Document:

Unassociated Document

     

    
      FORM
OF SUBSCRIPTION ESCROW AGREEMENT

      

      THIS SUBSCRIPTION ESCROW AGREEMENT
(this “Escrow
Agreement”), dated as
of                   ,
2010, is entered into by and among Realty Capital Securities, LLC (the “Dealer Manager”), American
Realty Capital New York Recovery REIT, Inc. (the “Company”) and Wells Fargo
Bank, National Association, as Escrow Agent (the “Escrow Agent”).

      

      WHEREAS, the Company intends
to raise cash funds from investors (the “Investors”) pursuant to a
public offering (the “Offering”) of not less than
$2,000,000 (the “Minimum
Amount”) nor more than $1,500,000,000 of shares of common stock, par
value $0.01 of the Company (the “Securities”) pursuant to the
registration statement on Form S-11 of the Company (No. 333-163069) (the “Offering Document”), as
amended, a copy of which is attached as Exhibit A hereto.

      

      WHEREAS, the Company desires
to establish an escrow account with the Escrow Agent for funds contributed by
the Investors with the Escrow Agent, to be held for the benefit of the Investors
and the Company until such time as (i) subscriptions for the Minimum Amount of
the Securities, have been deposited into escrow or otherwise in accordance with
the terms of this Escrow Agreement, (ii) in the case of subscriptions received
from residents of Pennsylvania (“Pennsylvania Investors”) and
residents of Massachusetts (“Massachusetts Investors”),
aggregate subscriptions from all Investors resulting in a total minimum capital
raised of $50,000,000 (the “Pennsylvania and Massachusetts
Minimum Amount”) and deposited into escrow or otherwise provided in
accordance with the terms of this Escrow Agreement and (iii) in the case of
subscriptions received from residents of Tennessee (“Tennessee Investors”)
aggregate subscriptions from all Investors resulting in a total minimum capital
raised of $10,000,000 (the “Tennessee Minimum Amount”)
and deposited into escrow or otherwise provided in accordance with the terms of
this Escrow Agreement.

      

      WHEREAS, the Escrow Agent is
willing to accept appointment as Escrow Agent only for the expressed duties
outlined herein.

      

      NOW, THEREFORE, in
consideration of the premises set forth above and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:

      

      1.           
 Proceeds to be Escrowed.
On or before the first date of the Offering, the Company shall establish
an escrow account with the Escrow Agent to be invested in accordance with
Section 9 hereof entitled “ESCROW ACCOUNT FOR THE BENEFIT OF SUBSCRIBERS FOR
COMMON STOCK OF AMERICAN REALTY CAPITAL NEW YORK RECOVERY REIT, INC.” (the
“Escrow
Account”).  All funds received from Investors in payment for
the Securities (“Investor
Funds”) will be delivered to the Escrow Agent within one (1) business day
following the day upon which such Investor Funds are received by the Company or
its agents, and shall, upon receipt by the Escrow Agent, be retained in escrow
by the Escrow Agent and invested as stated herein. During the term of this
Escrow Agreement, the Company or its agents shall cause all checks received by
and made payable to it in payment for the Securities to be endorsed in favor of
the Escrow Agent and delivered to the Escrow Agent for deposit in the Escrow
Account.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Proceeds received from Pennsylvania
Investors and Massachusetts Investors shall be accounted for separately in a
subaccount entitled “Escrow Account for the Benefit of Pennsylvania and
Massachusetts Subscribers for American Realty Capital New York Recovery REIT,
Inc.” (the “Pennsylvania and
Massachusetts Escrow Account”), until such Pennsylvania and Massachusetts
Escrow Account has closed pursuant to Section 4 hereof.  The Company
shall, and shall cause its agents to, cooperate with the Escrow Agent in
separately accounting for subscription proceeds from Pennsylvania Investors and
Massachusetts Investors in the Pennsylvania and Massachusetts Escrow Account,
and the Escrow Agent shall be entitled to rely upon information provided by the
Company or its agents in this regard.

      

      Proceeds received from Tennessee
Investors shall be accounted for separately in a subaccount entitled “Escrow
Account for the Benefit of Tennessee Subscribers for American Realty Capital New
York Recovery REIT, Inc.” (the “Tennessee Escrow Account,”
and together with the Escrow Account and Pennsylvania and Massachusetts Escrow
Account, the “ARC NYRR Escrow
Accounts”), until such Tennessee Escrow Account has closed pursuant to
Section 5 hereof.  The Company shall, and shall cause its agents to,
cooperate with the Escrow Agent in separately accounting for subscription
proceeds from Tennessee Investors in the Tennessee Escrow Account, and the
Escrow Agent shall be entitled to rely upon information provided by the Company
or its agents in this regard.

      

      The Escrow Agent shall have no duty to
make any disbursement, investment or other use of Investor Funds until and
unless it has good and collected funds.  In the event that any checks
deposited in the ARC NYRR Escrow Accounts are returned or prove uncollectible
after the funds represented thereby have been released by the Escrow Agent, then
the Company shall promptly reimburse the Escrow Agent for any and all costs
incurred for such, upon request, and the Escrow Agent shall deliver the returned
checks to the Company.  The Escrow Agent shall be under no duty or
responsibility to enforce collection of any check delivered to it
hereunder. 
The Escrow Agent reserves the right to deny, suspend or terminate participation
by an Investor to the extent the Escrow Agent deems it advisable or necessary to
comply with applicable laws or to eliminate practices that are not consistent
with the purposes of the Offering.

      

      2.     
       Subscribers. Persons
subscribing to purchase the Securities will be instructed by Realty Capital
Securities, LLC (the “Dealer
Manager”) or any soliciting dealers to remit the purchase price in the
form of checks (hereinafter “instruments of payment”) payable to the order of,
or funds wired in favor of, “WELLS FARGO BANK, NA, ESCROW AGENT FOR AMERICAN
REALTY CAPITAL NEW YORK RECOVERY REIT, INC.”  Any checks received made
payable to a party other than the Escrow Agent shall be returned to the
soliciting dealer who submitted the check.  By 12:00 p.m. (noon) the
next business day after receipt of instruments of payment from the Offering, the
Escrow Agent shall be furnished with a list of the Investors who have paid for
the Securities showing the name, address, tax identification number, amount of
Securities subscribed for, the amount paid and whether such Investors are
Pennsylvania Investors, Massachusetts Investors or Tennessee
Investors.  The information comprising the identity of Investors shall
be provided to the Escrow Agent in the format set forth in the “List of
Investors” attached hereto as Exhibit B.  The Escrow Agent shall be
entitled to conclusively rely upon the list of Investors in determining whether
Investors are Pennsylvania Investors, Massachusetts Investors or Tennessee
Investors, and shall have no duty to independently determine or verify the
same.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      All Investor Funds deposited in the ARC
NYRR Escrow Accounts shall not be subject to any liens or charges by the Company
or the Escrow Agent, or judgments or creditors' claims against the Company,
until and unless released to the Company as hereinafter provided.  The
Company understands and agrees that the Company shall not be entitled to any
Investor Funds on deposit in the ARC NYRR Escrow Accounts and no such funds
shall become the property of the Company, or any other entity except as released
to the Company pursuant to Section 3, Section 4 for Pennsylvania Investors or
Massachusetts Investors or Section 5 for Tennessee Investors. The Escrow Agent
will not use the information provided to it by the Company for any purpose other
than to fulfill its obligations as Escrow Agent.  The Company and the
Escrow Agent will treat all Investor information as confidential.  The
Escrow Agent shall not be required to accept any Investor Funds which are not
accompanied by the information on the List of Investors.

      

      3.      
      Disbursement of
Funds.  Once the Escrow Agent is in receipt of good and
collected Investor Funds totaling at least the Minimum Amount from Investors
(excluding funds from Pennsylvania Investors, Massachusetts Investors and
Tennessee Investors), the Escrow Agent shall notify the Company of same in
writing. Additionally, at the end of the third business day following the
Termination Date (as defined in Section 6), the Escrow Agent shall notify the
Company of the amount of the Investor Funds received.  If the Minimum
Amount has been obtained on or before the Termination Date, the Escrow Agent
shall promptly notify the Company and, upon receiving an acknowledgement of such
notice written instructions from the Company’s General Counsel or Chief
Financial Officer, the Escrow Agent shall disburse to the Company, by check or
wire transfer, the funds in the Escrow Account representing the gross purchase
price of the Securities.  The Escrow Agent agrees that funds in the
Escrow Account shall not be released to the Company until and unless the Escrow
Agent receives written instructions to release the funds from the Company’s
General Counsel or Chief Financial Officer.

      

      If the Minimum Amount has not been
obtained prior to the Termination Date, the Escrow Agent shall, within a
reasonable time following the Termination Date, but in no event more than thirty
(30) days after the Termination Date, refund to each Investor by check funds
deposited in the Escrow Account, or shall return the instruments of payment
delivered to Escrow Agent if such instruments have not been processed for
collection prior to such time, directly to each Investor at the address provided
in the list of Investors. Included in the remittance shall be a proportionate
share of the income earned in the account allocable to each Investor's
investment in accordance with the terms and conditions specified herein, except
that in the case of subscribers who have not provided an executed Form W-9 or
substitute Form W-9 (or the applicable substitute Form W-8 for foreign
investors), the Escrow Agent shall withhold the applicable percentage of the
earnings attributable to those Investors in accordance with IRS regulations.
Notwithstanding the foregoing, the Escrow Agent shall not be required to remit
any payments until funds represented by such payments have been collected by
Escrow Agent.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      In the event the Escrow Agent receives
written notice from the Company that the Company intends to reject an Investor’s
subscription, the Escrow Agent shall pay to the applicable Investor(s), within a
reasonable time not to exceed ten (10) business days after receiving notice of
the rejection, by first class United States Mail at the address appearing on the
List of Investors, or at such other address as shall be furnished to the Escrow
Agent by the Investor in writing, all collected sums paid by the Investor for
Securities and received by the Escrow Agent, together with the interest earned
on such Investor Funds.

      

      4.      
      Disbursement of Proceeds for
Pennsylvania Investors and Massachusetts
Investors.   Notwithstanding the foregoing, proceeds from
Pennsylvania Investors and Massachusetts Investors will not count towards
meeting the Minimum Amount for purposes of Section 3.  Proceeds
received from Pennsylvania Investors and Massachusetts Investors will not be
released from the Pennsylvania and Massachusetts Escrow Account until the
Pennsylvania and Massachusetts Minimum Amount is obtained.  If the
Pennsylvania and Massachusetts Minimum Amount is obtained at any time prior to
the Termination Date, the Escrow Agent shall promptly notify the Company and,
upon receiving acknowledgement of such notice and written instructions from the
Company’s General Counsel or Chief Financial Officer, the Escrow Agent shall
disburse to the Company, by check or wire transfer, the funds in the
Pennsylvania and Massachusetts Escrow Account representing the gross purchase
price of the Securities.   The Escrow Agent agrees that funds in
the Pennsylvania and Massachusetts Escrow Account shall not be released to the
Company until and unless the Escrow Agent receives written instructions to
release the funds from the Company’s General Counsel or Chief Financial
Officer.

      

      If the
Pennsylvania and Massachusetts Minimum Amount has not been obtained prior to the
Termination Date, the Escrow Agent shall, within a reasonable time following the
Termination Date, but in no event more than thirty (30) days after the
Termination Date, refund to each Pennsylvania Investor and Massachusetts
Investor by check funds deposited in the Pennsylvania and Massachusetts Escrow
Account, or shall return the instruments of payment delivered to Escrow Agent if
such instruments have not been processed for collection prior to such time,
directly to each Pennsylvania Investor or Massachusetts Investor at the address
provided in the list of Investors. Included in the remittance shall be a
proportionate share of the income earned in the account allocable to each
Pennsylvania Investor's or and Massachusetts Investor’s investment in accordance
with the terms and conditions specified herein, except that in the case of
subscribers who have not provided an executed Form W-9 or substitute Form W-9,
the Escrow Agent shall withhold the applicable percentage of the earnings
attributable to those Investors in accordance with IRS regulations.
Notwithstanding the foregoing, the Escrow Agent shall not be required to remit
any payments until funds represented by such payments have been collected by
Escrow Agent.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      If the Escrow Agent is not in receipt
of evidence of subscriptions accepted on or before the close of business on such
date that is 120 days after commencement of the Offering (the Company will
notify the Escrow Agent of the commencement date of the Offering) (the “Initial Escrow Period”), and
instruments of payment dated not later than that date, for the purchase of
Securities providing for total purchase proceeds from all nonaffiliated sources
that equal or exceed the Pennsylvania and Massachusetts Minimum Amount, the
Escrow Agent shall promptly notify the Company. Thereafter, the Company or its
agents shall send to each Pennsylvania Investor by certified mail within ten
(10) calendar days after the end of the Initial Escrow Period a
notification substantially in the form of Exhibit F.  If,
pursuant to such notification, a Pennsylvania Investor requests the return of
his or her subscription funds within ten (10) calendar days after receipt of the
notification (the “Request
Period”), the Escrow Agent shall promptly refund directly to each
Pennsylvania Investor the collected funds deposited in the Pennsylvania and
Massachusetts Escrow Account on behalf of such Pennsylvania Investor or shall
return the instruments of payment delivered, but not yet processed for
collection prior to such time, to the address provided by the Dealer Manager or
the Company or their respective agents to the Escrow Agent, which the Escrow
Agent shall be entitled to rely upon, together with interest income (which
interest shall be paid within five business days after the first business day of
the succeeding month) in the amounts calculated pursuant to Section 9.
Notwithstanding the above, if the Escrow Agent has not received an executed Form
W-9 or substitute Form W-9 for such Pennsylvania Investor, the Escrow Agent
shall thereupon remit an amount to such Pennsylvania Investor in accordance with
the provisions hereof, withholding the applicable percentage for backup
withholding required by the Internal Revenue Code, as then in effect, from any
interest income earned on subscription proceeds (determined in accordance with
Section 9) attributable to such Pennsylvania Investor. However, the Escrow Agent
shall not be required to remit such payments until the Escrow Agent has
collected funds represented by such payments.

       

      The
subscription funds of Pennsylvania Investors who do not request the return of
their subscription funds within the Request Period shall remain in the
Pennsylvania and Massachusetts Escrow Account for successive 120-day escrow
periods (a “Successive Escrow
Period”), each commencing automatically upon the termination of the prior
Successive Escrow Period, and the Company and Escrow Agent shall follow the
notification and payment procedure set forth above with respect to the Initial
Escrow Period for each Successive Escrow Period until the occurrence of the
earliest of (i) the Termination Date, (ii) the receipt and acceptance
by the Company of subscriptions for the purchase of Securities with total
purchase proceeds that equal or exceed the Pennsylvania and Massachusetts
Minimum Amount and the disbursement of the Pennsylvania and Massachusetts Escrow
Account on the terms specified herein, or (iii) all funds held in the
Pennsylvania and Massachusetts Escrow Account having been returned to the
Pennsylvania Investors and Massachusetts Investors in accordance with the
provisions hereof.

      

      5.        
    Disbursement of Proceeds for
Tennessee Investors.  Notwithstanding the foregoing, proceeds
from Tennessee Investors will not count towards meeting the Minimum Amount for
purposes of Section 3.  Proceeds received from Tennessee Investors
will not be released from the Tennessee Escrow Account until the Tennessee
Minimum Amount is obtained.  If the Tennessee Minimum Amount is
obtained at any time prior to the Termination Date, the Escrow Agent shall
promptly notify the Company and, upon receiving acknowledgement of such notice
and written instructions from the Company’s General Counsel of Chief Financial
Officer, the Escrow Agent shall disburse to the Company, by check or wire
transfer, the funds in the Tennessee Escrow Account representing the gross
purchase price of the Securities.  The Escrow Agent agrees that funds
in the Tennessee Escrow Account shall not be released to the Company until and
unless the Escrow Agent receives written instructions to release the funds from
the Company’s General Counsel or Chief Financial Officer.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      If the
Tennessee Minimum Amount has not been obtained prior to the Termination Date,
the Escrow Agent shall, within a reasonable time following the Termination Date,
but in no event more than thirty (30) days after the Termination Date, refund to
each Tennessee Investor by check funds deposited in the Tennessee Escrow
Account, or shall return the instruments of payment delivered to Escrow Agent if
such instruments have not been processed for collection prior to such time,
directly to each Tennessee Investor at the address provided in the list of
Investors.  Included in the remittance shall be a proportionate share
of the income earned in the account allocable to each Tennessee Investor’s
investment in accordance with the terms and conditions specified herein, except
that in the case of subscribers who have not provided an executed Form W-9 or
substitute Form W-9, the Escrow Agent shall withhold the applicable percentage
of the earnings attributable to those Investors in accordance with IRS
regulations. Notwithstanding the foregoing, the Escrow Agent shall not be
required to remit any payments until funds represented by such payments have
been collected by Escrow Agent.

      

      6.  
          Term of Escrow. The
"Termination Date" shall be the earlier of (i) the close of business on the one
year anniversary of the date of this Escrow Agreement; (ii) all funds held in
the ARC NYRR Escrow Accounts are distributed to the Company or to Investors
pursuant to Section 3, Section 4 for Pennsylvania Investors and Massachusetts
Investors and Section 5 for Tennessee Investors, and the Company has informed
the Escrow Agent in writing to close each of the ARC NYRR Escrow Accounts; (iii)
the date the Escrow Agent receives written notice from the Company that it is
abandoning the sale of the Securities; or (iv) the date the Escrow Agent
receives notice from the Securities and Exchange Commission or any other federal
or state regulatory authority that a stop or similar order has been issued with
respect to the Offering Document and has remained in effect for at least twenty
(20) days.  After the Termination Date the Company shall not deposit,
and the Escrow Agent shall not accept, any additional amounts representing
payments by prospective Investors.

      

      7.        
    Duty
and Liability of the Escrow Agent. The sole duty of the Escrow Agent
shall be to receive Investor Funds and hold them subject to release, in
accordance herewith, and the Escrow Agent shall be under no duty to determine
whether the Company or the Dealer Manager is complying with requirements of this
Escrow Agreement, the Offering or applicable securities or other laws in
tendering the Investor Funds to the Escrow Agent. No other agreement entered
into between the parties, or any of them, shall be considered as adopted or
binding, in whole or in part, upon the Escrow Agent notwithstanding that any
such other agreement may be referred to herein or deposited with the Escrow
Agent or the Escrow Agent may have knowledge thereof, including specifically but
without limitation any Offering Documents, and the Escrow Agent's rights and
responsibilities shall be governed solely by this Escrow
Agreement.  The Escrow Agent shall not be responsible for or be
required to enforce any of the terms or conditions of any Offering Document or
other agreement between the Company and any other party.  The Escrow
Agent may conclusively rely upon and shall be protected in acting upon any
statement, certificate, notice, request, consent, order or other document
believed by it to be genuine and to have been signed or presented by the proper
party or parties. The Escrow Agent shall have no duty or liability to verify any
such statement, certificate, notice, request, consent, order or other document,
and its sole responsibility shall be to act only as expressly set forth in this
Escrow Agreement. Concurrent with the execution of this Escrow Agreement, the
Company shall deliver to the Escrow Agent an authorized signers form in the form
of Exhibit C to this Escrow Agreement.  The Escrow Agent shall be
under no obligation to institute or defend any action, suit or proceeding in
connection with this Escrow Agreement unless first indemnified to its
satisfaction.  The Escrow Agent may consult counsel of its own choice
with respect to any question arising under this Escrow Agreement and the Escrow
Agent shall not be liable for any action taken or omitted in good faith upon
advice of such counsel.  The Escrow Agent shall not be liable for any
action taken or omitted by it in good faith except to the extent that a court of
competent jurisdiction determines that the Escrow Agent's gross negligence or
willful misconduct was the primary cause of loss. The Escrow Agent is acting
solely as escrow agent hereunder and owes no duties, covenants or obligations,
fiduciary or otherwise, to any other person by reason of this Escrow Agreement,
except as otherwise stated herein, and no implied duties, covenants or
obligations, fiduciary or otherwise, shall be read into this Escrow Agreement
against the Escrow Agent.  In the event of any disagreement between any of
the parties to this Escrow Agreement, or between any of them and any other
person, including any Investor, resulting in adverse claims or demands being
made in connection with the matters covered by this Escrow Agreement, or in the
event that the Escrow Agent is in doubt as to what action it should take
hereunder, the Escrow Agent may, at its option, refuse to comply with any claims
or demands on it, or refuse to take any other action hereunder, so long as such
disagreement continues or such doubt exists, and in any such event, the Escrow
Agent shall not be or become liable in any way or to any person for its failure
or refusal to act, and the Escrow Agent shall be entitled to continue so to
refrain from acting until (i) the rights of all interested parties shall have
been fully and finally adjudicated by a court of competent jurisdiction, or (ii)
all differences shall have been adjudged and all doubt resolved by agreement
among all of the interested persons, and the Escrow Agent shall have been
notified thereof in writing signed by all such persons. Notwithstanding the
foregoing, the Escrow Agent may in its discretion obey the order, judgment,
decree or levy of any court, whether with or without jurisdiction and the Escrow
Agent is hereby authorized in its sole discretion to comply with and obey any
such orders, judgments, decrees or levies.  In the event that any
controversy should arise with respect to this Escrow Agreement the Escrow Agent
shall have the right, at its option, to institute an interpleader action in any
court of competent jurisdiction to determine the rights of the
parties.  IN NO EVENT SHALL THE ESCROW AGENT BE LIABLE, DIRECTLY OR
INDIRECTLY, FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL LOSSES OR DAMAGES OF ANY
KIND WHATSOEVER (INCLUDING WITHOUT LIMITATION LOST PROFITS), EVEN IF THE ESCROW
AGENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES OR DAMAGES AND
REGARDLESS OF THE FORM OF ACTION.  The parties agree that the Escrow
Agent has no role in the preparation of the Offering Documents and makes no
representations or warranties with respect to the information contained therein
or omitted therefrom.  The Escrow Agent shall have no obligation, duty
or liability with respect to compliance with any federal or state securities,
disclosure or tax laws concerning the Offering Documents or the issuance,
offering or sale of the Securities.  The Escrow Agent shall have no
duty or obligation to monitor the application and use of the Investor Funds once
transferred to the Company, that being the sole obligation and responsibility of
the Company.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      8.     
      Escrow Agent's Fee. The Escrow
Agent shall be entitled to compensation for its services as stated in the fee
schedule attached hereto as Exhibit D, which compensation shall be paid by the
Company. The fee agreed upon for the services rendered hereunder is intended as
full compensation for the Escrow Agent's services as contemplated by this Escrow
Agreement; provided, however, that in the event that the conditions for the
disbursement of funds under this Escrow Agreement are not fulfilled, or the
Escrow Agent renders any material service not contemplated in this Escrow
Agreement, or there is any assignment of interest in the subject matter of this
Escrow Agreement, or any material modification hereof, or if any material
controversy arises hereunder, or the Escrow Agent is made a party to any
litigation pertaining to this Escrow Agreement, or the subject matter hereof,
then the Escrow Agent shall be reasonably compensated for such extraordinary
services and reimbursed for all costs and expenses, including reasonable
attorney's fees, occasioned by any delay, controversy, litigation or event, and
the same shall be recoverable from the Company.  The Company’s
obligations under this Section 8 shall survive the resignation or removal of the
Escrow Agent and the assignment or termination of this Escrow
Agreement.

      

      9.   
        Investment of Proceeds. The
Investor Funds shall be deposited in the ARC NYRR Escrow Accounts in accordance
with Section 3, Section 4 for Pennsylvania Investors and Massachusetts
Investors, and Section 5 for Tennessee Investors.  The Escrow Agent is
hereby directed to invest all funds received under this Escrow Agreement,
including principal and interest in, a Wells Fargo Bank Money Market Deposit
Account, as directed in writing in the form of Exhibit E to this Escrow
Agreement.  The Escrow Agent shall invest the Investor Funds in
alternative investments in accordance with written instructions as may from time
to time be provided to the Escrow Agent and signed by the Company.  In
the absence of written investment instructions from the Company to the contrary,
the Escrow Agent is hereby directed to invest the Investor Funds in the Wells
Fargo Bank Money Market Deposit Account.  Notwithstanding the
foregoing, Investor Funds shall not be invested in anything other than “Short
Term Investments” in compliance with Rule 15c2-4 of the Securities Exchange Act
of 1934, as amended.  The following are not permissible investments:
(a) money market mutual funds, (b) corporate debt or equity securities, (c)
repurchase agreements, (d) banker’s acceptance, (e) commercial paper, and (f)
municipal securities.  Any interest received by the Escrow Agent with
respect to the Investor Funds, including reinvested interest shall become part
of the Investor Funds, and shall be disbursed pursuant to Section 3, Section 4
for Pennsylvania Investors and Massachusetts Investors or Section 5 for
Tennessee Investors.

      

      The Escrow Agent shall be entitled to
sell or redeem any such investments as necessary to make any payments or
distributions required under this Escrow Agreement.  The Escrow Agent
shall have no responsibility or liability for any loss which may result from any
investment made pursuant to this Escrow Agreement, or for any loss resulting
from the sale of such investment.  The parties acknowledge that the
Escrow Agent is not providing investment supervision, recommendations, or
advice.

      

      The
Company on the date of this Escrow Agreement shall provide the Escrow Agent with
certified tax identification numbers by furnishing appropriate IRS forms W-9 or
W-8 (or substitute forms W-9 or W-8) and other forms and documents that the
Escrow Agent may reasonably request.  The Company understands that if
such tax reporting documentation is not so certified to the Escrow Agent, the
Escrow Agent may be required by the Internal Revenue Code of 1986, as amended,
to withhold a portion of any interest or other income earned on the Investor
Funds pursuant to this Escrow Agreement.

      

      The Company agrees to indemnify and
hold the Escrow Agent harmless from and against any taxes, additions for late
payment, interest, penalties and other expenses that may be assessed against the
Escrow Agent on or with respect to any payment or other activities under this
Escrow Agreement unless any such tax, addition for late payment, interest,
penalties and other expenses shall be determined by a court of competent
jurisdiction to have been caused by the Escrow Agent's gross negligence or
willful misconduct.  The terms of this Section shall survive the
termination of this Escrow Agreement and the resignation or removal of the
Escrow Agent.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      10.           Notices.  All
notices, requests, demands, and other communications under this Escrow Agreement
shall be in writing and shall be deemed to have been duly given (a) on the date
of service if served personally on the party to whom notice is to be given, (b)
on the day of transmission if sent by facsimile/email transmission to the
facsimile number/email address given below, and telephonic confirmation of
receipt is obtained promptly after completion of transmission, (c) on the day
after delivery to Federal Express or similar overnight courier or the Express
Mail service maintained by the United States Postal Service, or (d) on the fifth
day after mailing, if mailed to the party to whom notice is to be given, by
first class mail, registered or certified, postage prepaid, and properly
addressed, return receipt requested, to the party as follows:

      

      If to the
Company:

      

      405 Park
Avenue

      New York,
New York 10022

      Fax:
(212) 421-5799

      Attention:  Michael
Weil, Executive Vice President and Secretary

      Attention:  Brian
S. Block, Executive Vice President and Chief Financial Officer

      

      with a
copy to:

      

      Proskauer
Rose LLP

      1585
Broadway

      New York,
New York 10036

      Fax:
(212) 969-2900

      Attention:
Peter M. Fass, Esq.

      Attention:  James
P. Gerkis, Esq.

      

      

      If to the
Dealer Manager:

      

      Realty
Capital Securities, LLC

      Three
Copley Place

      Suite
3300

      Boston,
MA 02116

      Attention:  Nicholas
Corvinus, Chief Executive Officer

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      with a
copy to:

      

      Proskauer
Rose LLP

      1585
Broadway

      New York,
New York 10036

      Fax:
(212) 969-2900

      Attention:
Peter M. Fass, Esq.

      Attention:  James
P. Gerkis, Esq.

      

      and:

      

      American
Realty Capital New York Recovery REIT, Inc.

      405 Park
Avenue

      New York,
New York 10022

      Fax:
(212) 421-5799

      Attention:  Michael
Weil, Executive Vice President and Secretary

      Attention:  Brian
S. Block, Executive Vice President and Chief Financial Officer

      

      

      If to
Escrow Agent:

      

      Wells
Fargo Bank, National Association

      201 Main
Street, Suite 301

      Forth
Worth, Texas 76102-5489

      Attention:  [______________]

      

      Any party
may change its address for purposes of this Section by giving the other party
written notice of the new address in the manner set forth above.

      

      11.           Indemnification of Escrow Agent.
The Company and the Dealer Manager hereby jointly and severally
indemnify, defend and hold harmless the Escrow Agent from and against, any and
all loss, liability, cost, damage and expense, including, without limitation,
reasonable counsel fees and expenses, which the Escrow Agent may suffer or incur
by reason of any action, claim or proceeding brought against the Escrow Agent
arising out of or relating in any way to this Escrow Agreement or any
transaction to which this Escrow Agreement relates unless such loss, liability,
cost, damage or expense is finally determined by a court of competent
jurisdiction to have been primarily caused by the willful misconduct of the
Escrow Agent.  The terms of this Section shall survive the termination
of this Escrow Agreement and the resignation or removal of the Escrow
Agent.

      

      12.           Successors and Assigns. Except
as otherwise provided in this Escrow Agreement, no party hereto shall assign
this Escrow Agreement or any rights or obligations hereunder without the prior
written consent of the other parties hereto and any such attempted assignment
without such prior written consent shall be void and of no force and effect.
This Escrow Agreement shall inure to the benefit of and shall be binding upon
the successors and permitted assigns of the parties hereto.  Any
corporation or association into which the Escrow Agent may be converted or
merged, or with which it may be consolidated, or to which it may sell or
transfer all or substantially all of its corporate trust business and assets as
a whole or substantially as a whole, or any corporation or association resulting
from any such conversion, sale, merger, consolidation or transfer to which the
Escrow Agent is a party, shall be and become the successor Escrow Agent under
this Escrow Agreement and shall have and succeed to the rights, powers, duties,
immunities and privileges as its predecessor, without the execution or filing of
any instrument or paper or the performance any further act.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      13.           Governing Law; Jurisdiction.
This Escrow Agreement shall be construed, performed, and enforced in
accordance with, and governed by, the internal laws of the State of New York,
without giving effect to the principles of conflicts of laws
thereof.

      

      14.           Severability. In the event
that any part of this Escrow Agreement is declared by any court or other
judicial or administrative body to be null, void, or unenforceable, said
provision shall survive to the extent it is not so declared, and all of the
other provisions of this Escrow Agreement shall remain in full force and
effect.

      

      15.           Amendments; Waivers. This
Escrow Agreement may be amended or modified, and any of the terms, covenants,
representations, warranties, or conditions hereof may be waived, only by a
written instrument executed by the parties hereto, or in the case of a waiver,
by the party waiving compliance. Any waiver by any party of any condition, or of
the breach of any provision, term, covenant, representation, or warranty
contained in this Escrow Agreement, in any one or more instances, shall not be
deemed to be nor construed as further or continuing waiver of any such
condition, or of the breach of any other provision, term, covenant,
representation, or warranty of this Escrow Agreement.  The Company and
the Dealer Manager agree that any requested waiver, modification or amendment of
this Escrow Agreement shall be consistent with the terms of the
Offering.

      

      16.           Entire Agreement. This Escrow
Agreement contains the entire understanding among the parties hereto with
respect to the escrow contemplated hereby and supersedes and replaces all prior
and contemporaneous agreements and understandings, oral or written, with regard
to such escrow.

      

      17.           Section Headings. The section
headings in this Escrow Agreement are for reference purposes only and shall not
affect the meaning or interpretation of this Escrow Agreement.

      

      18.           Counterparts. This Escrow
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which shall constitute the same instrument.

      

      19.           Resignation. The Escrow Agent
may resign upon 30 days advance written notice to the parties hereto. If a
successor escrow agent is not appointed within the 30-day period following such
notice, the Escrow Agent may petition any court of competent jurisdiction to
name a successor escrow agent or interplead the Investor Funds with such court,
whereupon the Escrow Agent’s duties hereunder shall terminate.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      20.           References to Escrow
Agent.  Other than the Offering Document (including the
subscription agreement and exhibits thereto) and any amendments or supplements
thereto, no printed or other matter in any language (including, without
limitation, notices, reports and promotional material) which mentions the Escrow
Agent’s name or the rights, powers, or duties of the Escrow Agent shall be
issued by the Company or the Dealer Manager, or on the Company’s or the Dealer
Manager’s behalf, unless the Escrow Agent shall first have given its specific
written consent thereto.  Notwithstanding the foregoing, any amendment
or supplement to the Offering Document (including the subscription agreement and
exhibits thereto) that revises, alters, modifies, changes or adds to the
description of the Escrow Agent or its rights, powers or duties hereunder shall
not be issued by the Company or the Dealer Manager, or on the Company’s or
Dealer Manager’s behalf, unless the Escrow Agent has first given specific
written consent thereto.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      IN WITNESS WHEREOF, the
parties hereto have caused this Escrow Agreement to be executed the date and
year first set forth above.

      

      

      AMERICAN
REALTY CAPITAL

      NEW YORK
RECOVERY REIT, INC.

      

       

       

      
        
          	
                  By:

                	
                   

                	 
      
	 
      	
                  Name: 
      

                	
                  Nicholas
      S. Schorsch

                	 
      
	 
      	
                  Title:

                	
                  Chief
      Executive Officer

                	 
      

        

       

       

      REALTY
CAPITAL SECURITIES, LLC

      

      

       

      
        
          	
                  By:

                	
                   

                	 
      
	 
      	
                  Name: 
      

                	
                  Nicholas
      S. Schorsch

                	 
      
	 
      	
                  Title:

                	
                  Chief
      Executive Officer

                	 
      

        

        
 

         

      

      WELLS
FARGO BANK, NATIONAL

      ASSOCIATION,
as Escrow Agent

      

      
 

      
        
          
            	
                    By:

                  	
                     

                  	 
      
	 
      	
                    Name: 
      

                  	
                     

                  	 
      
	 
      	
                    Title:

                  	
                     

                  	 
      

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

             

          

        

      

      Exhibit
A

      

      Copy of
Offering Document

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Exhibit
B

      

      List of
Investors

      

      Pursuant
to the Escrow Agreement
dated                      ,
2010, by and between American Realty Capital New York Recovery REIT, Inc., (the
“Company”), and Wells
Fargo Bank, National Association (the “Escrow Agent”), the Company
hereby certifies that the following Investors have paid money for the purchase
of shares of the Company’s common stock, par value $0.01, and the money has been
deposited with the Escrow Agent:

      

      

      
        	
                1.

              	
                Name
      of Subscriber

              

      

      Address

      Tax
Identification Number

      Amount of
Securities subscribed for

      Amount of
money paid and deposited with Escrow Agent

      Is
Subscriber a resident of Pennsylvania (Yes or No)?

      Is
Subscriber a resident of Massachusetts (Yes or No)?

      Is
Subscriber a resident of Tennessee (Yes or No)?

      

      
        	
                2.

              	
                Name
      of Subscriber

              

      

      Address

      Tax
Identification Number

      Amount of
Securities subscribed for

      Amount of
money paid and deposited with Escrow Agent

      Is
Subscriber a resident of Pennsylvania (Yes or No)?

      Is
Subscriber a resident of Massachusetts (Yes or No)?

      Is
Subscriber a resident of Tennessee (Yes or No)?

      

      

      

      

      Company:  _________________________________

      By:  ________________________

      Its:  ________________________

      Date:  ______________________

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      Exhibit
C

      

      CERTIFICATE
AS TO AUTHORIZED SIGNATURES

      

      

      
        Account
Name:

      

      

      
        Account
Number:

      

      

      The
specimen signatures shown below are the specimen signatures of the individuals
who have been designated as Authorized Representatives of American Realty Capital New York
Recovery REIT, Inc. and are authorized to initiate and approve
transactions of all types for the above-mentioned account on behalf of American Realty Capital New York
Recovery REIT, Inc.

      

      

      
        	
                Name/Title

                 

                 

              	
                Specimen
      Signature

              
	
                Nicholas
      S. Schorsch

                Chief
      Executive Officer

              	
                _______________________________

                Signature

              
	 
      	 
      
	
                William
      M. Kahane

                President
      and Treasurer

              	
                _______________________________

                Signature

              
	 
      	 
      
	
                Michael
      Happel

                Executive
      Vice President and Chief Investment Officer

              	
                _______________________________

                Signature

              
	 
      	 
      
	
                Brian
      Block

                Executive
      Vice President and Chief Financial Officer

              	
                _______________________________

                Signature

              
	 
      	 
      
	
                Michael
      Weil

                Executive
      Vice President and Secretary

              	
                _______________________________

                Signature

              
	 
      	 
      

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Exhibit
D

      

       

      
        	
                Wells
      Fargo Bank

                Corporate
      Trust Services

                1445
      Ross Avenue, 2nd
      Floor

                Mac
      T5303-022

                Dallas,
      TX 75202

              	
                [NAME]

                [POSITION]

                Tel:  [__________]

                Fax:  [__________]

                [EMAIL]

              	 [logo]
      

      

      

      GENERAL
SCHEDULE OF FEES

      to
act as ESCROW AGENT for the

      American
Realty Capital New York Recovery REIT, Inc. Subscription Escrow up to
$50,000,000

      

      
        	
                Acceptance
      Fee:

              	
                $500

              

      

       

      Initial
Fees as they relate to Wells Fargo Bank acting in the capacity of Escrow Agent –
includes review of the Escrow Agreement; acceptance of the Escrow appointment;
setting up of Escrow Account(s) and accounting records; and coordination of
receipt of funds for deposit to the Escrow Account(s).

       

      Acceptance
Fee payable at time of Escrow Agreement execution.

      

      
        	
                Escrow Agent Annual
      Administration Fee:

              	
                $5,000.00
      on first offering, $3,500 on
subsequent

              

      

      Pennsylvania
and Massachusetts Sub-Accounting Administration
Fee:        $750

      

      For
ordinary administrative services by Escrow Agent – includes daily routine
account management; investment transactions; cash transaction processing
(including wire and check processing); monitoring claim notices pursuant to the
agreement; disbursement of funds in accordance with the agreement; and mailing
of trust account statements to all applicable parties.  Float credit
received by the bank for receiving funds that remain uninvested are deemed part
of the Paying Agent/Escrow Agent’s compensation.  These fees do not
contemplate paying interest to subscribers or providing 1099s which would be the
responsibility of ACS. If individual 1099s, interest checks, interest accrual
calculations or any individual subscriber information are required additional
fees will be charged.  For rejected subscriptions or a failed
offering, the following fees will apply.

      

      1099
Reporting $25 each

      Interest
Rate Calculations and Interest Checks/Wires $ 35 each

      Returned
Item Charges $35 each

       

      The administrative fee is payable in
advance, with the first year fee due upon opening of the account. The
Annual Fee covers a full year or any part thereof, and therefore will not be
prorated or refunded in the year of early termination.  These fees do
not include bank activity fees associated with Desktop Deposit
system.  Fees for these services will be provided separately by our
Treasury Management Group.

      

      Wells
Fargo’s bid is based on the following assumptions:

      
        	
                ·

              	
                Number
      of Escrow Accounts to be established:  One
  (1)

              

      

      
        	
                ·

              	
                Number
      of Deposits to Escrow Account:  Electronically, approximately
      (10-20 per day)

              

      

      
        	
                ·

              	
                Number
      of Withdrawals from Escrow Fund:  Not more than two per
      week.

              

      

      
        	
                ·

              	
                Term
      of Escrow:  One (1) year

              

      

      
        	
                ·

              	
                APPOINTMENT SUBJECT TO RECEIPT
      OF REQUESTED DUE DILIGENCE INFORMATION AS PER THE USA PATRIOT
      ACT

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                ·

              	
                THIS PROPOSAL ASSUMES THAT
      BALANCES IN THE ACCOUNT WILL BE INVESTED IN MONEY MARKET
      FUNDS

              

      

      
        	
                ·

              	
                ALL FUNDS WILL
      BE  RECEIVED FROM OR DISTRIBUTED TO A DOMESTIC OR AN APPROVED
      FOREIGN ENTITY

              

      

      
        	
                ·

              	
                IF THE ACCOUNT(S) DOES NOT OPEN
      WITHIN THREE (3) MONTHS OF THE DATE SHOWN BELOW, THIS PROPOSAL WILL BE
      DEEMED TO BE NULL AND VOID

              

      

      

      
        	
                Out-of Pocket
      Expenses:

              	
                At
      Cost

              

      

       

      We will
charge for out-of-pocket expenses in response to specific tasks assigned by the
client or provided for in the escrow agreement.  Possible expenses
would be, but are not limited to, express mail and messenger charges, travel
expenses to attend closing or other meetings.   There are no
charges for indirect out-of- pocket expenses.

       

      This
fee schedule is based upon the assumptions listed above which pertain to the
responsibilities and risks involved in Wells Fargo undertaking the role of
Escrow Agent.  These assumptions are based on information provided to
us as of the date of this fee schedule.  Our fee schedule is subject
to review and acceptance of the final documents.  Should any of the
assumptions, duties or responsibilities change, we reserve the right to affirm,
modify or rescind our fee schedule. Extraordinary services (services other than
the ordinary administration services of Escrow Agent described above) are not
included in the annual administration fee and will be billed as incurred at the
rates in effect from time to time.

                                                                                                                    Submitted
on:                       ,
2010

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Exhibit
E

      

      Agency
and Custody Account Direction

      For
Cash Balances

      Wells
Fargo Bank Money Market Deposit Accounts

      

      

      Direction
to use the following Wells Fargo Bank Money Market Deposit Accounts for Cash
Balances for the escrow account (the “Account”) created under the Escrow
Agreement to which this Exhibit is attached.

      

      You are
hereby directed to deposit, as indicated below, or as we shall direct further in
writing from time to time, all cash in the Account in the following money market
deposit account of Wells Fargo Bank, National Association (“Bank”):

      

      Wells
Fargo Bank Money Market Deposit Account (“MMDA”)

      

      We
understand that amounts on deposit in the MMDA are insured, subject to the
applicable rules and regulations of the Federal Deposit Insurance Corporation
(the “FDIC”), in the basic FDIC insurance amount of $250,000 per depositor, per
insured bank. This includes principal and accrued interest up to a total of
$250,000.  We understand that deposits in the MMDA are not
secured.

      

      Wells
Fargo Bank, National Association has short term debt ratings of "P-1” from
Moody's Investors Service and "A-1+" from Standard & Poor's Ratings
Services.

      

      We
acknowledge that we have full power to direct investments in the
Account.

      

      We
understand that we may change this direction at any time and that it shall
continue in effect until revoked or modified by us by written notice to
you.

      

       

      
        
          	 
      	
                  American
      Realty Capital New York Recovery REIT, Inc.

                
	 
      	 
      	 
      
	 
      	
                   

                	 
      
	 
      	
                  Signature

                	 
      
	 
      	 
      	 
      
	 
      	
                  ­­­­­­­­­­­­­­­­

                	 
      
	 
      	
                  Date

                	 
      

        

      

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Exhibit
F

      

      [Form of
Notice to Pennsylvania Investors]

      

      You have
tendered a subscription to purchase shares of common stock of American Realty
Capital New York Recovery REIT, Inc. (the “Company”). Your subscription is
currently being held in escrow.  The guidelines of the Pennsylvania
Securities Commission do not permit the Company to accept subscriptions from
Pennsylvania residents until an aggregate of $50,000,000 of gross offering
proceeds have been received by the Company. The Pennsylvania guidelines provide
that until this minimum amount of offering proceeds is received by the Company,
every 120 days during the offering period Pennsylvania Investors may
request that their subscription be returned.  If you wish to continue
your subscription in escrow until the Pennsylvania minimum subscription amount
is received, nothing further is required.

      

      If you
wish to terminate your subscription for the Company’s common stock and have your
subscription returned please so indicate below, sign, date, and return to the
Escrow Agent, Wells Fargo Bank, National Association.

      

      I hereby
terminate my prior subscription to purchase shares of common stock of American
Realty Capital New York Recovery REIT, Inc. and request the return of my
subscription funds.  I certify to American Realty Capital New York
Recovery REIT, Inc. that I am a resident of Pennsylvania.

      

      
        	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                Signature:

              	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                Name:

              	 
      
	 
      	 
      	 
      	 
      	
                        (please
      print)

              	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                Date:

              	 
      

      

      

      Please
send the subscription refund to:Unassociated Document

    FORM
OF

     

    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

            
	
              1.

            	
              DEFINITIONS

            	
              1

            
	
              2.

            	
              APPOINTMENT

            	
              7

            
	
              3.

            	
              DUTIES
      OF THE ADVISOR

            	
              8

            
	
              4.

            	
              AUTHORITY
      OF ADVISOR.

            	
              10

            
	
              5.

            	
              FIDUCIARY
      RELATIONSHIP

            	
              10

            
	
              6.

            	
              NO
      PARTNERSHIP OR JOINT VENTURE

            	
              10

            
	
              7.

            	
              BANK
      ACCOUNTS

            	
              11

            
	
              8.

            	
              RECORDS;
      ACCESS

            	
              11

            
	
              9.

            	
              LIMITATIONS
      ON ACTIVITIES

            	
              11

            
	
              10.

            	
              FEES.

            	
              11

            
	
              11.

            	
              EXPENSES.

            	
              13

            
	
              12.

            	
              OTHER
      SERVICES

            	
              14

            
	
              13.

            	
              REIMBURSEMENT
      TO THE ADVISOR

            	
              14

            
	
              14.

            	
              OTHER
      ACTIVITIES OF THE ADVISOR

            	
              15

            
	
              15.

            	
              THE
      AMERICAN REALTY CAPITAL NAME

            	
              15

            
	
              16.

            	
              TERM
      OF AGREEMENT

            	
              16

            
	
              17.

            	
              TERMINATION
      BY THE PARTIES

            	
              16

            
	
              18.

            	
              ASSIGNMENT
      TO AN AFFILIATE

            	
              16

            
	
              19.

            	
              PAYMENTS
      TO AND DUTIES OF ADVISOR UPON TERMINATION.

            	
              16

            
	
              20.

            	
              INCORPORATION
      OF THE ARTICLES OF INCORPORATION AND THE OPERATING PARTNERSHIP
      AGREEMENT

            	
              18

            
	
              21.

            	
              INDEMNIFICATION
      BY THE COMPANY AND THE OPERATING PARTNERSHIP

            	
              19

            
	
              22.

            	
              INDEMNIFICATION
      BY ADVISOR

            	
              20

            
	
              23.

            	
              NOTICES

            	
              21

            
	
              24.

            	
              MODIFICATION

            	
              21

            
	
              25.

            	
              SEVERABILITY

            	
              21

            
	
              26.

            	
              GOVERNING
      LAW

            	
              21

            
	
              27.

            	
              ENTIRE
      AGREEMENT

            	
              22

            
	
              28.

            	
              NO
      WAIVER

            	
              22

            
	
              29.

            	
              PRONOUNS
      AND PLURALS

            	
              22

            
	
              30.

            	
              HEADINGS

            	
              22

            
	
              31.

            	
              EXECUTION
      IN COUNTERPARTS

            	
              22

            

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    
      FORM OF

       

      ADVISORY
AGREEMENT

       

       THIS
ADVISORY AGREEMENT (this “Agreement”) dated as
of
                    ,
2009 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. 

       

      W
I T N E S S E T H

       

      WHEREAS,
the Company is a Maryland corporation created in accordance with Maryland
General Corporation Law and intends to qualify as a REIT;

       

      WHEREAS,
the Company is the general partner of the Operating Partnership;

       

      WHEREAS,
the Company and the Operating Partnership desire to avail themselves of the
experience, sources of information, advice, assistance and certain facilities of
the Advisor and to have the Advisor undertake the duties and responsibilities
hereinafter set forth, on behalf of, and subject to the supervision of, the
Board of Directors of the Company, all as provided herein; and

       

       WHEREAS,
the Advisor is willing to render such services, 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, 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. 

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

       “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.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      “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. 

       

       “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. 

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

       “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.

       

       “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).

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

       “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. 

       

       “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. 

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

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

       

       “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(b). 

       

      “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. 

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

       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: 

       

      (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;

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      (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; 

       

      (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.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

       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. 

       

      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
and one-half percent (1.5%) of the purchase price of the
Investment.  The purchase price of an Investment shall equal the
amount paid or allocated to the purchase, development or improvement of an
Investment, 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 the Investment 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. 

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      (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 shall
not exceed six percent (6.0%) of the “contract purchase price”, as defined in
the Articles of Incorporation, of the Investment acquired.

       

       (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 or refinancing of any Loan in an amount equal to one percent
(1.0%) of the amount made available and/or outstanding under any such
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
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. 

       

       (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. 

       

       (h)           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. 

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      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;

       

      (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; 

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      (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.

       

      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

          
            

          

        

        
          
          

        

      

       

       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. 

       

       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.” 

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

       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.

       

       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.

       

       (a)           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. 

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

       (b)           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 equal to the sum
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; plus (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. 

        

         (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 sum 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; plus (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). 

         

      

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

       (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 sum
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; plus (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). 

       

       (iv)           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. 

       

      (c)           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.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

       21.           INDEMNIFICATION
BY THE COMPANY AND THE OPERATING PARTNERSHIP. 

       

       (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. 

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

       (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: 

       

       (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.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

       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. 

              
	 
      	 
      	 
      
	
                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.

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      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. 

       

      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.   

       

      [
Remainder of page intentionally left blank ]

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      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:

              	 
      	 
      
	 
      	 
      	
                Name:
      William M. Kahane

              
	 
      	 
      	
                Title:
      President

              

      

       

      
        
          
          

        

        
          23

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