Fourth
Amended and Restated


 


Sub-advisory
Agreement


 


between


 


American
Realty Capital II Advisors, LLC


 


and


 


Phillips
Edison NTR LLC


 


 


 


 


 


February
4, 2013







 








 








 


Table
of Contents


 


	
   

  	
  Page

  
	
  Article 1 –
  Definitions

  	
  2

  
	
  Article 2 -
  Appointment

  	
  3

  
	
  Article 3 -
  Duties of the Sub-advisor

  	
  4

  
	
  Article 4 -
  Authority and Certain Activities of Sub-advisor

  	
  4

  
	
  Article 5 –
  Assignment of Payments

  	
  4

  
	
  5.1
  Acquisition Fees

  	
  4

  
	
  5.2 Asset
  Management Fee

  	
  5

  
	
  5.3
  Disposition Fees

  	
  5

  
	
  5.4 Financing
  Fee

  	
  5

  
	
  5.5
  Subordinated Participation Interests

  	
  5

  
	
  5.6 Expense
  Reimbursements

  	
  5

  
	
  Article 6 –
  Allocation of Expense Reimbursements

  	
  6

  
	
  6.1
  Organization and Offering Expense Reimbursements

  	
  6

  
	
  6.2 All Other
  Expense Reimbursements

  	
  7

  
	
  Article 7 –
  Voting Agreements

  	
  7

  
	
  7.1 Election
  of Directors

  	
  7

  
	
  7.2 Other
  Voting of Shares

  	
  7

  
	
  7.3 Major
  Decisions

  	
  7

  
	
  Article 8 -
  Relationship Of Advisor And Company; Other Activities Of The Advisor  

  	
  9

  
	
  8.1
  Relationship

  	
  9

  
	
  8.2 Time
  Commitment

  	
  9

  
	
  8.3 Advisor
  and Sub-advisor Meetings

  	
  10

  
	
  8.4
  Investment Opportunities and Allocation

  	
  10

  
	
  8.5
  Prospectus Guidance

  	
  11

  
	
  Article 9 –
  Dealer Manager

  	
  12

  
	
  Article 10 -
  The Phillips Edison and ARC Names

  	
  12

  
	
  Article 11 –
  Other Agreements

  	
  12

  
	
  11.1 Approval
  and Funding of Company Organization and Offering Costs

  	
  12

  
	
  11.2 Property
  Level Agreements

  	
  13

  
	
  11.3 Advisor,
  Advisory Agreement and Dealings with Company

  	
  15

  
	
  11.3 Initial
  Capital Contribution

  	
  15

  
	
  Article 12 –
  Certain Transfers

  	
  15

  
	
  12.1
  Transfers

  	
  15

  
	
  12.2
  Prohibited Transfers

  	
  16

  
	
  Article 13 –
  Representations, Warranties, and Agreements

  	
  16

  
	
  Article 14 -
  Term And Termination of the Agreement

  	
  19

  
	
  14.1 Term

  	
  19

  
	
  14.2
  Termination

  	
  19

  
	
  14.3 Survival
  upon Termination

  	
  20

  
	
  14.4 Payments
  on Termination and Survival of Certain Rights and Obligations

  	
  20

  
	
  Article 15 -
  Assignment

  	
  21

  
	
  Article 16 -
  Indemnification And Limitation Of Liability

  	
  21

  
	
  Article 17 -
  Miscellaneous

  	
  21

  
	
  17.1 Notices

  	
  21

  
	
  17.2
  Modification

  	
  22

  
	
  17.3
  Severability

  	
  22

  




 












 










 








 








 


	
  17.4
  Construction

  	
  22

  
	
  17.5 Entire
  Agreement

  	
  22

  
	
  17.6 Waiver

  	
  23

  
	
  17.7 Gender

  	
  23

  
	
  17.8 Titles
  Not to Affect Interpretation

  	
  23

  
	
  17.9
  Counterparts

  	
  23

  


















 










 








 








Fourth Amended and Restated Sub-advisory Agreement


This Fourth Amended and Restated Sub-advisory
Agreement, dated as of February 4, 2013 (this “Agreement”), is between,
American Realty Capital II Advisors, LLC, a Delaware limited liability company
(the “Advisor”) and Phillips Edison NTR LLC (formerly known as Phillips
Edison & Company SubAdvisor LLC), a Delaware limited liability company (the
“Sub-advisor”). 


W
I T N E S S E T H


WHEREAS, the parties entered into that certain
Sub-advisory Agreement dated as of January 11, 2010; 


WHEREAS, the parties entered into that certain First
Amended and Restated Sub-advisory Agreement dated as of July 1, 2010;


WHEREAS, the parties entered into that certain Second
Amended and Restated Sub-advisory Agreement dated as of September 17, 2010;


WHEREAS, the parties entered into that certain Third
Amended and Restated Sub-advisory Agreement dated as of September 20, 2011 (the
“Amended Agreement”); 


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


WHEREAS, Phillips Edison – ARC Shopping Center REIT
Inc., a Maryland corporation (the “Company”) has appointed the Advisor
as its advisor pursuant to the Amended and Restated Advisory Agreement between
the Company, Phillips Edison – ARC Shopping Center Operating Partnership, L.P.
(the “Partnership”) and the Advisor, dated as of even date herewith (as
the same may be amended, restated or otherwise modified from time to time in
accordance with its terms, the “Advisory Agreement”); 


WHEREAS, the Advisor desires to avail itself of the
knowledge, experience, sources of information, advice, assistance and certain
facilities available to the Sub-advisor and to have the Sub-advisor undertake
the duties and responsibilities hereinafter set forth, on behalf of the
Advisor, and subject to the supervision of, the Board of Directors of the
Company, all as provided herein; and


WHEREAS, the Sub-advisor is willing to undertake such
duties and responsibilities, subject to the supervision of the Board of
Directors of the Company, on the terms and subject to the conditions
hereinafter set forth.


NOW, THEREFORE, in consideration of the foregoing and
of the mutual covenants and agreements contained herein, the Parties hereto
agree that the Amended Agreement hereby is amended and restated to read in its
entirety as follows:









1 




 










 








 








                                                                                                                                                                      
Article 1 


Definitions


Capitalized and other terms that are defined in the
Advisory Agreement but not otherwise defined in this Agreement have the
respective meanings ascribed to such terms in the Advisory Agreement, a copy of
which is attached hereto as Appendix A.   


The following defined terms used in this Agreement
shall have the meanings specified below:


“Advisor” has the meaning set forth at the head
of this Agreement.


“Advisory Agreement” has the meaning set forth
in the recitals.


“Affiliate” has the meaning set forth in the
Advisory Agreement.  For the avoidance of doubt, none of the Company, the
Sub-advisor, any subsidiary of the Company, any subsidiary of the Sub-advisor
and any other Person controlled by, controlling or under common control with
Phillips Edison Limited Partnership shall be an Affiliate of the Advisor. 


“Agreement” has the meaning set forth in the
preamble.


“Company” has the meaning set forth in the
recitals hereto.


“Dealer Manager” means Realty Capital Services,
LLC, a Delaware limited liability company, in its capacity as dealer manager
pursuant to the Dealer Manager Agreement.


“Dealer Manager Agreement” means that dealer
manager agreement, dated as of even date herewith, between the Company and the
Dealer Manager, providing for the distribution of the Shares.


“Effective Date” means the initial Effective
Date (as defined in the Dealer Manager Agreement).


“Fund IV” means Phillips Edison Shopping Center
Fund IV, L.P.


“Immediate Family Member” means, with respect
to a Key Person:  (i) any of such Key Person’s parents and siblings, spouse and
descendants and any of the spouses of such descendants (collectively, the “Individual
Group”); (ii) any trust, the beneficiaries of which consist exclusively of
one or more members of the Individual Group (collectively, the “Family
Trusts”); and (iii) any entity which is controlled by, directly or
indirectly, one or more members of the Individual Group and/or one or more of
the Family Trusts.









2 




 










 








 








“Joint Venture”
means any joint venture, limited liability company or other Affiliate of the
Company that owns, in whole or in part, on behalf of the Company any
Properties, Loans or other Permitted Investments.


“Key Person” means (i) with respect to the
Advisor, each of William Kahane and Nicholas Schorsch and his heirs, legal
representatives and executors, and (ii) with respect to the Sub-advisor, each
of Michael C. Phillips and Jeffrey S. Edison and his heirs, legal
representatives and executors.


“Offering Period” has the meaning set forth in
the Dealer Manager Agreement.


“Partnership” means Phillips Edison – ARC
Shopping Center Operating Partnership, L.P., a Delaware limited partnership.


“Partnership Agreement” means the Amended and
Restated Agreement of Limited Partnership of the Partnership, dated as of
February 4, 2013, among the Company, Phillips Edison Shopping Center OP GP LLC,
the Advisor, and PE – ARC Special Limited Partner LLC, as the same may be
amended from time to time.


“Party” or “Parties” refer to the
Advisor or the Sub-advisor or both, as the case may be.


“Prospectus” has the meaning set forth in the
Dealer Manager Agreement.


“Reference Date” means the first date the
Company breaks escrow on stockholder subscriptions in the Initial Public
Offering.


“Sub-advisor” has the meaning set forth at the
head of this Agreement.


“Transfer Restriction Period” means, with
respect to the Sub-advisor, the Offering Period plus 12 months, and with
respect to the Advisor, the Offering Period plus six months.


                                                                                                                                                              
Article 2 


Appointment


The Advisor, pursuant to its authority to delegate all
of its rights and powers to manage and control the business and affairs of the
Company to the Sub-advisor pursuant to Section 4.1 of the Advisory Agreement,
hereby appoints the Sub-advisor to serve as the Sub-advisor for the Company. 
The Sub-advisor hereby accepts such appointment.  The Advisor delegates, and
the Sub-advisor agrees to perform, all the duties of the Advisor set forth in
the Advisory Agreement, all on the terms and subject to the conditions set
forth in this Agreement.  










3 




 










 








 








                                                                                                                                                                        
Article 3 


Duties of the Sub-advisor


Under the Advisory Agreement, the Advisor is
responsible for managing, operating, directing and supervising the operations
and administration of the Company and its assets.  Consistent with Article 2 hereof,
the Sub-advisor undertakes to use commercially reasonable efforts to present to
the Company potential investment opportunities and to provide the Company with
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.  Subject to the limitations set forth in this Agreement and
the Advisory Agreement, including Article 4 of the Advisory Agreement,
consistent with the provisions of the Articles of Incorporation and Bylaws and
the continuing and exclusive authority of the Board over the supervision of the
Company, the Sub-advisor shall, either directly or by engaging an Affiliate or
third party, perform the duties set forth in Article 3 of the Advisory
Agreement (a copy of which is attached hereto as Appendix A), which
duties are incorporated herein by reference as if fully set forth herein.


                                                                                                                                                                        
Article 4 


Authority
and Certain Activities of Sub-advisor


The Sub-advisor shall have
the authority set forth in Article 4 of the Advisory Agreement, shall have the
authority to establish and maintain bank accounts as set forth in Article 5 of
the Advisory Agreement, shall maintain books and records for the Company as set
forth in Article 6 of the Advisory Agreement, and shall abide by the
limitations of Article 7 of the Advisory Agreement, all of which (i.e.,
Articles 4 through 7 of the Advisory Agreement) are incorporated herein by
reference as if fully set forth herein.


                                                                                                                                                                        
Article 5 


Assignment of Payments


As compensation for the
services provided pursuant to this Agreement, Advisor hereby assigns payments
as follows: 


5.1             
Acquisition Fees.  The Advisor
hereby assigns its right to receive direct payment from the Company or from any
Joint Venture of 85% of all Acquisition Fees payable pursuant to the applicable
advisory agreement between the Advisor and the Company or the Joint Venture. 
The Advisor will submit an invoice to the Company or the Joint Venture, which
the Sub-advisor shall prepare, following the closing or closings of each
acquisition or origination, accompanied by a computation of the Acquisition
Fee.  The portion of the Acquisition Fee payable to each of the Advisor and
Sub-advisor then will be paid by the Company or the Joint Venture at the
closing of the applicable transaction upon receipt of the 


 








 








invoice
by the Company or the Joint Venture as provided in the applicable advisory
agreement.  


5.2             
Asset Management Fee.  The Advisor hereby assigns its right to receive
direct payment from the Company or from any Joint Venture of 85% of all Asset
Management Fees payable pursuant to the applicable advisory agreement between
the Advisor and the Company or the Joint Venture.  The Advisor will submit a
quarterly invoice to the Company or the Joint Venture, which the Sub-advisor shall
prepare and which shall include a computation of the Asset Management Fee for
the applicable period.  The Asset Management Fee shall be payable by the
Company or Joint Venture as provided in the applicable advisory agreement.  


5.3             
Disposition Fees.  The Advisor hereby assigns its right to receive
direct payment from the Company or from any Joint Venture of 85% of all
Disposition Fees payable pursuant to the applicable advisory agreement between
the Advisor and the Company or the Joint Venture; provided, however,
that if the receipt by the Advisor of all or any part of a Disposition Fee for
any particular transaction would violate applicable law, and if applicable law
would permit payment thereof to the Sub-advisor, then the assignment shall be
deemed to be for the Disposition Fee (or part thereof) associated with that
particular transaction that would violate applicable law if received by the
Advisor.  The portion of the Disposition Fee payable to each of the Advisor and
the Sub-advisor shall be paid by the Company or the Joint Venture as provided
in the applicable advisory agreement.  


5.4             
Financing Fee.  The Advisor
hereby assigns its right to receive direct payment from the Company or from any
Joint Venture of 85% of all Financing Fees payable to the Advisor pursuant to
the applicable advisory agreement between the Advisor and the Company or the
Joint Venture; provided, however, that if the receipt by the
Advisor of a Financing Fee for any particular transaction would violate
applicable law, and if applicable law would permit payment thereof to the
Sub-advisor, then the assignment shall be deemed to be for the Financing Fee
(or part thereof) associated with that particular transaction that would
violate applicable law if received by the Advisor.


5.5             
Subordinated Participation
Interests.  The Advisor
hereby agrees to assign to the Sub-advisor 85% of the Subordinated
Participation Interests it periodically receives from the Partnership pursuant
to the Advisory Agreement and pursuant to the terms and conditions contained in
the Partnership Agreement.


5.6             
Expense Reimbursements.  Subject
to Article 6 of
this Agreement and Article 9 of the Advisory Agreement, the Advisor hereby
assigns its right to receive direct payment from the Company or any Joint
Venture of expense reimbursements the Sub-advisor incurs on behalf of the
Company or in connection with the services the Sub-advisor provides to the
Company pursuant to this Agreement.












5 




 










 

 


                                                                                                                                                                        
Article 6 


Allocation of Expense
Reimbursements


6.1             
Organization and Offering
Expense Reimbursements.  All Organization and Offering Expense
reimbursements will be apportioned between the Advisor and Sub-advisor pro
rata based on the amount of such Organization and Offering Expenses
reimbursements due each as of the date of the reimbursement.


(A)            
It is understood and agreed that
the Company shall be under no obligation to reimburse the Advisor or
Sub-advisor to the extent such reimbursement would cause the total amount spent
by the Company on Organization and Offering Expenses (excluding underwriting
and brokerage discounts and commissions, but including third-party due
diligence fees as set forth in detailed and itemized invoices) to exceed 1.5%
of Gross Proceeds raised in a Public Offering as of the termination of such
Public Offering; and


(B)             
Within 60 days after the end of
the month in which a Public Offering terminates, the Sub-advisor shall
reimburse the Advisor, to the extent the Advisor was not reimbursed or had an
obligation to reimburse the Company (and did so reimburse the Company), for
Organization and Offering Expenses (excluding underwriting and brokerage
discounts and commissions, but including third-party due diligence fees as set
forth in detailed and itemized invoices) exceeding 1.5% of Gross Proceeds
raised in a Public Offering.


(C)             
The Company shall not reimburse
the Advisor or Sub-advisor for any Organization and Offering Expenses that the
Conflicts Committee determines are not fair and commercially reasonable to the
Company.


(D)            
The Company shall not make any
reimbursement for any of the following Organization and Offering Expenses
incurred by the Dealer Manager that are to be paid out of the Dealer Manager’s
fee:


(1)              
participating broker-dealer
expense reimbursements (including meals with financial advisors and
participating broker-dealer client seminars);


(2)              
sales seminars sponsored by
participating broker-dealers;


(3)              
promotional items;


(4)              
marketing support;









6 




 










 








 








(5)              
expenses in connection with bona
fide training and educational meetings;


(6)              
wholesaling commissions,
wholesaling salaries and wholesaling expense reimbursements (including travel,
meals and lodging in connection with the Offering); 


(7)              
occasional meals and entertainment
expenses of participating broker-dealers; and


(8)              
legal fees and expenses of the
Dealer Manager associated with FINRA-related filings or the drafting and review
of any dealer manager agreements, participating broker-dealer agreements and
due diligence agreements.


6.2             
All Other Expense
Reimbursements.  All other expense reimbursements will be
apportioned between the Advisor and Sub-advisor pro rata based on the
amount of such expense reimbursements due each as of the date of the
reimbursement. 


                                                                                                                                                                        
Article 7 


Voting Agreements


7.1             
Election of Directors.  The Advisor and Sub-advisor each agrees, with
respect to any Shares now or hereinafter owned by it, to vote such Shares in
favor of the Advisor’s nominee for the Board and the Sub-advisor’s nominees for
the Board.  As of the date hereof, the Advisor’s nominee for the Board is
William M. Kahane, and the Sub-advisor’s nominees are Jeffrey S. Edison and
Michael C. Phillips.


7.2             
Other Voting of Shares.  The Advisor and Sub-advisor each agrees that, with
respect to any Shares now or hereinafter owned by it, neither will vote or
consent on matters submitted to the stockholders of the Company regarding (i)
the removal of the Advisor or any Affiliate of the Advisor; (ii) the removal of
the Sub-advisor or any Affiliate of the Sub-advisor; (iii) any transaction
between the Company and the Advisor or any of its Affiliates; or (iv) any transaction
between the Company and the Sub-advisor or any of its Affiliates.  This voting
restriction shall survive until such time that the Advisor is no longer serving
as such. 


7.3             
Major Decisions. 


(A)            
Subject to Sections 7.3(C)
and 7.3(D)  with
respect to the Company, all major decisions of the Company set forth below in clauses
(A)(1) through (A)(6)  (“Major Decisions”) shall be subject to
the Company’s Articles of Incorporation and joint approval by the Advisor and
Sub-advisor.  For the avoidance of doubt, Major Decisions specifically exclude
any decisions regarding the day-to-day operations of the Company, the
decision-making authority for which has been delegated to the Sub-advisor
pursuant to this Agreement.  Major Decisions shall consist of the following:









7 




 










 








 








(1)              
Decisions to recommend to the
Board of Directors that the Company acquire or sell Properties, Loans and other
Permitted Investments;


(2)              
Retention of investment banks for
the Company;


(3)              
Marketing methods for the
Company’s sale of Shares;


(4)              
Extending, initiating or
terminating the Initial Public Offering or any subsequent Offering of the
Shares;


(5)              
Issuing press releases involving
the major decisions of the Company or the Advisor or Sub-advisor or their
Affiliates with respect to the business or operations of the Company; provided,
that the Sub-advisor need not obtain consent to any press releases regarding
acquisitions or dispositions of Properties, Loans or other Permitted
Investments; and provided  further, however, that
notwithstanding the immediately preceding proviso, any mention of the Advisor
or its Affiliates in such press releases regarding acquisitions or dispositions
shall be pre-approved by the Advisor; and


(6)              
Merging or otherwise engaging in
any change of control transaction for the Company.


(B)             
Notwithstanding anything in this
Agreement to the contrary, if the Parties do not agree to any action
constituting a Major Decision that is described in any of clauses (A)(2)
through (A)(6)  above and that has been proposed by either Party, the
Parties shall meet (in person or by phone) to discuss the issue in dispute in
good faith over the five-business day period beginning with the delivery of
notice of the proposed action to the other Party.  


(C)             
Notwithstanding anything in this
Agreement to the contrary, with respect to Major Decisions described in clause
(A)(1) above (but subject to Section 7.3(D)), (1) joint approval
shall not be required, (2) the Sub-advisor and the Advisor shall discuss the
proposed transaction (either in person or by phone) prior to either Party
making any recommendation of the proposed transaction to the Board of
Directors, and (3) the Sub-advisor and the Advisor shall each give due
consideration to the opinions of the other Party.  Ordinarily, such discussions
shall begin at least five business days before a recommendation is made to the
Board of Directors; however, if in the sole discretion of the Sub-advisor it is
in the best interest of the Company to make a recommendation to the Board of
Directors more promptly, then the Sub-advisor may do so.  In the event the
Parties do not agree as to whether to recommend the proposed 







8 




 










 








 








transaction to the Board of Directors, the Sub-advisor’s
decision shall govern.


(D)            
Notwithstanding the provisions of
this Section 7.3 or
any other provision in this Agreement to the contrary, in all events, including
Major Decisions, the Company will be managed under the direction of the Board
of Directors.


(E)             
Notwithstanding anything in this
Agreement to the contrary (but subject to Section 7.3(D)), the
Sub-advisor shall have sole authority to act on behalf of the Company regarding
amending the Advisory Agreement.


                                                                                                                                                                        
Article 8 


Relationship of
Sub-advisor and Advisor and their Affiliates;

Other Activities of the Advisor and Sub-advisor


8.1             
Relationship.  The Advisor and the Sub-advisor are not partners or
joint venturers with each other, and nothing in this Agreement shall be
construed to make them such partners or joint venturers. Except as set forth in
Section 8.4,
nothing herein contained shall prevent the Advisor or Sub-advisor from engaging
in or earning fees from other activities, including, without limitation, the
rendering of advice to other Persons (including other REITs) and the management
of other programs advised, sponsored or organized by the Advisor or
Sub-advisor, respectively, or any of their Affiliates.  Nor shall this
Agreement limit or restrict the right of any manager, director, officer,
member, partner, employee or equityholder of the Advisor or Sub-advisor or
their Affiliates to engage in or earn fees from any other business or to render
services of any kind to any other Person.  The Sub-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 other similar co-investment arrangements, the Advisor or the
Sub-advisor may be engaged to provide advice and service to such Persons, in
which case, the Advisor or the Sub-advisor, as applicable, will earn fees for
rendering such advice and service.  Each of the Advisor and the Sub-advisor
shall promptly disclose to the Board the existence of any condition or
circumstance, existing or anticipated, of which it has knowledge, that creates
or which would reasonably result in a conflict of interest between its
obligations to the Company and its obligations to or its interest in any other
Persons (it being understood and agreed that the conditions and circumstances
referred to in the second paragraph of Section 8.4(A) are deemed to have
been disclosed to the Board for purposes of this Section 8.1). 


8.2             
Time Commitment.  The Sub-advisor shall, and shall cause its Affiliates
and their respective employees, officers and agents to, devote to the Company
such 







9 




 










 








 








time as shall be reasonably necessary to conduct
the business and affairs of the Company in an appropriate manner consistent
with the terms of this Agreement.  Each Party acknowledges that the other Party
and its Affiliates and their respective employees, officers and agents may also
engage in activities unrelated to the Company and may provide services to
Persons other than the Company or any of its Affiliates.


8.3             
Advisor and Sub-advisor
Meetings.  The Parties shall meet on a regular basis
(frequency to be determined) to discuss and consult with one another regarding
the Company and its assets and opportunities.  Advisor and Sub-advisor shall
cause their respective principals to meet (in person or by phone) with
representatives of each other upon the request of either Party.  The Parties
will provide each other information regarding the operations and acquisitions
of the Company as reasonably requested by the other.  Each of Advisor and
Sub-advisor shall have direct access to the books and records of the Company
and of each attorney, accountant, servicer and other contracting party of the Company
(except to the extent such attorney represents either Party with respect to
this Agreement). 


8.4             
Investment Opportunities and
Allocation.   


(A)            
The Sub-advisor shall be required
to use commercially reasonable efforts to present a continuing and suitable
investment program to the Company that is consistent with the investment
policies and objectives of the Company.  So long as the Advisor is acting in
its capacity as advisor under the Advisory Agreement, each of the Advisor and
the Sub-advisor will not (and will cause its Affiliates to not) (i) pursue any
opportunity to acquire any Property, Loan or other Permitted Investment that
fits within the Company’s strategy, or (ii) offer such Property, Loan or other
Permitted Investment to a third party, in each case unless and until such
opportunity is first presented to the Company.  The Company shall have 30 days
from the date of its receipt of a complete written offering package relating to
such opportunity, customary in scope and content, to notify the Advisor or the
Sub-advisor, as the case may be, of the Company’s decision as to whether or not
to pursue such opportunity.  If the Company fails so to notify the Advisor or
the Sub-advisor, as the case may be, within such 30-day period, the Company
shall be deemed to have passed on such opportunity.  If the Company passes on
such opportunity, then the Advisor, Sub-advisor or such Affiliate, as the case
may be, may acquire the subject investment or offer the subject investment to a
third party for a period of 180 days, in each case on terms and conditions
(including price) that are not materially different from the terms and
conditions set forth in the offering package to the Company.  If at the
expiration of such 180-day period, such opportunity remains available, then the
provisions of this Section 8.4(A) shall once again apply to such
opportunity.  


Notwithstanding the preceding, however, the Advisor or
any Affiliate of the Advisor shall be permitted to pursue any opportunity or to
offer any 


 

opportunity to a third party in respect of
(1) any net leased retail, office and industrial properties or other property
consistent with the investment policies of American Reality Capital Trust,
Inc., (2) any commercial real estate or other real estate investments that
relate to office, retail, multi-family residential, industrial and hotel
property types, located primarily in the New York metropolitan area or other
property consistent with the investment policies of American Realty Capital New
York Recovery REIT, Inc., or (3) any investments to be made by a contemplated
non-traded REIT (the “Identified REIT”) that the Advisor or any of its
Affiliates has described as (a) intending to invest primarily in “power center”
real estate developments, (b) being sponsored or co-sponsored by ARC (or one of
its Affiliates), the acquisition services for which will be provided by an
international commercial and residential real estate developer and manager (or
one of its Affiliates), and (c) being the subject of an executed letter of
intent or term sheet between the Advisor (or one of its Affiliates) and such
international commercial and residential real estate developer and manager (or
one of its Affiliates), and which has or will have as its publicly disclosed
(and not subsequently revised or required to be revised under applicable
securities laws) investment objectives to have less than 20% of its assets
(measured by purchase price) in anchored shopping centers with purchase prices
of less than $20,000,000 per property (determined once the proceeds of the
offering have been fully invested).  


(B)             
If Fund IV, Phillips Edison
Shopping Center Fund III, L.P., Phillips Edison Strategic Investment Fund or
Phillips Edison Limited Partnership presents an investment opportunity to the
Company and discloses in writing that such entity is attempting to seek
properties to qualify for tax deferred treatment under Section 1031 of the
Code, then if the Company does not respond within 21 days, the Company shall be
deemed to have passed on such investment opportunity.  For clarification,
developing single tenant retail or commercial properties shall not be
considered to fit within the Company’s strategy.  


(C)             
Notwithstanding the preceding, the
restrictions in clauses (A) and (B)  will cease to be effective
upon termination of the Offering Period or, if later, the time when all equity
raised during the Offering Period has been substantially invested or committed
to investment.


(D)            
Except as provided in this Section
8.4, none of
the Advisor and the Sub-advisor nor any of their respective Affiliates shall be
obligated generally to present any particular investment opportunity to the
Company.  


8.5             
Prospectus Guidance.  Sub-advisor
has read and will abide by the Prospectus with respect to the Company’s
investment objectives, targeted assets and investment restrictions, targeted
markets, leverage, distribution policy, and investor profile except to the
extent directed by the Board.










11 




 










 








 








                                                                                                                                                                        
Article 9 


Dealer Manager


            The Parties
agree to use their best efforts to cause the Company, subject to approval by
the Company’s Board of Directors, to enter into the Dealer Manager Agreement
with the Dealer Manager on terms consistent with the “Plan of Distribution”
section of the Prospectus.


                                                                                                                                                                     
Article 10 


The
Phillips Edison and ARC Names


            The Parties
acknowledge and reaffirm the rights and obligations set forth with respect to
their proprietary interests in their respective names as set forth in Article
12 of the Advisory Agreement.


                                                                                                                                                                     
Article 11 


Other
Agreements


11.1         
Approval and Funding of Certain
Organization and Offering Costs.  


(A)            
On or prior to the date hereof,
the Advisor has prepared an initial Organization and Offering Expense budget
for the Advisor and its Affiliates (including Realty Capital Services, LLC in its
capacity as Dealer Manager) for the period ending on the Effective Date, a copy
of which is attached as Schedule I hereto (the “Initial O&O
Budget”) and the Sub-advisor has reviewed and approved the Initial O&O
Budget.  On or before the Effective Date, the Advisor or its Affiliates will
prepare and present to the Sub-advisor for its review and approval the proposed
Organization and Offering Expense budget for the one-year period following the
Effective Date for the Advisor and its Affiliates (including Realty Capital
Services, LLC in its capacity as Dealer Manager).  Thereafter, on or before the
30th day preceding the annual anniversary of the Effective Date, the Advisor or
its Affiliates will prepare and present to the Sub-advisor for its review and
approval the proposed Organization and Offering Expense budget for the
following one-year period for the Advisor and its Affiliates (including Realty
Capital Services, LLC in its capacity as Dealer Manager).  Each of (1) the
Initial O&O Budget, and (2) each such other Organization and Offering
Expense budget for the time period specified therein once approved by the
Sub-advisor, shall be referred to herein as an “Approved O&O Budget”.  
It is understood and agreed that neither the Initial O&O Budget nor any
other Approved O&O Budget shall cover or refer to selling commissions or
the Dealer Manager Fee payable pursuant to the Dealer Manager Agreement.










12 




 










 








 








(B)             
Each Approved O&O Budget may
contain contingencies for expenditure items anticipated in good faith by the
Advisor and its Affiliates, but the precise amounts of which are unknown at the
time of preparation and submission thereof to the Sub-advisor for approval. 
Within 30 days after each proposed Organization and Offering Expense budget is
submitted to it, the Sub-advisor shall notify the Advisor in writing (1) that
it approves the proposed budget or (2) of the revisions it reasonably believes
should be made to such proposed budget.  If the Sub-advisor fails to respond
within such 30-day period, the Sub-advisor shall be deemed to have approved the
proposed budget and such proposed budget shall become the Approved O&O
Budget for the time periods specified therein.  If the Sub-advisor withholds
its approval of any proposed budget, then the Parties shall negotiate a mutually
acceptable Organization and Offering Expense budget for the Advisor and its
Affiliates (including Realty Capital Services, LLC in its capacity as Dealer
Manager).  For the avoidance of doubt,
this Section 11.1(B) shall not apply to the Initial O&O Budget.


(C)             
Notwithstanding anything to the
contrary contained herein or in any other agreement, the Advisor shall ensure
that it and its Affiliates shall not make any expenditure of Company funds or
of funds for which reimbursement is sought from the Company or Sub-advisor, or
commit to make any such expenditure, except as provided for in an Approved
O&O Budget; provided, however, with respect to any line item
in an Approved O&O Budget, the Advisor and its Affiliates may incur up to
115% of the amount budgeted therefor; provided  further, however,
with respect to any line item in an Approved O&O Budget, the Advisor and
its Affiliates may incur in excess of 115% of the amount budgeted therefor with
the approval of the Sub-advisor.


(D)            
The Advisor and Sub-advisor have
caused their Affiliates to fund $75,000 and $425,000, respectively, into their
respective bank accounts, and Advisor and Sub-advisor will bear the initial
$500,000 of Organization and Offering Expenses (excluding underwriting and
brokerage discounts and commissions) in the ratio of 15% to 85%, respectively. 
After such initial $500,000 of Organization and Offering Expenses have been
borne as aforesaid, Sub-advisor will fund 100% of all Organization and Offering
Expenses (excluding underwriting and brokerage discounts and commissions, but
including third-party due diligence fees set forth in detailed and itemized
invoices). 


11.2         
Property Level Agreements.  The Parties agree to use their best efforts to
cause the Company, subject to approval by the Company’s Board of Directors, to
enter into a Master Property Management, Leasing, and Construction Management
Agreement with an Affiliate of the Sub-advisor consistent with the description
of the same in the Prospectus.  Advisor shall have the right to review and
comment upon such master agreement, and to approve such master agreement (such
approval not to be unreasonably withheld), prior to submission to the Board.  







13 




 










 








 








Advisor agrees that it shall have no right in the fees
generated pursuant to such master agreement.













14 




 










 

11.3         
Advisor, Advisory Agreement and
Dealings with Company.  


(A)            
Advisor agrees to inform and make
Sub-advisor a party to all negotiations between Advisor and the Company
regarding any proposed amendment of the Advisory Agreement.  No amendment to
the Advisory Agreement will be agreed upon or permitted if such amendment would
impact the rights or obligations of the Sub-advisor without the Sub-advisor’s
consent and signature. 


(B)             
Advisor agrees to allow
Sub-advisor to present and recommend to the Company all investment
opportunities recommended by Sub-advisor.


 


11.4         
Initial Capital Contribution.  Sub-advisor acknowledges that it contributed an
amount equal to $200,000 to the capital of the Company on December 3, 2009. 
Sub-advisor agrees to purchase or to cause an Affiliate to purchase, on a
monthly basis, sufficient Shares sold in the Initial Public Offering during
each month following the Reference Date such that the total Shares owned by
Sub-advisor and its Affiliates is at least equal to 0.1% of the Shares
outstanding at the end of the immediately preceding month (ignoring for
purposes of calculating the outstanding number of Shares at the end of a month
any Shares issued after the Reference Date but outside of the Initial Public
Offering, such as Shares issued pursuant to an executive compensation plan or
upon exchange of Partnership securities).  The Shares to be purchased pursuant
to this obligation shall be at a purchase price of $9.00 per Share.


                                                                                                                                                                     
Article 12 


Certain Transfers


12.1         
Transfers.  The Parties
have selected one another based on the experience and personnel of each other
and their Affiliates.  Accordingly, each Party agrees that it is mutually desirable
to restrict changes in ownership of each Party.  Each Party agrees to amend, to
the extent necessary, its governing documents to restrict transferability of
any direct or indirect interest in such Party by such Party’s Key Persons
unless both Parties jointly agree as otherwise permitted by this Article 12; provided,
however, that any transfer of an interest in either Party by any of such
Party’s Key Persons, by any entity controlled by a Key Person of such Party or
by any Immediate Family Member of a Key Person of such Party shall be permitted
without any approval so long as (i) the transferee of such interest is an
Immediate Family Member of a Key Person of such Party, and (ii) one or more of
the Key Persons of such Party retain management and voting control over such
interest held by such transferee at all times after the applicable transfer
occurs.













15 




 










 








 








12.2         
Prohibited Transfers.   


(A)            
Except for Permitted Transfers and
other transfers made in accordance with, and as permitted by, this Agreement,
neither Party (1) will allow any direct or indirect transfer of interests
therein by its applicable Key Persons, and (2) will directly or indirectly
transfer any part of its direct or indirect ownership interest in the Company
(if any), whether in each such case voluntarily or by foreclosure, assignment
in lieu thereof or other enforcement of a pledge, hypothecation or collateral
assignment without the prior approval of the other Party.  


(B)             
“Permitted Transfer” (for
which no approval by the other Party shall be required) means either of the
following:


(1)              
any transfer of all or any portion
of the direct or indirect interest in the Company held by a Party (if any) to any
Affiliate of such Party; provided, however, that in each such
case the transferee executes an instrument agreeing to be bound by the
provisions of this Agreement to the extent applicable to the transferor; and


(2)              
any transfer of all or any portion
of the direct or indirect interest in a Party held, directly or indirectly, by
such Party’s Key Persons or Immediate Family Members; provided, however,
that either (a) either or both of such Party’s Key Persons remain involved
with the material decision-making and actions of such Party for the applicable
Transfer Restriction Period (for the sake of clarity, after  the
applicable Transfer Restriction Period, each Party is permitted to allow the
effecting of a transfer of all or any portion of the direct or indirect interest
in such Party without regard to the continued involvement of such Party’s Key
Persons) or (b) in the case of the Advisor, the transfer occurs after the
Offering Period and the applicable transferee agrees to cede any
decision-making and governance authority relating to the Company (including
making Major Decisions) to the Sub-advisor.


                                                                                                                                                                     
Article 13 


Representations,
Warranties, and Agreements


13.1         
The Advisor and the Sub-advisor
each hereby represents and warrants to, and agrees with, the other as follows:


(A)            
Such Party is duly formed and
validly existing under the laws of the jurisdiction of its organization;


(B)             
Such Party has full power and
authority to enter into this Agreement and to conduct its business to the
extent contemplated in this Agreement;




 








 








(C)             
This Agreement has been duly
authorized, executed and delivered by such Party and constitutes the valid and
legally binding agreement of such Party, enforceable in accordance with its
terms against such Party, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium and other similar laws relating to
creditors’ rights generally, and by general equitable principles.


(D)            
The execution and delivery of this
Agreement by such Party and the performance of its duties and obligations
hereunder do not result in a breach of any of the terms, conditions or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, credit agreement, note or other evidence of indebtedness, or any lease
or other agreement, or any license, permit, franchise or certificate to which
such Party is a party or by which it is bound or to which its properties are
subject or require any authorization or approval under or pursuant to any of
the foregoing, or violate any statute, regulation, law, order, writ,
injunction, judgment or decree to which such Party is subject;


(E)             
Such Party is not aware of any
facts pertaining to such Party or its Affiliates that would cause such Party,
or any of such Party’s Affiliates, to be unable to discharge timely the
obligations of such Party or its Affiliates under this Agreement or the
obligations of the Company under any agreement to which any of them is a party;


(F)              
To the knowledge of such Party, no
consent, approval or authorization of, or filing, registration or qualification
with, any court or governmental authority on the part of such Party is required
for the execution and delivery of this Agreement by such Party and the
performance of its obligations and duties hereunder and such execution,
delivery and performance shall not violate any other agreement to which such
Party is bound;


(G)            
Such Party recognizes that DLA
Piper LLP (US) is representing and in the future may represent the Sub-advisor,
its Affiliates and the Company with respect to matters in this Agreement and on
other unrelated matters, and acknowledges that it has been notified of this
representation and that it has been suggested that it retain independent
counsel in reviewing this Agreement and the terms agreed to herein.  The
Advisor hereby waives all conflicts of interest regarding DLA Piper with
respect thereto and hereby waives all rights to disqualify DLA Piper from
representing the Sub-advisor, its Affiliates, and the Company in any matter at
any time;   


(H)            
Such Party recognizes that
Proskauer Rose LLP is representing and in the future may represent the Advisor,
the Dealer Manager, their Affiliates and the Company with respect to matters in
this Agreement and on other unrelated matters, and acknowledges that it has
been notified of this representation and that it has been suggested that it
retain independent 







17 




 










 








 








counsel in reviewing this Agreement
and the terms agreed to herein.  The Sub-advisor hereby waives all conflicts of
interest regarding Proskauer Rose LLP with respect thereto and hereby waives
all rights to disqualify Proskauer Rose LLP from representing the Advisor, the
Dealer Manager, their Affiliates and the Company in any matter at any time; 


(I)               
Except as specifically provided in
this Agreement, such Party is not relying upon the other Party, the Company or
their respective Affiliates or advisors, in connection with any of the matters
referred to in this Agreement, including any projections, information, due
diligence, representations or warranties (express or implied, oral or written),
statements or other matters concerning the Company, the other Party, or
otherwise, and each Party hereby confirms that it has conducted an independent
investigation of the facts regarding the same (or has chosen not to do so at
such Party’s peril); 


(J)               
The Party is not acting as the
representative or agent or in any other capacity, fiduciary or otherwise, on
behalf of another Person in connection with the Company or the other matters
referred to in this Agreement;


(K)            
Such Party is aware that the other
Party and/or Affiliates of such other Party now and in the future shall be, and
in the past have been, engaged in businesses which are competitive with that of
the Company.  Each of the Parties hereby acknowledges and agrees that the
Parties’ obligations with respect to all future activities which are in
competition with the Company are as set forth in Article 8; 


(L)             
Such Party is aware that
compensation and reimbursements may be payable to Affiliates of the Parties by
the Company, as addressed in this Agreement, the Advisory Agreement and the
Dealer Manager Agreement;


(M)           
No Party is required to cause the
controlling persons of such Party to devote any specific portion of their time
to Company business other than as necessary to fulfill such Parties’
obligations under this Agreement and the Advisory Agreement, as the case may
be, and such controlling persons are expected to spend substantial amounts of
their time on activities that are unrelated to the Company;


(N)            
Such Party understands that the
other Party is relying on the accuracy of the representations set forth in this
Article 13
in entering into this Agreement;


(O)            
Such Party has not granted to any
third party rights that would be inconsistent with the rights granted to the
other Party by this Agreement; 


(P)              
Such Party has all requisite
licenses to do and perform all acts and receive all fees as contemplated by
this Agreement and the Advisory Agreement; and 









18 




 










 








 








(Q)            
None of its principals has been
convicted of any felony, or convicted of any misdemeanor involving moral
turpitude (including fraud), or entered a plea of nolo contendere in connection
with any felony or any such misdemeanor.


13.2         
The Sub-advisor hereby represents
and warrants to, and agrees with, the Advisor as follows:


(A)            
The staff and employees of the
Sub-advisor and its Affiliates have the skills, knowledge of and expertise in
property selection, acquisitions/development, financing, asset and property
management, and dispositions as to perform their respective duties and
obligations hereunder; and 


(B)             
The Sub-advisor is sophisticated
in real estate and securities transactions, has been granted access to such
financial and other material information concerning the Company, the other
Party and the other Party’s Affiliates, and their respective current and
anticipated operations and such due diligence materials as it deems necessary
or advisable, as it has requested or may require in connection with its
investment (including an advance of expenses that may be reimbursed) in the
Company, is able, either directly or through its agents and representatives, to
evaluate such information and any due diligence materials provided or made
available to it from time to time hereunder, and is able to bear the financial
risk of loss presented by an investment in the Company, particularly in light
of the risks that would be disclosed by a detailed analysis thereof (its access
to which, to the full extent any Party has requested, hereby is confirmed by
each Party); 


                                                                                                                                                                     
Article 14 


Term And Termination of
the Agreement


14.1         
Term.  This Agreement shall have an initial term of one
year from the date hereof and shall be renewed for an unlimited number of
successive one-year terms upon renewal of the Advisory Agreement.  This
Agreement shall be co-terminus with the Advisory Agreement.  


14.2         
Termination.  Subject to last sentence of Section 14.1:   


(A)            
This Agreement may be terminated
(1) by the Advisor upon 60 days’ prior written notice by the Advisor to the
Sub-advisor with approval of a majority of the Conflicts Committee, or (2) by
the Sub-advisor upon 60 days’ prior written notice by the Sub-advisor to the
Advisor;  


(B)             
This Agreement may be terminated
by the Advisor, if the Sub-advisor materially breaches this Agreement; provided,
however, that the Sub-







19 




 










 








 








advisor shall have 30
calendar days after the receipt of notice of such breach from the Advisor to
cure such breach; 


(C)             
This Agreement may be terminated
by the Advisor, as a result of any fraud, criminal conduct, gross negligence or
willful misconduct by Sub-advisor or any Affiliate thereof in any action or
failure to act undertaken by such Person pertaining to or having a detrimental
effect upon the ability of the Advisor or the Sub-advisor to perform their
respective duties hereunder; provided, however, that the
Sub-advisor does not cure any such act within 30 calendar days after the
receipt of notice of such act (or at such later time as may be stated in the
notice) from the Advisor; or


(D)            
This Agreement may be terminated
by either Party, if the other Party (1) commences a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (2)  consents to the entry of an order for relief in an involuntary
case under any such law, (3) consents to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) for the other Party or for any substantial
part of its property, or (4) makes any general assignment for the benefit of
creditors under applicable state law;


(E)             
This Agreement may be terminated
by either Party, if:  (1) an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect has been commenced
against the other Party, and such case has not been dismissed within 60 days
after the commencement thereof; or (2) a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) has been appointed for
the other Party or has taken possession of the other Party or any substantial
part of its property, and such appointment has not been rescinded or such
possession has not been relinquished within 60 days after the occurrence
thereof; or


(F)              
This Agreement may be terminated
at any time within five years after the date hereof by the Advisor if both
Michael C. Phillips and Jeffrey S. Edison cease to be actively involved in the
management of the Sub-advisor.


14.3         
Survival upon Termination.  Notwithstanding anything else that may be to the
contrary herein, the expiration or earlier termination of this Agreement shall
not relieve a party for liability for any breach occurring prior to such
expiration or earlier termination.  The provisions of Articles 1, 5,
6, 10, 13, 14, 16, and 17  shall
survive termination of this Agreement. 


14.4         
Payments on Termination and
Survival of Certain Rights and Obligations.  After termination of this Agreement, the
Sub-advisor shall have the rights to payment and the responsibilities as set
forth in Section 13.3 of the Advisory Agreement. 










20 




 










 








 








                                                                                                                                                                     
Article 15 


Assignment


This Agreement may be
assigned by the Sub-advisor (a) to an Affiliate with the consent of the
Advisor, such consent not to be unreasonably withheld or delayed, provided that
such Affiliate remains at all times thereafter an Affiliate of Phillips Edison
Limited Partnership or (b) in a manner meeting the conditions of Section 12.2(B)(2). 
This Agreement shall not be assigned by the Advisor without the consent of the
Sub-advisor, except in the case of (i) an assignment by the Advisor to the
Company whereby the Sub-advisor becomes the advisor to the Company or (ii) an
assignment by the Advisor meeting the conditions of Section 12.2(B)(2). 


                                                                                                                                                                     
Article 16 


Indemnification And
Limitation Of Liability


The indemnification and
limitation of liability provisions contained in the Advisory Agreement apply to
both the Advisor and Sub-advisor.  Both Parties agree that neither will take
any action inconsistent with such limitation of liability or indemnification
provisions.


                                                                                                                                                                     
Article 17 


Miscellaneous


17.1         
Notices.  Any notice, request, demand, approval, consent,
waiver or other communication required or permitted to be given hereunder or to
be served upon any of the Parties hereto (each a “Notice”) shall be in
writing and shall be (a) delivered in person, (b) sent by facsimile
transmission (with the original thereof also contemporaneously given by another
method specified in this Section 17.1),
(c) sent by a nationally-recognized overnight courier service, or (d) sent by
certified or registered mail (postage prepaid, return receipt requested), to
the address of such Party set forth herein.



To the Advisor:



American Realty Capital II Advisors, LLC

405 Park Avenue

New York, New York 10022

Attention:  Nicholas S. Schorsch

                   Jesse Galloway



with a copy to (which shall not constitute Notice):



Proskauer Rose LLP

Eleven Times Square









21 




 










 








 








New York, New York 10036

Attention: Peter M. Fass, Esq.

                  James P. Gerkis, Esq.

Telephone:  (212) 969-3000

Facsimile:  (212) 969-2900



To the Sub-advisor:



Phillips Edison NTR LLC

11501 Northlake Drive

Cincinnati, OH 45249



with a copy to (which shall not constitute Notice):



DLA Piper LLP (US)

4141 Parklake Drive , Suite 300

Raleigh, North Carolina 27612

Attention: Robert Bergdolt

Telephone: (919) 786-2002

Facsimile: (919) 786-2202



Either Party may at any time give Notice in writing to the other Party of a
change in its address for the purposes of this Section 17.1.  Each Notice shall be deemed given and effective upon
receipt (or refusal of receipt).


17.2         
Modification.  This Agreement shall not be amended, supplemented,
changed, modified, terminated or discharged, in whole or in part, except by an
instrument in writing signed by both Parties hereto, or their respective
successors or permitted assigns.  


17.3         
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.


17.4         
Construction.  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.


17.5         
Entire Agreement.  This Agreement contains the entire agreement and
understanding between the Parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or
written, of any nature whatsoever with respect to the subject matter hereof.
The express terms hereof control and supersede any course of performance and/or
usage of the trade inconsistent with any of the terms hereof.  In all events, nothing contained herein shall be
read, construed, interpreted or applied in any manner that prevents or 


 








 








hinders the Company from qualifying as a real estate
investment trust under Section 856(c) of the Code.


17.6         
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.


17.7         
Gender.  Words used herein regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or
neuter, as the context requires.


17.8         
Titles Not to Affect
Interpretation.  The titles of Articles and Sections 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.


17.9         
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. This Agreement
shall become binding when one or more counterpart signature pages or
counterparts hereof, individually or taken together, shall bear the signatures
of all of the Parties reflected hereon as the signatories. 


 


[The
remainder of this page is intentionally left blank.


Signature
page follows.]












23 




 










 








 








           IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date
and year first above written.


 


	
   

  	
   

  	
   

   

  
	
   

  	
   

  	
  American Realty Capital II Advisors,
  LLC

   

   

   

     By:    /s/ William Kahane______________ 

           William Kahane, President

   

  




 


	

   

  	
  Phillips Edison NTR LLC

   

   

   

     By:   /s/ R. Mark Addy________________ 

           R. Mark Addy, President

   

   

   

  




 


 












24 




 










 








 








Schedule I


Initial
O&O Budget


 


 


Phillips Edison –
ARC Shopping Center REIT, Inc. 


Estimated Issuer Costs 


(Based on $1.5 billion offering) 


Pre-Effective Period 


 




	
   

  	
   

  	
   

  	
   

  
	
   

  	
    

  	
  Pre-Effective

  
	
   

  	
    

  	
  Period

  
	
  SEC Registration Fee

  	
    

  	
   

  	
  97,000

  
	
  FINRA Filing Fee

  	
    

  	
   

  	
  75,500

  
	
  Legal – Issuer

  	
    

  	
   

  	
  900,000

  
	
  Legal – Managing BD (including FINRA)

  	
    

  	
   

  	
  200,000

  
	
  Printing

  	
    

  	
   

  	
  150,000

  
	
  Accounting

  	
    

  	
   

  	
  115,000

  
	
  Blue Sky Expenses

  	
    

  	
   

  	
  50,000

  
	
  Advertising and Sales Literature

  	
    

  	
   

  	
  500,000

  
	
  Miscellaneous – Fulfillment

  	
    

  	
   

  	
   

  
	
  Seminars

  	
    

  	
   

  	
  250,000

  
	
  Other 1 – Investor Relations and Transfer Agent and Fulfillment

  	
    

  	
   

  	
  175,500

  
	
  Other 2 – Other Overhead Costs

  	
    

  	
   

  	
  202,000

  
	
  Other 3 – Due Diligence

  	
    

  	
   

  	
  200,000

  
	
   

  	
    

  	
   

  	
   

  
	
  Total Issuer Costs for the Period

  	
    

  	
  $

  	
  2,915,000

  






 







 








 








Appendix A


Form of
Advisory Agreement 


 











26