EXHIBIT 10.1

 

EXECUTION VERSION

 

AR Capital, llc

ARc properties advisors, LLC

405 Park Avenue

New York, New York 10022

 

American Realty Capital Trust III, Inc.

405 Park Avenue

New York, New York 10022

 

December 14, 2012

 

Re: Acquisition and Capital Services Agreement and Management Agreement

 

Reference is made to that certain Agreement and Plan of Merger, dated as of the
date hereof (the “Merger Agreement”), by and among American Realty Capital
Properties, Inc., a Maryland corporation (the “Company”), ARC Properties
Operating Partnership, L.P., a Delaware limited partnership and the operating
partnership of the Company (the “Company OP”), Tiger Acquisition, LLC, a
Delaware limited liability company wholly-owned by the Company (“Merger Sub”),
American Realty Capital Trust III, Inc., a Maryland corporation (“Target”), and
American Realty Capital Operating Partnership III, L.P., a Delaware limited
partnership and the operating partnership of Target (the “Target OP”), pursuant
to which (x) Target will merge with and into Merger Sub, with Merger Sub being
the surviving entity and (y) the Target OP will merge with and into the Company
OP with the Company OP being the surviving entity. Any term not otherwise
defined herein shall have the meaning given such term in the Merger Agreement.

 

Reference also is hereby made to: (i) that certain Acquisition and Capital
Services Agreement, dated as of September 6, 2011 (the “Acquisition and Capital
Services Agreement”), by and between the Company and AR Capital, LLC (formerly
known as American Realty Capital II, LLC), a Delaware limited liability company
(“ARC”), and (ii) that certain Management Agreement, dated as of September 6,
2011 (the “Management Agreement”), by and between the Company and ARC Properties
Advisors, LLC, a Delaware limited liability company (the “Advisor”).

 

In connection with the Merger Agreement, the Company agreed to cause (x) the
Acquisition and Capital Services Agreement to terminate in the manner described
below and (y) the Management Agreement to be amended and restated in the manner
described below.

 

In order to induce the parties to the Merger Agreement to enter into the Merger
Agreement, each of the Company, Target, ARC and the Advisor hereby agree as
follows:

 

1.The Company and ARC hereby agree that, with no further action necessary by any
party, the Acquisition and Capital Services Agreement shall automatically
terminate and be of no further force or effect upon the later of: (a) the
Closing and (b) (i) the cessation of all the potential property acquisitions
listed on Exhibit A hereto (collectively, the “Pipeline Properties”) as
potential property acquisitions of the Company (regardless of the form in which
such cessation occurs, including, without limitation, a purchase of one or more
Pipeline Properties by the Company or a third party, the definitive
determination by the Advisor or the Company not to pursue the acquisition of one
or more Pipeline Properties and/or the casualty or condemnation of one or more
Pipeline Properties) and (ii) the financing of all the Pipeline Properties;
provided, however, that, if the Closing occurs prior to the cessation of all the
Pipeline Properties as potential property acquisitions of the Company and the
financing thereof, the “Acquisition Fee” and “Financing Fee” (each as defined in
the Acquisition and Capital Services Agreement) shall be payable with respect to
the Pipeline Properties only; provided, further, however, that Section 8 of the
Acquisition and Capital Services Agreement shall survive indefinitely.

 

 

 

 

2.The Advisor hereby agrees to enter into that certain Amended and Restated
Management Agreement, substantially in the form attached as Exhibit B hereto,
with the Company concurrently with the Closing.

 

Each of the Company, Target, ARC and the Advisor, as applicable, represent and
warrant that (a) each has the necessary power and authority to enter into this
letter agreement and to carry out its obligations hereunder and (b) no consents,
approvals, authorizations or other actions are required for the Company, Target,
ARC or the Advisor to execute, deliver and perform their respective obligations
under this letter agreement.

 

This letter agreement may be amended, modified or supplemented only by a written
instrument executed by each of the parties hereto. This letter agreement may be
executed in two or more counterparts, each of which shall be deemed to be an
original and together with this letter agreement shall be deemed to be one and
the same instrument. This letter agreement shall terminate concurrently with any
termination of the Merger Agreement without a Closing. This letter agreement
shall be governed by and interpreted and enforced in accordance with the laws of
the State of New York (without reference to the choice of law provisions).

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

  Very truly yours,       AR CAPITAL, LLC       By: /s/ Nicholas S. Schorsch  
Name: Nicholas S. Schorsch   Title: Authorized Signatory       ARC PROPERTIES
ADVISORS, LLC       By: AR Capital, LLC   its sole member       By: /s/ Nicholas
S. Schorsch   Name: Nicholas S. Schorsch   Title: Authorized Signatory      
American Realty Capital Properties, Inc.       By: /s/ Nicholas S. Schorsch  
Name: Nicholas S. Schorsch   Title: Chief Executive Officer       American
Realty Capital TRUST III, Inc.       By: /s/ Edward M. Weil, Jr.   Name: Edward
M. Weil, Jr.   Title: President and Chief Operating Officer

 

 

 

 

Exhibit A

 

Pipeline Properties

 

Property   Address   City   State Advance Auto   2001 Oglethorpe Blvd.   Albany
  GA Advance Auto   116 S. Tallahassee St.   Hazlehurst   GA Advance Auto   436
Elma G. Miles Pkwy.   Hinesville   GA Advance Auto   1208 East Jackson St.  
Thomasville   GA Advance Auto   2718 Montgomery Hwy   Dothan   AL Advance Auto  
 908 Rucker Blvd.   Enterprise   AL Advance Auto    1335 Ball St.   Perry   GA
Advance Auto    340 8th Ave.    Cairo   GA Advance Auto   1831 East Main Street
  Springfield   OH Family Dollar   New Mexico 76   Chimayo   NM Pilot Flying J  
10226 Old Federal Highway   Carnesville   GA Synovus Bank   4003 Neptune Street
  Tampa   FL Walgreens   3798 South Western Avenue   Chicago   IL Walgreens  
5935 West Addison Street   Chicago   IL

 

 

 

 

 

Exhibit B

 

 

 

AMENDED AND RESTATED MANAGEMENT AGREEMENT

 

by and between

 

American Realty Capital Properties, Inc.

 

and

 

ARC Properties Advisors, LLC

 

Dated as of [_______], 2013

 

 

 

 

 

 

AMENDED AND RESTATED MANAGEMENT AGREEMENT, dated as of [________], 2013, by and
between American Realty Capital Properties, Inc., a Maryland corporation (the
“Company”), and ARC Properties Advisors, LLC, a Delaware limited liability
company (the “Manager”).

 

WITNESSETH:

 

WHEREAS, the Company is a corporation which has elected to be taxed as, and
qualifies as, a real estate investment trust for federal income tax purposes
within the meaning of Section 856 of the Internal Revenue Code of 1986, as
amended (the “Code”);

 

WHEREAS, the Company and the Manager are parties to that certain Management
Agreement, dated as of September 6, 2011 (the “Original Agreement”), pursuant to
which the Manager administers the business activities and day-to-day operations
of the Company and performs services for the Company in the manner and on the
terms set forth therein;

 

WHEREAS, the Company, ARC Properties Operating Partnership, L.P., a Delaware
limited partnership and the operating partnership of the Company, Tiger
Acquisition LLC, a Delaware limited liability company wholly-owned by the
Company (“Merger Sub”), American Realty Capital Trust III, Inc., a Maryland
corporation (“Target”) and American Realty Capital Operating Partnership III,
L.P., a Delaware limited partnership and the operating partnership of Target,
are parties to that certain Agreement and Plan of Merger, dated as of December
14, 2012 (the “Merger Agreement”), pursuant to which Target will be merged with
and into Merger Sub, with Merger Sub being the surviving entity (the “Merger”);

 

WHEREAS, as a condition to entering into the Merger Agreement, Target requested
that the Company obtain the Manager’s consent to reduce the base management fee
payable pursuant to the Original Agreement for all assets held by the Company
above an unadjusted book value of $3.0 billion from 0.50% per annum to 0.40% per
annum, in each case of the unadjusted book value of such assets, in response to
which the Manager agreed, pursuant to a letter agreement dated December 14,
2012, to modify the terms of the Original Agreement to reflect such base
management fee reduction;

 

WHEREAS, the Merger has been consummated concurrently with the execution of this
Agreement; and

 

WHEREAS, the Company and the Manager desire to amend and restate the Original
Agreement in its entirety.

 

NOW THEREFORE, in consideration of the premises and agreements hereinafter set
forth, the parties hereto hereby agree as follows:

 

Section 1. Definitions.

 

(a)          The following terms shall have the meanings set forth in this
Section 1(a):

 

“Affiliate” means, with respect to any Person, (i) any Person directly or
indirectly controlling, controlled by, or under common control with such
specified Person, (ii) any executive officer or general partner of such
specified Person, (iii) any member of the board of directors or board of
managers (or bodies performing similar functions) of such specified Person, and
(iv) any legal entity for which such specified Person acts as an executive
officer or general partner. For purposes of this definition, the terms
“controlling”, “controlled by”, or “under common control with” shall mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of an entity, whether through the ownership of
voting securities, by contract or credit arrangement, as trustee or executor, or
otherwise.

 

 

 

 

“Acquisition Expenses” means any and all expenses incurred by the Company, the
Subsidiaries, the Manager or any of their Affiliates in connection with the
selection, evaluation, acquisition, origination, financing, making or
development of any Real Estate Assets, whether or not acquired, including,
without limitation, legal fees and expenses, travel and communications expenses,
brokerage fees, costs of appraisals, nonrefundable option payments on property
not acquired, accounting fees and expenses, title insurance premiums and the
costs of performing due diligence.

 

“Agreement” means this Amended and Restated Management Agreement, as amended,
supplemented or otherwise modified from time to time.

 

“Automatic Renewal Term” has the meaning set forth in Section 10(a) hereof.

 

“Bankruptcy” means, with respect to any Person, (a) the filing by such Person of
a voluntary petition seeking liquidation, reorganization, arrangement or
readjustment, in any form, of its debts under Title 11 of the United States Code
or any other U.S. federal or state or foreign insolvency law, or such Person’s
filing an answer consenting to or acquiescing in any such petition, (b) the
making by such Person of any assignment for the benefit of its creditors, (c)
the expiration of 60 days after the filing of an involuntary petition under
Title 11 of the United States Code, an application for the appointment of a
receiver for a material portion of the assets of such Person, or an involuntary
petition seeking liquidation, reorganization, arrangement or readjustment of its
debts under any other U.S. federal or state or foreign insolvency law, provided
that the same shall not have been vacated, set aside or stayed within such
60-day period or (d) the entry against such Person of a final and non-appealable
order for relief under any bankruptcy, insolvency or similar law now or
hereinafter in effect.

 

“Base Management Fee” means the fee payable to the Manager pursuant to Section
6(c).

 

“Board” means the board of directors of the Company.

 

“Board Investment Committee” means a committee consisting solely of members of
the Board formed for the primary purpose of (1) periodically reviewing the
Company’s investments and (2) pursuant to the Investment Guidelines, approving
certain investments proposed to be made by the Company.

 

“Business Day” means any day except a Saturday, a Sunday or a day on which
banking institutions in New York, New York are not required to be open.

 

“Claim” has the meaning set forth in Section 8(c) hereof.

 

“Closing Date” means the date of closing of the Initial Public Offering.

 

“Code” has the meaning set forth in the Recitals.

 

“Common Stock” means the common stock, par value $0.01, of the Company.

 

“Company” has the meaning set forth in the Preamble.

 

“Company Indemnified Party” has meaning set forth in Section 8(b) hereof.

 

“Conduct Policies” has the meaning set forth in Section 2(l) hereof.

 

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“Confidential Information” has the meaning set forth in Section 5(a) hereof.

 

“Core Earnings” means the net income (loss), computed in accordance with GAAP,
excluding (i) non-cash equity compensation expense, (ii) the Incentive
Compensation, (iii) acquisition fees, (iv) financing fees, (v) depreciation and
amortization, (vi) any unrealized gains or losses or other non-cash items that
are included in net income for the applicable reporting period, regardless of
whether such items are included in other comprehensive income or loss, or in net
income, and (vii) one-time events pursuant to changes in GAAP and certain
non-cash charges, in each case after discussions between the Manager and the
Independent Directors and approved by a majority of the Independent Directors.

 

“Effective Termination Date” means the last day of the Initial Term or an
Automatic Renewal Term, as the case may be, on which this Agreement is
terminated.

 

“Equity Incentive Plans” means the equity incentive plans adopted by the Company
to provide incentive compensation to attract and retain qualified directors,
officers, advisors, consultants and other personnel, including the Manager and
Affiliates and personnel of the Manager and its Affiliates, and any joint
venture affiliates of the Company.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“GAAP” means generally accepted accounting principles in effect in the United
States on the date such principles are applied.

 

“Governing Instruments” means, with regard to any entity, the articles of
incorporation or certificate of incorporation and bylaws in the case of a
corporation, the partnership agreement in the case of a general or limited
partnership, the certificate of formation and operating agreement or limited
liability company agreement in the case of a limited liability company, the
declaration of trust or other comparable trust instrument in the case of a
trust, or similar governing documents, in each case as the same may be amended
from time to time.

 

“Incentive Compensation” means the incentive management fee calculated and
payable with respect to each calendar quarter (or part thereof that this
Agreement is in effect) in arrears in an amount, not less than zero, equal to
the difference between (1) the product of (a) 20% and (b) the difference between
(i) Core Earnings of the Company for the previous 12- month period, and (ii) the
product of (A) the weighted average of the issue price per share of the Common
Stock of all of the Company’s public offerings of Common Stock multiplied by the
weighted average number of shares of Common Stock outstanding (including, for
the avoidance of doubt, any restricted shares of Common Stock and any shares of
Common Stock underlying other awards granted under one or more of the Company’s
Equity Incentive Plans) in the previous 12-month period, and (B) 8%, and (2) the
sum of any Incentive Compensation paid to the Manager with respect to the first
three calendar quarters of such previous 12-month period; provided, however,
that no Incentive Compensation shall be payable with respect to any calendar
quarter unless Core Earnings for the 12 most recently completed calendar
quarters is greater than zero.

 

For purposes of calculating the Incentive Compensation prior to the completion
of a 12-month period during the term of this Agreement, Core Earnings shall be
calculated on the basis of the number of days that this Agreement has been in
effect on an annualized basis.

 

If the Effective Termination Date does not correspond to the end of a calendar
quarter, the Manager’s Incentive Compensation shall be calculated for the period
beginning on the day after the end of the calendar quarter immediately preceding
the Effective Termination Date and ending on the Effective Termination Date,
which Incentive Compensation shall be calculated using Core Earnings for the
12-month period ending on the Effective Termination Date.

 

3

 

 

“Indemnified Party” has the meaning set forth in Section 8(b) hereof.

 

“Independent Director” means a member of the Board who is “independent” in
accordance with the Company’s Governing Instruments and the rules of NASDAQ or
such other securities exchange on which the shares of Common Stock are listed.

 

“Initial Public Offering” means the Company’s sale of Common Stock to the public
through dealer managers pursuant to the Registration Statement.

 

“Initial Term” has the meaning set forth in Section 10(a) hereof.

 

“Investment Company Act” means the Investment Company Act of 1940, as amended.

 

“Investment Guidelines” means the investment guidelines approved by the Board, a
copy of which is attached hereto as Exhibit A, as the same may amended,
restated, modified, supplemented or waived pursuant to the approval of a
majority of the entire Board (which must include a majority of the Independent
Directors) and the Manager Investment Committee.

 

“Joint Ventures” means the joint venture or partnership or other similar
arrangements (other than between or among the Company and its Subsidiary or
between or among two or more of the Company’s Subsidiaries) in which the Company
or its Subsidiary is a co-venturer, member, partner or other equity holder,
which are established to own investments.

 

“Last Appraiser” has the meaning set forth in Section 6(g) hereof.

 

“Losses” has the meaning set forth in Section 8(a) hereof.

 

“Manager” has the meaning set forth in the Preamble and shall include any
successor in interest thereto.

 

“Manager Change of Control” means a change in the direct or indirect (i)
beneficial ownership of more than fifty percent (50%) of the combined voting
power of the Manager’s then outstanding equity interests, or (ii) power to
direct or control the management policies of the Manager, whether through the
ownership of beneficial equity interests, common directors or officers, by
contract or otherwise. Manager Change of Control shall not include (i) public
offerings of the equity interests of the Manager, or (ii) any assignment of this
Agreement by the Manager as permitted hereby and in accordance with the terms
hereof.

 

“Manager Indemnified Party” has the meaning set forth in Section 8(a) hereof.

 

“Manager Investment Committee” means the investment committee formed by the
Manager, the members of which shall consist of employees of the Manager and its
Affiliates and may change from time to time.

 

“Manager Permitted Disclosure Parties” has the meaning set forth in Section 5(a)
hereof.

 

“NASDAQ” means The Nasdaq Capital Market.

 

“Notice of Proposal to Negotiate” has the meaning set forth in Section 10(c)
hereof.

 

4

 

 

“Person” means any natural person, corporation, partnership, association,
limited liability company, estate, trust, joint venture, any federal, state,
county or municipal government or any bureau, department or agency thereof or
any other legal entity and any fiduciary acting in such capacity on behalf of
the foregoing.

 

“Real Estate Asset” means real property owned from time to time by the Company
or any of its Subsidiaries, directly, through one or more subsidiaries or
through a Joint Venture, which consists of (i) land only, (ii) land, including
the buildings located thereon, (iii) buildings only, or (iv) such investments
the Board or the Manager designates as Real Estate Asset to the extent such
investments could be classified as Real Estate Asset.

 

“Registration Statement” means the Company’s Registration Statement on Form S-11
(No. 333-172205), as amended from time to time, pursuant to which the Company is
conducting or has conducted the Initial Public Offering.

 

“Regulation FD” means Regulation FD as promulgated by the SEC.

 

“REIT” means a “real estate investment trust” as defined under the Code.

 

“SEC” means the United States Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Subsidiary” means (i) any subsidiary of the Company, (ii) any partnership the
general partner of which is the Company or any subsidiary of the Company, and
(iii) any limited liability company the managing member of which is the Company
or any subsidiary of the Company.

 

“Target Assets” means the types of assets described under “Business— Overview”
in the prospectus included in the Registration Statement, subject to, and
including any changes to the Company’s Investment Guidelines that may be
approved by the Manager and the Company from time to time.

 

“Termination Notice” has the meaning set forth in Section 10(b) hereof.

 

“Termination Without Cause” has the meaning set forth in Section 10(b) hereof.

 

“Valuation Notice” has the meaning set forth in Section 6(g) hereof.

 

(b)          As used herein, accounting terms relating to the Company and its
Subsidiaries, if any, not defined in Section 1(a) and accounting terms partly
defined in Section 1(a), to the extent not defined, shall have the respective
meanings given to them under GAAP. As used herein, “calendar quarters” shall
mean the periods from January 1 to March 31, April 1 to June 30, July 1 to
September 30 and October 1 to December 31 of the applicable year.

 

(c)          The words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section references are to
this Agreement unless otherwise specified.

 

(d)          The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. The words
include, includes and including shall be deemed to be followed by the phrase
“without limitation.”

 

5

 

 

Section 2. Appointment and Duties of the Manager.

 

(a)          The Company hereby appoints the Manager to manage the investments
and day-to-day operations of the Company and its Subsidiaries, subject at all
times to the further terms and conditions set forth in this Agreement and to the
supervision of, and such further limitations or parameters as may be imposed
from time to time by, the Board. The Manager hereby agrees to use its
commercially reasonable efforts to perform each of the duties set forth herein,
provided that funds are made available by the Company for such purposes as set
forth in Section 7 hereof. The appointment of the Manager shall be exclusive to
the Manager, except to the extent that the Manager elects, in its sole and
absolute discretion, subject to the terms of this Agreement, to cause the duties
of the Manager as set forth herein to be provided by third parties.

 

(b)          The Manager, in its capacity as manager of the investments and the
day-to-day operations of the Company and its Subsidiaries, at all times will be
subject to the supervision and direction of the Board, will act in a manner that
is compliant with the provisions of the Governing Instruments of the Company and
each of its Subsidiaries and will have only such functions and authority as the
Board may delegate to it, including, without limitation, managing the Company’s
business affairs in conformity with the Investment Guidelines and other policies
that are approved and adopted by the Board. The Company and the Manager hereby
acknowledge the recommendation by the Manager and the approval by the Board, of
the Investment Guidelines, including, but not limited to the Company’s
investment strategy with respect to the Target Assets. The Company and the
Manager hereby acknowledge and agree that, during the term of this Agreement,
any proposed changes to the Company’s investment strategy that would modify or
expand the Target Assets may only be recommended by the Manager and shall
require the approval of the Board and the Manager.

 

(c)          The Manager will be responsible for the day-to-day operations of
the Company (which, for purposes of the Manager’s responsibilities in this
Agreement, includes its Subsidiaries) and will perform (or cause to be
performed) such services and activities relating to the investments and
operations of the Company as may be appropriate, which may include, without
limitation:

 

(i)          forming the Manager Investment Committee, which will have the
following responsibilities: (A) proposing modifications to the Investment
Guidelines to the Board, (B) reviewing the Company’s investment portfolio for
compliance with the Investment Guidelines on a quarterly basis, (C) reviewing
the diversification of the Company’s investment portfolio and the Company’s
hedging and financing strategies on a quarterly basis, and (D) conducting or
overseeing the provision of the services set forth in this Section 2;

 

(ii)         serving as the Company’s consultant with respect to the periodic
review of the Investment Guidelines and other parameters for the Company’s
investments, financing activities and operations, any modification to which will
be approved by a majority of our independent directors;

 

(iii)        investigating, analyzing and selecting possible investment
opportunities and acquiring, financing, retaining, selling, restructuring or
disposing of investments consistent with the Investment Guidelines;

 

(iv)        with respect to prospective purchases, sales or exchanges of
investments, conducting negotiations on the Company’s behalf with sellers,
purchasers and brokers and, if applicable, their respective agents and
representatives;

 

6

 

 

(v)         with respect to prospective lease transactions, conducting
negotiations on the Company’s behalf with current and prospective tenants;

 

(vi)        analyzing prospective opportunities to reposition properties for
alternative uses or make capital improvements or in order to retain existing
tenants or attract new tenants at the Real Estate Assets;

 

(vii)       serving as the Company’s consultant with respect to decisions
regarding any of its financings or borrowings undertaken by it, including (1)
sourcing financing alternatives, (2) assisting it in developing criteria for
debt and equity financing that is specifically tailored to its investment
objectives, and (3) advising it with respect to obtaining appropriate financing
for the Real Estate Assets;

 

(viii)      engaging and supervising, on the Company’s behalf and at the
Company’s expense, independent contractors that provide investment banking,
securities brokerage, mortgage brokerage, other financial services, due
diligence services, underwriting review services, legal and accounting services,
and all other services (including transfer agent and registrar services) as may
be required relating to the Company’s operations or investments (or potential
investments);

 

(ix)         coordinating and managing operations of any Joint Venture or
co-investment interests held by the Company and conducting all matters with the
Joint Venture or co-investment partners;

 

(x)          providing executive and administrative personnel, office space and
office services required in rendering services to the Company;

 

(xi)         administering the day-to-day operations and performing and
supervising the performance of such other administrative functions necessary to
the Company’s management as may be agreed upon by the Manager and the Board,
including, without limitation, the collection of revenues and the payment of the
Company’s debts and obligations and maintenance of appropriate computer services
to perform such administrative functions;

 

(xii)        communicating on the Company’s behalf with the holders of any of
the Company’s equity or debt securities as required to satisfy the reporting and
other requirements of any governmental bodies or agencies or trading markets and
to maintain effective relations with such holders;

 

(xiii)       counseling the Company in connection with policy decisions to be
made by our the Board;

 

(xiv)      counseling the Company regarding the maintenance of the Company’s
qualification as a REIT and monitoring compliance with the various REIT
qualification tests and other rules set out in the Code and Treasury Regulations
thereunder and using commercially reasonable efforts to cause the Company to
qualify for taxation as a REIT;

 

(xv)       furnishing reports and statistical and economic research to the
Company regarding the Company’s activities and services performed for the
Company by the Manager;

 

(xvi)      monitoring the operating performance of the Company’s investments and
providing periodic reports with respect thereto to the Board, including
comparative information with respect to such operating performance and budgeted
or projected operating results;

 

7

 

 

(xvii)     investing and reinvesting any moneys and securities of the Company
(including investing in short-term investments pending investment in other
investments, payment of fees, costs and expenses, or payments of dividends or
distributions to the Company’s stockholders and partners) and advising the
Company as to the Company’s capital structure and capital raising;

 

(xviii)    causing the Company to retain qualified accountants and legal
counsel, as applicable, to assist in developing appropriate accounting
procedures and systems, internal controls and other compliance procedures and
testing systems with respect to financial reporting obligations and compliance
with the provisions of the Code applicable to REITs and, if applicable, taxable
REIT subsidiaries, and to conduct quarterly compliance reviews with respect
thereto;

 

(xix)       assisting the Company in qualifying to do business in all applicable
jurisdictions and to obtain and maintain all appropriate licenses;

 

(xx)        assisting the Company in complying with all regulatory requirements
applicable to the Company in respect of the Company’s business activities,
including preparing or causing to be prepared all financial statements required
under applicable regulations and contractual undertakings and all reports and
documents, if any, required under the Exchange Act or the Securities Act, or by
NASDAQ;

 

(xxi)       assisting the Company in taking all necessary action to enable the
Company to make required tax filings and reports, including soliciting
stockholders for required information to the extent required by the provisions
of the Code applicable to REITs;

 

(xxii)      handling and resolving all claims, disputes or controversies
(including all litigation, arbitration, settlement or other proceedings or
negotiations) in which the Company may be involved or to which the Company may
be subject arising out of the Company’s day-to-day operations (other than with
the Manager or its Affiliates), subject to such limitations or parameters as may
be imposed from time to time by the Board;

 

(xxiii)     using commercially reasonable efforts to cause expenses incurred by
the Company or on the Company’s behalf to be commercially reasonable or
commercially customary and within any budgeted parameters or expense guidelines
set by the Board from time to time;

 

(xxiv)    advising the Company with respect to and structuring long-term
financing vehicles for the Company’s portfolio of Real Estate Assets, and
offering and selling securities publicly or privately in connection with any
such structured financing;

 

(xxv)     providing the Company with portfolio management;

 

(xxvi)    arranging marketing materials, advertising, industry group activities
(such as conference participations and industry organization memberships) and
other promotional efforts designed to promote the Company’s business;

 

(xxvii)   performing such other services as may be required from time to time
for management and other activities relating to the Company’s properties and
business, as the Board shall reasonably request or the Manager shall deem
appropriate under the particular circumstances; and

 

8

 

 

(xxviii)    using commercially reasonable efforts to cause the Company to comply
with all applicable laws.

 

(d)          The Manager may retain, for and on behalf, and at the sole cost and
expense, of the Company, such services of the Persons referred to in Section
7(b) hereof as the Manager deems necessary or advisable in connection with the
management and operations of the Company. In performing its duties under this
Section 2, the Manager shall be entitled to rely reasonably on qualified experts
and professionals (including, without limitation, accountants, legal counsel and
other professional service providers) hired by the Manager at the Company’s sole
cost and expense.

 

(e)          The Manager shall refrain from any action that, in its sole
judgment made in good faith, (i) is not in compliance with the Investment
Guidelines, (ii) would adversely and materially affect the qualification of the
Company as a REIT under the Code or the Company’s status as an entity excluded
from investment company status under the Investment Company Act, or (iii) would
violate any law, rule or regulation of any governmental body or agency having
jurisdiction over the Company or of any exchange on which the securities of the
Company may be listed or that would otherwise not be permitted by the applicable
Governing Instruments. If the Manager is ordered to take any action by the
Board, the Manager shall promptly notify the Board if it is the Manager’s
judgment that such action would adversely and materially affect such status or
violate any such law, rule or regulation or Governing Instruments.
Notwithstanding the foregoing, neither the Manager nor any of its Affiliates
shall be liable to the Company, the Board, or the Company’s stockholders for any
act or omission by the Manager or any of its Affiliates, except as provided in
Section 8 of this Agreement.

 

(f)          The Company (including the Board) agrees to take all actions
reasonably required to permit and enable the Manager to carry out its duties and
obligations under this Agreement, including, without limitation, all steps
reasonably necessary to allow the Manager to file any registration statement or
other filing required to be made under the Securities Act, Exchange Act,
NASDAQ’s Rules Manual, the Code or other applicable law, rule or regulation on
behalf of the Company in a timely manner. The Company further agrees to use
commercially reasonable efforts to make available to the Manager all resources,
information and materials reasonably requested by the Manager to enable the
Manager to satisfy its obligations hereunder, including its obligations to
deliver financial statements and any other information or reports with respect
to the Company.

 

(g)          As frequently as the Manager may deem reasonably necessary or
advisable, or at the direction of the Board, the Manager shall prepare, or, at
the sole cost and expense of the Company, cause to be prepared, with respect to
any reports and other information relating to any proposed or consummated
investment as may be reasonably requested by the Company.

 

(i)          The Manager shall prepare, or, at the sole cost and expense of the
Company, cause to be prepared, all reports, financial or otherwise, with respect
to the Company reasonably required by the Board in order for the Company to
comply with its Governing Instruments, or any other materials required to be
filed with any governmental body or agency, and shall prepare, or, at the sole
cost and expense of the Company, cause to be prepared, all materials and data
necessary to complete such reports and other materials, including, without
limitation, an annual audit of the Company’s books of account by a nationally
recognized independent accounting firm.

 

(ii)         The Manager shall prepare, or, at the sole cost and expense to the
Company, cause to be prepared, regular reports for the Board to enable the Board
to review the Company’s acquisitions, portfolio composition and characteristics,
credit quality, performance and compliance with the Investment Guidelines and
policies approved by the Board.

 

9

 

 

(h)          Officers, employees and agents of the Manager and its Affiliates
may serve as directors, officers, agents, nominees or signatories for the
Company or any of its Subsidiaries, to the extent permitted by their respective
Governing Instruments, by any resolutions duly adopted by the Board. When
executing documents or otherwise acting in such capacities for the Company or
any of its Subsidiaries, such Persons shall indicate in what capacity they are
executing on behalf of the Company or any of its Subsidiaries. Without limiting
the foregoing, while this Agreement is in effect, the Manager will provide the
Company with a management team, including a Chief Executive Officer and
President or similar positions, along with appropriate support personnel, to
provide the management services to be provided by the Manager to the Company
hereunder, who shall devote such of their time to the management of the Company
as necessary and appropriate, commensurate with the level of activity of the
Company from time to time.

 

(i)          The Manager, at its sole cost and expense, shall provide personnel
for service on the Manager Investment Committee.

 

(j)          The Manager, at its sole cost and expense, shall maintain
reasonable and customary “errors and omissions” insurance coverage and other
customary insurance coverage in respect to its obligations and activities under,
or pursuant to, this Agreement, naming the Company as an additional insured.

 

(k)          The Manager, at its sole cost and expense, shall provide such
internal audit, compliance and control services as may be required for the
Company to comply with applicable law (including the Securities Act and Exchange
Act), regulation (including SEC regulations) and the rules and requirements of
NASDAQ and as otherwise reasonably requested by the Company or its Board from
time to time.

 

(l)          The Manager acknowledges receipt of the Company’s Code of Business
Conduct and Ethics (the “Conduct Policies”) and agrees to require the persons
who provide services to the Company to comply with such Conduct Policies in the
performance of such services hereunder or such comparable policies as shall in
substance hold such persons to at least the standards of conduct set forth in
the Conduct Policies.

 

(m)          The Manager, at its sole cost and expense, shall maintain any
required registration of the Manager or any Affiliate with the SEC under the
Investment Advisers Act of 1940, as amended, or with any state securities
authority in any state in which the Manager or its Affiliate is required to be
registered as an investment advisor under applicable state securities laws.

 

Section 3. Additional Activities of the Manager; Non-Solicitation; Restrictions.

 

(a)          Except as provided in Section 3(b) and/or the Investment
Guidelines, nothing in this Agreement shall (i) prevent the Manager or any of
its Affiliates or any of their respective officers, directors or employees, from
engaging in other businesses or from rendering services of any kind to any other
Person, whether or not the investment objectives or policies of any such other
Person are similar to those of the Company or (ii) in any way bind or restrict
the Manager or any of its Affiliates or any of their respective officers,
directors or employees from buying, selling or trading any securities or
commodities for their own accounts or for the account of others for whom the
Manager or any of its Affiliates, officers, directors or employees may be
acting.

 

10

 

 

(b)          While information and recommendations supplied to the Company
shall, in the Manager’s reasonable and good faith judgment, be appropriate under
the circumstances and in light of the investment objectives and policies of the
Company, they may be different from the information and recommendations supplied
by the Manager or any Affiliate of the Manager to others. The Company shall be
entitled to equitable treatment under the circumstances in receiving
information, recommendations and any other services, but the Company recognizes
that it is not entitled to receive preferential treatment as compared with the
treatment given by the Manager or any Affiliate of the Manager to others. The
Company shall have the benefit of the Manager’s best judgment and effort in
rendering services hereunder and, in furtherance of the foregoing, the Manager
shall not undertake activities that, in its good faith judgment, will adversely
affect the performance of its obligations under this Agreement.

 

(c)          In the event of a Termination Without Cause of this Agreement by
the Company pursuant to Section 10(b) hereof, for a period of two (2) years from
and after the date of such termination of this Agreement, the Company shall not
(and shall cause each of its Subsidiaries to not), without the consent of the
Manager, employ or otherwise retain (directly or indirectly by any of the
Company’s Subsidiaries) any employee of the Manager or any of its Affiliates on
the date of such termination or any Person who shall have been employed by the
Manager or any of its Affiliates at any time within the two (2) year period
immediately preceding the date on which such Person commences employment with or
is otherwise retained by the Company or its Subsidiary. The Company acknowledges
and agrees that, in addition to any damages, the Manager shall be entitled to
equitable relief for any violation of this Section 3(c) by the Company or its
Subsidiaries, including, without limitation, injunctive relief.

 

Section 4. Bank Accounts. At the direction of the Board, the Manager may
establish and maintain one or more bank accounts in the name of the Company or
any Subsidiary, and may collect and deposit into any such account or accounts,
and disburse funds from any such account or accounts, under such policies, terms
and conditions as the Company may establish and the Board may approve. The
Manager shall from time to time render appropriate accountings of such
collections and payments to the Board and, upon request, shall provide
information regarding such accountings to the auditors of the Company or any
Subsidiary.

 

Section 5. Records; Confidentiality.

 

(a)          The Manager shall maintain appropriate books of accounts and
records relating to services performed hereunder, and such books of account and
records shall be accessible for inspection by representatives of the Company or
any Subsidiary at any time during normal business hours. The Manager shall keep
confidential any and all non-public information, written or oral, obtained by it
in connection with the services rendered hereunder (“Confidential Information”)
and shall not use Confidential Information except in furtherance of its duties
under this Agreement or disclose Confidential Information, in whole or in part,
to any Person other than (i) to its Affiliates, officers, directors, employees,
agents, representatives or advisors who need to know such Confidential
Information for the purpose of rendering services hereunder, (ii) to appraisers,
financing sources and others in the ordinary course of the Company’s business
((i) and (ii) collectively, “Manager Permitted Disclosure Parties”), (iii) in
connection with any governmental or regulatory filings of the Company, or
filings with NASDAQ or other applicable securities exchanges or markets, or
disclosure or presentations to Company investors (subject to compliance with
Regulation FD), (iv) to governmental officials having jurisdiction over the
Company, (v) as requested by law or legal process to which the Manager or any
Person to whom disclosure is permitted hereunder is a party, or (vi) with the
consent of the Company. The Manager agrees to inform each of its Manager
Permitted Disclosure Parties of the non-public nature of the Confidential
Information and to obtain agreement from such Persons to treat such Confidential
Information in accordance with the terms hereof.

 

11

 

 

(b)          Nothing herein shall prevent any Manager Permitted Disclosure Party
from disclosing Confidential Information (i) upon the order of any court or
administrative agency, (ii) upon the request or demand of, or pursuant to any
law or regulation to, any regulatory agency or authority, (iii) to the extent
reasonably required in connection with the exercise of any remedy hereunder, or
(iv) to its legal counsel or independent auditors; provided, however that with
respect to clauses (i) and (ii), it is agreed that, so long as not legally
prohibited, the Manager will provide the Company with prompt written notice of
such order, request or demand so that the Company may seek, at its sole expense,
an appropriate protective order and/or waive the Manager Permitted Disclosure
Party compliance with the provisions of this Agreement. If, failing the entry of
a protective order or the receipt of a waiver hereunder, the Manager Permitted
Disclosure Party is required to disclose Confidential Information, the Manager
Permitted Disclosure Party may disclose only that portion of such information
that is legally required without liability hereunder; provided, that the Manager
Permitted Disclosure Party agrees to exercise its commercially reasonable
efforts to obtain reliable assurance that confidential treatment will be
accorded such information.

 

(c)          Notwithstanding anything herein to the contrary, each of the
following shall be deemed to be excluded from provisions hereof: any
Confidential Information that (A) is available to the public from a source other
than the Manager, (B) is released in writing by the Company to the public
(except to the extent exempt under Regulation FD) or to persons who are not
under similar obligation of confidentiality to the Company, or (C) is obtained
by the Manager from a third-party which, to the best of the Manager’s knowledge,
does not constitute a breach by such third-party of an obligation of confidence
with respect to the Confidential Information disclosed. The provisions of this
Agreement shall survive the expiration or earlier termination of this Agreement
for a period of one year.

 

Section 6. Compensation.

 

(a)          For the services rendered under this Agreement, the Company shall
pay the Base Management Fee and the Incentive Compensation to the Manager. The
Manager will not receive any compensation for the period prior to the Closing
Date other than expenses incurred and reimbursed pursuant to Section 7 hereof.

 

(b)          The parties acknowledge that the Base Management Fee is intended to
compensate the Manager for certain expenses not otherwise reimbursable under
Section 7 below in order for the Manager to provide the Company the investment
advisory services and general management services rendered under this Agreement.

 

(c)          The Company shall pay a monthly Base Management Fee to the Manager
or its permitted assignees as compensation for services rendered in connection
with this Agreement.  The Base Management Fee shall be payable monthly, in
advance, in cash or shares of Common Stock, at the option of the Manager, in an
amount calculated as follows: with respect to the sum of the average unadjusted
book value (before reduction for depreciation, amortization, impairment charges
and cumulative acquisition costs charged to expense in accordance with GAAP) of
all Real Estate Assets held by the Company as of the last day of the immediately
preceding month, (i) one twelfth of 0.50% of the lesser of such sum or $3.0
billion and (ii) one twelfth of 0.40% of the excess of such sum over $3.0
billion, if any.  The Base Management Fee will be pro rated for any partial
month. The Manager shall calculate each monthly installment of the Base
Management Fee, and deliver such calculation to the Company, within ten (10)
days following the last day of each calendar month for which a Base Management
Fee is payable. The Company shall pay the Manager each installment of the Base
Management Fee within five (5) Business Days after the date of delivery to the
Company of such computations.

 

(d)          The Incentive Compensation shall be payable in arrears, in
quarterly installments commencing with the quarter in which this Agreement is
executed. The Manager shall compute each quarterly installment of the Incentive
Compensation within forty-five (45) days after the end of the calendar quarter
with respect to which such installment is payable. A copy of the computations
made by the Manager to calculate such installment shall thereafter promptly be
delivered to the Board and, upon such delivery, payment of such installment of
the Incentive Compensation shown therein shall be due and payable no later than
the date which is five (5) Business Days after the date of delivery to the Board
of such computations.

 

12

 

 

(e)          Each installment of the Incentive Compensation shall be payable as
follows:

 

(i)          fifty percent (50%) of the Incentive Compensation will be payable
in shares of Common Stock; provided, however, the percentage of the Incentive
Compensation payable in shares of Common Stock is subject to the following: (1)
the ownership of such shares by the Manager does not violate the limit on
ownership of Common Stock set forth in the Company’s Governing Instruments,
after giving effect to any waiver from such limit that the Board may grant to
the Manager in the future and (2) the Company’s issuance of such shares to the
Manager complies with all applicable restrictions under U.S. federal securities
laws and the rules of NASDAQ; and

 

(ii)         the remainder will be payable in cash.

 

(f)          The number of shares of Common Stock payable as the Incentive
Compensation to be issued to the Manager will be equal to the dollar amount of
the portion of the quarterly installment of the Incentive Compensation payable
in shares of Common Stock divided by a value determined as follows:

 

(i)          if the Common Stock is traded on a securities exchange, the value
shall be deemed to be the average of the closing prices of the Common Stock on
such exchange on the five (5) Business Days prior to the date on which the
quarterly installment of the Incentive Compensation is paid;

 

(ii)         if the Common Stock is not traded on a securities exchange but is
actively traded over-the-counter, the value shall be deemed to be the average of
the closing bids or sales prices, as applicable, on the five (5) Business Days
prior to the date on which the quarterly installment of the Incentive
Compensation is paid; and

 

(iii)        if the Common Stock is neither traded on a securities exchange nor
actively traded over-the-counter, the value shall be the fair market value
thereof, as reasonably determined in good faith by the Board (including a
majority of the Independent Directors) of the Company.

 

(g)          If at any time the Manager shall, in connection with a
determination of the value of the Common Stock made by the Board pursuant to
Section 6(f)(iii) hereof, (i) dispute such determination in good faith by more
than five percent (5%), and (ii) such dispute cannot be resolved between the
Independent Directors and the Manager within ten (10) Business Days after the
Manager provides written notice to the Company of such dispute (the “Valuation
Notice”), then the matter shall be resolved by an independent appraiser of
recognized standing selected jointly by the Independent Directors and the
Manager within not more than twenty (20) days after the Valuation Notice. In the
event the Independent Directors and the Manager cannot agree with respect to
such selection within the aforesaid twenty (20) day time-frame, the Independent
Directors shall select one such independent appraiser and the Manager shall
select one independent appraiser within five (5) Business Days after the
expiration of the twenty (20) day period, with one additional such appraiser
(the “Last Appraiser”) to be selected by the appraisers so designated within
five (5) Business Days after their selection. Any valuation decision made by the
Last Appraiser shall be deemed final and binding upon the Board and the Manager
and shall be delivered to the Manager and the Board within not more than fifteen
(15) days after the selection of the Last Appraiser. The expenses of the
appraisal shall be paid by the party with the estimate which deviated the
furthest from the final valuation decision made by the independent appraisers.

 

13

 

 

Section 7. Expenses of the Company.

 

(a)          The Manager shall be responsible for the expenses related to any
and all personnel of the Manager and its Affiliates who provide services to the
Company pursuant to this Agreement (including, without limitation, each of the
officers of the Company and any directors of the Company who are also directors,
officers, employees or agents of the Manager or any of its Affiliates),
including, without limitation, salaries, bonus and other wages, payroll taxes
and the cost of employee benefit plans of such personnel, and costs of insurance
with respect to such personnel.

 

(b)          The Company shall pay all of its costs and expenses and shall
reimburse the Manager or its Affiliates for expenses of the Manager and its
Affiliates incurred on behalf of the Company, excepting only those expenses that
are specifically the responsibility of the Manager pursuant to Section 7(a) of
this Agreement. Without limiting the generality of the foregoing, it is
specifically agreed that the following costs and expenses of the Company or any
Subsidiary shall be paid by the Company and shall not be paid by the Manager or
Affiliates of the Manager:

 

(i)          Acquisition Expenses; provided, however, that Acquisition Expenses
paid pursuant to this Agreement shall be without duplication with any
“Acquisition Expenses” paid pursuant to that certain Acquisition and Capital
Services Agreement, dated as of September 6, 2011, by and between the Company
and AR Capital, LLC (formerly known as American Realty Capital II, LLC);

 

(ii)         expenses in connection with the issuance of securities of the
Company and transaction costs incident to the acquisition, disposition and
financing of the investments of the Company and its Subsidiaries;

 

(iii)        costs of legal, tax, accounting, consulting, auditing and other
similar services rendered for the Company by providers retained by the Manager
or, if provided by the Manager’s personnel, in amounts which are no greater than
those which would be payable to outside professionals or consultants engaged to
perform such services pursuant to agreements negotiated on an arm’s-length
basis;

 

(iv)        the compensation and expenses of the Company’s directors and the
cost of liability insurance to indemnify the Company’s directors and officers;

 

(v)         costs associated with the establishment and maintenance of any of
the Company’s credit facilities, other financing arrangements, or other
indebtedness of the Company (including commitment fees, accounting fees, legal
fees, closing and other similar costs) or any of the Company’s securities
offerings;

 

(vi)        expenses connected with communications to holders of the Company’s
securities or of the Subsidiaries and other bookkeeping and clerical work
necessary in maintaining relations with holders of such securities and in
complying with the continuous reporting and other requirements of governmental
bodies or agencies, including, without limitation, all costs of preparing and
filing required reports with the SEC, the costs payable by the Company to any
transfer agent and registrar in connection with the listing and/or trading of
the Company’s securities on any exchange, the fees payable by the Company to any
such exchange in connection with its listing, costs of preparing, printing and
mailing the Company’s annual report to the Company’s stockholders and proxy
materials with respect to any meeting of the Company’s stockholders;

 

14

 

 

(vii)       costs associated with any computer software or hardware, electronic
equipment or purchased information technology services from third-party vendors
that is used for the Company;

 

(viii)      expenses incurred by managers, officers, personnel and agents of the
Manager for travel on the Company’s behalf and other out-of-pocket expenses
incurred by managers, officers, personnel and agents of the Manager in
connection with the purchase, financing, refinancing, sale or other disposition
of an investment or establishment and maintenance of any of the Company’s
securitizations or any of the Company’s securities offerings;

 

(ix)         costs and expenses incurred with respect to market information
systems and publications, research publications and materials, and settlement,
clearing and custodial fees and expenses;

 

(x)          compensation and expenses of the Company’s custodian and transfer
agent, if any;

 

(xi)         the costs of maintaining compliance with all federal, state and
local rules and regulations or any other regulatory agency;

 

(xii)        all taxes and license fees;

 

(xiii)       all insurance costs incurred in connection with the operation of
the Company’s business except for the costs attributable to the insurance that
the Manager elects to carry for itself and its personnel;

 

(xiv)      costs and expenses incurred in contracting with third parties;

 

(xv)       all other costs and expenses relating to the Company’s business and
investment operations, including, without limitation, the costs and expenses of
acquiring, owning, protecting, maintaining, developing and disposing of
investments, including appraisal, reporting, audit and legal fees;

 

(xvi)      expenses relating to any office(s) or office facilities, including,
but not limited to, disaster backup recovery sites and facilities, maintained
for the Company or the investments of the Company and its Subsidiaries separate
from the office or offices of the Manager;

 

(xvii)     expenses connected with the payments of interest, dividends or
distributions in cash or any other form authorized or caused to be made by the
Board to or on account of holders of the Company’s securities or of the
Subsidiaries, including, without limitation, in connection with any dividend
reinvestment plan;

 

(xviii)    any judgment or settlement of pending or threatened proceedings
(whether civil, criminal or otherwise) against the Company or any Subsidiary, or
against any trustee, director, partner, member or officer of the Company or of
any Subsidiary in his capacity as such for which the Company or any Subsidiary
is required to indemnify such trustee, director, partner, member or officer by
any court or governmental agency; and

 

(xix)       all other expenses actually incurred by the Manager (except as
otherwise specified herein) which are reasonably necessary for the performance
by the Manager of its duties and functions under this Agreement.

 

15

 

 

(c)          Costs and expenses incurred by the Manager on behalf of the Company
shall be reimbursed monthly to the Manager. The Manager shall prepare a written
statement in reasonable detail documenting the costs and expenses of the Company
and those incurred by the Manager on behalf of the Company during each month,
and shall deliver such written statement to the Company within thirty (30) days
after the end of each month. The Company shall pay all amounts payable to the
Manager pursuant to this Section 7(c) within five (5) Business Days after the
receipt of the written statement without demand, deduction, offset or delay.
Cost and expense reimbursement to the Manager shall be subject to adjustment at
the end of each calendar year in connection with the annual audit of the
Company. The provisions of this Section 7 shall survive the expiration or
earlier termination of this Agreement to the extent such expenses have
previously been incurred or are incurred in connection with such expiration or
termination.

 

Section 8. Limits of the Manager’s Responsibility.

 

(a)          The Manager assumes no responsibility under this Agreement other
than to render the services called for hereunder in good faith and shall not be
responsible for any action of the Board in following or declining to follow any
advice or recommendations of the Manager, including as set forth in the
Investment Guidelines. The Manager and its Affiliates, and the directors,
officers, employees, partners, members, stockholders, other equity holders,
agents and representatives of the Manager and its Affiliates (each, a “Manager
Indemnified Party”), will not be liable to the Company, any Subsidiary, the
Board, the Company’s stockholders or any Subsidiary’s stockholders, partners or
members for any acts or omissions by any Manager Indemnified Party performed in
accordance with and pursuant to this Agreement, except by reason of any act or
omission constituting bad faith, willful misconduct, gross negligence or
reckless disregard of the duties under this Agreement on the part of such
Manager Indemnified Party. The Company shall, to the full extent lawful,
reimburse, indemnify and hold harmless each Manager Indemnified Party, of and
from any and all expenses, losses, damages, liabilities, demands, charges and
claims of any nature whatsoever (including reasonable attorneys’ fees)
(collectively “Losses”) in respect of or arising from any acts or omissions of
such Manager Indemnified Party performed in good faith under this Agreement and
not constituting bad faith, willful misconduct, gross negligence or reckless
disregard of duties on the part of such Manager Indemnified Party under this
Agreement. In addition, (i) the Manager will not be liable for trade errors that
may result from ordinary negligence, including, without limitation, errors in
the investment decision making process or in the trade process and (ii) the
Company shall advance funds to a Manager Indemnified Party for legal fees and
other costs and expenses incurred as a result of any claim, suit, action or
proceeding for which indemnification is being sought, provided that such Manager
Indemnified Party undertakes to repay the advanced funds to the Company,
together with the applicable legal rate of interest thereon, in cases in which
such Manager Indemnified Party is found pursuant to a final and non-appealable
order or judgment to not be entitled to indemnification.

 

(b)          The Manager shall, to the full extent lawful, reimburse, indemnify
and hold harmless the Company, and the directors, officers and stockholders of
the Company and each Person, if any, controlling the Company (each, a “Company
Indemnified Party”; a Manager Indemnified Party and a Company Indemnified Party
are each sometimes hereinafter referred to as an “ Indemnified Party”) of and
from any and all Losses in respect of or arising from (i) any acts or omissions
of the Manager constituting bad faith, willful misconduct, gross negligence or
reckless disregard of duties of the Manager under this Agreement or (ii) any
claims by the Manager’s employees relating to the terms and conditions of their
employment by the Manager.

 

16

 

 

(c)          In case any such claim, suit, action or proceeding (a “Claim”) is
brought against any Indemnified Party in respect of which indemnification may be
sought by such Indemnified Party pursuant hereto, the Indemnified Party shall
give prompt written notice thereof to the indemnifying party, which notice shall
include all documents and information in the possession of or under the control
of such Indemnified Party reasonably necessary for the evaluation and/or defense
of such Claim and shall specifically state that indemnification for such Claim
is being sought under this Section; provided, however, that the failure of the
Indemnified Party to so notify the indemnifying party shall not limit or affect
such Indemnified Party’s rights other than pursuant to this Section. Upon
receipt of such notice of Claim (together with such documents and information
from such Indemnified Party), the indemnifying party shall, at its sole cost and
expense, in good faith defend any such Claim with counsel reasonably
satisfactory to such Indemnified Party, which counsel may, without limiting the
rights of such Indemnified Party pursuant to the next succeeding sentence of
this Section 8(c), also represent the indemnifying party in such investigation,
action or proceeding. In the alternative, such Indemnified Party may elect to
conduct the defense of the Claim, if (i) such Indemnified Party reasonably
determines that the conduct of its defense by the indemnifying party could be
materially prejudicial to its interests, (ii) the indemnifying party refuses to
assume such defense (or fails to give written notice to the Indemnified Party
within ten (10) days of receipt of a notice of Claim that the indemnifying party
assumes such defense), or (iii) the indemnifying party shall have failed, in
such Indemnified Party’s reasonable judgment, to defend the Claim in good faith.
The indemnifying party may settle any Claim against such Indemnified Party
without such Indemnified Party’s consent, provided (i) such settlement is
without any Losses whatsoever to such Indemnified Party, (ii) the settlement
does not include or require any admission of liability or culpability by such
Indemnified Party and (iii) the indemnifying party obtains an effective written
release of liability for such Indemnified Party from the party to the Claim with
whom such settlement is being made, which release must be reasonably acceptable
to such Indemnified Party, and a dismissal with prejudice with respect to all
claims made by the party against such Indemnified Party in connection with such
Claim. The applicable Indemnified Party shall reasonably cooperate with the
indemnifying party, at the indemnifying party’s sole cost and expense, in
connection with the defense or settlement of any Claim in accordance with the
terms hereof. If such Indemnified Party is entitled pursuant to this Section
8(c) to elect to defend such Claim by counsel of its own choosing and so elects,
then the indemnifying party shall be responsible for any good faith settlement
of such Claim entered into by such Indemnified Party. Except as provided in the
immediately preceding sentence, no Indemnified Party may pay or settle any Claim
and seek reimbursement therefor under this Section 8(c).

 

(d)          The provisions of this Section 8 shall survive the expiration or
earlier termination of this Agreement.

 

Section 9. No Joint Venture. The Company and the Manager are not partners or
joint venturers with each other and nothing herein shall be construed to make
them such partners or joint venturers or impose any liability as such on either
of them.

 

Section 10. Term; Renewal; Termination Without Cause.

 

(a)          This Agreement shall become effective on the Closing Date and shall
continue in operation, unless terminated in accordance with the terms hereof,
until the tenth anniversary of the Closing Date (the “Initial Term”). After the
Initial Term, this Agreement shall be deemed renewed automatically each year for
an additional one-year period (an “Automatic Renewal Term”) unless the Company
or the Manager elects not to renew this Agreement in accordance with Section
10(b) or Section 10(d), respectively.

 

17

 

 

(b)          Notwithstanding any other provision of this Agreement to the
contrary, upon written notice provided to the Manager no later than 180 days
prior to the expiration of the Initial Term or any Automatic Renewal Term (the
“Termination Notice”), the Company may, without cause, in connection with the
expiration of the Initial Term or the then current Automatic Renewal Term,
decline to renew this Agreement (any such nonrenewal, a “Termination Without
Cause”) upon the affirmative vote of at least two-thirds of the Independent
Directors that includes a finding by such two-thirds of the Independent
Directors that either (1) there has been unsatisfactory performance by the
Manager that is materially detrimental to the Company and its Subsidiaries taken
as a whole or (2) the Base Management Fee and Incentive Compensation payable to
the Manager are not fair, subject to Section 10(c) below. The Company may
terminate this Agreement for cause pursuant to Section 12 hereof even after
providing a Termination Notice.

 

(c)          Notwithstanding the provisions of Section 10(b), if the reason for
nonrenewal specified in the Termination Notice is that two-thirds of the
Independent Directors have determined that the Base Management Fee or the
Incentive Compensation payable to the Manager is unfair, the Company shall not
have the foregoing nonrenewal right in the event the Manager agrees that it will
continue to perform its duties hereunder during the Automatic Renewal Term that
would commence upon the expiration of the Initial Term or then current Automatic
Renewal Term at a fee that at least two-thirds of the Independent Directors
determine to be fair; provided, however, the Manager shall have the right to
renegotiate the Base Management Fee and/or the Incentive Compensation, by
delivering to the Company, not less than 120 days prior to the pending Effective
Termination Date, written notice (a “Notice of Proposal to Negotiate”) of its
intention to renegotiate the Base Management Fee and/or the Incentive
Compensation. Thereupon, the Company and the Manager shall endeavor to negotiate
the Base Management Fee and/or the Incentive Compensation in good faith.
Provided that the Company and the Manager agree to a revised Base Management
Fee, Incentive Compensation or other compensation structure within sixty (60)
days following the Company’s receipt of the Notice of Proposal to Negotiate, the
Termination Notice from the Company shall be deemed of no force and effect, and
this Agreement shall continue in full force and effect on the terms stated
herein, except that the Base Management Fee, the Incentive Compensation or other
compensation structure shall be the revised Base Management Fee, Incentive
Compensation or other compensation structure as then agreed upon by the Company
and the Manager. The Company and the Manager agree to execute and deliver an
amendment to this Agreement setting forth such revised Base Management Fee,
Incentive Compensation, or other compensation structure promptly upon reaching
an agreement regarding same. In the event that the Company and the Manager are
unable to agree to a revised Base Management Fee, Incentive Compensation, or
other compensation structure during such sixty (60) day period, this Agreement
shall terminate on the Effective Termination Date.

 

(d)          No later than 180 days prior to the expiration of the Initial Term
or the then current Automatic Renewal Term, the Manager may deliver written
notice to the Company informing it of the Manager’s intention to decline to
renew this Agreement, whereupon this Agreement shall not be renewed and extended
and this Agreement shall terminate effective on the anniversary date of this
Agreement next following the delivery of such notice.

 

(e)          Except as set forth in this Section 10, a nonrenewal of this
Agreement pursuant to this Section 10 shall be without any further liability or
obligation of either party to the other, except as provided in Section 3(c),
Section 5, Section 7, Section 8 and Section 14 of this Agreement.

 

(f)          The Manager shall cooperate with the Company in executing an
orderly transition of the management of the Company’s consolidated assets to a
new manager.

 

18

 

 

Section 11. Assignments.

 

(a)          Assignments by the Manager. This Agreement shall terminate
automatically in the event of its assignment, in whole or in part, by the
Manager, unless such assignment is consented to in writing by the Company with
the consent of a majority of the Independent Directors. Any such permitted
assignment shall bind the assignee under this Agreement in the same manner as
the Manager is bound, and the Manager shall be liable to the Company for all
acts or omissions of the assignee under any such assignment. In addition, the
assignee shall execute and deliver to the Company a counterpart of this
Agreement naming such assignee as the Manager. Notwithstanding the foregoing,
the Manager may, without the approval of the Company’s Independent Directors,
(i) assign this Agreement to an Affiliate of the Manager and (ii) delegate to
one or more of its Affiliates the performance of any of its responsibilities
hereunder so long as it remains liable for any such Affiliate’s performance, in
each case so long as assignment or delegation does not require the Company’s
approval under the Investment Company Act (but if such approval is required, the
Company shall not unreasonably withhold, condition or delay its consent).
Nothing contained in this Agreement shall preclude any pledge, hypothecation or
other transfer of any amounts payable to the Manager under this Agreement.

 

(b)          Assignments by the Company. This Agreement shall not be assigned by
the Company without the prior written consent of the Manager, except in the case
of assignment by the Company to another REIT or other organization which is a
successor (by merger, consolidation, purchase of assets, or other transaction)
to the Company, in which case such successor organization shall be bound under
this Agreement and by the terms of such assignment in the same manner as the
Company is bound under this Agreement.

 

Section 12. Termination for Cause.

 

(a)          The Company may terminate this Agreement effective upon 30 days’
prior written notice of termination from the Company to the Manager if (i) the
Manager, its agents or its assignees breaches any material provision of this
Agreement and such breach shall continue for a period of 30 days after written
notice thereof specifying such breach and requesting that the same be remedied
in such 30-day period (or 45 days after written notice of such breach if the
Manager takes steps to cure such breach within 30 days of the written notice),
(ii) there is a commencement of any proceeding relating to the Manager’s
Bankruptcy or insolvency, including an order for relief in an involuntary
bankruptcy case or the Manager authorizing or filing a voluntary bankruptcy
petition, (iii) any Manager Change of Control which a majority of the
Independent Directors determines is materially detrimental to the Company and
its Subsidiaries taken as a whole, (iv) the dissolution of the Manager, or (v)
the Manager commits fraud against the Company, misappropriates or embezzles
funds of the Company, or acts, or fails to act, in a manner constituting bad
faith, willful misconduct, gross negligence or reckless disregard in the
performance of its duties under this Agreement; provided, however, that if any
of the actions or omissions described in this clause (v) are caused by an
employee and/or officer of the Manager or one of its Affiliates and the Manager
takes all necessary and appropriate action against such person and cures the
damage caused by such actions or omissions within 30 days of the Manager’s
actual knowledge of its commission or omission, the Company shall not have the
right to terminate this Agreement pursuant to this Section 12(a)(v).

 

(b)          The Manager may terminate this Agreement effective upon 60 days’
prior written notice of termination to the Company in the event that the Company
shall default in the performance or observance of any material term, condition
or covenant contained in this Agreement and such default shall continue for a
period of 30 days after written notice thereof specifying such default and
requesting that the same be remedied in such 30-day period.

 

(c)          The Manager may terminate this Agreement if the Company becomes
required to register as an investment company under the Investment Company Act,
with such termination deemed to occur immediately before such event.

 

19

 

 

Section 13. Action Upon Termination. From and after the effective date of
termination of this Agreement pursuant to Sections 10, 11, or 12 of this
Agreement, the Manager shall not be entitled to compensation for further
services hereunder, but shall be paid all compensation accruing to the date of
termination. Upon any such termination, the Manager shall forthwith:

 

(a)          after deducting any accrued compensation and reimbursement for its
expenses to which it is then entitled, pay over to the Company or a Subsidiary
all money collected and held for the account of the Company or a Subsidiary
pursuant to this Agreement;

 

(b)          deliver to the Board a full accounting, including a statement
showing all payments collected by it and a statement of all money held by it,
covering the period following the date of the last accounting furnished to the
Board with respect to the Company and any Subsidiaries; and

 

(c)          deliver to the Board all property and documents of the Company and
any Subsidiaries then in the custody of the Manager.

 

Section 14. Release of Money or Other Property Upon Written Request.

 

The Manager agrees that any money or other property of the Company (which such
term, for the purposes of this Section 14, shall be deemed to include any and
all of its Subsidiaries, if any) held by the Manager shall be held by the
Manager as custodian for the Company, and the Manager’s records shall be
appropriately and clearly marked to reflect the ownership of such money or other
property by the Company. Upon the receipt by the Manager of a written request
signed by a duly authorized officer of the Company requesting the Manager to
release to the Company any money or other property then held by the Manager for
the account of the Company under this Agreement, the Manager shall release such
money or other property to the Company within a reasonable period of time, but
in no event later than 60 days following such request. Upon delivery of such
money or other property to the Company, the Manager shall not be liable to the
Company, the Board, or the Company’s stockholders or partners for any acts or
omissions by the Company in connection with the money or other property released
to the Company in accordance with this Section 14. The Company shall indemnify
the Manager, its directors, officers, stockholders, employees and agents against
any and all Losses which arise in connection with the Manager’s proper release
of such money or other property to the Company in accordance with the terms of
this Section 14. Indemnification pursuant to this provision shall be in addition
to any right of the Manager to indemnification under Section 8 of this
Agreement.

 

Section 15. Representations and Warranties.

 

(a)          The Company hereby represents and warrants to the Manager as
follows:

 

(i)          The Company is duly organized, validly existing and in good
standing under the laws of the State of Maryland, has the corporate power and
authority and the legal right to own and operate its assets, to lease any
property it may operate as lessee and to conduct the business in which it is now
engaged and is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification, except for failures to
be so qualified, authorized or licensed that could not in the aggregate have a
material adverse effect on the business operations, assets or financial
condition of the Company and its Subsidiaries, if any, taken as a whole.

 

20

 

 

(ii)         The Company has the corporate power and authority and the legal
right to make, deliver and perform this Agreement and all obligations required
hereunder and has taken all necessary corporate action to authorize this
Agreement on the terms and conditions hereof and the execution, delivery and
performance of this Agreement and all obligations required hereunder. No consent
of any other Person, including stockholders and creditors of the Company, and no
license, permit, approval or authorization of, exemption by, notice or report
to, or registration, filing or declaration with, any governmental authority is
required by the Company in connection with this Agreement or the execution,
delivery, performance, validity or enforceability of this Agreement and all
obligations required hereunder. This Agreement has been, and each instrument or
document required hereunder will be, executed and delivered by a duly authorized
officer of the Company, and this Agreement constitutes, and each instrument or
document required hereunder when executed and delivered hereunder will
constitute, the legally valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.

 

(iii)        The execution, delivery and performance of this Agreement and the
documents or instruments required hereunder will not violate any provision of
any existing law or regulation binding on the Company, or any order, judgment,
award or decree of any court, arbitrator or governmental authority binding on
the Company, or the Governing Instruments of, or any securities issued by, the
Company or of any mortgage, indenture, lease, contract or other agreement,
instrument or undertaking to which the Company is a party or by which the
Company or any of its assets may be bound, the violation of which would have a
material adverse effect on the business operations, assets or financial
condition of the Company and its Subsidiaries, if any, taken as a whole, and
will not result in, or require, the creation or imposition of any lien or any of
its property, assets or revenues pursuant to the provisions of any such
mortgage, indenture, lease, contract or other agreement, instrument or
undertaking.

 

(b)          The Manager hereby represents and warrants to the Company as
follows:

 

(i)          The Manager is duly organized, validly existing and in good
standing under the laws of the State of Delaware, has the limited liability
company power and authority and the legal right to own and operate its assets,
to lease the property it operates as lessee and to conduct the business in which
it is now engaged and is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification, except for
failures to be so qualified, authorized or licensed that could not in the
aggregate have a material adverse effect on the business operations, assets or
financial condition of the Manager.

 

(ii)         The Manager has the limited liability company power and authority
and the legal right to make, deliver and perform this Agreement and all
obligations required hereunder and has taken all necessary corporate action to
authorize this Agreement on the terms and conditions hereof and the execution,
delivery and performance of this Agreement and all obligations required
hereunder. No consent of any other Person, including members and creditors of
the Manager, and no license, permit, approval or authorization of, exemption by,
notice or report to, or registration, filing or declaration with, any
governmental authority is required by the Manager in connection with this
Agreement or the execution, delivery, performance, validity or enforceability of
this Agreement and all obligations required hereunder. This Agreement has been,
and each instrument or document required hereunder will be, executed and
delivered by a duly authorized officer of the Manager, and this Agreement
constitutes, and each instrument or document required hereunder when executed
and delivered hereunder will constitute, the legally valid and binding
obligation of the Manager enforceable against the Manager in accordance with its
terms.

 

21

 

 

(iii)        The execution, delivery and performance of this Agreement and the
documents or instruments required hereunder will not violate any provision of
any existing law or regulation binding on the Manager, or any order, judgment,
award or decree of any court, arbitrator or governmental authority binding on
the Manager, or the Governing Instruments of, or any securities issued by, the
Manager or of any mortgage, indenture, lease, contract or other agreement,
instrument or undertaking to which the Manager is a party or by which the
Manager or any of its assets may be bound, the violation of which would have a
material adverse effect on the business operations, assets or financial
condition of the Manager, and will not result in, or require, the creation or
imposition of any lien or any of its property, assets or revenues pursuant to
the provisions of any such mortgage, indenture, lease, contract or other
agreement, instrument or undertaking.

 

Section 16. The American Realty Capital Name.

 

The Manager and its Affiliates have or may have a proprietary interest in the
names “American Realty Capital,” “ARC” and “AR Capital.”  The Manager hereby
grants to the Company, to the extent of any proprietary interest the Manager may
have in any of the names “American Realty Capital,” “ARC” and “AR Capital,” a
non-transferable, non-assignable, non-exclusive, royalty-free right and license
to use the names “American Realty Capital,” “ARC” and “AR Capital” during the
term of this Agreement. The Company agrees that the Manager and its Affiliates
will have the right to approve of any use by the Company of the names “American
Realty Capital,” “ARC” and “AR Capital,” such approval not to be unreasonably
withheld, conditioned or delayed. Accordingly, and in recognition of this right,
if at any time the Company ceases to retain the Manager or one of its Affiliates
to perform management services for the Company, the Company will, promptly after
receipt of written request from the Manager, cease to conduct business under or
use the names “American Realty Capital,” “ARC” and “AR Capital” or any
derivative thereof and the Company shall change its name and the names of any of
its subsidiaries to a name that does not contain the names “American Realty
Capital,” “ARC” and “AR Capital” or any other word or words that might, in the
reasonable discretion of the Manager, be susceptible of indication of some form
of relationship between the Company and the Manager or any its Affiliates. At
such time, the Company will also make any changes to any trademarks,
servicemarks or other marks necessary to remove any references to the words
“American Realty Capital,” “ARC” and “AR Capital.” Consistent with the
foregoing, it is specifically recognized that the Manager or one or more of its
Affiliates has in the past and may in the future organize, sponsor or otherwise
permit to exist other investment vehicles (including vehicles for investment in
real estate) and financial and service organizations having any of the names
“American Realty Capital,” “ARC” and “AR Capital” as a part of their name, all
without the need for any consent (and without the right to object thereto) by
the Company.  Neither the Manager nor any of its Affiliates makes any
representation or warranty, express or implied, with respect to the names
“American Realty Capital,” “ARC” and “AR Capital” licensed hereunder or the use
thereof (including without limitation as to whether the use of the names
“American Realty Capital,” “ARC” and “AR Capital” will be free from infringement
of the intellectual property rights of third parties.  Notwithstanding the
preceding, the Manager represents and warrants that it is not aware of any
pending claims or litigation or of any claims threatened in writing regarding
the use or ownership of the names “American Realty Capital,” “ARC” and “AR
Capital.”

 

Section 17. Miscellaneous.

 

(a)          Notices. All notices, requests, communications and demands to or
upon the respective parties hereto to be effective shall be in writing
(including by facsimile), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered against receipt or upon
actual receipt of (i) personal delivery, (ii) delivery by reputable overnight
courier, (iii) delivery by facsimile transmission with telephonic confirmation
or (iv) delivery by registered or certified mail, postage prepaid, return
receipt requested, addressed as set forth below (or to such other address as may
be hereafter notified by the respective parties hereto in accordance with this
Section 17):

 

22

 

 

  The Company: American Realty Capital Properties, Inc.     405 Park Avenue 15th
Floor     New York, New York 10022     Facsimile No.:  (212) 421-5799    
Attention:  Nicholas S. Schorsch           with a copy to:           Proskauer
Rose LLP     Eleven Times Square     New York, New York 10036     Facsimile
No.:  (212) 969-2900     Attention:  Peter M. Fass, Esq.     Steven L.
Lichtenfeld, Esq.         The Manager: ARC Properties Advisors, LLC     405 Park
Avenue 15th Floor     New York, New York 10022     Facsimile No.:  (212)
421-5799     Attention:  Nicholas S. Schorsch           with a copy to:        
  Proskauer Rose LLP     Eleven Times Square     New York, New York 10036    
Facsimile No.:  (212) 969-2900     Attention:  Peter M. Fass, Esq.     Steven L.
Lichtenfeld, Esq.

 

(b)          Binding Nature of Agreement; Successors and Assigns; No Third Party
Beneficiaries. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, legal representatives, successors
and permitted assigns as provided herein. Except as provided in this Agreement
with respect to indemnification of Indemnified Parties hereunder, nothing in
this Agreement shall confer any rights upon any Person other than the parties
hereto and their respective heirs, legal representatives, successors and
permitted assigns.

 

(c)          Integration. This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof.

 

(d)          Amendments. This Agreement, nor any terms hereof, may not be
amended, supplemented or modified except in an instrument in writing executed by
the parties hereto.

 

(e)          GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO IRREVOCABLY SUBMITS
TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE
UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN, NEW YORK CITY,
FOR THE PURPOSE OF ANY ACTION OR JUDGMENT RELATING TO OR ARISING OUT OF THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND TO THE LAYING OF
VENUE IN SUCH COURT.

 

23

 

 

(f)          WAIVER OF JURY TRIAL. EACH PARTY HERETO ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND, THEREFORE, EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO
ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

(g)          Survival of Representations and Warranties. All representations and
warranties made hereunder, and in any document, certificate or statement
delivered pursuant hereto or in connection herewith, shall survive the execution
and delivery of this Agreement.

 

(h)          No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of a party hereto, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

 

(i)          Costs and Expenses. Each party hereto shall bear its own costs and
expenses (including the fees and disbursements of counsel and accountants)
incurred in connection with the negotiations and preparation of and the closing
under this Agreement, and all matters incident thereto. If any party hereto
initiates any legal action arising out of or in connection with this Agreement,
the prevailing party shall be entitled to recover from the other party all
reasonable attorneys’ fees, expert witness fees and expenses incurred by the
prevailing party in connection therewith.

 

(j)          Section Headings. The section and subsection headings in this
Agreement are for convenience in reference only and shall not be deemed to alter
or affect the interpretation of any provisions hereof.

 

(k)          Counterparts. This Agreement may be executed (including by
facsimile transmission) with counterpart signature pages or in any number of
separate counterparts, and all of which taken together shall be deemed to
constitute one and the same instrument.

 

(l)          Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

24

 

 

IN WITNESS WHEREOF, each of the parties hereto has executed this Amended and
Restated Management Agreement as of the date first written above.

 

AMERICAN REALTY CAPITAL PROPERTIES, INC.         By:       Name:     Title:    
    ARC PROPERTIES ADVISORS, LLC         By:       Name:     Title:

 

25

 

 

Exhibit A

 

Investment Guidelines

 

1.          No investment shall be made that would cause the Company to fail to
qualify as a REIT under the Code.

 

2.          No investment shall be made that would cause the Company to be
regulated as an investment company under the Investment Company Act.

 

3.          The Company’s investments shall be in the Target Assets.

 

4.          Until appropriate investments in the Target Assets are identified,
the Manager may invest the proceeds of the Initial Public Offering and any
future offerings of the Company’s securities for cash in interest-bearing,
short-term investments and money market accounts and/or funds, subject to the
requirements for the Company’s qualification as a REIT under the Code.

 

5.          Before issuing any final form of commitment to acquire a Real Estate
Asset, the transaction must be approved by the Manager Investment Committee.

 

6.          Any proposed investment in a Real Estate Asset must be approved by a
majority of the Independent Directors (or a committee established by the
Independent Directors for this purpose). If a proposed investment in a Real
Estate Asset is for less than $10 million, such approval may be sought via
electronic board meetings, which entails emailing of the applicable materials to
the Independent Directors (or the members of the committee established by the
Independent Directors for this purpose) and any questions to be addressed in
advance of voting on the proposed investment in a Real Estate Asset and
requesting a response for approval, and whereby the Independent Directors (or
the members of the committee established by the Independent Directors for this
purpose) cast their votes in favor or against a proposed acquisition via email.

 

These Investment Guidelines may be amended, restated, modified, supplemented or
waived by the Board (which must include a majority of the Independent Directors)
without the approval of the Company’s stockholders.

 

26