Document:

FIRST AMENDMENT TO INCENTIVE LISTING
FEE NOTE AGREEMENT

 

This FIRST AMENDMENT
TO INCENTIVE LISTING FEE NOTE Agreement (this “Amendment”) is
entered into as of September 10, 2012 by and among American Realty Capital Trust, Inc., a Maryland corporation (“ARCT”),
American Realty Capital Operating Partnership, L.P., a Delaware limited partnership (together with ARCT, the “Obligors”)
and AR Capital, LLC, a Delaware limited liability company (the “Holder”). All capitalized terms used but not
defined herein shall have the meanings ascribed to such terms in the Agreement (as defined below).

 

RECITALS

 

A.The Obligors and
the Holder are parties to that certain Incentive Listing Fee Note Agreement, dated as of September 6, 2012 (the “Agreement”).

 

B.The Holder has
determined to relinquish its potential right to receive the Additional Note.

 

C.Pursuant to Section
3.7 of the Agreement, the parties hereto desire to make certain amendments to the Agreement.

 

AGREEMENT

 

In consideration of the
mutual agreements and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree to amend the Agreement as follows:

 

I.Section
1.1 of the Agreement is hereby deleted in its entirety, and the following new Section 1.1 is substituted in its place:

 

1.1Issuance
of the Subordinated Incentive Listing Fee Note. If the excess of (I) the sum of (a) the market value of ARCT’s common
stock, based on the average market value of the shares issued and outstanding at the Listing over the 30 trading days beginning
180 days after the Listing plus (b) distributions paid by ARCT from and after May 21, 2008 and prior to the Listing exceeds (II)
the sum of (c) the total amount of capital raised from stockholders during ARCT’s IPO and (d) the amount of cash flow necessary
to generate a 6.0% annual cumulative, non-compounded return to such stockholders through the date of the Listing (the excess of
clause (I) over clause (II) being hereinafter referred to as the “Excess Value Amount”), then the Obligors,
jointly and severally, shall issue to the Holder the Subordinated Incentive Listing Fee in the form of a promissory note, substantially
in the form of Exhibit A (the “Subordinated Incentive Listing Fee Note”), in a principal amount equal
to 15% of the Excess Value Amount; provided, however, that the principal amount of the Subordinated Incentive Listing
Fee Note (x) will not be less than $58,600,000 and (y) will not be more than $76,000,000.

 

II.Exhibit A of the Agreement is hereby restated
in their entirety with Exhibit A to this Amendment.

 

    	 

    	 

    
 

III.Exhibit B of the Agreement is hereby deleted
in its entirety.

 

IV. All references in the Agreement to the “Additional
Note” are hereby deleted in their entirety, and the corresponding grammatical changes as the context requires are hereby
made.

 

 

* * * 

 

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

 

	 	OBLIGORS:
	 	 
	 	American Realty Capital Trust, Inc.
	 	 
	 	 
	 	By:  /s/ William M. Kahane
	 	 Name: William M. Kahane
	 	 Title:  President and Chief Executive Officer
	 	 
	 	 
	 	AMERICAN REALTY CAPITAL OPERATING PARTNERSHIP, L.P.
	 	 
	 	By:  American Realty Capital Trust, Inc., its general partner
	 	 
	 	 
	 	By: /s/ William M. Kahane                     
	 	 Name: William M. Kahane
	 	 Title:  President and Chief Executive Officer
	 	 
	 	 
	 	HOLDER:
	 	 
	 	AR CAPITAL, LLC
	 	 
	 	 
	 	By:  /s/ Nicholas S. Schorsch                      
	 	Name:  Nicholas S. Schorsch
	 	Title:  Manager
	 	 
	 	 

 

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Exhibit A

 

FORM
OF Subordinated Incentive Listing Fee Note

 

 

THIS
INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
SUBORDINATION AGREEMENT (AS AMENDED, RESTATED, MODIFIED OR OTHERWISE SUPPLEMENTED FROM TIME TO TIME, THE “SUBORDINATION
AGREEMENT”), DATED AS OF [__________], 2012, BETWEEN AR CAPITAL, LLC, RBS CITIZENS, N.A., AS SENIOR REVOLVER AGENT, AND
WELLS FARGO BANK, NATIONAL ASSOCIATION, AS SENIOR TERM LOAN AGENT (OR ANY “SUCCESSOR SENIOR AGENT” (AS DEFINED THEREIN)
PARTY THERETO), TO THE “SENIOR DEBT” (AS DEFINED THEREIN), AND EACH Holder
OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.

 

THIS INSTRUMENT HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY, EXCEPT (A) TO AMERICAN REALTY CAPITAL TRUST, INC. (“ARCT”),
AMERICAN REALTY CAPITAL OPERATING PARTNERSHIP, L.P. (“ARCOP” AND, TOGETHER WITH ARCT, THE “ISSUERS”),
OR A SUBSIDIARY OF EITHER ISSUER; OR (B) TO A PERSON THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED
IN RULE 144A ADOPTED UNDER THE SECURITIES ACT) THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL
BUYER AND TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, ALL IN COMPLIANCE WITH RULE 144A (IF
AVAILABLE). THIS INSTRUMENT IS SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH HEREIN.

 

    	 

    	 

    
 

	$[__________]	[_______], 2012

 

 

FORM OF PROMISSORY NOTE

 

FOR VALUE RECEIVED,
the undersigned, AMERICAN REALTY CAPITAL TRUST, INC., a Maryland corporation (“ARCT”),
and American Realty Capital Operating Partnership, L.P., a Delaware limited partnership
(“ARCOP” and, together with ARCT, the “Obligors”), jointly and severally promise to pay to
AR CAPITAL, LLC, a Delaware limited liability company (the “Holder”), at its address at 405 Park Avenue, New
York, New York 10022, or such other place as the Holder may designate from time to time in writing, in lawful money of the United
States of America and in immediately available funds, the aggregate amount of [_________________________] DOLLARS in accordance
with the provisions of this Promissory Note (this “Note”). Capitalized terms have the meanings ascribed such
terms herein.

 

		1.	Interest.

 

The Obligors shall pay to the
Holder interest on the principal amount of this Note, accruing from the date hereof or from the most recent date on which interest
has been paid or provided for, at a rate equal to [___]%1 per annum, payable quarterly in arrears on each March 31,
June 30, September 30 and December 31 during the term of this Note, commencing on [__________], 20122.

 

		2.	Payment of Principal.

 

		(a)	Scheduled Payment. Subject
                                                              to Section 5, the Obligors will pay the outstanding principal
                                                              amount of this Note on [________], 20153, together with
                                                              any accrued and unpaid interest thereon; provided that during
                                                              the period commencing on the date hereof through and including October
                                                              31, 2012, upon not less than five (5) Business Days’ prior
                                                              written notice by the Holder, subject to Section 5 the Obligors
                                                              will pay the outstanding principal amount of this Note on such fifth
                                                              Business Day (any such date of payment, (the “Maturity
                                                              Date”).

 

		(b)	Mandatory Prepayment.

 

		(i)	Subject
to Section 5, the Holder shall have the right to require that the Obligors prepay the outstanding principal amount of this
Note (including all accrued and unpaid interest thereon) with the Net Cash Proceeds of any Asset Sale. Within three (3) Business
Days after the receipt of any Net Cash Proceeds in respect of any Asset Sale, the Obligors shall send to the Holder a notice stating:
(a) that an Asset Sale that has generated Net Cash Proceeds has occurred and that the Holder has the right to require the Obligors
to prepay the outstanding principal amount of this Note plus accrued but unpaid interest in an amount equal to such Net Cash Proceeds
(which amount will be specified in dollars); (b) the circumstances and relevant facts regarding such Asset Sale (including information
with respect to pro forma historical income, cash flow and capitalization, each after giving effect to such Asset Sale); (c) the
prepayment date (which shall be not earlier than fifteen (15) calendar days nor later than thirty (30) calendar days from the
date such notice is mailed); and (d) the instructions determined by the Obligors, consistent with this Section 2(b), that
the Holder must follow in order to have this Note prepaid.

 

 

 

1 To be the applicable federal rate established
by the Internal Revenue Service on the date of this Note.

2 To be the date that is the last day of the quarter
during which this Note is issued.

3 To be the date that is the three-year anniversary
of the date of this Note.

 

 

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		(ii)	If the Holder elects to have all or a portion of this Note prepaid, it will be required to provide a notice to the Obligors (at
the address specified in the notice from the Obligors to the Holder) specifying the amount of this Note it desires to have prepaid
and, if the entire Note is to be prepaid, the Holder shall be required to surrender this Note, in each case at least three (3)
Business Days prior to the prepayment date.

 

		3.	[RESERVED]

 

		4.	[RESERVED]

 

		5.	Payment Restrictions; Subordination. Notwithstanding anything to the contrary set forth
in this Note, any payment of principal, interest, or other amounts hereunder will be subject to the applicable restrictions contained
in the Subordination Agreement. In furtherance of the foregoing, to the extent any payment in cash would be prohibited by the terms
of the Subordination Agreement on any payment date, the Holder agrees that the portion of any such payment that cannot be made
in cash (the “Restricted Portion”) may, at the election of the Holder, by prior written notice to the Obligors,
be deferred, with interest calculated as under Section 1, until such time as payment of the Restricted Portion may be made
in cash.

 

		6.	No Redemption or Prepayment. Except as set forth in Section 2(b), this Note is not
subject to redemption or prepayment at the election of the Obligors.

 

		7.	Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the
Obligors shall execute and deliver, in exchange and substitution for and upon cancellation of this Note (if mutilated), or in lieu
of or in substitution for this Note (if lost, stolen or destroyed), a new promissory note for the outstanding principal amount
of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such
Note, and of the ownership hereof, reasonably satisfactory to the Obligors.

 

		8.	Cancellation. After all amounts at any time owed under this Note have been paid in full,
the Holder shall surrender this Note to the Obligors for cancellation, and no other promissory note or instrument shall be reissued.

 

		9.	Costs of Enforcement. In the event of the breach by the Obligors of any provision of this
Note or the occurrence of an Event of Default, the Holder shall, subject to Section 5, be entitled to proceed to protect
and enforce its rights hereunder by appropriate judicial proceedings and the Holder shall be entitled to exercise all other rights
and remedies available at law or in equity. The Obligors shall reimburse the Holder for all reasonable costs and expenses incurred
in connection with the protection and enforcement of its rights hereunder and collection of all amounts owing hereunder plus reasonable
attorneys’ fees and expenses.

 

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		10.	Events of Default. For purposes of this Note, an “Event of Default” will
be deemed to have occurred if:

 

		(a)	the Obligors default in the payment of any principal due under this Note pursuant to either Section
2(a) or Section 2(b) hereof;

 

		(b)	the Obligors default in the payment of any interest or other amounts (other than principal) due
under this Note (unless such nonpayment is in accordance with Section 5) and such default has continued for longer than
fifteen (15) days;

 

		(c)	a Change of Control occurs; or

 

		(d)	a Bankruptcy Event of Default occurs.

 

		11.	Remedies Upon an Event of Default. The Obligors shall, within five (5) Business Days after
becoming aware thereof, notify the Holder of the occurrence of any Event of Default. If an Event of Default shall occur and be
continuing, the Holder shall be entitled to declare all outstanding principal of this Note and accrued and unpaid interest through
the date of such declaration to be immediately due and payable, by a notice in writing to the Holder. Upon any such declaration,
subject to Section 5, (a) such principal and interest shall become due and payable immediately and (b) the Maturity Date
shall be accelerated to the date of such acceleration.

 

		12.	Definitions.

 

		(a)	“Asset Sale” means any transaction or series of transactions whereby: (i) either
Obligor 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 asset, real estate related loan or other investment or portion
thereof, including any event with respect to any real estate asset that gives rise to a significant amount of insurance proceeds
or condemnation awards; (ii) either Obligor 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
such Obligor in any joint venture in which it is a co-venturer, member or partner; (iii) any joint venture in which either Obligor
is a co-venturer, member or partner 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 asset or portion thereof, including
any event with respect to any real estate asset which gives rise to insurance claims or condemnation awards; or (iv) either Obligor
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 loan 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 in connection therewith; or (v) either Obligor 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 investment asset not previously described in this definition or any portion thereof.

 

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		(b)	“Bankruptcy Event of Default” means any of the following: (i) a case or proceeding
shall have been commenced against either Obligor seeking a decree or order in respect of such Obligor (a) under Title 11
of the United States Code, as now constituted or hereafter amended or any other applicable federal, state or foreign
bankruptcy or other similar law, (b) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) for such Obligor, or of any substantial part of such Obligor’s assets, or (c) ordering the winding-up or liquidation
of the affairs of such Obligor, and such case or proceeding shall remain undismissed or unstayed for sixty (60) calendar days or
more or such court shall enter a decree or order granting the relief sought in such case or proceeding; or (ii) such Obligor shall
(a) file a petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended,
or any other applicable federal, state or foreign bankruptcy or other similar law, (b) fail to contest in a timely and appropriate
manner or shall consent to the institution of proceedings thereunder or to the filing of any such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) of such Obligor,
or of any substantial part of any of such Obligor’s assets, (c) make an assignment for the benefit of creditors, (d) take
any corporate or partnership, as applicable, action in furtherance of any of the foregoing, or (e) admit in writing its inability
to, or shall be generally unable to, pay its debts as such debts become due.

 

		(c)	“Business Day” means any day other than a Saturday, Sunday or other day on which
banks in New York City are authorized or required by law to close.

 

		(d)	“Change of Control” means any of the following: (i) any person or group (as
such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan
of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator
of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange
Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all equity interests that
such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time
(such right, an “option right”)), directly or indirectly, of thirty-five percent (35%) or more of the equity interests
of ARCT entitled to vote for members of the board of directors or equivalent governing body of ARCT on a fully-diluted basis (and
taking into account all such equity interests that such person or group has the right to acquire pursuant to any option right);
(ii) during any period of twelve consecutive calendar months, individuals who at the beginning of such period constituted the board
of directors of ARCT (together with any new directors whose election by the board of directors of ARCT or whose nomination for
election by the stockholders of ARCT was approved by a vote of at least two-thirds of the directors then still in office who either
were directors at the beginning of such period or whose elections or nomination for election was previously so approved) cease
for any reason other than death or disability to constitute a majority of the directors then in office; (iii) ARCT shall cease
to own and control all of the general partner interest in ARCOP; or (iv) ARCOP shall cease to own and control all of the economic
and voting rights associated with all of the outstanding equity interests of each of its subsidiaries (other than those subsidiaries
of ARCOP owned through a joint venture).

 

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		(e)	“Net Cash Proceeds” means the aggregate proceeds paid in cash received by either
Obligor in connection with any Asset Sale, net of (i) direct costs (including legal and accounting fees, sales commissions and
underwriting discounts and all title and recording expenses), (ii) all federal, state, provincial, foreign and local taxes required
to be accrued as a liability as a consequence thereof, (iii) all payments made by such Obligor on any indebtedness that is secured
by the assets subject to such Asset Sale in accordance with the terms of any lien upon or with respect to such assets or that must,
by the terms of such lien or by applicable law, be repaid out of the proceeds from such Asset Sale and (iv) a reasonable reserve
for the after-tax costs of any indemnification payments (fixed or contingent) attributable to the seller’s indemnities to
the purchaser undertaken by such Obligor in connection with such Asset Sale. Upon release from reserve or escrow or payment of
any amounts referred to in clause (iv) above that are released or paid to such Obligor or any reduction in the amount of taxes
required to be accrued pursuant to clause (ii) above resulting in a payment to such Obligor, such amounts shall then be deemed
to be “Net Cash Proceeds”.

 

		(f)	“Senior Agents” means each of (i) RBS Citizens, N.A., in its capacity as administrative
agent under the Senior Revolver Agreement and (ii) Wells Fargo Bank, National Association, in its capacity as administrative agent
under the Senior Term Loan Agreement.

 

		(g)	“Senior Revolver Agreement” means the Credit Agreement, dated as of August 17,
2011, by and among the Obligors, RBS Citizens, N.A., as administrative agent, and the lenders party thereto, as amended (including
any amendment and restatement thereof), supplemented, waived or otherwise modified from time to time.

 

		(h)	“Senior Term Loan Agreement” means (i) the Term Loan Agreement, dated as of
April 16, 2012, by and among the Obligors, Wells Fargo Bank, National Association, as administrative agent, and the lenders party
thereto, as amended (including any amendment and restatement thereof), supplemented, waived or otherwise modified from time to
time and (ii) after the Long-Term Senior Term Loan Refinancing is consummated, the Long-Term Senior Term Loan Agreement (in each
case as defined in the Subordination Agreement).

 

		(i)	“Subordination Agreement” means the Subordination Agreement, dated as of the
date hereof, by and among Holder, the Senior Agents and acknowledged by the Obligors.

 

		13.	Miscellaneous. 

 

		(a)	Notices. All notices, requests, demands, waivers and other communications required or permitted
to be given under this Note shall be in writing and shall be deemed to have been duly given only if delivered (i) personally against
written receipt, (ii) by facsimile transmission against facsimile confirmation, (iii) mailed by prepaid first class certified mail,
return receipt requested, or (iv) mailed by prepaid overnight courier to the addresses set forth on the signature pages hereof.
All such notices, requests, demands, waivers and other communications shall be deemed to have been given, (x) in the case of clauses
(i) and (ii) above, on the date of such delivery and (y) in the case of clauses (iii) and (iv) above, when received.

 

		(b)	Amendments; Waivers.

 

		(i)	Subject to the terms of the Subordination Agreement, this Note may be altered, amended or waived only by prior written agreement
signed by the party or parties against whom enforcement of any alteration, amendment or waiver is sought.

 

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		(ii) 	No
failure or delay by either party in exercising any right, power or privilege under this Note shall operate as a waiver thereof
nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right,
power or privilege. Except as otherwise provided herein, no action taken pursuant to this Note shall be deemed to constitute a
waiver by the party taking such action of compliance with any agreements contained in this Note. The waiver by any party of a
breach of any provision hereunder shall not operate or be construed as a waiver of any prior or subsequent breach of the same
or any other provision hereunder.

 

		(c)	Successors and Assigns. Neither party may assign or transfer this Note or any of its obligations
or benefits under this Note (other than by operation of law) in any manner whatsoever without the prior written consent of the
other party. The provisions hereof shall be binding upon the legal representatives, successors and permitted assigns of the Obligors
and shall inure to the benefit of Holder and its successors by operation of law.

 

		(d)	Governing Law. This Note shall be governed by and construed in accordance with the laws
of the State of New York without giving effect to the principles of conflicts of laws thereof that would require the application
of any other law.

 

		(e)	Entire Agreement. This Note and the other agreements and instruments referred to herein
embody the final, entire agreement among the parties hereto and supersede any and all prior commitments, agreements, representations,
and understandings, whether written or oral, relating to the subject matter hereof and thereof and may not be contradicted or varied
evidence of prior, contemporaneous, or subsequent oral agreements or discussions of the parties hereto. There are no oral agreements
among the parties hereto with respect to the subject matter hereof.

 

		(f)	Severability. Any provision of this Note that is prohibited or unenforceable shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions
of this Note or affecting the validity or enforceability of such provision in any other jurisdiction. The application of such invalid
or unenforceable provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall be
valid and be enforced to the fullest extent permitted by applicable law. To the extent any provision of this Note is determined
to be prohibited or unenforceable in any jurisdiction, the Obligors and the Holder agree to use commercially reasonable efforts
to substitute one or more valid, legal and enforceable provisions that, insofar as practicable, implement the purposes and intent
of the prohibited or unenforceable provision.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the undersigned has executed
and delivered this Note as of the day and year first above written.

 

THE OBLIGORS:

 

AMERICAN REALTY CAPITAL TRUST, INC.

 

 

 

By:                                                                 

          Name:

         Title:

 

AMERICAN REALTY CAPITAL
operating partnership, l.p.

 

 

 

By:                                                                 

          Name:

         Title:

 

 

 

Address for Notices:

 

American Realty Capital Trust, Inc.

American Realty Capital Operating Partnership, L.P.

405 Park Avenue, 15th Floor

New York, New York 10022

Facsimile No.: (646) 861-7812

Attention: William M. Kahane

 

with a copy to:

 

American Realty Capital Trust, Inc.

American Realty Capital Operating Partnership, L.P.

405 Park Avenue, 15th Floor

New York, New York 10022

Facsimile No.: (646) 861-7804

Attention: Jesse C. Galloway

 

 

[Signature Page to Promissory Note]

 

    	 

    	 

    
 

AGREED TO AND ACCEPTED:

 

Holder:

 

AR CAPITAL, LLC

 

 

 

By:                                                         

          Name:

         Title:

 

Address for Notices:

 

AR Capital, LLC

405 Park Avenue

New York, New York 10022

Facsimile No.:

Attention: Nicholas S. Schorsch

 

 

[Signature Page to Promissory Note]Letter Agreement

 Exhibit 10.1 
 ThinkEquity ILC 
 August 29, 2012 

Bill Joll 
 Chief Executive Officer 

ISC8 Inc. 
 3001 Red Hill Avenue 

Building 4, Suite 108 
 Costa Mesa, CA 92626-4526

 Dear Mr. Joll: 

This letter agreement (the “Agreement”) confirms our mutual understanding concerning the retention by ISC8 Inc. (the
“Company” or “you”) of ThinkEquity LLC (“ThinkEquity”, “we” or “us”) to act as your lead agent on a non-exclusive basis in connection with the introduction of the Company to certain
institutional investors (the “Investors”) as a source of potential financing in the form of a private investment in public equity, in convertible debt or equity, or in a combination thereof (the “Transaction”). 

 

	1.	Scope of the Engagement. In connection with a Transaction and subject to the procedures, terms and conditions set forth on Schedule II attached
hereto, we will contact potential Investors, assist in the negotiation and structuring of such Transaction, assist in the preparation of a private placement memorandum and/or other related materials (the “Offering Materials”) and provide
related services to facilitate the closing of such Transaction (the “Closing”). In providing such services, ThinkEquity will exercise reasonable commercial efforts, consistent with investment banking industry standards.

 The Company acknowledges that ThinkEquity does not provide tax, accounting or legal advice. The Company shall
consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of any Transaction, and ThinkEquity shall have no responsibility or liability to the Company with respect
thereto. 
  

	2.	Responsibility for Disclosure. You agree to furnish or cause to be furnished to us such current and historical financial information and other information
regarding the business of the Company as we request. The Company recognizes that ThinkEquity will rely upon and assume the accuracy and completeness of all information provided by the Company without independent investigation, and that ThinkEquity
will not be responsible for verifying the adequacy, accuracy or completeness for any purpose of information provided to ThinkEquity or any third party. You agree to keep us advised of all material developments affecting the Company or its financial
position. You also agree, during the period of our engagement, that neither the Company nor its 

  
 600 Montgomery
Street, San Francisco, CA 94111 • T: 415.249.2900 • 
 www.thinkequity.com 

 ISC8, Inc. 
 August 29, 2012 
  Page
 2
 of 12 
  

 management will initiate any discussions with third parties regarding any possible
Transaction without first consulting with ThinkEquity. 
 ThinkEquity will have no obligation to conduct any independent
evaluation or appraisal of the assets or liabilities of the Company or any other party or to advise or opine on any related solvency issues. Any solvency opinion or issues addressed will be the responsibility of an independent solvency professional
or professionals to be retained by the Company, its Board of Directors, or a third party. ThinkEquity will have no responsibility for monitoring the work or opinions of such solvency professionals. 

 

	3.	Advisory Fees and Expenses. In consideration of our services, you agree to pay ThinkEquity the following: 

a. Advisory Fee. The Company shall pay ThinkEquity a fee in an amount equal to (i) three and a half percent
(3.5%) of the gross proceeds for each Transaction involving the parties identified on Schedule 3.a attached (as it may be amended from time to time by the parties), and (ii) seven percent (7%) of the gross proceeds for any other
Transaction, which fee shall be paid to ThinkEquity in cash by wire transfer simultaneous with each Closing. The Company shall pay ThinkEquity a minimum aggregate fee in an amount equal to five hundred thousand dollars ($500,000) so long as a
minimum threshold amount of $7.5 million dollars is raised. ThinkEquity agrees to invite other placement agents into the Transaction as discussed and provide customary compensation to those agents. The parties agree in good faith to modify payments
based on each party's respective contribution, and fairness to the Company and ThinkEquity. 
 b. Alternative Transaction
Fee. If instead of or in addition to a Transaction you complete an alternative transaction with our assistance, then ThinkEquity and the Company will negotiate in good faith the amount of the cash fee payable to ThinkEquity, which will take
into account, among other factors, the results obtained and the custom and practice of nationally recognized investment banking firms acting in similar transactions. 
 c. Expenses. Regardless of whether any Transaction is completed, the Company agrees to reimburse ThinkEquity for our reasonable out-of-pocket expenses, including travel costs, document
production, database, third-party research expenses, and other similar expenses, fees and disbursements of our attorneys and other professional advisors, and any sales, use or similar taxes (including additions to such taxes, if any) that we incur
in connection with this Agreement. All payments owed under this subparagraph shall be due within ten (10) days of receipt by the Company of ThinkEquity's invoice. 

  
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 d. General. All amounts payable under this Agreement shall be paid in
immediately available funds in U.S. Dollars, without setoff and without deduction for any withholding, value-added or other similar taxes, charges, fees or assessments. No fee payable to any other person (by you or any other company) in connection
with the subject matter of this Agreement shall reduce or otherwise affect any fee payable hereunder. Any amounts due and payable under this Agreement that remain unpaid shall be assessed a finance charge of one percent (1%) per month until
satisfied in full. 
  

	4.	Indemnification. The Company agrees to the indemnification and other obligations set forth in the attached Schedule I, which is incorporated herein
by reference, and all such obligations shall survive any termination or expiration of this Agreement. 

  

	5.	Term and Termination. The term of this Agreement will be one (1) year from the date hereof. Either party may terminate this Agreement at any time
without liability or continuing obligation, except that following such termination ThinkEquity shall remain entitled to any fees accrued, and to reimbursement of any reasonable expenses incurred, prior to such termination but not yet paid. In
addition, in the case of termination by the Company or expiration of this Agreement, ThinkEquity shall be entitled to full payment of all fees provided for under this Agreement in connection with any Transaction involving an Investor previously
identified and/or contacted by ThinkEquity during the term of this Agreement that is announced or results from negotiations commenced during the period from the date hereof until one (1) year following such termination or expiration. The
indemnification and other obligations set forth in the attached Schedule I and the miscellaneous provisions shall survive any termination or expiration of this Agreement. 

 

	6.	Right of Participation. During the term of this Agreement and for a period of twelve(12) months after termination of this Agreement, the Company
grantsThinkEquity the right to provide investment banking services to the Company on a non-exclusive basis in matters for which investment banking services are sought by the Company (the “Right of Participation”). For these purposes,
investment banking services shall include without limitation (i) acting as co-manager for any underwritten public offering; (ii) acting as co-placement agent or co-financial advisor in connection with any private offering of Securities;
ThinkEquity shall notify the Company of its intention to exercise the Right of Participation within 15 business days of receiving written notice from the Company. Any decision by ThinkEquity to act in any such capacity shall be contained in separate
written agreements to be negotiated in good faith that provide for, among other matters, customary fees for transactions of similar size 

  
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	 	and nature as may be mutually agreed upon, and indemnification of ThinkEquity and its affiliates. Such agreements shall be subject to general market conditions. If
ThinkEquity declines to exercise the Right of Participation (which it may do in its sole and absolute discretion), the Company shall have the right to retain any other person or persons to provide such services on terms and conditions which are not
materially more favorable to such other person or persons than the terms declined by ThinkEquity. 

  

	7.	Miscellaneous. 

 a.
Scope of Use. Any written or oral op1mon or advice provided by ThinkEquity pursuant to this Agreement is intended solely for the benefit and use of the Company's senior management and Board of Directors, in (and only in) their
capacity as such, and may not be used or relied upon by any other person, nor may such advice be reproduced, summarized, described, excerpted from, provided to any other person or otherwise publicly referred to or disclosed, in whole or in
part, without ThinkEquity's express prior written consent. 
 b. Successors and Assigns. The provisions of this
Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company, ThinkEquity, and any other person entitled to indemnity pursuant to Schedule I. Except as set forth in Schedule I, nothing in this
Agreement is intended to confer upon any other person (including stockholders, employees or creditors of the Company) any rights or remedies hereunder or by reason hereof. 
 c. Independent Contractor Status. ThinkEquity has been retained under this Agreement as an independent contractor, and owes its duties arising out of this engagement solely to the Company
and to no other person. It is understood and agreed that this Agreement does not create a fiduciary relationship between ThinkEquity and the Company, its Board of Directors, or its stockholders. 

d. Public Announcements. Any press release or other public announcement issued by the Company announcing the Transaction
shall state that ThinkEquity acted as the Company's exclusive agent in connection with the Transaction. The Company agrees that ThinkEquity has the right to place usual and customary advertisements in financial and other newspapers and journals at
ThinkEquity’s expense describing its services to the Company. 
 e. Governing Law. This Agreement and any
action, claim, suit, or proceeding arising directly or indirectly out of this Agreement (including any claim concerning advice provided pursuant to this Agreement) shall be governed by and construed in accordance with the laws of the State of New
York (without giving effect to the conflicts of law provisions thereof). Each of the parties hereto 

  
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 irrevocably submits to the exclusive jurisdiction and venue of the state or federal
courts located in New York City for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby (including with respect to the enforcement of this Agreement) and hereby irrevocably waives any
objection it may now or hereafter have as to the venue of any such action or proceeding brought in such court including but not limited to any objection that such court is an inconvenient forum. Each party (on its own behalf and, to the extent
permitted by applicable law, on behalf of its shareholders) hereby irrevocably waives any right they may have to trial by jury in any action, proceeding, claim or counterclaim (whether based upon contract, tort or otherwise) related to or arising
out of this Agreement, ThinkEquity's performance under this Agreement or the transactions contemplated hereby. 
 Notwithstanding
the foregoing paragraph, any dispute between the parties regarding payment owed to ThinkEquity arising out of or relating to this Agreement shall be settled by arbitration administered by the American Arbitration Association under its Commercial
Arbitration Rules. The number of arbitrators shall be one (1). The place of arbitration shall be New York, New York. The arbitrator is authorized to award the prevailing party its reasonable attorneys’ fees and costs. Judgment on the award(s)
rendered by the arbitrator may be entered in any court having jurisdiction thereof. 
 f. Entire Agreement. This
Agreement, including the attached Schedules, constitutes the entire agreement between the parties and supersedes all prior written or oral agreements and understandings regarding the subject matter hereof. This Agreement may not be amended or
otherwise modified except in a writing signed by the parties hereto. 
 g. Attorneys’ Fees. The prevailing
party in any legal action or proceeding related to or arising from this Agreement shall be entitled to recover from the other party its reasonable attorneys’ fees, costs and expenses (including expert witness fees) incurred in connection with
such action or proceeding, including without limitation any appeal or enforcement of any judgment obtained. 
 h.
Counterparts. This Agreement may be signed in one or more counterparts by original, facsimile or electronic signature, and each such counterpart shall be deemed to be an original, but all of which together shall constitute one and the
same instrument. 
 ********************* 

  
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 If the foregoing correctly sets forth our understanding, please sign the enclosed copy
of this Agreement in the space provided, and return it to us, whereupon this Agreement shall constitute a binding agreement between the Company and ThinkEquity. 

 

			
	Very truly yours,
	
	THINKEQUITY LLC
		
	By:	 	/s/ Jonatha Levy
	Name:	 	Jonatha Levy
	Its:	 	Managing Director

 AGREED TO AND ACCEPTED 
 as of the date first 
 above written: 
 ISCSinc. 

			
		
	By:	 	/s/ Bill Joll
	Name:	 	Bill Joll
	Its:	 	Chief Executive Officer

  
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 Schedule I 
 In the event that ThinkEquity, any affiliate of ThinkEquity, or their respective partners, directors, officers, agents, consultants, employees and controlling persons (if any) (each such person or entity
is hereinafter referred to as an "Indemnified Person") becomes involved in any capacity in any action, claim, proceeding, inquiry, or investigation brought or threatened by or against any person, including the Company, its stockholders, or its
creditors, related to, arising from, or in connection with either ThinkEquity's engagement or this Agreement, the Company will indemnify and hold each Indemnified Person harmless from and against any and all losses, claims, damages, liabilities or
expenses, joint or several, related to, arising from, or in connection with either ThinkEquity's engagement or this Agreement, whether or not any pending or threatened action, claim, proceeding, inquiry or investigation giving rise to such losses,
claims, damages, liabilities or expenses is initiated or brought by or on the Company's behalf and whether or not the Company or any Indemnified Person is a party to such action, proceeding, inquiry or investigation. In addition, the Company will
promptly reimburse each Indemnified Person for its legal and other expenses (including the cost of any investigation and preparation) as and when they are incurred in connection therewith, including the cost of asserting or enforcing rights under
the indemnity; provided, however, that the Company shall not be liable under the foregoing indemnity and reimbursement provisions to the extent that any such loss, claim, damage, liability or expense has been found by a court of competent
jurisdiction in a judgment which has become final in that it is no longer subject to appeal or review to have resulted primarily and directly from the gross negligence or willful misconduct of ThinkEquity in performing the services that are the
subject of this Agreement. 
 If for any reason the foregoing indemnification or reimbursement is unavailable or insufficient to
hold each Indemnified Person harmless, then the Company shall contribute to the amount paid or payable by each Indemnified Person as a result of such loss, claim, damage, liability or expense in such proportion as is appropriate (i) to reflect
the relative economic benefits received by the Company and its security holders on the one hand and ThinkEquity on the other hand in the matters contemplated by this Agreement, or (ii) if the allocation on that basis is not permitted by
applicable law, to reflect not only the relative benefits referred to in clause (i) above, but also the relative fault of the Company and ThinkEquity with respect to such loss, claim, damage, liability or expense and any other relevant
equitable considerations. Notwithstanding the foregoing, in no event shall the Indemnified Persons be required to contribute an aggregate amount greater than the fees actually paid to ThinkEquity for services provided under this Agreement.

 The Company’s reimbursement, indemnity and contribution obligations under this Schedule shall be in addition to any
liability which the Company may otherwise have, shall extend upon the same terms and conditions to any affiliate of ThinkEquity and the 

  
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partners, directors, officers, agents, consultants, employees and controlling persons (if any), as the case may be, of ThinkEquity and any such affiliate, and shall be binding upon and inure to
the benefit of any successors, assigns, heirs and personal representatives of the Company, ThinkEquity, any such affiliate and any such person. The Company agrees that it will not settle, compromise or consent to the entry of any judgment or
otherwise seek to terminate, without ThinkEquity's prior written consent, any pending or threatened claim, action, proceeding or investigation in which indemnification or contribution could be sought hereunder (whether or not an Indemnified Person
is an actual or potential party to such claim, action or proceeding or investigation), unless such settlement, compromise, termination or consent (i) includes an unconditional release of each Indemnified Person from all liability arising out of
such claim, action, proceeding or investigation; and (ii) does not include a statement or admission of fault, culpability, or failure to act by or on behalf of any Indemnified Person. 

The Company and its security holders also agree that no Indemnified Person shall have any liability (whether direct or indirect, in
contract or tort or otherwise) to the Company, its security holders, its creditors, or any person asserting claims on behalf of the Company related to, arising from or in connection with either ThinkEquity's engagement or this Agreement except to
the extent that any loss, claim, damage, liability or expense has been found by a court of competent jurisdiction in a judgment which has become final in that it is no longer subject to appeal or review to have resulted primarily and directly from
the gross negligence or willful misconduct of ThinkEquity in performing the services that are the subject of this Agreement. In no event shall any Indemnified Person be responsible for any special, indirect or consequential damages. The provisions
of this Schedule shall survive any termination or expiration of the Agreement. 

  
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 Schedule II 
 (a) ThinkEquity will conduct all solicitation efforts in a manner consistent with the Company’s intent that the Transaction be an exempt transaction pursuant to the Securities Act of 1933, as amended
(the “Act”), and only to “accredited investors” as defined in Rule 501(a) under the Act. The Company shall in any event have sole and final authority to approve the timing, price, investors and other terms of the Transaction and
may at any time elect not to proceed with the Transaction. 
 (b) The Company acknowledges and agrees that the Offering
Materials are its own work product, that ThinkEquity may rely, without independent verification, upon the accuracy and completeness of all information furnished by the Company to ThinkEquity for use in connection with the Transaction (collectively,
the “Information”) and that ThinkEquity does not assume any responsibility therefor. 
 (c) The Company shall advise
ThinkEquity of those states in which the Company’s securities (the “Securities”) have been qualified or exempted under the appropriate securities laws. ThinkEquity agrees not to solicit any offerees who do not reside in jurisdictions
in which the Securities or the Transaction have been qualified or exempted under the appropriate securities laws; provided, however, the Company will take such action (if any) as ThinkEquity reasonably may request to qualify the Securities for offer
and sale under the securities laws of such states as ThinkEquity may specify; provided, further, however, in connection therewith the Company will not be required to qualify as a foreign corporation or file a general consent to service of process.
The Company agrees that it, in conjunction with its counsel, will be responsible for making any filings or taking other actions required under applicable federal or state securities laws and shall be responsible for any costs and expenses associated
with such filings or other actions, including without limitation those associated with any sales pursuant to Regulation D under the Act and "blue sky" laws. 
 (d) The Company shall represent that (i) the Information and the Offering Materials will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were made, not misleading, (ii) all historical financial data provided to ThinkEquity will be prepared in accordance with generally accepted accounting principles and
practices then in effect in the United States and will fairly present in all material respects the financial condition and operations of the Company, and (iii) any forecasted financial, market or industrial information provided to ThinkEquity
will be prepared in good faith with a reasonable basis for the assumptions and the conclusions reached therein. In addition, the Company agrees that it will notify ThinkEquity promptly if any of the foregoing representations ceases to be accurate at
any time during the period of this Agreement. 

  
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 (e) The Company hereby represents and warrants to ThinkEquity that it has not had and
will not have any discussions with any person on the basis of which such person would be able to assert a claim for a finder’s fee or similar fee in connection with the sale by the Company of the Securities covered by this Agreement to
prospects in the United States or overseas. 
 (f) The Company hereby represents and warrants to ThinkEquity that during the
term of this Agreement the Company (i) will not offer any Securities for sale to, or solicit any offers to buy from, any person or persons, whether directly or indirectly, other than through ThinkEquity, and (ii) will not engage in any
discussions with any person other than representatives of ThinkEquity for the purpose of engaging, or considering the engagement of, such person as a finder or broker in connection with the Company’s sale of the securities covered by this
Agreement to prospects in the United States or overseas. The Company represents and agrees that no offers or sales of Securities of the same or a similar class as the Securities have been made or will be made by the Company or on its behalf that
would be integrated with the offer and sale of the Securities under the doctrine of integration referred to in Regulation D under the Securities Act of 1933, as amended. 
 (g) ThinkEquity will not have any rights or any obligations in connection with the Transaction contemplated by this Agreement other than those expressly provided herein. Any financing arranged by
ThinkEquity will be as your agent and not on an underwritten basis. ThinkEquity reserves the right not to participate in any offer of Securities or any other issuance of debt and the foregoing is not an agreement by ThinkEquity to underwrite, place
or purchase the Securities or otherwise provide or participate (as underwriter, placement agent or otherwise) in any Transaction. In connection with any offering in which ThinkEquity elects to participate, the Company and any other issuer in any
such offering shall enter into an underwriting agreement, placement agency agreement or purchase agreement, as applicable, with ThinkEquity, which agreement shall be in ThinkEquity’s customary form. It is understood and agreed that ThinkEquity
shall not have any obligation hereunder to act as underwriter, placement agent or initial purchaser with respect to instruments or Securities unless and until such time as ThinkEquity has executed and delivered an underwriting, placement agent or
other purchase agreement setting forth the obligations of ThinkEquity. This Agreement is not intended to be and should not be considered as a commitment with respect to the underwriting, sale or placement of the Securities and creates no obligation
or liability on our part in connection therewith. 
 (h) The Company understands and agrees that, without ThinkEquity’s
prior written consent, ThinkEquity may not be quoted or referred to in any document, release or communication prepared, issued or transmitted by the Company, any entity controlled by or under common control with the Company, or any director,
officer, employee or agent thereof. 

  
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 (i) The Company acknowledges that ThinkEquity is a full service securities firm and in
the ordinary course of its business, for its own account or the accounts of its customers, holds long or short positions in securities (including options), which may include securities relating to the Company or other entities which may be involved
in the engagement contemplated hereby. Nothing in this Agreement shall be deemed to prohibit ThinkEquity from providing any services permitted by applicable law to any third party or from engaging in any lawfully permitted activity on its own
behalf. 
 (j) ThinkEquity and its affiliates may from time to time perform various investment banking and financial advisory
services for other clients and customers who may have conflicting interests with respect to the Company or the Transaction. ThinkEquity and its affiliates will not use confidential information obtained from the Company pursuant to this Agreement or
their other relationships with the Company in connection with the performance by ThinkEquity and its affiliates of services for other companies. The Company also acknowledges that ThinkEquity and its affiliates have no obligation to use in
connection with this Agreement, or to furnish to the Company, confidential information from other companies. 
 (k) The Company
acknowledges that ThinkEquity and its affiliates may have fiduciary or other relationships whereby ThinkEquity and its affiliates may exercise voting power over securities of various persons, including without limitation potential purchasers of
Securities or others with interests in respect of the Transaction. The Company acknowledges that ThinkEquity and its affiliates may exercise such powers and otherwise perform its functions in connection with such fiduciary or other relationships
without regard to ThinkEquity’s relationship to the Company hereunder. 
 (l) The Company agrees that following the
Closing, ThinkEquity shall have the right to place usual and customary advertisements in financial and other newspapers and journals at its own expense describing its services to the Company. 

  
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 Schedule 3.a- August 29, 2011 

TCV 
 JP Morgan

 Griffin Partners 

  
 600 Montgomery
Street, San Francisco, CA 94111 • T: 415.249.2900 • 
 www.thinkequity.com

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