Document:

Unassociated Document

    

    FORM
OF

    

    ADVISORY
AGREEMENT

    

    AMONG

    

    AMERICAN
REALTY CAPITAL HEALTHCARE TRUST, INC.,

    

    AMERICAN REALTY
CAPITAL HEALTHCARE TRUST OPERATING PARTNERSHIP, L.P.,

    

    AND

    

    AMERICAN REALTY
CAPITAL HEALTHCARE ADVISORS, LLC

    

    Dated
as of         , 2011

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

     

    
      
        	 
      	 
      	
                Page

              
	 
      	 
      	 
      
	
                 
      1.

              	
                DEFINITIONS.

              	
                1

              
	 
      	 
      	 
      
	
                 
      2.

              	
                APPOINTMENT.

              	
                5

              
	 
      	 
      	 
      
	
                 
      3.

              	
                DUTIES
      OF THE ADVISOR.

              	
                5

              
	 
      	 
      	 
      
	
                 
      4.

              	
                AUTHORITY
      OF ADVISOR.

              	
                7

              
	 
      	 
      	 
      
	
                 
      5.

              	
                FIDUCIARY
      RELATIONSHIP.

              	
                7

              
	 
      	 
      	 
      
	
                 
      6.

              	
                NO
      PARTNERSHIP OR JOINT VENTURE.

              	
                7

              
	 
      	 
      	 
      
	
                 
      7.

              	
                BANK
      ACCOUNTS.

              	
                8

              
	 
      	 
      	 
      
	
                  8.

              	
                RECORDS;
      ACCESS.

              	
                8

              
	 
      	 
      	 
      
	
                 
      9.

              	
                LIMITATIONS
      ON ACTIVITIES.

              	
                8

              
	 
      	 
      	 
      
	
                 10.

              	
                FEES.

              	
                8

              
	 
      	 
      	 
      
	
                 11.

              	
                EXPENSES.

              	
                9

              
	 
      	 
      	 
      
	
                 12.

              	
                OTHER
      SERVICES.

              	
                10

              
	 
      	 
      	 
      
	
                 13.

              	
                REIMBURSEMENT
      TO THE ADVISOR.

              	
                10

              
	 
      	 
      	 
      
	
                 14.

              	
                OTHER
      ACTIVITIES OF THE ADVISOR

              	
                11

              
	 
      	 
      	 
      
	
                 15.

              	
                THE
      AMERICAN REALTY CAPITAL NAME

              	
                11

              
	 
      	 
      	 
      
	
                 16.

              	
                TERM
      OF AGREEMENT

              	
                11

              
	 
      	 
      	 
      
	
                 17.

              	
                TERMINATION
      BY THE PARTIES

              	
                11

              
	 
      	 
      	 
      
	
                 18.

              	
                ASSIGNMENT
      TO AN AFFILIATE

              	
                12

              
	 
      	 
      	 
      
	
                 19.

              	
                PAYMENTS
      TO AND DUTIES OF ADVISOR UPON TERMINATION

              	
                12

              
	 
      	 
      	 
      
	
                 20.

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

              	
                12

              
	 
      	 
      	 
      
	
                 21.

              	
                INDEMNIFICATION
      BY THE COMPANY AND THE OPERATING PARTNERSHIP

              	
                12

              
	 
      	 
      	 
      
	
                 22.

              	
                INDEMNIFICATION
      BY ADVISOR

              	
                13

              

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

    (continued)

    

    
      
        	 
      	 
      	
                Page

              
	 
      	 
      	 
      
	
                 23. 

              	
                NOTICES

              	
                13

              
	 
      	 
      	 
      
	
                 24.

              	
                MODIFICATION

              	
                14

              
	 
      	 
      	 
      
	
                 25.

              	
                SEVERABILITY

              	
                14

              
	 
      	 
      	 
      
	
                 26.

              	
                GOVERNING
      LAW

              	
                14

              
	 
      	 
      	 
      
	
                 27.

              	
                ENTIRE
      AGREEMENT

              	
                14

              
	 
      	 
      	 
      
	
                 28.

              	
                NO
      WAIVER

              	
                14

              
	 
      	 
      	 
      
	
                 29.

              	
                PRONOUNS
      AND PLURALS

              	
                15

              
	 
      	 
      	 
      
	
                 30.

              	
                HEADINGS

              	
                15

              
	 
      	 
      	 
      
	
                 31.

              	
                EXECUTION
      IN COUNTERPARTS

              	
                15

              

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    FORM OF

    ADVISORY
AGREEMENT

    

    THIS
ADVISORY AGREEMENT dated as of      
    , 2011, is entered into among American Realty Capital
Healthcare Trust, Inc., a Maryland corporation (the “ Company ”), American
Realty Capital Healthcare Trust Operating Partnership, L.P., a Delaware limited
partnership (the “ Operating
Partnership”), and American Realty Capital Healthcare Advisors, LLC, a
Delaware limited liability company.

    

    WITNESSETH

    

    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 American Realty Capital Healthcare Advisors, LLC, a Delaware limited
liability company, any successor advisor to the Company and the Operating
Partnership, or any Person to which American Realty Capital Healthcare Advisors,
LLC or any successor advisor subcontracts substantially all its
functions.  Notwithstanding the foregoing, a Person hired or retained
by American Realty Capital Healthcare 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
American Realty Capital Healthcare 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.

    

    “Agreement”
means this Advisory Agreement, as the same may be amended, supplemented or
restated from time to time.

    

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

    
      
         

      

      
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    “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.

    

    “ 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 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.

    

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

    

    “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 Purchase
Price” has the meaning set forth in the Articles of
Incorporation.

    

    “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.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

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

    

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

    

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

    

    “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

    

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

    
       

      “FFO” means funds
from operations, as defined by the National Association of Real Estate
Investment Trusts.

    “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”
and “Indemnitees”
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.

    

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

    

    “Management
Agreement” means the Property Management and Leasing Agreement, dated as
of             
, 2011, among the Company, the Operating Partnership and American Realty Capital
Healthcare Properties, LLC, as the same may be amended from time to
time.

    

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

    
      
         

      

      
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    “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” has the meaning set forth in the preamble.

    

    “Operating
Partnership Agreement” means the Agreement of Limited Partnership of the
Operating Partnership dated as of        ,
2011, among the Company, the Operating Partnership and American Realty Capital
Healthcare 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.  The definition of
“Organization and Offering Expenses” set forth above is intended to encompass
all, but only, those expenses which are required to be treated as Organization
and Offering Expenses under the NASAA REIT Guidelines.  As a result,
and notwithstanding the definition set forth above, any expenses of the Company
which is not a part of Organization and Offering Expenses under the NASAA REIT
Guidelines shall not be treated as part of Organization and Offering Expenses
for purposes hereof.

    

    “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.

    

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

    

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

    

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

    

    “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.

    
      
         

      

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

    

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

    

    “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 V, LLC, a Delaware limited liability
company.

    

    “Stockholders”
means the registered holders of the Shares.

    

    “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,
Acquisition Expenses or Financing Coordination Fees.  The definition
of “Total Operating Expenses” set forth above is intended to encompass all, but
only, those expenses which are required to be treated as Total Operating
Expenses under the NASAA REIT Guidelines.  As a result, and
notwithstanding the definition set forth above, any expense of the Company which
is not part of Total Operating Expenses under the NASAA REIT Guidelines shall
not be treated as part of Total Operating Expenses for purposes
hereof.

    

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

    

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

    

    3.           
DUTIES OF THE ADVISOR.   The Advisor will use its reasonable
best efforts to present to the Company 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:

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (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, property managers, 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) provide research, economic and statistical data, 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;

    

    (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;

    
      
         

      

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

    

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

    

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

    

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

    

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

    

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

    

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

    

    (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 or anything else that may be to the contrary in this Agreement,
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 specified by 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.

    
      
         

      

      
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    7.           
BANK ACCOUNTS.   The Advisor may establish and maintain one or
more bank accounts 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; Acquisition Expenses.   Subject to Section 10(b), 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.
If the Advisor is terminated without cause pursuant to Section 17(a), the
Advisor or its assignees shall be entitled to an Acquisition Fee for any
Investments acquired after the Termination Date for which a contract to
acquire any such Investment had been entered into at or prior to the Termination
Date. The total Acquisition Fee payable to the Advisor or its assignees shall
equal one percent (1.0%) of the purchase price of Real Estate Assets and one
percent (1.0%) of the amount advanced for Real Estate Related Loans or other
Investments (other than Real Estate Assets), along with reimbursement of
Acquisition Expenses.  The purchase price of the Real Estate
Assets shall equal the amount paid or allocated to the purchase, development or
improvement of the Real Estate Assets inclusive of expenses related thereto and
the amount of debt associated with such Investment.  The purchase
price allocable for an Investment held through a Joint Venture shall equal the
product of (i) the purchase price of, or the amount advanced for, the
Investment, as applicable, and (ii) the direct or indirect ownership
percentage in the Joint Venture held directly or indirectly by the Company or
the Operating Partnership.  For purposes of this Section 10(a),
“ownership percentage” shall be the percentage of capital stock, membership
interests, partnership interests or other equity interests held by the Company
or the Operating Partnership, without regard to classification of such equity
interests.  The Company shall pay to the Advisor or its assignees the
Acquisition Fee promptly upon the closing of the Investment.  In
addition, if during the period ending two years after the close of the initial
Offering, the Company sells an Investment and then reinvests in other
Investments, the Company will pay to American Realty Capital Healthcare
Advisors, LLC one percent (1.0%) of the purchase price of Real Estate Assets and
one percent (1.0%) of the amount advanced for Real Estate Related Loans or other
Investments (other than Real Estate Assets), along with reimbursement of
acquisition expenses.

    

    (b)           
Limitation
on Total Acquisition Fees, Financing Coordination Fees and Acquisition
Expenses.  The total of all
Acquisition Fees, Financing Coordination Fees and Acquisition Expenses payable
in connection with any Investment or any reinvestment shall not exceed four
and one-half percent (4.5%) of the Contract Purchase Price of the
Investment acquired or four and one-half percent (4.5%) of the amount advanced
for an Investment; provided,
however, that once all the proceeds from the initial Offering have been
fully invested, the total of all Acquisition Fees and Financing Coordination
Fees shall not exceed one and one-half percent (1.5%) of the Contract Purchase
Price of all the Investments acquired.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    (c)          
Property
Disposition Fee.  In connection
with a Sale of a Real Estate Asset 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 equal to the lesser of (i) two percent (2.0%) of the
Contract Sales Price of such Real Estate Asset and (ii) one-half of the total
brokerage commission paid if a brokerage commission or other disposition fee is
paid to a non-Affiliate broker in addition to the Property Disposition Fee paid
to the Advisor or its assignees; 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 the
Asset Management Fee shall be reduced by any amounts payable as an Oversight Fee
(as defined in the Management Agreement), such that the aggregate of the Asset
Management Fee and the Oversight Fee does not exceed 0.75% per annum of Average
Invested Assets. The Asset Management Fee is payable semiannually, on
January 1 and July 1, in the amount of 0.375% of Average Invested Assets for the
preceding semiannual period. The Asset Management Fee will be reduced to the
extent that FFO, as adjusted, during
the six months ending on the last day of the calendar quarter immediately
preceding the date that such Asset Management Fee is payable is less than the
Distributions declared with respect to such six month period. For purposes of
this test, FFO, as
adjusted, is FFO adjusted to add (i) acquisition fees and related expenses;
(ii) non-cash restricted stock grant amortization, if any; and (iii) impairments
of real estate related investments, if any (including properties, loans
receivable and equity and debt investments).

    

    (e)          
Financing
Coordination Fee.   The Company
shall pay a Financing Coordination Fee to the Advisor or its assignees in
connection with the financing of any Investment, assumption of any Loans with
respect to any Investment or refinancing of any Loan in an amount equal to one
percent (1.0%) of the amount made available and/or outstanding under any such
Loan, including any assumed Loan.  The Advisor may reallow some of or
all this Financing Coordination Fee to reimburse third parties with whom it may
subcontract to procure any such Loan.

    

    (f)          
Payment
of Fees.   In connection
with the Acquisition Fee, Property Disposition Fee, Asset Management Fee and
Financing Coordination Fee, the Company shall pay such fees to the Advisor or
its assignees in cash or in Shares, or a combination of both, the form of
payment to be determined in the sole discretion of the Advisor. For the purposes
of the payment of such fees in Shares, each Share shall be valued at the
then-current per share offering price of the Shares in the Offering minus the
maximum selling commissions and dealer manager fee allowed in the Offering, or,
after the Board has determined a reasonable estimated value of the Shares and
such value has been publicly disclosed, each Share shall be valued at the
then-current publicly disclosed reasonable estimated value.

    

    (g)         
Exclusion
of Certain Transactions.

    

    (i)           
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.

    

    (ii)           If
the Board elects to internalize any management services provided by
the Advisor, neither the Company nor the Operating Partnership shall pay
any compensation or other remuneration to the Advisor or its Affiliates in
connection with the internalization transaction.  For the avoidance of
doubt, any compensation paid or payable by the Company to employees of the
Company in connection with their employment by the Company (which employees were
formerly employed by the Advisor or any of their Affiliates) shall not be deemed
to be compensation or other remuneration in connection with any internalization
transaction for purposes of the immediately preceding sentence.  This
provision shall not limit any other consideration or distributions that the
Company may pay the Advisor in accordance with this Agreement or any other
agreement.  This provision shall in no way obligate the Advisor to
facilitate an internalization transaction with the Advisor or any of its
Affiliates.

    

    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, including third-party due diligence fees related to the
Primary Offering, as set forth in detailed and itemized invoices; provided, however, that the
Company shall not reimburse the Advisor to the extent such reimbursement would
cause 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;

    

    (ii)           Acquisition
Expenses subject to the limitation set forth in Section 10(b)
;

    

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

    
      
         

      

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

    

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

    

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

    

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

    

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

    

    (ix)           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;

    

    (x)           expenses
connected with payments of Distributions;

    

    (xi)      
   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;

    

    (xii)      
  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;

    

    (xiii)        administrative
service expenses, including all costs and expenses incurred by the 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

    

    (xiv)         audit,
accounting and legal fees.

    

    (b)          Commencing
upon the earlier to occur of (i) the fifth fiscal quarter after the Company
makes its first Investment and (ii) six (6) months after the commencement of the
initial Offering, expenses incurred by the Advisor on behalf of the Company and
the Operating Partnership or in connection with the services provided by the
Advisor hereunder 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 incurred by the Advisor 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.

    
      
         

      

      
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    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,” “ARC” and “AR Capital.”  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,” “ARC” and “AR Capital,” a
non-transferable, non-assignable, non-exclusive, royalty-free right and license
to use the names “American Realty Capital,” “ARC” and “AR Capital” 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,” “ARC” and “AR Capital,” 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,” “ARC” and “AR Capital” 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,” “ARC” and “AR Capital” 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,” “ARC” and “AR Capital.” 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,” “ARC” and “AR Capital” 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,” “ARC” and “AR Capital” licensed hereunder or the use
thereof (including without limitation as to whether the use of the names
“American Realty Capital,” “ARC” and “AR Capital” 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,” “ARC” and “AR
Capital.”

    

    16.         
TERM OF AGREEMENT.   This Agreement shall continue in force for
a period of one year from the date hereof.  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’ prior 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 15
and 19
through 31
(inclusive) of this Agreement shall survive any expiration or earlier
termination of this Agreement.

    
      
         

      

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

    

    19.        
PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION.

    

    (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.

    

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

    

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

    

    (ii)         deliver
to the Board a full accounting, including a statement showing all payments
collected by it and a statement of all money held by it, covering the period
following the date of the last accounting furnished to the Board;

    

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

    

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

    

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

    

    21.     
   INDEMNIFICATION BY THE COMPANY AND THE OPERATING
PARTNERSHIP.

    

    (a)       
  The Company and the Operating Partnership, jointly and severally,
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
and against all losses, claims, damages, losses, joint or several, expenses
(including reasonable attorneys’ fees and other legal fees and expenses),
judgments, fines, settlements, and other amounts (collectively, “Losses”) arising in
the performance of their duties hereunder, including reasonable attorneys’ fees,
to the extent such Losses 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 suffered by such Indemnitee, nor
shall they provide that an Indemnitee be held harmless for any Loss 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;

    
      
         

      

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

    

    (iv)        such
indemnification or agreement to hold harmless is not recoverable from the
Stockholders.

    

    (b)           Notwithstanding
the foregoing, an Indemnitee shall not be indemnified by the Company and the
Operating Partnership for any Losses 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)         the
related claim has 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 related claim
against the Indemnitee and finds that indemnification of the settlement and the
related costs should be made, and the court considering the request for
indemnification has been advised of the position of the Securities and Exchange
Commission and of the published position of any state securities regulatory
authority in which securities of the Company or the Operating Partnership were
offered or sold as to indemnification for violation of securities
laws.

    

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

    

    (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 ultimately found not to be
entitled to indemnification in a final, non-appealable judgment of a court if
competent jurisdiction.

    

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

    

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

    

    
      	
              To
      the Company:

            	 
      	
              American
      Realty Capital Healthcare Trust, Inc.

            
	 
      	 
      	
              405
      Park Avenue

            
	 
      	 
      	
              New
      York, New York 10022

            
	 
      	 
      	
              Attention:  William
      M. Kahane,

            
	 
      	 
      	
                               President

            

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    
      	 
      	 
      	
              with
      a copy to:

            
	 
      	 
      	 
      
	 
      	 
      	
              Proskauer
      Rose LLP

            
	 
      	 
      	
              Eleven
      Times Square

            
	 
      	 
      	
              New
      York, New York 10036

            
	 
      	 
      	
              Attention:  Peter
      M. Fass, Esq.

            
	 
      	 
      	
              Attention:  James
      P. Gerkis, Esq.

            

    

    

    
      
        	
                To
      the Operating Partnership:

              	 
      	
                American
      Realty Capital Healthcare Trust Operating Partnership,
  L.P.

              
	 
      	 
      	
                405
      Park Avenue

              
	 
      	 
      	
                New
      York, New York 10022

              
	 
      	 
      	
                Attention:  William
      M. Kahane

              
	 
      	 
      	 
      
	 
      	 
      	
                with
      a copy to:

              
	 
      	 
      	 
      
	 
      	 
      	
                Proskauer
      Rose LLP

              
	 
      	 
      	
                Eleven
      Times Square

              
	 
      	 
      	
                New
      York, New York 10036

              
	 
      	 
      	
                Attention:  Peter
      M. Fass, Esq.

              
	 
      	 
      	
                Attention:  James
      P. Gerkis, Esq.

              
	 
      	 
      	 
      
	
                To
      the Advisor:

              	 
      	
                American
      Realty Capital Healthcare Advisors, LLC

              
	 
      	 
      	
                405
      Park Avenue

              
	 
      	 
      	
                New
      York, New York 10022

              
	 
      	 
      	
                Attention:  William
      M. Kahane

              
	 
      	 
      	 
      
	 
      	 
      	
                with
      a copy to:

              
	 
      	 
      	 
      
	 
      	 
      	
                Proskauer
      Rose LLP

              
	 
      	 
      	
                Eleven
      Times Square

              
	 
      	 
      	
                New
      York, New York 10036

              
	 
      	 
      	
                Attention:  Peter
      M. Fass, Esq.

              
	 
      	 
      	
                Attention:  James
      P. Gerkis, Esq.

              

      

    

     

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

    

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

    

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

    

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

    

    27.         
ENTIRE AGREEMENT.   This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter
hereof.  The express terms hereof control and supersede any course of
performance or usage of the trade inconsistent with any of the terms
hereof.

    

    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.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

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

    

    [Remainder
of page intentionally left blank]

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

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

    

    
      
        
          
            
              
                
                  	
                          AMERICAN
      REALTY CAPITAL NEW HEALTHCARE

                          TRUST,
      INC.

                        
	 
      	 
      
	
                          By:

                        	 
      
	 
      	
                          Name:  William
      M. Kahane

                        
	 
      	
                          Title:  President

                        
	 
      
	
                          AMERICAN
      REALTY CAPITAL HEALTHCARE TRUST

                          OPERATING
      PARTNERSHIP, L.P.

                        
	 
      	 
      
	
                          By:

                        	
                          American
      Realty Capital Healthcare Trust, Inc.

                        
	 
      	 
      
	 
      	
                          its
      General Partner

                        
	 
      	 
      
	
                          By:

                        	 
      
	 
      	
                          Name:  William
      M. Kahane

                        
	 
      	
                          Title:  President

                        
	 
      
	
                          AMERICAN
      REALTY CAPITAL HEALTHCARE

                          ADVISORS,
      LLC

                        
	 
      	 
      
	
                          By:

                        	
                          American
      Realty Capital Healthcare Trust

                          Special
      Limited Partnership, LLC

                        
	 
      	 
      
	 
      	
                          its
      Member

                        
	 
      	 
      
	
                          By:

                        	
                          American
      Realty Capital V, LLC

                        
	 
      	 
      
	 
      	
                          its
      Managing Member

                        
	 
      	 
      
	
                          By:

                        	 
      
	 
      	
                          Name:  Nicholas
      S. Schorsch

                        
	 
      	
                          Title:  Authorized
      Signatory

                        

                

              

            

          

        

      

    

    
      
         

      

      
        16Unassociated Document

    Exhibit 10.10

    
      
CONTRIBUTION
AGREEMENT

    
       

      DATED
AS OF FEBRUARY 4, 2011

       

      BETWEEN

       

      ARC
REAL ESTATE PARTNERS, LLC

       

      AND

       

      ARC
PROPERTIES OPERATING PARTNERSHIP, L.P. 

      
        

      

      

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

    

     

    TABLE
OF CONTENTS

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              	 
      	 
      	
                                                                      Page

                                                                    
	 
      	 
      	 
      
	
                                                                      ARTICLE
      1

                                                                    	
                                                                      CONTRIBUTION

                                                                    	
                                                                      2

                                                                    
	 
      	 
      	 
      
	
                                                                      Section
      1.01

                                                                    	
                                                                      CONTRIBUTION
      TRANSACTION

                                                                    	
                                                                      2

                                                                    
	
                                                                      Section
      1.02

                                                                    	
                                                                      CONSIDERATION

                                                                    	
                                                                      2

                                                                    
	
                                                                      Section
      1.03

                                                                    	
                                                                      ISSUANCE
      OF OP UNITS

                                                                    	
                                                                      2

                                                                    
	
                                                                      Section
      1.04

                                                                    	
                                                                      CONTRIBUTOR’S
      FORMATION TRANSACTION VALUE ADJUSTMENT

                                                                    	
                                                                      2

                                                                    
	
                                                                      Section
      1.05

                                                                    	
                                                                      FURTHER
      ACTION

                                                                    	
                                                                      4

                                                                    
	
                                                                      Section
      1.06

                                                                    	
                                                                      TRANSACTION
      COSTS

                                                                    	
                                                                      4

                                                                    
	
                                                                      Section
      1.07

                                                                    	
                                                                      TAX
      TREATMENT OF THE CONTRIBUTION

                                                                    	
                                                                      4

                                                                    
	 
      	 
      	 
      
	
                                                                      ARTICLE
      2

                                                                    	
                                                                      CLOSING

                                                                    	
                                                                      4

                                                                    
	 
      	 
      	 
      
	
                                                                      Section
      2.01

                                                                    	
                                                                      CONDITIONS
      PRECEDENT

                                                                    	
                                                                      4

                                                                    
	
                                                                      Section
      2.02

                                                                    	
                                                                      TIME
      AND PLACE

                                                                    	
                                                                      6

                                                                    
	
                                                                      Section
      2.03

                                                                    	
                                                                      DELIVERY
      OF OP UNITS; EXECUTION OF OPERATING PARTNERSHIP AGREEMENT

                                                                    	
                                                                      6

                                                                    
	
                                                                      Section
      2.04

                                                                    	
                                                                      CLOSING
      DELIVERIES

                                                                    	
                                                                      6

                                                                    
	
                                                                      Section
      2.05

                                                                    	
                                                                      CLOSING
      COSTS

                                                                    	
                                                                      7

                                                                    
	
                                                                      Section
      2.06

                                                                    	
                                                                      TERM
      OF THE AGREEMENT

                                                                    	
                                                                      7

                                                                    
	
                                                                      Section
      2.07

                                                                    	
                                                                      EFFECT
      OF TERMINATION

                                                                    	
                                                                      7

                                                                    
	
                                                                      Section
      2.08

                                                                    	
                                                                      TAX
      WITHHOLDING

                                                                    	
                                                                      7

                                                                    
	 
      	 
      	 
      
	
                                                                      ARTICLE
      3

                                                                    	
                                                                      REPRESENTATIONS,
      WARRANTIES AND INDEMNITIES OF THE OPERATING PARTNERSHIP

                                                                    	
                                                                      8

                                                                    
	 
      	 
      	 
      
	
                                                                      Section
      3.01

                                                                    	
                                                                      ORGANIZATION;
      AUTHORITY

                                                                    	
                                                                      8

                                                                    
	
                                                                      Section
      3.02

                                                                    	
                                                                      DUE
      AUTHORIZATION

                                                                    	
                                                                      8

                                                                    
	
                                                                      Section
      3.03

                                                                    	
                                                                      CONSENTS
      AND APPROVALS

                                                                    	
                                                                      8

                                                                    
	
                                                                      Section
      3.04

                                                                    	
                                                                      NO
      VIOLATION

                                                                    	
                                                                      8

                                                                    
	
                                                                      Section
      3.05

                                                                    	
                                                                      VALIDITY
      OF OP UNITS

                                                                    	
                                                                      8

                                                                    
	
                                                                      Section
      3.06

                                                                    	
                                                                      LITIGATION

                                                                    	
                                                                      9

                                                                    
	
                                                                      Section
      3.07

                                                                    	
                                                                      LIMITED
      ACTIVITIES

                                                                    	
                                                                      9

                                                                    
	
                                                                      Section
      3.08

                                                                    	
                                                                      NO
      OTHER REPRESENTATIONS OR WARRANTIES

                                                                    	
                                                                      9

                                                                    
	
                                                                      Section
      3.09

                                                                    	
                                                                      INDEMNIFICATION

                                                                    	
                                                                      9

                                                                    
	 
      	 
      	 
      
	
                                                                      ARTICLE
      4

                                                                    	
                                                                      REPRESENTATIONS
      AND WARRANTIES OF THE CONTRIBUTOR

                                                                    	
                                                                      11

                                                                    
	 
      	 
      	 
      
	
                                                                      Section
      4.01

                                                                    	
                                                                      ORGANIZATION;
      AUTHORITY

                                                                    	
                                                                      11

                                                                    
	
                                                                      Section
      4.02

                                                                    	
                                                                      DUE
      AUTHORIZATION

                                                                    	
                                                                      11

                                                                    
	
                                                                      Section
      4.03

                                                                    	
                                                                      OWNERSHIP
      OF CONTRIBUTED INTERESTS

                                                                    	
                                                                      11

                                                                    
	
                                                                      Section
      4.04

                                                                    	
                                                                      CONSENTS
      AND APPROVALS

                                                                    	
                                                                      11

                                                                    
	
                                                                      Section
      4.05

                                                                    	
                                                                      NO
      VIOLATION

                                                                    	
                                                                      12

                                                                    
	
                                                                      Section
      4.06

                                                                    	
                                                                      NON-FOREIGN
      PERSON

                                                                    	
                                                                      12

                                                                    

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        	
                                                                Section
      4.07

                                                              	
                                                                TAXES

                                                              	
                                                                12

                                                              
	
                                                                Section
      4.08

                                                              	
                                                                TAX
      MATTERS

                                                              	
                                                                13

                                                              
	
                                                                Section
      4.09

                                                              	
                                                                TAX
      INFORMATION

                                                              	
                                                                13

                                                              
	
                                                                Section
      4.10

                                                              	
                                                                SOLVENCY

                                                              	
                                                                13

                                                              
	
                                                                Section
      4.11

                                                              	
                                                                LITIGATION

                                                              	
                                                                13

                                                              
	
                                                                Section
      4.12

                                                              	
                                                                INVESTMENT

                                                              	
                                                                13

                                                              
	
                                                                Section
      4.13

                                                              	
                                                                NO
      BROKERS OR FINDERS

                                                              	
                                                                14

                                                              
	
                                                                Section
      4.14

                                                              	
                                                                WAIVER
      OF RIGHTS UNDER ORGANIZATIONAL AGREEMENT

                                                              	
                                                                15

                                                              
	
                                                                Section
      4.15

                                                              	
                                                                NO
      OTHER REPRESENTATIONS OR WARRANTIES

                                                              	
                                                                15

                                                              
	
                                                                Section
      4.16

                                                              	
                                                                SURVIVAL
      OF REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTOR

                                                              	
                                                                15

                                                              
	 
      	 
      	 
      
	
                                                                ARTICLE
      5

                                                              	
                                                                COVENANTS
      AND OTHER AGREEMENTS

                                                              	
                                                                15

                                                              
	 
      	 
      	 
      
	
                                                                Section
      5.01

                                                              	
                                                                COVENANTS
      OF THE CONTRIBUTOR

                                                              	
                                                                15

                                                              
	
                                                                Section
      5.02

                                                              	
                                                                COMMERCIALLY
      REASONABLE EFFORTS BY THE OPERATING PARTNERSHIP AND THE
      CONTRIBUTOR

                                                              	
                                                                16

                                                              
	 
      	 
      	 
      
	
                                                                ARTICLE
      6

                                                              	
                                                                CHANGES
      TO FORM AGREEMENTS

                                                              	
                                                                16

                                                              
	 
      	 
      	 
      
	
                                                                Section
      6.01

                                                              	
                                                                CHANGES
      TO FORM AGREEMENTS

                                                              	
                                                                16

                                                              
	 
      	 
      	 
      
	
                                                                ARTICLE
      7

                                                              	
                                                                POWER
      OF ATTORNEY

                                                              	
                                                                16

                                                              
	 
      	 
      	 
      
	
                                                                Section
      7.01

                                                              	
                                                                POWER
      OF ATTORNEY

                                                              	
                                                                16

                                                              
	 
      	 
      	 
      
	
                                                                ARTICLE
      8

                                                              	
                                                                GENERAL
      PROVISIONS

                                                              	
                                                                17

                                                              
	 
      	 
      	 
      
	
                                                                Section
      8.01

                                                              	
                                                                NOTICES

                                                              	
                                                                17

                                                              
	
                                                                Section
      8.02

                                                              	
                                                                DEFINITIONS

                                                              	
                                                                17

                                                              
	
                                                                Section
      8.03

                                                              	
                                                                COUNTERPARTS

                                                              	
                                                                23

                                                              
	
                                                                Section
      8.04

                                                              	
                                                                ENTIRE
      AGREEMENT; THIRD-PARTY BENEFICIARIES

                                                              	
                                                                23

                                                              
	
                                                                Section
      8.05

                                                              	
                                                                GOVERNING
      LAW

                                                              	
                                                                23

                                                              
	
                                                                Section
      8.06

                                                              	
                                                                ASSIGNMENT

                                                              	
                                                                23

                                                              
	
                                                                Section
      8.07

                                                              	
                                                                JURISDICTION

                                                              	
                                                                24

                                                              
	
                                                                Section
      8.08

                                                              	
                                                                SEVERABILITY

                                                              	
                                                                24

                                                              
	
                                                                Section
      8.09

                                                              	
                                                                RULES
      OF CONSTRUCTION

                                                              	
                                                                24

                                                              
	
                                                                Section
      8.10

                                                              	
                                                                EQUITABLE
      REMEDIES

                                                              	
                                                                24

                                                              
	
                                                                Section
      8.11

                                                              	
                                                                TIME
      OF THE ESSENCE

                                                              	
                                                                25

                                                              
	
                                                                Section
      8.12

                                                              	
                                                                DESCRIPTIVE
      HEADINGS

                                                              	
                                                                25

                                                              
	
                                                                Section
      8.13

                                                              	
                                                                NO
      PERSONAL LIABILITY CONFERRED

                                                              	
                                                                25

                                                              
	
                                                                Section
      8.14

                                                              	
                                                                AMENDMENTS

                                                              	
                                                                25

                                                              

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    EXHIBITS

     

    A – List
of Properties

    B –
FIRPTA Affidavit

    C –
Accredited Investor Questionnaire

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    D – Form
of Assignment and Assumption of Ownership Interests

    E –
Permitted Exceptions

    F –
Permitted Mortgage Indebtedness

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    CONTRIBUTION
AGREEMENT

     

    THIS
CONTRIBUTION AGREEMENT (this “Agreement”) is made and
entered into between ARC Properties Operating Partnership, L.P., a Delaware
limited partnership and subsidiary of the REIT (defined below) (the “Operating Partnership”), and
ARC Real Estate Partners, LLC, a Delaware limited liability company (the “Contributor”), and shall be
effective as of the date accepted by the Operating Partnership, as set forth on
the signature page hereto (the “Effective Date”). Capitalized
terms used herein shall have the meanings set forth in Section 8.02
hereof.

     

    RECITALS

     

    WHEREAS,
in connection with an initial public offering (“IPO”) of its common stock, par
value $.01 per share (“REIT
Common Stock”), American Realty Capital Properties, Inc., a Maryland
corporation (the “REIT”), desires to (i)
consolidate the ownership of a portfolio of properties set forth on Exhibit
A hereto (the “Properties”) currently owned,
directly or indirectly, by ARC Income Properties, LLC, a Delaware limited
liability company and American Realty Capital Partners, LLC, a Delaware limited
liability company (collectively, the “Contributed Entities”); and
(ii) own and operate such Properties within the meaning of Section 856 of the
Code; and

     

    WHEREAS,
the Contributor owns all of the issued and outstanding ownership interests (the
“Contributed Interests”)
in the Contributed Entities; and

     

    WHEREAS,
the consolidation of the ownership of the Properties will be accomplished by a
contribution (the “Contribution”) by the
Contributor of the Contributed Interests to the Operating Partnership in
exchange for units of limited partner interest in the Operating Partnership
(“OP Units”) pursuant to
this Agreement; and

     

    WHEREAS,
upon the closing of its IPO, the REIT shall contribute the net proceeds of such
IPO to the Operating Partnership in exchange for that number of OP Units
necessary to provide to the REIT an aggregate total value in OP Units equal to
the net proceeds contributed, with a value per OP Unit equal to the initial
public offering price of a share of REIT Common Stock (the “IPO Price”); and

     

    WHEREAS,
as part of the Contribution and subject to (a) the terms and conditions set
forth herein; and (b) the completion of the IPO, the Contributor desires to
contribute to the Operating Partnership, and the Operating Partnership desires
to acquire from the Contributor, all of the Contributor’s right, title and
interests in the Contributed Interests, in exchange for OP Units;
and

     

    WHEREAS,
all necessary approvals have been obtained by the parties to this Agreement to
consummate the transactions contemplated herein.

     

    NOW,
THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and other terms contained in this Agreement, the parties
hereto, intending to be legally bound hereby, agree as follows:

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    ARTICLE
1

     

    CONTRIBUTION

     

    Section
1.01        CONTRIBUTION
TRANSACTION. At the
Closing and subject to the terms and conditions contained in this Agreement, the
Contributor hereby agrees to assign, set over, and transfer to the Operating
Partnership, absolutely and unconditionally and free and clear of all Liens, all of its right,
title and interest in and to the Contributed Interests, in exchange for the
consideration set forth in Section 1.02, and the
Operating Partnership hereby agrees to accept such assignment by the Contributor
and to agree to be bound by the terms of the Organizational Agreement and to
undertake, assume and agree to punctually and faithfully perform, pay or
discharge when due and otherwise in accordance with its terms all agreements,
covenants, conditions, obligations and liabilities of the Contributor in the
Contributed Entities with respect to the Contributed Interest on or after the
Closing Date.

     

    Section
1.02        CONSIDERATION. At the
Closing and subject to the terms and conditions contained in this Agreement, the
Contributor hereby irrevocably agrees to accept, in exchange for the Contributed
Interests, a number of OP Units equal to $3,875,000, as the same may be adjusted
in accordance with Section 1.04 below
(the “Contributor’s Formation
Transaction Value”), divided by the IPO
Price.

     

    Section
1.03        ISSUANCE OF OP
UNITS. At the
Closing and subject to the terms and conditions contained in this Agreement, the
Operating Partnership shall, in exchange for the Contributed Interests
contributed by the Contributor, issue to the Contributor a number of OP Units
equal to the Contributor’s Formation Transaction Value, divided by the IPO
Price. No fractional OP Units shall be issued pursuant to this Agreement. If the
preceding formula would require the issuance of a fractional OP Unit, the number
of OP Units which the Contributor shall be entitled to receive shall be rounded
to the nearest whole number.

     

    Section 1.04        CONTRIBUTOR’S FORMATION
TRANSACTION VALUE ADJUSTMENT. The
Contributor’s Formation Transaction Value shall be adjusted on the Closing Date
as follows:

     

    (a)         the
Contributor’s Formation Transaction Value shall be increased by an amount equal
to:

     

    (i)           all
Amortizing Principal Payments made by a Property Owner on or after February 1,
2011 and prior to the Cut-Off Date in respect of Debt of a Property
Owner;

     

    (ii)          all
Extraordinary Principal Payments made by a Property Owner after the Effective
Date and prior to the Cut-Off Date in respect of Debt of a Property
Owner;

     

    (iii)        all
additions to Non-Operating Expense Reserves of a Property Owner made on or after
February 1, 2011 and prior to the Cut-Off Date; and

     

    (iv)        all
Extraordinary Expense Prepayments made by a Property Owner after the Effective
Date and outstanding as of the Cut-Off Date, other than that portion of each
such Extraordinary Expense Prepayment relating to the period ending thirty (30)
calendar days after the Cut-Off Date;

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    in each
case to the extent such amounts were paid in cash from operating income of a
Property Owner and in any event not from loan proceeds, casualty insurance
proceeds or proceeds from condemnation or eminent domain proceedings, or
proceeds from the sale or other disposition of a Property or any interest
therein, or that are otherwise derived from a source other than the operation,
leasing, management or occupancy of a Property;

     

    (b)         the
Contributor’s Formation Transaction Value shall be decreased by an amount equal
to:

     

    (i)           all
Extraordinary Rent Prepayments received by a Property Owner after the Effective
Date, other than that portion of each such Extraordinary Rent Prepayment
relating to the period ending thirty (30) calendar days after the Cut-Off
Date;

     

    (ii)          all
Past Due Payables of a Property Owner outstanding as of the Cut-Off
Date;

     

    (iii)         all
withdrawals from Non-Operating Expense Reserves of a Property Owner made on or
after the Effective Date and prior to the Cut-Off Date;

     

    (iv)         all
distributions made by a Property Owner of funds consisting of loan proceeds,
casualty insurance proceeds, proceeds from condemnation or eminent domain
proceedings, or proceeds from the sale or other disposition of a Property or any
interest therein, or that are otherwise derived from a source other than the
operation, leasing, management or occupancy of a Property; and

     

    (v)          all
liens, judgments and other monetary encumbrances against a Property other than
Permitted Exceptions.

     

    (c)         the
Contributor’s Formation Transaction Value shall be increased or decreased by the
amount, if any, by which the Cut-Off Date Cash Balance is greater than (in which
case such value shall be increased) or less than (in which case such value shall
be decreased) the Target Cash Balance.

     

    Within
ten (10) calendar days of the SEC Effective Date, the Operating Partnership and
the Contributor will in good faith make a calculation of the Contributor’s
Formation Transaction Value as of the SEC Effective Date. The number of the OP
Units to be received by the Contributor in accordance with Section 1.02 shall be
increased or decreased based on this calculation. After the SEC Effective Date
no further adjustments in the number of OP Units to be received by the
Contributor shall be made. If the Contributor’s Formation Transaction Value as
determined in the Final Adjustment is greater than the product of (x) the number
of OP Units received by the Contributor at the Closing and (y) the IPO Price,
the Operating Partnership shall, within five (5) calendar days of the Closing,
pay such difference to the Contributor in cash. If the Contributor’s Formation
Transaction Value as determined in the Final Adjustment is less than the product
of (x) the number of OP Units received by the Contributor at the Closing and (y)
the IPO, the Contributor shall, within five (5) calendar days of the Closing,
pay such difference to the Operating Partnership in cash. A further final
adjustment to the Contributor’s Formation Transaction Value shall be determined
as of the Cut-Off Date (the “Final Adjustment”), and no
further adjustment shall be made thereafter. The Contributor agrees to provide,
and to use the Contributor’s reasonable efforts to cause the Contributed
Entities and the Property Owners to provide, such information as the Operating
Partnership may reasonably require to make the adjustments to the Contributor’s
Formation Transaction Value as provided in this Section 1.04. The
parties acknowledge and agree that in determining the Contributor’s Formation
Transaction Value the parties assumed, among other things, that the
Contributor’s Formation Transaction Value would not be subject to any pro ration
or adjustment other than as specifically provided in this Section
1.04.

    
      
         

      

      
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    Section
1.05        FURTHER
ACTION. If, at
any time after the Closing, the Operating Partnership shall determine or be
advised that any deeds, bills of sale, assignments, assurances or other actions
or things are necessary or desirable to vest, perfect or confirm of record or
otherwise in the Operating Partnership the right, title or interest in or to the
Contributed Interests and the admission and substitution of the Operating
Partnership for the Contributor as a member of the Contributed Entities, the
Contributor shall execute and deliver all such deeds, bills of sale, assignments
and assurances and take and do all such other actions and things as may be
necessary or desirable to vest, perfect or confirm any and all right, title and
interest in the Contributed Interests or otherwise to carry out this
Agreement.

     

    Section
1.06        TRANSACTION
COSTS. If the
Closing occurs, the REIT and the Operating Partnership shall be solely
responsible for all transaction costs and expenses of the REIT, the Operating
Partnership and the Contributed Entities in connection with the Contribution and
the IPO, which include, but are not limited to, the selling commissions and
dealer manager fees; provided that the REIT and
the Operating Partnership shall not be responsible for any transaction costs or
expenses incurred by the Contributor.

     

    Section
1.07        TAX TREATMENT OF THE
CONTRIBUTION. The
parties hereto intend and agree to treat, for U.S. federal income tax purposes,
the contribution of the Contributed Interests in exchange for OP Units
effectuated pursuant to this Agreement as a contribution to a partnership
pursuant to Section 721 of the Code, except with respect to OP Units received in
connection with amounts under Section 1.04, and no party shall maintain any
position to the contrary on any Tax Return or otherwise.

     

    ARTICLE
2

     

    CLOSING

     

    Section
2.01        CONDITIONS
PRECEDENT.

     

    (a)         Condition to Each Party’s
Obligations. The respective obligations of each party to effect the
contribution of the Contributed Interests and the issuance of the OP Units
contemplated by this Agreement, and to consummate the other transactions
contemplated hereby, is subject to the satisfaction or, if applicable, waiver,
on or prior to the Closing Date, of the following conditions:

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (i)           Registration Statement. The
Registration Statement shall have become effective under the Securities Act of
1933, as amended (the “Securities Act”), and shall not be the
subject of any stop order or proceeding by the Securities and Exchange
Commission (the “SEC”) seeking a stop order.
This condition may not be waived by any party.

     

    (ii)          IPO Proceeds. The REIT shall
have received the proceeds from the IPO not later than concurrently herewith.
This condition may not be waived by any party.

     

    (iii)         No Injunction. No party to
this Agreement shall be subject to any statute, rule, regulation, executive
order, decree, judgment, injunction or other order (whether temporary,
preliminary or permanent) of any Governmental Authority that prevents or
prohibits consummation of any of the transactions contemplated in this
Agreement.

     

    (b)         Conditions to Obligations of the
Operating Partnership. The obligations of the Operating Partnership are
further subject to satisfaction of the following conditions (any of which may be
waived by the Operating Partnership in whole or in part):

     

    (i)           Representations and Warranties.
Except as would not have a material adverse effect on the financial
condition or results of operations of the Contributed Entities or the Operating
Partnership, the representations and warranties of the Contributor contained in
this Agreement shall be true and correct at the Closing as if made again at that
time (except to the extent that any representation or warranty speaks as of an
earlier date, in which case it must be true and correct only as of that earlier
date).

     

    (ii)          Performance by the Contributor.
The Contributor shall have performed in all material respects all
agreements and covenants required by this Agreement to be performed or complied
with by it on or prior to the Closing Date.

     

    (iii)         Consents, Etc. All necessary consents
and approvals of Governmental Authorities or third parties (including lenders)
for the Contributor and each Property Owner to consummate the transactions
contemplated hereby (except for those the absence of which would not have a
material adverse effect on the ability of the Contributor or any Property Owner
to consummate the transactions contemplated by this Agreement) shall have been
obtained.

     

    (iv)        No Material Adverse Change.
There shall have not occurred between the date hereof and the Closing
Date any material adverse change in any of the assets, business, financial
condition, results of operation or prospects of the Contributed Entities or the
Operating Entity.

     

    (c)         Conditions to Obligations of the
Contributor. The obligation of the Contributor to effect the contribution
contemplated by this Agreement and to consummate the other transactions
contemplated hereby to occur on the Closing Date are further subject to
satisfaction of the following conditions:

     

    (i)           Representations and Warranties.
Except as would not have a material adverse effect on the financial
condition or results of operations of the Operating Partnership, the
representations and warranties of the Operating Partnership contained in this
Agreement shall be true and correct at the Closing as if made again at that time
(except to the extent that any representation or warranty speaks as of an
earlier date, in which case it must be true and correct only as of that earlier
date).

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (ii)          Performance by the Operating
Partnership. The Operating Partnership shall have performed in all
material respects all agreements and covenants required by this Agreement to be
performed or complied with by it on or prior to the Closing Date.

     

    (iii)         Registration Rights Agreement.
The REIT shall have executed and delivered a registration rights
agreement substantially in a form reasonably acceptable to the parties
hereto.

     

    (iv)        Guarantees. Nicholas S.
Schorsch and William M. Kahane will be released from, or indemnified by the
Operating Partnership against, any guarantees granted by them to the lenders
holding the Permitted Mortgage Indebtedness.

     

    Section
2.02         TIME AND
PLACE. Unless
this Agreement shall have been terminated pursuant to Section 2.06 hereof,
and subject to satisfaction or waiver of the conditions in Section 2.01 hereof,
the closing of the Contribution (the “Closing”) and the other
transactions contemplated hereby shall occur on the day on which the REIT
receives the proceeds from the IPO from the dealer managers (the “Closing Date”). The Closing shall take
place at the offices of Proskauer Rose LLP, Eleven Times Square, New York, NY
10036, or such other place as determined by the Operating Partnership in its
sole discretion. The Contribution and all closing deliveries shall be deemed
concurrent for all purposes.

     

    Section
2.03       DELIVERY OF OP UNITS;
EXECUTION OF OPERATING PARTNERSHIP AGREEMENT.  The
issuance of the OP Units pursuant to this Agreement shall be reflected in the
Amended and Restated Agreement of Limited Partnership of the Operating
Partnership (as amended, supplemented or otherwise modified from time to time,
the “Operating Partnership
Agreement”) in form and substance
reasonably acceptable to the Operating Partnership and the Contributor. The OP
Units will be governed by the terms and conditions of the Operating Partnership
Agreement, a copy of which the Contributor will accept and agree to execute and
by which the Contributor will agree to be legally bound. At the Closing (or as
soon as reasonably practicable thereafter), the Operating Partnership shall
deliver or cause to be delivered to the Contributor an executed copy of the
Operating Partnership Agreement.

     

    Section
2.04        CLOSING
DELIVERIES. At the
Closing, the parties shall make, execute, acknowledge and deliver, or cause to
be made, executed, acknowledged and delivered any other documents reasonably
requested by the Operating Partnership or reasonably necessary or desirable to
assign, transfer, convey, contribute and deliver the Contributed Interests, free
and clear of all Liens, to admit and substitute the Operating Partnership for
the Contributor as a member of the Contributed Entities and to effectuate the
transactions contemplated hereby, including, without limitation:

     

    (a)         The
Operating Partnership Agreement;

     

    (b)         The
Registration Rights Agreement;

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    (c)         To
the extent Nicholas S. Schorsch and William H. Kahane are not released from any
guarantees they have provided to the lenders holding the Permitted Mortgage
Indebtedness, the Operating Partnership shall deliver the Indemnification
Agreement;

     

    (d)         An
Assignment and Assumption;

     

    (e)         A
FIRPTA Affidavit in the form attached hereto as Exhibit
B;

     

    (f)          An
IRS Form W-9; and

     

    (g)         A
tax protection agreement between the Contributor and the Operating Partnership,
the terms of which shall be reasonably agreed to prior to the
Closing.

     

    Section
2.05       CLOSING
COSTS. The
Operating Partnership shall pay any documentary transfer Taxes, escrow charges,
title charges and recording Taxes or fees incurred in connection with the
transactions contemplated hereby.

     

    Section
2.06        TERM OF THE
AGREEMENT. This
Agreement shall terminate automatically if (i) the initial registration
statement of the REIT for the IPO (the “Registration Statement”) has not been filed with
the SEC by April 30, 2011, or (ii) the Contribution shall not have been
consummated on or prior to November 30, 2011 (such date is hereinafter referred
to as the “Outside
Date”).

     

    Section
2.07        EFFECT OF
TERMINATION. In the
event of termination of this Agreement for any reason, all obligations on the
part of the Operating Partnership and the Contributor under this Agreement shall
terminate, except that the obligations set forth in Article 8 shall
survive; it being understood and agreed, however, for the avoidance of doubt,
that if this Agreement is terminated because one or more of the conditions to a
non-breaching party’s obligations under this Agreement is not satisfied by the
Outside Date as a result of another party’s material breach of a covenant,
representation, warranty or other obligation under this Agreement, the
non-breaching party’s right to pursue all legal remedies with respect to such
breach will survive such termination unimpaired. If this Agreement shall
terminate for any reason prior to completion of the Contribution, the
Contributor shall pay its own costs and expenses and the transaction costs and
expenses of the REIT, the Operating Partnership and the Contributed Entities
relating to the Contribution, as determined by the Operating Partnership in its
reasonable discretion.

     

    Section
2.08        TAX
WITHHOLDING. The
Operating Partnership shall be entitled to deduct and withhold, from the
consideration payable pursuant to this Agreement, if any, to the Contributor
such amounts as the Operating Partnership is required to deduct and withhold
with respect to the making of such payment under the Code or any provision of
state, local or foreign tax law (e.g., backup withholding or
FIRPTA withholding). To the extent that amounts are so withheld by the Operating
Partnership, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the Contributor in respect of which such
deduction and withholding was made by the Operating
Partnership.

    
      
         

      

      
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    ARTICLE
3

     

    REPRESENTATIONS,
WARRANTIES AND

    INDEMNITIES
OF THE OPERATING PARTNERSHIP

     

    The
Operating Partnership hereby represents and warrants to and covenants with the
Contributor as follows:

     

    Section
3.01        ORGANIZATION;
AUTHORITY. The
Operating Partnership is a limited partnership duly organized, validly existing
and in good standing under the Laws of the State of Delaware. The Operating
Partnership has all requisite power and authority to enter this Agreement and to
carry out the transactions contemplated hereby, and to own, lease or operate its
property and to carry on its business as presently conducted and, to the extent
required under applicable Law, is qualified to do business and is in good
standing in each jurisdiction in which the nature of its business or the
character of its property make such qualification necessary, other than in such
jurisdictions where the failure to be so qualified would not have a material
adverse effect on the financial condition or results of operations of the
Operating Partnership.

     

    Section
3.02        DUE
AUTHORIZATION. The
execution, delivery and performance of this Agreement by the Operating
Partnership have been duly and validly authorized by all necessary action of the
Operating Partnership. This Agreement and each agreement, document and
instrument executed and delivered by or on behalf of the Operating Partnership
pursuant to this Agreement constitute, or when executed and delivered will
constitute, the legal, valid and binding obligation of the Operating
Partnership, each enforceable against the Operating Partnership in accordance
with its terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar Laws relating to creditors’ rights and general principles of
equity and except to the extent that enforceability of the indemnification and
contribution provisions set forth in this Agreement may be limited by the
federal or state securities Laws or the public policy underlying such
Laws.

     

    Section
3.03        CONSENTS AND
APPROVALS. Except in
connection with the IPO and the consummation of the Contribution, no consent,
waiver, approval or authorization of, or filing with, any Person or Governmental
Authority or under any applicable Laws is required to be obtained by the
Operating Partnership in connection with the execution, delivery and performance
of this Agreement and the transactions contemplated hereby.

     

    Section
3.04        NO
VIOLATION. None of
the execution, delivery or performance of this Agreement, any agreement
contemplated hereby between the parties to this Agreement and the transactions
contemplated hereby between the parties to this Agreement does or will, with or
without the giving of notice, lapse of time, or both, violate, conflict with,
result in a breach of, or constitute a default under (a) the organizational
documents of the Operating Partnership, (b) any term or provision of any
judgment, order, writ, injunction, or decree binding on the Operating
Partnership, or (c) any other material agreement to which the Operating
Partnership is a party.

     

    Section
3.05        VALIDITY OF OP
UNITS. The
issuance of the OP Units to the Contributor pursuant to this Agreement will have
been duly authorized by the Operating Partnership and, when issued against the
consideration therefor, will be validly issued by the Operating Partnership,
free and clear of all Liens (other than Liens created by the Operating
Partnership Agreement).

    
      
         

      

      
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    Section
3.06        LITIGATION. There is
no action, suit or proceeding pending or, to the Operating Partnership’s
knowledge, threatened against the Operating Partnership that, if adversely
determined, would have a material adverse effect on the financial condition or
results of operations of the Operating Partnership or which challenges or
impairs the ability of the Operating Partnership to execute or deliver, or
perform its obligations under, this Agreement and the documents executed by it
pursuant to this Agreement or to consummate the transactions contemplated hereby
or thereby.

     

    Section
3.07        LIMITED
ACTIVITIES. Except
for activities in connection with the IPO or the Contribution, the Operating
Partnership has not engaged in any material business or incurred any material
obligations.

     

    Section
3.08        NO OTHER REPRESENTATIONS OR
WARRANTIES. Other
than the representations and warranties expressly set forth in this Article III, the
Operating Partnership shall not be deemed to have made any other representation
or warranty in connection with this Agreement or the transactions contemplated
hereby.

     

    Section
3.09        INDEMNIFICATION.

     

    (a)         From
and after the Closing Date, the Operating Partnership shall indemnify and hold
harmless the Contributor and its Affiliates (each, a “Contributor Indemnified
Party”) from
and against any and all charges, complaints, claims, actions, causes of action,
losses, damages, liabilities and expenses of any nature whatsoever, including
without limitation, amounts paid in settlement, reasonable attorneys’ fees,
costs of investigation, costs of investigative judicial or administrative
proceedings or appeals therefrom and costs of attachment or similar bonds
(collectively, “Losses”)
arising out of or relating to, asserted against, imposed upon or incurred by any
Contributor Indemnified Party in connection with or as a result of any breach of
a representation, warranty or covenant of the Operating Partnership contained in
this Agreement or in any schedule, exhibit, certificate or affidavit or any
other document delivered by the Operating Partnership pursuant to this
Agreement; provided, however, that the Operating
Partnership shall not have any obligation under this Section 3.09 to
indemnify any Contributor Indemnified Party against any Losses to the extent
that such Losses arise from (i) any diminution in value of OP Units; or (ii) the Contributor’s
breach of this Agreement, gross negligence, willful misconduct or
fraud.

     

    (b)         At
the time when any Contributor Indemnified Party learns of any potential claim
under this Section
3.09 (a “Claim”) against the Operating
Partnership, it will promptly give written notice (a “Claim Notice”) to the Operating
Partnership; provided
that failure to do so shall
not prevent recovery under this Agreement, except to the extent that the
Operating Partnership shall have been materially prejudiced by such failure.
Each Claim Notice shall describe in reasonable detail the facts known to such
Contributor Indemnified Party giving rise to such Claim, and the amount or good
faith estimate of the amount of Losses arising therefrom. Unless prohibited by
Law, such Contributor Indemnified Party shall deliver to the Operating
Partnership, promptly after such Contributor Indemnified Party’s receipt
thereof, copies of all notices and documents (including court papers) received
by such Contributor Indemnified Party relating to a Third Party Claim. Any
Contributor Indemnified Party may, at its option, demand indemnity under this
Section 3.09 as
soon as a Claim has been threatened by a third party, regardless of whether an
actual Loss has been suffered, so long as such Contributor Indemnified Party
shall in good faith determine that such Claim is not frivolous and that such
Contributor Indemnified Party may be liable for, or otherwise incur, a Loss as a
result thereof.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (c)         The
Operating Partnership shall be entitled, at its own expense, to assume and
control the defense of any Claims asserted by third parties (“Third Party Claims”), through counsel chosen
by the Operating Partnership, if it gives notice of its intention to do so to
such Contributor Indemnified Party within thirty (30) calendar days of the
receipt of the applicable Claim Notice; provided, however, that such Contributor
Indemnified Party may at all times participate in such defense at its own
expense. Without limiting the foregoing, in the event that the Operating
Partnership exercises the right to undertake any such defense against a Third
Party Claim, such Contributor Indemnified Party shall cooperate with the
Operating Partnership in such defense and make available to the Operating
Partnership (unless prohibited by Law), at the Operating Partnership’s expense,
all witnesses, pertinent records, materials and information in such Contributor
Indemnified Party’s possession or under such Contributor Indemnified Party’s
control relating thereto as is reasonably required by the Operating Partnership.
No compromise or settlement of such Third Party Claim may be effected by either
such Contributor Indemnified Party, on the one hand, or the Operating
Partnership, on the other hand, without the other’s consent (which shall not be
unreasonably withheld or delayed) unless (i) there is no finding or admission of
any violation of Law and no effect on any other claims that may be made against
such other party and (ii) each Contributor Indemnified Party that is party to
such Claim is released from all liability with respect to such
Claim.

     

    (d)         All
representations, warranties and covenants of the Operating Partnership contained
in this Agreement shall survive until the first anniversary of the Closing Date
(the “Expiration
Date”). If a
Claim Notice has been given in accordance with the provisions of this Section 3.09 prior to
the Expiration Date, then the relevant representation, warranty and covenant
shall survive, but only with respect to such specific Claim, until such Claim
has been finally resolved. Any claim for indemnification not so asserted in
writing by the Expiration Date may not thereafter be asserted and shall forever
be waived. In furtherance of the foregoing, the Contributor hereby waives, as of
the Closing, to the fullest extent permitted under applicable Law, any and all
rights, claims and causes of action (other than claims of, or causes of action
arising from, fraud) it may have against the Operating Partnership arising under
or based upon any federal, state, local or foreign Law, other than the right to
seek indemnity pursuant to this Section 3.09. The
foregoing sentence shall not limit the Contributor’s right to specific
performance or injunctive relief in connection with the breach by the Operating
Partnership of its covenants in this Agreement.

     

    (e)         All
indemnity payments made hereunder shall be treated as adjustments to the
consideration paid hereunder for United States federal income tax
purposes.

    
      
         

      

      
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    ARTICLE
4

     

    REPRESENTATIONS
AND WARRANTIES OF THE CONTRIBUTOR

     

    The
Contributor hereby represents, warrants and agrees that as of the Closing
Date:

     

    Section
4.01        ORGANIZATION;
AUTHORITY. The
Contributor is a limited liability company duly organized, validly existing and
in good standing under the Laws of the State of Delaware. The Contributor has
all requisite power and authority to enter this Agreement and to carry out the
transactions contemplated hereby, and to own, lease or operate its property and
to carry on its business as presently conducted and, to the extent required
under applicable Law, is qualified to do business and is in good standing in
each jurisdiction in which the nature of its business or the character of its
property make such qualification necessary, other than in such jurisdictions
where the failure to be so qualified would not have a material adverse effect on
the financial condition or results of operations of the
Contributor.

     

    Section
4.02        DUE
AUTHORIZATION. The
execution, delivery and performance of this Agreement by the Contributor has
been duly and validly authorized by all necessary action of the Contributor.
This Agreement and each agreement, document and instrument executed and
delivered by or on behalf of the Contributor pursuant to this Agreement
constitute, or when executed and delivered will constitute, the legal, valid and
binding obligation of the Contributor, each enforceable against the Contributor
in accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar Laws relating to creditors’ rights and general
principles of equity and except to the extent that enforceability of the
indemnification and contribution provisions set forth in this Agreement may be
limited by the federal or state securities Laws or the public policy underlying
such Laws.

     

    Section
4.03        OWNERSHIP OF CONTRIBUTED
INTERESTS. The
Contributor is the record owner of the Contributed Interests owned by it and has
the power and authority to transfer, sell, assign and convey to the Operating
Partnership the Contributed Interests free and clear of any Liens and, upon
delivery of the consideration for the Contributed Interests as provided herein,
the Operating Partnership will acquire good and valid title thereto, free and
clear of any Liens. Except as provided for in this Agreement, there are no
rights, subscriptions, warrants, options, conversion rights, preemptive rights,
agreements, instruments or understandings of any kind outstanding (i) relating
to the Contributed Interests or (ii) to purchase, transfer or otherwise acquire,
or in any way encumber, any of the interests which comprise the Contributed
Interests or any securities or obligations of any kind convertible into any of
the interests which comprise the Contributed Interests or other equity interests
or profit participation of any kind in the Contributed Entities. All of the
issued and outstanding Contributed Interests have been duly authorized and are
validly issued, fully paid and non-assessable. By acquiring the Contributed
Interests, the Operating Partnership will acquire indirectly a 100% interest in
each of the Properties.

     

    Section
4.04        CONSENTS AND
APPROVALS. Except as
shall have been satisfied on or prior to the Closing Date, no consent, waiver,
approval or authorization of, or filing with, any Person or Governmental
Authority or under any applicable Laws is required to be obtained by the
Contributor in connection with the execution, delivery and performance of this
Agreement and the transactions contemplated hereby, except for those consents,
waivers, approvals, authorizations or filings, the failure of which to obtain or
to file would not have a material adverse effect on the financial condition or
results of operations of the Contributed Entities.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    Section
4.05        NO
VIOLATION. None of
the execution, delivery or performance of this Agreement, any agreement
contemplated hereby between the parties to this Agreement and the transactions
contemplated hereby or thereby does or will, with or without the giving of
notice, lapse of time, or both, violate, conflict with, result in a breach of,
or constitute a default under or give to others any right of termination,
acceleration, cancellation or other right under (A) any agreement, document or
instrument to which the Contributor is a party or by which the Contributor or
its Contributed Interest is bound, (B) any term or provision of any judgment,
order, writ, injunction, or decree binding on the Contributor (or its assets or
properties), or (C) any provisions of the organizational or other formation or
governing documents or agreements of the Contributor, except any such breaches
or defaults that would not have a material adverse effect on the financial
condition or results of operations of the Contributed Entities.

     

    Section
4.06        NON-FOREIGN
PERSON. The
Contributor is a United States person (as defined in the Code) and is,
therefore, not subject to the provisions of the Code relating to the withholding
of sales or exchange proceeds to foreign persons.

     

    Section
4.07        TAXES.

     

    (a)         The
Contributor has timely filed, or caused to be timely filed, all material Tax
Returns and reports required to be filed by it and each Operating Entity (after
giving effect to any filing extension properly granted by a Governmental
Authority having authority to do so) and all such Tax Returns and reports are
accurate and complete in all material respects, and has timely paid in full, or
caused to be timely paid in full, all Taxes as required to be paid by it and
each Operating Entity whether or not shown to be due and payable on such Tax
Returns. No written deficiencies for any Taxes have been proposed, asserted or
assessed against the Contributor or any Operating Entity, and to the
Contributor’s knowledge, no deficiencies for any Taxes will be proposed,
asserted or assessed against it or any Operating Entity. No waivers of the
statutes of limitation are in effect in respect of any Taxes and none of the
Operating Entities has agreed to any extension of time with respect to a Tax
assessment or deficiency.

     

    (b)         No
claim has ever been made by an authority in a jurisdiction where an Operating
Entity does not file Tax Returns that such Operating Entity is or may be subject
to taxation by that jurisdiction.

     

    (c)         There
are no Liens for Taxes (other than Taxes not yet due and payable) upon any of
the assets of the Operating Entities.

     

    (d)         The
Operating Entities have complied in all material respects with all applicable
Laws and agreements relating to the payment and withholding of Taxes and have,
within the time and in the manner prescribed by applicable Laws and agreements,
withheld and paid over to the proper Governmental Authority all amounts required
to have been withhold and paid in connection with amounts paid or owing to any
past or present employee, independent contractor, creditor, member, consultant
or other third party.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    (e)         Each
Operating Entity has been at all times treated as other than an association
taxable as a corporation for U.S. federal income tax purposes.

     

    (f)          No
closing agreement is currently in force pursuant to Section 7121 of the Code (or
any similar provision of state, local or foreign Law) with respect to any of the
Operating Entities and there are no Tax rulings or requests for Tax rulings or
closing agreements that could affect to liability for Taxes of any of the
Operating Entities after the Closing Date.

     

    (g)         No
Operating Entity is a party to any Tax Sharing Agreement.

     

    (h)         No
Operating Entity is or has been a party to any “reportable transaction,” as
defined in Section 6707A(c)(1) of the Code and Treasury Regulations Section
1.6011-4(b).

     

    Section
4.08        TAX
MATTERS. Contributor
represents and warrants that it has obtained from its own counsel advice
regarding the tax consequences of (i) the transfer of the Contributed Interests
to the Operating Partnership and the receipt of OP Units as consideration
therefor, (ii) Contributor’s admission as a limited partner of the Operating
Partnership and (iii) any other transaction contemplated by this Agreement.
Contributor further represents and warrants that it has not relied on the
Operating Partnership, the REIT, or any of their Affiliates, representatives or
counsel for any tax advice.

     

    Section
4.09        TAX
INFORMATION. From the
date hereof and subsequent to the Closing, Contributor agrees to provide the
Operating Partnership with such tax information relating to the Contributed
Interests and the Operating Entities that is in the Contributor’s possession or
control (including such tax information the Contributor could obtain using
reasonable efforts) and that is reasonably requested by the Operating
Partnership and not otherwise in the Operating Partnership’s possession or
control and to cooperate with the Operating Partnership with respect to the
filing of Tax Returns by the Operating Partnership.

     

    Section
4.10        SOLVENCY. The
Contributor has been solvent at all times prior to and, to the Contributor’s
knowledge, should remain solvent for no less than ninety (90) calendar days
following, the transfer of the Contributed Interests to the Operating
Partnership.

     

    Section
4.11        LITIGATION. There is
no action, suit or proceeding pending or, to the Contributor’s knowledge,
threatened against the Contributor affecting all or any portion of the
Contributed Interests or the Contributor’s ability to consummate the
transactions contemplated hereby which, if adversely determined, would adversely
affect the Contributor’s ability to so consummate the transactions contemplated
hereby. The Contributor knows of no outstanding order, writ, injunction or
decree of any Governmental Authority against or affecting all or any portion of
the Contributed Interests, which in any such case would impair the Contributors’
ability to enter into and perform all of its obligations under this
Agreement.

     

    Section
4.12        INVESTMENT. The
Contributor acknowledges that the offering and issuance of the OP Units to be
acquired pursuant to this Agreement are intended to be exempt from registration
under the Securities Act and that the Operating Partnership’s reliance on such
exemptions is predicated in part on the accuracy and completeness of the
representations and warranties of the Contributor contained herein. In
furtherance thereof, the Contributor represents and warrants to the Operating
Partnership as follows:

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    (a)         The
Contributor is an “accredited investor” (as such term is defined in Rule 501(a)
of Regulation D promulgated under the Securities Act). The Contributor has
accurately completed the Accredited Investor Questionnaire attached hereto as
Exhibit
C indicating
the basis for the Contributor’s accredited investor status. The Contributor
will, upon request, execute and/or deliver any additional documents deemed by
the Operating Partnership to be necessary or desirable to confirm the
Contributor’s accredited investor status.

     

    (b)         The
Contributor is acquiring the OP Units solely for its own account for the purpose
of investment and not as a nominee or agent for any other Person and not with a
view to, or for offer or sale in connection with, any distribution thereof in
violation of the federal securities Laws.

     

    (c)         The
Contributor is knowledgeable, sophisticated and experienced in business and
financial matters and the Contributor fully understands the limitations on
transfer imposed by the federal securities Laws. The Contributor is able to bear
the economic risk of holding the OP Units for an indefinite period and is able
to afford the complete loss of its investment in the OP Units; the Contributor
has received and reviewed all information and documents about or pertaining to
the Operating Partnership and the business and prospects of the Operating
Partnership and the issuance of the OP Units as the Contributor deems necessary
or desirable, and has been given the opportunity to obtain any additional
information or documents and to ask questions and receive answers about such
information and documents, the Operating Partnership and the business and
prospects of the Operating Partnership which the Contributor deems necessary or
desirable to evaluate the merits and risks related to its investment in the OP
Units; and the Contributor understands and has taken cognizance of all risk
factors related to the OP Units set forth in the Registration Statement. The
Contributor is relying upon its own independent analysis and assessment
(including with respect to Taxes), and the advice of the Contributor’s advisors
(including tax advisors), and not upon that of the Operating Partnership or any
of the Operating Partnership’s Affiliates, for purposes of evaluating, entering
into, and consummating the transactions contemplated hereby. The Contributor has
not been furnished with, and has not relied on any oral or written
representation in connection with the offering of the OP Units.

     

    (d)         The
Contributor acknowledges that the OP Units have not been registered under the
Securities Act and, therefore, may not be sold unless registered under the
Securities Act or an exemption from registration is available. The Contributor
acknowledges that its ability to sell or otherwise transfer the OP Units is
further restricted by certain provisions of the Operating Partnership Agreement
and may be further restricted by other applicable securities Laws.

     

    (e)         The
Contributor is, for purposes of the application of state securities laws, a
resident of the State of Delaware.

     

    Section
4.13        NO BROKERS OR
FINDERS. The
Contributor has not entered into any agreement and is not otherwise liable or
responsible to pay any brokers’ or finders’ fees or expenses to any Person with
respect to this Agreement or the purchase and issuance of the OP Units
contemplated hereby, except for any such person or entity the fees and expenses
for which the Contributor shall be solely responsible and pay.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    Section
4.14        WAIVER OF RIGHTS UNDER
ORGANIZATIONAL AGREEMENT. The
Contributor hereby waives any rights or claims it may have under the
Organizational Agreement related to the transfer of the Contributed Interests to
the Operating Partnership by the members, of the Contributed Entities, including
but not limited to any notice requirements, rights of first refusal, rights of
first offer, drag-along rights and tag-along rights, and further waives
compliance with any terms or conditions under the Organizational Agreement with
respect to such transfer.

     

    Section
4.15        NO OTHER REPRESENTATIONS OR
WARRANTIES. Other
than the representations and warranties expressly set forth in this Article IV, the
Contributor shall not be deemed to have made any other representation or
warranty in connection with this Agreement or the transactions contemplated
hereby.

     

    Section 4.16       
SURVIVAL OF
REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTOR. The
parties hereto agree and acknowledge that the representations and warranties set
forth in this Article
IV shall survive the Closing for a period of one year; provided, however,
that the representations and warranties set forth in Sections 4.07, 4.08 and
4.09 shall survive the Closing until the expiration of the applicable statute of
limitations plus 30 days.

     

    ARTICLE
5

     

    COVENANTS
AND OTHER AGREEMENTS

     

    Section
5.01        COVENANTS OF THE
CONTRIBUTOR. From the
date hereof through the Closing, except as otherwise provided for or as
contemplated by this Agreement, the Contributor shall not:

     

    (a)         sell,
transfer or otherwise dispose of all or any portion of the Contributed Interests
or any interests therein and/or any of the Properties;

     

    (b)         mortgage,
pledge, hypothecate, encumber (or permit to become encumbered) all or any
portion of the Contributed Interests and/or any of the Properties;

     

    (c)         authorize
or consent to, or cause the Contributed Entities to sell, assign, transfer or
dispose of any of its assets and/or any of the Properties;

     

    (d)         except
as set forth on Schedule 5.01(d),
authorize or consent to, or cause the Contributed Entities to mortgage, pledge,
hypothecate, encumber (or permit to become encumbered) all or any portion of its
assets and/or any of the Properties;

     

    (e)         amend
the Organizational Agreement or other governing documents of the Contributed
Entities without the consent of the Operating Partnership;

     

    (f)          (i)
make, revoke or change any material Tax election or adopt or change any method
of accounting, (ii) enter into any settlement of or compromise any material Tax
liability. (iii) change any annual Tax accounting period, (iv) enter into a
closing agreement for any material amount of Tax, (v) surrender any right to any
material Tax refund, or (vi) file any amended Tax Return or refund claim with
respect to any material Tax; or

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    (g)         adopt
a plan of liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or reorganization with respect to the Contributed
Entities.

     

    Section
5.02        COMMERCIALLY REASONABLE
EFFORTS BY THE OPERATING PARTNERSHIP AND THE CONTRIBUTOR. Each of
the Operating Partnership and the Contributor shall use commercially reasonable
efforts and cooperate with each other in (i) promptly determining whether any
filings are required to be made or consents, approvals, waivers, permits or
authorizations are required to be obtained (under any applicable Law or
regulation or from any Governmental Authority or third party) in connection with
the transactions contemplated by this Agreement, and (ii) promptly making any
such filings, in furnishing information required in connection therewith and in
timely seeking to obtain any such consents, approvals, waivers, permits or
authorizations.

     

    ARTICLE
6

     

    CHANGES
TO FORM AGREEMENTS

     

    Section
6.01        CHANGES TO FORM
AGREEMENTS. The
Contributor agrees and confirms that the terms of the OP Units described in the
Registration Statement and the Exhibits thereto are not final and may be
modified without the Contributor’s consent. By executing this Agreement the
Contributor hereby authorizes the Operating Partnership and the REIT to, and
understands and agrees that the Operating Partnership and the REIT may, make
changes (including changes that may be deemed material) to the Operating
Partnership Agreement, the Registration Rights Agreement, and the Assignment and
Assumption and the Contributor agrees to receive the OP Units with such final
terms and conditions as the Operating Partnership and/or the REIT determines, in
their reasonable discretion.

     

    ARTICLE
7

     

    POWER
OF ATTORNEY

     

    Section
7.01        POWER OF
ATTORNEY. By
executing this Agreement, the Contributor hereby irrevocably constitutes and
appoints the Operating Partnership (or a substitute appointed by the Operating
Partnership) as its attorney-in-fact and agent with full power of substitution to
take any and all actions and execute any of the following agreements on the
Contributor’s behalf and in the Contributor’s name: the Operating Partnership
Agreement, the Registration Rights Agreement, the Indemnification Agreement, the
Assignment and Assumption and any other documents related to the consummation of
the Contribution, or any of the other transactions contemplated by this
Agreement on the Contributor’s behalf and in the Contributor’s name, as may be
deemed by the Operating Partnership as necessary or desirable to effectuate the
Contribution, the IPO, and the other transactions described herein. The
Contributor hereby grants to each attorney-in-fact full power and authority to
do and perform each and every act and thing which may be necessary, or
convenient, in connection with the foregoing, as fully, to all intents and
purposes, as the undersigned might or could do if personally present, hereby
ratifying and confirming all that such attorney-in-fact shall lawfully do or
cause to be done by authority hereof. Such power-of-attorney shall be deemed to
be coupled with an interest and shall be irrevocable and shall survive the
death, disability or dissolution of the Contributor.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    ARTICLE
8

     

    GENERAL
PROVISIONS

     

    Section
8.01        NOTICES. All
notices and other communications under this Agreement shall be in writing and
shall be deemed given when (a) delivered personally, (b) five (5) Business Days
after being mailed by certified mail, return receipt requested and postage
prepaid, (c) one (1) Business Day after being sent by a nationally recognized
overnight courier or (d) transmitted by facsimile if confirmed within 24 hours
thereafter by a signed original sent in the manner provided in clause (a), (b)
or (c) to the parties at the addresses set forth below (or at such other address
for a party as shall be specified by notice from such party):

     

    
      
        	
                If
      to the Operating Partnership:

              	
                ARC
      Properties Operating Partnership, L.P.

              
	 
      	
                405
      Park Avenue

              
	 
      	
                New
      York, New York 10022

              
	 
      	
                Attention: William
      M. Kahane

              
	 
      	 
      
	 
      	
                with
      a copy to:

              
	 
      	 
      
	 
      	
                Proskauer
      Rose LLP

              
	 
      	
                Eleven
      Times Square

              
	 
      	
                New
      York, New York 10036

              
	 
      	
                Attention: 
      Peter M. Fass, Esq.

              
	 
      	
                Steven
      L. Lichtenfeld, Esq.

              
	 
      	 
      
	
                If
      to the Contributor:

              	
                ARC
      Real Estate Partners, LLC

              
	 
      	
                405
      Park Avenue

              
	 
      	
                New
      York, New York 10022

              
	 
      	
                Attention: William
      M. Kahane

              
	 
      	 
      
	 
      	
                with
      a copy to:

              
	 
      	 
      
	 
      	
                Proskauer
      Rose LLP

              
	 
      	
                Eleven
      Times Square

              
	 
      	
                New
      York, NY 10036

              
	 
      	
                Attention: 
      Peter M. Fass, Esq.

              
	 
      	
                Steven
      L. Lichtenfeld, Esq.

              

      

    

    

    Section
8.02        DEFINITIONS. For
purposes of this Agreement, the following terms shall have the following
meanings.

     

    (a)         “Affiliate” means, with respect to
any Person, a Person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
specified Person. For the purposes of this definition, “control” (including,
with correlative meanings, the terms “controlled by” and “under common control
with”) as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities,
by agreement or otherwise.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    (b)         “Agreement” has the meaning set
forth in the Preamble.

     

    (c)         “Amortizing Principal
Payment” means the principal
component of any regularly scheduled installment of principal and interest in
respect of Debt. The term “Amortizing Principal Payment” does not include the
principal component of (i) any voluntary prepayment of Debt, or (ii) any payment
made in respect of any Debt that has become due by reason of acceleration or the
occurrence or nonoccurrence of any event requiring a mandatory
prepayment.

     

    (d)         “ARC” means the American Realty
Capital group of companies.

     

    (e)         “Assignment and
Assumption” means an Assignment and
Assumption of Ownership Interests substantially in the form attached as Exhibit
D hereto.

     

    (f)          “Business Day” means any day
that is not a Saturday, Sunday or legal holiday in the State of New
York.

     

    (g)         “Claim” has the meaning set
forth in Section
3.09(b).

     

    (h)         “Claim Notice” has the meaning
set forth in Section
3.09(b).

     

    (i)          “Closing” has the meaning set
forth in Section
2.02.

     

    (j)           “Closing Date” has the meaning
set forth in Section
2.02.

     

    (k)         “Code” means the Internal
Revenue Code of 1986, as amended, together with the Treasury Regulations
promulgated or issued thereunder.

     

    (l)          “Contributed Entities” has the
meaning set forth in the Recitals.

     

    (m)        “Contributed Interests” has the
meaning set forth in the Recitals.

     

    (n)         “Contribution” has the meaning
set forth in the Recitals.

     

    (o)         “Contributor” has the meaning
set forth in the Preamble.

     

    (p)         “Contributor Indemnified Party”
has the meaning set forth in Section
3.09(a).

     

    (q)         “Contributor’s Formation Transaction
Value” has the meaning set forth in Section
1.02.

     

    (r)          “Cut-Off Date” means a date to be
established by the Operating Partnership for purposes of determining adjustments
to the Contributor’s Formation Transaction Value pursuant to Section 1.04 hereof,
which date shall be no earlier than ten (10) calendar days prior to the Closing
Date and no later than the calendar day prior to the Closing
Date.

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    (s)           “Cut-Off Date Cash
Balance” means all cash and cash
equivalents that would be shown on a balance sheet of the Property Owners
prepared on the Cut-Off Date in a manner consistent with historical accounting
practices applicable to the Property Owners to the extent the same derive from
operating income of the Property Owners and in any event excluding (i) cash and
cash equivalents consisting of loan proceeds, casualty insurance proceeds,
proceeds from condemnation or eminent domain proceedings, or proceeds from the
sale or other disposition of the Properties or any interest therein, or that are
otherwise derived from a source other than the operation, leasing, management or
occupancy of the Properties, and (ii) cash and cash equivalents consisting of
Non-Operating Expense Reserves made on or after February 1, 2011.

     

    (t)           “Debt” means, with respect to
any Person, without duplication, (a) its liabilities for borrowed money, (b) its
liabilities for the deferred purchase price of any property acquired by such
Person (excluding accounts payable arising in the ordinary course of business
but including, without limitation, all liabilities created or arising under any
conditional sale or other title retention agreement with respect to any such
property), (c) its capital lease obligations, and (d) all liabilities for
borrowed money secured by any Lien with respect to any property owned by such
Person (whether or not it has assumed or otherwise become liable for such
liabilities).

     

    (u)          “Effective Date” has the
meaning set forth in the Preamble.

     

    (v)          “Expiration Date” has the
meaning set forth in Section
3.09(d).

     

    (w)          “Extraordinary Expense
Prepayments” means, as of any date of
determination, all prepaid expenses of a Property Owner to the extent such
expenses relate to a date more than thirty (30) calendar days after such date of
determination.

     

    (x)           “Extraordinary Principal
Payment” means any payment of
principal in respect of Debt other than an Amortizing Principal
Payment.  The term “Extraordinary Principal
Payment” includes the principal component of (i) any voluntary prepayment of
Debt, or (ii) any payment made in respect of any Debt that has become due by
reason of acceleration or the occurrence or nonoccurrence of any event requiring
a mandatory prepayment.

     

    (y)          “Extraordinary Rent
Prepayments” means any prepayment of
rent and other fees and charges due or to become due to a Property Owner
pursuant to any lease or other occupancy agreement more than thirty (30)
calendar days in advance to the extent the same is received by a Property
Owner.

     

    (z)           “Final Adjustment” has the
meaning set forth in Section
1.04.

     

    (aa)         “Governmental Authority” means any government or
agency, bureau, board, commission, court, department, official, political
subdivision, tribunal or other instrumentality of any government, whether
federal, state or local, domestic or foreign.

     

    (bb)        “Indemnification Agreement”
means, if applicable, that certain Indemnification Agreement, dated the Closing
Date, by the Operating Partnership in favor of Nicholas S. Schorsch and William
M. Kahane in form and substance reasonably acceptable to the
parties.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    (cc)        “IPO” has the meaning set forth
in the Recitals.

     

    (dd)        “IPO Price” has the meaning set
forth in the Recitals.

     

    (ee)         “Laws” means laws, statutes,
rules, regulations, codes, orders, ordinances, judgments, injunctions, decrees
and policies of any Governmental Authority.

     

    (ff)          “Liens” means all pledges,
claims, liens, charges, restrictions, controls, easements, rights of way,
exceptions, reservations, leases, licenses, grants, covenants and conditions,
encumbrances and security interests of any kind or nature
whatsoever.

     

    (gg)        “Losses” has the meaning set
forth in Section
3.09(a).

     

    (hh)        “Non-Operating Expense
Reserves” means any escrow, deposit or reserve required by the terms of
any agreement to which a Property Owner is a party or by which a Property Owner
or its assets are bound, other than Restricted Deposits.

     

    (ii)           “Operating Entity” means the Contributed
Entities and each of its Subsidiaries, including, without limitation, the
Property Owners.

     

    (jj)           “Operating Expenses” means all
normal and reasonable expenses of owning, operating, leasing, managing,
maintaining and occupying all real and personal property owned by a Property
Owner, including but not limited to:  (i) payments to, for the benefit
of or required in connection with personnel employed to manage, operate and
maintain a Property Owner or its properties; (ii) utility charges; (iii) costs
of heating, lighting, ventilating and air conditioning; (iv) premiums for
hazard, casualty, rent loss and liability insurance; (v) ad valorem real estate
and personal property taxes, installments of special assessments and sales tax
payments; (vi) expenses for maintenance and repair of buildings, grounds,
driveways and parking areas; (vii) costs of janitorial services, tools,
equipment and supplies; (viii) management fees, including, without limitation,
fees paid or payable to ARC or one or more of its Affiliates; (ix) landscaping,
lawn, shrub and tree trimming, fertilizing and care expenses; (x) equipment
lease payments; (xi) snow and ice removal expenses; (xii) advertising and
promotion expenses; (xiii) expenses related to the delivery of cable television,
internet access, telephone and similar services to tenants of a Property Owner
for a fee; (xiv) all security expenses; (xv) costs of printing, stationery and
office supplies; (xvi) attorneys’ fees and accountants’ fees, (xvii) capital
improvement and expenditures; (xviii) costs of warranty repairs; (xix) fees of
consultants; (xx) costs in connection with or in contemplation of sale or
refinancing, such as costs of appraisals, environmental or engineering studies;
and (xxi) income, franchise and other taxes.

     

    (kk)        “Operating Partnership” has the
meaning set forth in the Preamble.

     

    (ll)          “Operating Partnership
Agreement” has the meaning set forth in the Section
2.03.

     

    (mm)      “OP Units” has the meaning set
forth in the Recitals.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    (nn)       “Organizational
Agreements” means the limited
liability company agreements of the Contributed Entities.

     

    (oo)       “Outside Date” has the meaning
set forth in Section
2.06.

     

    (pp)       “Past Due Payables” means, as of any date of
determination, all liabilities and other obligations of a Property Owner that
(i) are due and remain unpaid as of such date of determination, and (ii) all
expenses incurred by a Property Owner that remain unpaid as of such date of
determination to the extent such expenses relate to a date more than thirty (30)
calendar days prior to the date of determination.

     

    (qq)    
   “Permitted
Exceptions” means the exceptions to the title of the Properties set forth
on Exhibit
E hereto.

     

    (rr)         “Permitted Mortgage
Indebtedness” means the mortgage indebtedness encumbering the Properties
as set forth on Exhibit
F hereto.

     

    (ss)   
     “Person” means an individual,
partnership, corporation, limited liability company, joint venture, association,
trust, unincorporated organization or other entity, or a government or agency or
political subdivision thereof.

     

    (tt)      
   “Property
Owner” means the entity owned directly or indirectly by the Contributed
Entities which hold fee title to the Properties set forth opposite its name on
Exhibit A
hereto.

     

    (uu)   
    “Properties” has the meaning
set forth in the Recitals.

     

    (vv)     
  “Registration
Rights Agreement” has the meaning set forth in Section
2.01(c)(iii).

     

    (ww)   
   “Registration
Statement” has the meaning set forth in Section
2.06.

     

    (xx)         “REIT Common Stock” has the
meaning set forth in the Recitals.

     

    (yy)  
      “REIT” has the meaning set
forth in the Recitals.

     

    (zz)         “Restricted Deposit” means any escrow,
deposit or reserve required by the terms of any agreement to which a Property
Owner is a party or by which the Operating Entity or its assets are bound and
established or maintained to pay or provide for payment of any Operating Expense
of such Property Owner, including, without limitation, escrows for taxes,
insurance and other charges, and deposits and reserves for repairs,
replacements, capital expenditures, leasing commissions and tenant
improvements.

     

    (aaa)   
   “SEC”
has the meaning set forth in Section
2.01(a)(i).

     

    (bbb) 
    “SEC
Effective Date” means the date the Registration statement is declared
effective by the SEC.

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    (ccc)      “Securities Act” has the
meaning set forth in Section
2.01(a)(i).

     

    (ddd)     “Stock” shall
mean all shares, options, warrants, general or limited partnership interests or
other equivalents (regardless of how designated) of or in a corporation,
partnership or equivalent entity whether voting or nonvoting, including common
stock, preferred stock or any other “equity security” (as such term is defined
in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended).

     

    (eee)      “Subsidiary” shall mean, with
respect to any Person, (a) any corporation of which an aggregate of more than
fifty percent (50%) of the outstanding Stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether, at the time, Stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, owned legally or
beneficially by such Person and/or one or more Subsidiaries of such Person, or
with respect to which any such Person has the right to vote or designate the
vote of fifty percent (50%) or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than fifty percent (50%) or of which
any such Person is a general partner or may exercise the powers of a general
partner.

     

    (fff)        “Target Cash Balance” means, as of any date of
determination, an amount, determined by the Operating Partnership in its
reasonable discretion, equal to the sum of the following:

     

    (i)           all
security deposits and similar deposits due or that may become due to tenants of
a Property or other third parties;

     

    (ii)           the
aggregate amount of all Restricted Deposits and other escrow, deposits and
reserves that are otherwise historically or customarily maintained by a Property
Owner, including, without limitation, escrows for taxes, insurance and other
charges, and deposits and reserves for repairs, replacements, capital
expenditures, leasing commissions and tenant improvements, whether or not so
required, but excluding Non-Operating Expense Reserves;

     

    (iii)          the
aggregate amount of all payments of principal, interest and/or late fees on Debt
that are due on such date or scheduled to become due during the period of thirty
(30) calendar days following such date; and

     

    (iv)         all
Operating Expenses incurred or to be incurred by the a Property Owner that are
due on such date or scheduled to become due during the period of thirty (30)
calendar days following such date.

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    (ggg)     “Tax” or “Taxes” means (i) all federal,
state, local and foreign net or gross income, gross receipts, turnover, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under Code Section 59A), customs,
duties, export taxes and withholdings, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, supplementary,
retirement system, disability, real property, personal property, sales, use,
transfer, registration, value added, recording, intangible, documentary, goods
and services, ad valorem, net proceeds, net worth, special assessments, workers’
compensation, utility, production, gains, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, together with any interest,
penalty, or addition thereto payable in connection with such taxes, whether
disputed or not and (ii) any liability of any Person for the payment of amounts
of the type described in clause (i) as a transferee, successor or payable
pursuant to a contractual obligation.

     

    (hhh)     “Tax Return” means any return,
declaration, report, claim for refund, document, or information return or
statement relating to Taxes, or other filing required to be supplied to any
taxing authority or jurisdiction (foreign or domestic) with respect to Taxes,
including any schedules or attachments thereto, and including any amendments
thereof.

     

    (iii)         “Tax Sharing Agreement” shall
mean any written or unwritten agreement, indemnity or other arrangement for the
allocation or payment of Tax liabilities or payment for Tax benefits between an
Operating Entity and any Person other than (i) the indemnity provided pursuant
to this Agreement, and (ii) customary Tax indemnification or other arrangements
contained in a commercial agreement entered into in the ordinary course of
business the primary purpose of which does not relate to Taxes..

     

    (jjj)          “Third Party Claims” has the
meaning set forth in Section
3.09(c).

     

    

    Section
8.03          COUNTERPARTS.  This
Agreement may be executed in counterparts, all of which shall be considered one
and the same agreement and shall become effective when one or more counterparts
have been signed by each party and delivered to each other party.

     

    Section
8.04          ENTIRE AGREEMENT;
THIRD-PARTY BENEFICIARIES.  This
Agreement, including, without limitation, the exhibits and schedules hereto,
constitute the entire agreement and supersede each prior agreement and
understanding, whether written or oral, among the parties regarding the subject
matter of this Agreement.  Except as set forth in Section 3.09, this
Agreement is not intended to confer any rights or remedies on any Person other
than the parties hereto.

     

    Section
8.05          GOVERNING
LAW.  This
Agreement shall be governed by, and construed in accordance with, the Laws of
the State of New York, regardless of any Laws that might otherwise govern under
applicable principles of conflicts of laws thereof.

     

    Section
8.06          ASSIGNMENT.  This
Agreement shall be binding upon, and shall be enforceable by and inure to the
benefit of, the parties hereto and their respective heirs, legal
representatives, successors and assigns; provided, however, that this
Agreement may not be assigned (including by operation of law) by either party
without the prior written consent of the other party and any attempted
assignment without such consent shall be null and void and of no force and
effect, except that the Operating Partnership may assign its rights and
obligations hereunder to an Affiliate.

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    Section
8.07          JURISDICTION.  The
parties hereto hereby (a) submit to the exclusive jurisdiction of any state or
federal court sitting in Borough of Manhattan, City of New York, State of New
York, with respect to any dispute arising out of this Agreement or any
transaction contemplated hereby to the extent such courts would have subject
matter jurisdiction with respect to such dispute, and (b) irrevocably waive, and
agree not to assert by way of motion, defense, or otherwise, in any such action,
any claim that it is not subject personally to the jurisdiction of the
above-named courts, that its property is exempt or immune from attachment or
execution, that the action is brought in an inconvenient forum, or that the
venue of the action is improper.

     

    Section
8.08          SEVERABILITY.  Each
provision of this Agreement will be interpreted so as to be effective and valid
under applicable Law, but if any provision is held invalid, illegal or
unenforceable under applicable Law in any jurisdiction, then such invalidity,
illegality or unenforceability will not affect any other provision, and this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision had never been included
herein.

     

    Section
8.09          RULES OF
CONSTRUCTION.

     

    (a)           The
parties hereto agree that they have participated in the negotiation, preparation
and execution of this Agreement and, therefore, waive the application of any
Law, regulation, holding or rule of construction providing that ambiguities in
an agreement or other document will be construed against the party drafting such
agreement or document.

     

    (b)           The
words “hereof,” “herein” and “herewith” and words of similar import shall,
unless otherwise stated, be construed to refer to this Agreement as a whole and
not to any particular provision of this Agreement, and article, section,
paragraph, exhibit and schedule references are to the articles, sections,
paragraphs, exhibits and schedules of this Agreement unless otherwise
specified.  Whenever the words “include,” “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words
“without limitation.” All terms defined in this Agreement shall have the defined
meanings contained herein when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.  The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms.  Unless explicitly stated
otherwise herein, any agreement, instrument or statute defined or referred to
herein or in any agreement or instrument that is referred to herein means such
agreement, instrument or statute as from time to time amended, qualified or
supplemented, including (in the case of agreements and instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and all attachments thereto and instruments incorporated
therein.  References to a Person are also to its permitted successors
and assigns.

     

    Section
8.10          EQUITABLE
REMEDIES.  The
parties agree that irreparable damage would
occur to the Operating Partnership in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached.  It is accordingly agreed that the Operating
Partnership shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement by the Contributor and to enforce specifically the
terms and provisions hereof, this being in addition to any other remedy to which
the Operating Partnership is entitled under this Agreement or otherwise at law
or in equity.  Notwithstanding the foregoing, this Agreement shall not
bar any equitable remedies otherwise available to the Contributor pursuant to
the terms and provisions contained in Section
3.09.

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    Section
8.11          TIME OF THE
ESSENCE.  Time
is of the essence with respect to all obligations under this
Agreement.

     

    Section
8.12          DESCRIPTIVE
HEADINGS.  The
descriptive headings herein are inserted for convenience only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement.

     

    Section
8.13          NO PERSONAL LIABILITY
CONFERRED.  This
Agreement shall not create or permit any personal liability or obligation on the
part of any officer, director, partner, member, employee or shareholder of the
Operating Partnership or the Contributor.

     

    Section
8.14          AMENDMENTS.  This
Agreement may be amended, supplemented or otherwise modified only by written
instrument signed by both parties.

     

    [SIGNATURE
PAGES FOLLOW]

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by
their respective duly authorized officers or representatives, all as of the
Effective Date.

     

    
      
        
          
            
              	
                      Effective
      Date:  February 4, 2011

                    	
                      ARC
      PROPERTIES OPERATING

                    
	 
      	 
      	
                      PARTNERSHIP,
      L.P.

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	
                      AMERICAN
      REALTY CAPITAL

                    
	 
      	 
      	
                      PROPERTIES,
      INC.

                    
	 
      	 
      	
                      Its
      general partner

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	/s/
      Nicholas S. Schorsch  
	 
      	 
      	
                      Name:
      Nicholas S. Schorsch

                    
	 
      	 
      	
                      Title:   Chief
      Executive Officer

                    
	 
      	 
      
	 
      	
                      ARC
      REAL ESTATE PARTNERS, LLC

                    
	 
      	 
      
	 
      	
                      By:

                    	/s/
      Nicholas S. Schorsch  
	 
      	 
      	
                      Name:  Nicholas
      S. Schorsch

                    
	 
      	 
      	
                      Title:    Manager

                    

            

          

        

      

    

     

    
      Signature
Page to Contribution Agreement

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
5.01(d)

    With the
consent of the Operating Partnership, which consent shall not be unreasonably
withheld, conditioned or delayed, the Contributor may, or may cause the
Contributed Entities to, negotiate, authorize or consent to documentation with
respect to a refinancing of all or any of the Properties (other than the
property owned by ARC HDCOLSC001, LLC), subject to the closing of the
IPO.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
A

     

    List of Properties and
Property Owners

     

    
      
        	
                Property Owner

              	 
      	
                Property

              
	 
      	 
      	 
      
	
                CRE
      JV Mixed Five CT Branch Holdings LLC

              	 
      	
                458
      Ocean Avenue (450), New London, CT

              
	
                CRE
      JV Mixed Five CT Branch Holdings LLC

              	 
      	
                6
      Killingworth Road, Higganum, CT

              
	
                CRE
      JV Mixed Five DE Branch Holdings LLC

              	 
      	
                5
      West Commerce Street, Smyrna, DE

              
	
                CRE
      JV Mixed Five IL 4 Branch Holdings LLC

              	 
      	
                7310
      W Grand Avenue (7312), Elmwood Park, IL

              
	
                CRE
      JV Mixed Five MI 7 Branch Holdings LLC

              	 
      	
                48950
      Van Dyke Avenue, Utica, MI

              
	
                CRE
      JV Mixed Five MI 7 Branch Holdings LLC

              	 
      	
                633
      Notre Dame, Grosse Pointe, MI

              
	
                CRE
      JV Mixed Five NH Branch Holdings LLC

              	 
      	
                405
      Portland Avenue, Rollinsford, NH

              
	
                CRE
      JV Mixed Five NH Branch Holdings LLC

              	 
      	
                54
      Main Street, Pittsfield, NH

              
	
                CRE
      JV Mixed Five NY 1 Branch Holdings LLC

              	 
      	
                17
      South Market Street, Johnstown, NY

              
	
                CRE
      JV Mixed Five NY 1 Branch Holdings LLC

              	 
      	
                501
      State Street, Schenectady, NY

              
	
                CRE
      JV Mixed Five NY 1 Branch Holdings LLC

              	 
      	
                501
      Western Avenue, Albany, NY

              
	
                CRE
      JV Mixed Five OH 1 Branch Holdings LLC

              	 
      	
                10300
      Northfield, Northfield, OH

              
	
                CRE
      JV Mixed Five OH 1 Branch Holdings LLC

              	 
      	
                38115
      Euclid Avenue, Willoughby, OH

              
	
                CRE
      JV Mixed Five OH 1 Branch Holdings LLC

              	 
      	
                7820
      Plaza Boulevard, Mentor, OH

              
	
                CRE
      JV Mixed Five OH 2 Branch Holdings LLC

              	 
      	
                16622
      Harvard Avenue, Cleveland, OH

              
	
                CRE
      JV Mixed Five OH 2 Branch Holdings LLC

              	 
      	
                17411
      Lorain Avenue, Cleveland, OH

              
	
                CRE
      JV Mixed Five OH 2 Branch Holdings LLC

              	 
      	
                4300
      Clark Avenue, Cleveland, OH

              
	
                CRE
      JV Mixed Five OH 3 Branch Holdings LLC

              	 
      	
                14534
      Madison Avenue, Lakewood, OH

              
	
                CRE
      JV Mixed Five OH 3 Branch Holdings LLC

              	 
      	
                21550
      Center Ridge Road, Rocky River, OH

              
	
                CRE
      JV Mixed Five OH 4 Branch Holdings LLC

              	 
      	
                9243
      Broadview Road, Broadview Heights, OH

              
	
                CRE
      JV Mixed Five PA Branch Holdings LLC

              	 
      	
                100
      Essex Avenue, Narberth, PA

              
	
                CRE
      JV Mixed Five PA Branch Holdings LLC

              	 
      	
                1635
      East Derby Road, Havertown, PA

              
	
                CRE
      JV Mixed Five PA Branch Holdings LLC

              	 
      	
                560
      Donner Avenue, Monesson, PA

              
	
                CRE
      JV Mixed Five PA Branch Holdings LLC

              	 
      	
                600
      Market St/600 Merchant St, Ambridge, PA

              
	
                CRE
      JV Mixed Five VT Branch Holdings LLC

              	 
      	
                152
      S Main Street, St. Albans, VT

              
	
                CRE
      JV Mixed Five VT Branch Holdings LLC

              	 
      	
                155
      Maple Street, White River Junction, VT

              
	
                CRE
      JV Mixed Five VT Branch Holdings LLC

              	 
      	
                177
      Main Street, Poultney, VT

              
	
                CRE
      JV Mixed Five MI 2 Branch Holdings LLC

              	 
      	
                31231
      Harper Avenue, St. Clair Shores, MI

              
	
                CRE
      JV Mixed Five MI 2 Branch Holdings LLC

              	 
      	
                69055
      Main Street, Richmond, MI

              
	
                CRE
      JV Mixed Five MI 3 Branch Holdings LLC

              	 
      	
                2050
      12 Mile Road, Warren, MI

              
	
                CRE
      JV Mixed Five MI 3 Branch Holdings LLC

              	 
      	
                27777
      Southfield Road, Lathrup Village, MI

              
	
                CRE
      JV Mixed Five MI 4 Branch Holdings LLC

              	 
      	
                23801
      Michigan Avenue, Dearborn, MI

              
	
                CRE
      JV Mixed Five MI 4 Branch Holdings LLC

              	 
      	
                15930
      Michigan Avenue, Dearborn, MI

              
	
                CRE
      JV Mixed Five NY 3 Branch Holdings LLC

              	 
      	
                89
      Oriskany Boulevard, Whitesboro, NY

              
	
                CRE
      JV Mixed Five NY 3 Branch Holdings LLC

              	 
      	
                N
      Chenango & Genesee, Greene, NY

              
	
                CRE
      JV Mixed Five NY 4 Branch Holdings LLC

              	 
      	
                2000
      Monroe Avenue, Rochester, NY

              
	
                CRE
      JV Mixed Five NY 4 Branch Holdings LLC

              	 
      	
                212
      Main Street, East Aurora, NY

              
	
                CRE
      JV Mixed Five NY 4 Branch Holdings LLC

              	 
      	
                3180
      Sheridan Drive, Amherst (Buffalo), NY

              
	
                CRE
      JV Mixed Five OH 5 Branch Holdings LLC

              	 
      	
                214
      High Street, Wadsworth,
OH

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        	
                CRE
      JV Mixed Five OH 5 Branch Holdings LLC

              	 
      	
                3720
      Center Road, Brunswick, OH

              
	
                CRE
      JV Mixed Five OH 5 Branch Holdings LLC

              	 
      	
                955
      Boardman-Poland Road, Boardman, OH

              
	
                CRE
      JV Mixed Five OH 6 Branch Holdings LLC

              	 
      	
                315
      E Main Street, Louisville, OH

              
	
                CRE
      JV Mixed Five OH 6 Branch Holdings LLC

              	 
      	
                780
      W State Street, Alliance, OH

              
	
                CRE
      JV Mixed Five IL 2 Branch Holdings LLC

              	 
      	
                417
      S Water Street, Wilmington, IL

              
	
                CRE
      JV Mixed Five IL 2 Branch Holdings LLC

              	 
      	
                6720
      W 111 Street, Worth, IL

              
	
                CRE
      JV Mixed Five MI 1 Branch Holdings LLC

              	 
      	
                24624
      W 10 Mile Road, Southfield, MI

              
	
                CRE
      JV Mixed Five MI 1 Branch Holdings LLC

              	 
      	
                36520
      Moravian, Clinton Township, MI

              
	
                CRE
      JV Mixed Five MI 6 Branch Holdings LLC

              	 
      	
                16530
      E Warren, Detroit, MI

              
	
                CRE
      JV Mixed Five MI 6 Branch Holdings LLC

              	 
      	
                19601
      Vernier, Harper Woods, MI

              
	
                CRE
      JV Mixed Five NY 2 Branch Holdings LLC

              	 
      	
                118
      Main Street, Whitehall, NY

              
	
                CRE
      JV Mixed Five NY 2 Branch Holdings LLC

              	 
      	
                Route
      32, Vails Gate, NY

              
	
                CRE
      JV Mixed Five NY 5 Branch Holdings LLC

              	 
      	
                5 S
      Broome Street, Port Jervis, NY

              
	
                CRE
      JV Mixed Five IL 3 Branch Holdings LLC

              	 
      	
                2854
      W Cermak Street (Road), Chicago, IL

              
	
                CRE
      JV Mixed Five IL 3 Branch Holdings LLC

              	 
      	
                4231
      Joliet Avenue, Lyons, IL

              
	
                CRE
      JV Mixed Five IL 3 Branch Holdings LLC

              	 
      	
                9244
      S Chicago Avenue, Chicago, IL

              
	
                CRE
      JV Mixed Five IL 5 Branch Holdings LLC

              	 
      	
                12004
      S Pulaski Road, Alsip, IL

              
	
                CRE
      JV Mixed Five IL 5 Branch Holdings LLC

              	 
      	
                2917
      W 95 Street, Evergreen Park, IL

              
	
                CRE
      JV Mixed Five MI 5 Branch Holdings LLC

              	 
      	
                12380
      Woodward Avenue, Highland Park, MI

              
	
                CRE
      JV Mixed Five MI 5 Branch Holdings LLC

              	 
      	
                16841
      Schaefer Road, Detroit, MI

              
	
                CRE
      JV Mixed Five MI 5 Branch Holdings LLC

              	 
      	
                31441
      Plymouth Road, Livonia, MI

              
	
                CRE
      JV Mixed Five OH 7 Branch Holdings LLC

              	 
      	
                2200
      Wales Avenue, NW, Massillon, OH

              
	
                CRE
      JV Mixed Five OH 7 Branch Holdings LLC

              	 
      	
                54
      Federal Avenue NE, Massillon, OH

              
	
                ARC
      HDCOLSC001, LLC

              	
                  

              	
                420
      Foster Brothers Drive, West Columbia,
SC

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
B

     

    FIRPTA
Affidavit

     

    Section
1445 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue
Code”) provides that a transferee of a U.S. real property interest must
withhold tax if the transferor is a foreign person.  For U.S. tax
purposes (including Section 1445), the owner of a disregarded entity (which has
legal title to a U.S. real property interest under local law) will be the
transferor of the property and not the disregarded entity.  To inform
ARC Properties Operating Partnership, L.P., a Delaware limited partnership
(“Transferee”),
that withholding of tax is not required upon the disposition of a U.S. real
property interest by ARC Real Estate Partners, LLC (“Transferor”), the
undersigned hereby certifies the following on behalf of Transferor:

     

    1.           Transferor
is not a foreign corporation, foreign partnership, foreign trust, or foreign
estate (as those terms are defined in the Internal Revenue Code and Income Tax
Regulations);

     

    2.           Transferor
is not a disregarded entity as defined in § 1.1445-2(b)(2)(iii);

     

    3.           Transferor’s
U.S. employer identification number is ________________; and

     

    4.           Transferor’s
office address is 405 Park Avenue, New York, NY 10022.

     

    Transferor
understands that this certification may be disclosed to the Internal Revenue
Service by Transferee and that any false statement contained herein could be
punished by fine, imprisonment or both.

     

    Under
penalties of perjury, I declare that I have examined this certification and, to
the best of my knowledge and belief, it is true, correct and complete, and
further declare that I have authority to sign this document on behalf of
Transferor.

     

    
      
        
          
            
              	 
      	 
      
	 
      	 
      
	 
      	
                      Name:

                    	 
      
	 
      	 
      
	 
      	
                      Title:

                    	 
      

            

          

        

      

    

    Date:
__________, 2011

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
C

     

    Accredited Investor
Questionnaire

     

    ACCREDITED INVESTOR STATUS FOR
ENTITIES (Please check the applicable subparagraphs):

     

    1.       ̈          We
are either:  a bank as defined in Section 3(a)(2) of the Securities
Act of 1933, as amended (the “Securities Act”), or a savings
and loan association or other institution as defined in Section 3(a)(5)(A) of
the Securities Act whether acting in its individual or fiduciary capacity; a
broker or dealer registered pursuant to Section 15 of the Securities Exchange
Act of 1934, as amended; an insurance company as defined in Section 2(a)(13) of
the Securities Act; an investment company registered under the Investment
Company Act of 1940, as amended (the “Investment Company Act”) or a business
development company as defined in Section 2(a)(48) of the Investment Company
Act; a Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958, as amended; a plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, and such plan has total assets
in excess of $5,000,000; or an employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and (i) the investment
decision is made by a plan fiduciary, as defined in section 3(21) of ERISA,
which is either a bank, savings and loan association, insurance company, or
registered investment adviser, (ii) the employee benefit plan has total assets
in excess of $5,000,000 or, (iii) an employee benefit plan that is a
self-directed plan, with investment decisions made solely by persons that are
accredited investors (within the meaning of Rule 501(a) under the Securities
Act).

     

    2.       ̈          We
are a private business development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940, as amended.

     

    3.       ̈          We
are an organization described in Section 501(c)(3) of the Internal Revenue Code
of 1986, as amended, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring OP Units, with
total assets in excess of $5,000,000.

     

    4.       ̈          We
are a trust with total assets in excess of $5,000,000, that was not formed for
the specific purpose of purchasing OP Units and whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) under the Securities
Act.

     

    5.       ̈          We
are an entity in which all of the equity owners are accredited investors (within
the meaning of Rule 501(a) under the Securities Act).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
D

     

    Form of Assignment And
Assumption of Ownership Interests

     

    This
Assignment and Assumption of Ownership Interests (“Assignment”) is made and
entered into effective as of__________, 2011 (the “Effective Date”), by and among
ARC Real Estate Partners, LLC, a Delaware limited liability company (“Assignor”), and ARC Properties
Operating Partnership, L.P., a Delaware limited partnership (“Assignee”).

     

    RECITALS

     

    A.           Assignor
is the legal and beneficial owner of one hundred percent (100%) of the limited
liability company interest (collectively, the “Ownership Interests”) in ARC
Income Properties, LLC, a Delaware limited liability company, and American
Realty Capital Partners, LLC, a Delaware limited liability company
(collectively, the “Companies”).

     

    B.           Assignor
desires to assign the Ownership Interests to Assignee, and Assignee desires to
assume the Ownership Interests from Assignor.  It is the intent of the
parties that, upon this Assignment, Assignor will withdraw as a member (“Owner”) of each of the
Companies, and Assignee will become a substitute member of each of the
Companies.

     

    ASSIGNMENT

     

    The
parties agree as follows:

     

    1.           Assignment.  For
value received, the receipt and sufficiency of which are hereby acknowledged,
Assignor hereby assigns, transfers, conveys and delivers the Ownership Interests
and all of its right, title and interest in the Companies to
Assignee.  Upon the execution of this Assignment, the records of each
Company, including the limited liability company agreement, as amended,
supplemented or otherwise modified from time to time (each, an “Organizational Agreement”), shall be amended to reflect
the change in ownership of the Ownership Interests.

     

    2.           Assumption.  Assignee
hereby accepts the foregoing assignment and assumes the agreements and
obligations of an Owner under each Organizational Agreement, including the
obligation to fulfill the obligations of Assignor in accordance with the terms
of each Organizational Agreement with respect to the Ownership
Interests.  Assignee’s execution of this Assignment constitutes the
execution of a counterpart signature page to each Organizational
Agreement.  Assignee acknowledges it has received and reviewed a copy
of each Organizational Agreement.

     

    3.           Withdrawal and Substitution
of Owner.  Assignor hereby withdraws as Owner of each Company,
and Assignee is hereby admitted and substituted as Owner of each Company with
respect to the Ownership Interests.

     

    4.           Representations and
Warranties.  Assignor hereby represents and warrants to
Assignee that the Ownership Interests are free and clear of all liens,
assignments, security interests, options and adverse claims to or encumbrances
on title of any kind or character.  Each of Assignor and Assignee
hereby represents and warrants that the execution and delivery by it of this
Assignment will not violate or constitute a default under the terms or
provisions of any agreement, document or instrument to which it is
bound.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5.           Effective
Date.  This Assignment is effective as of the Effective Date
set forth above.

     

    6.           Successors and
Assigns.  This Assignment is binding on and inures to the
benefit of the parties and their respective successors and assigns.

     

    7.           Governing
Law.  This Assignment, the rights and obligations of the
parties hereto, and any claims and disputes relating thereto, are governed by
and shall be construed in accordance with the laws of the State of
Delaware.

     

    8.           Counterparts.  This
Assignment may be executed in counterparts, each of which will be deemed an
original, but all of which together will constitute the same
instrument.

     

    9.           Future
Cooperation.  Each of the parties hereto agrees to cooperate at
all times from and after the date hereof with respect to all of the matters
described herein, and to execute such further assignments, releases,
assumptions, amendments of agreements, notifications and other documents as may
be reasonably requested for the purpose of giving effect to, or evidencing or
giving notice of, the transactions contemplated by this Assignment.

     

    [Remainder
of Page Intentionally Left Blank;

    Signature
Page Follows.]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	 
      	
                                    ASSIGNOR:

                                  
	 
      	 
      
	 
      	
                                    ARC
      REAL ESTATE PARTNERS, LLC

                                  
	 
      	 
      
	 
      	
                                    By:

                                  	 
      
	 
      	 
      	
                                    Name:

                                  
	 
      	 
      	
                                    Title:

                                  
	 
      	 
      
	 
      	
                                    ASSIGNEE:

                                  
	 
      	 
      
	 
      	
                                    ARC
      PROPERTIES OPERATING

                                  
	 	 	
                                    PARTNERSHIP,
      L.P.

                                  
	 	 	 
	 
      	
                                    By:

                                  	
                                    AMERICAN
      REALTY CAPITAL

                                  
	 
      	 
      	
                                    PROPERTIES,
      INC.

                                  
	 
      	 
      	
                                    Its
      general partner

                                  
	 
      	 
      
	 
      	
                                    By:

                                  	 
      
	 
      	 
      	
                                    Name:

                                  
	 
      	 
      	
                                    Title:

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

      Exhibit
E

       

      Permitted
Exceptions

       

      
        	
                1.

              	
                Consents
      by Property Owner or any former owner of a Property for the erection of
      any structure or structures on, under or above any street or streets on
      which the land upon which a Property is constructed may
    abut.

              

      

       

      
        	
                2.

              	
                Encroachments
      of stoops, areas, roof cornices, window trims, vent pipes, cellar doors,
      steps, columns and column bases, flue pipes, signs, piers, lintels, window
      sills, fire escapes, satellite dishes, ledges, fences, coping, retaining
      walls and yard walls, air conditioners and the like, if any, on, under or
      above any street or highway, a Property or any adjoining
      property.

              

      

       

      
        	
                3.

              	
                Variations
      between tax lot lines and lines of record
title.

              

      

       

      
        	
                4.

              	
                Covenants,
      agreements, licenses, easements and restrictions of record, if any, to the
      extent  not otherwise described in this
  Exhibit.

              

      

       

      
        	
                5.

              	
                Rights
      of utility companies to lay, maintain and repair pipes, lines, conduits,
      cable boxes and other installations on, under and across a Property and
      any rights, easements and licenses in favor of, or agreements with, any
      public utility company, including but not limited to, gas, electricity,
      telephone, telegraph and cable television services,
      if  any.

              

      

       

      
        	
                6.

              	
                Rights
      of tenants pursuant to leases with a Property Owner or any predecessor fee
      owner of the applicable Property or other statutory tenants and others
      claiming by, through or under the
tenants.

              

      

       

      
        	
                7.

              	
                Any
      lien or encumbrance (including, without limitation, any mechanics’ and
      materialmen’s  liens) the removal of which is the obligation of
      a tenant pursuant to its related
lease.

              

      

       

      
        	
                8.

              	
                All
      notes or notices of or violations of law or municipal ordinances, orders
      or requirements noted in or issued by any state or municipal departments
      having jurisdiction, now or hereafter against or affecting a
      Property.

              

      

       

      
        	
                9.

              	
                Subject
      to adjustment as herein provided, real estate taxes, tax liens, water and
      sewer charges, assessments and vault charges, and the liens of any of the
      foregoing.

              

      

       

      
        	
                10.

              	
                Zoning
      and building regulations, ordinances, and requirements adopted by any
      governmental or municipal authority having jurisdiction over a Property,
      and amendments and additions thereto now in force and effect, which relate
      to a Property.

              

      

       

      
        	
                11.

              	
                Any
      financing statements, chattel mortgages, encumbrances, or mechanics’ or
      other liens entered into by, or arising from, any financing statements
      filed on a day more than five (5) years prior to the Closing and any
      financing statements, chattel mortgages, encumbrances or mechanics’ or
      other liens filed against property no longer on a
  Property.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                12.

              	
                A
      certificate or certificates of occupancy, or no certificate or
      certificates of occupancy (or, if there be such certificate(s), that there
      exist any variances between such certificate(s) and the actual state or
      use(s) a Property.

              

      

       

      
        	
                13.

              	
                Actual
      conditions and exceptions to title contained in the title policy for a
      Property.

              

      

       

      
        	
                14.

              	
                All
      Liens or encumbrances relating to the Permitted Mortgage
      Indebtedness.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Exhibit
F

       

      Permitted Mortgage
Indebtedness

       

      The
mortgage indebtedness encumbering the Properties is as follows:

       

      
        	
                 
      

              	
                ·

              	
                $13,850,000
      under the loan agreement, dated June 24, 2010, between Ladder Capital
      Finance LLC, as lender, and ARC HDCOLSC001, LLC, as
    borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $9,613,114
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Fifteen MI 2 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $2,599,151
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Fifteen MI 3 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $2,962,352
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five MI 5 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $4,435,900
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five MI 7 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $5,005,457
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five OH 1 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $3,585,233
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five OH 2 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $2,812,983
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five OH 3 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $1,209,935
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five OH 4 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $3,586,021
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five OH 5 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $2,216,075
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five OH 6 Branch Holdings
      LLC, as borrower.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                ·

              	
                $2,785,256
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five OH 7 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $1,471,370
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five CT Branch Holdings LLC,
      as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $1,080,200
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five DE Branch Holdings LLC,
      as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $2,926,980
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five IL 2 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $2,598,800
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five IL 4 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $2,193,306
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five IL 5 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $1,298,130
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five NH Branch Holdings LLC,
      as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $4,031,963
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five NY 1 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $2,292,943
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five NY 2 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $3,119,763
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five NY 3 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $3,386,165
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five NY 4 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $844,888
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five NY 5 Branch Holdings
      LLC, as borrower.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                ·

              	
                $6,395,039
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five NY 5 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $2,796,504
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five VT Branch Holdings LLC,
      as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $2,321,977
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five MI 6 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $4,861,024
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five MI 4 Branch Holdings
      LLC, as borrower.

              

      

       

      
        	
                 
      

              	
                ·

              	
                $3,746,984
      under the loan agreement, dated July 21, 2006, between UBS Real Estate
      Investments Inc., as lender, and CRE JV Mixed Five IL 3 Branch Holdings
      LLC, as borrower.

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