FORM OF ADVISORY AGREEMENT AMONG AMERICAN REALTY CAPITAL TRUST, INC., AMERICAN REALTY CAPITAL OPERATING PARTNERSHIP, L.P. and AMERICAN REALTY CAPITAL ADVISORS, LLC
FORM
OF
ADVISORY
AGREEMENT AMONG
AMERICAN
REALTY CAPITAL OPERATING PARTNERSHIP, L.P.
and
AMERICAN
REALTY CAPITAL ADVISORS, LLC
This
Advisory Agreement (this “Agreement”) dated as of _______, 2008 is among
American Realty Capital Trust, Inc., a Maryland corporation (the “Company”),
American Realty Capital Operating Partnership, L.P., a Delaware limited
partnership (the “OP”), and American Realty Capital Advisors, LLC, a Delaware
limited liability company (the “Advisor”). The Company and the OP are sometimes
referred to herein collectively as the “Advisees” and each individually as an
“Advisee.”
WITNESSETH:
WHEREAS,
the Company is a Maryland corporation created in accordance with applicable
provisions of the Maryland General Corporation Law, as amended from time to
time
(the “Maryland GCL”); and
WHEREAS,
the purposes of the Company are, as determined from time to time by the board
of
directors of the Company (the “Board of Directors”), to engage in any lawful
business or activity for which a corporation may be created under the Maryland
GCL; and
WHEREAS,
the Company is the general partner of the OP; and
WHEREAS,
the Company desires, on its own behalf and as general partner of the OP, to
avail itself of the experience, sources of information, advice and assistance
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, all as provided herein; and
WHEREAS,
the Advisor is willing to render such services, subject to the supervision
of
the Board of Directors, on the terms and conditions hereinafter set
forth;
NOW,
THEREFORE, in consideration of the mutual covenants herein contained, IT IS
AGREED as follows:
1.
Definitions.
Capitalized terms used but not defined herein shall have the meaning ascribed
to
them in the Company’s Charter (as herein defined), and the following terms, as
used herein, shall have the meanings set forth below:
(a)
“Acquisition
Expenses”
shall
mean expenses related to the Advisee’s selection of, and investment in, real
properties and mortgage investments and other investments, whether or not
acquired or made, including but not limited to advertising costs, brokerage
fees, environmental, engineering and other due diligence expenses, legal fees
and expenses, travel and communications expenses, cost of appraisals, accounting
fees and expenses, title insurance and miscellaneous other
expenses.
(b)
“Acquisition
Fee”
shall
have the meaning set forth in Section 11(a)(i).
(c)
“Affiliate”
means
a
Person who is (i) in the case of an individual, any relative of such Person,
(ii) any officer, director, trustee, partner, manager, employee or holder of
ten
percent (10%) or more of any class of the voting securities of or equity
interest in such Person; (iii) any corporation, partnership, limited liability
company, trust or other entity controlling, controlled by or under common
control with such Person; or (iv) any officer, director, trustee, partner,
manager, employee or holder of ten percent (10%) or more of the outstanding
voting securities of any corporation, partnership, limited liability company,
trust or other entity controlling, controlled by or under common control with
such Person. For purposes of this definition, the term “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 the ownership of voting
rights, by contract or otherwise.
(d)
“Asset
Management Fee”
shall
have the meaning set forth in Section 11(a)(ii).
(e)
“Average
Invested Assets”
shall
mean the average, at the end of each calendar month during the calendar quarter
in respect of which an Asset Management Fee is being calculated, of the
aggregate book value of the Advisees’ assets invested in equity interests in and
loans secured by real estate, before reserves for depreciation or bad debt
or
other similar non-cash reserves.
(f)
“Board
of Directors”
shall
have the meaning set forth in the recitals hereto.
(g)
“Cause”
shall
mean (x) fraud, criminal conduct, willful misconduct or illegal or negligent
breach of fiduciary duty by the Advisor or a breach of this Agreement by the
Advisor; or (y) if any of the following events occur: (i) the Advisor shall
violate any material provision of this Agreement, and after written notice
of
such violation, shall not cure such default within 30 days or have begun action
within 30 days to cure the default which shall be completed with reasonable
diligence, (ii) the Advisor shall be adjudged bankrupt or insolvent by a court
of competent jurisdiction, or an order shall be made by a court of competent
jurisdiction for the appointment of a receiver, liquidator, or trustee of the
Advisor, for all or substantially all of its property by reason of the
foregoing, or if a court of competent jurisdiction approves any petition filed
against the Advisor for reorganization, and such adjudication or order shall
remain in force or unstayed for a period of 30 days, (iii) the Advisor shall
institute proceedings for voluntary bankruptcy or shall file a petition seeking
reorganization under the federal bankruptcy laws, or for relief under any law
for relief of debtors, or shall consent to the appointment of a receiver for
itself or for all or substantially all of its property, or shall make a general
assignment for the benefit of its creditors, or shall admit in writing its
inability to pay its debts, generally, as they become due.
(h)
“Charter”
shall
mean the Articles of Incorporation of the Company, as amended from time to
time.
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(i)
“Financing
Coordination Fee”
shall
have the meaning set forth in Section 11(a)(iii).
(j)
“Good
Reason”
shall
mean, with respect to the termination of this Agreement, (x) any failure to
obtain a satisfactory agreement from any successor to an Advisee to assume
and
agree to perform such Advisee’s obligations under this Agreement; or (y) any
material breach of this Agreement of any nature whatsoever by an
Advisee.
(k)
“Independent
Director”
shall
have the meaning set forth in the By-laws of the Company, as amended from time
to time.
(l)
“Initial
Term”
shall
have the meaning set forth in Section 17(a).
(m)
“Offering
Expenses”
shall
have the meaning set forth in Article 1 of the Partnership Agreement.
(n)
“Offering
Proceeds”
shall
have the meaning set forth in Section 16.
(o)
“Partnership
Agreement”
shall
mean the Agreement of Limited Partnership of the OP, as amended and restated
from time to time.
(p)
“Person”
shall
mean an individual, corporation, partnership, joint venture, association,
company (whether of limited liability or otherwise), trust, bank or other
entity, or government or any agency or political subdivision of a
government.
(q)
“Property
Disposition Fee”
shall
have the meaning set forth in Section 11(a)(iv).
(r)
“Preferred
Return”
shall
mean the receipt by the stockholders of the Company of (i) a Cumulative
Non-Compound Return of 7% per year on such stockholders’ net investment, and
(ii) the amount of such net investment.
(s)
“Prospectus”
shall
mean the final prospectus of the Company in connection with the initial
registration of the Shares filed with the SEC on Form S-11, as amended and
supplemented from time to time.
(t)
“SEC”
shall
mean the United States Securities and Exchange Commission.
(u)
“Share”
shall
mean a share of the Common Stock, par value $0.01, of the Company.
(v)
“Total
Operating Expenses”
of
a
Person means the aggregate of all expenses paid or incurred by such Person,
but
excluding organization and offering expenses, interest payments, taxes, non-cash
expenditures, any Acquisition Fee or other acquisition expenses.
2.
Duties
of Advisor.
The
Company, on its own behalf, and as general partner of the OP, hereby retains
and
appoints the Advisor as the advisor of the Company and the OP to perform the
services hereinafter set forth, and the Advisor hereby accepts such appointment,
all subject to the terms and conditions hereinafter set forth. In the
performance of this undertaking, subject to the supervision of the Board of
Directors and consistent with the provisions of the Company’s Charter and the
Agreement of Limited Partnership of the OP (the “Partnership Agreement”), the
Advisor shall devote sufficient resources to the administration of the Company
to discharge is obligations hereunder and shall:
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a.
obtain
for the Advisees, furnish and/or supervise the services necessary to perform
any
ministerial functions in connection with the management of the day-to-day
operations of the Advisees;
b.
use
its
best efforts to seek out, present and recommend to the Advisees, whether through
its own efforts or those of third parties retained by it, suitable investment
opportunities that are consistent with the Advisees’ respective investment
objectives and policies and acquisition strategy and objectives, as adopted
by
the Board of Directors from time to time, and negotiate on behalf of the
Advisees with respect to potential investments or the disposition
thereof;
c.
exercise
absolute discretion, subject to the Board of Directors’ review, in decisions to
originate, acquire, retain or sell real properties, provided,
that,
the
Advisor may acquire on behalf of the Advisees any real property with purchase
price that is less than $15,000,000, or finance such an acquisition on the
Advisees’ behalf, without the prior approval of the Board of Directors if and to
the extent that:
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i.
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the
proposed acquisition or financing would not, if consummated, violate
or
conflict with the investment guidelines of the Advisees as set forth
in
the Prospectus;
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ii.
|
the
proposed acquisition or financing would not, if consummated, violate
the
restriction set forth in section 2(f) below;
and
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iii.
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the
consideration proposed to be paid for such real property does not
exceed
the fair market value of such property, as determined by a qualified
independent real estate appraiser selected in good faith by the Advisor
and acceptable to the Independent
Directors;
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d.
recommend
investment opportunities consistent with the Advisees’ respective investment
objectives and policies and negotiate on behalf of the Advisees with respect
to
potential investments or the disposition thereof;
e.
structure
the terms and conditions pursuant to which acquisitions of properties will
be
made, subject to the Board of Directors’ review;
f.
arrange
for financing and refinancing of properties, subject to the Board of Directors’
prior approval if such financing or refinancing, when consummated causes the
total leverage on each such property or on all such properties in the aggregate
to exceed 75% of such property’s or properties’, as the case may be, fair market
value;
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g.
obtain
for the Advisees such other services as may be required in acquiring or
disposing of investments, disbursing and collecting the funds of the Advisees,
paying the debts and fulfilling the obligations of the Advisees, and handling,
prosecuting and settling any claims of the Advisees;
h.
obtain
for the Advisees such services as may be required for property management,
leasing, mortgage brokerage and servicing, and other activities relating to
the
investment portfolio of the Advisees;
i.
supervise
the servicing of the Advisees’ loan portfolios;
j.
administer
the Advisee’s respective bookkeeping and accounting functions, and prepare, or
cause to be prepared, statements and other relevant information for distribution
to stockholders or partners, as the case may be, including annual and quarterly
reports and any filings required by regulatory authorities;
k.
monitor
operations and expenses of the Advisees;
l.
from
time
to time, or as requested by the Board of Directors, make reports to the Advisees
as to its performance of the foregoing services;
m.
perform
any other powers of the Board of Directors or the Company (as general partner
of
the OP) which (with respect to the Company) are set forth in the Charter and
the
Partnership Agreement, as applicable, which may be delegated to it by the Board
of Directors from time to time;
n.
render
such other services as the Board of Directors deems appropriate;
and
o.
do
all
things necessary to assure its ability to render the services contemplated
herein.
3.
Fiduciary
Relationship.
The
Advisor, as a result of its relationship with the Advisees pursuant to this
Agreement, stands in a fiduciary relationship with the stockholders of the
Company and the partners of the OP.
4.
No
Partnership or Joint Venture.
The
Advisees and the Advisor 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.
5.
Records.
At all
times, the Advisor shall keep books of account and records relating to services
performed hereunder, which books of account and records shall be accessible
for
inspection by the Advisees and the Advisee’s appointees at any time during the
ordinary business hours of the Advisor.
6.
REIT
Qualification; Other Limitations on Advisor Actions.
Anything else in this Agreement to the contrary notwithstanding, the Advisor
shall refrain from any action which, in its sole judgment made in good faith,
or, in the judgment of the Board of Directors provided that the Board of
Directors give the Advisor written notice to such effect, would (a) adversely
affect the status of the Company as a real estate investment trust pursuant
to
Section 856 of the Code; (b) cause the Advisees to be classified as an
“investment company” for purposes of the Investment Company Act of 1940, as
amended, (c) cause the OP to be classified other than as a partnership for
purposes of the Code; (d) violate any law, rule, regulation or statement of
policy of any governmental body or agency having jurisdiction over the Advisees
or over their securities, or (e) be prohibited by the Company’s Charter or the
Partnership Agreement of the OP.
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7.
Bank
Accounts.
The
Advisor may establish and maintain one or more bank accounts in the name of
the
Advisees or in its own name as agent for the Advisees and may collect and
deposit in and disburse from any such account, any money on behalf of the
Advisees, under such terms and conditions as the Board of Directors may approve,
provided that no funds in such account shall be commingled with funds of the
Advisor. From time to time and upon appropriate request, the Advisor shall
render appropriate accounting of such collections and payments to the Board
of
Directors and the auditors of the Advisees.
8.
Bond.
If
required by the Board of Directors, the Advisor will maintain a fidelity bond
with a responsible surety company in such amounts as may be required by the
Board of Directors, covering all members or partners thereof together with
employees and agents of the advisor handling funds of the Advisees and
investment documents or records pertaining to investments of the Advisees.
Such
bonds shall inure to the benefit of the Advisees in respect of losses from
acts
of such partners, employees and agents through theft, embezzlement, fraud,
negligence, error or omission or otherwise. The premiums on such bonds shall
be
paid by the Advisees.
9.
Information
Furnished to Advisor.
The
Board of Directors shall, at all times, keep the Advisor fully informed with
regard to the investment policies of the Advisees, including any specific types
of real properties, mortgage investments and mortgage securities desired, and
any criteria or conditions established by the Board of Directors as to whether
the Advisees will make a particular investment, the capitalization policy of
the
Advisees (including the policy with regard to the incurrence of indebtedness
by
the Advisees) and their intentions as to the future operations of the Advisees.
In particular, the Board of Directors shall notify the Advisor promptly of
their
intention to either sell or otherwise dispose of any of the Advisees’
investments, to make any new investment, to incur any indebtedness or to issue
any additional shares of Common Stock or Preferred Stock of the Company or
any
partnership interests in the OP.
10.
Consultation
and Advice.
In
addition to the services described above, the Advisor shall consult with the
Board of Directors and shall, at the request of the Board of Directors of the
Company, furnish advice and recommendations with respect to other aspects of
the
business and affairs of the Advisees.
11.
Fees
and Other Compensation of the Advisor.
a.
The
Advisor or its designees shall be entitled to receive from the respective
Advisees (except those payable by others as noted below) the following fees
and
other compensation, which shall be paid to the Advisor by the OP on its own
behalf or on behalf of the Company:
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(i) Acquisition
Fee. The
Advisor or its Affiliates shall receive an acquisition fee (the “Acquisition
Fee”)
of two
percent (2%) of the gross contract purchase price of each property acquired
by
an Advisee, including the amount of any mortgage securing such property, payable
by the OP on behalf of the applicable Advisee upon consummation of the
investment; provided,
that,
the
Acquisition Fee, together with any and all Acquisition Expenses and other
acquisition fees paid to the Advisor or to any third parties, whether or not
affiliated with the Advisor or the Advisees, shall not exceed, in the aggregate,
four percent (4.0%) of the gross contract purchase price of a particular
property, including the amount of any mortgage securing such property. In the
event that such acquisition fees and expenses, including the Acquisition Fee,
exceed such limitation, the Acquisition Fee shall be reduced by such excess
amount.
(ii) Asset
Management Fee.
The
Advisor or its Affiliates shall receive an asset management fee (the
“Asset
Management Fee”)
in the
form of a monthly fee equal to 0.02083%, which is one-twelfth of 0.25%, of
the
aggregate assets value plus costs and expenses incurred by the Advisor in
providing asset management services.
(iii) Financing
Coordination Fee. For
services in connection with the origination or refinancing of any debt financing
the Advisee obtains and uses to acquire properties or to make other permitted
investments, or that is assumed, directly or indirectly, in connection with
the
acquisition of properties, the Advisor or its Affiliates shall receive a
financing coordination fee (the “Financing
Coordination Fee”)
equal
to 1% of the amount available and/or outstanding under such financing;
provided,
however, that the Advisor will not be entitled to a financing coordination
fee
in connection with the refinancing of any loan secured by any particular
property that was previously subject to a refinancing in which the Advisor
received such a fee. Financing coordination fees payable from loan proceeds
from
permanent financing will be paid to the Advisor as the Advisees acquire and/or
assume such permanent financing.
(iv) Property
Disposition Fee. The
Advisor or its Affiliates shall receive an amount equal to up to one-half of
the
brokerage commission (the “Property
Disposition Fee”)
paid
on the sale of property, not to exceed 3% of the contract price of each property
sold; provided,
however, in no event may the real estate commissions paid to our advisor, its
affiliates and unaffiliated third parties exceed 6% of the contract sales price.
(v) Fees
for Additional Services. Subject
to Section 15 below, the Advisor shall be entitled to receive compensation
for
any additional services requested from time to time by the Advisees on separate
agreed-upon terms, subject to approval by a majority of the Independent
Directors as being fair and reasonable to the Company.
b.
Stockholder/Partner
Interests Distributions. The
Advisor shall be entitled to receive distributions from the Advisees in respect
of any shares of Common Stock of the Company or partner interests of the OP
which it holds, along with the other holders of such shares or
interests.
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12.
Statements.
Prior
to the payment of any fees hereunder, the Advisor shall furnish to the Advisees
a statement showing the computation of the fees, if any, payable under Section
11 hereof.
13.
Expenses
of the Company.
a.
The
OP,
on its own behalf and on behalf of the Company, shall pay all of the Advisees’
expenses. Without limiting the foregoing, it is specifically agreed that the
following expenses of an Advisee shall be paid by the OP on its own behalf
or on
behalf of the Company and shall not be borne by the Advisor unless such expense
is a fee or other service for which the Advisor is otherwise receiving a fee
from the Advisees:
(i)
the
cost
of money borrowed by the Advisee;
(ii)
all
taxes
applicable to the Advisee including, without limitation, taxes on income and
on
assessments of real property;
(iii)
fees
and
expenses paid to independent contractors, unaffiliated mortgage servicers,
consultants, managers and other agents employed by or no behalf of the
Advisee;
(iv)
Acquisition
Expenses and expenses directly connected with the ownership and disposition
of
real property or other investments, and with the purchase or origination of
real
property and mortgage investments (including the costs of foreclosure, insurance
premiums, legal services, brokerage and sales commission, maintenance, repair
and improvement of property);
(v)
expenses
of maintaining and managing real estate equity interests, processing and
servicing mortgage and other loans and managing the Advisee’s other
investments;
(vi)
insurance
coverage in connection with the business of the Advisee (including officers’,
directors’ and partners’ liability insurance);
(vii)
the
expenses of dissolving and liquidating the Advisee or revising, amending or
modifying its organizational documents;
(viii)
expenses
connected with payments of dividends or interest or distribution in cash or
any
other form made or caused to be made by the Board of Directors to the
stockholders or partners, as the case may be, of such Advisee.
(ix)
all
expenses connected with communications to stockholders or partners, as the
case
may be, and other bookkeeping and clerical work necessary in maintaining
relations with the stockholders or partners, as the case may be, including
the
cost of printing and mailing certificates for securities, proxy solicitation
materials and reports to holders of the Advisee’s securities;
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(x)
the
cost
of any accounting, statistical or bookkeeping equipment necessary for the
maintenance of the books and records of the Advisee;
(xi)
transfer
agent’s and registrar’s fees and charges; and
(xii)
other
legal, accounting and auditing fees and expenses as well as any costs incurred
in connection with any litigation in which the Advisee is involved and the
examination, investigation or other proceedings conducted by any regulatory
agency with respect to the Advisee.
b.
The
Advisor shall bear the expenses it incurs in connection with performing its
duties under the advisory agreement. These include salaries and fringe benefits
of its directors and officers and travel and other administrative expenses
of
its directors or officers.
c.
The
OP
shall reimburse the Advisor and its Affiliates on its own behalf or on behalf
of
the Company for (i) advertising expenses, expense reimbursements, and legal
and
accounting fees; (ii) the actual cost of goods and materials used by the
Advisees and obtained from entities not affiliated with the Advisor; (iii)
administrative services (including personnel costs; provided, however, that
no
reimbursement shall be made for costs of personnel to the extent that such
personnel perform services in transactions for which the Advisor receives a
separate fee); (iv) acquisition expenses, which include travel and expenses
related to the selection and acquisition of properties, for goods and services
provided by the Advisor; (v) rent, leasehold improvement costs, utilities or
other administrative items generally constituting Advisor’s overhead; and (vi)
expenses related to negotiating and servicing mortgage loans. In no event shall
the OP reimburse the Advisor for any services for which the Advisor shall
receive a separate fee. The amounts charged to an Advisee for services performed
shall not exceed the lesser of (a) the actual cost of such services, or (b)
the
amount which such Advisee would be required to pay to independent parties for
comparable services.
d.
Notwithstanding
the foregoing, reimbursements of expenses and payment of fees under this
Agreement will be subject to approval by the Board of Directors (including
the
approval of the majority of Independent Directors).
14.
Reimbursement
by Advisor.
a.
For
any
year which the Company qualifies as a real estate investment trust under the
Internal Revenue Code of 1986, as amended, the Advisor shall be obligated to
reimburse the Advisees for the amounts, if any, by which the sum of Advisees’
Total Operating Expenses and Asset Management Fees paid during the immediately
prior fiscal year exceed the greater of (i) 2.0% of the Company’s and the OP’s
Average Invested Assets during the four quarters of such fiscal year, or (ii)
25.0% of the Company’s and the OP’s net income for such fiscal year; provided,
however, that the Board of Directors (including a majority of the Independent
Directors) may require a lower amount which the Advisor shall be obligated
to
reimburse the Company, upon a determination that such lower reimbursement amount
is justified in light of such unanticipated, unusual or non-recurring factors
which may have occurred within sixty (60) days after the end of the quarter
for
which the excess occurred, and there shall be sent to the stockholders of the
Company a written disclosure of such determination, together with an explanation
of the factors the Board of Directors considered in arriving at the conclusion
that the higher Total Operating Expenses were justified.
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15.
Other
Activities of Advisor.
(a)
Except
as
set forth in this Section 15, nothing in this Agreement shall prevent the
Advisor or any of its Affiliates from engaging in other business activities
related to real estate, mortgage investments or other investments whether
similar or dissimilar to those made by any of the Advisees or from acting as
advisor to any other person or entity having investment policies whether similar
or dissimilar to those of the Company or the OP (including other REITs or
partnerships); provided,
that,
before
the Advisor and all Persons controlled by the Advisor may take advantage of
an
opportunity for their own account or present or recommend it to others, they
are
obligated to present an investment opportunity to an Advisee if (i) such
opportunity is compatible with such Advisee’s investment objectives and policies
(including such Advisee’s requirements relating to all pertinent factors,
including diversification, property type and location), (ii) such opportunity
is
of a character which could be taken by such Advisee, and (iii) the Advisee
has
the financial resources to take advantage of such opportunity. In furtherance,
and not in limitation, of the immediately preceding sentence, neither the
Advisor nor any Affiliate of the Advisor may make any investment in residential,
retail, industrial and office properties where the investment objective is
substantially similar to the investment objectives of the Advisees until such
time as seventy five percent (75.0%) of the total gross proceeds (the “Offering
Proceeds”) from the offering of the Company’s shares offered for sale pursuant
to a registration statement on form S-11 filed with the SEC, following final
closing of such offering, have been invested or committed for investment in
such
properties.
(b)
The
Advisor will use its best efforts to present suitable investments to the
Advisees consistent with their investment procedures, objectives and policies.
If the Advisor or any of its Affiliates is presented with a potential investment
in a property which might be made by more than one investment entity which
it
advises or manages, the decision as to the suitability of the property for
investment by a particular entity will be based upon a review of the investment
portfolio of each entity and upon factors such as: (i) cash flow from the
property; (ii) the effect of the acquisition of the property on the
diversification of each entity's portfolio; (iii) rental payments during any
renewal period; (iv) the amount of equity required to make the investment;
(v)
the policies of each entity relating to leverage; (vi) the funds of each entity
available for investment; and (vii) the length of time the funds have been
available for investment and the manner in which the potential investment can
be
structured by each entity. To the extent that a particular property might be
determined to be suitable for more than one investment entity, priority
generally will be given to the investment entity having uninvested funds for
the
longest period of time.
16.
Term;
Termination of Agreement.
This
Agreement shall continue in force for a period of one year from the date hereof
(the “Initial Term”) and thereafter it may be renewed from year to year by
written consent of the parties hereto. Notwithstanding any other provision
to
the contrary, this Agreement may be terminable by the Advisor or by the Advisees
(upon determination of the majority of the Independent Directors) at any time
upon 60 days’ prior written notice to the non-terminating party. In the event of
the termination of this Agreement, the Advisor will cooperate with the Advisees
and take all reasonable steps requested to assist the Advisees in making an
orderly transition of the advisory function.
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17.
Amendments.
This
Agreement shall not be changed, modified, terminated or discharged in whole
or
in part except by an instrument in writing signed by all parties hereto, or
their respective successors or permitted assigns, or otherwise as provided
herein.
18.
Assignment.
This
Agreement may not be assigned by the Advisor, except to an Affiliate of the
Advisor, and then only upon the consent of the Advisees and the approval of
a
majority of the Independent Directors. Any assignee of the Advisor shall be
bound hereunder to the same extent as the Advisor. This Agreement shall not
be
assigned by any Advisee without the written consent of the Advisor, except
to a
corporation, association, trust or other organization which is a successor
to
such Advisee. Such successor shall be bound hereunder to the same extent as
such
Advisee. Notwithstanding anything to the contrary contained herein, the economic
rights of the Advisor hereunder, including the right to receive all compensation
hereunder, may be sold, transferred or assigned by the Advisor without the
consent of the Advisees.
19.
Action
Upon Termination.
From
and after the effective date of termination of this Agreement, pursuant to
Section 17 hereof, the Advisor shall not be entitled to compensation for further
service rendered hereunder but shall be paid all compensation and reimbursed
for
all expenses accrued through the date of termination within thirty (30) days
of
such termination. The Advisor shall forthwith upon such
termination:
(a)
Pay
over
to the Advisees all moneys collected and held for the account of such Advisees
pursuant to this Agreement, after deducting any accrued compensation and
reimbursement for its expenses to which it is then entitled;
(b)
Deliver
to the Advisees a full accounting, including a statement showing all payments
collected by it and a statement of all moneys held by it, covering the period
following the date of the last accounting furnished to the Advisees;
and
(c)
Deliver
to the Advisees all property and documents of the Advisees then in the custody
of the Advisor.
20.
Incorporation
of the Charter and the Partnership Agreement.
To the
extent the Charter or the Partnership Agreement impose obligations or
restrictions on the Advisor or grant the Advisor certain rights which are not
set forth in this Agreement, the Advisor shall abide by such obligations or
restrictions and such rights shall inure to the benefit of the Advisor with
the
same force and effect as if they were set forth herein.
21.
Standard
of Care.
a.
The
Advisor assumes no responsibility under this Agreement other than to render
the
services called for hereunder in good faith, and shall not be responsible for
any action of the Advisees in following or declining to follow any advice or
recommendations of the Advisor. Neither the advisor nor its directors, officers,
partners, members, and employees shall be liable to the Advisees, or to the
stockholders, partners or directors of the Advisees, as the case may be, or
to
any successor or assignee of the Advisees, except by reason of acts constituting
bad faith, gross negligence or willful misconduct. This shall in no way affect
the standard for indemnification but shall only constitute a standard of
liability. The duties to be performed by the Advisor pursuant to this Agreement
may be performed by it or by officers, members or directors or by Affiliates
of
the foregoing under the direction of the Advisor or delegated to unaffiliated
third parties under its direction.
11
b.
The
Advisor shall look solely to the assets of the Advisees for satisfaction of
all
claims against the Advisees, and in no event shall any stockholder, partner
or
director of the Advisees, as the case may be, have any personal liability for
the obligations of the Advisees under this Agreement.
22.
Indemnification
of Advisor.
a.
Subject
to sections (b)-(d) below, the Advisees shall indemnify the Advisor and its
Affiliates for any loss arising out of any of their acts or omissions in
connection with this Agreement and the Advisor and its Affiliates will be held
harmless for any loss of liability suffered by the Advisees.
b.
The
Advisees shall not indemnify the Advisor or its Affiliates for any liability
loss suffered by the Advisor or its Affiliates, nor shall it hold the Advisor
or
its Affiliates harmless for any loss or liability suffered by the Advisees
unless all of the following conditions are met: (i) the Advisor or its
Affiliates determined in good faith that the course of conduct which caused
the
loss or liability was in the best interests of the Advisees, (ii) the Advisor
or
its Affiliates were acting on behalf of the Advisees or performing services
for
the Advisees, (iii) such liability or loss or expense was not the result of
negligence or misconduct on the part of the Advisor or its Affiliates and (iv)
such indemnification or agreement to hold harmless shall be recoverable only
out
of the net assets of the Advisees and not from the stockholders, partners or
members of the Advisees.
c.
Notwithstanding
anything to the contrary in subsection b, the Advisees shall not indemnify
the
Advisor or its Affiliates or any persons acting as a broker-dealer for any
losses, liabilities or expenses arising from or out of an alleged violation
of
federal or state securities laws by such party 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
particular Indemnitee, (ii) such claims have been dismissed with prejudice
on
the merits by a court of competent jurisdiction as to the particular Indemnitee
or (iii) a court of competent jurisdiction approves a settlement of the claims
against a particular Indemnitee and finds that indemnification of the settlement
and related costs should be made, and the court considering the matter has
been
advised of the position of the Securities and Exchange Commission and the
published position of any state securities regulatory authority as to
indemnification for violations of securities law.
d.
The
Advisees will advance amounts to the Advisor or its Affiliates for legal
expenses and other costs incurred as a result of any legal action for which
indemnification is being sought is permissible only if all of the following
conditions are satisfied: (i) the legal action relates to acts or omissions
with
respect to the performance of duties or services on behalf of the Advisees,
(ii)
the legal action is initiated by a third party who is not a Stockholder or
is
initiated by a Stockholder acting in his or her capacity as such and a court
of
competent jurisdiction specifically approves the advancement and (iii) the
Advisor or its Affiliates undertake in writing to repay the advanced funds
to
the Advisees, together with the applicable legal rate of interest thereon,
in
cases in which such the Advisor or its Affiliates are found not to be entitled
to indemnification.
12
23.
Notices.
Any
notice, report or other communication required or permitted to be given
hereunder shall be in writing, and shall be given by delivering such notice
by
hand or by certified mail, return receipt requested, postage pre-paid, at the
following addresses of the parties hereto:
Advisees:
The
Company:
0000
Xxx
Xxxxxxx
Xxxxxxxxxx,
XX 00000
Attn: Xxxxxxxx
X. Xxxxxxxx
Chief
Executive Officer
With
a
copy to:
Proskauer
Rose LLP
0000
Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxx X. Xxxx, Esq.
|
The
OP
|
|
American
Realty Capital Operating Partnership, L.P.
0000
Xxx Xxxxxxx
Xxxxxxxxxx,
XX
00000
|
With
a copy to:
|
Proskauer
Rose LLP
0000
Xxxxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxxx X. Xxxx, Esq.
|
|
The
Advisor:
|
American
Realty Capital Advisors, LLC
0000
Xxx
Xxxxxxx
Xxxxxxxxxx,
XX 00000
Attn: Xxxxxxxx
X. Xxxxxxxx
Chief
Executive Officer
13
With
a
copy to:
Proskauer
Rose LLP
0000
Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxx X. Xxxx, Esq.
Any
party
may at any time change its address for the purpose of this Section 25 by like
notice.
24.
Headings.
The
section headings herein have been inserted for convenience of reference only
and
shall not be construed to affect the meaning, construction or effect of this
Agreement.
25.
No
Waivers.
Neither
the failure nor any delay on the party 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 occurrences. No waiver
shall be effective unless it is in writing and is signed by the party asserted
to have granted such waiver.
26.
Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed to be an original, and all of which shall together constitute one and
the
same instrument.
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.
28.
Governing
Law.
The
provisions of this Agreement shall be construed and interpreted in accordance
with the laws of the State of Pennsylvania as at the time in
effect.
[END
OF
TEXT]
14
IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be signed as
of
the day and year first above written.
|
By:
|
_________________________________
|
| Name: |
| Title: |
AMERICAN
REALTY CAPITAL OPERATING PARTNERSHIP, L.P.
| By: | American Realty Capital Trust, Inc., |
|
its
General Partner
|
|
By:
|
_________________________________
|
| Name: |
| Title: |
AMERICAN
REALTY CAPITAL ADVISORS, LLC
|
By:
|
_________________________________
|
| Name: |
| Title: |
