FORM OF ADVISORY AGREEMENT AMONG AMERICAN REALTY CAPITAL HEALTHCARE TRUST, INC., AMERICAN REALTY CAPITAL HEALTHCARE TRUST OPERATING PARTNERSHIP, L.P., AND AMERICAN REALTY CAPITAL HEALTHCARE ADVISORS, LLC Dated as of , 2011
FORM
OF
AMONG
AMERICAN
REALTY CAPITAL HEALTHCARE TRUST, INC.,
AMERICAN REALTY
CAPITAL HEALTHCARE TRUST OPERATING PARTNERSHIP, L.P.,
AND
AMERICAN REALTY
CAPITAL HEALTHCARE ADVISORS, LLC
Dated
as of , 2011
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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5
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3.
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DUTIES
OF THE ADVISOR.
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5
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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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7
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6.
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NO
PARTNERSHIP OR JOINT VENTURE.
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7
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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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TABLE
OF CONTENTS
(continued)
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Page
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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 dated as of
, 2011, is entered into among American Realty Capital
Healthcare Trust, Inc., a Maryland corporation (the “ Company ”), American
Realty Capital Healthcare Trust Operating Partnership, L.P., a Delaware limited
partnership (the “ Operating
Partnership”), and American Realty Capital Healthcare Advisors, LLC, a
Delaware limited liability company.
WITNESSETH
WHEREAS,
the Company is a Maryland corporation created in accordance with Maryland
General Corporation Law and intends to qualify as a REIT;
WHEREAS,
the Company is the general partner of the Operating Partnership;
WHEREAS,
the Company and the Operating Partnership desire to avail themselves of the
experience, sources of information, advice, assistance and certain facilities of
the Advisor and to have the Advisor undertake the duties and responsibilities
hereinafter set forth, on behalf of, and subject to the supervision of the Board
of Directors of the Company, all as provided herein; and
WHEREAS,
the Advisor is willing to render such services, subject to the supervision of
the Board of Directors of the Company, on the terms and 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 Healthcare Advisors, LLC, a Delaware limited
liability company, any successor advisor to the Company and the Operating
Partnership, or any Person to which American Realty Capital Healthcare Advisors,
LLC or any successor advisor subcontracts substantially all its
functions. Notwithstanding the foregoing, a Person hired or retained
by American Realty Capital Healthcare Advisors, LLC to perform property
management and related services for the Company or the Operating Partnership
that is not hired or retained to perform substantially all the functions of
American Realty Capital Healthcare Advisors, 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.
“Agreement”
means this Advisory Agreement, as the same may be amended, supplemented or
restated from time to time.
“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.
“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 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.
“Company”
has the meaning set forth in the preamble.
“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 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.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Expense
Year” has the meaning set forth in Section 13.
“FFO” means funds
from operations, as defined by the National Association of Real Estate
Investment Trusts.
“Financing
Coordination Fee” means the fees payable to the Advisor pursuant to
Section 10(e).
“GAAP”
means United States generally accepted accounting principles, consistently
applied.
“ 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, the purchase price of any Share for which reduced
Selling Commissions are paid to the Dealer Manager or a Soliciting Dealer (where
net proceeds to the Company are not reduced) shall be deemed to be the full
amount of the offering price per Share pursuant to the Prospectus for such
Offering without reduction.
“Included
Assets” has the meaning set forth in Section 19(b)(ii).
“Indemnitee”
and “Indemnitees”
has the meaning set forth in Section 21.
“Independent
Director” has the meaning set forth in the Articles of
Incorporation.
“Investments”
means any investments by the Company or the Operating Partnership, 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.
“Losses”
has the meaning set forth in Section
21.
“Management
Agreement” means the Property Management and Leasing Agreement, dated as
of
, 2011, among the Company, the Operating Partnership and American Realty Capital
Healthcare Properties, 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.
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” has the meaning set forth in the preamble.
“Operating
Partnership Agreement” means the Agreement of Limited Partnership of the
Operating Partnership dated as of ,
2011, among the Company, the Operating Partnership and American Realty Capital
Healthcare Special Limited Partnership, 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
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. The definition of
“Organization and Offering Expenses” set forth above is intended to encompass
all, but only, those expenses which are required to be treated as Organization
and Offering Expenses under the NASAA REIT Guidelines. As a result,
and notwithstanding the definition set forth above, any expenses of the Company
which is not a part of Organization and Offering Expenses under the NASAA REIT
Guidelines shall not be treated as part of Organization and Offering Expenses
for purposes hereof.
“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.
“Primary
Offering” means the portion of an Offering other than the Shares offered
pursuant to the Company’s distribution reinvestment plan.
“Property
Disposition Fee” means the fees payable to the Advisor pursuant to Section 10(c)
..
“Prospectus”
means 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
(including each final prospectus of the Company that may be so filed after the
initial prospectus of the Company).
“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
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.
“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, Real
Estate Related Loans 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.
“Securities
Act” means the Securities Act of 1933, as amended.
“Selling
Commission” means seven percent (7.0%) of Gross Proceeds from the sale of
Shares in a Primary Offering payable to the Dealer Manager and reallowable to
Soliciting Dealers with respect to Shares sold by them.
“Shares”
means the shares of the Company’s common stock, par value $0.01 per
share.
“Soliciting
Dealers” means broker-dealers who are members of the Financial Industry
Regulatory Authority Inc., or that are exempt from broker-dealer registration,
and who, in either case, have executed soliciting dealer or other agreements
with the Dealer Manager to sell Shares.
“Sponsor”
means American Realty Capital V, 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,
Acquisition Expenses or Financing Coordination Fees. The definition
of “Total Operating Expenses” set forth above is intended to encompass all, but
only, those expenses which are required to be treated as Total Operating
Expenses under the NASAA REIT Guidelines. As a result, and
notwithstanding the definition set forth above, any expense of the Company which
is not part of Total Operating Expenses under the NASAA REIT Guidelines shall
not be treated as part of Total Operating Expenses for purposes
hereof.
“2%/25%
Guidelines” has the meaning set forth in Section 13.
2.
APPOINTMENT. The Company and the Operating Partnership hereby
appoint the Advisor to serve as their advisor to perform the services set forth
herein on the terms and 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 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:
5
(a) serve
as the Company’s and the Operating Partnership’s investment and financial
advisor;
(b) provide
the daily management for the Company and the Operating Partnership and perform
and supervise the various administrative functions necessary for the day-to-day
management of the operations of the Company and the Operating
Partnership;
(c) investigate,
select and, on behalf of the Company and the Operating Partnership, engage and
conduct business with and supervise the performance of such Persons as the
Advisor deems necessary to the proper performance of its obligations hereunder
(including 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, property managers, 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) provide research, economic and statistical data, 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;
(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;
6
(j) from
time to time, or at any time reasonably requested by the Board, make reports to
the Board of its performance of services to the Company and the Operating
Partnership under this Agreement, including reports with respect to potential
conflicts of interest involving the Advisor or any of its
Affiliates;
(k) provide
the Company and the Operating Partnership with all necessary cash management
services;
(l) deliver
to, or maintain on behalf of, the Company copies of all appraisals obtained in
connection with the investments in any Real Estate Assets as may be required to
be obtained by the Board;
(m) notify
the Board of all proposed material transactions before they are
completed;
(n) effect
any private placement of OP Units, tenancy-in-common (TIC) or other
interests in Investments as may be approved by the Board;
(o) perform
investor-relations and Stockholder communications functions for the
Company;
(p) render
such services as may be reasonably determined by the Board of Directors
consistent with the terms and conditions herein;
(q) maintain
the Company’s accounting and other records and assist the Company in filing all
reports required to be filed by it with the Securities and Exchange Commission,
the Internal Revenue Service and other regulatory agencies; and
(r) do
all things reasonably necessary to assure its ability to render the services
described in this Agreement.
Notwithstanding
the foregoing or anything else that may be to the contrary in this Agreement,
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.
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
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; Acquisition Expenses. Subject to Section 10(b), 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 10(a),
“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 Healthcare
Advisors, 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, Financing Coordination Fees and Acquisition
Expenses. The total of all
Acquisition Fees, Financing Coordination 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 and Financing Coordination
Fees shall not exceed one and one-half percent (1.5%) of the Contract Purchase
Price of all the Investments acquired.
8
(c)
Property
Disposition Fee. 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
Property Disposition Fee equal to the lesser of (i) two percent (2.0%) of the
Contract Sales Price of such Real Estate Asset and (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 Property Disposition Fee paid
to the Advisor or its assignees; provided, however, that in no
event may the Property Disposition Fee paid to the Advisor, its Affiliates and
non-Affiliates exceed the lesser of six percent (6.0%) of the Contract Sales
Price and a Competitive Real Estate Commission.
(d)
Asset
Management Fee. The Company
shall pay an Asset Management Fee to the Advisor or its assignees as
compensation for services rendered in connection with the management of the
Company’s assets in an amount equal to 0.75% per annum of Average Invested
Assets; provided, however, that the
Asset Management Fee shall be reduced by any amounts payable as an Oversight Fee
(as defined in the Management Agreement), such that the aggregate of the Asset
Management Fee and the Oversight Fee does not exceed 0.75% per annum of Average
Invested Assets. The Asset Management Fee is payable semiannually, on
January 1 and July 1, in the amount of 0.375% of Average Invested Assets for the
preceding semiannual period. The Asset Management Fee will be reduced to the
extent that FFO, as adjusted, during
the six months ending on the last day of the calendar quarter immediately
preceding the date that such Asset Management Fee is payable is less than the
Distributions declared with respect to such six month period. For purposes of
this test, FFO, as
adjusted, is FFO adjusted to add (i) acquisition fees and related expenses;
(ii) non-cash restricted stock grant amortization, if any; and (iii) impairments
of real estate related investments, if any (including properties, loans
receivable and equity and debt investments).
(e)
Financing
Coordination Fee. The Company
shall pay a Financing Coordination Fee to the Advisor or its assignees in
connection with the financing of any Investment, assumption of any Loans with
respect to any Investment or refinancing of any Loan in an amount equal to one
percent (1.0%) of the amount made available and/or outstanding under any such
Loan, including any assumed Loan. The Advisor may reallow some of or
all this Financing Coordination Fee to reimburse third parties with whom it may
subcontract to procure any such Loan.
(f)
Payment
of Fees. In connection
with the Acquisition Fee, Property Disposition Fee, Asset Management Fee and
Financing Coordination 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, each Share shall be valued at the
then-current per share offering price of the Shares in the Offering minus the
maximum selling commissions and dealer manager fee allowed in the Offering, or,
after the Board has determined a reasonable estimated value of the Shares and
such value has been publicly disclosed, each Share shall be valued at the
then-current publicly disclosed reasonable estimated value.
(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. For the avoidance of
doubt, any compensation paid or payable by the Company to employees of the
Company in connection with their employment by the Company (which employees were
formerly employed by the Advisor or any of their Affiliates) shall not be deemed
to be compensation or other remuneration in connection with any internalization
transaction for purposes of the immediately preceding sentence. This
provision shall not limit any other consideration or distributions that the
Company may pay the Advisor in accordance with this Agreement or any other
agreement. This provision shall in no way obligate the Advisor to
facilitate an internalization transaction with the Advisor or any of its
Affiliates.
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 subject to the limitation 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
(iv) interest
and other costs for Loans, including discounts, points and other similar
fees;
(v) taxes
and assessments on income of the Company or Investments;
(vi)
costs associated with insurance required in
connection with the business of the Company or by the Board;
(vii) expenses
of managing and operating Investments owned by the Company, whether payable to
an Affiliate of the Company or a non-affiliated Person;
(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 the 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 and (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.
10
14.
OTHER ACTIVITIES OF THE ADVISOR. Except as set forth in this
Section 14 ,
nothing herein contained shall prevent the Advisor or any of its Affiliates from
engaging in or earning fees from other activities, including 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.
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’ prior 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 15
and 19
through 31
(inclusive) of this Agreement shall survive any expiration or earlier
termination of this Agreement.
11
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.
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 as in effect on the date hereof impose
obligations or restrictions on the Advisor or grant the Advisor certain rights
which are not set forth in this Agreement, the Advisor shall abide by such
obligations or restrictions and such rights shall inure to the benefit of the
Advisor with the same force and effect as if they were set forth
herein.
21.
INDEMNIFICATION BY THE COMPANY AND THE OPERATING
PARTNERSHIP.
(a)
The Company and the Operating Partnership, jointly and severally,
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
and against all losses, claims, damages, losses, joint or several, expenses
(including reasonable attorneys’ fees and other legal fees and expenses),
judgments, fines, settlements, and other amounts (collectively, “Losses”) arising in
the performance of their duties hereunder, including reasonable attorneys’ fees,
to the extent such Losses 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 suffered by such Indemnitee, nor
shall they provide that an Indemnitee be held harmless for any Loss 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;
12
(iii) such
Loss was not the result of negligence or willful misconduct by the Indemnitee;
and
(iv) such
indemnification or agreement to hold harmless is not recoverable from the
Stockholders.
(b) Notwithstanding
the foregoing, an Indemnitee shall not be indemnified by the Company and the
Operating Partnership for any Losses 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) the
related claim has 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 related claim
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 ultimately found not to be
entitled to indemnification in a final, non-appealable judgment of a court if
competent jurisdiction.
22.
INDEMNIFICATION BY ADVISOR. The Advisor shall indemnify and
hold harmless the Company and the Operating Partnership from Losses, to the
extent that such Losses 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:
|
To
the Company:
|
American
Realty Capital Healthcare Trust, Inc.
|
|
|
000
Xxxx Xxxxxx
|
||
|
Xxx
Xxxx, Xxx Xxxx 00000
|
||
|
Attention: Xxxxxxx
X. Xxxxxx,
|
||
|
President
|
13
|
with
a copy to:
|
||
|
Proskauer
Rose LLP
|
||
|
Eleven
Times Square
|
||
|
Attention: Xxxxx
X. Xxxx, Esq.
|
||
|
Attention: Xxxxx
X. Gerkis, Esq.
|
|
To
the Operating Partnership:
|
American
Realty Capital Healthcare Trust Operating Partnership,
L.P.
|
|
|
000
Xxxx Xxxxxx
|
||
|
Xxx
Xxxx, Xxx Xxxx 00000
|
||
|
Attention: Xxxxxxx
X. Xxxxxx
|
||
|
with
a copy to:
|
||
|
Proskauer
Rose LLP
|
||
|
Eleven
Times Square
|
||
|
Attention: Xxxxx
X. Xxxx, Esq.
|
||
|
Attention: Xxxxx
X. Gerkis, Esq.
|
||
|
To
the Advisor:
|
American
Realty Capital Healthcare Advisors, LLC
|
|
|
000
Xxxx Xxxxxx
|
||
|
Xxx
Xxxx, Xxx Xxxx 00000
|
||
|
Attention: Xxxxxxx
X. Xxxxxx
|
||
|
with
a copy to:
|
||
|
Proskauer
Rose LLP
|
||
|
Eleven
Times Square
|
||
|
Attention: Xxxxx
X. Xxxx, Esq.
|
||
|
Attention: Xxxxx
X. Gerkis, Esq.
|
Any party
may at any time give Notice in writing to the other parties of a change in its
address for the purposes of this Section 23
..
24.
MODIFICATION. This Agreement shall not be amended,
supplemented, 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.
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29. PRONOUNS
AND PLURALS. Whenever the context may require, any pronoun
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa.
30.
HEADINGS. The titles of sections and subsections contained in
this Agreement are for convenience only, and they neither form a part of this
Agreement nor are they to be used in the construction or interpretation
hereof.
31.
EXECUTION IN COUNTERPARTS. This Agreement may be executed
(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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AMERICAN
REALTY CAPITAL NEW HEALTHCARE
TRUST,
INC.
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By:
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Name: Xxxxxxx
X. Xxxxxx
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Title: President
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AMERICAN
REALTY CAPITAL HEALTHCARE TRUST
OPERATING
PARTNERSHIP, L.P.
|
|
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By:
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American
Realty Capital Healthcare Trust, Inc.
|
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its
General Partner
|
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By:
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|
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Name: Xxxxxxx
X. Xxxxxx
|
|
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Title: President
|
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AMERICAN
REALTY CAPITAL HEALTHCARE
ADVISORS,
LLC
|
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By:
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American
Realty Capital Healthcare Trust
Special
Limited Partnership, LLC
|
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its
Member
|
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By:
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American
Realty Capital V, LLC
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its
Managing Member
|
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By:
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Name: Xxxxxxxx
X. Xxxxxxxx
|
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Title: Authorized
Signatory
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