AMERICAN REALTY CAPITAL TRUST, INC. 150,000,000 SHARES OF COMMON STOCK $.01 PAR VALUE PER SHARE DEALER MANAGER AGREEMENT
150,000,000
SHARES
OF
COMMON
STOCK
$.01
PAR
VALUE PER SHARE
__________,
2008
Realty
Capital Securities, LLC
Three
Xxxxxx Place, Suite 3300B
Xxxxxx,
Xxxxxxxxxxxxx 00000
Ladies/Gentlemen:
American
Realty Capital Trust, Inc. (the “Company”), a Maryland corporation, intends to
qualify as a real estate investment trust (a “REIT”) under federal income tax
laws. The Company was formed on __________, 2007, and is governed by the
By-Laws
(the “By-Laws”) and the Articles of Incorporation, (the “Articles”) in the form
included as Exhibits to the Registration Statement, as described in Section
1(a)
hereof (such By-Laws and Articles being hereinafter referred to as the
“Organizational Documents”). The advisor to the Company is Realty Capital
Securities, LLC, a Delaware limited liability company (the “Advisor”). Unless
otherwise defined, capitalized terms used herein shall have the same meaning
as
in the Articles.
The
Company is offering (i) on a “best efforts” basis up to 150,000,000 shares
of common stock, $.0l par value per share (the “Shares”) for a purchase price of
$10.00 per Share with a minimum initial investment of $1,000, and (ii) up
to 25,000,000 Shares for a purchase price of $9.50 per Share for issuance
through the Company’s Distribution Reinvestment Program, all upon the other
terms and conditions set forth in the Prospectus, as described in
Section 1(a) hereof. The subscribers, each of whom will be required to
enter into a subscription agreement substantially similar to the form of
Subscription Agreement (the “Subscription Agreement”) attached as Appendix C to
the Prospectus, will, upon acceptance of their subscriptions by and in the
discretion of the Company, become stockholders of the Company (the
“Stockholders”).
(i) the
Registration Statement, the Prospectus and any amendments or supplements thereto
will contain all statements which are required to be stated therein by the
Act
and the Rules and Regulations and will comply in all material respects with
the
Act and the Rules and Regulations; and
(ii) neither
the Registration Statement nor the Prospectus nor any amendment or supplement
thereto will at any such time include any untrue statement of a material fact
or
omit to state any material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading.
(i) incurred
any material liabilities or obligations, direct or contingent; or
(ii) entered
into any material transaction, not in the ordinary course of business and,
except as so disclosed, there has not been and will not be any material adverse
change in the financial position or results of operations of the
Company.
2
3
Although
it is believed that the information contained in the sales literature or sales
material will not conflict with any of the information set forth in the
Prospectus, the sales literature will not purport to be complete, and should
not
be considered as a part of the Prospectus, or as incorporated in the Prospectus
by reference, or as forming the basis of the Offering.
4
(b) SUBSCRIPTION
AGREEMENTS AND SUBSCRIBERS’ FUNDS. Each person desiring to purchase Shares
through you or any other Soliciting Dealer will be required to complete and
execute the Subscription Agreement and to deliver such document to you or such
Soliciting Dealer, together with a check payable to the order of “American
Realty Capital Trust, Inc., Boston Private Bank & Trust Company Escrow
Agent” or “ARC Trust, Inc., BPB & TC Escrow Agent” in the amount of $10
per Share. Each Soliciting Dealer shall forward any such Subscription Agreement
and check to you not later than noon of the next business day after receipt
of
such Subscription Agreement, if the Soliciting Dealer conducts its internal
supervisory procedures at the location where the Subscription Agreement and
check were initially received. When such internal supervisory procedures are
to
be performed at a different location (the “Final Review Office”), the
Subscription Agreement and check must be transmitted to the Final Review Office
by the end of the next business day following receipt of the Subscription
Agreement and check by the Soliciting Dealer. The Final Review Office will,
by
the next business day following receipt of the Subscription Agreement and check,
forward both the Subscription Agreement and check to you as processing
broker-dealer in order that you may complete your review of the documentation
and process the Subscription Agreement and check. The Company will have
representatives available to review the Subscription Agreement at your location
in order to determine whether it wishes to accept the proposed purchaser as
a
Stockholder, it being understood that the Company reserves the unconditional
right to reject the tender of any Subscription Agreement and check (exclusive
of
the Company’s Distribution Reinvestment Program). Any check received by you
directly or as processing broker-dealer from the Soliciting Dealers will, in
all
cases, be forwarded to the Escrow Agent as soon as practicable, but in any
event
by the end of the second business day following receipt by you of the
Subscription Agreement and check. The Company will promptly notify you or the
Soliciting Dealer, as appropriate, of any rejection, and you shall send the
check and the Subscription Agreement to the Escrow Agent with directions to
promptly return both the Subscription Agreement and check to the rejected
subscriber. All subscription funds must be deposited in the Escrow
Account.
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Nothing
contained in this Section 2 shall be construed to impose upon the Company
the responsibility of assuring that prospective purchasers meet the suitability
standards contained in the Prospectus or to relieve you or any of the Soliciting
Dealers of the responsibility of complying with the Rules of the
FINRA.
(i) The
Company agrees to pay to you a sales commission of 7% of the sales price for
each Share sold (except for Special Sales) from the 150,000,000 Shares offered
on a “best efforts” basis, as set forth in the Prospectus under the caption
“Plan of Distribution.” In lieu of reimbursement of specific expenses, and as
compensation for acting as the managing dealer, you will also receive, subject
to the limitations described herein and in the Prospectus, a managing dealer
fee
equal to 3% of the sale price from the 150,000,000 Shares offered on a “best
efforts” basis, of which such fee may be retained or reallowed by you, subject
to federal and state securities laws, to the Soliciting Dealer who sold the
Shares, as described more fully in the Soliciting Dealers Agreement. No sales
commissions or dealer manager fees will be paid in connection with common stock
sold under the Company’s distribution reinvestment plan.
Single
Purchasers (as defined below) purchasing more than $250,000 worth of Shares
(25,000 Shares) will be entitled to a reduced Share purchase price and a
reduction in selling commissions payable in connection with the purchase
of such
Shares reduced by the amount of the share purchase price discount. The total
share purchase price will be cumulatively reduced for each share purchased
in
the total volume ranges set forth in the table below.
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For
a “Single
Purchaser”
|
Cumulative
Purchase Price Per Share
in
Volume Discount Range
|
Cumulative
Selling Commission Per
Share
in Volume Discount Range
|
|||||||||
$
|
1,000
|
–
|
$
|
250,000
|
$10.00
|
$0.70
|
|||||
250,001
|
–
|
500,000
|
|
9.90
|
0.60
|
||||||
500,001
|
–
|
750,000
|
9.75
|
0.45
|
|||||||
750,001
|
–
|
1,000,000
|
9.65
|
0.35
|
|||||||
1,000,001
|
–
|
5,000,000
|
+ |
9.55
|
0.25
|
Any
reduction from the amount of selling commissions otherwise payable to you and
reallowable to a Soliciting Dealer in respect of a purchaser’s subscription will
be credited to the purchaser in the form of additional Shares purchased net
of
commissions. Fractional Shares will be issued. As to sales of Shares which
are
entitled to the above described volume discounts, the Company will pay the
reduced selling commissions set forth above.
Selling
commissions for purchases of $5,000,000 or more will, in the Company’s sole
discretion, be reduced to $0.20 per Share or less, but in no event will the
proceeds to the Company from the sale of such Shares be less than $9.20 per
Share (except for Shares sold to affiliates of the Company at a price of $9.00
per share, which is the purchase price per Share net of any sales commissions
and dealer manager fees). In the event of a sale of $5,000,000 or more, the
Company will supplement the Prospectus in the manner described in the Prospectus
under the section “Volume Discounts”.
Certain
subscriptions may be combined for the purpose of crediting a purchaser or
purchasers with additional Shares for the above described volume discount and
for determining commissions payable to you and reallowable to Soliciting Dealers
so long as all such combined purchases are made through the same Soliciting
Dealer and approved by the Company. As used herein, the term “Single Purchaser”
will include (i) any person or entity, or persons or entities, acquiring
Shares as joint purchasers; (ii) all profit-sharing, pension and other
retirement trusts maintained by a given corporation, partnership or other
entity; (iii) all funds and foundations maintained by a given corporation
partnership or other entity; and (iv) all profit-sharing, pension and other
retirement trusts and all funds or foundations over which a designated bank
or
other trustee, person or entity (except an investment advisor registered under
the Investment Advisors Act of 1940) exercises discretionary authority with
respect to an investment in the Company.
The
investor must xxxx the “Additional Investment” space on the Subscription
Agreement Signature Page, and set forth the basis for the discount and identity
the orders to be combined in order for subscriptions to be combined. The Company
is not responsible for failing to combine subscriptions, where the investor
fails to xxxx the “Additional Investment” space.
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If
the
Subscription Agreements for the subscriptions to be combined are submitted
at
the same time, then the additional Shares to be credited to the purchasers
as a
result of such combined purchases will be credited on a pro-rata basis. If
the
Subscription Agreements for the subscriptions to be combined are not submitted
at the same time, then any additional Shares to be credited as a result of
such
combined purchases will be credited to the last component purchase, unless
the
Company is otherwise directed in writing at the time of such submission; except
however, the additional Shares to be credited to any Tax-Exempt Entities whose
subscriptions are combined for purposes of the volume discount will be credited
only on a pro-rata basis based on the amount of the investment of each
Tax-Exempt Entity and their combined purchases.
In
the
event the dollar amount of commissions paid for such combined purchases exceeds
the maximum commissions for such combined purchases (taking the volume discount
into effect), you will be obligated to forthwith return to the Company any
excess commissions received. The Company may adjust any future commissions
due
to you for any such excess commissions that have not been returned.
Notwithstanding
the foregoing, it is understood and agreed that no commission shall be payable
with respect to particular Shares if the Company rejects a proposed subscriber’s
Subscription Agreement, which it may do for any reason or for no reason, as
set
forth in the form of Subscription Agreement. In addition, no selling commission
shall be payable in connection with the sale of Shares to employees and
associates of the Company and its Affiliates, the Advisor, affiliates of the
Advisor, the Dealer Manager or the Soliciting Dealers.
Volume
discounts will not be available to California residents to the extent that
such
discounts do not comply with the provisions of Rule 260.145.51 adopted
pursuant to the California Corporate Securities Law of 1968, which provides
that
volume discounts can be made available to California residents only in
accordance with the following conditions: (i) there can be no variance in
the net proceeds to the Company from the sale of the Shares to difference
purchasers of the same offering; (ii) all purchasers of the Shares must be
informed of the availability of quantity discounts; (iii) the same volume
discounts must be allowed to all purchasers of Shares which are part of the
offering; (iv) the minimum amount of shares as to which volume discounts
are allowed cannot be less than $10,000; (v) the variance in the price of
the shares must result solely from a different range of commissions, and all
discounts must be based on a uniform scale of commissions; and (vi) no
discounts are allowed to any group of purchasers. Accordingly, volume discounts
for California residents will be available in accordance with the foregoing
table of uniform discount levels based on dollar volume of shares purchased,
but
no discounts are allowed to any group of purchasers, and no subscriptions may
be
aggregated as part of a combined order for purposes of determining the number
of
Shares issued.
(ii) All
sales
commissions payable to you will be paid on a monthly basis, substantially
concurrently with the acceptance of a subscriber as a Stockholder by the
Company, in an amount equal to the sales commissions payable with respect to
such Shares; provided however, the Company reserves the right, at its sole
discretion, to change the frequency of the payment of such commissions to a
monthly basis.
8
(i) any
amendments to the Registration Statement or supplements to the Prospectus which
may be required pursuant to the undertakings in the Registration Statement;
and
(ii) upon
your
reasonable request any amendments to the Registration Statement or supplements
to the Prospectus which, in the opinion of you or your counsel, may be necessary
or advisable in view of the requirements of the Act and the Rules and
Regulations in connection with the offer and sale of the Shares during the
Offering Period.
9
(i) a
copy of
each report or general communication (whether financial or otherwise) sent
to
the Stockholders;
(ii) a
copy of
each report (whether financial or otherwise) filed with the Commission;
and
10
(iii) such
other information as you may from time to time reasonably request regarding
the
financial condition and operations of the Company including, but not limited
to,
copies of operating statements of properties acquired by the
Company.
With
respect to your and each Soliciting Dealer’s participation in any resales or
transfers of the Shares, you agree, and each Soliciting Dealer agrees, to comply
and shall comply with any applicable requirements as set forth above. In
addition, you and each Soliciting Dealer agree that should you or they assist
with the resale or transfer of the Shares, you and each Soliciting Dealer will
fulfill the obligations pursuant to Sections 3(b) and 4(d) of
Rule 2810 of the Rules of the FINRA.
11
12
(1) items
of
compensation;
(2) Company
properties, if any;
(3) tax
aspects;
(4) conflicts
and risk factors; and
(5) appraisals
and other pertinent reports.
Notwithstanding
the foregoing, you and each Soliciting Dealer may rely upon the results of
an
inquiry conducted by another Soliciting Dealer, provided that:
(i) such
Soliciting Dealer has reasonable grounds to believe that such inquiry was
conducted with due care;
(ii) the
results of the inquiry were provided to you with the consent of the Soliciting
Dealer conducting or directing the inquiry; and
(iii) no
Soliciting Dealer that participated in the inquiry is an affiliate of the
Company or the Advisor.
(g) OFFERING
PRICE ADJUSTMENT. If, after the Effective Date, the Company shall adjust the
initial purchase price of $10.00 per Share for the 150,000,000 Shares to be
offered for sale on a “best efforts” basis in the Offering, you agree (and each
Soliciting Dealer agrees) that the total of all compensation payable to the
Dealer Manager as provided in Section 2(d) above, shall be adjusted
proportionally. In no event shall the total of all such compensation paid to
you
and to all Soliciting Dealers (i.e., the aggregate of the sales commission
exceed six and a half percent (6.5%)
of the
total of all subscription proceeds received by the Company.
Prior
to
the sale of the Shares, you and each Soliciting Dealer shall inform the
prospective purchaser of all pertinent facts relating to the liquidity and
marketability of the Shares during the term of the investment.
13
(a) the
Commission’s registration fee;
(b) expenses
of printing the Registration Statement, the Prospectus and any amendment or
supplement thereto and the expense of furnishing to you copies of the
Registration Statement, the Prospectus and any amendment or supplement thereto
as herein provided;
(c) fees
and
expenses of its and your accountants and counsel in connection with the Offering
contemplated by this Agreement;
(d) fees
and
expenses incurred in connection with any required filing with the
FINRA;
(e) all
of
your expenses in connection with the Offering, subject to the limitations
contained in the Prospectus, including, but not limited to, the salaries, fringe
benefits, travel expenses and similar expenses of your employees and personnel
incurred in connection with the Offering; and
(f) expenses
of qualifying the Shares for offering and sale under state blue sky and
securities laws, and expenses in connection with the preparation and printing
of
the Blue Sky Survey.
In
no
event, however, will the total of the selling commissions paid to you (which
you
may reallow to the Soliciting Dealers) exceed 7% of the gross proceeds of the
Offering.
14
(a) Subject
to the limitations set forth below, the Company agrees to indemnify and hold
harmless you, each Soliciting Dealer and each person, if any, who controls
you
or any Soliciting Dealer within the meaning of the Act (collectively, the
“Indemnified Parties”), against any and all loss, liability, claim, damage and
expense whatsoever caused by any untrue statement or alleged untrue statement
of
a material fact contained in the Registration Statement, the Prospectus or
any
amendment or supplement thereto, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Such indemnification shall be subject to the provisions of
Sections 7(b) and (c) of this Agreement.
The
Company shall not provide indemnification for any liability or loss suffered
by
you, nor shall it provide that you be held harmless for any liability suffered
by the Company unless all of the following conditions are met: (i) the
party seeking indemnification has determined, in good faith, that its course
of
conduct, if such course of conduct caused the loss or liability, was in the
best
interests of the Company; (ii) the person seeking indemnification was
acting on behalf of or performing services on behalf of the Company;
(iii) such liability or loss was not the result of gross negligence or
willful misconduct on the part of the party seeking indemnification or the
Indemnified Party; and (iv) such indemnification or agreement to be held
harmless is recoverable only out of the assets of the Company and not from
the
Stockholders.
In
no
case shall the Company be liable under this indemnity agreement with respect
to
any claim made against any of the Indemnified Parties unless the Company shall
have been notified in writing (in the manner provided in Section 10 hereof)
of the nature of the claim within a reasonable time after the assertion thereof;
but the failure to so notify the Company shall not relieve the Company from
any
liability which the Company would have incurred otherwise than on account of
this indemnity agreement. The Company shall be entitled to participate, at
its
own expense, in the defense of, or if it so elects within a reasonable time
after receipt of such notice, to assume the defense of any claim or suit for
which any of the Indemnified Parties seek indemnification hereunder. If the
Company elects to assume said defense, such defense shall be conducted by
counsel chosen by it and reasonably satisfactory to the Indemnified
Parties.
In
the
event that the Company elects to assume the defense of any such suit and retains
such counsel, the Company shall not be liable under this Section 7 to the
Indemnified Parties in the suit for any legal or other expenses subsequently
incurred by the Indemnified Parties, and the Indemnified Parties shall bear
the
fees and expenses of any additional counsel retained by the Indemnified Parties
unless: (A) the employment of counsel by the Indemnified Party has been
authorized by the Company; or (B) the Company shall not in fact have
employed counsel to assume the defense of such action, in either of which events
such fees and expenses shall be borne by the Company.
The
Company may advance amounts to the Indemnified Parties for legal and other
expenses and costs incurred as a result of any legal action for which
indemnification is being sought only if all of the following conditions are
satisfied: (i) the legal action relates to acts or omissions with respect
to the performance of duties or services by one or more Indemnified Parties
for
or on behalf of the Company; (ii) the legal action is initiated by a third
party who is not a Stockholder or is initiated by a Stockholder acting in his
or
her capacity as such and a court of competent jurisdiction specifically approves
such advancement; and (iii) the Indemnified Parties receiving such advances
undertake to repay the advanced funds to the Company, together with the
applicable legal rate of interest thereon, in cases in which such Indemnified
Parties are thereafter found not to be entitled to indemnification.
15
Notwithstanding
the foregoing provisions of this Section 7, the Company will not be liable
in any such case to the extent that any loss, liability, claim, damage or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by or on behalf
of
you or any Soliciting Dealer for use in the preparation of the Registration
Statement (or any amendment thereof) or the Prospectus (or any supplement
thereto). The foregoing indemnity agreement is subject to the further condition
that, insofar as it relates to any untrue statement, alleged untrue statement,
omission or alleged omission made in the Prospectus but eliminated or remedied
in any amendment or supplement thereto, such indemnity agreement shall not
inure
to your benefit or to any Soliciting Dealer from whom the person asserting
any
loss, liability, claim, damage or expense purchased the Shares which are the
subject thereof (or to the benefit of any person who controls you or any
Soliciting Dealer), if a copy of the Prospectus as so amended or supplemented
was not sent or given to such person at or prior to the time the subscription
of
such person was accepted by the Company; but only if a copy of the Prospectus
(as so amended or supplemented) had been supplied by the Company to you or
any
Soliciting Dealer prior to such acceptance. This indemnity agreement will be
in
addition to any liability which the Company may otherwise have.
(b) The
indemnification and agreement to hold harmless provided in subparagraph (a)
of this Section 7 is further limited to the extent that no such
indemnification by the Company of you or a Soliciting Dealer shall be permitted
under this Agreement for or arising out of an alleged violation of federal
or
state securities laws unless one or more of the following conditions are met:
(i) there has been a successful adjudication on the merits of each count
involving alleged securities law violations by you or any Soliciting Dealer
and
a court of competent jurisdiction has approved indemnification of the litigation
costs; (ii) such claims against you or any Soliciting Dealer have been
dismissed with prejudice on the merits by a court of competent jurisdiction
as
to the particular indemnitee and the court has approved indemnification of
the
litigation costs; or (iii) a court of competent jurisdiction approves a
settlement of the claims against you or any Soliciting Dealer and finds that
indemnification of the settlement and related costs should be made and the
court
considering the request has been advised of the position of the Commission
and
of any state securities regulatory authority in which securities of the Company
were offered and sold as to indemnification for securities law
violations.
16
(c) You
and
each Soliciting Dealer agree to indemnify and hold harmless the Company, and
each person, if any, who controls the Company within the meaning of the Act
and
any controlling person of the Company: (i) to the same extent as in the
foregoing indemnity from the Company to you and each Soliciting Dealer, but
only
with reference to statements or omissions based upon the information relating
to
you or any Soliciting Dealer furnished in writing by you or such Soliciting
Dealer or on your or their behalf for use in the Registration Statement or
the
Prospectus, or any amendment or supplement thereto; and (ii) for any
violation by you or any Soliciting Dealer in the sale of the Shares of any
applicable state or federal law or any rule, regulation or instruction
thereunder, provided that such violation is not committed in reliance on any
violation by the Company of such law, rule, regulation or instruction. You
and
each Soliciting Dealer further agree to indemnify and hold harmless the Company
and any controlling person of the Company against any losses, liabilities,
claims, damages or expenses to which the Company or any such controlling person
may become subject under the securities or blue sky laws of any jurisdiction
insofar as such losses, liabilities, claims, damages or expenses (or actions,
proceedings or investigations in respect thereof) arise by reason of a sale
of
the Shares through the efforts of you (with respect to sales effected without
the assistance of a Soliciting Dealer) or a Soliciting Dealer (with respect
to
sales effected by such Soliciting Dealer) which is effected other than in
accordance with the Blue Sky Survey supplied to you by the Company (a
“Non-Permitted Sale”), whether such Non-Permitted Sale is caused by a sale in a
jurisdiction other than those specified in the Blue Sky Survey, by a sale in
a
jurisdiction in which you or the Soliciting Dealer is not registered to sell
the
Shares or which results in a sale in a jurisdiction in excess of the number
of
Shares permitted to be sold in such jurisdiction, and will reimburse the Company
or any such controlling person for any legal fees, monetary penalties or other
expenses reasonably incurred by any of them in connection with investigating,
curing or defending against any such losses, liabilities, claims, damages,
actions, proceedings or investigations. This indemnity agreement will be in
addition to any liability which you or any Soliciting Dealer may otherwise
have.
(d) The
notice provisions contained in Section 7(a) hereof, relating to notice to
the Company, shall be equally applicable to you and each Soliciting Dealer
if
the Company or any controlling person of the Company seeks indemnification
pursuant to Section 7(c) hereof. In addition, you and each Soliciting
Dealer may participate in the defense, or assure the defense, of any such suit
so sought under Section 7(c) hereof and have the same rights and privileges
as the Company enjoys with respect to such suits under Section 7(a)
hereof.
In
any
case, this Agreement shall terminate at the close of business on the Termination
Date. Termination of this Agreement pursuant to this Section 8 shall be
without liability of any party to any other party other than as provided in
Sections 5 and 7 hereof, which shall survive such termination.
17
10.
NOTICES.
All communications hereunder shall be in writing and, if sent to you, shall
be
mailed by registered mail or delivered, telefacsimilied or telegraphed and
confirmed in writing to Realty Capital Securities, LLC, Three Xxxxxx Xxxxx,
Xxxxx 0000X, Xxxxxx, XX 00000 and, if sent to the Company, shall be mailed
by
registered mail or delivered, telefacsimilied or telegraphed and confirmed
in
writing to American Realty Capital Trust, Inc., 0000 Xxx Xxxxxxx, Xxxxxxxxxx,
XX
00000.
11.
REFERENCE
TO REALTY CAPITAL SECURITIES, LLC. All references herein to Realty Capital
Securities, LLC or the Dealer Manager hereunder shall be deemed to include
all
successors and assigns of Realty Capital Securities, LLC.
13. APPLICABLE
LAW. This Agreement and any disputes relative to the interpretation or
enforcement hereto shall be governed by and construed under the internal laws,
as opposed to the conflicts of laws provisions, of the State of
Pennsylvania.
18
If
the
foregoing is in accordance with your understanding of our agreement, kindly
sign
and return it to us, whereupon this instrument will become a binding agreement
between you and the Company in accordance with its terms.
a
Maryland corporation
By:
_________________________________
Name:
Title:
Accepted
as of the date first above written:
REALTY
CAPITAL SECURITIES, LLC
By:
_________________________________
Name:
Title:
19