Unassociated Document


    Exhibit
10.3

       

      FORM
OF

      


      PROPERTY MANAGEMENT AND
LEASING AGREEMENT

      


      This
property management and leasing agreement (this “Management
Agreement”) is made and entered into as of
the     day
of                ,
2010, by and among AMERICAN REALTY CAPITAL TRUST II, INC., a Maryland
corporation (the “Company”), AMERICAN
REALTY CAPITAL OPERATING PARTNERSHIP II, L.P., a Delaware limited partnership
(the “OP”), and
AMERICAN REALTY CAPITAL PROPERTIES II, LLC, a Delaware limited liability company
(the “Manager”).

      


      WHEREAS,
the OP was organized to acquire, own, operate, lease and manage real estate
properties on behalf of the Company; and

      


      WHEREAS,
the Company intends to continue to raise money from the sale of its common stock
to be used, net of payment of certain offering costs and expenses, for
investment in the acquisition and rehabilitation of income-producing real estate
and other real-estate related investments, which are to be acquired and held by
the Company or by the OP on behalf of the Company; and

      


      WHEREAS,
the Owner desires to retain the Manager to manage and coordinate the leasing of
the real estate properties acquired by the Owner, and the Manager desires to be
so retained, all under the terms and conditions set forth in this Management
Agreement.

      


      NOW,
THEREFORE, in consideration of the foregoing and of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:

      


      ARTICLE
I.

      


      DEFINITIONS

      


      Except as
otherwise specified or as the context may otherwise require, the following terms
have the respective meanings set forth below for all purposes of this Management
Agreement:

      


      1.1           “Account” has the
meaning set forth in Section 2.3(i)
hereof.

      


      1.2           “Affiliate” means with
respect to any Person, (i) any Person directly or indirectly owning, controlling
or holding, with the power to vote, ten percent (10%) or more of the outstanding
voting securities of such other Person; (ii) any Person ten percent (10%) or
more of whose outstanding voting securities are directly or indirectly owned,
controlled or held, with the power to vote, by such other Person; (iii) any
Person directly or indirectly controlling, controlled by or under common control
with such other Person; (iv) any executive officer, director, trustee or general
partner of such other Person; and (v) any legal entity for which such Person
acts as an executive officer, director, trustee or general
partner.  For purposes of this definition, the terms “controls,” “is
controlled by,” or “is 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 ownership or voting
rights, by contract or otherwise.

      


      1.3           “Articles of
Incorporation” means the Articles of Incorporation of the Company, as
amended from time to time.

      


      1.4           “Budget” has the
meaning set forth in Section 2.5(c)
hereof.

      


      1.5           “Gross Revenues” means
all amounts actually collected as rents or other charges for the use and
occupancy of the Properties, but shall exclude interest and other investment
income of the Owner and proceeds received by the Owner for a sale, exchange,
condemnation, eminent domain taking, casualty or other disposition of assets of
the Owner.


      
        
           


        

        
          
          

          
            

          

        

        
           


        

      


      1.6           “Improvements” means
buildings, structures, equipment from time to time located on the Properties and
all parking and common areas located on the Properties.

      


      1.7           “Independent Director”
has the meaning set forth in the Articles of Incorporation.

      


      1.8           “Joint Venture” means
the joint venture or partnership arrangements (other than between the Company
and the OP) in which the Company or the OP or any of their subsidiaries is a
co-venturer or general partner which are established to own
Properties.

      


      1.9           “Management Fees” has
the meaning set forth in Section 4.1(a)
hereof.

      


      1.10         “Oversight Fees” has
the meaning set forth in Section 4.2
hereof.

      


      1.11         “Owner” means the
Company, the OP and any Joint Venture that owns, in whole or in part, any
Properties.

      


      1.12         “Ownership Agreements”
has the meaning set forth in Section 2.3(k)
hereof.

      


      1.13         “Person” means an
individual, corporation, partnership, joint venture, association, company
(whether of limited liability or otherwise), trust, bank or other entity, or
government or any agency or political subdivision of a government.

      


      1.14         “Plan” has the meaning
set forth in Section
2.5(c) hereof.

      


      1.15         “Properties” means all
real estate properties owned by the Owner and all tracts as yet unspecified but
to be acquired by the Owner containing income-producing Improvements or on which
the Owner will develop or rehabilitate income-producing
Improvements.

      


      ARTICLE
II.

      APPOINTMENT
OF THE MANAGER; SERVICES TO BE PERFORMED

      


      2.1           Appointment of the
Manager.  The Owner hereby engages and retains the Manager as
the sole and exclusive manager and agent of the Properties, and the Manager
hereby accepts such appointment, all on the terms and conditions hereinafter set
forth, it being understood that this Management Agreement shall cause the
Manager to be, at law, the Owner’s agent upon the terms contained
herein.

      


      2.2           General
Duties.  The Manager shall use commercially reasonable efforts
in performing its duties hereunder to manage, operate, maintain and lease the
Properties in a diligent, careful and vigilant manner.  The services
of the Manager are to be of scope and quality not less than those generally
performed by professional property managers of other similar properties in the
area.  The Manager shall make available to the Owner the full benefit
of the judgment, experience and advice of its members and staff with respect to
the policies to be pursued by the Owner relating to the operation and leasing of
the Properties.

      


      2.3           Specific
Duties.  The Manager’s duties include the
following:

      


      
        	
              	
                (a)

              	
                Lease
      Obligations.  The Manager shall
      perform all duties of the landlord under all leases insofar as such duties
      relate to the operation, maintenance, and day-to-day management of the
      Properties.  The Manager shall also provide or cause to be
      provided, at the Owner’s expense, all services normally provided to
      tenants of like premises, including, where applicable and without
      limitation, gas, electricity or other utilities required to be furnished
      to tenants under leases, normal repairs and maintenance, and cleaning and
      janitorial service.  The Manager shall arrange for and supervise
      the performance of all installations and improvements in space leased to
      any tenant which are either expressly required under the terms of the
      lease of such space or which are customarily provided to
      tenants.

              


      


      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

      


      
        	
              	
                (b)

              	
                Maintenance.  The Manager shall
      cause the Properties to be maintained in the same manner as similar
      properties in the area.  The Manager’s duties and supervision in
      this respect shall include, without limitation, cleaning of the interior
      and the exterior of the Improvements and the public common areas on the
      Properties and the making and supervision of repair, alterations, and
      decoration of the Improvements, subject to and in strict compliance with
      this Management Agreement and any applicable
      leases.  Construction and rehabilitation activities undertaken
      by the Manager, if any, will be limited to activities related to the
      management, operation, maintenance, and leasing of the Property (e.g.,
      repairs, renovations, and leasehold
  improvements).

              


      

      


      
        	
              	
                (c)

              	
                Leasing
      Functions.  The Manager shall
      coordinate the leasing of the Properties and shall negotiate and use its
      best efforts to secure executed leases from qualified tenants, and to
      execute same on behalf of the Owner, if requested, for available space in
      the Properties, such leases to be in form and on terms approved by the
      Owner and the Manager, and to bring about complete leasing of the
      Properties.  The Manager shall be responsible for the hiring of
      all leasing agents, as necessary for the leasing of the Properties, and to
      otherwise oversee and manage the leasing process on behalf of the
      Owner.

              


      

      


      
        	
              	
                (d)

              	
                Notice
      of Violations.  The Manager shall
      forward to the Owner, promptly upon receipt, all notices of violation or
      other notices from any governmental authority, and board of fire
      underwriters or any insurance company, and shall make such recommendations
      regarding compliance with such notice as shall be
      appropriate.

              


      

      


      
        	
              	
                (e)

              	
                Personnel.  Any personnel hired
      by the Manager to maintain, operate and lease the Property shall be the
      employees or independent contractors of the Manager and not of the
      Owner.  The Manager shall use due care in the selection and
      supervision of such employees or independent contractors.  The
      Manager shall be responsible for the preparation of and shall timely file
      all payroll tax reports and timely make payments of all withholding and
      other payroll taxes with respect to each
  employee.

              


      

      


      
        	
              	
                (f)

              	
                Utilities
      and Supplies.  The Manager shall
      enter into or renew contracts for electricity, gas, steam, landscaping,
      fuel, oil, maintenance and other services as are customarily furnished or
      rendered in connection with the operation of similar rental property in
      the area.

              


      

      


      
        	
              	
                (g)

              	
                Expenses.  The Manager shall
      analyze all bills received for services, work and supplies in connection
      with maintaining and operating the Properties, pay all such bills, and, if
      requested by the Owner, pay, when due, utility and water charges, sewer
      rent and assessments, any applicable taxes, including, without limitation,
      any real estate taxes, and any other amount payable in respect to the
      Properties.  All bills shall be paid by the Manager within the
      time required to obtain discounts, if any.  The Owner may from
      time to time request that the Manager forward certain bills to the Owner
      promptly after receipt, and the Manager shall comply with any such
      request.  The payment of all bills, real property taxes,
      assessments, insurance premiums and any other amounts payable with respect
      to the Properties shall be paid out of the Account by the
      Manager.  All expenses shall be billed at net cost (i.e., less
      all rebates, commissions, discounts and allowances, however
      designed).

              


      

      


      
        	
              	
                (h)

              	
                Monies
      Collected.  The Manager shall
      collect all rent and other monies from tenants and any sums otherwise due
      to the Owner with respect to the Properties in the ordinary course of
      business.  In collecting such monies, the Manager shall inform
      tenants of the Properties that all remittances are to be in the form of a
      check or money order.  The Owner authorizes the Manager to
      request, demand, collect and provide receipts for all such rent and other
      monies and to institute legal proceedings in the name of the Owner for the
      collection thereof and for the dispossession of any tenant in default
      under its lease.

              


      

      


      
        	
              	
                (i)

              	
                Banking
      Accommodations. The
      Manager shall establish and maintain a separate checking account (the
      “Account”) for funds relating to the
      Properties.  All monies deposited from time to time in the
      Account shall be deemed to be trust funds and shall be and remain the
      property of the Owner and shall be withdrawn and disbursed by the Manager
      for the account of the Owner only as expressly permitted by this
      Management Agreement for the purposes of performing the obligations of the
      Manager hereunder.  No monies collected by the Manager on the
      Owner’s behalf shall be commingled with funds of the
      Manager.  The Account shall be maintained, and monies shall be
      deposited therein and withdrawn therefrom, in accordance with the
      following:

              


      


      
        
           


        

        
          
          

          
            

          

        

        
           


        

      


      (i)      All
sums received from rents and other income from the Properties shall be promptly
deposited by the Manager in the Account.  The Manager shall have the
right to designate two (2) or more persons who shall be authorized to draw
against the Account, but only for purposes authorized by this Management
Agreement.

      


      (ii)               All
sums due to the Manager hereunder, whether for compensation, reimbursement for
expenditures, or otherwise, as herein provided, shall be a charge against the
operating revenues of the Properties and shall be paid and/or withdrawn by the
Manager from the Account prior to the making of any other disbursements
therefrom.

      


      (iii)              On
or before the 30th day following the end of each calendar quarter during the
term of this Management Agreement, the Manager shall forward to the Owner all
net operating proceeds from the preceding quarter, retaining at all times,
however, a reserve of $5,000, in addition to any other amounts otherwise
provided in the Budget.

      


      
        	
              	
                (j)

              	
                Tenant
      Complaints.  The Manager shall
      maintain business-like relations with the tenants of the
      Properties.

              


      

      


      
        	
              	
                (k)

              	
                Ownership
      Agreements.  The Manager has
      received copies of the Agreement of Limited Partnership of the OP,
      Articles of Incorporation and the other constitutive documents of the
      Owner (collectively, the “Ownership
      Agreements”) and is
      familiar with the terms thereof.  The Manager shall use
      reasonable care to avoid any act or omission which, in the performance of
      its duties hereunder, shall in any way conflict with the terms of the
      Ownership Agreements.

              


      

      


      
        	
              	
                (l)

              	
                Signs.  The Manager shall
      place and remove, or cause to be placed and removed, such signs upon the
      Properties as the Manager deems appropriate, subject, however, to the
      terms and conditions of the leases and to any applicable ordinances and
      regulations.

              


      

      


      2.4           Approval of Leases,
Contracts, Etc.  In fulfilling its duties to the Owner, the
Manager may and hereby is authorized to enter into any leases, contracts or
agreements on behalf of the Owner in the ordinary course of the management,
operation, maintenance and leasing of the Properties.

      


      2.5           Accounting, Records and
Reports.

      


      
        	
              	
                (a)

              	
                Records.  The Manager shall
      maintain all office records and books of account and shall record therein,
      and keep copies of, each invoice received from services, work and supplies
      ordered in connection with the maintenance and operation of the
      Properties.  Such records shall be maintained on a double entry
      basis.  The Owner and persons designated by the Owner shall at
      all reasonable times have access to and the right to audit and make
      independent examinations of such records, books and accounts and all
      vouchers, files and all other material pertaining to the Properties and
      this Management Agreement, all of which the Manager agrees to keep safe,
      available and separate from any records not pertaining to the Properties,
      at a place recommended by the Manager and approved by the
      Owner.

              


      

      


      
        	
              	
                (b)

              	
                Quarterly
      Reports.  On or before the
      30th day following the end of each calendar quarter during the term of
      this Management Agreement, the Manager shall prepare and submit to the
      Owner the following reports and
  statements:

              


      

      


      
        	
                 
      

              	
                (i)

              	
                Rental collection
      record;

              


      

      


      
        	
                 
      

              	
                (ii)

              	
                Quarterly operating
      statement;

              


      


      
        
           


        

        
          
          

          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                (iii)

              	
                Copy of cash disbursements ledger
      entries for such period, if
requested;

              


      

      


      
        	
                 
      

              	
                (iv)

              	
                Copy of cash receipts ledger
      entries for such period, if
requested;

              


      

      


      
        
          	
                	
                   (v)

                	
                  The original copies of all
      contracts entered into by the Manager on behalf of the Owner during such
      period, if requested;
and

                


        

      

      


      
        
          	
                	
                   (vi)

                	
                  Copy of ledger entries for such
      period relating to security deposits maintained by the Manager, if
      requested.

                


        

      

      


      
        	
              	
                (c)

              	
                Budgets
      and Leasing Plans.  On or before
      November 15 of each calendar year, the Manager shall prepare and submit to
      the Owner for its approval an operating budget (a “Budget”) and a marketing and leasing
      plan (a “Plan”) on the Properties for the
      calendar year immediately following such submission.  Each
      Budget and Plan shall be in the form approved by the Owner prior to the
      date thereof.  As often as reasonably necessary during the
      period covered by any Budget or Plan, the Manager may submit to the Owner
      for its approval an updated Budget or Plan incorporating such changes as
      shall be necessary to reflect cost overruns and the like during such
      period.  If the Owner does not disapprove a Budget or Plan
      within thirty (30) days after receipt thereof by the Owner, such Budget or
      Plan shall be deemed approved.  If the Owner shall disapprove
      any Budget or Plan, it shall so notify the Manager within said thirty (30)
      day period and explain the reasons therefor.  The Manager will
      not incur any costs other than those estimated in an approved Budget
      except for:

              


      

      


      
        	
                 
      

              	
                (i)

              	
                maintenance or repair costs under
      $5,000 per Property;

              


      

      


      
        	
                 
      

              	
                (ii)

              	
                costs incurred in emergency
      situations in which action is immediately necessary for the preservation
      or safety of the Property, or for the safety of occupants or other persons
      on the Property (or to avoid the suspension of any necessary service of
      the Property);

              


      

      


      
        	
                 
      

              	
                (iii)

              	
                expenditures for real estate
      taxes and assessments; and

              


      

      


      
        	
                 
      

              	
                (iv)

              	
                maintenance supplies calling for
      an aggregate purchase price of less than $25,000 for all
      Properties.

              


      

      


      
        	
              	
                (d)

              	
                Returns
      Required by Law.  The Manager shall
      execute and file when due all forms, reports, and returns required by law
      relating to the employment of its
  personnel.

              


      

      


      
        	
              	
                (e)

              	
                Notices.  Promptly after
      receipt, the Manager shall deliver to the Owner all notices, from any
      tenant, or any governmental authority, that are not of a routine
      nature.  The Manager shall also report expeditiously to the
      Owner notice of any extensive damage to any part of the
      Properties.

              


      

      


      2.6           Subcontracting.  Notwithstanding
anything to the contrary contained in this Agreement, the Manager may
subcontract any of its duties hereunder, without the consent of the Owner, for a
fee that may be less than the Management Fees paid hereunder.  In the
event that the Manager does so subcontract any its duties hereunder, such fees
payable to such third parties may, at the instruction of the Manager, be
deducted from the Management Fee and paid by the Owner to such parties, or paid
directly by the Manager to such parties, in its discretion.

      


      ARTICLE
III.

      EXPENSES

      


      3.1           Owner’s
Expenses.  Except as otherwise specifically provided, all costs
and expenses incurred hereunder by the Manager in fulfilling its duties to the
Owner shall be for the account of and on behalf of the Owner.  Such
costs and expenses may include, without limitation, reasonable wages and
salaries and other employee-related expenses of all on-site and off-site
employees of the Manager who are engaged in the operation, management,
maintenance and leasing of the Properties, including taxes, insurance and
benefits relating to such employees, and legal, travel and other out-of-pocket
expenses which are directly related to the operation, management, maintenance
and leasing of specific Properties.  All costs and expenses for which
the Owner is responsible under this Management Agreement shall be paid by the
Manager out of the Account.  In the event the Account does not contain
sufficient funds to pay all of the costs and expenses, the Owner shall fund all
sums necessary to meet such additional costs and expenses.


      
        
           


        

        
          
          

          
            

          

        

        
           


        

      


      3.2           Manager’s
Expenses.  The Manager shall, out of its own funds, pay all of
its general overhead and administrative expenses.

      


      ARTICLE
IV.

      MANAGER’S
COMPENSATION

      


      4.1           Management
Fees.

      


      
        	
              	
                (a)

              	
                The Owner shall pay the Manager
      or any of its Affiliates property management fees (the “Management
      Fees”), on a monthly
      basis, equal to:  (i) with respect to stand-alone, single-tenant
      net leased Properties, two percent (2%) of Gross Revenues from the
      Properties managed; and (ii) with respect to multitenant Properties, four
      percent (4%) of Gross Revenues from the Properties managed, plus
      market-based leasing commissions applicable to the geographic location of
      the Property. Except as otherwise set forth herein, the Owner shall also
      reimburse the Manager for any costs and expenses incurred by the Manager
      in connection with managing the
  Properties.

              


      

      


      
        	
              	
                (b)

              	
                The Manager may charge a separate
      fee for the one-time initial rent-up or leasing-up of newly constructed
      Properties in an amount not to exceed the fee customarily charged in arm’s
      length transactions by others rendering similar services in the same
      geographic area for similar
properties.

              


      

      


      
        	
              	
                (c)

              	
                Notwithstanding the foregoing,
      the Manager may be entitled to receive higher fees in the event the
      Manager can demonstrate to the satisfaction of the board of directors of
      the Company (including a majority of the Independent Directors) through
      empirical data that a higher competitive fee is justified for the services
      rendered and the type of Property managed.  As described in
      Section
      2.6 above, in the
      event that the Manager properly engages one or more third parties to
      perform the services described herein, the fees payable to such parties
      for such services will be deducted from the Management Fees, or paid
      directly by the Manager, at the Manager’s option.  The Manager’s
      compensation under this Section
      4.1 shall apply to
      all renewals, extensions or expansions of leases which the Manager
      originally negotiated.

              


      

      


      4.2           Oversight
Fees.  If the Owner contracts directly with one or more third
parties for the services described in Section 2.3 above, the Owner will pay such
third parties customary market fees and shall pay the Manager oversight fees
(the “Oversight
Fees”) equal to 1.0% of the Gross Revenues of the particular Property
managed by such third parties. In no event shall the Manager (including any
Affiliate of the Manager) be entitled to both Management Fees and Oversight Fees
with respect to any particular Property.

      


      4.3           Additional
Fees.  If the Manager provides services other than those
specified herein, the Owner shall pay to the Manager a monthly fee equal to no
more than that which the Owner would pay to a third party that is not an
Affiliate of the Owner or the Manager to provide such services.

      


      4.4           Audit
Adjustment.  If any audit of the records, books or accounts
relating to the Properties discloses an overpayment or underpayment of
Management Fees, the Owner or the Manager shall promptly pay to the other party
the amount of such overpayment or underpayment, as the case may
be.  If such audit discloses an overpayment of Management Fees for any
fiscal year of more than the correct Management Fees for such fiscal year, the
Manager shall bear the cost of such audit.


      
        
           


        

        
          
          

          
            

          

        

        
           


        

      


      ARTICLE
V.

      INSURANCE
AND INDEMNIFICATION

      


      5.1           Insurance to be
Carried.

      


      
        	
              	
                (a)

              	
                The Manager shall obtain and keep
      in full force and effect insurance on the Properties against such hazards
      as the Owner and the Manager shall deem appropriate, but in any event,
      insurance sufficient to comply with the leases and the Ownership
      Agreements shall be maintained.  All liability policies shall
      provide sufficient insurance satisfactory to both the Owner and the
      Manager and shall contain waivers of subrogation for the benefit of the
      Manager.

              


      

      


      
        	
              	
                (b)

              	
                The Manager shall obtain and keep
      in full force and effect, in accordance with the laws of the state in
      which each Property is located, employer’s liability insurance applicable
      to and covering all employees of the Manager at the Properties and all
      persons engaged in the performance of any work required hereunder, and the
      Manager shall furnish the Owner certificates of insurers naming the Owner
      as a co-insured and evidencing that such insurance is in
      effect.  If any of the Manager’s duties hereunder are
      subcontracted as permitted under Section
      2.6, the Manager
      shall include in each subcontract a provision that the subcontractor shall
      also furnish the Owner with such a
  certificate.

              


      

      


      5.2           Cooperation with
Insurers.  The Manager shall cooperate with and provide
reasonable access to the Properties to representatives of insurance companies
and insurance brokers or agents with respect to insurance which is in effect or
for which application has been made.  The Manager shall use its best
efforts to comply with all requirements of insurers.

      


      5.3           Accidents and
Claims.  The Manager shall promptly investigate and report in
detail to the Owner all accidents, claims for damage relating to the ownership,
operation or maintenance of the Properties, and any damage or destruction to the
Properties and the estimated costs of repair thereof, and shall prepare for
approval by the Owner all reports required by an insurance company in connection
with any such accident, claim, damage, or destruction.  Such reports
shall be given to the Owner promptly and any report not so given within ten (10)
days after the occurrence of any such accident, claim, damage or destruction
shall be noted in the report delivered to the Owner pursuant to Section
2.5(b).  The Manager is authorized to settle any claim against
an insurance company arising out of any policy and, in connection with such
claim, to execute proofs of loss and adjustments of loss and to collect and
provide receipts for loss proceeds.

      


      5.4           Indemnification.  The
Manager shall hold the Owner harmless from and indemnify and defend the Owner
against any and all claims or liability for any injury or damage to any person
or property whatsoever for which the Manager is responsible occurring in, on, or
about the Properties, including, without limitation, the Improvements when such
injury or damage is caused by the negligence or misconduct of the Manager, its
agents, servants, or employees, except to the extent that the Owner recovers
insurance proceeds with respect to such matter.  The Owner will
indemnify and hold the Manager harmless against all liability for injury to
persons and damage to property caused by the Owner’s negligence and which did
not result from the negligence or misconduct of the Manager, except to the
extent the Manager recovers insurance proceeds with respect to such
matter.

      


      ARTICLE
VI.

      TERM;
TERMINATION

      


      6.1           Term.  This
Management Agreement shall commence on the date first above written and shall
continue until terminated in accordance with the earliest to occur of the
following:

      


      
        
          	
                	
                  (a)

                	
                  One year from the date of the
      commencement of the term hereof.  However, this Management
      Agreement will be automatically extended for an unlimited number of
      successive one year terms at the end of each year unless any party gives
      sixty (60) days’ written notice to the other parties of its intention to
      terminate this Management
Agreement;

                


        

      

      


      
        
          	
                	
                  (b)

                	
                  Immediately upon the occurrence
      of any of the
following:

                


        

      

      


      (i)      A
decree or order is rendered by a court having jurisdiction (A) adjudging the
Manager as bankrupt or insolvent, (B) approving as properly filed a petition
seeking reorganization, readjustment, arrangement, composition or similar relief
for the Manager under the federal bankruptcy laws or any similar applicable law
or practice, or (C) appointing a receiver, liquidator, trustee or assignee in
bankruptcy or insolvency of the Manager or a substantial part of the Manager’s
assets, or for the winding up or liquidation of its affairs, or


      
        
           


        

        
          
          

          
            

          

        

        
           


        

      


      (ii)              The
Manager (A) voluntarily institutes proceedings to be adjudicated bankrupt or
insolvent, (B) consents to the filing of a bankruptcy proceeding against it, (C)
files a petition, answer or consent seeking reorganization, readjustment,
arrangement, composition or relief under any similar applicable law or practice,
(D) consents to the filing of any such petition, or to the appointment of a
receiver, liquidator, trustee or assignee in bankruptcy or insolvency for it or
for a substantial part of its assets, (E) makes an assignment for the benefit of
creditors, (F) is unable to or admits in writing its inability to pay its debts
generally as they become due, unless such inability shall be the fault of the
Owner, or (G) takes corporate or other action in furtherance of any of the
aforesaid purposes; and

      


      
        	
              	
                (c)

              	
                Upon written notice from the
      Owner in the event that the Manager commits an act of gross negligence or
      willful misconduct in the performance of its duties
      hereunder.

              


      

      


      Upon
termination, the obligations of the parties hereto shall cease; provided, however; that the
Manager shall comply with the provisions hereof applicable in the event of
termination and shall be entitled to receive all compensation which may be due
to the Manager hereunder up to the date of such termination; provided, further, however; that if this
Management Agreement terminates pursuant to clauses (b) or (c) of this Section 6.1, the
Owner shall have other remedies as may be available at law or in
equity.

      


      6.2           Manager’s Obligations after
Termination.  Upon the termination of this Management
Agreement, the Manager shall have the following duties:

      


      
        	
              	
                (a)

              	
                The Manager shall deliver to the
      Owner, or its designee, all books and records with respect to the
      Properties.

              


      

      


      
        	
              	
                (b)

              	
                The Manager shall transfer and
      assign to the Owner, or its designee, all service contracts and personal
      property relating to or used in the operation and maintenance of the
      Properties, except personal property paid for and owned by the Manager.
      Manager shall also, for a period of sixty (60) days immediately following
      the date of such termination, make itself available to consult with and
      advise the Owner, or its designee, regarding the operation, maintenance
      and leasing of the
Properties.

              


      

      


      
        	
              	
                (c)

              	
                The Manager shall render to the
      Owner an accounting of all funds of the Owner in its possession and shall
      deliver to the Owner a statement of Management Fees claimed to be due the
      Manager and shall cause funds of the Owner held by the Manager relating to
      the Properties to be paid to the Owner or its
    designee.

              


      

      


      
        	
              	
                (d)

              	
                The Manager shall cooperate with
      the Owner to provide an orderly transition of the Manager’s duties
      hereunder.

              


      

      


      ARTICLE
VII.

      MISCELLANEOUS

      


      7.1           Notices.  All
notices, approvals, consents and other communications hereunder shall be in
writing, and, except when receipt is required to start the running of a period
of time, shall be deemed given when delivered in person or on the fifth day
after its mailing by either party by registered or certified United States mail,
postage prepaid and return receipt requested, to the other party, at the
addresses set forth after their respect name below or at such different
addresses as either party shall have theretofore advised the other party in
writing in accordance with this Section
7.1.


      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

      


      
        
          
            	
                    To
      the Owner:

                  	 
      	
                    American
      Realty Capital Trust II, Inc.

                  
	 
      	 
      	
                    405
      Park Avenue

                  
	 
      	 
      	
                    New
      York, NY 10022

                  
	 
      	 
      	
                    Attention:
      William M. Kahane, President

                  
	 
      	 
      	 
      
	 
      	 
      	
                    with
      a copy to:

                  
	 
      	 
      	 
      
	 
      	 
      	
                    American
      Realty Capital Operating Partnership II, L.P.

                  
	 
      	 
      	
                    405
      Park Avenue

                  
	 
      	 
      	
                    New
      York, NY 10022

                  
	 
      	 
      	
                    Attention:
      William M. Kahane

                  
	 
      	 
      	 
      
	 
      	 
      	
                    with
      a copy to:

                  
	 
      	 
      	 
      
	 
      	 
      	
                    Proskauer
      Rose LLP

                  
	 
      	 
      	
                    1585
      Broadway

                  
	 
      	 
      	
                    New
      York, New York 10036

                  
	 
      	 
      	
                    Attention:
      Peter M. Fass, Esq.

                  
	 
      	 
      	 
      
	
                    To
      the Manager:

                  	 
      	
                    American
      Realty Capital Properties II, LLC

                  
	 
      	 
      	
                    405
      Park Avenue

                  
	 
      	 
      	
                    New
      York, NY 10022

                  
	 
      	 
      	
                    Attention:
      William M. Kahane, Chief Operating Officer

                  
	 
      	 
      	 
      
	 
      	 
      	
                    with
      a copy to:

                  
	 
      	 
      	 
      
	 
      	 
      	
                    Proskauer
      Rose LLP

                  
	 
      	 
      	
                    1585
      Broadway

                  
	 
      	 
      	
                    New
      York, New York 10036

                  
	 
      	 
      	
                    Attention:
      Peter M. Fass, Esq.

                  


          

        

      

      


      7.2           Governing
Law.  This Management Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the principles of conflicts of law thereof.

      


      7.3           Assignment.  Except
as permitted in Section 2.6 hereof,
this Management Agreement may not be assigned by the Manager, except to an
Affiliate of the Manager, and then only upon the consent of the Owner and the
approval of a majority of the Independent Directors. Any assignee of the Manager
shall be bound hereunder to the same extent as the Manager. This Agreement shall
not be assigned by the Owner without the written consent of the Manager, except
to a Person which is a successor to such Owner. Such successor shall be bound
hereunder to the same extent as such Owner. Notwithstanding anything to the
contrary contained herein, the economic rights of the Manager hereunder,
including the right to receive all compensation hereunder, may be sold,
transferred or assigned by the Manager without the consent of the
Owner.

      


      7.4           No
Waiver.  Neither the failure nor any delay on the part of a
party to exercise any right, remedy, power or privilege under this Management
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrences. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such
waiver.

      


      7.5           Amendments.  This
Management Agreement may be amended only by an instrument in writing signed by
the party against whom enforcement of the amendment is sought.


      
        
           


        

        
          
          

          
            

          

        

        
           


        

      


      7.6           Headings.  The
headings of the various subdivisions of this Management Agreement are for
reference only and shall not define or limit any of the terms or provisions
hereof.

      


      7.7           Counterparts.  This
Management Agreement may be executed (including by facsimile transmission) with
counterpart signature pages or in any number of counterparts, each of which
shall be deemed to be an original as against any party whose signature appears
thereon, and all of which shall together constitute one and the same
instrument.

      


      7.8           Entire
Agreement.  This Management 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.

      


      7.9           Disputes.  If
there shall be a dispute between the Owner and the Manager relating to this
Management Agreement resulting in litigation, the prevailing party in such
litigation shall be entitled to recover from the other party to such litigation
such amount as the court shall fix as reasonable attorneys’ fees.

      


      7.10         Activities of the
Manager.  The obligations of the Manager pursuant to the terms
and provisions of this Management Agreement shall not be construed to preclude
the Manager from engaging in other activities or business ventures, whether or
not such other activities or ventures are in competition with the Owner or the
business of the Owner.

      


      7.11         Independent
Contractor.  The Manager and the Owner shall not be construed
as joint venturers or partners of each other pursuant to this Management
Agreement, and neither party shall have the power to bind or obligate the other
except as set forth herein.  In all respects, the status of the
Manager to the Owner under this Management Agreement is that of an independent
contractor.

      


      7.12         Pronouns and
Plurals.  Whenever the context may require, any pronoun used in
this Management Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa.

      


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      IN
WITNESS WHEREOF, the parties have executed this Management Agreement as of the
date first above written.

      


      
        
          
            
              	 
      	
                      AMERICAN
      REALTY CAPITAL TRUST II, INC.

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	 
      	
                      Name:

                    
	 
      	 
      	
                      Title:

                    


            

          

        

      

      


      
        
          
            	 
      	
                    AMERICAN
      REALTY CAPITAL OPERATING

                    PARTNERSHIP
      II, L.P.

                  
	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    American
      Realty Capital Trust II, Inc.

                  
	 
      	 
      	
                    its
      General Partner

                  
	 
      	 
      	 
      
	 
      	
                    By:

                  	 
      
	 
      	 
      	
                    Name:

                  
	 
      	 
      	
                    Title:

                  


          

        

      

      


      
        
          
            	 
      	
                    AMERICAN
      REALTY CAPITAL PROPERTIES II,

                    LLC

                  
	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    American
      Realty Capital Trust II Special Limited

                    Partner,
      LLC

                  
	 
      	 
      	 
      
	 
      	 
      	
                    its
      Member

                  
	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    American
      Realty Capital II, LLC

                  
	 
      	 
      	 
      
	 
      	 
      	
                    its
      Managing Member

                  


          

        

      

      


      
        
          	 
      	
                  By:

                	 
      
	 
      	 
      	
                  Name:

                
	 
      	 
      	
                  Title: