Document:

CONTRIBUTION AND EXCHANGE AGREEMENT

 

This CONTRIBUTION AND
EXCHANGE AGREEMENT (this “Agreement”), is made and entered into as of February 28, 2013, by and between American
Realty Capital Operating Partnership III, L.P., a Delaware limited partnership (the “Operating Partnership”),
American Realty Capital Trust III Special Limited Partner, LLC, a Delaware limited liability company (the “Special Limited
Partner”) and ARC Properties Operating Partnership, L.P., a Delaware limited partnership (the “Parent OP”).

 

WHEREAS, the Operating
Partnership is the operating subsidiary of American Realty Capital Trust III, Inc., a Maryland corporation (the “REIT”),
and the REIT is the sole general partner thereof.

 

WHEREAS, the Special
Limited Partner is a limited partner of the Operating Partnership and owns all of the “Special Limited Partner Interest”
in the Operating Partnership (the “SLP Interest”).

 

WHEREAS, ownership
of the SLP Interest entitles the Special Limited Partner to receive certain distributions from the Operating Partnership, including
a subordinated distribution of net sales proceeds (“Subordinated Distribution”) resulting from an “Investment
Liquidity Event” (as defined in the Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated
as of September 6, 2011, and as amended up to but not including the date hereof (the “Partnership Agreement”))
(an “Investment Liquidity Event”).

 

WHEREAS, the Operating
Partnership and the REIT are parties to that certain Agreement and Plan of Merger, dated as of December 14, 2012 (the “Merger
Agreement”), by and among the Operating Partnership, the REIT, American Realty Capital Properties, Inc., a Maryland corporation
(“Parent”), the Parent OP, which is the operating partnership of Parent, and Tiger Acquisition, LLC, a Delaware
limited liability company wholly-owned by Parent (“Merger Sub”), pursuant to which (x) the REIT will merge with
and into Merger Sub, with Merger Sub being the surviving entity, and (y) the Operating Partnership will merge with and into the
Parent OP, with the Parent OP being the surviving entity (the “Merged OP” and the mergers, collectively, the
“Mergers”).

 

WHEREAS, the Mergers
constitute an Investment Liquidity Event, as a result of which the Special Limited Partner will be entitled to receive a Subordinated
Distribution in respect of the SLP Interest in an amount equal to $98,359,915 (the “Subordinated Distribution Amount”).

 

WHEREAS, in order to
induce the parties to the Merger Agreement to enter into the Merger Agreement, the Operating Partnership and the Special Limited
Partner, pursuant to a side letter, dated as of December 14, 2012, between the REIT, the Operating Partnership, the Special Limited
Partner, American Realty Capital Advisors III, LLC, American Realty Capital Properties III, LLC and Parent, agreed that, in accordance
with Section 8.7(b) of the Partnership Agreement, the Special Limited Partner would contribute its SLP Interest to the Operating
Partnership in exchange for a number of OP Units in the Operating Partnership (“OP Units”) calculated in accordance
with Section 8.7(b) of the Partnership Agreement, which calculation is to be based on the Subordinated Distribution Amount (the
“Exchange”).

 

WHEREAS, in connection
with the consummation of the Mergers, the parties hereto desire to consummate the Exchange in accordance with the terms set forth
below.

 

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

 

 

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ARTICLE
I.

CONTRIBUTION AND EXCHANGE

 

Section
1.1.CONTRIBUTION TRANSACTION. The Special Limited Partner hereby agrees to assign,
set over, and transfer to the Operating Partnership, absolutely and unconditionally and free and clear of all pledges, claims,
liens, charges, restrictions, exceptions, reservations, covenants and conditions, encumbrances and security interests of any kind
or nature whatsoever (“Liens”), all of its right, title and interest in and to the SLP Interest, together with
$750,000.00 in cash (the “Cash Consideration”), in exchange for the consideration set forth in Section 1.2,
and the Operating Partnership hereby agrees to redeem the SLP Interest.

 

Section
1.2.CONSIDERATION. The Special Limited Partner hereby irrevocably agrees to
accept, in exchange for the SLP Interest and the Cash Consideration,  an amount of OP Units equivalent to 7,318,356 “OP
Units” of the Parent OP in accordance with the Merger Agreement.

 

Section
1.3.ISSUANCE OF OP UNITS. The Operating Partnership shall, in exchange for the
SLP Interest and the Cash Consideration contributed by the Special Limited Partner, issue to the Special Limited Partner an amount of OP Units equivalent to 7,318,356 “OP
Units” of the Parent OP in accordance with the Merger Agreement. No fractional OP Units shall be issued pursuant to this Agreement. If the formula for calculating the number of OP Units
issuable pursuant to this Agreement would require the issuance of a fractional OP Unit, the number of OP Units which the Special
Limited Partner shall be entitled to receive shall be rounded to the nearest whole number. The Operating Partnership shall revise
the Partnership Agreement to reflect the Special Limited Partner’s ownership of such OP Units. Immediately thereafter, upon
the consummation of the Mergers, the OP Units will be converted into “OP Units” of the Parent OP in accordance with
the Merger Agreement.

 

Section
1.4.TAX TREATMENT OF THE EXCHANGE. The parties hereto intend and agree to treat,
for U.S. federal income tax purposes, the contribution of the SLP Interest and the Cash Consideration in exchange for OP Units
effectuated pursuant to this Agreement as a contribution to a partnership pursuant to Section 721 of the Internal Revenue Code
of 1986, as amended, and no party shall maintain any position to the contrary on any tax return or otherwise. Furthermore, the
parties hereto intend and agree that (a) consistent with the definition of “Gross Asset Value” contained in the Partnership
Agreement, the contribution by the Special Limited Partner of the Cash Consideration in exchange for OP Units pursuant to the terms
of this Agreement is a “book-up” event pursuant to which the Gross Asset Value of the Operating Partnership’s
assets should be adjusted to reflect the relative economic interests of the Partners, and that such adjustment in Gross Asset Value
of the Operating Partnership’s assets shall result in a corresponding adjustment, if any, to the Capital Accounts of the
Partners including, for the avoidance of doubt, the Capital Account of the Special Limited Partner and the holder of Class B Units
and (b) such booked-up Capital Accounts of the Partners will be reflected in the books and records of the Merged OP.

 

ARTICLE
II.

REPRESENTATIONS AND WARRANTIES OF THE SPECIAL LIMITED PARTNER

 

The Special Limited
Partner hereby represents, warrants and agrees with the Operating Partnership and the Parent OP that:

 

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

 

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Section
2.2.DUE AUTHORIZATION. The execution, delivery and performance of this Agreement
by the Special Limited Partner has been duly and validly authorized by all necessary action of the Special Limited Partner. This
Agreement and each agreement, document and instrument executed and delivered by or on behalf of the Special Limited Partner pursuant
to this Agreement constitute, or when executed and delivered will constitute, the legal, valid and binding obligation of the Special
Limited Partner, each enforceable against the Special Limited Partner in accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors’ rights and general principles of equity.

 

Section
2.3.OWNERSHIP OF SLP INTEREST. The Special Limited Partner is the record owner
of the SLP Interest and has the power and authority to transfer, assign and convey to the Operating Partnership the SLP Interest
free and clear of any Liens. There are no rights, subscriptions, warrants, options, conversion rights, preemptive rights, agreements,
instruments or understandings of any kind outstanding (i) relating to the SLP Interest or (ii) to purchase, transfer or otherwise
acquire, or in any way encumber, any of the interests which comprise the SLP Interest or any securities or obligations of any kind
convertible into any of the interests which comprise the SLP Interest.

 

Section
2.4.CONSENTS AND APPROVALS. Except as shall have been satisfied on or prior to
the Closing Date, no consent, waiver, approval or authorization of, or filing with, any individual, partnership, corporation, limited
liability company, joint venture, association, trust, unincorporated organization or other entity, or a government or agency or
political subdivision thereof (each, a “Person”) or governmental authority or under any applicable laws is required
to be obtained by the Special Limited Partner in connection with the execution, delivery and performance of this Agreement and
the transactions contemplated hereby.

 

Section
2.5.NO VIOLATION. None of the execution, delivery or performance of this Agreement,
any agreement contemplated hereby between the parties to this Agreement and the transactions contemplated hereby or thereby does
or will, with or without the giving of notice, lapse of time, or both, violate, conflict with, result in a breach of, or constitute
a default under or give to others any right of termination, acceleration, cancellation or other right under (a) any agreement,
document or instrument to which the Special Limited Partner is a party or by which the Special Limited Partner or the SLP Interest
is bound, (b) any term or provision of any judgment, order, writ, injunction, or decree binding on the Special Limited Partner,
or (c) any provisions of the organizational or other formation or governing documents or agreements of the Special Limited Partner.

 

ARTICLE
III.

REPRESENTATIONS AND WARRANTIES OF THE OPERATING PARTNERSHIP

 

The Operating Partnership
hereby represents, warrants and agrees with the Special Limited Partner and the Parent OP as follows:

 

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

 

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Section
3.2.DUE AUTHORIZATION. The execution, delivery and performance of this Agreement
by the Operating Partnership have been duly and validly authorized by all necessary action of the Operating Partnership. This Agreement
and each agreement, document and instrument executed and delivered by or on behalf of the Operating Partnership pursuant to this
Agreement constitute, or when executed and delivered will constitute, the legal, valid and binding obligation of the Operating
Partnership, each enforceable against the Operating Partnership in accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors’ rights and general principles of equity.

 

Section
3.3.CONSENTS AND APPROVALS. No consent, waiver, approval or authorization of, or
filing with, any Person or governmental authority or under any applicable laws is required to be obtained by the Operating Partnership
in connection with the execution, delivery and performance of this Agreement and the transactions contemplated hereby.

 

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

 

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

 

ARTICLE
IV.

GENERAL PROVISIONS

 

Section
4.1.DEFINITIONS. Capitalized terms used herein that are not otherwise defined herein
shall have the meaning ascribed to them in the Partnership Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section
4.10.FURTHER ASSURANCES. Each of the parties shall, without further consideration,
take such action and execute and deliver such documents as may be necessary to carry out this Agreement.

 

Section
4.11.AMENDMENTS. This Agreement may be amended, supplemented or otherwise modified
only by written instrument signed by all the parties hereto.

 

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be signed by their respective duly authorized officers or representatives as of
the date first written above.

 

 

 

	 	AMERICAN REALTY CAPITAL OPERATING PARTNERSHIP III, L.P.
	 	 
	 	By:	AMERICAN REALTY CAPITAL TRUST III, INC.,
	 	 	Its general partner
	 	 	 
	 	By: 	/s/ Edward M. Weil, Jr.
	 	 	Name: Edward M. Weil, Jr.
	 	 	Title: President and Chief Operating Officer

 

 

	 	AMERICAN REALTY CAPITAL TRUST III SPECIAL LIMITED PARTNER, LLC
	 	 
	 	By:	AR CAPITAL, LLC,
	 	 	Its managing member
	 	 	 
	 	By:	/s/ Brian S. Block
	 	 	Name: Brian S. Block
	 	 	Title: Authorized Signatory

 

 

	ACKNOWLEDGED AND AGREED:	 	 	 	 
	 	 	 	 	 
	ARC PROPERTIES OPERATING PARTNERSHIP, L.P.	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	By: 	AMERICAN REALTY CAPITAL PROPERTIES, INC.,	 	 	 	 
	 	Its general partner	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	/s/ Nicholas S. Schorsch	 	 	 	 
	 	Name: Nicholas S. Schorsch	 	 	 	 
	 	Title: Chief Executive Officer	 	 	 	 

 

    	6AMERICAN REALTY CAPITAL PROPERTIES,
INC.

2013 ADVISOR MULTI-YEAR OUTPERFORMANCE AGREEMENT

 

This 2013 ADVISOR MULTI-YEAR OUTPERFORMANCE
AGREEMENT (this “Agreement”) made as of February 28, 2013 (the “Grant Date”), between AMERICAN
REALTY CAPITAL PROPERTIES, INC., a Maryland corporation (the “Company”), its subsidiary ARC
Properties Operating Partnership, L.P., a Delaware limited partnership and the entity through which the Company conducts
substantially all of its operations (the “Partnership”), and ARC Properties Advisors LLC, a Delaware limited
liability company, the Company’s manager (the “Advisor”).

 

RECITALS

 

The Advisor provides services to the Company
pursuant to the Management Agreement by and between the Company and the Advisor dated as of September 6, 2011 (the “Management
Agreement”).

 

The Compensation Committee (the “Committee”)
of the Board of Directors of the Company (the “Board”) approved this Agreement to provide the Advisor with the
incentive compensation described in this Agreement (the “Award”) and thereby provide additional incentive for
the Advisor to promote the progress and success of the business of the Company and its affiliates, including the Partnership. This
Agreement evidences the Award and is subject to the terms and conditions set forth herein and in the Partnership Agreement (as
defined herein).

 

NOW, THEREFORE, the Company, the Partnership
and the Advisor agree as follows:

 

1.Administration. The Award
granted under this Agreement shall be administered by the Committee; provided that all powers of the Committee hereunder
can be exercised by the full Board if the Board so elects. The Committee shall have the discretionary authority to make all determinations
regarding the Award, including, without limitation, the interpretation and construction of the Award and the determination of relevant
facts; provided such determinations are made in good faith and are consistent with the purpose and intent of the Award. Except
as expressly provided herein, no such action by the Committee shall adversely affect the rights of the Advisor to any earned and
outstanding Award LTIP Units. Subject to the terms hereof, all decisions made by the Committee shall be final, conclusive and binding
on all persons, including the Company and the Advisor. No member of the Committee, nor any other member of the Board or any officer
or employee of the Company acting on behalf of the Committee, shall be personally liable for any action, determination or interpretation
taken or made in good faith with respect to the Award, and all members of the Committee and each other member of the Board and
any officer or employee of the Company acting on their behalf shall, to the extent permitted by law, be fully indemnified and protected
by the Company in respect of any such action, determination or interpretation.

 

2.Definitions. As used herein:

 

“Additional Shares”
means (without double-counting), as of a particular date of determination, the sum of (A) the number of shares of Common Stock
plus (B) the REIT Shares Amount for all Partnership Units (assuming that such Partnership Units were converted, exercised,
exchanged or redeemed for OP Units as of such date of determination at the applicable conversion, exercise, exchange or redemption
rate (or rate deemed applicable by the Committee if there is no such stated rate) and such OP Units were then tendered to the Partnership
for redemption pursuant to Section 8.4 of the Partnership Agreement as of such date) other than those Partnership Units held by
the Company, in the case of each (A) and (B), to the extent issued after the Effective Date and on or before such date of determination
in a capital raising transaction, in exchange for assets or securities, or upon the acquisition of another entity; provided,
that for the avoidance of doubt, this definition of “Additional Shares” shall exclude: (i) shares of Common Stock issued
after the Effective Date upon exercise of stock options or upon the exchange (directly or indirectly) of LTIP Units or other Partnership
Units issued to employees, non-employee directors, consultants, advisors or other persons or entities as incentive or other compensation,
(ii) shares of Common Stock awarded after the Effective Date to employees or other persons or entities in exchange for services
provided or to be provided to the Company or any of its affiliates, and (iii) all Initial Shares.

 

    	 

    	 

    
 

“Adjusted Market Cap”
means (A) the Company’s Initial Market Cap minus the value of any Buyback Shares repurchased or redeemed since the Effective
Date plus the value of any Additional Shares issued after the Effective Date (prorated to reflect the number of days they were
outstanding since the Effective Date) with respect to the calculation of (i) the Annual Amount on the First Valuation Date, (ii)
the Interim Amount, (iii) the Final Absolute TRS Amount and (iv) the Final Relative TRS Amount, and (B) the Company’s Adjusted
Market Cap calculated pursuant to (A) as of the prior Valuation Date minus the value of any Buyback Shares repurchased or redeemed
since the prior Valuation Date plus the value of any Additional Shares issued after the prior Valuation Date (prorated to reflect
the number of days they were outstanding since the prior Valuation Date) with respect to the calculation of the Annual Amount on
the Second Valuation Date and the Final Valuation Date.

 

“Annual Absolute TRS”
means, as of the each Valuation Date and provided the Company’s TRS Percentage exceeds seven percent (7%) for the period
commencing on (A) the Commencement Date with respect to the First Valuation Date and (B) the prior Valuation Date with respect
to the Second Valuation Date and the Final Valuation Date, a dollar amount equal to four percent (4%) of the dollar amount by which,
if any, the amount of the Company’s Total Return, determined as of such date, exceeds the Threshold Amount, determined as
of such date.

 

“Annual Amount” means,
as of a Valuation Date, an amount equal to up to one and one-quarter percent (1.25%) of the Company’s Initial Market Cap
based on the level of achievement of Annual Absolute TRS and Annual Relative TRS as of such Valuation Date for the period commencing
on (A) the Commencement Date with respect to the First Valuation Date and (B) the prior Valuation Date with respect to the Second
Valuation Date and the Final Valuation Date.

 

“Annual Relative TRS”
means, as of each Valuation Date, a dollar amount equal to four percent (4%) of any amount by which the Company’s Total
Return for the period commencing on (A) the Commencement Date with respect to the First Valuation Date and (B) the prior Valuation
Date with respect to the Second Valuation Date and the Final Valuation Date, exceeds the Relative Threshold Amount as of such date;
provided, that the amount so earned will be subject to reduction in accordance with a ratable sliding scale factor so that
(A) if the Company’s TRS Percentage for the applicable period is six percent (6%) or more, there will be no reduction to
Annual Relative TRS for such period; (B) Annual Relative TRS for such period shall be reduced by fifty percent (50%) if such TRS
Percentage for the applicable period is zero percent (0%); (C) Annual Relative TRS for such period shall be reduced based on a
linear interpolation between the foregoing reduction factors if the Company’s TRS Percentage for the applicable period is
between zero percent (0%) and six percent (6%); and (D) Annual Relative TRS for such period shall be reduced by one hundred percent
(100%) if the TRS Percentage for the applicable period is below zero percent (0%).

 

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“Award OP Units”
has the meaning set forth in Section 7 hereof.

 

“Award LTIP Units”
has the meaning set forth in Section 3(a) hereof.

 

“Beneficial Owner”
has the meaning set forth in Rule 13d-3 under the Exchange Act.

 

“Buyback Shares”
means (without double-counting), as of a particular date of determination, (A) shares of Common Stock or (B) the REIT
Shares Amount for Partnership Units (assuming that such Partnership Units were converted, exercised, exchanged or redeemed for
OP Units as of such date of determination at the applicable conversion, exercise, exchange or redemption rate (or rate deemed applicable
by the Committee if there is no such stated rate) and such OP Units were then tendered to the Partnership for redemption pursuant
to Section 8.4 of the Partnership Agreement as of such date), other than those Partnership Units held by the Company, in the case
of each (A) and (B), to the extent repurchased by the Company after the Effective Date and on or before such date of determination
in a stock buyback transaction or in a redemption of Partnership Units for cash pursuant to Section 8.4 of the Partnership Agreement;
provided, that for the avoidance of doubt, this definition of “Buyback Shares” shall exclude: (i) shares of
Common Stock issued after the Effective Date upon exercise of stock options or upon the exchange (directly or indirectly) of LTIP
Units or other Partnership Units issued to employees, non-employee directors, consultants, advisors or other persons or entities
as incentive or other compensation, and (ii) shares of Common Stock awarded after the Effective Date to employees or other persons
or entities in exchange for services provided or to be provided to the Company or any of its affiliates.

 

“Change of Control”
means and includes any of the following events:

 

(i)any Person is or becomes Beneficial
Owner, directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting power
of the then outstanding securities of the Company, excluding (A) any Person who becomes such a Beneficial Owner in connection
with a transaction described in clause (x) of subsection (ii) below and (B) any Person who becomes such a Beneficial
Owner through the issuance of such securities with respect to purchases made directly from the Company; or

 

(ii)the consummation of a merger
or consolidation of the Company with any other Person or the issuance of voting securities of the Company in connection with a
merger or consolidation of the Company (or any direct or indirect subsidiary of the Company) pursuant to applicable stock exchange
requirements, other than (x) a merger or consolidation which would result in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) thirty percent (30%) or more of the combined voting power
of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation,
or (y) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which
no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing thirty percent
(30%) or more of the combined voting power of the then outstanding securities of the Company; or

 

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(iii)the consummation of a sale
or disposition by the Company of all or substantially all of the assets of the Company; or

 

(iv)persons who, as of the Effective
Date, constitute the Board (the “Incumbent Directors”) cease for any reason, including, without limitation,
as a result of a tender offer, proxy contest, merger or similar transaction, to constitute at least a majority of the Board, provided
that any person becoming a director of the Company subsequent to such date shall be considered an Incumbent Director if such person’s
election was approved by or such person was nominated for election a vote of at least a majority of the Incumbent Directors.

 

Notwithstanding the foregoing, with respect to any payment that
is triggered upon a Change in Control, a transaction shall not be deemed to be a Change in Control unless
such transaction constitutes a “change in control event” within the meaning of Section 409A of the Code.

 

“Code” means the
Internal Revenue Code of 1986, as amended.

 

“Commencement Date”
means December 11, 2012.

 

“Common Stock” means
the Company’s common stock, par value $0.01 per share, either currently existing or authorized hereafter.

 

“Common Stock Price”
means, as of a particular date, the average of the Fair Market Value of one share of Common Stock over the fifteen (15) consecutive
trading days ending on, and including, such date (or, if such date is not a trading day, the most recent trading day immediately
preceding such date); provided, however, that if such date is the date upon which a Transactional Change of Control occurs,
the Common Stock Price as of such date shall be equal to the fair value, as determined by the Committee, of the total consideration
paid or payable in the transaction resulting in the Transactional Change of Control for one share of Common Stock.

 

“Continuous Service”
means the Advisor’s continuous service as manager of the Company without interruption or termination.

 

“Convertible Preferred Stock” means
the series of  the Company’s preferred stock, par value $0.01 per share, designated as Series A Convertible Preferred
Stock and Series B Convertible Preferred Stock.

 

“Conversion Factor”
has the meaning set forth in the Partnership Agreement.

 

“Effective Date”
means the date of the closing of the merger contemplated under the Merger Agreement.

 

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

 

“Fair Market Value”
means, as of any given date, the fair market value of a security determined by the Committee using any reasonable method and in
good faith (such determination will be made in a manner that satisfies Section 409A of the Code and in good-faith as required
by Section 422(c)(1) of the Code); provided that (A) if such security is admitted to trading on a national securities
exchange, the fair market value of such security on any date shall be the closing sale price reported for such security on the
principal stock exchange or, if applicable, any other national exchange on which the security is traded or admitted to trading
on such date on which a sale was reported; and (B) if such security is admitted to quotation on the National Association of
Securities Dealers Automated Quotation System (“NASDAQ”) or a successor quotation system, the fair market value
of such security on any such date shall be the average of the highest bid and lowest asked prices for such security on the system
on such date on which both the bid and asked prices were reported.

 

“Final Absolute TRS Amount”
means, as of the Final Valuation Date and provided the Company’s TRS Percentage exceeds twenty-one percent (21%) for the
period commencing on the Commencement Date through the Final Valuation Date, a dollar amount equal to four percent (4%) of the
dollar amount by which, if any, the amount of the Company’s Total Return, determined as of such date, exceeds the Threshold
Amount, determined as of such date.

 

“Final Relative TRS Amount”
means, as of the Final Valuation Date, a dollar amount equal to four percent (4%) of any amount by which the Company’s
Total Return for the period commencing on the Commencement Date through the Final Valuation Date exceeds the Relative Threshold
Amount as of such date; provided, that the amount so earned will be subject to reduction in accordance with a ratable sliding
scale factor so that (A) if the Company’s TRS Percentage for the period commencing on the Commencement Date through the Final
Valuation Date is eighteen percent (18%) or more, there will be no reduction to the Final Relative TRS Amount; (B) the Final Relative
TRS Amount shall be reduced by fifty percent (50%) if such TRS Percentage is zero percent (0%); (C) the Final Relative TRS Amount
shall be reduced based on a linear interpolation between the foregoing reduction factors if the Company’s TRS Percentage
is between zero percent (0%) and eighteen percent (18%); and (D) the Final Relative TRS Amount shall be reduced by one hundred
percent (100%) if such TRS Percentage is below zero percent (0%).

 

“Final Valuation Date”
means December 31, 2015.

 

“First Valuation
Date” means December 31, 2013.

 

“Initial Market
Cap” means (A) the 5-day trailing average closing price per share price of the Company’s Common
Stock on the Effective Date multiplied by (B) the number of Initial Shares outstanding on the Effective Date.

 

“Initial Shares”
means 164,822,029 shares of Common Stock, which includes the sum of (A) all shares of Common Stock outstanding as of the
Effective Date ( including the shares of Common Stock into which shares of Convertible Preferred Stock are convertible, and including
any vested and nonvested restricted shares of Common Stock issued under any other incentive plan maintained by the Company prior
to the Effective Date), plus (B) any shares of Common Stock representing the REIT Shares Amount for all Partnership
Units outstanding as of the Effective Date (assuming such Partnership Units were converted, exercised, exchange or redeemed for
OP Units as of the Effective Date at the applicable conversion, exercise, exchange or redemption rate (or rate deemed applicable
by the Committee if there is no such stated rate) and such OP Units were then tendered to the Partnership for redemption pursuant
to Section 8.4 of the Partnership Agreement as of such date) other than Partnership Units held by the Company; provided, that
for the avoidance of doubt, this definition of “Initial Shares” shall exclude shares of Common Stock issuable upon
exercise of stock options or upon the exchange (directly or indirectly) of LTIP Units or other Partnership Units issued to employees,
non-employee directors, consultants, advisors or other persons or entities as incentive or other compensation.

 

    	5

    	 

    
 

“Interim Amount” means,
as of the Second Valuation Date, an amount equal to (A) up to three percent (3%) of the Company’s Initial Market Cap, less
(B) any amount of the Annual Amount achieved through the Second Valuation Date (such that the maximum level of achievement through
the Second Valuation Date shall not exceed three (3%) of the Company’s Initial Market Cap), based on the level of achievement
of: (x) as of the Second Valuation Date and provided the Company’s TRS Percentage exceeds fourteen percent (14%) for the
period commencing on the Commencement Date, a dollar amount equal to four percent (4%) of the dollar amount by which, if any, the
amount of the Company’s Total Return, determined as of such date, exceeds the Threshold Amount, determined as of such date
(“Interim Absolute TSR”), and (y) as of the Second Valuation Date, a dollar amount equal to four percent (4%)
of any amount by which the Company’s Total Return for the period commencing on the Commencement Date, exceeds the Relative
Threshold Amount as of such date (“Interim Relative TRS”); provided, that the amount so earned
will be subject to reduction in accordance with a ratable sliding scale factor so that (A) if the Company’s TRS Percentage
for the applicable period is twelve percent (12%) or more, there will be no reduction to Interim Relative TRS for such period;
(B) Interim Relative TRS for such period shall be reduced by fifty percent (50%) if such TRS Percentage for the applicable period
is zero percent (0%); (C) Interim Relative TRS for such period shall be reduced based on a linear interpolation between the foregoing
reduction factors if the Company’s TRS Percentage for the applicable period is between zero percent (0%) and twelve percent
(12%); and (D) Interim Relative TRS for such period shall be reduced by one hundred percent (100%) if the TRS Percentage for the
applicable period is below zero percent (0%).

 

“LTIP Units” means
LTIP Units, as such term is defined in the Partnership Agreement.

 

“Market Cap” means
(A) Initial Market Cap with respect to the calculation of (i) the Annual Amount on the First Valuation Date, (ii) the Interim Amount,
(iii) the Final Absolute TRS Amount and (iv) the Final Relative TRS Amount, and (B) Adjusted Market Cap calculated as of the prior
Valuation Date with respect to the calculation of the Annual Amount on the Second Valuation Date and the Final Valuation Date.

 

“Maximum Total Outperformance
Amount” means five percent (5%) of the Company’s Initial Market Cap.

 

    	6

    	 

    
 

“Merger Agreement”
means the Agreement and Plan of Merger, dated as of December 14, 2012, by and among the Company, the Partnership, Tiger Acquisition,
LLC, American Realty Capital Trust III, Inc. and American Realty Capital Operating Partnership III, L.P.

 

“OP Units” has the
meaning set forth in the Partnership Agreement.

 

“Partnership Agreement”
means the Second Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of the Effective Date, among
the Company, as general partner, Tiger Acquisition, LLC and any limited partners or general partner that is admitted from time
to time to the Partnership and listed on Exhibit A thereto, as amended, restated or supplemented from time to time.

 

“Partnership Units”
has the meaning set forth in the Partnership Agreement.

 

“Peer Group” means
each of the following companies (i) CapLease, Inc.; (ii) EPR Properties; (iii) Getty Realty Corporation; (iv) Lexington Realty
Trust; (v) National Retail Properties, Inc.; and (vi) Realty Income Corporation; provided, that if (A) any of the foregoing
companies ceases to exist and the Committee determines that there is no successor to such company or (B) the Committee reasonably
determines that any of the forgoing companies is no longer suitable for the purposes of this Agreement, then the Committee in its
good faith reasonable discretion shall select a comparable company for subsequent periods, or if the Committee in its reasonable
good faith discretion so determines, for the entire period from the Commencement Date to the Valuation Date.

 

“Peer Group Return Percentage”
means, the median percentage return to stockholders of the Peer Group (A) for the period commencing on the Commencement Date and
ending on the First Valuation Date with respect to the calculation of Annual Relative TRS for the First Valuation Date, (B) for
the period commencing on the day after the prior Valuation Date and ending on the next Valuation Date with respect to calculation
of Annual Relative TRS for the Second Valuation Date and the Final Valuation Date and (C) for the period commencing on the Commencement
Date and ending on the Second Valuation Date and the Final Valuation Date with respect to calculating Interim Relative TRS and
Final Relative TRS, respectively; in each case as calculated by a consultant engaged by the Committee and as approved by the Committee
in its reasonable discretion.

 

“Person” means an
individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization,
other entity or “group” (as defined in the Exchange Act).

 

“REIT Shares Amount”
has the meaning set forth in the Partnership Agreement.

 

“Relative Threshold Amount”
means an amount equal to (A) the Company’s Market Cap multiplied by (B) the Peer Group Return Percentage.

 

“Second Valuation Date”
means December 31, 2014.

 

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

 

    	7

    	 

    
 

“Subsidiary” means
any corporation or other entity (other than the Company) in which the Company has more than a 50 percent interest, either directly
or indirectly.

 

“Threshold Amount”
means an amount equal to (A) with respect to Annual Absolute TRS, seven percent (7%) of the value of the Company’s Adjusted
Market Cap for the period commencing on (x) the Commencement Date with respect to the First Valuation Date and (y) the prior Valuation
Date with respect to the Second Valuation Date and the Final Valuation Date, (B) with respect to Interim Absolute TRS, fourteen
percent (14%) of the value of the Company’s Adjusted Market Cap for the period commencing on the Commencement Date, and (C)
with respect to the Final Absolute TRS Amount, twenty-one percent (21%) of the value of the Company’s Adjusted Market
Cap for the period commencing on the Commencement Date.

 

“Total Outperformance Amount”
means, as of the Final Valuation Date, a dollar amount equal to the algebraic sum of: (A) the Final Absolute TRS Amount, (B) the
Final Relative TRS Amount, (C) the Annual Amounts determined as of each Valuation Date and (D) the Interim Amount; provided
that (i) if the resulting amount is a negative number, the Total Outperformance Amount shall be zero, and (ii) in no
event shall the Total Outperformance Amount exceed the Maximum Total Outperformance Amount.

 

“Total Return” means
(without double-counting), as of a particular date of determination, a dollar amount equal to the sum of: (A) the Total Shares
as of such date of determination multiplied by the Common Stock Price as of such date, (“Current Market Cap”),
minus (B) (x) the Initial Market Cap with respect to the calculation of (i) the Annual Amount on the First Valuation Date,
(ii) the Interim Amount, (iii) the Final Absolute TRS Amount and (iv) the Final Relative TRS Amount, and (y) the Adjusted Market
Cap calculated as of the prior Valuation Date with respect to the calculation of the Annual Amount on the Second Valuation Date
and the Final Valuation Date, plus (C) an amount equal to the sum of the total dividends and other distributions declared
between the Commencement Date and such date of determination so long as the “ex-dividend” date with respect thereto
falls prior to such date of determination (excluding dividends and distributions paid in the form of additional shares of Common
Stock or Partnership Units), in respect of the Total Shares as of such date of determination (it being understood, for the avoidance
of doubt, that such total dividends and distributions shall be calculated by reference to actual securities outstanding as of each
record date with respect to each applicable dividend or distribution payment date, and not by multiplying the aggregate amount
of distributions paid on one OP Unit that was outstanding as of the Commencement Date between the Commencement Date and such date
of determination by the number of Total Shares as of the date of determination).

 

“Total Shares” means
(without double-counting), as of a particular date of determination, the algebraic sum of: (A) the Initial Shares, plus
(B) the Additional Shares, minus (C) all Buyback Shares repurchased or redeemed between the Effective Date and
such date of determination.

 

“Total OPP Unit Equivalent”
means the aggregate of the (i) sum of Annual OPP Unit Equivalents and the Interim OPP Unit Equivalent (the “Earned Annual
and Interim OPP Unit Equivalents”) and (ii) the excess (if any) of the Final OPP Unit Equivalent over the Earned Annual and
Interim OPP Unit Equivalents.

 

    	8

    	 

    
 

“Transactional Change of Control”
means (A) a Change of Control described in clause (a) of the definition thereof where the Person makes a tender offer
for Common Stock, (B) a Change of Control described in clause (b) of the definition thereof where the Company is not
the surviving entity, or (C) a Change of Control described in clause (c) of the definition thereof.

 

“Transfer” has the
meaning set forth in Section 7 hereof.

 

“TRS Percentage”
means the Company’s Total Return divided by the Market Cap, with the result multiplied by 100 and expressed as a percentage.

 

“Valuation Date”
means the First Valuation Date, the Second Valuation Date and the Final Valuation Date, as applicable.

 

3.Outperformance Award.

 

a.The Advisor is hereby
granted an Award, consisting of  8,241,101 LTIP Units (the “Award LTIP Units”), which will be
subject to forfeiture and vesting to the extent provided in this Section 3 and Section 4 hereof.

 

b.As soon as practicable following
each Valuation Date, but as of such Valuation Date, the Committee will determine the applicable Annual Amount and divide the resulting
dollar amount by the Common Stock Price calculated as of the applicable Valuation Date (appropriately adjusted to the extent that
the Conversion Factor is greater or less than 1.0); the resulting number of unit equivalents determined for each Valuation Date
referred to herein as the “Annual OPP Unit Equivalent”.

 

c.As soon as practicable following
the Second Valuation Date, but as of the Second Valuation Date, the Committee will determine the Interim Amount and divide the
resulting dollar amount by the Common Stock Price calculated as of the Second Valuation Date (appropriately adjusted to the extent
that the Conversion Factor is greater or less than 1.0); the resulting number of unit equivalents determined as of the Second Valuation
Date referred to herein as the “Interim OPP Unit Equivalent”.

 

d.As soon as practicable following
the Final Valuation Date, but as of the Final Valuation Date, the Committee will:

 

(i)determine the Final Absolute
TRS Amount;

 

(ii)determine the Final Relative
TRS Amount;

 

(iii)determine the Total Outperformance
Amount; and

 

(iv)divide the resulting dollar
amounts by the Common Stock Price calculated as of the Final Valuation Date (appropriately adjusted to the extent that the Conversion
Factor is greater or less than 1.0); the resulting number of unit equivalents determined as of the Final Valuation Date referred
to herein as the “Final OPP Unit Equivalent.”

 

    	9

    	 

    
 

Exhibit A hereto sets forth
a hypothetical example of the calculation of the Final Absolute TRS Amount, the Final Relative TRS Amount and the Total Outperformance
Amount, without regard to the calculation of any Annual Amount or the Interim Amount, based on factual assumptions as of the date
of this Agreement. For the avoidance of doubt, Exhibit A is merely illustrative and will not control the determination
of the Total OPP Unit Equivalent as of the Final Valuation Date.

 

If the Total OPP Unit Equivalent is
smaller than the number of Award LTIP Units previously issued to the Advisor, as of the Final Valuation Date, the Advisor shall
forfeit the number of Award LTIP Units equal to the difference without payment of any consideration by the Partnership; thereafter
the term Award LTIP Units will refer only to the Award LTIP Units that were not so forfeited and neither the Advisor nor any of
its successors, members or their respective assigns or personal representatives will have any further rights or interests in the
Award LTIP Units that were so forfeited. If the Total OPP Unit Equivalent is greater than the number of Award LTIP Units previously
issued to the Advisor: (A) the Company shall cause the Partnership to issue to the Advisor, as of the Final Valuation Date,
a number of additional LTIP Units equal to the difference; (B) such additional LTIP Units shall be added to the Award LTIP
Units previously issued, if any, and thereby become part of this Award; and (C) the Company and the Partnership shall take
such action as is necessary to accomplish the grant of such additional LTIP Units; provided that such issuance will be subject
to the Advisor executing and delivering such documents, comparable to the documents executed and delivered in connection with this
Agreement, as the Company and/or the Partnership reasonably request in order to comply with all applicable legal requirements,
including, without limitation, federal and state securities laws. If the Total OPP Unit Equivalent is the same as the number of
Award LTIP Units previously issued to the Advisor, then there will be no change to the number of Award LTIP Units under this Award.

 

e.If any of the Award LTIP Units
have been earned based on performance as provided in Sections 3(b), (c) and (d), subject to Section 4 hereof,
the Award LTIP Units shall become vested in the following amounts and at the following times, provided that the Continuous
Service of the Advisor must continue through the applicable vesting date or the accelerated vesting date provided in Section 4
hereof, as applicable:

 

(i)one-third (1/3) on December
31, 2015;

 

(ii)one-third (1/3) on December
31, 2016; and

 

(iii)one-third (1/3) on December
31, 2017.

 

f.Within thirty (30) days following
each vesting date under Section 3(e), the Advisor, in its sole discretion, shall be entitled to convert such Award LTIP
Units that vested on such date into OP Units.

 

g.Any Award LTIP Units that do
not become vested pursuant to Section 3(e) or Section 4 hereof shall, without payment of any consideration
by the Partnership automatically and without notice be forfeited and be and become null and void, and neither the Advisor nor any
of its successors, heirs, assigns, members or their respective assigns or personal representatives will thereafter have any further
rights or interests in such forfeited Award LTIP Units.

 

    	10

    	 

    
 

4.Termination/ Change of Control.

 

a.In the event the Company terminates
the Advisor’s Continuous Service for any reason prior to the Final Valuation Date, the calculations provided in Sections
3(b), (c) and (d) hereof shall be performed as of the Valuation Date next following such termination (and if such Valuation
Date is not the Final Valuation Date, on the Final Valuation Date as well) as if the termination of Continuous Service had not
occurred and the Advisor shall be fully (100%) vested in the Total OPP Unit Equivalent as so determined.
In the event the Advisor terminates its Continuous Service prior to the Final Valuation Date, the calculations described in the
preceding sentence shall be performed as of the Valuation Date next following such termination and the Advisor shall be fully (100%)
vested in the Total OPP Unit Equivalent as determined on such date. In either case, within thirty
(30) days of the date such calculations are completed, the Advisor, in its sole discretion, shall be entitled to convert the Total
OPP Unit Equivalent so determined into OP Units or their equivalent in cash.

 

b.In the event of a termination
of the Advisor’s Continuous Service for any reason after the Final Valuation Date, any then unvested Award LTIP Units shall
be fully (100%) vested and nonforfeitable hereunder. Within thirty (30) days of the date such termination,
the Advisor, in its sole discretion, shall be entitled to convert such Award LTIP Units into OP Units or their equivalent in cash.

 

c.In the event of a Change in
Control prior to the Final Valuation Date, (i) the Advisor shall become fully (100%) vested in any Award LTIP Units that had been
earned but were unvested prior to the Change in Control and within thirty (30) days of the date such
Change in Control, the Advisor, in its sole discretion, shall be entitled to convert such Earned Annual and Interim OPP
Units into OP Units or their equivalent in cash; and (ii) the calculations provided in Sections
3(b), (c) and (d) hereof shall be performed as of the Valuation Date next following such Change in Control (and if such Valuation
Date is not the Final Valuation Date, on the Final Valuation Date as well) and the Advisor shall be fully (100%) vested in the
Total OPP Unit Equivalent as so determined and within thirty (30) days of the date such calculations
are completed, the Advisor, in its sole discretion, shall be entitled to convert the number of Award LTIP Units so determined into
OP Units or their equivalent in cash.

 

d.In the event of a Change in
Control after the Final Valuation Date, any then unvested Award LTIP Units shall be fully (100%) vested and nonforfeitable hereunder.
Within thirty (30) days of the date such Change in Control, the Advisor, in its sole discretion, shall
be entitled to convert such Award LTIP Units into OP Units or their equivalent in cash.

 

5.Rights of Advisor. The
Advisor shall have no rights with respect to this Agreement (and the Award evidenced hereby) (i) until the closing contemplated
under the Merger Agreement occurs, and (ii) unless the Advisor shall have accepted this Agreement prior to the close of business
on the Effective Date by (a) signing and delivering to the Partnership a copy of this Agreement and (b) unless the Advisor is already
a Limited Partner (as defined in the Partnership Agreement), signing, as a Limited Partner, and delivering to the Partnership a
counterpart signature page to the Partnership Agreement (attached hereto as Exhibit B). Upon acceptance of this Agreement
by the Advisor, the Partnership Agreement shall be amended to reflect the issuance to the Advisor of the Award LTIP Units so accepted.
Thereupon, the Advisor shall have all the rights of a Limited Partner of the Partnership with respect to the Award LTIP Units,
as set forth in the Partnership Agreement, subject, however, to the restrictions and conditions specified herein. Award LTIP Units
constitute and shall be treated for all purposes as the property of the Advisor, subject to the terms of this Agreement and the
Partnership Agreement.

 

    	11

    	 

    
 

6.Distributions.

 

a.The Advisor shall be entitled
to receive distributions with respect to the Award LTIP Units to the extent provided for in the Partnership Agreement, as modified
hereby.

 

b.The LTIP Unit Distribution
Participation Date (as defined in the Partnership Agreement) with respect to any Award LTIP Unit shall be the date as of which
such Award LTIP Unit is earned pursuant to Sections 3(b), (c) and (d), and on such date, the Partnership will pay the Advisor,
for each Award LTIP Unit earned, an amount in cash equal to the quotient of (i) the per unit amount of all distributions paid with
respect to each OP Unit on or after the Effective Date and before the date on which such Award LTIP Unit is earned (other than
those with respect to which an adjustment was made pursuant to Section 8 hereof) divided by (ii) the Conversion Factor.

 

c. All distributions paid with respect
to Award LTIP Units shall be fully vested and non-forfeitable when paid, whether or not the underlying LTIP Units have been earned
based on performance or have become vested based on the passage of time as provided in Section 3 or Section 4 hereof.

 

7.Restrictions on Transfer.
Except as otherwise permitted by the Committee in its sole discretion, none of the Award LTIP Units granted hereunder nor any of
the OP Units of the Partnership into which such Award LTIP Units may be converted (the “Award OP Units”) shall
be sold, assigned, transferred, pledged, hypothecated, given away or in any other manner disposed of, encumbered, whether voluntarily
or by operation of law (each such action a “Transfer”). The transferee in any Transfers of Award LTIP Units
or Award OP Units permitted by the Committee must agree in writing with the Company and the Partnership to be bound by all the
terms and conditions of this Agreement and that subsequent transfers shall be prohibited except those in accordance with this Section 7.
Additionally, all Transfers of Award LTIP Units or Award OP Units must be in compliance with all applicable securities laws (including,
without limitation, the Securities Act) and the applicable terms and conditions of the Partnership Agreement. In connection with
any Transfer of Award LTIP Units or Award OP Units, the Partnership may require the Advisor to provide an opinion of counsel, satisfactory
to the Partnership, that such Transfer is in compliance with all federal and state securities laws (including, without limitation,
the Securities Act). Any attempted Transfer of Award LTIP Units or Award OP Units not in accordance with the terms and conditions
of this Section 7 shall be null and void, and the Partnership shall not reflect on its records any change in record
ownership of any Award LTIP Units or Award OP Units as a result of any such Transfer, shall otherwise refuse to recognize any such
Transfer and shall not in any way give effect to any such Transfer of any Award LTIP Units or Award OP Units. Except as provided
in this Section 7, this Agreement is personal to the Advisor, is non-assignable and is not transferable in any manner,
by operation of law or otherwise.

 

    	12

    	 

    
 

8.Changes in Capital Structure.
If (i) the Company shall at any time be involved in a merger, consolidation, dissolution, liquidation, reorganization, exchange
of shares, sale of all or substantially all of the assets or stock of the Company or other transaction similar thereto, (ii) any
reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, significant repurchases of
stock, or other similar change in the capital stock of the Company, (iii) any cash dividend or other distribution to holders
of share of Common Stock or OP Units shall be declared and paid other than in the ordinary course, or (iv) any other extraordinary
corporate event shall occur that in each case in the good faith judgment of the Committee necessitates action by way of equitable
or proportionate adjustment in the terms of this Agreement or the Award LTIP Units to avoid distortion in the value of this Award,
the Committee shall make equitable or proportionate adjustment and take such other action as it deems necessary to maintain the
Advisor’s rights hereunder so that they are substantially proportionate to the rights existing under this Award and the terms
of the Award LTIP Units prior to such event, including, without limitation: (A) interpretations of or modifications to any
defined term in this Agreement; (B) adjustments in any calculations provided for in this Agreement, and (C) substitution
of other awards. All adjustments made by the Committee shall be final, binding and conclusive.

 

9.Miscellaneous.

 

a.Amendments. This Agreement
may be amended or modified only with the consent of the Company and the Partnership acting through the Committee; provided
that any such amendment or modification that adversely affects the rights of the Advisor hereunder must be consented to by the
Advisor to be effective as against it. Notwithstanding the foregoing, this Agreement may be amended in writing signed only by the
Company and the Partnership to correct any errors or ambiguities in this Agreement and/or to make such changes that do not adversely
affect the Advisor’s rights hereunder.

 

b.Legend. The records
of the Partnership evidencing the Award LTIP Units shall bear an appropriate legend, as determined by the Partnership in its sole
discretion, to the effect that such Award LTIP Units are subject to restrictions as set forth herein and in the Partnership Agreement.

 

c.Compliance With Law.
The Partnership and the Advisor will make reasonable efforts to comply with all applicable securities laws. In addition, notwithstanding
any provision of this Agreement to the contrary, no Award LTIP Units will become vested or be paid at a time that such vesting
or payment would result in a violation of any such law.

 

    	13

    	 

    
 

d.Advisor Representations;
Registration.

 

(i)The Advisor hereby represents
and warrants that (A) it understands that it is responsible for consulting its own tax advisor with respect to the application
of the U.S. federal income tax laws, and the tax laws of any state, local or other taxing jurisdiction to which the Advisor is
or by reason of this Award may become subject, to its particular situation; (B) the Advisor has not received or relied upon business
or tax advice from the Company, the Partnership or any of their respective Affiliates (as defined in the Partnership Agreement),
employees, agents, consultants or advisors, in their capacity as such; (C) the Advisor provides services to the Partnership on
a regular basis and in such capacity has access to such information, and has such experience of and involvement in the business
and operations of the Partnership, as the Advisor believes to be necessary and appropriate to make an informed decision to accept
this Award; (D) Award LTIP Units are subject to substantial risks; (E) the Advisor has been furnished with, and has reviewed and
understands, information relating to this Award; (F) the Advisor has been afforded the opportunity to obtain such additional information
as it deemed necessary before accepting this Award; and (G) the Advisor has had an opportunity to ask questions of representatives
of the Partnership and the Company, or persons acting on their behalf, concerning this Award.

 

(ii)The Advisor hereby acknowledges
that: (A) there is no public market for Award LTIP Units or Award OP Units and neither the Partnership nor the Company has
any obligation or intention to create such a market; (B) sales of Award LTIP Units and Award OP Units are subject to restrictions
under the Securities Act and applicable state securities laws; and (C) because of the restrictions on transfer or assignment
of Award LTIP Units and Award OP Units set forth in the Partnership Agreement and in this Agreement, the Advisor may have to bear
the economic risk of its ownership of the Award LTIP Units covered by this Award for an indefinite period of time.

 

e.Section 83(b) Election.
In connection with each separate issuance of LTIP Units under this Award pursuant to Section 3 hereof, the Advisor
may elect to include in gross income in the year of transfer the applicable Award LTIP Units pursuant to Section 83(b) of
the Code substantially in the form attached hereto as Exhibit C and to supply the necessary information in accordance
with the regulations promulgated thereunder. The Advisor agrees to file such election (or to permit the Partnership to file such
election on the Advisor’s behalf) within thirty (30) days after the Grant Date with the IRS Service Center where the Advisor
files its personal income tax returns, provide a copy of such election to the Partnership, and to file a copy of such election
with the Advisor’s U.S. federal income tax return for the taxable year in which the LTIP Units are awarded to the Advisor.
So long as the Advisor holds any Award LTIP Units, the Advisor shall disclose to the Partnership in writing such information as
may be reasonably requested with respect to ownership of LTIP Units as the Partnership may deem reasonably necessary to ascertain
and to establish compliance with provisions of the Code applicable to the Partnership or to comply with requirements of any other
appropriate taxing authority.

 

f.Severability. If, for
any reason, any provision of this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement
not so held invalid, and each such other provision shall to the full extent consistent with law continue in full force and effect.
If any provision of this Agreement shall be held invalid in part, such invalidity shall in no way affect the rest of such provision
not held so invalid, and the rest of such provision, together with all other provisions of this Agreement, shall to the full extent
consistent with law continue in full force and effect.

    	14

    	 

    
 

g.Governing Law. This
Agreement is made under, and will be construed in accordance with, the laws of State of Delaware, without giving effect to the
principles of conflict of laws of such state.

 

h.No Obligation to Continue
Service as a Consultant or Advisor. Neither the Company nor any affiliate is obligated by or as a result of this Agreement
to continue to have the Advisor as a consultant, advisor or other service provider and this Agreement shall not interfere in any
way with the right of the Company or any affiliate to terminate the Advisor’s service relationship at any time.

 

i.Notices. Any notice
to be given to the Company shall be addressed to the Secretary of the Company at 405 Park Avenue, New York, New York, 10022, and
any notice to be given the Advisor shall be addressed to the Advisor at the Advisor’s address as it appears on the records
of the Company, or at such other address as the Company or the Advisor may hereafter designate in writing to the other.

 

j.Withholding and Taxes.
The Advisor shall be solely responsible for all federal, state, local or foreign taxes or any taxes under the Federal Insurance
Contributions Act with respect to this Award. Notwithstanding the foregoing, if at any time the Company or Partnership are required
to withhold any such taxes, the Advisor shall make arrangements satisfactory to the Committee regarding the payment of any United
States federal, state or local or foreign taxes required by law to be withheld with respect to such amount; provided, however,
that if any Award LTIP Units or Award OP Units are withheld (or returned), the number of Award LTIP Units or Award OP Units so
withheld (or returned) shall be limited to the number which have a fair market value on the date of withholding equal to the aggregate
amount of such liabilities based on the minimum statutory withholding rates for federal, state, local and foreign income tax and
payroll tax purposes that are applicable to such supplemental taxable income. The obligations of the Company under this Agreement
will be conditional on such payment or arrangements, and the Company and its affiliates shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment otherwise due to the Advisor.

 

k.Excise Tax. In the event
that the Advisor becomes entitled to any amounts under this Agreement that will be subject to the tax imposed by Section 4999 of
the Code, the provisions of Section 8 of the Company’s Equity Plan will apply to such amounts.

 

l.Headings. The headings
of paragraphs hereof are included solely for convenience of reference and shall not control the meaning or interpretation of any
of the provisions of this Agreement.

 

m.Counterparts. This Agreement
may be executed in multiple counterparts with the same effect as if each of the signing parties had signed the same document. All
counterparts shall be construed together and constitute the same instrument.

 

    	15

    	 

    
 

n.Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and any successors to the Company and the Partnership,
on the one hand, and any successors to the Advisor, on the other hand, by will or the laws of descent and distribution, but this
Agreement shall not otherwise be assignable or otherwise subject to hypothecation by the Advisor.

 

o.Section 409A. This Agreement
shall be construed, administered and interpreted in accordance with a good faith interpretation of Section 409A of the Code.
Any provision of this Agreement that is inconsistent with Section 409A of the Code, or that may result in penalties under
Section 409A of the Code, shall be amended, with the reasonable cooperation of the Advisor and the Company and the Partnership,
to the extent necessary to exempt it from, or bring it into compliance with, Section 409A of the Code. Any payment to Advisor
made pursuant to Section 9(k) will be made in a manner intended to comply with Regulation Section 1.409A-3(i)(1)(v).

 

 

 

 

 

[Signature page follows]

 

 

    	16

    	 

    

 

IN WITNESS WHEREOF, the undersigned have
caused this Agreement to be executed as of the 28th day of February, 2013.

 

	 	AMERICAN REALTY CAPITAL PROPERTIES, INC.
	 	 
	 	By:	/s/ Nicholas S. Schorsch
	 	 	Name: Nicholas S. Schorsch
	 	 	Title: Chief Executive Officer

 

	 	ARC Properties Operating Partnership, L.P.
	 	 
	 	By:	American Realty Capital Properties, Inc., its general partner
	 	 	 
	 	 	 
	 	By:	/s/ Nicholas S. Schorsch
	 	 	Name: Nicholas S. Schorsch
	 	 	Title: Chief Executive Officer
	 	 	 
	 	 	 
	 	ARC PROPERTIES ADVISORS LLC
	 	 	 
	 	By	AR Capital, LLC, its sole member
	 	 	 
	 	By:	/s/ Edward M. Weil, Jr.
	 	 	Name: Edward M. Weil, Jr.
	 	 	Title: Authorized Signatory

 

[Signature Page to Outperformance Award
Agreement]

 

    	 

    	 

    
 

EXHIBIT A

 

 

 

 

 

 

 

 

 

Exhibit A - 1

    	 

    	 

    

 

 

EXHIBIT B

 

FORM OF LIMITED PARTNER SIGNATURE PAGE

 

ARC Properties Advisors LLC (the “Advisor”),
desiring to become one of the within named Limited Partners of ARC Properties Operating Partnership, L.P., hereby accepts all of
the terms and conditions of (including, without limitation, the provisions of the Section 8.02 titled “Power of Attorney”),
and becomes a party to, the Second Amended and Restated Agreement of Limited Partnership, dated as of February 28, 2013 of ARC
Properties Operating Partnership, L.P. as amended through the date hereof (the “Partnership Agreement”). The
Advisor agrees that this signature page may be attached to any counterpart of the Partnership Agreement.

 

	 	 	ARC Properties Advisors LLC
	 	 	 
	 	 	 
	 	 	Name:

Title: 

Date: [•], 201[•]
	 	 	 
	 	 	Address of Limited Partner:
	 	 	 
	 	 	 
	 	 	 

 

 

 

Exhibit B - 1

    	 

    	 

    

 

EXHIBIT C

 

ELECTION TO INCLUDE IN GROSS INCOME
IN YEAR OF TRANSFER OF

PROPERTY PURSUANT TO SECTION 83(b) OF THE INTERNAL REVENUE CODE

 

The undersigned hereby makes an election
pursuant to Section 83(b) of the Internal Revenue Code with respect to the property described below and supplies the following
information in accordance with the regulations promulgated thereunder:

 

		1.	The name, address and taxpayer identification number of the undersigned
are:

Name: ARC Properties Advisors LLC (the “Taxpayer”)

Address: ______________________________________________________

Social Security No./Taxpayer Identification No.: ___-__-____

 

		2.	Description of property with respect to which the election is being made: ______ LTIP Units in ARC Properties Operating Partnership,
L.P. (the “Partnership”).

 

		3.	The date on which the LTIP Units were transferred is February 28, 2013. The taxable year to which this election relates is
calendar year 2013.

 

		4.	Nature of restrictions to which the LTIP Units are subject:

 

		(a)	With limited exceptions, until the LTIP Units vest, the Taxpayer may not transfer in any manner any portion of the LTIP Units
without the consent of the Partnership.

 

		(b)	The Taxpayer’s LTIP Units vest in accordance with the vesting provisions described in the Schedule attached hereto. Unvested
LTIP Units are forfeited in accordance with the vesting provisions described in the Schedule attached hereto.

 

		5.	The fair market value at time of transfer (determined without regard to any restrictions other than restrictions which by their
terms will never lapse) of the LTIP Units with respect to which this election is being made was $[•] per LTIP Unit.

 

		6.	The amount paid by the Taxpayer for the LTIP Units was $0 per LTIP Unit.

 

		7.	A copy of this statement has been furnished to the Partnership and American Realty Capital Properties, Inc.

 

	Dated: 	 	 	Name:	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

 

Exhibit C - 1

    	 

    	 

    

SCHEDULE TO EXHIBIT C

 

Vesting Provisions of LTIP Units

 

The LTIP Units are subject to time-based
and performance-based vesting with the final vesting percentage equaling the product of the time-based vesting percentage and the
performance-based vesting percentage. Performance-based vesting will be from 0% to 100% based (i) 50% on American Realty Capital
Properties, Inc.’s (the “Company’s”) per-share total return to shareholders and (ii) 50% on total
return against the total percentage return to stock holders of a specified peer group, in each case for the period from December
11, 2012 to December 31, 2015 (or earlier in certain circumstances). Under the time-based vesting hurdles, one-third (1/3) of the
LTIP Units will vest on December 31, 2015, one-third (1/3) of the LTIP Units will vest on December 31, 2016, and the remaining
one-third (1/3) of the LTIP Units will vest on December 31, 2017, provided that the Taxpayer continues its service relationship
with the Company and the Partnership through such dates, subject to acceleration in the event of certain extraordinary transactions
or termination of the Taxpayer’s service relationship with the Company under specified circumstances. Unvested LTIP Units
are subject to forfeiture in the event of failure to vest based on the determination of the performance-based percentage or the
passage of time.

 

 

Schedule A - 1

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