Document:

Unassociated Document

    

      FORM
OF

       

      ADVISORY
AGREEMENT

       

      BY
AND AMONG

       

      AMERICAN
REALTY CAPITAL NEW YORK RECOVERY REIT, INC.,

       

      NEW
YORK RECOVERY OPERATING PARTNERSHIP, L.P.,

       

      AND

       

      NEW
YORK RECOVERY ADVISORS, LLC

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      TABLE
OF CONTENTS

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          	 
      	 
      	 
      	 
      	
                                                                                  Page

                                                                                
	
                                                                                  1.

                                                                                	 
      	
                                                                                  DEFINITIONS

                                                                                	 
      	
                                                                                  1

                                                                                
	 	 	 	 	 
	
                                                                                  2.

                                                                                	 
      	
                                                                                  APPOINTMENT

                                                                                	 
      	
                                                                                  5

                                                                                
	 	 	 	 	 
	
                                                                                  3.

                                                                                	 
      	
                                                                                  DUTIES
      OF THE ADVISOR

                                                                                	 
      	
                                                                                  5

                                                                                
	 	 	 	 	 
	
                                                                                  4.

                                                                                	 
      	
                                                                                  AUTHORITY
      OF ADVISOR

                                                                                	 
      	
                                                                                  7

                                                                                
	 	 	 	 	 
	
                                                                                  5.

                                                                                	 
      	
                                                                                  FIDUCIARY
      RELATIONSHIP

                                                                                	 
      	
                                                                                  8

                                                                                
	 	 	 	 	 
	
                                                                                  6.

                                                                                	 
      	
                                                                                  NO
      PARTNERSHIP OR JOINT VENTURE

                                                                                	 
      	
                                                                                  8

                                                                                
	 	 	 	 	 
	
                                                                                  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

                                                                                
	 	 	 	 	 
	
                                                                                  23.

                                                                                	 
      	
                                                                                  NOTICES

                                                                                	 
      	
                                                                                  13

                                                                                
	 	 	 	 	 
	
                                                                                  24.

                                                                                	 
      	
                                                                                  MODIFICATION

                                                                                	 
      	
                                                                                  14

                                                                                
	 	 	 	 	 
	
                                                                                  25.

                                                                                	 
      	
                                                                                  SEVERABILITY

                                                                                	 
      	
                                                                                  14

                                                                                
	 	 	 	 	 
	
                                                                                  26.

                                                                                	 
      	
                                                                                  GOVERNING
      LAW

                                                                                	 
      	
                                                                                  14

                                                                                
	 	 	 	 	 
	
                                                                                  27.

                                                                                	 
      	
                                                                                  ENTIRE
      AGREEMENT

                                                                                	 
      	
                                                                                  14

                                                                                
	 	 	 	 	 
	
                                                                                  28.

                                                                                	 
      	
                                                                                  NO
      WAIVER

                                                                                	 
      	
                                                                                  15

                                                                                
	 	 	 	 	 
	
                                                                                  29.

                                                                                	 
      	
                                                                                  PRONOUNS
      AND PLURALS

                                                                                	 
      	
                                                                                  15

                                                                                
	 	 	 	 	 
	
                                                                                  30.

                                                                                	 
      	
                                                                                  HEADINGS

                                                                                	 
      	
                                                                                  15

                                                                                
	 	 	 	 	 
	
                                                                                  31.

                                                                                	
                                                                                    

                                                                                	
                                                                                  EXECUTION
      IN COUNTERPARTS

                                                                                	
                                                                                    

                                                                                	
                                                                                  15

                                                                                

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
           

        

        
          ii

          
            

          

        

        
           

        

      

      FORM OF

      ADVISORY
AGREEMENT

       

       THIS
ADVISORY AGREEMENT (this “Agreement”), dated as
of               
, 2009 (the “Effective
Date”), is entered into by and among American Realty Capital New York
Recovery REIT, Inc., a Maryland corporation (the “Company”), New York
Recovery Operating Partnership, L.P., a Delaware limited partnership (the “Operating
Partnership”), and New York Recovery Advisors, LLC, a Delaware limited
liability company. 

       

      WITNESSETH

       

      WHEREAS,
the 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 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 pursuant to Section 10(a).

       

      “Advisor”
means New York Recovery Advisors, LLC, a Delaware limited liability company, any
successor advisor to the Company, the Operating Partnership or any Person to
which New York Recovery Advisors, LLC or any successor advisor subcontracts
substantially all of its functions.  Notwithstanding the foregoing, a
Person hired or retained by New York Recovery Advisors, LLC to perform property
management and related services for the Company or the Operating Partnership
that is not hired or retained to perform substantially all of the functions of
New York Recovery Advisors, LLC with respect to the Company or 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 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 other Person; (ii) any
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 other Person; (iii) any Person directly or indirectly controlling,
controlled by or under common control with such other Person; (iv) any
executive officer, director, trustee or general partner of such other Person;
and (v) any legal entity for which such Person acts as an executive
officer, director, trustee or general partner.  For purposes of this
definition, the terms “controls,” “is controlled by,” or “is under common
control with” shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of an entity,
whether through ownership or voting rights, by contract or
otherwise.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

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

       

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

       

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

       

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

       

      “Bylaws”
means the bylaws of the Company, as amended and as the same are in effect from
time to time.

       

      “Cause”
means (x) fraud, criminal conduct, willful misconduct or illegal or negligent
breach of fiduciary duty by the Advisor or a breach of this Agreement by the
Advisor; or (y) if any of the following events occur: (i) the Advisor shall
violate any material provision of this Agreement, and after written notice of
such violation, 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, (ii) 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 of 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
(iii) 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 of 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 Securities Exchange Act of
1934, as amended (the “Exchange Act”), as
enacted and in force on the date hereof, whether or not the Company is then
subject to such reporting requirements; provided, however, that,
without limitation, a Change of Control shall be deemed to have occurred if: (i)
any “person” (within the meaning of Section 13(d) of the Exchange Act, as
enacted and in force on the date hereof) is or becomes the “beneficial owner”
(as that term is defined in Rule 13d-3, as enacted and in force on the date
hereof, under the Exchange Act) of securities of the Company representing 9.8%
or more of the combined voting power of the Company’s securities then
outstanding; (ii) there occurs a merger, consolidation or other reorganization
of the Company which is not approved by the Board of Directors; (iii) there
occurs a sale, exchange, transfer or other disposition of substantially all of
the assets of the Company to another entity, which disposition is not approved
by the Board of Directors; or (iv) there occurs a contested proxy solicitation
of the Stockholders that results in the contesting party electing candidates to
a majority of the Board of Directors’ positions next up for
election.

       

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

       

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

       

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

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      “Dealer
Manager” means Realty Capital Securities, LLC, or such other Person or
entity 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 the Primary Offering, payable to the Dealer Manager for serving as the dealer
manager of such Offering.

       

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

       

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

       

      “Effective
Date”  has the meaning set forth in the preamble.

       

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

       

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

       

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

       

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

       

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

       

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

         

      

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

       

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

       

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

       

      “Joint
Ventures” means the joint venture or partnership 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 or general
partner which are established to own Investments.

       

      “Listing” means the listing of the
Shares on a national securities exchange or the receipt by the Stockholders of
securities that are listed on a national securities exchange in exchange for the
Company’s common stock.

       

      “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.

       

      “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 may be amended from time to
time.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      “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.

       

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

       

      “Operating
Partnership Agreement” means the Agreement of Limited Partnership of the
Operating Partnership, among the Company, the Operating Partnership and New York
Recovery Special Limited Partnership, LLC.

       

      “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 the
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 the 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 the 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.

       

      “Person”
means an individual, corporation, partnership, joint venture, association,
company (whether of limited liability or otherwise), trust, bank or other
entity, or 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 the final prospectus of the Company filed pursuant to Rule 424(b) of the
Securities Act, as may be amended or supplemented from time to
time.

       

      “Real Estate
Assets” means any investment by the Company or the Operating Partnership
in unimproved and improved Real Property (including, without limitation, fee or
leasehold interests, options and leases) either directly 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, without limitation, 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, either directly or
through a Joint Venture.

       

      “Real
Property” means real property owned from time to time by the Company or
the Operating Partnership, either directly or through a Joint Venture, which
consists of (i) land only, (ii) land, including the buildings located
thereon, (iii) buildings only or (iv) such investments the Board or
the Advisor designate as Real Property to the extent such investments could be
classified as Real Property.

       

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

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      “Sale”
means any transaction or series of transactions whereby: (A) 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 any Real Estate Assets, Loan or other Investment
or portion thereof, including the lease of any Real Estate Assets consisting of
a building only, and including any event with respect to any Real Estate Assets
which gives rise to a significant amount of insurance proceeds or condemnation
awards; (B) 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 of
the interest of the Company or the Operating Partnership in any Joint Venture in
which it is a co-venturer or partner; (C) 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 or partner
sells, grants, transfers, conveys, or relinquishes its 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
(D) the Company or the Operating Partnership directly or indirectly (except
as described in other subsections of this definition) sells, grants, conveys or
relinquishes its 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 (E) 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 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
(A) through (E) 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 the 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 capital stock, par value $0.01 per
share.

       

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

       

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

       

      “Stockholders”
means the registered holders of the Shares.

       

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

         

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

         

         “Subordinated
Termination Fee” means the fees payable to the Advisor pursuant to Section 19(b). 

         

      

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

       

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

       

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

       

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

       

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

      
        
           

        

        
          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, but not limited to, consultants, accountants, correspondents,
lenders, technical advisors, attorneys, brokers, underwriters, corporate
fiduciaries, escrow agents, depositaries, custodians, agents for collection,
insurers, insurance agents, banks, builders, developers, property owners, real
estate management companies, real estate operating companies, securities
investment advisors, mortgagors, the registrar and the transfer agent and any
and all agents for any of the foregoing, including Affiliates of the Advisor,
and Persons acting in any other capacity deemed by the Advisor necessary or
desirable for the performance of any of the foregoing services, including, but
not limited to, 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
hereof, (i) participate in formulating an investment strategy and asset
allocation framework, (ii) locate, analyze and select potential
Investments, (iii) structure and negotiate the terms and conditions of
transactions pursuant to which acquisitions and dispositions of Investments will
be made; (iv) research, identify, review and recommend acquisitions and
dispositions of Investments to the Board and make Investments on behalf of the
Company and the Operating Partnership in compliance with the investment
objectives and policies of the Company; (v) arrange for financing and
refinancing and make other changes in the asset or capital structure of, and
dispose of, reinvest the proceeds from the sale of, or otherwise deal with,
Investments; (vi) enter into leases and service contracts for Real Estate
Assets and, to the extent necessary, perform all other operational functions for
the maintenance and administration of such Real Estate Assets;
(vii) actively oversee and manage Investments for purposes of meeting the
Company’s investment objectives and reviewing and analyzing financial
information for each of the Investments and the overall portfolio;
(viii) select Joint Venture partners, structure corresponding agreements
and oversee and monitor these relationships; (ix) oversee, supervise and
evaluate Affiliated and non-Affiliated property managers who perform services
for the Company or the Operating Partnership; (x) oversee Affiliated and
non-Affiliated Persons with whom the Advisor contracts to perform certain of the
services required to be performed under this Agreement; (xi) manage
accounting and other record-keeping functions for the Company and the Operating
Partnership, including reviewing and analyzing the capital and operating budgets
for the Real Estate Assets and generating an annual budget for the Company;
(xii) recommend various liquidity events to the Board when appropriate and
(xiii) source and structure Real Estate Related Loans;

       

      (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 and the Operating Partnership, and
negotiate on behalf of the Company and the Operating Partnership with investment
banking firms and broker-dealers or negotiate private sales of Shares or obtain
Loans for the Company and the Operating Partnership, but in no event in such a
manner so that the Advisor shall be acting as broker-dealer or underwriter;
provided, further, 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 or the
Operating Partnership;

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      (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 necessary to assure its ability to render the services described in
this Agreement.

       

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

       

      4.            
AUTHORITY OF ADVISOR.

       

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

       

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

       

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

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      (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 of the Operating Partnership. 

       

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

       

      7.            
BANK
ACCOUNTS.  The Advisor may establish and maintain one or more
bank accounts in its own name for the account of the Company or the Operating
Partnership or in the name of the Company and 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 the Advisor
shall upon request 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 or its Shares, or otherwise not be
permitted by the Articles of Incorporation or Bylaws, except if such action
shall be ordered by the Board, in which case the Advisor shall notify promptly
the Board of the Advisor’s judgment of the potential impact of such action and
shall refrain from taking such action until it receives further clarification or
instructions from the Board.  In such event, the Advisor shall have no
liability for acting in accordance with the specific instructions of the Board
so given.

       

      10.         
FEES.

       

      (a)           Acquisition
Fees.  The Company shall
pay an Acquisition Fee to the Advisor as compensation for services rendered in
connection with the investigation, selection and acquisition (by purchase,
investment or exchange) of Investments.  The total Acquisition Fees
payable to the Advisor or its Affiliates shall equal one and one-half percent
(1.5%) of the purchase price of the Investment.  The purchase price of
an Investment shall equal the amount paid or allocated to the purchase,
development or improvement of an Investment, inclusive of expenses related
thereto, and the amount of debt associated with such Investment.  The
purchase price allocable for a Joint Venture Investment shall equal the product
of (i) the purchase price of the Investment and (ii) the Company’s
ownership percentage in the Joint Venture.  For purposes of this
section, “ownership percentage” shall be the percentage of capital stock owned
by the Company, without regard to classification of such capital
stock.  The Company shall pay to the Advisor the Acquisition Fee
promptly upon the closing of the Investment.

       

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

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

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

       

      (d)           Asset
Management Fee.  The Company shall
pay an Asset Management Fee to the Advisor as compensation for services rendered
in connection with the management of the Company’s assets in an amount equal to
one percent (1.0%) per annum of Average Invested Assets.  The Asset
Management Fee is payable semiannually in advance, on January 1 and July
1 , in the amount of 0.5% of Average Invested Assets held by the
Company on such date. 

       

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

       

      
         (f)           Subordinated
Incentive Listing Fee.  Upon Listing of the Shares, the Company
shall pay the Advisor a Subordinated Incentive Listing Fee equal to fifteen
percent (15%) of the amount, if any, by which (1) the market value of the
outstanding Shares plus Distributions paid by the Company prior to Listing,
exceeds (2) the sum of the total amount of capital raised from investors and the
amount of cash flow necessary to generate a six percent (6%) annual cumulative,
non-compounded return to investors. 

         

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

      

       

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

       

      11.         
EXPENSES.

       

      (a)           In
addition to the compensation paid to the Advisor pursuant to Section 10, the
Company or the Operating Partnership shall pay directly or reimburse the Advisor
for all of 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, but not limited
to:

       

      (i)        
   Organization and Offering Expenses; 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 (including the
Dealer Manager Fee and Selling Commissions) paid by the Company and the
Operating Partnership to exceed one and one-half percent (1.5%) of the Gross
Proceeds raised in the Primary Offering;

       

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

       

      (iii)          third-party
due diligence fees of up to 0.5% of the Gross Proceeds as set forth in a
detailed and itemized invoice;

       

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

       

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

       

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

       

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

      
        
           

        

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

       

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

       

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

       

      (xi)          expenses
connected with payments of Distributions;

       

      (xii)         expenses
of organizing, revising, amending, converting, modifying, or terminating the
Company or any subsidiary thereof or the Articles of Incorporation, Bylaws or
governing documents of any subsidiary;

       

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

       

      (xiv)        administrative
service expenses, including all costs and expenses incurred by Advisor or its
Affiliates in fulfilling its duties hereunder, including but not limited to
reasonable salaries and wages, benefits and overhead of all employees directly
involved in the performance of such services; provided, that no
reimbursement shall be made for costs of such employees of the Advisor or its
Affiliates to the extent that such employees perform services for which the
Advisor receives a separate fee; and

       

      (xv)         audit,
accounting and legal fees.

       

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

       

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

       

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

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

       

      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, without
limitation, 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
its Affiliates to engage in or earn fees from any other business or to render
services of any kind to any other partnership, corporation, firm, individual,
trust or association 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 partnership,
corporation, firm, individual, trust or association.  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 best efforts to apply such
method fairly to the Company.

       

      15.         
THE AMERICAN REALTY
CAPITAL NAME.  The Advisor and its Affiliates have a
proprietary interest in the name “American Realty Capital.” The Advisor hereby
grants to the Company a non-transferable, non-assignable, non-exclusive,
royalty-free right and license to use the name “American Realty Capital” during
the term of this Agreement. 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 name “American Realty 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 name “American Realty 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 word “American Realty 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 “American Realty Capital” as a part
of their name, all without the need for any consent (and without the right to
object thereto) by the Company.

       

      16.         
TERM OF
AGREEMENT.  This Agreement shall continue in force for a period
of one year from the Effective Date, and thereafter it may be renewed for an
unlimited number of successive one-year terms upon mutual consent of the
parties.

       

      17.         
TERMINATION BY THE
PARTIES.  This Agreement may be terminated upon sixty
(60) days written notice (i) by the Independent Directors of the Company or
the Advisor, without Cause and without penalty, (ii) by the Advisor for Good
Reason or (iii) by the Advisor upon a Change of Control.  The
provisions of Sections 19
through 32 of
this Agreement shall survive termination of this Agreement.

      
        
           

        

        
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      18.         
ASSIGNMENT TO AN
AFFILIATE.  This Agreement may be assigned by the Advisor to an
Affiliate with the approval of a majority of the Directors (including a majority
of the Independent Directors).  The Advisor may assign any rights to
receive fees or other payments under this Agreement to any Person without
obtaining the approval of the Directors.  This Agreement shall not be
assigned by the Company or the Operating Partnership without the consent of the
Advisor, except in the case of an assignment by the Company or the Operating
Partnership to a corporation, limited partnership or other organization which is
a successor to all of the assets, rights and obligations of the Company or the
Operating Partnership, in which case such successor organization shall be bound
hereunder and by the terms of said assignment in the same manner as the Company
and the Operating Partnership are 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 of 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)           Subordinated
Termination Fee.  (i)  Upon
termination of this Agreement, the Advisor shall be entitled to a Subordinated
Termination Fee. The Subordinated Termination Fee, if any, will equal to the sum
of (A) fifteen percent (15%) of the amount, if any, by which (1) the appraised
value of the Company’s Investments on the Termination Date, less any Loans
secured by such Investments, plus total Distributions paid through the
Termination Date, exceeds (2) the Gross Proceeds (less amounts paid to
repurchase Shares pursuant to the Company’s share repurchase plan) and the total
amount of cash that, if distributed to the Advisor as of the Termination Date,
would have provided the Advisor an annual six percent (6%) cumulative,
non-compounded return on the Gross Proceeds through the Termination Date, plus
(B) deemed Property Disposition Fees equal to three percent (3%) of the Contract
Sales Price that would have been paid to the Advisor or its Affiliates (assuming
the sale of substantially all the Investments of the Operating Partnership at
the Termination Date, at fair market value on such date; provided that in no
event may such deemed Property Disposition Fees exceed the aggregate Competitive
Real Estate Commissions for such Investments). In addition, the Advisor may
elect to defer its right to receive a Subordinated Termination Fee until either
a Listing or other liquidity event occurs, including a liquidation, sale of
substantially all of the Company’s Investments or merger in which the
Stockholders receive in exchange for their shares of the Company’s common stock
shares of a company that are traded on a national securities
exchange. 

         

         (ii)           If
the Advisor elects to defer its right to receive a Subordinated Termination Fee
and there is a Listing, then the Advisor will be entitled to receive a
Subordinated Termination Fee in an amount equal to fifteen percent (15%) of the
amount, if any, by which the sum of (A) (1) the fair market value of the
Investments (determined by appraisal as of the date of the Listing) owned as of
the Termination Date of this Agreement, plus any Investments acquired after such
Termination Date for which the Advisor would have been entitled to receive an
Acquisition Fee (referred to herein as the ‘‘Included Assets’’)
less any Loans secured by the Included Assets, plus the cumulative Distributions
made by the Operating Partnership to the Company and the limited partners who
received OP Units in connection with the acquisition of the Included Assets,
from the inception through the date of the Listing, exceeds (2) the Gross
Proceeds and the capital value of OP Units issued in connection with the
acquisition of the Included Assets through the date of the Listing (excluding
any capital raised after the completion of the Primary Offering) (less amounts
paid to repurchase Shares pursuant to the Company’s share repurchase plan), plus
an amount equal to an annual six percent (6%) cumulative, non-compounded return
on the Gross Proceeds and the capital value of such OP Units measured for the
period from inception through the date of the Listing, plus (B) deemed Property
Disposition Fees equal to three percent (3%) of the Contract Sales Price that
would have been paid to the Advisor or its Affiliates (assuming the sale of
substantially all the Investments of the Operating Partnership at the
Termination Date, at fair market value on such date; provided that in no event
may such deemed Property Disposition Fees exceed the aggregate Competitive Real
Estate Commissions for such Investments). 

         

         (iii)           If
the Advisor elects to defer its right to receive a Subordinated Termination Fee
and there is a liquidation or sale of all or substantially all of the
Investments of the Operating Partnership, then the Advisor will be entitled to
receive a Subordinated Termination Fee in an amount equal to the sum of (A)
fifteen percent (15%) of the net proceeds from the sale of the Included Assets,
after subtracting the sum of (1) Distributions to Stockholders and the limited
partners who received OP Units in connection with the acquisition of the
Included Assets of their initial invested capital and the capital value of such
OP Units (less amounts paid to repurchase Shares pursuant to the Company’s share
repurchase plan) through the date of the liquidity event plus (2) an amount
equal to an annual six percent (6%) cumulative, non-compounded return on such
initial invested capital and the capital value of such OP Units measured for the
period from inception through the date of the liquidity event date, plus (B)
deemed Property Disposition Fees equal to three percent (3%) of the Contract
Sales Price that would have been paid to the Advisor or its Affiliates (assuming
the sale of substantially all the Investments of the Operating Partnership at
the Termination Date, at fair market value of such Investments; provided that in
no event may such deemed Property Disposition Fees exceed the aggregate
Competitive Real Estate Commissions for such Investments). If the Advisor
receives the Subordinated Incentive Listing Fee, it would no longer be entitled
to receive Subordinated Distributions Of Net Sales Proceeds or the Subordinated
Termination Fee. If the Advisor receives the Subordinated Termination Fee, it
would no longer be entitled to receive Subordinated Distributions Of Net Sales
Proceeds or the Subordinated Incentive Listing Fee. 

         

      

       

      
        
           

        

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

       

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

       

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

       

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

       

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

       

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

       

      21.         
INDEMNIFICATION BY THE
COMPANY AND THE OPERATING PARTNERSHIP.  The Company and the
Operating Partnership shall indemnify and hold harmless the Advisor and its
Affiliates, including their respective directors (collectively, the “ Indemnitees ,” and
each, an “ Indemnitee ”), from
all liability, claims, damages or losses arising in the performance of their
duties hereunder, and related expenses, including reasonable attorneys’ fees, to
the extent such liability, claims, damages or losses and related expenses are
not fully reimbursed by insurance, and to the extent that such indemnification
would not be inconsistent with the laws of the State of New York, the Articles
of Incorporation or the provisions of Section II.G of the NASAA REIT
Guidelines.  Notwithstanding the foregoing, the Company and the
Operating Partnership shall not provide for indemnification of an Indemnitee for
any loss or liability suffered by such Indemnitee, nor shall they provide that
an Indemnitee be held harmless for any loss or liability suffered by the Company
and the Operating Partnership, unless all of the following conditions are
met:

       

      (a)           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;

       

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

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

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

       

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

       

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

       

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

       

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

       

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

       

      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 of the following conditions are satisfied:

       

      (a)           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;

       

      (b)           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

       

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

       

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

       

      23.         
NOTICES.  Any
notice, report or other communication required or permitted to be given
hereunder shall be in writing unless some other method of giving such notice,
report or other communication is required by the Articles of Incorporation, the
Bylaws, or accepted by the party to whom it is given, 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: 

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

       

      
        
          	
                  To
      the Company:

                	 
      	
                  American
      Realty Capital New York Recovery REIT, Inc.

                
	 
      	 
      	
                  405
      Park Avenue

                
	 
      	 
      	
                  New
      York, New York 10022

                
	 
      	 
      	
                  Attention:
      William M. Kahane,

                
	 
      	 
      	
                                   President

                
	 
      	 
      	 
      
	 
      	 
      	
                  with
      a copy to:

                
	 
      	 
      	 
      
	 
      	 
      	
                  Proskauer
      Rose LLP

                
	 
      	 
      	
                  1585
      Broadway

                
	 
      	 
      	
                  New
      York, New York 10036

                
	 
      	 
      	
                  Attention:
      Peter M. Fass, Esq.

                
	 
      	 
      	 
      
	
                  To
      the Operating Partnership:

                	 
      	
                  New
      York Recovery Operating Partnership, L.P.

                
	 
      	 
      	
                  405
      Park Avenue

                
	 
      	 
      	
                  New
      York, New York 10022

                
	 
      	 
      	
                  Attention:
      William M. Kahane

                
	 
      	 
      	 
      
	 
      	 
      	
                  with
      a copy to:

                
	 
      	 
      	 
      
	 
      	 
      	
                  Proskauer
      Rose LLP

                
	 
      	 
      	
                  1585
      Broadway

                
	 
      	 
      	
                  New
      York, New York 10036

                
	 
      	 
      	
                  Attention:
      Peter M. Fass, Esq.

                
	 
      	 
      	 
      
	
                  To
      the Advisor:

                	 
      	
                  New
      York Recovery Advisors, LLC

                
	 
      	 
      	
                  405
      Park Avenue

                
	 
      	 
      	
                  New
      York, New York 10022

                
	 
      	 
      	
                  Attention:
      William M. Kahane

                
	 
      	 
      	 
      
	 
      	 
      	
                  with
      a copy to:

                
	 
      	 
      	 
      
	 
      	 
      	
                  Proskauer
      Rose LLP

                
	 
      	 
      	
                  1585
      Broadway

                
	 
      	 
      	
                  New
      York, New York 10036

                
	 
      	 
      	
                  Attention:
      Peter M. Fass, Esq.

                

        

      

       

      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, modified, 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.

       

      
        
          
             

          

          
            15

            
              

            

          

          
             

          

        

      

       

      28.         
NO
WAIVER.  Neither the failure nor any delay on the part of a
party to exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy, power or privilege, nor shall any waiver
of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence.  No waiver shall be effective unless it is in
writing and is signed by the party asserted to have granted such
waiver.

       

      29.         
PRONOUNS
AND PLURALS.  Whenever the context may require, any pronoun
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa.

       

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

       

      31.         
EXECUTION IN
COUNTERPARTS.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument.  This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.

       

      [
Remainder of page intentionally left blank ]

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

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

       

      
        
          
            
              
                
                  	
                          AMERICAN
      REALTY CAPITAL NEW YORK RECOVERY

                          REIT,
      INC.

                        
	 
      	 
      
	
                          By:

                        	 
      
	 
      	
                          Name:
      William M. Kahane

                        
	 
      	
                          Title:
      President

                        
	 
      
	
                          NEW
      YORK RECOVERY OPERATING PARTNERSHIP, L.P.

                        
	 
      	 
      
	
                          By:

                        	
                          American
      Realty Capital New York Recovery REIT, Inc.

                        
	 
      	
                          its
      General Partner

                        
	 
      	 
      
	
                          By:

                        	 
      
	 
      	
                          Name:
      William M. Kahane

                        
	 
      	
                          Title:
      President

                        
	 
      
	
                          NEW
      YORK RECOVERY ADVISORS, LLC

                        
	 
      	 
      
	
                          By:

                        	 
      
	 
      	
                          Name:
      William M. Kahane

                        
	 
      	
                          Title:
      President

                        

                

              

            

          

        

      

       

      
        
           

        

        
          17Unassociated Document

    
      

        FORM
OF

        MANAGEMENT
AGREEMENT

         

         This management agreement (this
“Management
Agreement”) is made and entered into as of the   
 day
of                         
, 2009, by and among AMERICAN REALTY CAPITAL NEW YORK RECOVERY REIT, INC., a
Maryland corporation (the “Company”), NEW YORK
RECOVERY OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the “OP”), and NEW YORK
RECOVERY PROPERTIES, LLC, a Delaware limited liability company (the “Manager”). 

         

        WHEREAS, the OP was organized to
acquire, own, operate, lease and manage real estate properties on behalf of the
Company; and

         

        WHEREAS, the Company intends to
continue to raise money from the sale of its common stock to be used, net of
payment of certain offering costs and expenses, for investment in the
acquisition and rehabilitation of income-producing real estate and other
real-estate related investments, which are to be acquired and held by the
Company or by the OP on behalf of the Company; and

         

        WHEREAS, the Owner desires to retain
the Manager to manage and coordinate the leasing of the real estate properties
acquired by the Owner, and the Manager desires to be so retained, all under the
terms and conditions set forth in this Management Agreement.

         

        NOW, THEREFORE, in consideration of the
premises and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound hereby, do hereby agree as follows:

         

        ARTICLE
I.

         

        DEFINITIONS

         

        Except as otherwise specified or as the
context may otherwise require, the following terms have the respective meanings
set forth below for all purposes of this Management Agreement:

         

        1.1           “Account” has the
meaning set forth in Section 2.3(i)
hereof.

         

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

         

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

         

        1.4           “Budget” has the
meaning set forth in Section 2.5(c)
hereof.

         

        1.5           “Gross Revenues” means
all amounts actually collected as rents or other charges for the use and
occupancy of the Properties, but shall exclude interest and other investment
income of the Owner and proceeds received by the Owner for a sale, exchange,
condemnation, eminent domain taking, casualty or other disposition of assets of
the Owner.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        1.6           “Improvements” means
buildings, structures, equipment from time to time located on the Properties and
all parking and common areas located on the Properties.

         

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

         

        1.8           “Joint Venture” means
the joint venture or partnership arrangements (other than between the Company
and the OP) in which the Company or the OP or any of their subsidiaries is a
co-venturer or general partner which are established to own
Properties.

         

        1.9           “Management Fees” has
the meaning set forth in Section 4.1(a)
hereof.

         

        1.10         “Owner” means the
Company, the OP and any Joint Venture that owns, in whole or in part, any
Properties.

         

        1.11         “Ownership Agreements”
has the meaning set forth in Section 2.3(k)
hereof.

         

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

         

        1.13         “Plan” has the meaning
set forth in Section
2.5(c) hereof.

         

        1.14         “Properties” means all
real estate properties owned by the Owner and all tracts as yet unspecified but
to be acquired by the Owner containing income-producing Improvements or on which
the Owner will develop or rehabilitate income-producing
Improvements.

         

        ARTICLE
II.

        APPOINTMENT
OF THE MANAGER; SERVICES TO BE PERFORMED

         

        2.1           Appointment of the
Manager.  The Owner hereby engages and retains the Manager as
the sole and exclusive manager and agent of the Properties, and the Manager
hereby accepts such appointment, all on the terms and conditions hereinafter set
forth, it being understood that this Management Agreement shall cause the
Manager to be, at law, the Owner’s agent upon the terms contained
herein.

         

        2.2           General
Duties.  The Manager shall use commercially reasonable efforts
in performing its duties hereunder to manage, operate, maintain and lease the
Properties in a diligent, careful and vigilant manner.  The services
of the Manager are to be of scope and quality not less than those generally
performed by professional property managers of other similar properties in the
area.  The Manager shall make available to the Owner the full benefit
of the judgment, experience and advice of its members and staff with respect to
the policies to be pursued by the Owner relating to the operation and leasing of
the Properties.

         

        2.3           Specific
Duties.  The Manager’s duties include the
following:

         

        
          	
                   
      

                	
                  (a)

                	
                  Lease
      Obligations.  The Manager shall perform all duties of the
      landlord under all leases insofar as such duties relate to the operation,
      maintenance, and day-to-day management of the Properties.  The
      Manager shall also provide or cause to be provided, at the Owner’s
      expense, all services normally provided to tenants of like premises,
      including, where applicable and without limitation, gas, electricity or
      other utilities required to be furnished to tenants under leases, normal
      repairs and maintenance, and cleaning and janitorial
      service.  The Manager shall arrange for and supervise the
      performance of all installations and improvements in space leased to any
      tenant which are either expressly required under the terms of the lease of
      such space or which are customarily provided to
  tenants.

                

        

         

        
          	
                   
      

                	
                  (b)

                	
                  Maintenance.  The
      Manager shall cause the Properties to be maintained in the same manner as
      similar properties in the area.  The Manager’s duties and
      supervision in this respect shall include, without limitation, cleaning of
      the interior and the exterior of the Improvements and the public common
      areas on the Properties and the making and supervision of repair,
      alterations, and decoration of the Improvements, subject to and in strict
      compliance with this Management Agreement and any applicable
      leases.  Construction and rehabilitation activities undertaken
      by the Manager, if any, will be limited to activities related to the
      management, operation, maintenance, and leasing of the Property (e.g.,
      repairs, renovations, and leasehold
  improvements).

                

        

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  (c)

                	
                  Leasing
      Functions.  The Manager shall coordinate the leasing of
      the Properties and shall negotiate and use its best efforts to secure
      executed leases from qualified tenants, and to execute same on behalf of
      the Owner, if requested, for available space in the Properties, such
      leases to be in form and on terms approved by the Owner and the Manager,
      and to bring about complete leasing of the Properties.  The
      Manager shall be responsible for the hiring of all leasing agents, as
      necessary for the leasing of the Properties, and to otherwise oversee and
      manage the leasing process on behalf of the
  Owner.

                

        

         

        
          	
                   
      

                	
                  (d)

                	
                  Notice of
      Violations.  The Manager shall forward to the Owner,
      promptly upon receipt, all notices of violation or other notices from any
      governmental authority, and board of fire underwriters or any insurance
      company, and shall make such recommendations regarding compliance with
      such notice as shall be
appropriate.

                

        

         

        
          	
                   
      

                	
                  (e)

                	
                  Personnel.  Any
      personnel hired by the Manager to maintain, operate and lease the Property
      shall be the employees or independent contractors of the Manager and not
      of the Owner.  The Manager shall use due care in the selection
      and supervision of such employees or independent
      contractors.  The Manager shall be responsible for the
      preparation of and shall timely file all payroll tax reports and timely
      make payments of all withholding and other payroll taxes with respect to
      each employee.

                

        

         

        
          	
                   
      

                	
                  (f)

                	
                  Utilities
      and Supplies.  The Manager shall enter into or renew
      contracts for electricity, gas, steam, landscaping, fuel, oil, maintenance
      and other services as are customarily furnished or rendered in connection
      with the operation of similar rental property in the
  area.

                

        

         

        
          	
                   
      

                	
                  (g)

                	
                  Expenses.  The
      Manager shall analyze all bills received for services, work and supplies
      in connection with maintaining and operating the Properties, pay all such
      bills, and, if requested by the Owner, pay, when due, utility and water
      charges, sewer rent and assessments, any applicable taxes, including,
      without limitation, any real estate taxes, and any other amount payable in
      respect to the Properties.  All bills shall be paid by the
      Manager within the time required to obtain discounts, if
      any.  The Owner may from time to time request that the Manager
      forward certain bills to the Owner promptly after receipt, and the Manager
      shall comply with any such request.  The payment of all bills,
      real property taxes, assessments, insurance premiums and any other amounts
      payable with respect to the Properties shall be paid out of the Account by
      the Manager.  All expenses shall be billed at net cost (i.e.,
      less all rebates, commissions, discounts and allowances, however
      designed).

                

        

         

        
          	
                   
      

                	
                  (h)

                	
                  Monies
      Collected.  The Manager shall collect all rent and other
      monies from tenants and any sums otherwise due to the Owner with respect
      to the Properties in the ordinary course of business.  In
      collecting such monies, the Manager shall inform tenants of the Properties
      that all remittances are to be in the form of a check or money
      order.  The Owner authorizes the Manager to request, demand,
      collect and provide receipts for all such rent and other monies and to
      institute legal proceedings in the name of the Owner for the collection
      thereof and for the dispossession of any tenant in default under its
      lease.

                

        

         

        
          	
                   
      

                	
                  (i)

                	
                  
                    Banking
      Accommodations. The Manager shall establish and maintain a separate
      checking account (the “Account”) for
      funds relating to the Properties.  All monies deposited from
      time to time in the Account shall be deemed to be trust funds and shall be
      and remain the property of the Owner and shall be withdrawn and disbursed
      by the Manager for the account of the Owner only as expressly permitted by
      this Management Agreement for the purposes of performing the obligations
      of the Manager hereunder.  No monies collected by the Manager on
      the Owner’s behalf shall be commingled with funds of the
      Manager.  The Account shall be maintained, and monies shall be
      deposited therein and withdrawn therefrom, in accordance with the
      following:

                  

                

        

         

        (i)      All
sums received from rents and other income from the Properties shall be promptly
deposited by the Manager in the Account.  The Manager shall have the
right to designate two (2) or more persons who shall be authorized to draw
against the Account, but only for purposes authorized by this Management
Agreement.

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

         

        (ii)                 All
sums due to the Manager hereunder, whether for compensation, reimbursement for
expenditures, or otherwise, as herein provided, shall be a charge against the
operating revenues of the Properties and shall be paid and/or withdrawn by the
Manager from the Account prior to the making of any other disbursements
therefrom.

         

        (iii)                 
On or before the 30th day following the end of each calendar quarter during the
term of this Management Agreement, the Manager shall forward to the Owner all
net operating proceeds from the preceding quarter, retaining at all times,
however, a reserve of $5,000, in addition to any other amounts otherwise
provided in the Budget.

         

        
          
            	
                  	
                    (j)

                  	
                    Tenant
      Complaints.  The Manager shall maintain business-like
      relations with the tenants of the
Properties.

                  

          

        

         

        
          
            	
                  	
                    (k)

                  	
                    Ownership
      Agreements.  The Manager has received copies of the
      Agreement of Limited Partnership of the OP, Articles of Incorporation and
      the other constitutive documents of the Owner (collectively, the “Ownership
      Agreements”) and is familiar with the terms thereof.  The
      Manager shall use reasonable care to avoid any act or omission which, in
      the performance of its duties hereunder, shall in any way conflict with
      the terms of the Ownership
Agreements.

                  

          

        

         

        
          
            	
                  	
                    (l)

                  	
                    Signs.  The
      Manager shall place and remove, or cause to be placed and removed, such
      signs upon the Properties as the Manager deems appropriate, subject,
      however, to the terms and conditions of the leases and to any applicable
      ordinances and regulations.

                  

          

        

         

        2.4           Approval of Leases,
Contracts, Etc.  In fulfilling its duties to the Owner, the
Manager may and hereby is authorized to enter into any leases, contracts or
agreements on behalf of the Owner in the ordinary course of the management,
operation, maintenance and leasing of the Properties.

         

        2.5           Accounting, Records and
Reports.

         

        
          	
                   
      

                	
                  (a)

                	
                  Records.  The
      Manager shall maintain all office records and books of account and shall
      record therein, and keep copies of, each invoice received from services,
      work and supplies ordered in connection with the maintenance and operation
      of the Properties.  Such records shall be maintained on a double
      entry basis.  The Owner and persons designated by the Owner
      shall at all reasonable times have access to and the right to audit and
      make independent examinations of such records, books and accounts and all
      vouchers, files and all other material pertaining to the Properties and
      this Management Agreement, all of which the Manager agrees to keep safe,
      available and separate from any records not pertaining to the Properties,
      at a place recommended by the Manager and approved by the
      Owner.

                

        

         

        
          	
                   
      

                	
                  (b)

                	
                  Quarterly
      Reports.  On or before the 30th day following the end of
      each calendar quarter during the term of this Management Agreement, the
      Manager shall prepare and submit to the Owner the following reports and
      statements:

                

        

         

        
          	
                   
      

                	
                  (i)

                	
                  Rental
      collection record;

                

        

         

        
          	
                   
      

                	
                  (ii)

                	
                  Quarterly
      operating statement;

                

        

         

        
          	
                   
      

                	
                  (iii)

                	
                  Copy
      of cash disbursements ledger entries for such period, if
      requested;

                

        

         

        
          	
                   
      

                	
                  (iv)

                	
                  Copy
      of cash receipts ledger entries for such period, if
    requested;

                

        

         

        
          	
                   
      

                	
                  (v)

                	
                  The
      original copies of all contracts entered into by the Manager on behalf of
      the Owner during such period, if requested;
and

                

        

         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  (vi)

                	
                  Copy
      of ledger entries for such period relating to security deposits maintained
      by the Manager, if requested.

                

        

         

        
          	
                   
      

                	
                  (c)

                	
                  Budgets and
      Leasing Plans.  On or before November 15 of each calendar
      year, the Manager shall prepare and submit to the Owner for its approval
      an operating budget (a “Budget”) and a
      marketing and leasing plan (a “Plan”) on the
      Properties for the calendar year immediately following such
      submission.  Each Budget and Plan shall be in the form approved
      by the Owner prior to the date thereof.  As often as reasonably
      necessary during the period covered by any Budget or Plan, the Manager may
      submit to the Owner for its approval an updated Budget or Plan
      incorporating such changes as shall be necessary to reflect cost over-runs
      and the like during such period.  If the Owner does not
      disapprove a Budget or Plan within thirty (30) days after receipt thereof
      by the Owner, such Budget or Plan shall be deemed approved.  If
      the Owner shall disapprove any Budget or Plan, it shall so notify the
      Manager within said thirty (30) day period and explain the reasons
      therefor.  The Manager will not incur any costs other than those
      estimated in an approved Budget except
for:

                

        

         

        
          	
                   
      

                	
                  (i)

                	
                  maintenance
      or repair costs under $5,000 per
Property;

                

        

         

        
          	
                   
      

                	
                  (ii)

                	
                  costs
      incurred in emergency situations in which action is immediately necessary
      for the preservation or safety of the Property, or for the safety of
      occupants or other persons on the Property (or to avoid the suspension of
      any necessary service of the
Property);

                

        

         

        
          	
                   
      

                	
                  (iii)

                	
                  expenditures
      for real estate taxes and assessments;
and

                

        

         

        
          	
                   
      

                	
                  (iv)

                	
                  maintenance
      supplies calling for an aggregate purchase price of less than $25,000 for
      all Properties.

                

        

         

        
          	
                   
      

                	
                  (d)

                	
                  Returns
      Required by Law.  The Manager shall execute and file when
      due all forms, reports, and returns required by law relating to the
      employment of its personnel.

                

        

         

        
          	
                   
      

                	
                  (e)

                	
                  Notices.  Promptly
      after receipt, the Manager shall deliver to the Owner all notices, from
      any tenant, or any governmental authority, that are not of a routine
      nature.  The Manager shall also report expeditiously to the
      Owner notice of any extensive damage to any part of the
      Properties.

                

        

         

        2.6           Subcontracting.  Notwithstanding
anything to the contrary contained in this Agreement, the Manager may
subcontract any of its duties hereunder, without the consent of the Owner, for a
fee that may be less than the Management Fees paid hereunder.  In the
event that the Manager does so subcontract any its duties hereunder, such fees
payable to such third parties may, at the instruction of the Manager, be
deducted from the Management Fee and paid by the Owner to such parties, or paid
directly by the Manager to such parties, in its discretion.

         

        ARTICLE
III.

        EXPENSES

         

        3.1           Owner’s
Expenses.  Except as otherwise specifically provided, all costs
and expenses incurred hereunder by the Manager in fulfilling its duties to the
Owner shall be for the account of and on behalf of the Owner.  Such
costs and expenses may include, without limitation, reasonable wages and
salaries and other employee-related expenses of all on-site and off-site
employees of the Manager who are engaged in the operation, management,
maintenance and leasing of the Properties, including taxes, insurance and
benefits relating to such employees, and legal, travel and other out-of-pocket
expenses which are directly related to the operation, management, maintenance
and leasing of specific Properties.  All costs and expenses for which
the Owner is responsible under this Management Agreement shall be paid by the
Manager out of the Account.  In the event the Account does not contain
sufficient funds to pay all of the costs and expenses, the Owner shall fund all
sums necessary to meet such additional costs and expenses.

         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

         

        3.2          Manager’s
Expenses.  The Manager shall, out of its own funds, pay all of
its general overhead and administrative expenses.

         

        ARTICLE
IV.

        MANAGER’S
COMPENSATION

         

        4.1          Management
Fees.

         

        
          	
                   
      

                	
                  (a)

                	
                  The
      Owner shall pay the Manager property management and leasing fees (the
      “Management
      Fees”), on a monthly basis, (i) for non-hotel properties, equal to
      four percent (4.0%) of gross revenues collected from such properties, plus
      market-based leasing commissions applicable to the geographic location of
      the property, and (ii) for all hotel properties, a fee based on a
      percentage of gross revenues collected from such hotel at a market rate in
      light of the size, type and location of the hotel property, plus a
      customary incentive fee based on performance.  Except as
      otherwise set forth herein, the Owner shall also reimburse the Manager for
      any costs and expenses incurred by the Manager in connection with managing
      the Properties.

                

        

         

        
          	
                   
      

                	
                  (b)

                	
                  The
      Manager may charge a separate fee for the one-time initial rent-up or
      leasing-up of newly constructed Properties in an amount not to exceed the
      fee customarily charged in arm’s length transactions by others rendering
      similar services in the same geographic area for similar
      properties.

                

        

         

        
          	
                   
      

                	
                  (c)

                	
                  Notwithstanding
      the foregoing, the Manager may be entitled to receive higher fees in the
      event the Manager can demonstrate to the satisfaction of the board of
      directors of the Company (including a majority of the Independent
      Directors) through empirical data that a higher competitive fee is
      justified for the services rendered and the type of Property
      managed.  As described in Section 2.6
      above, in the event that the Manager properly engages one or more third
      parties to perform the services described herein, the fees payable to such
      parties for such services will be deducted from the Management Fees, or
      paid directly by the Manager, at the Manager’s option.  The
      Manager’s compensation under this Section 4.1
      shall apply to all renewals, extensions or expansions of leases which the
      Manager originally negotiated.

                

        

         

        4.2           Additional
Fees.  In the event that the Manager provides services other
than those specified herein, the Owner shall pay to the Manager a monthly fee
equal to no more than that which the Owner would pay to a third party that is
not an Affiliate of the Owner or the Manager to provide such
services.

         

        4.3           Audit
Adjustment.  If any audit of the records, books or accounts
relating to the Properties discloses an overpayment or underpayment of
Management Fees, the Owner or the Manager shall promptly pay to the other party
the amount of such overpayment or underpayment, as the case may
be.  If such audit discloses an overpayment of Management Fees for any
fiscal year of more than the correct Management Fees for such fiscal year, the
Manager shall bear the cost of such audit.

         

        ARTICLE
V.

        INSURANCE
AND INDEMNIFICATION

         

        5.1          Insurance to be
Carried.

         

        
          	
                   
      

                	
                  (a)

                	
                  The
      Manager shall obtain and keep in full force and effect insurance on the
      Properties against such hazards as the Owner and the Manager shall deem
      appropriate, but in any event, insurance sufficient to comply with the
      leases and the Ownership Agreements shall be maintained.  All
      liability policies shall provide sufficient insurance satisfactory to both
      the Owner and the Manager and shall contain waivers of subrogation for the
      benefit of the Manager.

                

        

         

        
          	
                   
      

                	
                  (b)

                	
                  The
      Manager shall obtain and keep in full force and effect, in accordance with
      the laws of the state in which each Property is located, employer’s
      liability insurance applicable to and covering all employees of the
      Manager at the Properties and all persons engaged in the performance of
      any work required hereunder, and the Manager shall furnish the Owner
      certificates of insurers naming the Owner as a co-insured and evidencing
      that such insurance is in effect.  If any of the Manager’s
      duties hereunder are subcontracted as permitted under Section 2.6,
      the Manager shall include in each subcontract a provision that the
      subcontractor shall also furnish the Owner with such a
      certificate.

                

        

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

         

        5.2           Cooperation with
Insurers.  The Manager shall cooperate with and provide
reasonable access to the Properties to representatives of insurance companies
and insurance brokers or agents with respect to insurance which is in effect or
for which application has been made.  The Manager shall use its best
efforts to comply with all requirements of insurers.

         

        5.3           Accidents and
Claims.  The Manager shall promptly investigate and report in
detail to the Owner all accidents, claims for damage relating to the ownership,
operation or maintenance of the Properties, and any damage or destruction to the
Properties and the estimated costs of repair thereof, and shall prepare for
approval by the Owner all reports required by an insurance company in connection
with any such accident, claim, damage, or destruction.  Such reports
shall be given to the Owner promptly and any report not so given within ten (10)
days after the occurrence of any such accident, claim, damage or destruction
shall be noted in the report delivered to the Owner pursuant to Section
2.5(b).  The Manager is authorized to settle any claim against
an insurance company arising out of any policy and, in connection with such
claim, to execute proofs of loss and adjustments of loss and to collect and
provide receipts for loss proceeds.

         

        5.4           Indemnification.  The
Manager shall hold the Owner harmless from and indemnify and defend the Owner
against any and all claims or liability for any injury or damage to any person
or property whatsoever for which the Manager is responsible occurring in, on, or
about the Properties, including, without limitation, the Improvements when such
injury or damage is caused by the negligence or misconduct of the Manager, its
agents, servants, or employees, except to the extent that the Owner recovers
insurance proceeds with respect to such matter.  The Owner will
indemnify and hold the Manager harmless against all liability for injury to
persons and damage to property caused by the Owner’s negligence and which did
not result from the negligence or misconduct of the Manager, except to the
extent the Manager recovers insurance proceeds with respect to such
matter.

         

        ARTICLE
VI.

        TERM;
TERMINATION

         

        6.1           Term.  This
Management Agreement shall commence on the date first above written and shall
continue until terminated in accordance with the earliest to occur of the
following:

         

        
          	
                   
      

                	
                  (a)

                	
                  One
      year from the date of the commencement of the term
      hereof.  However, this Management Agreement will be
      automatically extended for an unlimited number of successive one year
      terms at the end of each year unless any party gives sixty (60) days’
      written notice to the other parties of its intention to terminate this
      Management Agreement;

                

        

         

        
          	
                   
      

                	
                  (b)

                	
                  Immediately
      upon the occurrence of any of the
following:

                

        

         

        (i)      A
decree or order is rendered by a court having jurisdiction (A) adjudging the
Manager as bankrupt or insolvent, (B) approving as properly filed a petition
seeking reorganization, readjustment, arrangement, composition or similar relief
for the Manager under the federal bankruptcy laws or any similar applicable law
or practice, or (C) appointing a receiver, liquidator, trustee or assignee in
bankruptcy or insolvency of the Manager or a substantial part of the Manager’s
assets, or for the winding up or liquidation of its affairs, or

         

        (ii)     The
Manager (A) voluntarily institutes proceedings to be adjudicated bankrupt or
insolvent, (B) consents to the filing of a bankruptcy proceeding against it, (C)
files a petition, answer or consent seeking reorganization, readjustment,
arrangement, composition  or relief under any similar applicable law
or practice, (D) consents to the filing of any such petition, or to the
appointment of a receiver, liquidator, trustee or assignee in bankruptcy or
insolvency for it or for a substantial part of its assets, (E) makes an
assignment for the benefit of creditors, (F) is unable to or admits in writing
its inability to pay its debts generally as they become due, unless such
inability shall be the fault of the Owner, or (G) takes corporate or other
action in furtherance of any of the aforesaid purposes; or

        
          
             

          

          
            7

            
              

            

          

          
             

          

        

      

       

    

    
      	
               
      

            	
              (c)

            	
              Upon
      written notice from the Owner in the event that the Manager commits an act
      of gross negligence or willful misconduct in the performance of its duties
      hereunder.

            

    

     

    Upon termination, the obligations of
the parties hereto shall cease, provided that the Manager
shall comply with the provisions hereof applicable in the event of termination
and shall be entitled to receive all compensation which may be due to the
Manager hereunder up to the date of such termination; provided, further, that if
this Management Agreement terminates pursuant to clauses (b) or (c) of this
Section 6.1,
the Owner shall have other remedies as may be available at law or in
equity.

     

    6.2           Manager’s Obligations after
Termination.  Upon the termination of this Management
Agreement, the Manager shall have the following duties:

     

    
      	
               
      

            	
              (a)

            	
              The
      Manager shall deliver to the Owner, or its designee, all books and records
      with respect to the Properties.

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      Manager shall transfer and assign to the Owner, or its designee, all
      service contracts and personal property relating to or used in the
      operation and maintenance of the Properties, except personal property paid
      for and owned by the Manager.  Manager shall also, for a period
      of sixty (60) days immediately following the date of such termination,
      make itself available to consult with and advise the Owner, or its
      designee, regarding the operation, maintenance and leasing of the
      Properties.

            

    

     

    
      	
               
      

            	
              (c)

            	
              The
      Manager shall render to the Owner an accounting of all funds of the Owner
      in its possession and shall deliver to the Owner a statement of Management
      Fees claimed to be due the Manager and shall cause funds of the Owner held
      by the Manager relating to the Properties to be paid to the Owner or its
      designee.

            

    

     

    
      	
               
      

            	
              (d)

            	
              The
      Manager shall cooperate with the Owner to provide an orderly transition of
      the Manager’s duties hereunder.

            

    

     

    ARTICLE
VII.

    MISCELLANEOUS

     

    7.1           Notices.  All
notices, approvals, consents and other communications hereunder shall be in
writing, and, except when receipt is required to start the running of a period
of time, shall be deemed given when delivered in person or on the fifth day
after its mailing by either party by registered or certified United States mail,
postage prepaid and return receipt requested, to the other party, at the
addresses set forth after their respect name below or at such different
addresses as either party shall have theretofore advised the other party in
writing in accordance with this Section
7.1.

     

    
      
        
          	
                  To
      the Owner:

                	
                  American
      Realty Capital New York Recovery REIT, Inc.

                
	 
      	
                  405
      Park Avenue

                
	 
      	
                  New
      York, New York 10022

                
	 
      	
                  Attention:
      William M. Kahane,

                
	 
      	
                                   President

                

        

      

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    
      
        
          
            	 
      	
                    with
      a copy to:

                  
	 
      	 
      
	 
      	
                    New
      York Recovery Operating Partnership, L.P.

                  
	 
      	
                    405
      Park Avenue

                  
	 
      	
                    New
      York, New York 10022

                  
	 
      	
                    Attention:
      William M. Kahane

                  
	 
      	 
      
	 
      	
                    with
      a copy to:

                  
	 
      	 
      
	 
      	
                    Proskauer
      Rose LLP

                  
	 
      	
                    1585
      Broadway

                  
	 
      	
                    New
      York, New York 10036

                  
	 
      	
                    Attention:
      Peter M. Fass, Esq.

                  
	 
      	 
      
	
                    To
      the Manager:

                  	
                    New
      York Recovery Properties, LLC

                  
	 
      	
                    405
      Park Avenue

                  
	 
      	
                    New
      York, New York 10022

                  
	 
      	
                    Attention:
      William M. Kahane,

                  
	 
      	
                                     Chief
      Operating Officer

                  
	 
      	 
      
	 
      	
                    with
      a copy to:

                  
	 
      	 
      
	 
      	
                    Proskauer
      Rose LLP

                  
	 
      	
                    1585
      Broadway

                  
	 
      	
                    New
      York, New York 10036

                  
	 
      	
                    Attention:
      Peter M. Fass,
Esq.

                  

          

        

      

    

    

    7.2           Governing
Law.  This Management Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the principles of conflicts of law thereof.

     

    7.3           Assignment.  Except
as permitted in Section 2.6 hereof,
this Management Agreement may not be assigned by the Manager, except to an
Affiliate of the Manager, and then only upon the consent of the Owner and the
approval of a majority of the Independent Directors.  Any assignee of
the Manager shall be bound hereunder to the same extent as the
Manager.  This Agreement shall not be assigned by the Owner without
the written consent of the Manager, except to a Person which is a successor to
such Owner.  Such successor shall be bound hereunder to the same
extent as such Owner.  Notwithstanding anything to the contrary
contained herein, the economic rights of the Manager hereunder, including the
right to receive all compensation hereunder, may be sold, transferred or
assigned by the Manager without the consent of the Owner.

     

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

     

    7.5           Amendments.  This
Management Agreement may be amended only by an instrument in writing signed by
the party against whom enforcement of the amendment is sought.

     

    7.6           Headings.  The
headings of the various subdivisions of this Management Agreement are for
reference only and shall not define or limit any of the terms or provisions
hereof.

     

    7.7           Counterparts.  This
Management Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original as against any party whose signature
appears thereon, and all of which shall together constitute one and the same
instrument.  This Management Agreement shall become binding when one
or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the
signatories.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    7.8           Entire
Agreement.  This Management 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.

     

    7.9           Disputes.  If
there shall be a dispute between the Owner and the Manager relating to this
Management Agreement resulting in litigation, the prevailing party in such
litigation shall be entitled to recover from the other party to such litigation
such amount as the court shall fix as reasonable attorneys’ fees.

     

    7.10         Activities of the
Manager.  The obligations of the Manager pursuant to the terms
and provisions of this Management Agreement shall not be construed to preclude
the Manager from engaging in other activities or business ventures, whether or
not such other activities or ventures are in competition with the Owner or the
business of the Owner.

     

    7.11        Independent
Contractor.  The Manager and the Owner shall not be construed
as joint venturers or partners of each other pursuant to this Management
Agreement, and neither party shall have the power to bind or obligate the other
except as set forth herein.  In all respects, the status of the
Manager to the Owner under this Management Agreement is that of an independent
contractor.

     

    7.12        Pronouns
and Plurals.  Whenever the context may require, any pronoun
used in this Management 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.

     

    [Remainder
of page intentionally left blank]

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

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

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              	
                                                      AMERICAN REALTY CAPITAL NEW YORK RECOVERY

                                                      REIT,
      INC.

                                                    
	 
      	 
      
	
                                                      By:

                                                    	  
      
	 
      	
                                                      Name:
      William M. Kahane

                                                    
	 
      	
                                                      Title:
      President

                                                    
	 
      	 
      
	
                                                      NEW
      YORK RECOVERY OPERATING PARTNERSHIP, L.P.

                                                    
	 
      	 
      
	
                                                      By:

                                                    	
                                                      American
      Realty Capital New York Recovery REIT, Inc.

                                                    
	 	 
	 
      	
                                                      its
      General Partner

                                                    
	 
      	 
      
	
                                                      By:

                                                    	  
      
	 
      	
                                                      Name:
      William M. Kahane

                                                    
	 
      	
                                                      Title:
      President

                                                    

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  	
                          NEW
      YORK RECOVERY PROPERTIES, LLC

                        
	 
      	 
      
	
                          By:

                        	  
      
	 
      	
                          Name:
      William M. Kahane

                        
	 
      	
                          Title:
      Chief Operating
Officer

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