CONTRIBUTION AGREEMENT


 


 


This CONTRIBUTION AGREEMENT (this “Agreement”)
is entered into as of August 30, 2012 by and among American Realty Capital Operating Partnership, L.P., a Delaware
limited partnership (the “Partnership”), American Realty Capital Trust, Inc., a Maryland corporation and general
partner of the Partnership (the “General Partner”) and ARC Real Estate Partners, LLC, a Delaware limited liability
company (the “Contributor”).


 


WHEREAS, the Contributor wishes to
contribute to the Partnership and the Partnership wishes to accept from the Contributor, a contribution of cash to the capital
of the Partnership pursuant to the Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of March
1, 2012 (the “Partnership Agreement”), as amended by the First Amendment to the Partnership Agreement, dated
as of the date hereof, and on the terms provided herein.


 


WHEREAS, the Contributor wishes to
become a limited partner in the Partnership and the General Partner wishes to admit the Contributor as a limited partner in the
Partnership.


 


WHEREAS, the Contributor wishes to
provide a deficit restoration obligation (a “DRO”) with respect to its capital account in the Partnership, and
wishes to guaranty a portion of the indebtedness of the Partnership, and the Partnership wishes to provide debt for the Contributor
to guaranty and to allow the Contributor to provide a DRO.


 


NOW, THEREFORE,
in consideration of the foregoing recitals and the covenants, promises and representations set forth in this Agreement, and for
other good and valuable consideration, the parties hereto agree as follows:


 


Section
1.1.           Definitions.
Capitalized terms used herein that are not otherwise defined herein shall have the meaning ascribed to them in the Partnership
Agreement.


 


Section
1.2.           Contribution.
Effective as of the date hereof, the Contributor shall contribute, assign, transfer and deliver to
the Partnership, and Partnership shall accept, receive and acquire from the Contributor, on the terms and conditions, and subject
to the exceptions, set forth in this Agreement, $750,000 (the “Contribution”). 


 


Section
1.3.           Consideration.
In consideration of the Contribution, the Partnership shall issue to the Contributor 65,789 OP Units of the Partnership pursuant
to Section 4.02 of the Partnership Agreement. Such OP Units shall have all the same rights, powers, preferences and duties as OP
Units under the Partnership Agreement, including, but not limited to, the right to convert such OP Units into shares of the General
Partner or cash at the election of the General Partner. 


 


Section
1.4.           Admission
of Additional Limited Partner. The General Partner hereby consents to the admission
of the Contributor to the Partnership as an additional Limited Partner upon the terms and conditions contained in the Partnership
Agreement and the Contributor agrees to hereby execute the counterpart to the Partnership Agreement included as Exhibit
I.


 






    	 



    	 



    
 


Section
1.5.           Guaranty
Opportunity; DRO. 


 


(a)          
The Partnership agrees that it shall permit the Contributor the opportunity to provide one or more “bottom
dollar” guaranties (each, a “Guaranty”) of a portion or portions of the indebtedness of the Partnership
or its affiliates equal to up to one hundred and three (103%) percent of the principal amount of the Subordinated Incentive Listing
Note, pursuant to the terms of one or more “Guaranty of Collectibility” (in substantially the form attached hereto
as Exhibit II), during the period beginning on the date hereof and ending on the
earlier of (x) the tenth (10th) anniversary of the date hereof, (y) the termination of a Guaranty in accordance with
the terms of the applicable Guaranty of Collectibility, and (z) the date on which the Contributor disposes, directly or indirectly,
of its entire interest in the Partnership in a taxable transaction. The Guaranty provided by the Contributor shall not be subordinated
(i.e., have relatively higher economic risk) to any other guarantees of the same portion of indebtedness covered by such holder’s
Guaranty.


 


(b)         
The Contributor acknowledges that (i) the Partnership makes no representations, warranties or covenants regarding
its current or expected financial condition, or the terms of any guaranteed loan, nor shall the Partnership have any obligation
to keep the Contributor informed of any changes in any of the foregoing, or of any changes in the characteristics of any guaranteed
loan occurring after the date the Guaranty is delivered, and the Contributor fully assumes the risk of providing such Guaranty
and keeping itself informed of any such changes, or other developments and occurrences which might impact the risk to such holder
of providing or maintaining any such Guaranty, (ii) the ability to execute a Guaranty shall cease in accordance with the terms
of this Agreement, (iii) the Contributor shall have reviewed with its financial and legal advisors the potential consequences and
liabilities that may be associated with any guaranty provided pursuant to this Agreement, (iv) neither the Partnership not its
advisors have prepared to undertake a legal review (and make or representation or warranties) as to the effectiveness of any Guaranty
for federal income tax purposes, or any legal implications (e.g., order of payment, priority) that such Guaranty or any
obligations of the Contributor and rights of the creditor thereunder may involve under federal and state law, and (v) the Partnership
may, at any time, refinance or repay any indebtedness guaranteed by a Guaranty by providing notice of such event to the Contributor
at least thirty (30) days prior to such refinancing or repayment, an in such case, the Partnership shall, upon request, permit
the Contributor the opportunity to execute a Guaranty with respect to substitute indebtedness on the terms otherwise provided in
this Section 1.5. The foregoing provisions of this Section 1.5(b) shall in no way limit the obligations of the Partnership under
Section 1.5(a).


 


(c)           The General Partner and the Partnership agree that the Partnership and its affiliates shall maintain an amount of
indebtedness of the Partnership or its affiliates sufficient for the Contributor to provide one or more Guaranties in accordance
with this Section 1.5 until the tenth (10th) anniversary of the date of this Agreement; provided, that no indebtedness
shall be maintained for Guaranty if (i) all such Guaranties have been terminated according to the terms of this Agreement or (ii)
prior to the tenth (10th) anniversary of the date of this Agreement, the Partnership and its affiliates, under the terms
of the Guaranty of Collectibility, are no longer required to maintain an amount of indebtedness for Guaranty by the Contributor.


 






    	 



    	 



    
 


(d)       
  The General Partner and the Partnership agree that, to the extent the Contributor provides a Guaranty
pursuant to this Section 1.5, the Partnership Agreement shall be amended to provide that if the Partnership is liquidated
within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations, and if the Contributor has a deficit balance in its
Capital Account, the Contributor shall be obligated to contribute to the capital of the Partnership the amount necessary to
restore such deficit balance in its Capital Account to zero but not in excess of the amount of such Guaranty, a
“DRO”; provided, that consistent with Section 1.704-1(b)(2)(iv)(l) of the Regulations, a termination of
the Partnership pursuant to Section 708(b)(1)(B) of the Code shall not result in a liquidation of the Partnership.


 


Section
1.6.           Redemption
by Partnership. Notwithstanding anything to the contrary in this Agreement or
the Partnership Agreement, the Partnership shall not, and the General Partner (or a Successor Entity) shall not cause the Partnership
to redeem or cancel or cause a redemption or cancellation of the OP Units issued pursuant to this Agreement at any time during
which a Guaranty provided by the Contributor pursuant to Section 1.5 is currently in effect and outstanding, or the Contributor
has a deficit balance in its Capital Account and a DRO in effect, without the prior written consent of the Contributor, which consent
shall be given in the Contributor’s sole and absolute discretion; provided, that in no event shall the OP Units issued
pursuant to this Agreement be redeemed or cancelled by the Partnership on or prior to the twenty-four (24) month anniversary of
the date hereof.


 


Section
1.7.           Termination.
If the Contributor intends to dispose of its entire interest in the Partnership in a taxable transaction, the Contributor shall
give the General Partner fifteen (15) days notice of such intention, and the General Partner shall take such action as is necessary
to ensure that the Partnership does not cease to be treated as a partnership for federal income tax purposes during the taxable
year in which the Contributor disposes of its entire interest in the Partnership. Furthermore, at such time as the Contributor
disposes of its entire interest in the Partnership in a taxable transaction, any Guaranty provided by the Contributor shall terminate
pursuant to the terms of such Guaranty and any DRO provided by the Contributor in accordance with Section 1.5(c) hereof shall terminate.
The Partnership shall not, and the General Partner shall not cause the Partnership to, liquidate or terminate prior to the tenth
(10th) anniversary of the date of this Agreement.


 


Section
1.8.           Book-up
Event. The General Partner and the Partnership agree that, consistent with the
definition of Gross Asset Value contained in the Partnership Agreement, the contribution by the Contributor pursuant to the terms
of this Agreement is an event pursuant to which the Gross Asset Value of the Partnership’s Assets should be adjusted to reflect
the relative economic interests of the Partners, and that such adjustment in Gross Asset Value of the Partnership’s Assets
shall result in a corresponding adjustment to the Capital Accounts of the Partners including, for the avoidance of doubt, the holders
of LTIP Units.


 


Section
1.9.           Registration
Rights. Any REIT Shares issuable to the Contributor upon a conversion of its OP
Units in accordance with the provisions of the Partnership Agreement shall be issued pursuant to an effective shelf registration
statement (a “Shelf Registration Statement”), or if a Shelf Registration Statement is not then effective, the General
Partner (or Successor Entity) shall enter into a registration rights agreement with the Contributor (the “Registration
Rights Agreement”) on terms and subject to conditions reasonably satisfactory
to the Contributor, pursuant to which the General Partner will agree, for the benefit of the Contributor, that, among other things,
(i) it will, at the General Partner’s cost, within 90 days after the redemption of OP Units in exchange for REIT Shares,
file a Shelf Registration Statement with the Securities and Exchange Commission with respect to resales of the REIT Shares and
will use its commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective within 180 days
after such redemption, and (ii) it will use its commercially reasonable efforts to keep such Shelf Registration Statement continuously
effective, subject to certain exceptions specified in, and in accordance with, the Registration Rights Agreement.


 






    	 



    	 



    
 


Section
1.10.       Contributor
Representations. The Contributor represents and warrants to the Recipient, as
of the date hereof, as follows:


 


(a)          The Contributor has all requisite power and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the Contributor, and, assuming the due authorization,
execution and delivery by the Partnership and the General Partner, this Agreement constitutes a valid and binding obligation of
the Contributor, enforceable against the Contributor in accordance with its terms, except as such enforceability may be subject
to applicable bankruptcy, reorganization, insolvency, moratorium and similar laws affecting the enforcement of creditors’
rights generally and by general principles of equity.


 


Section
1.11.       Partnership
Representations. The Partnership represents and warrants to the Contributor, as
of the date hereof, as follows:


 


(a)          The Partnership has all requisite power and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the Partnership, and, assuming the due authorization,
execution and delivery by the Contributor, this Agreement constitutes a valid and binding obligation of the Partnership, enforceable
against the Partnership in accordance with its terms, except as such enforceability may be subject to applicable bankruptcy, reorganization,
insolvency, moratorium and similar laws affecting the enforcement of creditors’ rights generally and by general principles
of equity.


 


Section
1.12.       Indemnity.
In the event of any breach by the Partnership, the General Partner, or their affiliates or successors, of their respective obligations
(a) to provide the Contributor with the opportunity to guaranty indebtedness of the Partnership under Section 1.5(a) and to maintain
a sufficient amount of indebtedness to guaranty in accordance with Section 1.5(c), (b) to amend the Partnership Agreement pursuant
to Section 1.5(d) to provide for a DRO, (c) with respect to the redemption or cancellation of OP Units issued pursuant to this
agreement pursuant to Section 1.6, or (d) with respect to the liquidation or termination of the Partnership pursuant to Section
1.7, the Contributor shall be entitled to a payment of damages by the Partnership, promptly upon demand at any time following the
occurrence of such breach, in cash in an amount equal to the sum of (x) the full amount of federal, state and local income taxes
that would be payable by the Contributor (or its members) as a result of such breach plus (y) the amount of such taxes that
would be payable by the Contributor (or its members) on any payments made pursuant to clause (x), assuming for the purpose of determining
the amount of taxes payable by the Contributor (or its members) that the Contributor (or its members) is liable for income taxes
at the highest combined federal, state and local income tax rate applicable to an individual resident of New York City.


 






    	 



    	 



    
 


Section
1.13.       Governing
Law. This Agreement shall be construed under and governed by the laws of the State
of New York without regard for conflict of law principles that would result in the application of the laws of any other jurisdiction.



 


Section
1.14.       Entire
Agreement. This Agreement and any other writing signed by the parties that specifically
references this Agreement constitute the entire agreement among the parties with respect to the subject matter hereof and thereof
and supersede all prior agreements, understandings and negotiations, both written and oral, between the parties with respect to
the subject matter hereof and thereof. This Agreement is not intended to confer upon any person other than the parties hereto any
rights or remedies hereunder. In the event of a conflict between the terms and conditions of this Agreement and a Guaranty of Collectibility
executed by the Contributor, the terms and conditions of the Guaranty of Collectibility shall control for all purposes.


 


Section
1.15.       Counterparts.
This Agreement may be executed in counterparts by the parties hereto. Each such counterpart shall be,
and shall be deemed to be, an original instrument, but all such counterparts taken together shall constitute one and the same Agreement.


 


Section
1.16.       Headings.
The section headings of this Agreement are for reference purposes only and are to be given no effect in the construction or interpretation
of this Agreement.


 


Section
1.17.        Amendments.
This Agreement may not be amended or modified except in writing duly and validly executed by each party hereto.


 


Section
1.18.       Assignment;
Binding Effect. No party may assign this Agreement or any right or interest, or
delegate any of its duties or obligations, hereunder without the prior written consent of the other parties hereto. This Agreement
is binding upon, and shall inure to the benefit of and is enforceable by, the parties hereto and their respective successors, permitted
assigns and personal representatives.


 


[SIGNATURE PAGE FOLLOWS]


 






    	 



    	 



    
 




IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed as of the date set forth above by their duly authorized representatives.


 











	 	AMERICAN REALTY CAPITAL TRUST, INC. 	 
	 	 	 
	 	By: 	/s/ William M. Kahane	 
	 	 	Name:William M. Kahane 	 
	 	 	Title:President and Chief Executive Officer 	 



 


 





	 	AMERICAN REALTY CAPITAL OPERATING PARTNERSHIP, L.P.
	 	 	 
	 	By:American Realty Capital Trust, Inc., its General Partner 
	 	 	 
	 	 	By: 	/s/ William M. Kahane	 
	 	 	 	Name:William M. Kahane 	 
	 	 	 	Title:President and Chief Executive Officer 	 


 


 











	 	ARC REAL ESTATE PARTNERS, LLC	 
	 	 	 
	 	By: 	/s/ Nicholas S. Schorsch	 
	 	 	Name:Nicholas S. Schorsch 	 
	 	 	Title:Manager 	 
	 	 	 	 
	 	By: 	/s/ William M. Kahane 	 
	 	 	Name:William M. Kahane  	 
	 	 	Title:Manager 	 
	 	 	 	 


 


 


 


 


[Signature Page for Contribution Agreement]







 






    	 



    	 



    
 




IN WITNESS WHEREOF, the undersigned has
affixed its signature to this Amended and Restated Agreement of Limited Partnership, as of the 30th day of August, 2012.


 














	 	ADDITIONAL LIMITED PARTNER:	 
	 	 	 
	 	ARC Real Estate Partners, LLC 	 
	 	 	 
	 	By: 	/s/ Nicholas S. Schorsch	 
	 	 	Name:Nicholas S. Schorsch 	 
	 	 	Title:Manager 	 
	 	 	 	 
	 	By: 	/s/ William M. Kahane 	 
	 	 	Name:William M. Kahane  	 
	 	 	Title:Manager