Unassociated Document


    FORM
OF

     

    AMENDED
AND RESTATED ADVISORY AGREEMENT

     

    BY
AND AMONG

     

    AMERICAN
REALTY CAPITAL NEW YORK RECOVERY REIT, INC.,

     

    NEW
YORK RECOVERY OPERATING PARTNERSHIP, L.P.,

     

    AND

     

    NEW
YORK RECOVERY ADVISORS, LLC


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    TABLE
OF CONTENTS

     

    
      
        
          
            
              	 	 
      	
                      Page

                    
	 	 
      	 
      
	 	
                      DEFINITIONS.

                    	
                      1

                    
	 	 
      	 
      
	 	
                      APPOINTMENT.

                    	
                      7

                    
	 	 
      	 
      
	 	
                      DUTIES
      OF THE ADVISOR

                    	
                      7

                    
	 	 
      	 
      
	 	
                      AUTHORITY
      OF ADVISOR.

                    	
                      10

                    
	 	 
      	 
      
	 	
                      FIDUCIARY
      RELATIONSHIP.

                    	
                      10

                    
	 	 
      	 
      
	 	
                      NO
      PARTNERSHIP OR JOINT VENTURE.

                    	
                      10

                    
	 	 
      	 
      
	 	
                      BANK
      ACCOUNTS.

                    	
                      10

                    
	 	 
      	 
      
	 	
                      RECORDS;
      ACCESS.

                    	
                      11

                    
	 	 
      	 
      
	 	
                      LIMITATIONS
      ON ACTIVITIES

                    	
                      11

                    
	 	 
      	 
      
	10	
                      FEES.

                    	
                      11

                    
	 	 
      	 
      
	 	
                      EXPENSES.

                    	
                      13

                    
	 	 
      	 
      
	 	
                      OTHER
      SERVICES.

                    	
                      14

                    
	 	 
      	 
      
	 	
                      REIMBURSEMENT
      TO THE ADVISOR.

                    	
                      15

                    
	 	 
      	 
      
	 	
                      OTHER
      ACTIVITIES OF THE ADVISOR

                    	
                      15

                    
	 	 
      	 
      
	 	
                      THE
      AMERICAN REALTY CAPITAL NAME

                    	
                      16

                    
	 	 
      	 
      
	 	
                      TERM
      OF AGREEMENT

                    	
                      16

                    
	 	 
      	 
      
	 	
                      TERMINATION
      BY THE PARTIES

                    	
                      16

                    
	 	 
      	 
      
	 	
                      ASSIGNMENT
      TO AN AFFILIATE

                    	
                      17

                    
	 	 
      	 
      
	 	
                      PAYMENTS
      TO AND DUTIES OF ADVISOR UPON TERMINATION

                    	
                      17

                    
	 	 
      	 
      
	 	
                      INCORPORATION
      OF THE ARTICLES OF INCORPORATION AND THE OPERATING PARTNERSHIP
      AGREEMENT.

                    	
                      19

                    
	 	 
      	 
      
	 	
                      INDEMNIFICATION
      BY THE COMPANY AND THE OPERATING PARTNERSHIP

                    	
                      19

                    
	 	 
      	 
      
	 	
                      INDEMNIFICATION
      BY ADVISOR

                    	
                      21

                    


            

          

        

      

    


    
      
         


      

      
        i

        
          

        

      

      
         


      

    


    TABLE
OF CONTENTS

    (continued)

    


    
      
        
          
            
              
                	 	 
      	
                        

                          Page

                        

                      
	 	 
      	 
      
	 	
                        NOTICES

                      	
                        21

                      
	 	 
      	 
      
	 	
                        MODIFICATION

                      	
                        22

                      
	 	 
      	 
      
	 	
                        SEVERABILITY

                      	
                        22

                      
	 	 
      	 
      
	 	
                        GOVERNING
      LAW

                      	
                        22

                      
	 	 
      	 
      
	 	
                        ENTIRE
      AGREEMENT

                      	
                        22

                      
	 	 
      	 
      
	 	
                        NO
      WAIVER

                      	
                        23

                      
	 	 
      	 
      
	 	
                        PRONOUNS
      AND PLURALS

                      	
                        23

                      
	 	 
      	 
      
	 	
                        HEADINGS

                      	
                        23

                      
	 	 
      	 
      
	 	
                        EXECUTION
      IN COUNTERPARTS

                      	
                        23

                      


              

            

          

        

      

    


    
      
         


      

      
        ii

        
          

        

      

      
         


      

    

       

    FORM OF

    AMENDED AND RESTATED
ADVISORY AGREEMENT

     

    THIS
AMENDED AND RESTATED ADVISORY AGREEMENT (this “Agreement”) dated as
of           , 2010 is entered
into among American Realty Capital New York Recovery REIT, Inc., a Maryland
corporation (the “Company”), New York
Recovery Operating Partnership, L.P., a Delaware limited partnership (the “Operating
Partnership”), and New York Recovery Advisors, LLC, a Delaware limited
liability company.

     

    WITNESSETH

     

    WHEREAS,
the parties entered into the Advisory Agreement on February 17, 2010 (the “Original Agreement”);
and

     

    WHEREAS,
the parties have agreed to make certain amendments and desire to amend and
restate the Original Agreement;

     

    NOW,
THEREFORE, in consideration of the foregoing and of the mutual covenants and
agreements contained herein, the parties hereto, intending to be legally bound,
hereby agree as follows:

     

    1.           DEFINITIONS.  As
used in this Agreement, the following terms have the definitions set forth
below:

     

    “Acquisition
Expenses” means any and all expenses, exclusive of Acquisition Fees,
incurred by the Company, the Operating Partnership, the Advisor or any of their
Affiliates in connection with the selection, evaluation, acquisition,
origination, making or development of any Investments, 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.

     

    “Acquisition
Fee” means the fees payable to the Advisor or its assignees pursuant to
Section 10(a).

     

    “Advisor”
means New York Recovery Advisors, LLC, a Delaware limited liability company, any
successor advisor to the Company and the Operating Partnership, or any Person to
which New York Recovery Advisors, LLC or any successor advisor subcontracts
substantially all its functions.  Notwithstanding the foregoing, a
Person hired or retained by New York Recovery Advisors, LLC to perform property
management and related services for the Company or the Operating Partnership
that is not hired or retained to perform substantially all the functions of New
York Recovery Advisors, LLC with respect to the Company and the Operating
Partnership as a whole shall not be deemed to be an Advisor.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    “Affiliate”
or “Affiliated”
means with respect to any Person, (i) any other 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 Person; (ii) any
other 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 Person; (iii) any other Person directly or indirectly controlling,
controlled by or under common control with such Person; (iv) any executive
officer, director, trustee or general partner of such 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.

     

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

     

    “Asset Management
Fee” means the fees payable to the Advisor pursuant to Section 10(d).

     

    “Average Invested
Assets” means, for a specified period, the average of the aggregate book
value of the assets of the Company invested, directly or indirectly, in
Investments before deducting depreciation, bad debts or other non-cash reserves,
computed by taking the average of such values at the end of each month during
such period.  For an equity interest owned in a Joint Venture, the
calculation of Average Invested Assets shall take into consideration the
underlying Joint Venture’s aggregate book value for the equity
interest.

     

    “Board of
Directors” or “Board”
means the Board of Directors of the Company.

     

    “By-laws”
means the by-laws of the Company, as amended and as the same are in effect from
time to time.

     

    “Cause”
means (i) fraud, criminal conduct, willful misconduct or illegal or negligent
breach of fiduciary duty by the Advisor; or (ii) if any of the following events
occur:  (A) the Advisor shall breach any material provision of this
Agreement, and after written notice of such breach, shall not cure such default
within thirty (30) days or have begun action within thirty (30) days to cure the
default which shall be completed with reasonable diligence; (B) the Advisor
shall be adjudged bankrupt or insolvent by a court of competent jurisdiction, or
an order shall be made by a court of competent jurisdiction for the appointment
of a receiver, liquidator, or trustee of the Advisor, for all or substantially
all its property by reason of the foregoing, or if a court of competent
jurisdiction approves any petition filed against the Advisor for reorganization,
and such adjudication or order shall remain in force or unstayed for a period of
thirty (30) days; or (C) the Advisor shall institute proceedings for voluntary
bankruptcy or shall file a petition seeking reorganization under the federal
bankruptcy laws, or for relief under any law for relief of debtors, or shall
consent to the appointment of a receiver for itself or for all or substantially
all its property, or shall make a general assignment for the benefit of its
creditors, or shall admit in writing its inability to pay its debts, generally,
as they become due.


    
      
         


      

      
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    “Change of
Control” means a change of control of the Company of a nature that would
be required to be reported in response to the disclosure requirements of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), as
enacted and in force on the date hereof, whether or not the Company is then
subject to such reporting requirements; provided, however, that,
without limitation, a Change of Control shall be deemed to have occurred
if:  (i) any “person” (within the meaning of Section 13(d) of the
Exchange Act, as enacted and in force on the date hereof) is or becomes the
“beneficial owner” (as that term is defined in Rule 13d-3, as enacted and in
force on the date hereof, under the Exchange Act) of securities of the Company
representing 9.8% or more of the combined voting power of the Company’s
securities then outstanding; (ii) there occurs a merger, consolidation or other
reorganization of the Company which is not approved by the Board of Directors;
(iii) there occurs a sale, exchange, transfer or other disposition of
substantially all the assets of the Company to another Person, which disposition
is not approved by the Board of Directors; or (iv) there occurs a contested
proxy solicitation of the Stockholders that results in the contesting party
electing candidates to a majority of the Board of Directors’ positions next up
for election.

     

    “Code”
means the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto.  Reference to any provision of the Code
shall mean such provision as in effect from time to time, as the same may be
amended, and any successor provision thereto, as interpreted by any applicable
regulations as in effect from time to time.

     

    “Competitive Real
Estate Commission” means a real estate or brokerage commission for the
purchase or sale of an asset which is reasonable, customary and competitive in
light of the size, type and location of the asset.

     

    “Contract Sales
Price” means the total consideration received by the Company for the sale
of an Investment.

     

    “Dealer
Manager” means Realty Capital Securities, LLC, or such other Person
selected by the Board of Directors to act as the dealer manager for the
Offering.

     

    “Dealer Manager
Fee” means three percent (3.0%) of Gross Proceeds from the sale of Shares
in a Primary Offering, payable to the Dealer Manager for serving as the dealer
manager of such Primary Offering.

     

    “Director”
means a member of the Board of Directors.

     

    “Distributions”
means any distributions of money or other property by the Company to
Stockholders, including distributions that may constitute a return of capital
for U.S. federal income tax purposes.

     

    “Excess
Amount”  has the meaning set forth in Section 13.

     

    “Expense
Year” has the
meaning set forth in Section 13.

     

    “Financing
Coordination Fee”  means the fees payable to the Advisor
pursuant to Section 10(e).

     

    
      “GAAP”
means United States generally accepted accounting principles, consistently
applied.

       

    

    
      
         


      

      
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    “Good
Reason” means:  (i) any failure to obtain a satisfactory
agreement from any successor to the Company or the Operating Partnership to
assume and agree to perform obligations under this Agreement; or (ii) any
material breach of this Agreement of any nature whatsoever by the Company or the
Operating Partnership.

     

    “Gross
Proceeds” means the aggregate purchase price of all Shares sold for the
account of the Company through an Offering, without deduction for Selling
Commissions, volume discounts, any marketing support and due diligence expense
reimbursement or Organization and Offering
Expenses.  For the purpose of computing Gross Proceeds, the purchase
price of any Share for which reduced Selling Commissions are paid to the Dealer
Manager or a Soliciting Dealer (where net proceeds to the Company are not
reduced) shall be deemed to be the full amount of the offering price per Share
pursuant to the Prospectus for such Offering without reduction.

     

    “Included
Assets” has the meaning set forth in Section 19(b)(ii).

     

    “Indemnitee”
has the meaning set forth in Section 21.

     

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

     

    “Investments”
means any investments by the Company or the Operating Partnership, directly or
indirectly, in Real Estate Assets, Real Estate Related Loans or any other
asset.

     

    “Joint
Ventures” means the joint venture or partnership or other similar
arrangements (other than between the Company and the Operating Partnership) in
which the Company or the Operating Partnership or any of their subsidiaries is a
co-venturer, member or partner, which are established to own
Investments.

     

    “Listing” means (i) the listing
of the Shares on a national securities exchange, or (ii) the receipt by the
Stockholders of securities that are listed on a national securities exchange in
exchange for Shares in a merger or any other type of transaction.

     

    “Loans”
means any indebtedness or obligations in respect of borrowed money or evidenced
by bonds, notes, debentures, deeds of trust, letters of credit or similar
instruments, including mortgages and mezzanine loans.

     

    “Memorandum”
means the private placement memorandum of the Company prepared in connection
with the Private Offering, as the same may be amended or supplemented from time
to time.

     

    “NASAA REIT
Guidelines” means the Statement of Policy Regarding Real Estate
Investment Trusts published by the North American Securities Administrators
Association on May 7, 2007, as the same may be amended from time to
time.

     

    “Net
Income” means, for any period, the Company’s total revenues applicable to
such period, less the total expenses applicable to such period other than
additions to reserves for depreciation, bad debts or other similar non-cash
reserves and excluding any gain from the sale of the Company’s
assets.


    
      
         


      

      
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    “Notice”
has the meaning set forth in Section
23.

     

    “Offering”
means the public offering of Shares pursuant to a Prospectus.

     

    “Operating
Partnership Agreement” means the Agreement of Limited Partnership of the
Operating Partnership, among the Company, the Operating Partnership and New York
Recovery Special Limited Partnership, LLC, as the same may be amended from time
to time.

     

    “OP
Units”  means units of limited partnership interest in the
Operating Partnership.

     

    “Organization and
Offering Expenses” means all expenses (other than the Selling Commission
and the Dealer Manager Fee) to be paid by the Company in connection with an
Offering, including legal, accounting, printing, mailing and filing fees,
charges of the escrow holder and transfer agent, charges of the Advisor for
administrative services related to the issuance of Shares in an Offering,
reimbursement of the Advisor for costs in connection with preparing supplemental
sales materials, the cost of bona fide training and education meetings held by
the Company (primarily the travel, meal and lodging costs of the registered
representatives of broker-dealers), attendance and sponsorship fees and cost
reimbursement for employees of the Company’s Affiliates to attend retail
seminars conducted by broker-dealers and, in special cases, reimbursement to
soliciting broker-dealers for technology costs associated with an Offering,
costs and expenses related to such technology costs, and costs and expenses
associated with facilitation of the marketing of the Shares and the ownership of
Shares by such broker-dealer’s customers.

     

    “Other Liquidity
Event” means a liquidation or the sale of all or substantially all the
Investments (regardless of the form in which such sale shall
occur).  For clarification purposes, a transaction of the type
described in clause (ii) of the definition of Listing shall not be an Other
Liquidity Event.

     

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

     

    “Preferred
Stock” means the shares of the Company’s Series A Convertible Preferred
Stock, par value $0.01 per share.

     

    “Primary
Offering” means the portion of an Offering other than the Shares offered
pursuant to the Company’s distribution reinvestment plan.

     

    “Private
Offering” means the private offering of Preferred Stock pursuant to the
Memorandum.

     

    “Property
Disposition Fee” means the fees payable to the Advisor pursuant to Section 10(c).

     

    “Prospectus”
means a final prospectus of the Company filed pursuant to Rule 424(b) of the
Securities Act, as the same may be amended or supplemented from time to
time.


    
      
         


      

      
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    “Real Estate
Assets” means any investment by the Company or the Operating Partnership
in unimproved and improved Real Property (including fee or leasehold interests,
options and leases), directly, through one or more subsidiaries or through a
Joint Venture.

     

    “Real Estate
Related Loans” means any investments in mortgage loans and other types of
real estate related debt financing, including, mezzanine loans, bridge loans,
convertible mortgages, wraparound mortgage loans, construction mortgage loans,
loans on leasehold interests and participations in such loans, by the Company or
the Operating Partnership, directly, through one or more subsidiaries or through
a Joint Venture.

     

    “Real
Property” means real property owned from time to time by the Company or
the Operating Partnership, 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 Advisor designate as Real Property to the extent
such investments could be classified as Real Property.

     

    “REIT”
means a “real estate investment trust” under Sections 856 through 860 of
the Code.

     

    “Sale” or
“Sales”
means any transaction or series of transactions whereby:  (i) the
Company or the Operating Partnership directly or indirectly (except as described
in other subsections of this definition) sells, grants, transfers, conveys, or
relinquishes its direct or indirect ownership of any Real Estate Assets, Loan or
other Investment or portion thereof, including the lease of any Real Estate
Assets consisting of a building only, and including any event with respect to
any Real Estate Assets that gives rise to a significant amount of insurance
proceeds or condemnation awards; (ii) the Company or the Operating
Partnership directly or indirectly (except as described in other subsections of
this definition) sells, grants, transfers, conveys, or relinquishes its
ownership of all or substantially all the direct or indirect interest of the
Company or the Operating Partnership in any Joint Venture in which it is a
co-venturer, member or partner; (iii) any Joint Venture directly or
indirectly (except as described in other subsections of this definition) in
which the Company or the Operating Partnership as a co-venturer, member or
partner sells, grants, transfers, conveys, or relinquishes its direct or
indirect ownership of any Real Estate Assets or portion thereof, including any
event with respect to any Real Estate Assets which gives rise to insurance
claims or condemnation awards; or (iv) the Company or the Operating
Partnership directly or indirectly (except as described in other subsections of
this definition) sells, grants, conveys or relinquishes its direct or indirect
interest in any Real Estate Related Loans or portion thereof (including with
respect to any Real Estate Related Loan, all payments thereunder or in
satisfaction thereof other than regularly scheduled interest payments) and any
event which gives rise to a significant amount of insurance proceeds or similar
awards; or (v) the Company or the Operating Partnership directly or
indirectly (except as described in other subsections of this definition) sells,
grants, transfers, conveys, or relinquishes its direct or indirect ownership of
any other asset not previously described in this definition or any portion
thereof, but not including any transaction or series of transactions specified
in clauses (i) through (v) above in which the proceeds of such
transaction or series of transactions are reinvested by the Company in one or
more assets within 180 days thereafter.

     

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


    
      
         


      

      
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    “Selling
Commission” means seven percent (7.0%) of Gross Proceeds from the sale of
Shares in a Primary Offering payable to the Dealer Manager and reallowable to
Soliciting Dealers with respect to Shares sold by them.

     

    “Shares”
means the shares of the Company’s common stock, par value $0.01 per
share.

     

    “Soliciting
Dealers” means broker-dealers who are members of the Financial Industry
Regulatory Authority Inc., or that are exempt from broker-dealer registration,
and who, in either case, have executed soliciting dealer or other agreements
with the Dealer Manager to sell Shares.

     

    “Sponsor”
means American Realty Capital III, LLC, a Delaware limited liability
company.

     

    “Stockholders”
means the registered holders of the Shares.

     

    “Subordinated
Incentive Listing Fee” means the fees payable to the Advisor or its
assignees pursuant to Section 10(f).

     

    “Subordinated
Participation In Net Sale Proceeds” means the fees payable to the Advisor
or its assignees pursuant to Section 10(g).

     

    “Subordinated
Termination Fee” means the fees payable to the Advisor or its assignees
pursuant to Section 19(a).

     

    “Termination
Date” means the date of termination of this Agreement.

     

    “Total Operating
Expenses” of a Person means the aggregate of all costs and expenses paid
or incurred by such Person, but excluding Organization and Offering Expenses,
interest payments, taxes, non-cash expenditures, any Acquisitions Fees or
Acquisition Expenses.  The definition of “Total Operating Expenses”
set forth above is intended to encompass only those expenses which are required
to be treated as Total Operating Expenses under the NASAA REIT
Guidelines.  As a result, and notwithstanding the definition set forth
above, any expense of the Company which is not part of Total Operating Expenses
under the NASAA REIT Guidelines shall not be treated as part of Total Operating
Expenses for purposes hereof.

     

    “2%/25%
Guidelines” has the meaning set forth in Section 13.

     

    2.           APPOINTMENT.  The
Company and the Operating Partnership hereby appoint the Advisor to serve as
their advisor to perform the services set forth herein on the terms and subject
to the conditions set forth in this Agreement and subject to the supervision of
the Board, and the Advisor hereby accepts such appointment.

     

    3.           DUTIES
OF THE ADVISOR.  The Advisor will
use its reasonable best efforts to present to the Company and the Operating
Partnership potential investment opportunities and to provide a continuing and
suitable investment program consistent with the investment objectives and
policies of the Company as determined and adopted from time to time by the
Board.  In performance of this undertaking, subject to the supervision
of the Board and consistent with the provisions of the Articles of
Incorporation, By-laws and the Operating Partnership Agreement, the Advisor,
directly or indirectly, will:


    
      
         


      

      
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    (a)           serve
as the Company’s and the Operating Partnership’s investment and financial
advisor;

     

    (b)           provide
the daily management for the Company and the Operating Partnership and perform
and supervise the various administrative functions necessary for the day-to-day
management of the operations of the Company and the Operating
Partnership;

     

    (c)           investigate,
select and, on behalf of the Company and the Operating Partnership, engage and
conduct business with and supervise the performance of such Persons as the
Advisor deems necessary to the proper performance of its obligations hereunder
(including consultants, accountants, correspondents, lenders, technical
advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow
agents, depositaries, custodians, agents for collection, insurers, insurance
agents, banks, builders, developers, property owners, real estate management
companies, real estate operating companies, securities investment advisors,
mortgagors, the registrar and the transfer agent and any and all agents for any
of the foregoing), including Affiliates of the Advisor and Persons acting in any
other capacity deemed by the Advisor necessary or desirable for the performance
of any of the foregoing services (including entering into contracts in the name
of the Company and the Operating Partnership with any of the
foregoing);

     

    (d)           consult
with the officers and Directors of the Company and assist the Directors in the
formulation and implementation of the Company’s financial policies, and, as
necessary, furnish the Board with advice and recommendations with respect to the
making of investments consistent with the investment objectives and policies of
the Company and in connection with any borrowings proposed to be undertaken by
the Company or the Operating Partnership;

     

    (e)           subject
to the provisions of Section 4,
(i) participate in formulating an investment strategy and asset allocation
framework; (ii) locate, analyze and select potential Investments;
(iii) structure and negotiate the terms and conditions of transactions
pursuant to which acquisitions and dispositions of Investments will be made;
(iv) research, identify, review and recommend acquisitions and dispositions
of Investments to the Board and make Investments on behalf of the Company and
the Operating Partnership in compliance with the investment objectives and
policies of the Company; (v) arrange for financing and refinancing and make
other changes in the asset or capital structure of, and dispose of, reinvest the
proceeds from the sale of, or otherwise deal with, Investments; (vi) enter
into leases and service contracts for Real Estate Assets and, to the extent
necessary, perform all other operational functions for the maintenance and
administration of such Real Estate Assets; (vii) actively oversee and
manage Investments for purposes of meeting the Company’s investment objectives
and reviewing and analyzing financial information for each of the Investments
and the overall portfolio; (viii) select Joint Venture partners, structure
corresponding agreements and oversee and monitor these relationships; (ix)
oversee, supervise and evaluate Affiliated and non-Affiliated property managers
who perform services for the Company or the Operating Partnership;
(x) oversee Affiliated and non-Affiliated Persons with whom the Advisor
contracts to perform certain of the services required to be performed under this
Agreement; (xi) manage accounting and other record-keeping functions for
the Company and the Operating Partnership, including reviewing and analyzing the capital and operating budgets for the Real
Estate Assets and generating an annual budget for the Company;
(xii) recommend various liquidity events to the Board when appropriate; and
(xiii) source and structure Real Estate Related Loans;

     


    
      
         


      

      
        8

        
          

        

      

      
         


      

    


    (f)           upon
request, provide the Board with periodic reports regarding prospective
investments;

     

    (g)           make
investments in, and dispositions of, Investments within the discretionary limits
and authority as granted by the Board;

     

    (h)           negotiate
on behalf of the Company and the Operating Partnership with banks or other
lenders for Loans to be made to the Company, the Operating Partnership or any of
their subsidiaries, and negotiate with investment banking firms and
broker-dealers on behalf of the Company, the Operating Partnership or any of
their subsidiaries, or negotiate private sales of Shares or obtain Loans for the
Company, the Operating Partnership or any of their subsidiaries, but in no event
in such a manner so that the Advisor shall be acting as broker-dealer or
underwriter; provided,
however, that any fees
and costs payable to third parties incurred by the Advisor in connection with
the foregoing shall be the responsibility of the Company, the Operating
Partnership or any of their subsidiaries;

     

    (i)           obtain
reports (which may, but are not required to, be prepared by the Advisor or its
Affiliates), where appropriate, concerning the value of Investments or
contemplated investments of the Company and the Operating
Partnership;

     

    (j)           from
time to time, or at any time reasonably requested by the Board, make reports to
the Board of its performance of services to the Company and the Operating
Partnership under this Agreement, including reports with respect to potential
conflicts of interest involving the Advisor or any of its
Affiliates;

     

    (k)           provide
the Company and the Operating Partnership with all necessary cash management
services;

     

    (l)           deliver
to, or maintain on behalf of, the Company copies of all appraisals obtained in
connection with the investments in any Real Estate Assets as may be required to
be obtained by the Board;

     

    (m)           notify
the Board of all proposed material transactions before they are
completed;

     

    (n)           effect
any private placement of OP Units, tenancy-in-common (TIC) or other
interests in Investments as may be approved by the Board;

     

    (o)           perform
investor-relations and Stockholder communications functions for the
Company;

     

    (p)           render
such services as may be reasonably determined by the Board of Directors
consistent with the terms and conditions herein; 


    
      
         


      

      
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    (q)           maintain
the Company’s accounting and other records and assist the Company in filing all
reports required to be filed by it with the Securities and Exchange Commission,
the Internal Revenue Service and other regulatory agencies; and

     

    (r)           do
all things reasonably necessary to assure its ability to render the services
described in this Agreement.

     

    Notwithstanding
the foregoing, the Advisor may delegate any of the foregoing duties to any
Person so long as the Advisor or its Affiliate remains responsible for the
performance of the duties set forth in this Section 3.

     

    4.           AUTHORITY
OF ADVISOR.


     

    (a)           Pursuant
to the terms of this Agreement (including the restrictions included in this
Section 4
and in Section 9), and
subject to the continuing and exclusive authority of the Board over the
supervision of the Company, the Company, acting on the authority of the Board of
Directors, hereby delegates to the Advisor the authority to perform the services
described in Section 3.

     

    (b)           Notwithstanding
anything herein to the contrary, all Investments will require the prior approval
of the Board, any particular Directors specified by the Board or any committee
of the Board, as the case may be.

     

    (c)           If
a transaction requires approval by the Independent Directors, the Advisor will
deliver to the Independent Directors all documents and other information
reasonably required by them to evaluate properly the proposed
transaction.

     

    (d)           The
Board may, at any time upon the giving of notice to the Advisor, modify or
revoke the authority set forth in this Section 4; provided, however, that such
modification or revocation shall be effective upon receipt by the Advisor and
shall not be applicable to investment transactions to which the Advisor has
committed the Company or the Operating Partnership prior to the date of receipt
by the Advisor of such notification.

     

    5.           FIDUCIARY
RELATIONSHIP.  The
Advisor, as a result of its relationship with the Company and the Operating
Partnership pursuant to this Agreement, stands in a fiduciary relationship with
the Stockholders and the partners in the Operating
Partnership. 

     

    6.           NO
PARTNERSHIP OR JOINT VENTURE.  The
parties to this Agreement are not partners or joint venturers with each other
and nothing herein shall be construed to make them partners or joint venturers
or impose any liability as such on either of them.

     

    7.           BANK
ACCOUNTS.  The
Advisor may establish and maintain one or more bank accounts in its own name for
the account of the Company or the Operating Partnership or in the name of the
Company or the Operating Partnership and may collect and deposit into any such
account or accounts, and disburse from any such account or accounts, any money
on behalf of the Company or the Operating Partnership, under such terms and
conditions as the Board may approve, provided that no funds shall be commingled
with the funds of the Advisor; and, upon request, the Advisor shall render
appropriate accountings of such collections and payments to the Board and to the
auditors of the Company.


    
      
         


      

      
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    8.           RECORDS;
ACCESS.  The
Advisor shall maintain appropriate records of all its activities hereunder and
make such records available for inspection by the Directors and by counsel,
auditors and authorized agents of the Company, at any time and from time to
time.  The Advisor shall at all reasonable times have access to the
books and records of the Company and the Operating Partnership.

     

    9.           LIMITATIONS
ON ACTIVITIES  Notwithstanding
anything herein to the contrary, the Advisor shall refrain from taking any
action which, in its sole judgment, or in the sole judgment of the Company, made
in good faith, would (a) adversely affect the status of the Company as a
REIT, unless the Board has determined that REIT qualification is not in the best
interests of the Company and its Stockholders, (b) subject the Company to
regulation under the Investment Company Act of 1940, as amended, or
(c) violate any law, rule, regulation or statement of policy of any
governmental body or agency having jurisdiction over the Company, the Operating
Partnership or the Shares, or otherwise not be permitted by the Articles of
Incorporation or By-laws, except if such action shall be ordered by the Board,
in which case the Advisor shall notify promptly the Board of the Advisor’s
judgment of the potential impact of such action and shall refrain from taking
such action until it receives further clarification or instructions from the
Board.  In such event, the Advisor shall have no liability for acting
in accordance with the specific instructions of the Board so given.

     

    10.         FEES.

     

    (a)           Acquisition
Fees.  The Company shall
pay an Acquisition Fee to the Advisor or its assignees as compensation for
services rendered in connection with the investigation, selection and
acquisition (by purchase, investment or exchange) of Investments.  The
total Acquisition Fee payable to the Advisor or its assignees shall equal one
percent (1.0%) of the purchase price of Real Estate Assets and one percent
(1.0%) of the amount advanced for Real Estate Related Loans or other Investments
(other than Real Estate Assets), along with reimbursement of acquisition
expenses.  The purchase price of the Real Estate Assets shall
equal the amount paid or allocated to the purchase, development or improvement
of the Real Estate Assets inclusive of expenses related thereto and the amount
of debt associated with such Investment.  The purchase price allocable
for an Investment held through a Joint Venture shall equal the product of
(i) the purchase price of, or the amount advanced for, the Investment, as
applicable, and (ii) the direct or indirect ownership percentage in the
Joint Venture held directly or indirectly by the Company or the Operating
Partnership.  For purposes of this section, “ownership percentage”
shall be the percentage of capital stock, membership interests, partnership
interests or other equity interests held by the Company or the Operating
Partnership, without regard to classification of such equity
interests.  The Company shall pay to the Advisor or its assignees the
Acquisition Fee promptly upon the closing of the Investment.  In
addition, if during the period ending two years after the close of the initial
Offering, the Company sells an Investment and then reinvests in other
Investments, the Company will pay to New York Recovery Advisors, LLC one percent
(1.0%) of the purchase price of Real Estate Assets and one percent (1.0%) of the
amount advanced for Real Estate Related Loans or other Investments (other than
Real Estate Assets), along with reimbursement of acquisition
expenses.

     


    
      
         


      

      
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    (b)           Limitation
on Total Acquisition Fees, Financing Coordination Fees and Acquisition
Expenses.  Pursuant to the
NASAA REIT Guidelines, the total of all Acquisition Fees, Financing Coordination
Fees and Acquisition Expenses payable in connection with any Investment or any
reinvestment shall not exceed six percent (6.0%) of the “contract purchase
price”, as defined in the Articles of Incorporation, of the Investment acquired
or six percent (6.0%) of the amount advanced for an Investment.

     

    (c)           Property
Disposition Fee.  In connection
with a Sale of an Investment (except for such Investments that are traded on a
national securities exchange) in which the Advisor or any Affiliate of the
Advisor provides a substantial amount of services, as determined by the
Independent Directors, the Company shall pay to the Advisor or its assignees a
Property Disposition Fee up to the lesser of (i) two percent (2.0%) of the
Contract Sales Price of such Investment and (ii) one-half of the total brokerage
commission paid if a non-Affiliate is also involved; provided, however, that in no
event may the Property Disposition Fee paid to the Advisor, its Affiliates and
non-Affiliates exceed the lesser of six percent (6.0%) of the Contract Sales
Price and a Competitive Real Estate Commission.

     

    (d)           Asset
Management Fee.  The Company shall
pay an Asset Management Fee to the Advisor or its assignees as compensation for
services rendered in connection with the management of the Company’s assets in
an amount equal to 0.75% per annum of Average Invested Assets; provided, however, that no
Asset Management Fee will be payable on assets acquired using the proceeds from
the Private Offering until the Company has sufficient cash flow to pay dividends
on the Preferred Stock.  The Asset Management Fee is payable
semiannually in advance, on January 1 and July 1, in the amount of 0.5% of
Average Invested Assets for the preceding semiannual period.

     

    (e)           Financing
Coordination Fee.  The Company shall
pay a Financing Coordination Fee to the Advisor or its assignees in connection
with the financing of any Investment, assumption of any Loans with respect to
any Investment or refinancing of any Loan in an amount equal to 0.75% of the
amount made available and/or outstanding under any such Loan, including any
assumed Loan.  The Advisor may reallow some or all of this Financing
Coordination Fee to reimburse third parties with whom it may subcontract to
procure any such Loan.

     

    (f)           Subordinated
Incentive Listing Fee.  Upon Listing of
the Shares, the Company shall pay the Advisor or its assignees a Subordinated
Incentive Listing Fee in the form of an interest bearing promissory note
equal to fifteen percent (15%) of the amount, if any, by which (i) the market
value of the outstanding Shares plus Distributions paid by the Company prior to
Listing, exceeds (ii) the sum of the total amount of capital raised from
investors in Shares and the amount of cash flow necessary to generate a six
percent (6%) annual cumulative, non-compounded return to such
investors.  The interest bearing promissory note shall be repaid from
the net sales proceeds of each Sale of an Investment that occurs after the date
of the Listing.  At the time of each such Sale, the Company may pay at
its discretion all or a portion of such promissory note in Shares, which may or
may not be registered under the Securities Act, or cash.

     

    (g)           Subordinated
Participation In Net Sale Proceeds.  The Company shall
pay the Advisor or its assignees from time to time a Subordinated Participation
In Net Sales Proceeds equal to fifteen percent (15%) of remaining net sales
proceeds after return of capital contributions plus payment to investors in
Shares of a six percent (6%) cumulative, pre-tax, non-compounded return on the
capital contributed by such investors.

     


    
      
         


      

      
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    (h)           Payment
of Fees.  In connection
with the Acquisition Fee, Property Disposition Fee, Asset Management Fee and
Financing Coordination Fee, the Company shall pay such fees to the Advisor or
its assignees in cash or in Shares, or a combination of both, the form of
payment to be determined in the sole discretion of the Advisor. For the purposes
of the payment of such fees in Shares, each Share shall be valued at the per
share offering price of our Shares in the initial Offering minus the maximum
selling commissions and dealer manager fee allowed in the initial
Offering.

     

    (i)           Exclusion
of Certain Transactions.  If the Company or
the Operating Partnership shall propose to enter into any transaction in which
the Advisor, any Affiliate of the Advisor or any of the Advisor’s directors or
officers has a direct or indirect interest, then such transaction shall be
approved by a majority of the Board not otherwise interested in such
transaction, including a majority of the Independent Directors.

     

    11.         EXPENSES.


     

    (a)           In
addition to the compensation paid to the Advisor pursuant to Section 10, the
Company or the Operating Partnership shall pay directly or reimburse the Advisor
for all the expenses paid or incurred by the Advisor or its Affiliates in
connection with the services it provides to the Company and the Operating
Partnership pursuant to this Agreement, including, the following:

     

    (i)     
       Organization and Offering Expenses and
expenses related to the Private Offering; provided, however, that the
Company shall not reimburse the Advisor to the extent such reimbursement would
cause (A) the total amount of Organization and Offering Expenses paid by the
Company and the Operating Partnership to exceed one and one-half percent (1.5%)
of the Gross Proceeds raised in all Primary Offerings, or (B) the total amount
of the expenses related to the Private Offering to exceed one and one-half
(1.5%) of the Gross Proceeds raised in the Private Offering;

     

    (ii)           Acquisition
Expenses incurred in connection with the selection and acquisition of
Investments subject to the aggregate six percent (6.0%) cap on Acquisition Fees,
Financing Coordination Fees and Acquisition Expenses set forth in Section 10(b);

     

    (iii)           (A)
third-party due diligence fees related to the Private Offering of up to 0.5% of
the Gross Proceeds raised in all Primary Offerings, and (B) third-party due
diligence fees related to the Private Offering of up to 0.5% of the Gross
Proceeds raised in the Private Offering, in each case as set forth in detailed
and itemized invoices;

     

    (iv)           the
actual cost of goods and services used by the Company and obtained from entities
not Affiliated with the Advisor;

     

    (v)           interest
and other costs for Loans, including discounts, points and other similar
fees;

     


    
      
         


      

      
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    (vi)           taxes
and assessments on income of the Company or Investments;

     

    (vii)          costs
associated with insurance required in connection with the business of the
Company or by the Board;

     

    (viii)         expenses
of managing and operating Investments owned by the Company, whether payable to
an Affiliate of the Company or a non-affiliated Person;

     

    (ix)           all
expenses in connection with payments to the Directors for attending meetings of
the Board and Stockholders;

     

    (x)          
 expenses associated with a Listing, if applicable, or with the issuance
and distribution of Shares, such as selling commissions and fees, advertising
expenses, taxes, legal and accounting fees, listing and registration
fees;

     

    (xi)           expenses
connected with payments of Distributions;

     

    (xii)           expenses
of organizing, revising, amending, converting, modifying or terminating the
Company, the Operating Partnership or any subsidiary thereof or the Articles of
Incorporation, By-laws or governing documents of the Operating Partnership or
any subsidiary of the Company or the Operating Partnership;

     

    (xiii)          expenses
of maintaining communications with Stockholders, including the cost of
preparation, printing, and mailing annual reports and other Stockholder reports,
proxy statements and other reports required by governmental
entities;

     

    (xiv)  
      administrative service expenses, including
all costs and expenses incurred by Advisor or its Affiliates in fulfilling its
duties hereunder, including reasonable salaries and wages, benefits and overhead
of all employees directly involved in the performance of such services; provided, however, that no
reimbursement shall be made for costs of such employees of the Advisor or its
Affiliates to the extent that such employees perform services for which the
Advisor receives a separate fee; and

     

    (xv)          audit,
accounting and legal fees.

     

    (b)           Expenses
incurred by the Advisor on behalf of the Company and the Operating Partnership
and payable pursuant to this Section 11 shall
be reimbursed no less than monthly to the Advisor.

     

    12.         OTHER
SERVICES.  Should the Board
request that the Advisor or any director, officer or employee thereof render
services for the Company and the Operating Partnership other than set forth in
Section 3,
such services shall be separately compensated at such customary rates and in
such customary amounts as are agreed upon by the Advisor and the Board,
including a majority of the Independent Directors, subject to the limitations
contained in the Articles of Incorporation, and shall not be deemed to be
services pursuant to the terms of this Agreement.


    
      
         


      

      
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    13.         REIMBURSEMENT
TO THE ADVISOR.  The Company shall
not reimburse the Advisor at the end of any fiscal quarter in which Total
Operating Expenses for the four (4) consecutive fiscal quarters then ended (the
“Expense Year”)
exceed (the “Excess
Amount”) the greater of two percent (2%) of Average Invested Assets or
twenty-five percent (25%) of Net Income (the “2%/25% Guidelines”)
for such year.  Any Excess Amount paid to the Advisor during a fiscal
quarter shall be repaid to the Company or, at the option of the Company,
subtracted from the Total Operating Expenses reimbursed during the subsequent
fiscal quarter.  If there is an Excess Amount in any Expense Year and
the Independent Directors determine that such excess was justified based on
unusual and nonrecurring factors which they deem sufficient, then the Excess
Amount may be carried over and included in Total Operating Expenses in
subsequent Expense Years and reimbursed to the Advisor in one or more of such
years, provided that there shall be sent to the Stockholders a written
disclosure of such fact, together with an explanation of the factors the
Independent Directors considered in determining that such excess expenses were
justified.  Such determination shall be reflected in the minutes of
the meetings of the Board.  All figures used in the foregoing
computation shall be determined in accordance with GAAP applied on a consistent
basis.

     

    14.         OTHER
ACTIVITIES OF THE ADVISOR.  Except as set
forth in this Section
14, nothing herein contained shall prevent the Advisor or any of its
Affiliates from engaging in or earning fees from other activities, including the
rendering of advice to other Persons (including other REITs) and the management
of other programs advised, sponsored or organized by the Sponsor or its
Affiliates; nor shall this Agreement limit or restrict the right of any
director, officer, member, partner, employee or stockholder of the Advisor or
any of its Affiliates to engage in or earn fees from any other business or to
render services of any kind to any other Person and earn fees for rendering such
services; provided,
however, that the Advisor must devote sufficient resources to the
Company’s business to discharge its obligations to the Company under this
Agreement.  The Advisor may, with respect to any investment in which
the Company is a participant, also render advice and service to each and every
other participant therein, and earn fees for rendering such advice and
service.  Specifically, it is contemplated that the Company may enter
into Joint Ventures or other similar co-investment arrangements with certain
Persons, and pursuant to the agreements governing such Joint Ventures or
arrangements, the Advisor may be engaged to provide advice and service to such
Persons, in which case the Advisor will earn fees for rendering such advice and
service.

     

    The
Advisor shall report to the Board the existence of any condition or
circumstance, existing or anticipated, of which it has knowledge, which creates
or could create a conflict of interest between the Advisor’s obligations to the
Company and its obligations to or its interest in any other
Person.  If the Advisor, Director or Affiliates thereof have sponsored
other investment programs with similar investment objectives which have
investment funds available at the same time as the Company, the Advisor shall
inform the Board of the method to be applied by the Advisor in allocating
investment opportunities among the Company and competing investment entities and
shall provide regular updates to the Board of the investment opportunities
provided by the Advisor to competing programs in order for the Board (including
the Independent Directors) to fulfill its duty to ensure that the Advisor and
its Affiliates use their reasonable best efforts to apply such method fairly to
the Company.

     

    
      
         


      

      
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    15.         THE
AMERICAN REALTY CAPITAL NAME.  The Advisor and
its Affiliates have or may have a proprietary interest in the names “American
Realty Capital” and “ARC.”  The Advisor hereby grants to the Company,
to the extent of any proprietary interest the Advisor may have in any of the
names “American Realty Capital” and “ARC,” a non-transferable, non-assignable,
non-exclusive, royalty-free right and license to use the names “American Realty
Capital” and “ARC” during the term of this Agreement. The Company agrees that
the Advisor and its Affiliates will have the right to approve of any use by the
Company of the names “American Realty Capital” and “ARC,” such approval not to
be unreasonably withheld or delayed. Accordingly, and in recognition of this
right, if at any time the Company ceases to retain the Advisor or one of its
Affiliates to perform advisory services for the Company, the Company will,
promptly after receipt of written request from the Advisor, cease to conduct
business under or use the names “American Realty Capital” and “ARC” 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” or “ARC” or any other word or words that might, in the reasonable
discretion of the Advisor, be susceptible of indication of
some form of relationship between the Company and the Advisor 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” or “ARC.” Consistent with the foregoing, it
is specifically recognized that the Advisor 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” or “ARC” 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
Advisor nor any of its Affiliates makes any representation or warranty, express
or implied, with respect to the names “American Realty Capital” or “ARC”
licensed hereunder or the use thereof (including without limitation as to
whether the use of the names “American Realty Capital” or “ARC” will be free
from infringement of the intellectual property rights of third
parties.  Notwithstanding the preceding, the Advisor 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” or “ARC.”

     

    16.         TERM
OF AGREEMENT.  This Agreement
shall continue in force for a period of one year from the date of the Memorandum
and may be renewed for an unlimited number of successive one-year
periods.  If the Prospectus prepared in connection with the initial
Offering becomes effective, the term of this Agreement will be renewed and will
continue in force for a period of one year from the effective date of such
Prospectus.  Thereafter, the term may be renewed for an unlimited
number of successive one-year terms upon mutual consent of the
parties.

     

    17.         TERMINATION
BY THE PARTIES.  This Agreement
may be terminated upon sixty (60) days’ written notice (a) by the
Independent Directors of the Company or the Advisor, without Cause and without
penalty, (b) by the Advisor for Good Reason, or (c) by the Advisor upon a Change
of Control.  The provisions of Sections 19
through 31 of
this Agreement shall survive termination of this Agreement.


    
      
         


      

      
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    18.         ASSIGNMENT
TO AN AFFILIATE.  This Agreement
may be assigned by the Advisor to an Affiliate with the approval of a majority
of the Directors (including a majority of the Independent
Directors).  The Advisor may assign any rights to receive fees or
other payments under this Agreement to any Person without obtaining the approval
of the Directors.  This Agreement shall not be assigned by the Company
or the Operating Partnership without the consent of the Advisor, except in the
case of an assignment by the Company or the Operating Partnership to a Person
which is a successor to all the assets, rights and obligations of the Company or
the Operating Partnership, in which case such successor Person shall be bound
hereunder and by the terms of said assignment in the same manner as the Company
or the Operating Partnership, as applicable, is bound by this
Agreement.

     

    19.         PAYMENTS
TO AND DUTIES OF ADVISOR UPON TERMINATION.  Amounts
Owed.  After the
Termination Date, the Advisor shall be entitled to receive from the Company or
the Operating Partnership within thirty (30) days after the effective date
of such termination all amounts then accrued and owing to the Advisor, including
all its interest in the Company’s income, losses, distributions and capital by
payment of an amount equal to the then-present fair market value of the
Advisor’s interest, subject to the 2%/25% Guidelines to the extent
applicable.

     

    (a)           Subordinated
Termination Fee.

     

    (i)           Upon
termination of this Agreement, the Advisor shall be entitled to a Subordinated
Termination Fee. The Subordinated Termination Fee, if any, will be payable in
the form of an interest bearing promissory note equal to the greater
of:  (A) fifteen percent (15%) of the amount, if any, by which (1) the
sum of (v) the fair market value (determined by appraisal as of the
Termination Date) of the Investments on the Termination Date, less (w) any Loans
secured by such Investments, plus (x) total Distributions paid through the
Termination Date on Shares issued in Offerings through the Termination Date,
less (y) the liquidation preference of all Preferred Stock issued on or prior to
the Termination Date (whether or not converted into Shares), which liquidation
preference shall be reduced by any amounts paid on or prior to the Termination
Date to purchase or redeem any shares of Preferred Stock or any Shares issued on
conversion of any Preferred Stock, less (z) any amounts distributable as of the
Termination Date to limited partners who received OP Units in connection with
the acquisition of any Investments upon the liquidation or sale of such
Investments (assuming the liquidation or sale of such Investments on the
Termination Date), exceeds (2) the sum of the Gross Proceeds raised in all
Offerings through the Termination Date (less amounts paid on or prior to the
Termination Date to purchase or redeem any Shares purchased in an Offering
pursuant to the Company’s share repurchase plan) and the total amount of cash
that, if distributed to those Stockholders who purchased Shares in an Offering
on or prior to the Termination Date, would have provided such Stockholders an
annual six percent (6%) cumulative, non-compounded return on the Gross Proceeds
raised in all Offerings through the Termination Date, measured for the period
from inception through the Termination Date; and (B) deemed Property
Disposition Fees equal to three percent (3%) of the Contract Sales Price that
would have been paid to the Advisor or its Affiliates (assuming the sale of
substantially all the Investments on the Termination Date, at fair market value
on the Termination Date; provided, however, that in no event may
such deemed Property Disposition Fees exceed the aggregate Competitive Real
Estate Commissions for such Investments). In addition, the Advisor may
elect to defer its right to receive a Subordinated Termination Fee until either
a Listing or an Other Liquidity Event occurs.


    
      
         


      

      
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    (ii)          If
the Advisor elects to defer its right to receive a Subordinated Termination Fee
and there is a Listing, then the Advisor will be entitled to receive a
Subordinated Termination Fee in an amount equal to the greater
of:  (A) fifteen percent (15%) of the amount, if any, by which
(1) the sum of (v) the fair market value (determined by appraisal as
of the date of Listing) of the Investments owned as of the Termination Date and
any Investments acquired after the Termination Date for which the Advisor would
have been entitled to receive an Acquisition Fee (collectively, the “Included Assets”),
less (w) any Loans secured by the Included Assets, plus (x) total
Distributions paid through the date of Listing on Shares issued in Offerings
through the Termination Date, less (y) the liquidation preference of all
Preferred Stock issued on or prior to the Termination Date (whether or not
converted into Shares), which liquidation preference shall be reduced by any
amounts paid on or prior to the date of Listing to purchase or redeem any shares
of Preferred Stock or any Shares issued on conversion of any Preferred Stock,
less (z) any amounts distributable as of the date of Listing to limited partners
who received OP Units in connection with the acquisition of any Included Assets
upon the liquidation or sale of such Included Assets (assuming the liquidation
or sale of such Included Assets on the date of Listing), exceeds (2) the sum of
(y) the Gross Proceeds raised in all Offerings through the Termination Date
(less amounts paid on or prior to the date of Listing to purchase or redeem any
Shares purchased in an Offering on or prior to the Termination Date pursuant to
the Company’s share repurchase plan), plus (z) the total amount of cash that, if
distributed to those Stockholders who purchased Shares in an Offering on or
prior to the Termination Date, would have provided such Stockholders an annual
six percent (6%) cumulative, non-compounded return on the Gross Proceeds raised
in all Offerings through the Termination Date, measured for the period from
inception through the date of Listing; and (B) deemed Property
Disposition Fees equal to three percent (3%) of the Contract Sales Price that
would have been paid to the Advisor or its Affiliates (assuming the sale of
substantially all the Investments on the Termination Date, at fair market value
on the Termination Date; provided, however, that in no
event may such deemed Property Disposition Fees exceed the aggregate Competitive
Real Estate Commissions for such Investments).

     

    (iii)         If
the Advisor elects to defer its right to receive a Subordinated Termination Fee
and there is an Other Liquidity Event, then the Advisor will be entitled to
receive a Subordinated Termination Fee in an amount equal to the greater
of:  (A) fifteen percent (15%) of the amount, if any, by which (1) the
sum of (v) the fair market value (determined by appraisal as of the date of the
Other Liquidity Event) of the Included Assets, less (w) any Loans secured by the
Included Assets, plus (x) total Distributions paid through the date of the Other
Liquidity Event on Shares issued in Offerings through the Termination Date, less
(y) the liquidation preference of all Preferred Stock issued on or prior to the
Termination Date (whether or not converted into Shares), which liquidation
preference shall be reduced by any amounts paid on or prior to the date of the
Other Liquidity Event to purchase or redeem any shares of Preferred Stock or any
Shares issued on conversion of any Preferred Stock, less (z) any amounts
distributable as of the date of the Other Liquidity Event to limited partners
who received OP Units in connection with the acquisition of any Included Assets
upon the liquidation or sale of such Included Assets (assuming the liquidation
or sale of such Included Assets on the date of the Other Liquidity Event),
exceeds (2) the sum of (y) the Gross Proceeds raised in all Offerings through
the Termination Date (less amounts paid on or prior to the date of the Other
Liquidity Event to purchase or redeem any Shares purchased in an Offering on or
prior to the Termination Date pursuant to the Company’s share repurchase plan),
plus (z) the total amount of cash that, if distributed to those Stockholders who
purchased Shares in an Offering on or prior to the Termination Date, would have
provided such Stockholders an annual six percent (6%) cumulative, non-compounded
return on the Gross Proceeds raised in all Offerings through the Termination
Date, measured for the period from inception through the date of the Other
Liquidity Event; and (B) deemed Property Disposition Fees equal to three
percent (3%) of the Contract Sales Price that would have been paid to the
Advisor or its Affiliates (assuming the sale of substantially all the
Investments on the Termination Date, at fair market value on the Termination
Date; provided,
however, that in no event may such deemed Property Disposition Fees
exceed the aggregate Competitive Real Estate Commissions for such
Investments).


    
      
         


      

      
        18

        
          

        

      

      
         


      

    


    (iv)           Any
portion of the Subordinated Distributions Of Net Sales Proceeds received prior
to a Listing shall offset the amount that would otherwise by payable pursuant to
the Subordinated Incentive Listing Fee.  If the Advisor receives the
Subordinated Incentive Listing Fee, it would no longer be entitled to receive
Subordinated Distributions Of Net Sales Proceeds or the Subordinated Termination
Fee. If the Advisor receives the Subordinated Termination Fee, it would no
longer be entitled to receive Subordinated Distributions Of Net Sales Proceeds
or the Subordinated Incentive Listing Fee.

     

    (b)           Advisor’s
Duties.  The Advisor shall promptly upon termination of this
Agreement:

     

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

     

    (ii)          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;

     

    (iii)         deliver
to the Board all assets, including all Investments, and documents of the Company
and the Operating Partnership then in the custody of the Advisor;
and

     

    (iv)         cooperate
with the Company and the Operating Partnership to provide an orderly management
transition.

     

    20.         INCORPORATION
OF THE ARTICLES OF INCORPORATION AND THE OPERATING PARTNERSHIP
AGREEMENT.  To
the extent that the Articles of Incorporation or the Operating Partnership
Agreement impose obligations or restrictions on the Advisor or grant the Advisor
certain rights which are not set forth in this Agreement, the Advisor shall
abide by such obligations or restrictions and such rights shall inure to the
benefit of the Advisor with the same force and effect as if they were set forth
herein.

     

    21.         INDEMNIFICATION
BY THE COMPANY AND THE OPERATING PARTNERSHIP.


    
      
         


      

      
        19

        
          

        

      

      
         


      

    


    (a)           The
Company and the Operating Partnership shall indemnify and hold harmless the
Advisor and its Affiliates, as well as their respective officers, directors,
equity holders, members, partners, stockholders, other equity holders and
employees (collectively, the “Indemnitees,” and
each, an “Indemnitee”), from
all liability, claims, damages or losses arising in the performance of their
duties hereunder, and related expenses, including reasonable attorneys’ fees, to
the extent such liability, claims, damages or losses and related expenses are
not fully reimbursed by insurance, and to the extent that such indemnification
would not be inconsistent with the laws of the State of New York, the Articles
of Incorporation or the provisions of Section II.G of the NASAA REIT
Guidelines.  Notwithstanding the foregoing, the Company and the
Operating Partnership shall not provide for indemnification of an Indemnitee for
any loss or liability suffered by such Indemnitee, nor shall they provide that
an Indemnitee be held harmless for any loss or liability suffered by the Company
and the Operating Partnership, unless all the following conditions are
met:

     

    (i)           the
Indemnitee has determined, in good faith, that the course of conduct that caused
the loss or liability was in the best interest of the Company and the Operating
Partnership;

     

    (ii)          the
Indemnitee was acting on behalf of, or performing services for, the Company or
the Operating Partnership;

     

    (iii)         such
liability or loss was not the result of negligence or willful misconduct by the
Indemnitee; and

     

    (iv)        such
indemnification or agreement to hold harmless is recoverable only out of the
Company’s net assets and not from the Stockholders.

     

    (b)           Notwithstanding
the foregoing, an Indemnitee shall not be indemnified by the Company and the
Operating Partnership for any losses, liabilities or expenses arising from or
out of an alleged violation of federal or state securities laws by such
Indemnitee unless one or more of the following conditions are met:

     

    (i)           there
has been a successful adjudication on the merits of each count involving alleged
securities law violations as to the Indemnitee;

     

    (ii)         such
claims have been dismissed with prejudice on the merits by a court of competent
jurisdiction as to the Indemnitee; or

     

    (iii)         a
court of competent jurisdiction approves a settlement of the claims against the
Indemnitee and finds that indemnification of the settlement and the related
costs should be made, and the court considering the request for indemnification
has been advised of the position of the Securities and Exchange Commission and
of the published position of any state securities regulatory authority in which
securities of the Company or the Operating Partnership were offered or sold as
to indemnification for violation of securities laws.

     

    (c)           In
addition, the advancement of the Company’s or the Operating Partnership’s funds
to an Indemnitee for legal expenses and other costs incurred as a result of any
legal action for which indemnification is being sought is permissible only if
all the following conditions are satisfied:


    
      
         


      

      
        20

        
          

        

      

      
         


      

    


    (i)           the
legal action relates to acts or omissions with respect to the performance of
duties or services on behalf of the Company or the Operating
Partnership;

     

    (ii)          the
legal action is initiated by a third party who is not a Stockholder or the legal
action is initiated by a Stockholder acting in such Stockholder’s capacity as
such and a court of competent jurisdiction specifically approves such
advancement; and

     

    (iii)         the
Indemnitee undertakes to repay the advanced funds to the Company or the
Operating Partnership, together with the applicable legal rate of interest
thereon, in cases in which such Indemnitee is found not to be entitled to
indemnification.

     

    22.         INDEMNIFICATION
BY ADVISOR.  The Advisor shall
indemnify and hold harmless the Company and the Operating Partnership from
contract or other liability, claims, damages, taxes or losses and related
expenses, including reasonable attorneys’ fees, to the extent that such
liability, claims, damages, taxes or losses and related expenses are not fully
reimbursed by insurance and are incurred by reason of the Advisor’s bad faith,
fraud, willful misfeasance, intentional misconduct, gross negligence or reckless
disregard of its duties; provided, however, that the
Advisor shall not be held responsible for any action of the Board in following
or declining to follow any advice or recommendation given by the
Advisor.

     

    23.         NOTICES.  Any notice,
report or other communication (each a “Notice”) required or
permitted to be given hereunder shall be in writing unless some other method of
giving such Notice is required by the Articles of Incorporation, the By-laws,
and shall be given by being delivered by hand, by courier or overnight carrier
or by registered or certified mail to the addresses set forth below: 

    
      	 
      	 
      	 
      
	
              To
      the Company:

            	 
      	
              American
      Realty Capital New York Recovery REIT, Inc.

            
	 
      	 
      	
              405
      Park Avenue

            
	 
      	 
      	
              New
      York, New York 10022

            
	 
      	 
      	
              Attention:  William
      M. Kahane,

            
	 
      	 
      	
                               President

            
	 
      	 
      	 
      
	 
      	 
      	
              with
      a copy to:

            
	 
      	 
      	 
      
	 
      	 
      	
              Proskauer
      Rose LLP

            
	 
      	 
      	
              1585
      Broadway

            
	 
      	 
      	
              New
      York, New York 10036

            
	 
      	 
      	
              Attention:  Peter
      M. Fass, Esq.

            
	 
      	 
      	
              Attention:  James
      P. Gerkis, Esq.

            


    


    
      
         


      

      
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              To
      the Operating Partnership:

            	 
      	
              New
      York Recovery Operating Partnership, L.P.

            
	 
      	 
      	
              405
      Park Avenue

            
	 
      	 
      	
              New
      York, New York 10022

            
	 
      	 
      	
              Attention:  William
      M. Kahane

            
	 
      	 
      	 
      
	 
      	 
      	
              with
      a copy to:

            
	 
      	 
      	 
      
	 
      	 
      	
              Proskauer
      Rose LLP

            
	 
      	 
      	
              1585
      Broadway

            
	 
      	 
      	
              New
      York, New York 10036

            
	 
      	 
      	
              Attention:  Peter
      M. Fass, Esq.

            
	 
      	 
      	
              Attention:  James
      P. Gerkis, Esq.

            
	 
      	 
      	 
      
	
              To
      the Advisor:

            	 
      	
              New
      York Recovery Advisors, LLC

            
	 
      	 
      	
              405
      Park Avenue

            
	 
      	 
      	
              New
      York, New York 10022

            
	 
      	 
      	
              Attention:  William
      M. Kahane

            
	 
      	 
      	 
      
	 
      	 
      	
              with
      a copy to:

            
	 
      	 
      	 
      
	 
      	 
      	
              Proskauer
      Rose LLP

            
	 
      	 
      	
              1585
      Broadway

            
	 
      	 
      	
              New
      York, New York 10036

            
	 
      	 
      	
              Attention:  Peter
      M. Fass, Esq.

            
	 
      	 
      	
              Attention:  James
      P. Gerkis, Esq.

            
	 
      	 
      	 
      


    

    Any party
may at any time give Notice in writing to the other parties of a change in its
address for the purposes of this Section 23.

     

    24.         MODIFICATION.  This Agreement
shall not be amended, supplemented, terminated, or discharged, in whole or in
part, except by an instrument in writing signed by the parties hereto, or their
respective successors or assignees.

     

    25.         SEVERABILITY.  The provisions of
this Agreement are independent of and severable from each other, and no
provision shall be affected or rendered invalid or unenforceable by virtue of
the fact that for any reason any other or others of them may be invalid or
unenforceable in whole or in part.

     

    26.         GOVERNING
LAW. The provisions of this
Agreement shall be construed and interpreted in accordance with the laws of the
State of New York as at the time in effect, without regard to the principles of
conflicts of laws thereof.

     

    27.         ENTIRE
AGREEMENT.  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 or usage of the trade inconsistent with any of the
terms hereof. 


    
      
         


      

      
        22

        
          

        

      

      
         


      

    


    28.         NO
WAIVER.  Neither the
failure nor any delay on the part of a party to exercise any right, remedy,
power or privilege under this 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 occurrence.  No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.

     

    29.         PRONOUNS
AND PLURALS.  Whenever the
context may require, any pronoun used in this 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.

     

    30.         HEADINGS.  The titles of
sections and subsections contained in this Agreement are for convenience only,
and they neither form a part of this Agreement nor are they to be used in the
construction or interpretation hereof.

     

    31.         EXECUTION
IN COUNTERPARTS.  This Agreement
may be executed 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.

     

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

    
      
        
          
            
              	 
      
	
                      AMERICAN
      REALTY CAPITAL NEW YORK RECOVERY REIT, INC.

                    
	 
      	 
      
	
                      By:

                    	 
      
	 
      	
                      Name:  William
      M. Kahane

                    
	 
      	
                      Title:  President

                    
	 
      
	
                      NEW
      YORK RECOVERY OPERATING PARTNERSHIP, L.P.

                    
	 
      	 
      
	
                      By:

                    	
                      American
      Realty Capital New York Recovery REIT, Inc.

                    
	 
      	 
      
	 
      	
                      its
      General Partner

                    
	 
      	 
      
	
                      By:

                    	 
      
	 
      	
                      Name:  William
      M. Kahane

                    
	 
      	
                      Title:  President

                    
	 
      
	
                      NEW
      YORK RECOVERY ADVISORS, LLC

                    
	 
      	 
      
	
                      By:

                    	
                      New
      York Recovery Special Limited Partnership, LLC

                    
	 
      	 
      
	 
      	
                      its
      Member

                    
	 
      	 
      
	
                      By:

                    	
                      American
      Realty Capital III, LLC

                    
	 
      	 
      
	 
      	
                      its
      Managing Member

                    
	 
      	 
      
	
                      By:

                    	 
      
	 
      	
                      Name:  Nicholas
      S. Schorsch

                    
	 
      	
                      Title:  Authorized
      Signatory

                    


            

          

        

      

    


    
      
         


      

      
        24