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IMPORTANT INFORMATION REGARDING REALTY CAPITAL AND SC DISTRIBUTORS

Dear Friends,

In the wake of an ever expanding wave of regulatory scrutiny surrounding American Realty Capital, Realty Capital Securities, and its founder Nicholas Schorsch, TFS Securities, Inc. has decided effective immediately, to suspend sales in products distributed by Realty Capital Securities, and their subsidiary SC Distributors.  Products affected by this change include Carter Validus Mission Critical REIT II and Sierra Income Fund.

http://www.investmentnews.com/article/20151112/FREE/151119971/massachusetts-galvin-charges-realty-capital-securities-with-proxy

http://www.investmentnews.com/article/20151116/FREE/151119942/ar-capital-to-stop-creating-new-nontraded-reits-close-existing#.VkoEGv9nTa4.mailto

Unlike many of our competitors, TFS Securities, Inc. has never approved or offered programs offered by ARC, RCS, or its affiliates.  TFS Securities, Inc. has performed extensive Due Diligence and approved agreements for the sale of the Carter Validus and Sierra programs when they were distributed by SC Distributors.  Last year, SC Distributors was acquired by Realty Capital.

While these investment funds are completely separate entities that are unaffected by the dynamics of the distributor, we feel that it is prudent to move onto the sidelines while these issues are worked out.  TFS has always taken an ultra-conservative position regarding DPPs, LPs, REITs, and BDCs.  This industry has enjoyed a 5+ year window of explosive capital raised and deployed into real estate, initially at discounts from appraised value and extremely attractive CAP Rates.  As with any other cycle, the deeper we get into that cycle, the selection of bargains are no longer as plentiful.

As always, we encourage you to focus diligently on client suitability and concentration guidelines.  Anyone with business in hand should submit this business in person or via overnight mail to be received at TFS no later than Thursday Morning 11/19.  Please understand that this is not a fire sale, nor an invitation to run out and force through a lot of business under the deadline.  This type of activity will be heavily scrutinized and will not likely be approved.

As always, your cooperation is greatly appreciated.  Please direct any questions to me at 732-758-9300  x 145 or via email at tphyland@tfsweb.com.

Respectfully,

Tom

Thomas P. Hyland

President

437 Newman Springs Road
Lincroft, NJ 07738
732-758-9300 Extension 145
800-833-1862 Extension 145

732-576-4501 FAX

TPHyland@tfsweb.com

Visit us on the web at WealthTFS.com

Securities Offered Through TFS Securities, Inc. Member FINRA & SIPC

Investment Advisory Services Offered Through TFS Advisory Services                                                                                                                                                                                                             SEC Registered Investment Advisor

Mortgages Offered Through TFS Mortgage Corporation, Inc.
Correspondent Residential Mortgage Lender, NJDOBI

Registered Mortgage Broker, NYS Banking Department

Licensed Mortgage Broker, FL Office of Financial Regulation

Company NMLS ID 51460; Personal NMLS ID 52474

Insurance Products Offered through TFS Insurance Agency, Inc.

TFS Securities, Inc. does not accept and can not act upon any time sensitive trading instructions through email and/or voice mail messages. This includes but is not limited to transaction orders, fund transfer instructions, etc.

Notice: All email and instant messages (including attachments) sent to or from TFS Securities, Inc. personnel may be retained, monitored and/or reviewed by TFS Securities, Inc. and its agents, or authorized law enforcement personnel, without further notice or consent.

This email and any files transmitted with it are confidential and intended solely for the use of the individual(s) to whom they are addressed. Any and all other distribution or copying of this communication are strictly prohibited. Please notify the sender immediately if this message is received in error.

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