EX-4.5 6 dex45.htm AMENDED AND RESTATED ESCROW AGREEMENT AMENDED AND RESTATED ESCROW AGREEMENT
Exhibit 4.5
AMENDED AND RESTATED ESCROW AGREEMENT
THIS AMENDED AND RESTATED ESCROW AGREEMENT (this “Agreement”) made and entered into as of this 1st day of August, 2009 by and among KBS Capital Markets Group, LLC, a California limited liability company (the “Dealer Manager”), KBS Strategic Opportunity REIT, Inc., a Maryland Corporation (the “Company”), UMB Bank, N.A., as escrow agent, a national banking association organized and existing under the laws of the United States of America (the “Escrow Agent”), amends and restates that certain Escrow Agreement dated June 23, 2009 by and among the Dealer Manager, the Company and the Escrow Agent (the “Original Escrow Agreement”).
capacity of agent for the Escrow Agent and not in any capacity on behalf of the Company or the Dealer Manager, nor shall they have any interest other than that provided in this Agreement in assets in Processing Agent’s possession as the agent of the Escrow Agent.
WHEREAS, prior to the date hereto, the Dealer Manager, the Company and the Escrow Agent executed the Original Escrow Agreement.
WHEREAS, the Dealer Manager, the Company and the Escrow Agent wish to amend and restate the Original Escrow Agreement in its entirety as set forth below.
2. Operation of the Escrow.
(a) Deposits in the Escrow Account. During the Escrow Period, persons subscribing to purchase Shares will be instructed by the Company, the Dealer Manager and the Dealers to make checks for subscriptions payable to the order of “UMB Bank, N.A., as Escrow Agent for KBS Strategic Opportunity REIT, Inc.” Completed subscription agreements and checks or money orders in payment for the purchase price shall be remitted to the P.O. Box designated for the receipt of such agreements and funds, and drafts, wires, or Automated ClearingHouse (ACH) payments shall be transmitted directly to the Escrow Account. To the extent that subscription agreements and payments are remitted by the Company or the Dealer Manager, the Company or the Dealer Manager, as applicable, will furnish to the Escrow Agent a list detailing information regarding such subscriptions as set forth in Exhibit B. The Processing Agent will promptly deliver all monies received in good order from subscribers (or from the Dealer Manager or Dealers transmitting moneys and
- 2 -
subscriptions from subscribers) for the payment of Shares to the Escrow Agent for deposit in the Escrow Account. The Escrow Agent hereby agrees to maintain the funds contributed by the Pennsylvania Subscribers and the Tennessee Subscribers in a manner in which they may be separately accounted for so that the requirements of Sections 3 and 4 of this Agreement can be met. Deposits shall be held in the Escrow Account until such funds are disbursed in accordance with this Section 2 hereof. Prior to disbursement of the funds deposited in the Escrow Account, such funds shall not be subject to claims by creditors of the Company or any of its affiliates. If any of the instruments of payment are returned to the Escrow Agent for nonpayment prior to receipt of the Escrow Break Affidavit (as described below), the Escrow Agent shall promptly notify the Processing Agent and the Company in writing via mail, email or facsimile of such nonpayment, and the Escrow Agent is authorized to debit the Escrow Account, as applicable, in the amount of such returned payment as well as any interest earned on the amount of such payment and the Processing Agent shall delete the appropriate account from the records maintained by the Processing Agent. The Processing Agent will maintain a written account of each sale, which account shall set forth, among other things, the following information: (i) the subscriber’s name and address, (ii) the number of Shares purchased by such subscriber, and (iii) the amount paid by such subscriber for such Shares. During the Escrow Period neither the Company nor the Dealer Manager will be entitled to any principal funds received into the Escrow Account.
(b) Distribution of the Escrowed Funds. If at any time on or prior to the Closing Date, the Minimum Offering has been raised, then upon the happening of such event, the funds in the Escrow Account shall remain in the Escrow Account until the Escrow Agent receives written direction provided by the Company and the Dealer Manager instructing the Escrow Agent to deliver the principal amount of such escrowed funds as the Company shall direct (other than any funds received from Pennsylvania Subscribers and Tennessee Subscribers which cannot be released until the conditions of Sections 3 and 4, respectively, have been met); provided, however, that the Escrow Agent shall not disburse those funds of a subscriber whose subscription has been rejected or rescinded of which the Escrow Agent has been notified by the Company, or otherwise in accordance with the Company’s written request. An affidavit or certification from an officer of the Company and an officer of the Dealer Manager to the Escrow Agent and Processing Agent stating that at least the Minimum Offering has been timely raised, shall constitute sufficient evidence for the purpose of this Agreement that such event has occurred (the “Break Escrow Affidavit”). The Affidavit shall indicate (i) the date on which the Minimum Offering was raised and (ii) the actual total number of Shares sold as of such date. Thereafter, the Escrow Agent shall distribute directly to the subscribers any interest earned on such subscriber’s subscription payments while such payments were held in the Escrow Account.
(c) If the Escrow Agent has not received a Break Escrow Affidavit on or prior to the Closing Date, the Processing Agent shall provide the Escrow Agent the information needed to return the principal amount of the funds in the Escrow Account, together with any interest thereon, to each respective subscriber, and the Escrow Agent shall promptly create and dispatch checks and wires drawn on the Escrow Account to return the principal amount of the funds in the Escrow Account, together with any interest thereon, without deduction, penalty or expense, to the respective subscribers, and the Escrow Agent shall notify the Company and the Dealer Manager of its distribution of the funds. The subscription
- 3 -
payments returned to each subscriber (including those, if any, returned to Pennsylvania Subscribers and Tennessee Subscribers pursuant to Sections 3 and 4, respectively) shall be free and clear of any and all claims of the Company or any of its creditors.
3. Distribution of the Funds from Pennsylvania Subscribers.
(a) Notwithstanding anything to the contrary herein, disbursements of funds contributed by Pennsylvania Subscribers may only be distributed in compliance with the provisions of this Section 3. Irrespective of any disbursement of funds from the Escrow Account pursuant to Section 2 hereof, the Escrow Agent will continue to place deposits from the Pennsylvania Subscribers into the Escrow Account, until such time as the Company notifies the Escrow Agent in writing that total subscriptions (including amounts in the Escrow Account previously disbursed as directed by the Company and the amounts then held in the Escrow Account) equal or exceed $33,400,000, whereupon the Escrow Agent shall (i) disburse to the Company, at the Company’s request, the principal amount of the funds from the Pennsylvania Subscribers received by the Escrow Agent for accepted subscriptions and (ii) disburse directly to the Pennsylvania Subscribers any interest earned on such Pennsylvania Subscribers’ subscription payments while such payments were held in the Escrow Account. However, the Escrow Agent shall not disburse to the Company those funds of a subscriber whose subscription has been rejected or rescinded of which the Escrow Agent has been notified by the Company, or otherwise in accordance with the Company’s written request.
(b) If the Company has not received total subscriptions of at least $33,400,000 within 120 days of the date the Company first receives a subscription from a Pennsylvania Subscriber (the “Initial Escrow Period”), the Company shall notify each Pennsylvania Subscriber by certified mail or any other means (whereby receipt of delivery is obtained) of the right of Pennsylvania Subscribers to have their investment returned to them. If, pursuant to such notice, a Pennsylvania Subscriber requests the return of his or her subscription funds within ten (10) days after receipt of the notification (the “Request Period”), the Escrow Agent shall promptly refund, with a pro rata share of any interest earned thereon and without deduction, directly to each Pennsylvania Subscriber the funds deposited in the Escrow Account on behalf of the Pennsylvania Subscriber.
(c) The funds of Pennsylvania Subscribers who do not request the return of their funds within the Request Period shall remain in the Escrow Account for successive 120-day escrow periods (each a “Successive Escrow Period”), each commencing automatically upon the termination of the prior Successive Escrow Period, and the Company and Escrow Agent shall follow the notification and payment procedure set forth in Section 3(b) above with respect to the Initial Escrow Period for each Successive Escrow Period, until the occurrence of the earliest of (i) the termination of the offering, (ii) the receipt and acceptance by the Company of total subscriptions that equal or exceed $33,400,000 and the disbursement of the Escrow Account on the terms specified in this Section 3, or (iii) all funds held in the Escrow Account that were contributed by Pennsylvania Subscribers having been returned to the Pennsylvania Subscribers in accordance with the provisions hereof.
- 4 -
(d) If the Company has not received total subscriptions of at least $33,400,000 within 365 days after the Break Escrow Affidavit is delivered by the Company pursuant to Section 2(d), all funds in the Escrow Account that were contributed by Pennsylvania Subscribers will be promptly returned in full to such Pennsylvania Subscribers, together with their pro rata share of any interest earned thereon pursuant to instructions made by the Company, upon which the Escrow Agent may conclusively rely.
4. Distribution of the Funds from Tennessee Subscribers.
(a) Notwithstanding anything to the contrary herein, disbursements of funds contributed by Tennessee Subscribers may only be distributed in compliance with the provisions of this Section 4. Irrespective of any disbursement of funds from the Escrow Account pursuant to Section 2 hereof, the Escrow Agent will continue to place deposits from the Tennessee Subscribers into the Escrow Account, until such time as the Company notifies the Escrow Agent in writing that total subscriptions (including amounts in the Escrow Account previously disbursed as directed by the Company and the amounts then held in the Escrow Account) equal or exceed $20,000,000, whereupon the Escrow Agent shall (i) disburse to the Company, at the Company’s request, the principal amount of the funds from the Tennessee Subscribers received by the Escrow Agent for accepted subscriptions and (ii) disburse directly to the Tennessee Subscribers any interest earned on such Tennessee Subscribers’ subscription payments while such payments were held in the Escrow Account. However, the Escrow Agent shall not disburse those funds of a subscriber whose subscription has been rejected or rescinded of which the Escrow Agent has been notified by the Company, or otherwise in accordance with the Company’s written request.
(b) If the Company has not received total subscriptions of at least $20,000,000 within 365 days after the Break Escrow Affidavit is delivered by the Company pursuant to Section 2(d), the Processing Agent shall provide the Escrow Agent the information needed to return the principal amount of the funds in the Escrow Account that were contributed by Tennessee Subscribers, together with any interest thereon, to the respective Tennessee Subscribers, and the Escrow Agent shall promptly create and dispatch checks and wires drawn on the Escrow Account to return the principal amount of the funds in the Escrow Account that were contributed by Tennessee Subscribers, together with any interest thereon, without deduction, penalty or expense, to the respective Tennessee Subscribers, and the Escrow Agent shall notify the Company and the Dealer Manager of its distribution of the funds.
- 5 -
The Escrow Agent shall be entitled to sell or redeem any such investment as necessary to make any distributions required under this Agreement and shall not be liable or responsible for any loss resulting from any such sale or redemption.
Income, if any, resulting from the investment of the funds received from subscribers to the Offering shall be distributed according to this Agreement.
The Escrow Agent shall provide to the Company monthly statements (or more frequently as reasonably requested by the Company) on the account balance of the Escrow Account and the activities in the account since the last report.
7. Liability of the Escrow Agent and the Processing Agent; Indemnification. The Escrow Agent acts hereunder as a depository only. The Escrow Agent is not responsible or liable in any manner for the sufficiency, correctness, genuineness or validity of this Escrow Agreement or with respect to the form of execution of the same. Each of the Escrow Agent and the Processing Agent shall not be liable for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith, and in the exercise of its own best judgment, and may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent or the Processing Agent), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is believed by the Escrow Agent or the Processing Agent to be genuine and to be signed or presented by the proper person(s). Each of the Escrow Agent and the Processing Agent shall not be held liable for any error in judgment made in good faith by an officer or employee of either unless it shall be proved that the Escrow Agent or the Processing Agent, as appropriate, was grossly negligent or reckless in ascertaining the pertinent facts or acted intentionally in bad faith. The Escrow Agent shall not be bound by any notice of demand, or any waiver, modification, termination or rescission of this Agreement or any of the terms hereof, unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall give its prior written consent thereto.
Either of the Escrow Agent and the Processing Agent may consult legal counsel and shall exercise reasonable care in the selection of such counsel, in the event of any dispute or question as to the construction of any provisions hereof or its duties hereunder, and it shall incur no liability and shall be fully protected in acting in accordance with the reasonable opinion or instructions of such counsel.
- 6 -
Each of the Escrow Agent and the Processing Agent shall not be responsible, may conclusively rely upon and shall be protected, indemnified and held harmless by the Company, for the sufficiency or accuracy of the form of, or the execution, validity, value or genuineness of any document or property received, held or delivered by it hereunder, or of the signature or endorsement thereon, or for any description therein; nor shall the Escrow Agent or the Processing Agent be responsible or liable in any respect on account of the identity, authority or rights of the persons executing or delivering or purporting to execute or deliver any document, property or this Agreement.
In the event that either the Escrow Agent or the Processing Agent shall become involved in any arbitration or litigation relating to the funds received from subscribers to the Offering, each is authorized to comply with any decision reached through such arbitration or litigation.
The Company, hereby agrees to indemnify both the Escrow Agent and the Processing Agent for, and to hold it harmless against any loss, liability or expense incurred in connection herewith without gross negligence, recklessness or willful misconduct on the part of either of the Escrow Agent or the Processing Agent, including without limitation legal or other fees arising out of or in connection with its entering into this Agreement and carrying out its duties hereunder, including without limitation the costs and expenses of defending itself against any claim of liability in the premises or any action for interpleader. Neither the Escrow Agent, nor the Processing Agent, shall be under any obligation to institute or defend any action, suit, or legal proceeding in connection herewith, unless first indemnified and held harmless to its satisfaction in accordance with the foregoing, except that neither shall be indemnified against any loss, liability or expense arising out of its own gross negligence, recklessness or willful misconduct. Such indemnity shall survive the termination or discharge of this Agreement or resignation of the Escrow Agent.
8. The Escrow Agent’s Fee. Escrow Agent shall be entitled to fees and expenses for its regular services as Escrow Agent as set forth in Exhibit A. Additionally, Escrow Agent is entitled to reasonable fees for extraordinary services and reimbursement of any reasonable out of pocket and extraordinary costs and expenses related to its obligations as Escrow Agent under this Agreement, including, but not limited to, reasonable attorneys’ fees. All of the Escrow Agent’s compensation, costs and expenses shall be paid by the Company.
9. 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.
- 7 -
claimants shall have been fully and finally adjudicated in a Court assuming and having jurisdiction of the parties and money, papers and property involved herein or affected hereby, or (b) All differences shall have been adjusted by agreement and the Escrow Agent shall have been notified thereof in writing, signed by all the interested parties.
(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; further the Escrow Agent may pay into court all monies and property deposited with Escrow Agent under this Agreement.
| (1) If to Company: | KBS Strategic Opportunity REIT, Inc. | |
| 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000 | ||
| Xxxxxxx Xxxxx, XX 00000 | ||
| Telephone: (000) 000-0000 | ||
| Facsimile: (000) 000-0000 | ||
| Company Wire Instructions: | ||
| To be provided by the Company | ||
| (2) If to the Escrow Agent: | UMB Bank, N.A. | |
| 0000 Xxxxx Xxxx., 0xx Xxxxx | ||
| Mail Stop: 1020409 | ||
| Xxxxxx Xxxx, Xxxxxxxx 00000 | ||
| Attention: Xxxx Xxxxxxx, |
- 8 -
| Corporate Trust | ||
| Telephone: (000) 000-0000 | ||
| Facsimile: (000) 000-0000 | ||
| Escrow Agent Wiring Instructions: | ||
| UMB Bank, N.A. | ||
| ABA Routing Number: 000000000 | ||
| Account Number: To be provided by UMB Bank, N.A. | ||
| Account Name: UMB Bank, N.A., as Escrow Agent for KBS | ||
| Strategic Opportunity REIT, Inc. | ||
| Checks Payable Information: | ||
| UMB Bank, N.A., as Escrow Agent for KBS Strategic Opportunity REIT, Inc. | ||
| Attention: Xxxx Xxxxxxx, Corporate Trust | ||
| 0000 Xxxxx Xxxxxxxxx, 0xx Xxxxx | ||
| M/S 1020409 | ||
| Xxxxxx Xxxx, Xxxxxxxx 00000 | ||
| (3) If to Dealer Manager: | KBS Capital Markets Group, LLC | |
| 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000 | ||
| Xxxxxxx Xxxxx, XX 00000 | ||
| Attention: Xxx Xxxxx | ||
| Telephone: (000) 000-0000 | ||
| Facsimile: (000) 000-0000 |
13. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Missouri without regard to the principles of conflicts of law.
- 9 -
connection herewith. No failure or delay of the Escrow Agent in exercising any right, power or remedy may be, or may be deemed to be, a waiver thereof; nor may any single or partial exercise of any right, power or remedy preclude any other or further exercise of any right, power or remedy. In the event that any one or more of the provisions contained in this Agreement, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement.
- 10 -
[SIGNATURE PAGES FOLLOW]
- 11 -
| DEALER MANAGER: | ||
| KBS CAPITAL MARKETS GROUP, LLC | ||
| By: | /s/ Xxxxxxx X. Xxxxxxxx |
| Name: | Xxxxxxx X. Xxxxxxxx | |
| Title: | Chief Executive Officer |
| COMPANY: | ||
| KBS STRATEGIC OPPORTUNITY REIT, INC. | ||
| By: | /s/ Xxxxx X. Xxxxxx |
| Name: | Xxxxx X. Xxxxxx | |
| Title: | Chief Financial Officer, Treasurer and Secretary |
| ESCROW AGENT: | ||
| UMB BANK, N.A. | ||
| By: | /s/ Xxxx X. Xxxxxxx |
| Name: | Xxxx X. Xxxxxxx | |
| Title: | Vice President |
- 12 -
EXHIBIT A
ESCROW FEES AND EXPENSES
| Acceptance Fee | ||||
| Review escrow agreement and establish account | $ | 3,000 | ||
| Annual Fee | ||||
| Maintain account | $ | 3,000 | ||
| Transaction Fees | ||||
| (a) per outgoing wire transfer | $ | 35.00 | ||
| (b) per Form 1099 (Int., B or Misc.) | $ | 10.00 | * | |
| (c) per investment purchase, sale or settlement | $ | 35.00 | ** |
| * | Not anticipated to be charged |
| ** | Excludes money market mutual fund transactions |
Fees specified are for the regular, routine services contemplated by the Escrow Agreement, and any additional or extraordinary services, including, but not limited to disbursements involving a dispute or arbitration, or administration while a dispute, controversy or adverse claim is in existence, will be charged based upon time required at the then standard hourly rate. In addition to the specified fees, all expenses related to the administration of the Escrow Agreement (other than normal overhead expenses of the regular staff) such as, but not limited to, travel, postage, shipping, courier, telephone, facsimile, supplies, legal fees, accounting fees, etc., will be reimbursable. Acceptance and first year annual fees will be payable at the initiation of the escrow and annual fees will be payable in advance thereafter. Other fees and expenses will be billed as incurred.
- 13 -
EXHIBIT B
Form of Subscriber List
Pursuant to the Escrow Agreement dated as of , 2009, by and among . (the “Company”), UMB Bank, N.A., as escrow agent (the “Escrow Agent”), and (the “Dealer Manager”), the Dealer Manager hereby notifies the Escrow Agent that, as of the date set forth below, the following Subscribers have submitted subscription funds for the purchase of shares of common stock of the Company (the “Shares”), such subscription funds have been deposited with Escrow Agent in accordance with the Escrow Agreement:
| 1. | Name of Subscriber |
| Address |
| Tax Identification Number |
| Number of Shares subscribed for |
| Amount of money paid and deposited with Escrow Agent |
| 2. | Name of Subscriber |
| Address |
| Tax Identification Number |
| Number of Shares subscribed for |
| Amount of money paid and deposited with Escrow Agent |
| … | Name of Subscriber |
| Address |
| Tax Identification Number |
| Number of Shares subscribed for |
| Amount of money paid and deposited with Escrow Agent |
| ______________________ | ||
| By: |
| Name: |
| Title: |
| Date: | _______________________________, 200___ |
- 14 -
