Exhibit 10.13
BOSTON CAPITAL REAL ESTATE INVESTMENT TRUST, INC.
AMENDED AND RESTATED ESCROW AGREEMENT
This Amended and Restated Escrow Agreement (the "Agreement") is made as
of the 6th day of April 2006, by and between Boston Capital Real Estate
Investment Trust, Inc., a Maryland corporation (the "REIT"), Boston Capital
REIT Advisors, LLC, a Delaware limited liability company (the "Advisor"),
Boston Private Bank & Trust Company, Boston, Massachusetts (the "Escrow
Agent") and Boston Capital Securities, Inc., a Massachusetts corporation, as
dealer-manager (the "Dealer-Manager").
WHEREAS, the REIT filed a Registration Statement on Form S-11 (the
"Registration Statement") with the Securities and Exchange Commission, which
became effective on June 22, 2005, with respect to an initial public offering of
a minimum of 2,950,000 shares of common stock and a maximum of 100,000,000
shares of common stock;
WHEREAS, the REIT has filed a post-effective amendment to the Registration
Statement to, among other things, lower its minimum offering amount from
2,950,000 shares of common stock to 250,000 shares of common stock; and
WHEREAS, the parties hereto wish to amend and restate the escrow agreement
dated as of March 1, 2004 (the "Escrow Agreement") to reflect the lower minimum
offering amount.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
of the parties herein contained, and other good and valuable consideration,
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree to amend and restate the Escrow Agreement as follows:
1. THE OFFERING. The REIT intends to offer for subscription up to
100,000,000 shares at a price of $10.00 per share. The initial minimum purchase
by each potential investor completing an Investor Information Form (a
"Subscriber") is 100 shares ($1,000). The offering will be made through a group
of soliciting dealers (the "Soliciting Dealers"), organized by and including the
Dealer-Manager, which are members of the National Association of Securities
Dealers, Inc. The REIT hereby appoints Boston Private Bank & Trust Co., Boston,
Massachusetts as its Escrow Agent to receive from the Soliciting Dealers and
Dealer-Manager the monies paid by the subscribers for the shares to which they
have each subscribed (the "Subscription Payments") and to hold and invest such
Subscription Payments.
The offering by the REIT will terminate no later than July 1, 2007, unless
terminated earlier (the "Termination Date"), and is subject to the condition
that subscriptions for at least 250,000 shares be accepted by the Advisor by the
Termination Date. The Advisor will notify the Escrow Agent in writing received
by the Escrow Agent no later than 5:00 p.m. on the second business day preceding
the date the Advisor determines as the Termination Date.
2. ESTABLISHMENT OF THE ESCROW. The Escrow Agent will establish an escrow
account for the benefit of Subscribers (in the name of the Escrow Agent or the
name of its nominee or nominees) into which all Subscription Payments shall be
deposited (such account, including the subaccounts referenced below, the "Escrow
Account"). Instruments of payment and wired funds received from Pennsylvania and
New Mexico Subscribers (as identified as such by the REIT) shall be accounted
for separately in respective subaccounts established specifically for such
Subscribers until such time as such Subscribers' subscriptions are released from
escrow in accordance with Section 3 hereof. Directors of state securities
divisions shall have the right to inspect and make copies of the records of
the Escrow Agent at any reasonable time wherever the records are located. Credit
on the books of the Escrow Agent will be given as of the date of deposit of each
check. Interest on each deposited check will begin to accrue one (1) business
day after each such date of deposit. If the Escrow Agent receives notice that a
check for a Subscription Payment has been dishonored, it shall give immediate
oral notice (to be confirmed in writing promptly thereafter) to the Advisor;
and, unless otherwise instructed at that time by the Advisor, shall undertake
routine steps to collect such check through the Escrow Agent's customary
collections channels. In the event that collections from the Subscribers in the
form of checks or other demand remittances are credited by the Escrow Agent to
the Escrow Account and the items giving rise to such credits are subsequently
dishonored, the Escrow Agent may, in its discretion, charge to the Escrow
Account the amount of any item so dishonored. Upon final payment of any such
item, the Escrow Agent shall credit to the Escrow Account the amount thereof
with appropriate advice to the REIT. Subscription proceeds deposited may not be
withdrawn by Subscribers.
The Advisor agrees to inform the Escrow Agent when offers and sales in the
REIT have begun and terminated.
3. CLOSING AND DISBURSEMENT OF FUNDS. The REIT intends to make the
offering on the condition that a minimum of 250,000 shares ($2,500,000)
(exclusive of any subscriptions received from New Mexico and Pennsylvania
residents) shall have been accepted by the Advisor by the Termination Date.
Until subscriptions for at least 250,000 shares (exclusive of any subscriptions
received from New Mexico and Pennsylvania residents) are received, no Subscriber
will be recognized as an investor and subscriptions will be deposited with the
Escrow Agent. Once subscriptions for at least 250,000 shares (exclusive of any
subscriptions received from New Mexico and Pennsylvania residents) have been
released from escrow, additional subscriptions will be deposited with the Escrow
Agent and such funds will be released upon written notice from, and instruction
by, the Advisor. If $2,500,000 (250,000 shares) (exclusive of any subscriptions
received from New Mexico and Pennsylvania residents) of Subscription Payments
have not been collected and are not then held in cleared funds in the possession
of the Escrow Agent on the Termination Date, and upon written notice from, and
instructions by, the Advisor, the Escrow Agent shall return to the Subscribers
the Subscription Payments with interest, earned at prevailing market rates, on
the fifth business day after the later of the Termination Date or receipt of the
instructions from the Advisor.
Notwithstanding the foregoing, all Subscription Payments received from New
Mexico and Pennsylvania Subscribers shall be retained by the Escrow Agent, and
no Subscriber from such states shall be recognized as an investor, until the
earlier of (i) 120 days after the commencement of the offering (the "Initial
Escrow Period") or (ii) such time as a total of $31,500,000 (with respect to
Subscription Payments received from New Mexico Subscribers) and $50,000,000
(with respect to Subscription Payments received from Pennsylvania Subscribers)
has been deposited into the Escrow Account by Subscribers residing in all
states. If at the end of the Initial Escrow Period the minimum Subscription
Payments set forth above for Pennsylvania have not been satisfied, the Escrow
Agent shall promptly notify the REIT of such fact, and the REIT shall thereafter
send to each Pennsylvania Subscriber by certified mail within ten (10) calendar
days after the end of the Initial Escrow Period a notification in the form of
EXHIBIT A. If, pursuant to such notification, a Pennsylvania Subscriber requests
the return of his or her Subscription Payments within ten (10) calendar days
after receipt of the notification (the "Request Period"), the Escrow Agent shall
promptly thereafter refund directly to each Pennsylvania Subscriber the
collected funds deposited in the Pennsylvania Escrow Account on behalf of such
Pennsylvania Subscriber, or shall return the instruments of payment delivered,
but not yet processed for collection prior to such time, to the address provided
by the Advisor or the REIT, together with interest income in the amounts earned
pursuant to this Section 3. However, the Escrow Agent shall not be required to
remit such payments until funds represented by such payments have been collected
by the
Escrow Agent. The Subscription Payments of Pennsylvania Subscribers who do not
request the return of their Subscription Payments within the Request Period
shall remain in the Pennsylvania sub account for successive 120-day escrow
periods (a "Successive Escrow Period"), each commencing automatically upon the
termination of the prior Successive Escrow Period, and the REIT and Escrow Agent
shall follow the notification and payment procedure set forth in this Section 3
with respect to the Initial Escrow Period for each Successive Escrow Period
until the occurrence of the earliest of (i) the Termination Date, (ii) the
receipt and acceptance by the REIT of subscriptions for the purchase of shares
with total purchase proceeds that equal or exceed $50,000,000 and the
disbursement of the Pennsylvania sub account on the terms specified herein, or
(iii) all funds held in the Pennsylvania sub account having been returned to the
Pennsylvania Subscribers in accordance with the provisions hereof.
If at least $2,500,000 (exclusive of any subscriptions received from New
Mexico and Pennsylvania residents) of Subscription Payments have been collected
and are then held in cleared funds in the possession of the Escrow Agent by the
Termination Date, then upon written notice from, and instruction by, the
Advisor, the Escrow Agent shall pay to the REIT all funds then held in the
Escrow Account including interest earned at prevailing market rates thereon
prior to the Termination Date without deduction for expenses, including fees of
the Escrow Agent. The REIT shall determine the amount of interest due to each
Subscriber and within 75 days after the end of the fiscal quarter following a
Closing Date shall itself pay such interest to Subscribers. Subsequent to, but
not including, such Termination Date, any interest earned will be paid to the
REIT. A Subscriber will be entitled to the amount of interest earned on his
subscription proceeds starting from the day after such proceeds were deposited
in the Escrow Account until, but not including, the Closing Date. The Escrow
Agent shall notify directors of state securities divisions, as directed by the
Advisor, upon the release from escrow of the Subscription Payments.
Subscriptions for shares will be accepted or rejected by the Advisor, in
its sole discretion, within 30 days of receipt, but the issuance of shares to a
Subscriber shall be subject to acceptance of subscriptions for a number of
shares sufficient to effectuate a closing. If the Subscription Payments
allocated to such rejected or cancelled subscription ("Rejected Funds") have
been delivered to the Escrow Agent, the Advisor will inform the Escrow Agent of
the rejection or cancellation, and the Escrow Agent, upon receiving such notice,
will refund to the Subscriber the Rejected Funds within 10 days of such notice,
without interest.
4. INVESTMENT OF FUNDS. The REIT hereby directs the Escrow Agent to
invest (in the name of the Escrow Agent or the name of its nominee or nominees)
funds in the Escrow Account for the benefit of the Subscribers in any one or a
combination of the following: bank time deposits; short-term securities issued
or guaranteed by the United States Government; bank money market accounts; and
short-term certificates of deposit issued by a bank. Investments for periods of
five days or less shall not be required.
5. COMPENSATION. The REIT agrees to pay to the Escrow Agent compensation
of $1.00 per Subscriber whose funds are received by the Escrow Agent for all
services rendered by the Escrow Agent under this Agreement and, in addition, the
reasonable compensation of its counsel and all other reasonable expenses
incurred by the Escrow Agent hereunder.
6. EXCULPATION. The Advisor agrees to indemnify the Escrow Agent for, and
to hold it harmless against, any loss, liability, or expense incurred without
gross negligence, bad faith, reckless disregard of its duties and obligations
under this Agreement, fraud or willful misconduct on the part of the Escrow
Agent, its affiliates or agents arising directly or indirectly from any action
or omission to act on the part of the Escrow Agent, its affiliates or agents
pursuant to this Agreement, as well as the
reasonable costs and expenses of defending any claim or liability or of
prosecuting any action in the premises. The Escrow Agent shall not be obligated
to take any action hereunder which might in its reasonable judgment subject it
to any expense or liability unless it shall have been furnished with indemnity
acceptable to it. Prior to the Termination Date, Subscription Payments held by
the Escrow Agent shall remain the property of the Subscribers making such
Payments and shall not be subject to a lien of the Escrow Agent or any other
creditors of the REIT or the Advisor.
The Escrow Agent shall not be obligated to take any action which it is not
expressly directed to take in this Agreement unless and until it shall have
received written instruction from the REIT. The Escrow Agent shall be liable
only for its own, including its affiliates or agents own, gross negligence, bad
faith, fraud, willful misconduct or reckless disregard of its duties and
obligations under this Agreement and shall incur no liability for action in
accordance with the terms of this Escrow Agreement or with the terms of any
instructions received by it from the Advisor, whether or not contrary to the
provisions of this Agreement or to the agreements between the REIT and the
Subscribers. The Escrow Agent may rely upon, and shall be protected in acting
upon, any resolution, certificate, opinion, notice, request, consent, or other
paper or document believed by it to be genuine and to have been signed by the
proper person or persons. Any notice or instruction from the REIT shall be
sufficient if it bears or purports to bear the signature of any one of the
following: Xxxxxxx Xxxxxxxxx and Xxxx X. Xxxx, whose signatures appear hereon,
with or without designation of principal or of representative capacity. The
Escrow Agent may consult with counsel, and the opinion of such counsel shall be
full and complete protection in respect to any action taken or not taken, or
suffered by it hereunder in accordance with such opinion. The Escrow Agent may
petition any court of competent jurisdiction to resolve any disagreement
relating hereto and may refuse to act until such court has ordered it to act.
Such rights and remedies shall be alternative and any action taken or not taken
in conformance with an opinion of counsel or court order shall not constitute
negligence or misconduct and shall be complete and final acquittance and
discharge of the Escrow Agent's responsibilities with respect thereto.
Notwithstanding the foregoing, it is understood and agreed by the parties
that no member of the Advisor acting in its capacity as such shall have any
personal liability under this agreement and that any person asserting a claim
against the Advisor hereunder shall look solely to the assets of such Advisor
(specifically excluding the personal assets of the members thereof).
7. STANDARD OF CARE. The Escrow Agent shall be obligated to exercise care
and diligence in the performance of its duties hereunder, to act in good faith
and to use its best efforts, within reasonable limits, in performing services
provided for under this Agreement. The Escrow Agent shall be liable for any
damages arising out of its failure to perform its duties under this Agreement to
the extent such damages arise out of its willful misfeasance, fraud, bad faith,
gross negligence or reckless disregard of its duties.
8. NOTICES. All notices and other communications hereunder shall be in
writing, or if given by telephone, telegraph or telex shall be confirmed in
writing. No notice shall be given until given in writing and shall be sent,
postage prepaid, addressed as follows:
(a) If to the REIT or the Advisor, notice is deemed given when received by
Xxxx X. Xxxx, c/o Boston Capital Partners, Inc., Xxx Xxxxxx Xxxxx,
Xxxxx 0000, Xxxxxx, Xxxxxxxxxxxxx 00000.
(b) If to the Escrow Agent, notice is deemed given when received by
Xxxxxxxx XxXxxxxxx or to such other address as the Escrow Agent shall
subsequently designate in writing to the Advisor.
9. MISCELLANEOUS.
(a) This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the parties hereto.
(b) This Agreement shall be governed and construed in accordance with the
laws of the Commonwealth of Massachusetts, without regard to
principles of conflicts of law, and shall not be amended except by
written instrument executed by the parties hereto.
(c) This Agreement may be executed in one or more counterparts, each of
which shall constitute the original, and all of which collectively
shall constitute one and the same instrument.
(d) This Agreement embodies the entire agreement and understanding among
the parties and supersedes all prior agreements and understandings
relating to the subject matter hereof; provided that, the parties may
embody in one or more separate documents their agreement, if any, with
respect to delegated duties and instructions.
10. TERMINATION. This Agreement shall continue until terminated by either
party upon sixty (60) days prior written notice. Upon the termination of this
Agreement and upon the delivery of the balance of the Escrow Account to a
successor escrow agent or such other person as may be designated by written
instructions, the Escrow Agent shall be released and discharged of any and all
further obligations hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed under seal on the day and year first above written.
BOSTON CAPITAL REIT ADVISORS, LLC BOSTON PRIVATE BANK & TRUST
By: Boston Capital Corporation, By: /s/ Xxxxxxxx XxXxxxxxx
its manager ------------------------
Name: Xxxxxxxx XxXxxxxxx
By: /s/ Xxxx X. Xxxx Title: SVP
----------------------------
Name: Xxxx X. Xxxx
Title: Senior Vice President
Signatories:
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------
Xxxxxxx Xxxxxxxxx
By: /s/ Xxxx X. Xxxx
------------------------
Xxxx X. Xxxx
BOSTON CAPITAL REAL ESTATE
INVESTMENT TRUST, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and Chief Operating Officer
BOSTON CAPITAL SECURITIES, INC.
By: /s/ Xxxx X. Xxxx
-------------------------
Name: Xxxx X. Xxxx
Title: Senior Vice President
EXHIBIT A
FORM OF NOTICE TO PENNSYLVANIA SUBSCRIBERS
You have tendered a subscription to purchase shares of common stock of
Boston Capital Real Estate Investment Trust, Inc. (the "Company"). Your
subscription is currently being held in escrow. The guidelines of the
Pennsylvania Securities Commission do not permit the Company to accept
subscriptions from Pennsylvania residents until an aggregate of $50,000,000 of
gross offering proceeds have been received by the Company. The Pennsylvania
guidelines provide that until this minimum amount of offering proceeds is
received by the Company, every 120 days during the offering period Pennsylvania
subscribers may request that their subscription be returned.
If you wish to continue your subscription in escrow until the Pennsylvania
minimum subscription amount is received, nothing further is required.
If you wish to terminate your subscription for the Company's common stock
and have your subscription returned please so indicate below, sign, date, and
return to BCCLP, Inc., Investor Services for the Company, x/x Xxxxxx Xxxxxxx,
Xxxxx 0000, Xxx Xxxxxx Xxxxx, Xxxxxx, XX 00000.
I hereby terminate my prior subscription to purchase shares of common stock
of Boston Capital Real Estate Investment Trust, Inc. and request the return of
my subscription payments. I certify to Boston Capital Real Estate Investment
Trust, Inc. that I am a resident of Pennsylvania.
Signature:
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Name:
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(please print)
Date:
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Please send the subscription refund to:
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