.
2.Pursuant to CPLR 3218, IEC confesses judgment in favor of W. Barry Gilbert, residing at __________, for One Million Three Hundred Seventy Eight Thousand Nine Hundred Eighty Eight Dollars ($1,378,988.00) and authorizes Mr. Gilbert to enter judgment for that amount against IEC without further notice.
3.This confession of judgment is for a debt due or to become due to Mr. Gilbert arising upon the following facts:  in February of 2016, IEC and Mr. Gilbert entered into a Separation Agreement and Release of All Claims (“Agreement”).  As part of that Agreement, IEC promised to make certain payments to Mr. Gilbert over the next four years in settlement of an arbitration filed by Mr. Gilbert against IEC on or about June 24, 2015 (the “Arbitration”).  

4. Notwithstanding any provision in CPLR 3218(b) to the contrary, in the event that IEC fails to make any payment owed under the Agreement, this confession of judgment may be enforced, and judgment may entered pursuant thereto, at any time within five (5) years of the date hereof.
5.This Confession of Judgment is intended as security for the payments due Mr. Gilbert under the Agreement.  The judgment is for the full amount sought by Mr. Gilbert in the Arbitration.    

6.This confession of judgment is not for the purpose of securing Mr. Gilbert against a contingent liability.

    
                                 (Signature)

                        Print Name
    

Sworn to before me this _______
day of _____________________, 2016.

    
Notary Public

Arbitration
	
			
	 
	 
	 

	

W. Barry Gilbert,
                
                                     Claimant,
              v.

IEC Electronics Corp.,
                                                    Respondent.
	 
	 

	 
	 
	 

STIPULATION

It is hereby stipulated and agreed, by and between the undersigned counsel for the parties, that the above-captioned arbitration be, and the same hereby is, dismissed with prejudice and on the merits.  Each party shall bear one-half of any remaining fees and costs due the arbitrator.
	
			
	Dated:
	 
	Dated:

	 
	 

	 
	 

	Geiger and Rothenberg, LLP
	Harter Secrest & Emery LLP

	 
	 

	 
	 

	David Rothenberg
Attorneys for Claimant
45 Exchange Street, Suite 800
Rochester, New York 14614
	Jerauld E. Brydges
Attorneys for Respondent
1600 Bausch & Lomb Place
Rochester, NY 14604

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