FORM OF ADVISORY AGREEMENT BY AND AMONG AMERICAN REALTY CAPITAL TRUST II, INC., AMERICAN REALTY CAPITAL OPERATING PARTNERSHIP II, L.P., AND AMERICAN REALTY CAPITAL ADVISORS II, LLC Dated as of , 2010
FORM
OF
BY
AND AMONG
AMERICAN
REALTY CAPITAL OPERATING PARTNERSHIP II, L.P.,
AND
AMERICAN
REALTY CAPITAL ADVISORS II, LLC
Dated
as of
, 2010
TABLE
OF CONTENTS
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Page
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1.
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DEFINITIONS.
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1
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2.
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APPOINTMENT.
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6
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3.
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DUTIES
OF THE ADVISOR.
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6
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4.
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AUTHORITY
OF ADVISOR.
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7
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5.
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FIDUCIARY
RELATIONSHIP.
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8
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6.
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NO
PARTNERSHIP OR JOINT VENTURE.
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8
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7.
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BANK
ACCOUNTS.
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8
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8.
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RECORDS;
ACCESS.
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8
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9.
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LIMITATIONS
ON ACTIVITIES.
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8
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10.
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FEES.
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8
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11.
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EXPENSES.
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9
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12.
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OTHER
SERVICES.
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10
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13.
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REIMBURSEMENT
TO THE ADVISOR.
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10
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14.
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OTHER
ACTIVITIES OF THE ADVISOR
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11
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15.
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THE
AMERICAN REALTY CAPITAL NAME
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11
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16.
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TERM
OF AGREEMENT
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11
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17.
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TERMINATION
BY THE PARTIES
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11
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18.
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ASSIGNMENT
TO AN AFFILIATE
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12
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19.
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PAYMENTS
TO AND DUTIES OF ADVISOR UPON TERMINATION
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12
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20.
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INCORPORATION
OF THE ARTICLES OF INCORPORATION AND THE OPERATING PARTNERSHIP
AGREEMENT.
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12
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21.
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INDEMNIFICATION
BY THE COMPANY AND THE OPERATING PARTNERSHIP
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12
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22.
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INDEMNIFICATION
BY ADVISOR
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13
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23.
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NOTICES
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13
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24.
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MODIFICATION
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14
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25.
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SEVERABILITY
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14
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26.
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GOVERNING
LAW
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14
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27.
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ENTIRE
AGREEMENT
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14
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28.
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NO
WAIVER
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14
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29.
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PRONOUNS
AND PLURALS
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15
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30.
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HEADINGS
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15
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31.
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EXECUTION
IN COUNTERPARTS
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15
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FORM OF
THIS
ADVISORY AGREEMENT (this “Agreement”) dated as
of , 2010, is
entered into among American Realty Capital Trust II, Inc., a Maryland
corporation (the “Company”), American
Realty Capital Operating Partnership II, L.P., a Delaware limited partnership
(the “Operating
Partnership”), and American Realty Capital Advisors II, LLC, a Delaware
limited liability company.
WITNESSETH
WHEREAS,
the Company is a Maryland corporation created in accordance with Maryland
General Corporation Law and intends to qualify as a REIT;
WHEREAS,
the Company is the general partner of the Operating Partnership;
WHEREAS,
the Company and the Operating Partnership desire to avail themselves of the
experience, sources of information, advice, assistance and certain facilities of
the Advisor and to have the Advisor undertake the duties and responsibilities
hereinafter set forth, on behalf of, and subject to the supervision of the Board
of Directors of the Company, all as provided herein; and
WHEREAS,
the Advisor is willing to render such services, subject to the supervision of
the Board of Directors of the Company, on the terms and subject to the
conditions hereinafter set forth;
NOW,
THEREFORE, in consideration of the foregoing and of the mutual covenants and
agreements contained herein, the parties hereto, intending to be legally bound,
hereby agree as follows:
1.
DEFINITIONS. As used in this Agreement, the following terms
have the definitions set forth below:
“ Acquisition
Expenses” means any and all expenses, exclusive of Acquisition Fees,
incurred by the Company, the Operating Partnership, the Advisor or any of their
Affiliates in connection with the selection, evaluation, acquisition,
origination, making or development of any Investments, whether or not acquired,
including, without limitation, legal fees and expenses, travel and
communications expenses, brokerage fees, costs of appraisals, nonrefundable
option payments on property not acquired, accounting fees and expenses, title
insurance premiums and the costs of performing due diligence.
“Acquisition
Fee” means the fees payable to the Advisor or its assignees pursuant to
Section 10(a).
“Advisor”
means American Realty Capital Advisors II, LLC, a Delaware limited liability
company, any successor advisor to the Company and the Operating Partnership, or
any Person to which American Realty Capital Advisors II, LLC or any successor
advisor subcontracts substantially all its functions. Notwithstanding
the foregoing, a Person hired or retained by American Realty Capital Advisors
II, LLC to perform property management and related services for the Company or
the Operating Partnership that is not hired or retained to perform substantially
all the functions of American Realty Capital Advisors II, LLC with respect to
the Company and the Operating Partnership as a whole shall not be deemed to be
an Advisor.
“ Affiliate
” or “ Affiliated
” means with respect to any Person, (i) any other Person directly or
indirectly owning, controlling or holding, with the power to vote, ten percent
(10%) or more of the outstanding voting securities of such Person; (ii) any
other Person ten percent (10%) or more of whose outstanding voting securities
are directly or indirectly owned, controlled or held, with the power to vote, by
such Person; (iii) any other Person directly or indirectly controlling,
controlled by or under common control with such Person; (iv) any executive
officer, director, trustee or general partner of such Person; and (v) any
legal entity for which such Person acts as an executive officer, director,
trustee or general partner. For purposes of this definition, the
terms “controls,” “is controlled by,” or “is under common control with” shall
mean the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of an entity, whether through ownership
or voting rights, by contract or otherwise.
“Annual
Subordinated Performance Fee” means the fees payable to the Advisor or
its assignees pursuant to Section
10(e).
“Articles of
Incorporation” means the Articles of Incorporation of the Company, as
amended from time to time.
1
“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.
“Business
Day” means any day on which the New York Stock Exchange is open for
trading.
“By-laws”
means the by-laws of the Company, as amended and as the same are in effect from
time to time.
“ Cause”
means (i) fraud, criminal conduct, willful misconduct or illegal or negligent
breach of fiduciary duty by the Advisor, or (ii) if any of the following events
occur: (A) the Advisor shall breach any material provision of this
Agreement, and after written notice of such breach, shall not cure such default
within thirty (30) days or have begun action within thirty (30) days to cure the
default which shall be completed with reasonable diligence; (B) the Advisor
shall be adjudged bankrupt or insolvent by a court of competent jurisdiction, or
an order shall be made by a court of competent jurisdiction for the appointment
of a receiver, liquidator, or trustee of the Advisor, for all or substantially
all its property by reason of the foregoing, or if a court of competent
jurisdiction approves any petition filed against the Advisor for reorganization,
and such adjudication or order shall remain in force or unstayed for a period of
thirty (30) days; or (C) the Advisor shall institute proceedings for voluntary
bankruptcy or shall file a petition seeking reorganization under the federal
bankruptcy laws, or for relief under any law for relief of debtors, or shall
consent to the appointment of a receiver for itself or for all or substantially
all its property, or shall make a general assignment for the benefit of its
creditors, or shall admit in writing its inability to pay its debts, generally,
as they become due.
“ Change of
Control ” means a change of control of the Company of a nature that would
be required to be reported in response to the disclosure requirements of
Schedule 14A of Regulation 14A promulgated under the 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 the assets of the Company to another Person, which disposition
is not approved by the Board of Directors; or (iv) there occurs a contested
proxy solicitation of the Stockholders that results in the contesting party
electing candidates to a majority of the Board of Directors’ positions next up
for election.
“Code”
means the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code
shall mean such provision as in effect from time to time, as the same may be
amended, and any successor provision thereto, as interpreted by any applicable
regulations as in effect from time to time.
“Competitive Real
Estate Commission” means a real estate or brokerage commission for the
purchase or sale of an asset which is reasonable, customary and competitive in
light of the size, type and location of the asset.
“Contract Purchase
Price” has the meaning set forth in the Articles of
Incorporation.
“Contract Sales
Price” means the total consideration received by the Company for the sale
of an Investment.
“Dealer
Manager” means Realty Capital Securities, LLC, or such other Person
selected by the Board of Directors to act as the dealer manager for the
Offering.
“Dealer Manager
Fee” means three percent (3.0%) of Gross Proceeds from the sale of Retail
Shares in a Primary Offering, payable to the Dealer Manager for serving as the
dealer manager of such Primary Offering.
2
“Director”
means a member of the Board of Directors.
“Distributions”
means any distributions of money or other property by the Company to
Stockholders, including distributions that may constitute a return of capital
for U.S. federal income tax purposes.
“Excess
Amount” has the meaning set forth in Section 13.
“Expense
Year” has the meaning set forth in Section 13.
“ Good
Reason ” means: (i) any failure to obtain a satisfactory
agreement from any successor to the Company or the Operating Partnership to
assume and agree to perform obligations under this Agreement; or (ii) any
material breach of this Agreement of any nature whatsoever by the Company or the
Operating Partnership.
“Gross
Proceeds” means the aggregate purchase price of all Shares sold for the
account of the Company through an Offering, without deduction for Selling
Commissions, volume discounts, any marketing support and due diligence expense
reimbursement or Organization and Offering Expenses. For the purpose of
computing Gross Proceeds from the sale of Retail Shares, the purchase price of
any Retail 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 Retail
Share pursuant to the Prospectus for such Offering without
reduction.
“Included
Assets” has the meaning set forth in Section 19(b)(ii).
“Indemnitee”
has the meaning set forth in Section 21.
“Independent
Director” has the meaning set forth in the Articles of
Incorporation.
“Independent
Valuation Advisor” means a firm that is (i) engaged in the business of
conducting appraisals on real estate properties, (ii) not an affiliate of the
Advisor and (iii) engaged by the Company with the Board’s approval to apprise
the Real Properties and other Investments pursuant to the Valuation
Guidelines.
“Institutional
Shares” means shares of the Company’s common stock, par value $0.01 per
share that have been designated institutional shares.
“Investments”
means any investments by the Company or the Operating Partnership, directly or
indirectly, in Real Estate Assets, Real Estate Related Loans or any other
asset.
“Joint
Ventures ” means the joint venture or partnership or other similar
arrangements (other than between the Company and the Operating Partnership) in
which the Company or the Operating Partnership or any of their subsidiaries is a
co-venturer, member or partner, which are established to own
Investments.
“Listing” means (i) the listing
of the Shares on a national securities exchange, or (ii) the receipt by the
Stockholders of securities that are listed on a national securities exchange in
exchange for Shares in a merger or any other type of transaction.
“Loans”
means any indebtedness or obligations in respect of borrowed money or evidenced
by bonds, notes, debentures, deeds of trust, letters of credit or similar
instruments, including mortgages and mezzanine loans.
“Management
Agreement” means the Property Management and Leasing Agreement, dated as
of
, 2010, among the Company, the Operating Partnership and American Realty Capital
Properties II, LLC, as the same may be amended from time to time.
“NASAA REIT
Guidelines” means the Statement of Policy Regarding Real Estate
Investment Trusts published by the North American Securities Administrators
Association on May 7, 2007, as the same may be amended from time to
time.
“NAV” means
the Company’s net asset value, calculated pursuant to the Valuation
Guidelines.
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.
“Notice”
has the meaning set forth in Section
23.
“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 American
Realty Capital Trust II Special Limited Partner, LLC, as the same may
be amended from time to time.
“OP
Units” means units of limited partnership interest in the Operating
Partnership.
“Organization and
Offering Expenses” means all expenses (other than the Selling Commission,
the Platform Fee and the Dealer Manager Fee) to be paid by the Company in
connection with an Offering, including legal, accounting, printing, mailing and
filing fees, charges of the escrow holder and transfer agent, charges of the
Advisor for administrative services related to the issuance of Shares in an
Offering, reimbursement of the Advisor for costs in connection with preparing
supplemental sales materials, the cost of bona fide training and education
meetings held by the Company (primarily the travel, meal and lodging costs of
the registered representatives of broker-dealers), attendance and sponsorship
fees and cost reimbursement for employees of the Company’s Affiliates to attend
retail seminars conducted by broker-dealers and, in special cases, reimbursement
to soliciting broker-dealers for technology costs associated with an Offering,
costs and expenses related to such technology costs, and costs and expenses
associated with facilitation of the marketing of the Shares and the ownership of
Shares by such broker-dealer’s customers.
“Other Liquidity
Event” means a liquidation or the sale of all or substantially all the
Investments (regardless of the form in which such sale shall
occur). For clarification purposes, a transaction of the type
described in clause (ii) of the definition of Listing shall not be an Other
Liquidity Event.
“Person”
means an individual, corporation, partnership, joint venture, association,
company (whether of limited liability or otherwise), trust, bank or other
entity, or any government or any agency or political subdivision of a
government.
“Platform
Fee” means an asset-based platform fee payable to the Dealer Manager
monthly in arrears for sales of Institutional Shares in a Primary
Offering. The Platform Fee shall accrue daily and equals (a) the
number of Shares outstanding each day, excluding shares issued under the
Company’s distribution reinvestment plan, multiplied by (b) 1/365th of NAV
per Share on such day.
“Primary
Offering” means the portion of an Offering other than the Shares offered
pursuant to the Company’s distribution reinvestment plan.
“Prospectus”
means a final prospectus of the Company filed pursuant to Rule 424(b) of the
Securities Act, as the same may be amended or supplemented from time to time.
“Real Estate
Assets” means any investment by the Company or the Operating Partnership
in unimproved and improved Real Property (including fee or leasehold interests,
options and leases), directly, through one or more subsidiaries or through a
Joint Venture.
“Real Estate
Commission” means the fees payable to the Advisor pursuant to Section 10(c).
“Real Estate
Related Loans” means any investments in mortgage loans and other types of
real estate related debt financing, including, mezzanine loans, bridge loans,
convertible mortgages, wraparound mortgage loans, construction mortgage loans,
loans on leasehold interests and participations in such loans, by the Company or
the Operating Partnership, directly, through one or more subsidiaries or through
a Joint Venture.
“Real
Property” means real property owned from time to time by the Company or
the Operating Partnership, directly, through one or more subsidiaries or through
a Joint Venture, which consists of (i) land only, (ii) land, including
the buildings located thereon, (iii) buildings only, or (iv) such
investments the Board or the Advisor designate as Real Property to the extent
such investments could be classified as Real Property.
4
“REIT”
means a “real estate investment trust” under Sections 856 through 860 of
the Code.
“Retail
Shares” means shares of the Company’s common stock, par value $0.01 per
share that have been designated retail shares.
“Sale” or
“Sales”
means any transaction or series of transactions whereby: (i) the
Company or the Operating Partnership directly or indirectly (except as described
in other subsections of this definition) sells, grants, transfers, conveys, or
relinquishes its direct or indirect ownership of any Real Estate Assets, 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 that gives rise to a significant amount of insurance
proceeds or condemnation awards; (ii) the Company or the Operating
Partnership directly or indirectly (except as described in other subsections of
this definition) sells, grants, transfers, conveys, or relinquishes its
ownership of all or substantially all the direct or indirect interest of the
Company or the Operating Partnership in any Joint Venture in which it is a
co-venturer, member or partner; (iii) any Joint Venture directly or
indirectly (except as described in other subsections of this definition) in
which the Company or the Operating Partnership as a co-venturer, member or
partner sells, grants, transfers, conveys, or relinquishes its direct or
indirect ownership of any Real Estate Assets or portion thereof, including any
event with respect to any Real Estate Assets which gives rise to insurance
claims or condemnation awards; or (iv) the Company or the Operating
Partnership directly or indirectly (except as described in other subsections of
this definition) sells, grants, conveys or relinquishes its direct or indirect
interest in any Real Estate Related Loans or portion thereof (including with
respect to any Real Estate Related Loan, all payments thereunder or in
satisfaction thereof other than regularly scheduled interest payments) and any
event which gives rise to a significant amount of insurance proceeds or similar
awards; or (v) the Company or the Operating Partnership directly or
indirectly (except as described in other subsections of this definition) sells,
grants, transfers, conveys, or relinquishes its direct or indirect ownership of
any other asset not previously described in this definition or any portion
thereof, but not including any transaction or series of transactions specified
in clauses (i) through (v) above in which the proceeds of such
transaction or series of transactions are reinvested by the Company in one or
more assets within 180 days thereafter.
“Selling
Commission” means seven percent (7.0%) of Gross Proceeds from the sale of
Retail Shares in a Primary Offering payable to the Dealer Manager and
reallowable to Soliciting Dealers with respect to Retail Shares sold by them.
“Shares”
means the Institutional Shares and Retail Shares.
“Soliciting
Dealers” means broker-dealers who are members of the Financial Industry
Regulatory Authority Inc., or that are exempt from broker-dealer registration,
and who, in either case, have executed soliciting dealer or other agreements
with the Dealer Manager to sell Shares.
“Sponsor”
means American Realty Capital II, 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.
“Valuation
Guidelines” means the valuation guidelines adopted by the Board, as may
be amended from time to time.
“2%/25%
Guidelines” has the meaning set forth in Section 13.
5
2.
APPOINTMENT. The Company and the Operating Partnership hereby
appoint the Advisor to serve as their advisor to perform the services set forth
herein on the terms and subject to the conditions set forth in this Agreement
and subject to the supervision of the Board, and the Advisor hereby accepts such
appointment.
3.
DUTIES OF THE ADVISOR. The Advisor will use its reasonable
best efforts to present to the Company 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, By-laws and the Operating
Partnership Agreement, the Advisor, directly or indirectly, will:
(a) serve
as the Company’s and the Operating Partnership’s investment and financial
advisor;
(b) provide
the daily management for the Company and the Operating Partnership and perform
and supervise the various administrative functions necessary for the day-to-day
management of the operations of the Company and the Operating
Partnership;
(c) investigate,
select and, on behalf of the Company and the Operating Partnership, engage and
conduct business with and supervise the performance of such Persons as the
Advisor deems necessary to the proper performance of its obligations hereunder
(including consultants, accountants, correspondents, lenders, technical
advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow
agents, depositaries, custodians, agents for collection, insurers, insurance
agents, banks, builders, developers, property owners, real estate management
companies, real estate operating companies, securities investment advisors,
mortgagors, the registrar and the transfer agent and any and all agents for any
of the foregoing), including Affiliates of the Advisor and Persons acting in any
other capacity deemed by the Advisor necessary or desirable for the performance
of any of the foregoing services (including entering into contracts in the name
of the Company and the Operating Partnership with any of the
foregoing);
(d) consult
with the officers and Directors of the Company and assist the Directors in the
formulation and implementation of the Company’s financial policies, and, as
necessary, furnish the Board with advice and recommendations with respect to the
making of investments consistent with the investment objectives and policies of
the Company and in connection with any borrowings proposed to be undertaken by
the Company or the Operating Partnership;
(e) subject
to the provisions of Section 4 ,
(i) participate in formulating an investment strategy and asset allocation
framework; (ii) locate, analyze and select potential Investments;
(iii) structure and negotiate the terms and conditions of transactions
pursuant to which acquisitions and dispositions of Investments will be made;
(iv) 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, the Operating Partnership or any of
their subsidiaries, and negotiate with investment banking firms and
broker-dealers on behalf of the Company, the Operating Partnership or any of
their subsidiaries, or negotiate private sales of Shares or obtain Loans for the
Company, the Operating Partnership or any of their subsidiaries, but in no event
in such a manner so that the Advisor shall be acting as broker-dealer or
underwriter; provided ,
however , that any fees
and costs payable to third parties incurred by the Advisor in connection with
the foregoing shall be the responsibility of the Company, the Operating
Partnership or any of their subsidiaries;
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;
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(r)
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do
all things reasonably necessary to assure its ability to render the
services described in this
Agreement;
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(s)
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at
the end of each Business Day, calculate the NAV as provided in the
Valuation Guidelines, and in connection therewith, obtain appraisals
performed by the Independent Valuation Advisors;
and
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(t)
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supervise
one or more Independent Valuation Advisors and, if and when necessary,
recommend to the Board its
replacement.
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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
supervision of the Company, the Company, acting on the authority of the Board of
Directors, hereby delegates to the Advisor the authority to perform the services
described in Section 3.
(b) Notwithstanding
anything herein to the contrary, all Investments will require the prior approval
of the Board, any particular Directors specified by the Board or any committee
of the Board specified by the Board, as the case may be.
(c) If
a transaction requires approval by the Independent Directors, the Advisor will
deliver to the Independent Directors all documents and other information
reasonably required by them to evaluate properly the proposed
transaction.
(d) The
Board may, at any time upon the giving of notice to the Advisor, modify or
revoke the authority set forth in this Section 4; provided, however, that such
modification or revocation shall be effective upon receipt by the Advisor and
shall not be applicable to investment transactions to which the Advisor has
committed the Company or the Operating Partnership prior to the date of receipt
by the Advisor of such notification.
7
5.
FIDUCIARY RELATIONSHIP. The Advisor, as a result of its
relationship with the Company and the Operating Partnership pursuant to this
Agreement, stands in a fiduciary relationship with the Stockholders and the
partners in the Operating Partnership.
6.
NO PARTNERSHIP OR JOINT VENTURE. The parties to this
Agreement are not partners or joint venturers with each other and nothing herein
shall be construed to make them partners or joint venturers or impose any
liability as such on either of them.
7.
BANK ACCOUNTS. The Advisor may establish and maintain one or
more bank accounts in the name of the Company or the Operating Partnership and
may collect and deposit into any such account or accounts, and disburse from any
such account or accounts, any money on behalf of the Company or the Operating
Partnership, under such terms and conditions as the Board may approve, provided
that no funds shall be commingled with the funds of the Advisor; and, upon
request, the Advisor shall render appropriate accountings of such collections
and payments to the Board and to the auditors of the Company.
8.
RECORDS; ACCESS. The Advisor shall maintain appropriate
records of all its activities hereunder and make such records available for
inspection by the Directors and by counsel, auditors and authorized agents of
the Company, at any time and from time to time. The Advisor shall at
all reasonable times have access to the books and records of the Company and the
Operating Partnership.
9.
LIMITATIONS ON ACTIVITIES Notwithstanding anything herein to
the contrary, the Advisor shall refrain from taking any action which, in its
sole judgment, or in the sole judgment of the Company, made in good faith, would
(a) adversely affect the status of the Company as a REIT, unless the Board
has determined that REIT qualification is not in the best interests of the
Company and its Stockholders, (b) subject the Company to regulation under
the Investment Company Act of 1940, as amended, or (c) violate any law,
rule, regulation or statement of policy of any governmental body or agency
having jurisdiction over the Company, the Operating Partnership or the Shares,
or otherwise not be permitted by the Articles of Incorporation or By-laws,
except if such action shall be ordered by the Board, in which case the Advisor
shall notify promptly the Board of the Advisor’s judgment of the potential
impact of such action and shall refrain from taking such action until it
receives further clarification or instructions from the Board. In
such event, the Advisor shall have no liability for acting in accordance with
the specific instructions of the Board so given.
10.
FEES.
(a)
Acquisition
Fees.
The Company shall pay an Acquisition Fee to the Advisor or its
assignees as compensation for services rendered in connection with the
investigation, selection and acquisition (by purchase, investment or exchange)
of Investments. If the Advisor is terminated without cause pursuant to
Section 17(a), the Advisor or its assignees shall be entitled to an
Acquisition Fee for any Investments acquired after the Termination Date for
which a contract to acquire any such Investment had been entered into at or
prior to the Termination Date. The total Acquisition Fee payable to the Advisor
or its assignees shall equal one percent (1.0%) of the purchase price of Real
Estate Assets and one percent (1.0%) of the amount advanced for Real Estate
Related Loans or other Investments (other than Real Estate Assets), along with
reimbursement of acquisition expenses. The purchase price of the
Real Estate Assets shall equal the amount paid or allocated to the purchase,
development or improvement of the Real Estate Assets inclusive of expenses
related thereto and the amount of debt associated with such
Investment. The purchase price allocable for an Investment held
through a Joint Venture shall equal the product of (i) the purchase price
of, or the amount advanced for, the Investment, as applicable, and (ii) the
direct or indirect ownership percentage in the Joint Venture held directly or
indirectly by the Company or the Operating Partnership. For purposes
of this section, “ownership percentage” shall be the percentage of capital
stock, membership interests, partnership interests or other equity interests
held by the Company or the Operating Partnership, without regard to
classification of such equity interests. The Company shall pay to the
Advisor or its assignees the Acquisition Fee promptly upon the closing of the
Investment. In addition, if during the period ending two years after
the close of the initial Offering, the Company sells an Investment and then
reinvests in other Investments, the Company will pay to American Realty Capital
Advisors II, LLC one percent (1.0%) of the purchase price of Real Estate Assets
and one percent (1.0%) of the amount advanced for Real Estate Related Loans or
other Investments (other than Real Estate Assets), along with reimbursement of
acquisition expenses.
(b)
Limitation
on Total Acquisition Fees and Acquisition Expenses. The total of all
Acquisition Fees and Acquisition Expenses payable in connection with any
Investment or any reinvestment shall not exceed four and
one-half percent (4.5%) of the Contract Purchase Price of the Investment
acquired or four and one-half percent (4.5%) of the amount advanced for an
Investment; provided,
however, that once all the proceeds from the initial Offering have been
fully invested, the total of all Acquisition Fees shall not exceed one and
one-half percent (1.5%) of the Contract Purchase Price of all the Investments
acquired.
8
(c)
Real
Estate Commission. In connection
with a Sale of a Real Estate Asset in which the Advisor or any Affiliate of the
Advisor provides a substantial amount of services, as determined by the
Independent Directors, the Company shall pay to the Advisor or its assignees a
Real Estate Commission up to the lesser of (i) two percent (2.0%) of the
Contract Sales Price of such Real Estate Asset or (ii) one-half of the total
brokerage commission paid if a brokerage commission or other disposition fee is
paid to a non-Affiliate broker in addition to the Real Estate Commission paid to
the Advisor or its assignees; provided, however, that in no
event may the Real Estate Commission paid to the Advisor, its Affiliates and
non-Affiliates exceed the lesser of six percent (6.0%) of the Contract Sales
Price and a Competitive Real Estate Commission.
(d)
Asset
Management Fee. The Company
shall pay an Asset Management Fee to the Advisor or its assignees as
compensation for services rendered in connection with the management of the
Company’s assets in an amount equal to 1.0% of monthly NAV. The Asset
Management Fee is payable two quarters in advance.
(e) Annual
Subordinated Performance Fee. The Company may pay an Annual
Subordinated Performance Fee to the Advisor calculated on the basis of the total
return to Stockholders, payable monthly in arrears in any year in which the
Company’s total return on Stockholders’ capital contributions exceeds six
percent (6%) per annum. In such year, the Advisor will be paid
fifteen percent (15%) of the excess total return, not to exceed ten percent
(10%) of the aggregate total return for such year.
(f)
Payment
of Fees. In connection
with the Acquisition Fee, Real Estate Commission, Annual Subordinated
Performance Fee and Asset Management Fee, the Company shall pay such fees
to the Advisor or its assignees in cash or in Shares, or a combination of both,
the form of payment to be determined in the sole discretion of the Advisor. For
the purposes of the payment of such fees in Shares, prior to the end of the
escrow period and the acquisition of the Company’s first Real Estate Asset, each
Share shall be valued at the per share offering price of our Shares in the
initial Offering minus the maximum Selling Commissions, Platform Fees and Dealer
Manager Fee allowed in the initial Offering. Following the escrow
period and the acquisition of the Company’s first Real Estate Asset, each Share
shall be valued using NAV.
(g)
Exclusion
of Certain Transactions.
(i)
If the Company or the Operating Partnership shall propose to enter into any
transaction in which the Advisor, any Affiliate of the Advisor or any of the
Advisor’s directors or officers has a direct or indirect interest, then such
transaction shall be approved by a majority of the Board not otherwise
interested in such transaction, including a majority of the Independent
Directors.
(ii) If
the Board elects to internalize any management services provided by
the Advisor, neither the Company nor the Operating Partnership shall pay
any compensation or other remuneration to the Advisor or its Affiliates in
connection with the internalization transaction.
11.
EXPENSES.
(a) In
addition to the compensation paid to the Advisor pursuant to Section 10, the
Company or the Operating Partnership shall pay directly or reimburse the Advisor
for all the expenses paid or incurred by the Advisor or its Affiliates in
connection with the services it provides to the Company and the Operating
Partnership pursuant to this Agreement, including, the following:
(i) Organization
and Offering Expenses, including third-party due diligence fees related to the
Primary Offering, as set forth in detailed and itemized invoices; provided, however, that the
Company shall not reimburse the Advisor to the extent such reimbursement would
cause the total amount of Organization and Offering Expenses paid by the Company
and the Operating Partnership to exceed one and one-half percent (1.5%) of the
Gross Proceeds raised in all Primary Offerings;
(ii) Acquisition
Expenses incurred in connection with the selection and acquisition of
Investments, subject to the aggregate four and one-half percent (4.5%)
cap on Acquisition 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;
9
(v) taxes
and assessments on income of the Company or Investments;
(vi) costs
associated with insurance required in connection with the business of the
Company or by the Board;
(vii) expenses
of managing and operating Investments owned by the Company, whether payable to
an Affiliate of the Company or a non-affiliated Person;
(viii) all
expenses in connection with payments to the Directors for attending meetings of
the Board and Stockholders;
(ix)
expenses associated with a Listing, if applicable, or with the issuance and
distribution of Shares, such as selling commissions and fees, advertising
expenses, taxes, legal and accounting fees, listing and registration
fees;
(x)
expenses connected with payments of Distributions;
(xi) expenses
of organizing, revising, amending, converting, modifying or terminating the
Company, the Operating Partnership or any subsidiary thereof or the Articles of
Incorporation, By-laws or governing documents of the Operating Partnership or
any subsidiary of the Company or the Operating Partnership;
(xii) expenses
of maintaining communications with Stockholders, including the cost of
preparation, printing, and mailing annual reports and other Stockholder reports,
proxy statements and other reports required by governmental
entities;
(xiii)
administrative service expenses, including
all costs and expenses incurred by Advisor or its Affiliates in fulfilling its
duties hereunder, including reasonable salaries and wages, benefits and overhead
of all employees directly involved in the performance of such services; provided , however , that no
reimbursement shall be made for costs of such employees of the Advisor or its
Affiliates to the extent that such employees perform services for which the
Advisor receives a separate fee; and
(xiv) audit,
accounting and legal fees.
(b) Commencing
upon the earlier to occur of (i) the fifth fiscal quarter after the Company
makes its first Investment or (ii) six (6) months after the commencement of the
initial Offering, expenses incurred by the Advisor on behalf of the Company and
the Operating Partnership or in connection with the services provided by the
Advisor hereunder and payable pursuant to this Section 11 shall
be reimbursed, no less than monthly, to the Advisor.
12.
OTHER SERVICES. Should the Board
request that the Advisor or any director, officer or employee thereof render
services for the Company and the Operating Partnership other than set forth in
Section 3
, such services shall be separately compensated at such customary rates and in
such customary amounts as are agreed upon by the Advisor and the Board,
including a majority of the Independent Directors, subject to the limitations
contained in the Articles of Incorporation, and shall not be deemed to be
services pursuant to the terms of this Agreement.
13.
REIMBURSEMENT TO THE ADVISOR. The Company shall
not reimburse the Advisor at the end of any fiscal quarter in which Total
Operating Expenses incurred by the Advisor for the four (4) consecutive fiscal
quarters then ended (the “Expense Year”) exceed (the
“Excess
Amount”) the greater of two percent (2%) of Average Invested Assets or
twenty-five percent (25%) of Net Income (the “2%/25% Guidelines”)
for such year. Any Excess Amount paid to the Advisor during a fiscal
quarter shall be repaid to the Company or, at the option of the Company,
subtracted from the Total Operating Expenses reimbursed during the subsequent
fiscal quarter. If there is an Excess Amount in any Expense Year and
the Independent Directors determine that such excess was justified based on
unusual and nonrecurring factors which they deem sufficient, then the Excess
Amount may be carried over and included in Total Operating Expenses in
subsequent Expense Years and reimbursed to the Advisor in one or more of such
years, provided that there shall be sent to the Stockholders a written
disclosure of such fact, together with an explanation of the factors the
Independent Directors considered in determining that such excess expenses were
justified. Such determination shall be reflected in the minutes of
the meetings of the Board. All figures used in the foregoing
computation shall be determined in accordance with GAAP applied on a consistent
basis.
14.
OTHER ACTIVITIES OF THE ADVISOR. Except as set forth in this
Section 14 ,
nothing herein contained shall prevent the Advisor or any of its Affiliates from
engaging in or earning fees from other activities, including the rendering of
advice to other Persons (including other REITs) and the management of other
programs advised, sponsored or organized by the Sponsor or its Affiliates; nor
shall this Agreement limit or restrict the right of any director, officer,
member, partner, employee or stockholder of the Advisor or any of its Affiliates
to engage in or earn fees from any other business or to render services of any
kind to any other Person and earn fees for rendering such services; provided, however , that the
Advisor must devote sufficient resources to the Company’s business to discharge
its obligations to the Company under this Agreement. The Advisor may,
with respect to any investment in which the Company is a participant, also
render advice and service to each and every other participant therein, and earn
fees for rendering such advice and service. Specifically, it is
contemplated that the Company may enter into Joint Ventures or other similar
co-investment arrangements with certain Persons, and pursuant to the agreements
governing such Joint Ventures or arrangements, the Advisor may be engaged to
provide advice and service to such Persons, in which case the Advisor will earn
fees for rendering such advice and service.
10
The
Advisor shall report to the Board the existence of any condition or
circumstance, existing or anticipated, of which it has knowledge, which creates
or could create a conflict of interest between the Advisor’s obligations to the
Company and its obligations to or its interest in any other
Person. If the Advisor, Director or Affiliates thereof have sponsored
other investment programs with similar investment objectives which have
investment funds available at the same time as the Company, the Advisor shall
inform the Board of the method to be applied by the Advisor in allocating
investment opportunities among the Company and competing investment entities and
shall provide regular updates to the Board of the investment opportunities
provided by the Advisor to competing programs in order for the Board (including
the Independent Directors) to fulfill its duty to ensure that the Advisor and
its Affiliates use their reasonable best efforts to apply such method fairly to
the Company.
15.
THE AMERICAN REALTY CAPITAL NAME. The Advisor and its
Affiliates have or may have a proprietary interest in the names “American Realty
Capital,” “ARC” and “AR Capital.” The Advisor hereby grants to the
Company, to the extent of any proprietary interest the Advisor may have in any
of the names “American Realty Capital,” “ARC” and “AR Capital,” a
non-transferable, non-assignable, non-exclusive, royalty-free right and license
to use the names “American Realty Capital,” “ARC” and “AR Capital” during the
term of this Agreement. The Company agrees that the Advisor and its Affiliates
will have the right to approve of any use by the Company of the names “American
Realty Capital,” “ARC” and “AR Capital,” such approval not to be unreasonably
withheld or delayed. Accordingly, and in recognition of this right, if at any
time the Company ceases to retain the Advisor or one of its Affiliates to
perform advisory services for the Company, the Company will, promptly after
receipt of written request from the Advisor, cease to conduct business under or
use the names “American Realty Capital,” “ARC” and “AR Capital” or any
derivative thereof and the Company shall change its name and the names of any of
its subsidiaries to a name that does not contain the names “American Realty
Capital,” “ARC” and “AR Capital” or any other word or words that might, in the
reasonable discretion of the Advisor, be
susceptible of indication of some form of relationship between the Company and
the Advisor or any its Affiliates. At such time, the Company will also make any
changes to any trademarks, servicemarks or other marks necessary to remove any
references to the words “American Realty Capital,” “ARC” and “AR Capital.”
Consistent with the foregoing, it is specifically recognized that the Advisor or
one or more of its Affiliates has in the past and may in the future organize,
sponsor or otherwise permit to exist other investment vehicles (including
vehicles for investment in real estate) and financial and service organizations
having any of the names “American Realty Capital,” “ARC” and “AR Capital” as a
part of their name, all without the need for any consent (and without the right
to object thereto) by the Company. Neither the Advisor nor any of its
Affiliates makes any representation or warranty, express or implied, with
respect to the names “American Realty Capital,” “ARC” and “AR Capital” licensed
hereunder or the use thereof (including without limitation as to whether the use
of the names “American Realty Capital,” “ARC” and “AR Capital” will be free from
infringement of the intellectual property rights of third
parties. Notwithstanding the preceding, the Advisor represents and
warrants that it is not aware of any pending claims or litigation or of any
claims threatened in writing regarding the use or ownership of the names
“American Realty Capital,” “ARC” and “AR Capital.”
16.
TERM OF AGREEMENT. This Agreement shall continue in force for
a period of one year from the date hereof. Thereafter, the term may
be renewed for an unlimited number of successive one-year terms upon mutual
consent of the parties.
17.
TERMINATION BY THE PARTIES. This Agreement may be terminated
upon sixty (60) days’ written notice (a) by the Independent Directors of
the Company or the Advisor, without Cause and without penalty, (b) by the
Advisor for Good Reason, or (c) by the Advisor upon a Change of
Control. The provisions of Sections 19
through 31 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 Person which is a successor to all the
assets, rights and obligations of the Company or the Operating Partnership, in
which case such successor Person shall be bound hereunder and by the terms of
said assignment in the same manner as the Company or the Operating Partnership,
as applicable, is bound by this Agreement.
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19.
PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION.
(a)
Amounts
Owed .
After the Termination Date, the Advisor shall be entitled to receive
from the Company or the Operating Partnership within thirty (30) days after
the effective date of such termination all amounts then accrued and owing to the
Advisor, including all its interest in the Company’s income, losses,
distributions and capital by payment of an amount equal to the then-present fair
market value of the Advisor’s interest, subject to the 2%/25% Guidelines to the
extent applicable.
(b)
Advisor’s
Duties. The Advisor shall promptly upon termination of this
Agreement:
(i) pay
over to the Company and the Operating Partnership all money collected and held
for the account of the Company and the Operating Partnership pursuant to this
Agreement, after deducting any accrued compensation and reimbursement for its
expenses to which it is then entitled;
(ii) deliver
to the Board a full accounting, including a statement showing all payments
collected by it and a statement of all money held by it, covering the period
following the date of the last accounting furnished to the Board;
(iii) deliver
to the Board all assets, including all Investments, and documents of the Company
and the Operating Partnership then in the custody of the Advisor;
and
(iv) cooperate
with the Company and the Operating Partnership to provide an orderly management
transition.
20. INCORPORATION
OF THE ARTICLES OF INCORPORATION AND THE OPERATING PARTNERSHIP AGREEMENT.
To the extent that the Articles of Incorporation or the Operating
Partnership Agreement 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.
(a) The
Company and the Operating Partnership shall indemnify and hold harmless the
Advisor and its Affiliates, as well as their respective officers, directors,
equity holders, members, partners, stockholders, other equity holders and
employees (collectively, the “ Indemnitees ,” and
each, an “ Indemnitee ”), from
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 the following conditions are
met:
(i) the
Indemnitee has determined, in good faith, that the course of conduct that caused
the loss or liability was in the best interest of the Company and the Operating
Partnership;
(ii) the
Indemnitee was acting on behalf of, or performing services for, the Company or
the Operating Partnership;
(iii) such
liability or loss was not the result of negligence or willful misconduct by the
Indemnitee; and
(iv) such
indemnification or agreement to hold harmless is recoverable only out of the
Company’s net assets and not from the Stockholders.
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(b) 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:
(i) there
has been a successful adjudication on the merits of each count involving alleged
securities law violations as to the Indemnitee;
(ii) such
claims have been dismissed with prejudice on the merits by a court of competent
jurisdiction as to the Indemnitee; or
(iii) a
court of competent jurisdiction approves a settlement of the 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.
(c) In
addition, the advancement of the Company’s or the Operating Partnership’s funds
to an Indemnitee for legal expenses and other costs incurred as a result of any
legal action for which indemnification is being sought is permissible only if
all the following conditions are satisfied:
(i) the
legal action relates to acts or omissions with respect to the performance of
duties or services on behalf of the Company or the Operating
Partnership;
(ii) the
legal action is initiated by a third party who is not a Stockholder or the legal
action is initiated by a Stockholder acting in such Stockholder’s capacity as
such and a court of competent jurisdiction specifically approves such
advancement; and
(iii) the
Indemnitee undertakes to repay the advanced funds to the Company or the
Operating Partnership, together with the applicable legal rate of interest
thereon, in cases in which such Indemnitee is 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 (each a “
Notice ”)
required or permitted to be given hereunder shall be in writing unless some
other method of giving such Notice is required by the Articles of Incorporation,
the By-laws, and shall be given by being delivered by hand, by courier or
overnight carrier or by registered or certified mail to the addresses set forth
below:
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To
the Company:
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000
Xxxx Xxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Attention: Xxxxxxx
X. Xxxxxx,
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President
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with
a copy to:
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Proskauer
Rose LLP
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0000
Xxxxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Attention: Xxxxx
X. Xxxx, Esq.
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To
the Operating Partnership:
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American
Realty Capital Operating Partnership II, L.P.
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000
Xxxx Xxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Attention: Xxxxxxx
X. Xxxxxx
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with
a copy to:
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Proskauer
Rose LLP
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0000
Xxxxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Attention: Xxxxx
X. Xxxx, Esq.
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To
the Advisor:
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American
Realty Capital Advisors II, LLC
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000
Xxxx Xxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Attention: Xxxxxxx
X. Xxxxxx
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with
a copy to:
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Proskauer
Rose LLP
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0000
Xxxxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Attention: Xxxxx
X. Xxxx, Esq.
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Any party
may at any time give Notice in writing to the other parties of a change in its
address for the purposes of this Section 23
..
24.
MODIFICATION. This Agreement shall not be amended,
supplemented, terminated, or discharged, in whole or in part, except by an
instrument in writing signed by the parties hereto, or their respective
successors or assignees.
25.
SEVERABILITY. The provisions of this Agreement are
independent of and severable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in
part.
26. GOVERNING
LAW. The provisions of this
Agreement shall be construed and interpreted in accordance with the laws of the
State of New York as at the time in effect, without regard to the principles of
conflicts of laws thereof.
27.
ENTIRE AGREEMENT. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter
hereof. The express terms hereof control and supersede any course of
performance or usage of the trade inconsistent with any of the terms hereof.
28.
NO WAIVER. Neither the failure nor any delay on the part of a
party to exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy, power or privilege, nor shall any waiver
of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver shall be effective unless it is in
writing and is signed by the party asserted to have granted such
waiver.
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.
14
31.
EXECUTION IN COUNTERPARTS. This Agreement may be executed
(including by facsimile transmission) with counterpart signature pages or in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument.
[Remainder
of page intentionally left blank]
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IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.
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By:
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Name:
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Title:
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AMERICAN
REALTY CAPITAL OPERATING PARTNERSHIP II, L.P.
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By:
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its
General Partner
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By:
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Name:
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Title:
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AMERICAN
REALTY CAPITAL ADVISORS II, LLC
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By:
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American
Realty Capital Trust II Special Limited Partner, LLC
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its
Member
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By:
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American
Realty Capital II, LLC
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its
Managing Member
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By:
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Name:
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Title:
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16
