Document:

SECOND ALLONGE TO WARRANT TO
PURCHASE 1,092,621 SHARES

    

    This Second Allonge (this “Second Allonge”) to
that certain Warrant issued by Mandalay Media, Inc. (the “Company”) to ValueAct
Smallcap Master Fund, L.P. (“Holder”), as amended
by the Allonge dated as of October 23, 2008 (the “First Allonge”), to
purchase up to a total of 1,092,621 shares of common stock, $0.0001 par value
per share (“Common
Stock”) of the Company, at an original exercise price equal to $5.00 per
share (the “Warrant”), is made
and entered into as of August 11, 2009, by and between the Company and the
Holder, and is firmly affixed to and made a part of the Warrant.

    FOR GOOD AND VALUABLE CONSIDERATION,
the receipt and sufficiency of which are hereby acknowledged, the Company and
Holder hereby agree that the Warrant is hereby amended as set forth
below.  Capitalized terms used but not defined herein shall have the
meaning set forth in the Warrant.

    

    1.           The
introductory paragraph of the Warrant is hereby replaced in its entirety with
the following:

     

    “Mandalay Media, Inc., a
Delaware corporation (the “Company”), hereby certifies
that, for value received, VALUEACT SMALLCAP MASTER FUND, L.P. or its registered
assigns (the “Holder”),
is entitled to purchase from the Company up to a total of 1,092,621 shares of common stock,
$0.0001 par value per share (the “Common Stock”), of the
Company (each such share, a “Warrant Share” and all such
shares, the “Warrant
Shares”), at an exercise price equal to the lesser of (i) $1.25 per share
and (ii) the exercise price per share for any warrant to purchase shares of
Common Stock issued to Vivid Entertainment, LLC (as adjusted from time to time
as provided in Section 9, the
“Exercise Price”), at
any time and from time to time from and after the date hereof and through and
including July 14, 2010 (the “Expiration Date”), and
subject to the following terms and conditions:”

     

    2.           All
references to the “Warrant” and any other instrument or document delivered in
connection therewith shall be deemed to mean the Warrant as amended by this
Second Allonge and the First Allonge.

     

    3.           As
hereby amended, the Warrant is hereby ratified and confirmed in all
respects.

     

    

    

    
       
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Blank]

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

    

    IN WITNESS WHEREOF, THE EXECUTION
hereof as an instrument under seal as of the date first set forth above and
shall be governed by the laws of the State of New York.

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                	
                                                        MANDALAY
      MEDIA, INC.

                                                      	 
	 
      	 	 
	
                                                        By: 

                                                      	/s/
      James Lefkowitz	 
	 
      	 	 
	
                                                        Name: 

                                                      	James
      Lefkowitz	 
	 
      	 	 
	
                                                        Title: 

                                                      	President	 
	 
      	 	 
	 
      	 	 
	
                                                        VALUEACT
      SMALLCAP MASTER FUND, L.P.

                                                      
	
                                                        By:
      VA Smallcap Partners, LLC, its General Partner

                                                      
	 
      	 	 
	
                                                        By:

                                                      	/s/
      David Lockwood	 
	 	 	 
	
                                                        Name:

                                                      	David
      Lockwood	 
	 	 	 
	
                                                        Title:

                                                      	Managing
      Member	 

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    

    

    

    

    

    [Signature
Page to Second Allonge to Warrant to Purchase 1,092,621 Shares]

     

    
      
        
        

      

      
        2Unassociated Document

    FORM
OF

     

    ADVISORY
AGREEMENT

     

    BY
AND AMONG

     

    EMPIRE
AMERICAN REALTY TRUST, INC.,

     

    EMPIRE
AMERICAN REALTY OPERATING PARTNERSHIP, LP,

     

    AND

     

    EMPIRE
AMERICAN 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

                	
                  10

                
	
                  15.

                	
                  THE
      EMPIRE AMERICAN NAME

                	
                  11

                
	
                  16.

                	
                  TERM
      OF AGREEMENT

                	
                  11

                
	
                  17.

                	
                  TERMINATION
      BY THE PARTIES

                	
                  11

                
	
                  18.

                	
                  ASSIGNMENT
      TO AN AFFILIATE

                	
                  11

                
	
                  19.

                	
                  PAYMENTS
      TO AND DUTIES OF ADVISOR UPON TERMINATION.

                	
                  11

                
	
                  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

                	
                  14

                
	
                  29.

                	
                  PRONOUNS
      AND PLURALS

                	
                  14

                
	
                  30.

                	
                  HEADINGS

                	
                  14

                
	
                  31.

                	
                  EXECUTION
      IN COUNTERPARTS.

                	
                  15

                

        

      

    

    

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    FORM OF

    ADVISORY
AGREEMENT

     

    THIS
ADVISORY AGREEMENT (this “Agreement”), dated as
of [   ] , 2009 (the “Effective Date”), is
entered into by and among Empire American Realty Trust, Inc., a Maryland
corporation (the “Company”), Empire
American Realty Operating Partnership, LP, a Delaware limited partnership (the
“Operating
Partnership”), and Empire American 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 Empire American Advisors, LLC, a Delaware limited liability company, any
successor advisor to the Company, the Operating Partnership or any Person to
which Empire American Advisors, LLC or any successor advisor subcontracts
substantially all of its functions.  Notwithstanding the foregoing, a
Person hired or retained by Empire American 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
Empire American 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 Empire American Realty, 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.

     

    “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 Empire
American ALP, 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 program.

     

    “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.

     

    “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.

    
       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

    

    “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 Empire American holdings, LLC, a Delaware limited liability
company.

     

    “Stockholders”
means the registered holders of the Shares.

     

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

     

    “Total Operating
Expenses” of a Person means the aggregate of all costs and expenses paid
or incurred by such Person, but excluding Organization and Offering Expenses,
interest payments, taxes, non-cash expenditures, any Acquisitions Fees 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, any Investment with a purchase price of
$15,000,000 or more, including any financing thereof, 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.

     

    (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.

    
       

      
        
          
          

        

        
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    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 two and one-half percent
(2.5%) 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.

    
       

      
        
          
          

        

        
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    (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 equal to the lesser of (i) one-half of a
Competitive Real Estate Commission or (ii) one percent (1.0%) of the
Contract Sales Price of such Investment.  Any Property Disposition Fee
payable under this Section 10(c) may be
paid in addition to commissions paid to non-Affiliates, provided that the total
commissions (including such Property Disposition Fee) paid to all Persons by the
Company for the Sale of each Investment shall not exceed six percent (6.0%) of
the Contract Sales Price.

     

    (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
seventy five basis points (0.75%) per annum of Average Invested
Assets.  The Asset Management Fee is payable quarterly, in arrears at
the end of each calendar quarter, in the amount of 0.1875% of Average Invested
Assets in the immediately preceding quarter.

     

    (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)           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 fifteen percent (15.0%) 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)        the
actual cost of goods and services used by the Company and obtained from entities
not Affiliated with the Advisor;

     

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

     

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

     

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

     

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

    
       

      
        
          
          

        

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

     

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

     

    (x)          expenses
connected with payments of Distributions;

     

    (xi)         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;

     

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

     

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

     

    (xiv)      audit,
accounting and legal fees.

     

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

     

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

     

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

     

    14.    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.  Notwithstanding anything
herein to the contrary, neither the Advisor nor any Affiliate of the Advisor may
make any investment in residential properties where the investment objective is
substantially similar to the investment objectives of the Company, until such
time as at least seventy five percent (75.0%) of the Gross Proceeds, following
the final closing of the Offering, have been invested or committed for
investment.

    
       

      
        
          
          

        

        
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    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 EMPIRE AMERICAN NAME. The
Advisor and its Affiliates have a proprietary interest in the name “Empire
American.” The Advisor hereby grants to the Company a non-transferable,
non-assignable, non-exclusive, royalty-free right and license to use the name
“Empire American” 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 “Empire American” 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 “Empire American” 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 “Empire American.”
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 “Empire American” 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.

     

    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.

    
       

      
        
          
          

        

        
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    19.    PAYMENTS TO
AND DUTIES OF ADVISOR UPON TERMINATION.

     

    (a)           After
the Termination Date, the Advisor shall not be entitled to compensation for
further services hereunder, except it shall be entitled to receive from the
Company or the Operating Partnership within thirty (30) days after the
effective date of such termination all unpaid reimbursements of expenses and all
earned but unpaid fees payable to the Advisor prior to termination of this
Agreement, subject to the 2%/25% Guidelines to the extent
applicable.

     

    (b)           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;

    
       

      
        
          
          

        

        
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    (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: 

    
       

      
        
          
          

        

        
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              To
      the Company:

            	 
      	
              Empire
      American Realty Trust, Inc.

            
	 
      	 
      	
              25
      Philips Parkway

            
	 
      	 
      	
              Montvale,
      New Jersey 07645

            
	 
      	 
      	
              Attention:
      David Newman,

            
	 
      	 
      	
                               Chief
      Operating Officer

            
	 
      	 
      	 
      
	 
      	 
      	
              with
      a copy to:

            
	 
      	 
      	 
      
	 
      	 
      	
              Proskauer
      Rose LLP

            
	 
      	 
      	
              1585
      Broadway

            
	 
      	 
      	
              New
      York, New York 10036

            
	 
      	 
      	
              Attention:
      Peter M. Fass, Esq.

            
	 
      	 
      	 
      
	
              To
      the Operating Partnership:

            	 
      	
              Empire
      American Realty Operating Partnership, LP

            
	 
      	 
      	
              25
      Philips Parkway

            
	 
      	 
      	
              Montvale,
      New Jersey 07645

            
	 
      	 
      	
              Attention:
      David Newman

            
	 
      	 
      	 
      
	 
      	 
      	
              with
      a copy to:

            
	 
      	 
      	 
      
	 
      	 
      	
              Proskauer
      Rose LLP

            
	 
      	 
      	
              1585
      Broadway

            
	 
      	 
      	
              New
      York, New York 10036

            
	 
      	 
      	
              Attention:
      Peter M. Fass, Esq.

            
	 
      	 
      	 
      
	
              To
      the Advisor:

            	 
      	
              Empire
      American Advisors, LLC

            
	 
      	 
      	
              25
      Philips Parkway

            
	 
      	 
      	
              Montvale,
      New Jersey 07645

            
	 
      	 
      	
              Attention:
      David Newman

            
	 
      	 
      	 
      
	 
      	 
      	
              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. 

    
       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

    

    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 ]

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

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

     

     

    
      
        
          
            
              	 
      	 
      	 
      
	
                      EMPIRE
      AMERICAN REALTY TRUST, INC.

                       

                    
	 
      	 
      
	
                      By:

                    	 
      	 
      
	 
      	 
      	
                      Name:
      David Newman

                    
	 
      	 
      	
                      Title:
      Chief Operating Officer

                    
	 
      
	
                      EMPIRE
      AMERICAN REALTY OPERATING PARTNERSHIP, LP

                       

                    
	 
      	 
      
	
                      By:

                    	 
      	
                      Empire
      American Realty Trust, Inc.

                    
	 
      	 
      	
                      its
      General Partner

                    
	 
      	 
      
	
                      By:

                    	 
      	 
      
	 
      	 
      	
                      Name:
      David Newman

                    
	 
      	 
      	
                      Title:
      Chief Operating Officer

                    
	 
      
	
                      EMPIRE
      AMERICAN ADVISORS, LLC

                       

                    
	 
      	 
      
	
                      By:

                    	 
      	 
      
	 
      	 
      	
                      Name:
      David Newman

                    
	 
      	 
      	
                      Title:
      Authorized
Person

                    

            

          

        

      

    

    

     

    
      
         

      

      
        16

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