SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of June 4, 2013,
by and among American Realty Capital Properties, Inc., a Maryland corporation
(the “Company”), and each investor identified on the signature pages hereto
(individually, an “Investor” and collectively, the “Investors”).

 

BACKGROUND

 

A.           The Company and each Investor are executing and delivering this
Agreement in reliance upon the exemption from registration afforded by
Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”),
and Rule 506 of Regulation D (“Regulation D”) as promulgated by the United
States Securities and Exchange Commission (the “SEC”) under the Securities Act.

 

B.           Each Investor, severally and not jointly, wishes to purchase, and
the Company wishes to sell, upon the terms and conditions stated in this
Agreement, (i) that aggregate number of shares of the common stock, par value
$0.01 per share, of the Company (the “Common Stock”), set forth on such
Investor’s signature page to this Agreement (which aggregate amount for all
Investors together shall be 29,411,764 shares of Common Stock and shall
collectively be referred to herein as the “Common Shares”).

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Investors agree
as follows:

 

ARTICLE I
DEFINITIONS

 

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement,
the following terms have the meanings indicated:

 

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144 under the
Securities Act.

 

“Agent” has the meaning set forth in Section 3.1(h).

 

“Agreement” has the meaning set forth in the Preamble.

 

“Business Day” means any day other than Saturday, Sunday, any day which shall be
a federal legal holiday in the United States or any day on which banking
institutions in The State of New York are authorized or required by law or other
governmental action to close.

 

 

 

 

“CapLease Acquisition” means the Company’s pending acquisition of CapLease, Inc.
pursuant to that certain Agreement and Plan of Merger, dated as of March 28,
2013, between the Company, CapLease, Inc. and certain of their subsidiaries.

 

“Closing” means the closing of the purchase and sale of the Common Shares
pursuant to Section 2.1.

 

“Closing Date” means the date and time of the Closing, which shall occur on the
third (3rd) Business Day following the date of this Agreement or such other date
and time as is mutually agreed to by the Company and each Investor.

 

“Closing Price” means, for any date, the closing price per Common Share for such
date (or, if not a Trading Day, the nearest preceding date that is a Trading
Day) on the primary Eligible Market or exchange or quotation system on which the
Common Stock is then listed or quoted.

 

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

 

“Company” has the meaning set forth in the Preamble.

 

“Company Counsel” means Proskauer Rose LLP, counsel to the Company.

 

“Common Shares” has the meaning set forth in the Preamble.

 

“Common Stock” has the meaning set forth in the Preamble.

 

“Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto.

 

“Convertible Securities” means any stock or securities (other than Options)
convertible into or exercisable or exchangeable for Common Stock.

 

“Disclosure Materials” has the meaning set forth in Section 3.1(f).

 

“DTC” means The Depository Trust Company.

 

“Effective Date” means the date that the Registration Statement is first
declared effective by the SEC.

 

“Effectiveness Period” has the meaning set forth in Section 6.1(b).

 

“8-K Filing” has the meaning set forth in Section 4.5.

 

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“Eligible Market” means any of the New York Stock Exchange, the NYSE MKT, the
NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market
or OTC Bulletin Board.

 

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

 

“Filing Date” means the date that is fifteen (15) days after the Closing Date
or, if such date is not a Business Day, the next date that is a Business Day.

 

“GAAP” has the meaning set forth in Section 3.1(f).

 

“GE Portfolio Acquisition” means the Company’s pending acquisition of a property
portfolio from certain subsidiaries of GE Capital pursuant to that certain
purchase and sale agreement dated May 31, 2013.

 

“Indebtedness” of any Person means, without duplication (A) all indebtedness for
borrowed money, (B) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than trade payables
entered into in the ordinary course of business), (C) all reimbursement or
payment obligations with respect to letters of credit, surety bonds and other
similar instruments, (D) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses, (E) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property), (F) all
monetary obligations under any leasing or similar arrangement which, in
connection with generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, (G) all
indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of
such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (A) through (G)
above.

 

“Indemnified Party” has the meaning set forth in Section 6.4(c).

 

“Indemnifying Party” has the meaning set forth in Section 6.4(c).

 

“Insolvent” has the meaning set forth in Section 3.1(g).

 

“Investor” has the meaning set forth in the Preamble.

 

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“Lien” means any lien, charge, claim, security interest, encumbrance, right of
first refusal or other restriction.

 

“Losses” means any and all losses, claims, damages, liabilities, settlement
costs and expenses, including, without limitation, reasonable attorneys’ fees.

 

“Material Adverse Effect” means (i) a material adverse effect on the results of
operations, assets, business, prospects or financial condition of the Company
and the Subsidiaries taken as a whole on a consolidated basis or (ii) material
and adverse impairment of the Company's ability to perform its obligations under
any of the Transaction Documents, provided, that, none of the following alone
shall be deemed, in and of itself, to constitute a Material Adverse Effect: (i)
a change in the market price or trading volume of the Common Stock or (ii)
changes in general economic conditions or changes affecting the industry in
which the Company operates generally (as opposed to Company-specific changes) so
long as such changes do not have a disproportionate effect on the Company and
its Subsidiaries taken as a whole.

 

“Options” means any outstanding rights, warrants or options to subscribe for or
purchase Common Stock or Convertible Securities.

 

“Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization, a
government or any department or agency thereof and any other legal entity.

 

“Preferred Stock Purchase Agreement” means that certain Convertible Preferred
Stock Purchase Agreement, dated as of the date hereof, between the Company and
certain Investors.

 

“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, a partial proceeding, such as a deposition),
whether commenced or threatened in writing.

 

“Prospectus” means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus.

 

“Registrable Securities” means the Common Shares issued or issuable pursuant to
the Transaction Documents, together with any securities issued or issuable upon
any stock split, dividend or other distribution, recapitalization or similar
event with respect to the foregoing.

 

“Registration Statement” means each registration statement required to be filed
under Article VI with respect to the Registrable Securities, including (in each
case) the Prospectus, amendments and supplements to such registration statement
or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be incorporated
by reference in such registration statement.

 

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“Regulation D” has the meaning set forth in the Preamble.

 

“Rule 144,” “Rule 415,” and “Rule 424” means Rule 144, Rule 415 and Rule 424,
respectively, promulgated by the SEC pursuant to the Securities Act, as such
rules may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC having substantially the same effect as such Rule.

 

“SEC” has the meaning set forth in the Preamble.

 

“SEC Reports” has the meaning set forth in Section 3.1(f).

 

“Securities Act” has the meaning set forth in the Preamble.

 

“Selling Expenses” means all underwriting discounts, selling fees or commissions
and stock transfer taxes applicable to any sale of Registrable Securities.

 

“Shares” means shares of the Company’s Common Stock.

 

“Short Sales” has the meaning set forth in Section 3.2(i).

 

“Subsidiary” means any direct or indirect subsidiary of the Company.

 

“Trading Day” means (i) a day on which the Common Stock is traded on a Trading
Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not
listed or quoted on a Trading Market (other than the OTC Bulletin Board), a day
on which the Common Stock is traded in the over-the-counter market, as reported
by the OTC Bulletin Board, or (iii) if the Common Stock is not listed or quoted
on any Trading Market, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the Pink Sheets LLC (or any similar
organization or agency succeeding to its functions of reporting prices);
provided, that, in the event that the Common Stock is not listed or quoted as
set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business
Day.

 

“Trading Market” means whichever of the New York Stock Exchange, the NYSE MKT,
the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital
Market or OTC Bulletin Board on which the Common Stock is listed or quoted for
trading on the date in question.

 

“Transaction” has the meaning set forth in Section 3.2(i).

 

“Transaction Documents” means this Agreement, the schedules and exhibits
attached hereto and the Transfer Agent Instructions.

 

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“Transfer Agent” means Computershare Trust Company, N.A., or any successor
transfer agent for the Company.

 

“Transfer Agent Instructions” means, with respect to the Company, the
Irrevocable Transfer Agent Instructions, in the form of Exhibit E, executed by
the Company and delivered to and acknowledged in writing by the Transfer Agent.

 

ARTICLE II
PURCHASE AND SALE

 

2.1 Closing. Subject to the terms and conditions set forth in this Agreement, at
the Closing the Company shall issue and sell to each Investor, and each Investor
shall, severally and not jointly, purchase from the Company, such number of
Common Shares (either in certificated or book-entry form, as the Investor and
the Company shall agree) for the price set forth on such Investor’s signature
page to this Agreement. The date and time of the Closing and shall be 10:00
a.m., New York City Time, on the Closing Date. The Closing shall take place at
the offices of Company Counsel.

 

2.2 Closing Deliveries.

 

(a) At the Closing, the Company shall deliver or cause to be delivered to each
Investor the following:

 

(i)          a copy of the Company’s irrevocable instructions to the Transfer
Agent instructing the Transfer Agent to (A) if physical certificates are
required by the Investor, deliver, on an expedited basis, one or more stock
certificates or (B) if physical certificates are not required by the Investor,
make a book-entry record through the facilities of DTC, in each case free and
clear of all restrictive and other legends (except as expressly provided in
Section 4.1(b) hereof) and evidencing such number of Common Shares set forth on
such Investor’s signature page to this Agreement, registered in the name of such
Investor;

 

(ii)         duly executed Transfer Agent Instructions acknowledged by the
Company’s transfer agent;

 

(iii)        a legal opinion of Company Counsel and Venable LLP, the Company’s
Maryland counsel, in the form of Exhibits C-1 and C-2, respectively, executed by
such counsel and delivered to the Investors;

 

(iv)        a certificate of the Secretary of the Company, dated as of the
Closing Date, (a) certifying the resolutions adopted by the Board of Directors
of the Company approving the transactions contemplated by this Agreement and the
other Transaction Documents and the issuance of the Common Shares,
(b) certifying the current versions of the certificate of incorporation, as
amended, and by-laws of the Company and (c) certifying as to the signatures and
authority of persons signing the Transaction Documents and related documents on
behalf of the Company; and

 

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(v)         a certificate of the Chief Executive Officer or Chief Financial
Officer of the Company, dated as of the Closing Date, certifying to the
fulfillment of the conditions specified in Section 5.2.

 

(b) At the Closing, each Investor shall deliver or cause to be delivered to the
Company the purchase price set forth on such Investor’s signature page to this
Agreement in United States dollars and in immediately available funds, by wire
transfer to an account designated in writing to such Investor by the Company for
such purpose.

 

(c) At the Closing, the Company and each Investor shall execute and deliver a
contingent value rights agreement, substantially in the form of Exhibit D
(“Contingent Value Rights Agreement”), which shall provide that such Investor
shall be issued a number of contingent value rights equal to the number of
Common Shares issued to such Investor hereunder.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES

 

3.1 Representations and Warranties of the Company. The Company hereby represents
and warrants as of the date hereof (except for the representations and
warranties that speak as of a specific date, which shall be made as of such
date) to the Investors as follows:

 

(a) Organization and Qualification. The Company and each “significant
subsidiary” (as such term is defined in Rule 1-02 of Regulation S-X of the
Securities Act) (a “Significant Subsidiary”) of which the Company owns, directly
or indirectly, an interest, if any, is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, with the requisite power and legal authority to own and use its
properties and assets and to carry on its business as currently conducted. The
Company is not in violation of any of the provisions of its certificate or
articles of incorporation, bylaws or other organizational or charter documents.
The Company is duly qualified to do business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect.

 

(b) Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
each of the Transaction Documents to which it is a party and otherwise to carry
out its obligations hereunder and thereunder. The execution and delivery of each
of the Transaction Documents to which it is a party by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate action on the part of the Company and
no further consent or action is required by the Company, its Board of Directors
or its stockholders. Each of the Transaction Documents to which it is a party
has been (or upon delivery will be) duly executed by the Company and is, or when
delivered in accordance with the terms hereof, will constitute, the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

 

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(c) No Conflicts. The execution, delivery and performance of the Transaction
Documents to which it is a party by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby do not, and will
not, (i) conflict with or violate any provision of the Company’s certificate or
articles of incorporation, bylaws or other organizational or charter documents,
(ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
the Company or any Significant Subsidiary under the terms or conditions of, any
agreement, credit facility, debt or other instrument (evidencing a Company debt
or otherwise) or other understanding to which the Company or any Significant
Subsidiary is a party or by which any property or asset of the Company is bound,
or affected, except to the extent that such conflict, default, termination,
amendment, acceleration or cancellation right would not reasonably be expected
to have a Material Adverse Effect, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company or any Significant
Subsidiary is subject (including, assuming the accuracy of the representations
and warranties of the Investors set forth in Section 3.2 hereof, federal and
state securities laws and regulations and the rules and regulations of any
self-regulatory organization to which the Company or its securities are subject,
including all applicable Trading Markets), or by which any property or asset of
the Company or any Significant Subsidiary is bound or affected, except to the
extent that such violation would not reasonably be expected to have a Material
Adverse Effect. The issuance of shares of the Company’s Series C Convertible
Preferred Stock (the “Series C Preferred Stock”) pursuant to the Preferred Stock
Purchase Agreement will not conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company debt or otherwise) or
other understanding to which the Company is a party or by which any property or
asset of the Company is bound, or affected. Other than in connection or in
compliance with the provisions of the Securities Act, no notice to, filing with,
exemption or review by, or authorization, consent, approval of, any governmental
authority is necessary for the consummation of the transactions contemplated by
the Transaction Documents.

 

(d) The Common Shares. The Common Shares are duly authorized and, when issued
and paid for in accordance with the applicable Transaction Documents, will be
duly and validly issued, fully paid and nonassessable, free and clear of all
Liens and will not be subject to preemptive or similar rights of stockholders
(other than those imposed by the Investors).

 

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(e) Capitalization. Except as contemplated by the Preferred Stock Purchase
Agreement, the authorized capital stock of the Company is as set forth in the
Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 and
filed with the SEC on May 6, 2013. As of the date hereof, (i) 154,888,410 shares
of Common Stock are issued and outstanding, (ii) 545,454 shares of the Company’s
Series A Convertible Preferred Stock are issued and outstanding, (iii) 283,018
shares of the Company’s Series B Convertible Preferred Stock are issued and
outstanding and (iv) no shares of Manager’s Stock are issued and outstanding. As
of the Closing, (i) 184,300,174 shares of Common Stock will be issued and
outstanding, (ii) 545,454 shares of the Company’s Series A Convertible Preferred
Stock will be issued and outstanding, (iii) 283,018 shares of the Company’s
Series B Convertible Preferred Stock will be issued and outstanding, (iv)
28,398,213 shares of the Series C Preferred Stock will be issued and outstanding
and (v) no shares of Manager’s Stock will be issued and outstanding.
Additionally, as of the date hereof, 9,612,586 common units of limited
partnership interest in the form of “OP Units” in ARC Properties Operating
Partnership, L.P. were issued and outstanding. As of the date hereof, and as of
the Closing, all outstanding shares of capital stock are duly authorized,
validly issued, fully paid and nonassessable and have been issued in compliance
in all material respects with all applicable securities laws. Except as
disclosed in the SEC Reports filed prior to the date hereof, the Company did not
have outstanding at March 31, 2013 any other Options, script rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exercisable or exchangeable for, or
entered into any agreement giving any Person any right to subscribe for or
acquire, any Common Shares, or securities or rights convertible or exchangeable
into Common Shares. Except as disclosed in SEC Reports, and except for customary
adjustments as a result of stock dividends, stock splits, combinations of
shares, reorganizations, recapitalizations, reclassifications or other similar
events, there are no anti-dilution or price adjustment provisions contained in
any security issued by the Company (or in any agreement providing rights to
security holders) and the issuance and sale of the Common Shares will not
obligate the Company to issue Common Shares or other securities to any Person
(other than the Investors) and will not result in a right of any holder of
securities to adjust the exercise, conversion, exchange or reset price under
such securities. To the knowledge of the Company, except as disclosed in the SEC
Reports filed prior to the date hereof and any Schedules 13D or 13G filed with
the SEC pursuant to Rule 13d-1 of the Exchange Act by reporting persons or in
Schedule 3.1(e) hereto, no Person or group of related Persons beneficially owns
(as determined pursuant to Rule 13d-3 under the Exchange Act), or has the right
to acquire, by agreement with or by obligation binding upon the Company,
beneficial ownership of in excess of 5% of the outstanding Common Stock.

  

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(f) SEC Reports; Financial Statements. Except as set forth in SEC Reports filed
prior to the date hereof or on Schedule 3.1(f) hereto, the Company has filed all
reports required to be filed by it under the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the 12 months preceding the date hereof on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such extension and has
filed all reports required to be filed by it under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date
hereof. Such reports required to be filed by the Company under the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, together with any
materials filed or furnished by the Company under the Exchange Act, whether or
not any such reports were required, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as the
“SEC Reports” and, together with this Agreement and the Schedules to this
Agreement, the “Disclosure Materials”. As of their respective dates (or, if
amended or superseded by a filing prior to the date hereof, then on the date of
such filing), the SEC Reports filed by the Company complied in all material
respects with the requirements of the Securities Act and the Exchange Act and
the rules and regulations of the SEC promulgated thereunder, and none of the SEC
Reports, when filed (or, if amended or superseded by a filing prior to the date
hereof, then on the date of such filing) by the Company, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the SEC with respect thereto as in effect at the time of filing
(or, if amended or superseded by a filing prior to the Closing Date, then on the
date of such filing). Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a
consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements, the notes thereto and except
that unaudited financial statements may not contain all footnotes required by
GAAP or may be condensed or summary statements, and fairly present in all
material respects the consolidated financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, year-end audit adjustments. Except for
agreements related to the GE Portfolio Acquisition, all material agreements to
which the Company is a party or to which the property or assets of the Company
are subject are included as part of or identified in the SEC Reports, to the
extent such agreements are required to be included or identified pursuant to the
rules and regulations of the SEC.

 

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(g) Material Changes; Undisclosed Events, Liabilities or Developments; Solvency.
Since the date of the latest audited financial statements included within the
SEC Reports, except as disclosed in the SEC Reports (other than forward-looking
statements, risk factors and others statements cautionary in nature) filed prior
to the date hereof or in Schedule 3.1(g) hereto, (i) there has been no event,
occurrence or development that, individually or in the aggregate, has had or
that would result in a Material Adverse Effect, (ii) the Company has not
incurred any material liabilities other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the Company's
financial statements pursuant to GAAP or required to be disclosed in filings
made with the SEC, (iii) the Company has not altered its method of accounting or
changed its auditors, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders, in their capacities
as such, or purchased, redeemed or made any agreements to purchase or redeem any
shares of its capital stock, and (v) the Company has not issued any equity
securities to any officer, director or Affiliate, except pursuant to existing
Company stock-based plans. The Company has not taken any steps to seek
protection pursuant to any bankruptcy law nor does the Company have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact which would
reasonably lead a creditor to do so. The Company is not as of the date hereof,
and after giving effect to the transactions contemplated hereby to occur at the
applicable Closing, will not be Insolvent (as defined below). For purposes of
this Section 3.1(g), “Insolvent” means (i) the present fair saleable value of
the Company's assets is less than the amount required to pay the Company's total
Indebtedness, (ii) the Company is unable to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured, (iii) the Company intends to incur or believes that it
will incur debts that would be beyond its ability to pay as such debts mature or
(iv) the Company has unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted.

 

(h) No General Solicitation; Placement Agent's Fees. Neither the Company, nor
any of its Affiliates, nor any Person acting on its or their behalf, has engaged
in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with the offer or sale of the Common Shares. The
Company shall be responsible for the payment of any placement agent’s fees,
financial advisory fees, or brokers’ commission (other than for persons engaged
by any Investor or its investment advisor) relating to or arising out of the
issuance of the Common Shares pursuant to this Agreement. The Company shall pay,
and hold each Investor harmless against, any liability, loss or expense
(including, without limitation, reasonable attorney's fees and out-of-pocket
expenses) arising in connection with any such claim for fees arising out of the
issuance of the Common Shares pursuant to this Agreement. The Company
acknowledges that is has engaged JMP Securities, LLC as its exclusive placement
agent (the “Agent”) in connection with the sale of the Common Shares. Other than
the Agent, the Company has not engaged any placement agent or other agent in
connection with the sale of the Common Shares.

 

(i) Private Placement; Investment Company. Neither the Company nor any of its
Affiliates nor, any Person acting on the Company’s behalf has, directly or
indirectly, at any time within the past six months, made any offer or sale of
any security or solicitation of any offer to buy any security under
circumstances that would (i) eliminate the availability of the exemption from
registration under Regulation D under the Securities Act in connection with the
offer and sale by the Company of the Common Shares as contemplated hereby or
(ii) cause the offering of the Common Shares pursuant to the Transaction
Documents to be integrated with prior offerings by the Company for purposes of
any applicable law, regulation or stockholder approval provisions, including,
without limitation, under the rules and regulations of any Trading Market.
Assuming the accuracy of the representations and warranties of the Investors set
forth in Section 3.2, no registration under the Securities Act is required for
the offer and sale of the Common Shares by the Company to the Investors as
contemplated hereby. The sale and issuance of the Common Shares hereunder does
not contravene the rules and regulations of any Trading Market on which the
Common Stock is listed or quoted. The Company is not required to be registered
as, and is not an Affiliate of, an “investment company” within the meaning of
the Investment Company Act of 1940, as amended.

 

-11-

 

 

(j) Form S-3ASR. The Company has an effective shelf registration statement on
Form S-3ASR promulgated under the Securities Act and is eligible to register the
Common Shares for resale by the Investors using such registration statement.

 

(k) Listing and Maintenance Requirements. The Company has not, in the twelve
months preceding the date hereof, received notice (written or oral) from any
Trading Market on which the Common Stock is or has been listed or quoted to the
effect that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is, and has no reason to
believe that it will not in the foreseeable future continue to be, in compliance
with all such listing and maintenance requirements.

 

(l) Registration Rights. Except as disclosed in the SEC Reports, the Company has
not granted or agreed to grant to any Person any rights (including “piggy-back”
registration rights) to have any securities of the Company registered with the
SEC or any other governmental authority that have not expired or been satisfied
or waived. No Person has registration or “piggy-back” rights that would preempt
or “cut-back” the registration rights granted to the Investors under this
Agreement.

 

(m) Absence of Litigation. Except as disclosed in the SEC Reports (other than
forward-looking statements, risk factors and others statements cautionary in
nature) filed prior to the date hereof, to the Company's knowledge, there is no
action, suit, claim, Proceeding, inquiry or investigation, before or by any
court, public board, government agency, self-regulatory organization or body
pending or, to the Company’s knowledge, threatened against or affecting the
Company that could, individually or in the aggregate, to have a Material Adverse
Effect.

 

(n) Application of Takeover Protections. The Company and its Board of Directors
have taken all necessary action, if any, to render inapplicable any control
share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under the
Company’s charter documents or the laws of its state of incorporation that is or
could become applicable to any of the Investors as a result of the Investors and
the Company fulfilling their obligations or exercising their rights under the
Transaction Documents, including, without limitation, as a result of the
Company’s issuance of the Common Shares and the Investors’ ownership of the
Common Shares.

 

(o) Compliance. Except as would not, individually or in the aggregate,
reasonably be expected to have or result in a Material Adverse Effect, (i) the
Company is not in default under or in violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or both, would
result in a default by the Company under), nor has the Company received written
notice of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) the Company is not in
violation of any order of any court, arbitrator or governmental body, or (iii) 
the Company is not and has not been in violation of any statute, rule or
regulation of any governmental authority.

 

-12-

 

 

(p) Domestically Controlled REIT. To the Company’s knowledge and belief, the
Company is, and the Company expects that it will be immediately after the
Closing and after any conversion of the Series C Preferred Stock, a
“domestically controlled qualified investment entity” (within the meaning of
Section 897(h)(4) of the Code, and, for the avoidance of doubt, taking into
account the ownership of the Common Stock of the Company), provided that in
applying Section 897(h)(4)(B) of the Code for purposes of this representation,
it shall be assumed that all persons who own stock in the Company as a result of
the transactions contemplated by this Agreement and by the Articles
Supplementary (including any conversion of the Series C Preferred Stock) are
foreign persons.

 

(q) Internal Accounting Controls. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

 

(r) Sarbanes-Oxley Act. The Company is in compliance in all respects with
applicable requirements of the Sarbanes-Oxley Act of 2002 and applicable rules
and regulations promulgated by the SEC thereunder, except where such
noncompliance would not have, individually or in the aggregate, a Material
Adverse Effect.

 

3.2 Representations and Warranties of the Investors. Each Investor hereby, as to
itself only and for no other Investor, represents and warrants to the Company,
severally and not jointly, as follows:

 

(a) Organization; Authority. Such Investor is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with the requisite corporate, partnership or other power and
authority to enter into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder. The purchase by such Investor of the Common Shares hereunder has
been duly authorized by all necessary corporate, partnership or other action on
the part of such Investor. This Agreement has been duly executed and delivered
by such Investor and constitutes the valid and binding obligation of such
Investor, enforceable against it in accordance with its terms, except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

-13-

 

 

(b) No Public Sale or Distribution. Such Investor is acquiring the Common Shares
in the ordinary course of business for its own account and not with a view
towards, or for resale in connection with, the public sale or distribution
thereof, except pursuant to sales registered under the Securities Act or under
an exemption from such registration and in compliance with applicable federal
and state securities laws, and such Investor does not have a present arrangement
to effect any distribution of the Common Shares to or through any person or
entity; provided, however, that by making the representations herein, such
Investor does not agree to hold any of the Common Shares for any minimum or
other specific term and reserves the right to dispose of the Common Shares at
any time in accordance with or pursuant to a registration statement or an
exemption under the Securities Act.

 

(c) Investor Status. At the time such Investor was offered the Common Shares, it
was, and at the date hereof it is, an “accredited investor” as defined in Rule
501(a) under the Securities Act or a “qualified institutional buyer” as defined
in Rule 144A(a) under the Securities Act. Such Investor is not a registered
broker dealer registered under Section 15(a) of the Exchange Act, or a member of
the Financial Regulatory Authority, Inc. (“FINRA”) or an entity engaged in the
business of being a broker dealer. Except as otherwise disclosed in writing to
the Company on Exhibit B-2 (attached hereto) on or prior to the date of this
Agreement, such Investor is not affiliated with any broker dealer registered
under Section 15(a) of the Exchange Act, or a member of FINRA or an entity
engaged in the business of being a broker dealer.

 

(d) General Solicitation. Such Investor is not purchasing the Common Shares as a
result of any advertisement, article, notice or other communication regarding
the Common Shares published in any newspaper, magazine or similar media,
broadcast over television or radio, disseminated over the Internet or presented
at any seminar or any other general solicitation or general advertisement.

 

(e) Experience of Such Investor. Such Investor, either alone or together with
its representatives has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Common Shares, and has so evaluated
the merits and risks of such investment. Such Investor understands that it must
bear the economic risk of this investment in the Common Shares indefinitely, and
is able to bear such risk and is able to afford a complete loss of such
investment.

 

(f) Access to Information. Such Investor acknowledges that it has reviewed the
Disclosure Materials and all other materials such Investor deemed necessary for
the purpose of making an investment decision with respect to the Common Shares,
including information regarding the GE Portfolio Acquisition and the CapLease
Acquisition, and has been afforded: (i) the opportunity to ask such questions as
it has deemed necessary of, and to receive answers from, representatives of the
Company concerning the Company’s business, management and financial affairs and
terms and conditions of the offering of the Common Shares and the merits and
risks of investing in the Common Shares; (ii) access to information (including
material non-public information) about the Company and its Subsidiaries and
their respective financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that
the Company possesses or can acquire without unreasonable effort or expense that
is necessary to make an informed investment decision with respect to the
investment. Such Investor has evaluated the risks of investing in the Common
Shares, understands there are substantial risks of loss incidental to the
investment and has determined that it is a suitable investment for the Investor.

 

-14-

 

 

(g) No Governmental Review. Such Investor understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Common Shares or the
fairness or suitability of the investment in the Common Shares nor have such
authorities passed upon or endorsed the merits of the offering of the Common
Shares.

 

(h) No Conflicts. The execution, delivery and performance by such Investor of
this Agreement and the consummation by such Investor of the transactions
contemplated hereby will not (i) result in a violation of the organizational
documents of such Investor or (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which such Investor
is a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws) applicable to
such Investor, except in the case of clauses (ii) and (iii) above, for such that
are not material and do not otherwise affect the ability of such Investor to
consummate the transactions contemplated hereby.

 

(i)  Prohibited Transactions; Confidentiality. No Investor, directly or
indirectly, and no Person acting on behalf of or pursuant to any understanding
with any Investor, has engaged in any purchases or sales in the securities,
including derivatives, of the Company (including, without limitation, any Short
Sales (a “Transaction”) involving any of the Company’s securities) since the
time that such Investor was first contacted by the Company, the Agent or any
other Person regarding an investment in the Company. Such Investor covenants
that neither it nor any Person acting on its behalf or pursuant to any
understanding with such Investor will engage, directly or indirectly, in any
Transactions in the securities of the Company (including Short Sales) prior to
the time the transactions contemplated by this Agreement and the audited and pro
form financial information with respect to the GE Portfolio Acquisition are
publicly disclosed. “Short Sales” include, without limitation, all “short sales”
as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act
and all types of direct and indirect stock pledges, forward sale contracts,
options, puts, calls, short sales, swaps, derivatives and similar arrangements
(including on a total return basis), and sales and other transactions through
non-U.S. broker-dealers or foreign regulated brokers.

 

(j) Restricted Securities. The Investors understand that the Common Shares are
characterized as “restricted securities” under the U.S. federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act only
in certain limited circumstances.

 

-15-

 

 

(k) Legends. It is understood that, except as provided in Section 4.1(b),
certificates evidencing the Common Shares may bear any legend as required by the
"blue sky" laws of any state and a restrictive legend in substantially the form
set forth in Section 4.1(b) (and, with respect to Common Shares held in
book-entry form, the Transfer Agent will record such a legend or other notation
on the share register of the Company).

 

(l) No Legal, Tax or Investment Advice. Such Investor understands that nothing
in this Agreement or any other materials presented by or on behalf of the
Company to the Investor in connection with the purchase of the Common Shares
constitutes legal, tax or investment advice. Such Investor has consulted such
legal, tax and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of the Common Shares.
Such Investor understands that the Agent has acted solely as the agent of the
Company in this placement of the Common Shares, and that the Agent makes no
representation or warranty with regard to the merits of this transaction or as
to the accuracy of any information such Investor may have received in connection
therewith. Such Investor acknowledges that he has not relied on any information
or advice furnished by or on behalf of the Agent.

 

(m) Certain Information. Each Investor acknowledges that the Company may have
material, non-public information not known to the Investors regarding the Common
Shares and the Company, including, without limitation, (i) information,
including actual and pro forma financial information, with respect to (A) the GE
Portfolio Acquisition and (B) the CapLease Acquisition and (ii) information
received by the Company on a privileged basis from the attorneys and financial
advisers representing the Company and its Board of Directors. Each Investor
understands, based on its experience, the disadvantage to which such Investor is
subject due to the disparity of information between the Company and such
Investor and, notwithstanding this, such Investor has deemed it appropriate to
enter into this Agreement and engage in the transactions contemplated hereby.

 

ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES

 

4.1 Transfer Restrictions.

 

(a) Each Investor (severally and not jointly) covenants that the Common Shares
will only be disposed of pursuant to an effective registration statement under,
and in compliance with the requirements of, the Securities Act or pursuant to an
available exemption from the registration requirements of the Securities Act,
and in compliance with any applicable state securities laws. In connection with
any transfer of Common Shares other than pursuant to an effective registration
statement or to the Company, or pursuant to Rule 144, the Company may require
the transferor to provide to the Company an opinion of counsel selected by the
transferor and reasonably acceptable to the Company, the form and substance of
which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration under the Securities Act.
Notwithstanding the foregoing, the Company hereby consents to and agrees to
register on the books of the Company and with its Transfer Agent, without any
such legal opinion, except to the extent that the transfer agent requests such
legal opinion, any transfer of Common Shares by an Investor to an Affiliate of
such Investor, provided that the transferee certifies to the Company that it is
an “accredited investor” as defined in Rule 501(a) under the Securities Act and
provided that such Affiliate does not request any removal of any existing
legends on any certificate evidencing the Common Shares.

 

-16-

 

 

(b) The Investors agree that certificates representing the Common Shares shall
bear any legend as required by the "blue sky" laws of any state and a
restrictive legend in substantially the following form (and, with respect to
Common Shares held in book-entry form, the Transfer Agent will record such a
legend or other notation on the share register of the Company):

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS. THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN
“ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

 

(c) Removal of Legends. The restrictive legend set forth in Section 4.1(b) above
shall be removed and the Company shall issue a certificate without such
restrictive legend or any other restrictive legend to the holder of the
applicable Common Shares upon which it is stamped or issue to such holder by
electronic delivery at the applicable balance account at DTC, at such time as
Common Shares are being resold, (i) if a registration statement (including the
Registration Statement) covering the resale of the Common Shares is effective
under the Securities Act, (ii) following any sale of such Common Shares pursuant
to Rule 144 if the holder provides the Company with a legal opinion (and the
documents upon which the legal opinion is based) reasonably acceptable to the
Company to the effect that the Common Shares can be sold under Rule 144, (iii)
at the request of the holder (regardless of whether such Common Shares are then
being resold), if the Common Shares are eligible for sale under Rule 144 without
any volume limitation, or (iv) if the holder provides the Company with a legal
opinion (and the documents upon which the legal opinion is based) reasonably
acceptable to the Company to the effect that the legend is not required under
applicable requirements of the Securities Act (including controlling judicial
interpretations and pronouncements issued by the Staff of the SEC). In
connection with the resale of any Common Shares, following the Effective Date
and provided the registration statement referred to in clause (i) above is then
in effect, or at such earlier time as a legend is no longer required for certain
Common Shares, the Company will no later than three Trading Days following the
delivery by an Investor to the Company or the Transfer Agent (if delivery is
made to the Transfer Agent a copy shall be contemporaneously delivered to the
Company) of (i) a legended certificate representing such Common Shares (and, in
the case of a requested transfer, endorsed or with stock powers attached,
signatures guaranteed, and otherwise in form necessary to affect transfer), and
(ii) an opinion of counsel to the extent required by Section 4.1(a), deliver or
cause to be delivered to such Investor a certificate representing such Common
Shares that is free from all restrictive and other legends. Certificates for
Common Shares free from all restrictive legends may be transmitted by the
Transfer Agent to the Investor by crediting the account of the Investor’s
primary broker with DTC as directed by the Investor. The Company may not make
any notation on its records or give instructions to the Transfer Agent that
enlarge the restrictions on transfer set forth in this Section 4.1(c).

 

-17-

 

 

(d) Acknowledgement. Each Investor acknowledges its responsibilities under the
Securities Act and accordingly will not sell or otherwise transfer the Common
Shares or any interest therein without complying with the requirements of the
Securities Act and any other applicable securities laws.

 

4.2 Furnishing of Information. Until the date that any Investor owning Common
Shares may sell all of them without restriction under Rule 144 of the Securities
Act (or any successor provision), the Company covenants to use its reasonable
best efforts to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act. The Company further
covenants that it will take such further action as any holder of Common Shares
may reasonably request to satisfy the provisions of this Section 4.2.

 

4.3 Integration. The Company shall not, and shall use its commercially
reasonable efforts to ensure that no Affiliate thereof shall, sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in Section 2 of the Securities Act) that would be integrated with
the offer or sale of the Common Shares in a manner that would require the
registration under the Securities Act of the sale of the Common Shares to the
Investors or that would be integrated with the offer or sale of the Common
Shares for purposes of the rules and regulations of any Trading Market.

 

4.4  Reservation of Common Shares. The Company shall maintain a reserve from its
duly authorized Common Shares for issuance pursuant to the Transaction Documents
in such amount as may be required to fulfill its obligations to issue such
Shares under the Transaction Documents. In the event that at any time the then
authorized Common Shares are insufficient for the Company to satisfy its
obligations to issue such Shares under the Transaction Documents, the Company
shall promptly take such actions as may be required to increase the number of
authorized Shares.

 

4.5 Securities Laws Disclosure; Publicity. The Company shall, at or before 9:00
a.m., New York time, on the first (1st) Trading Day following execution of this
Agreement, issue a press release disclosing all material terms of the
transactions contemplated hereby. On or before 9:00 a.m., New York time, on the
fourth (4th) Trading Day following execution of this Agreement, the Company
shall file a Current Report on Form 8-K with the SEC (the “8-K Filing”)
describing the terms of the transactions contemplated by the Transaction
Documents and including as exhibits to such Current Report on Form 8-K the
Transaction Documents (including the schedules and the names, and addresses of
the Investors and the amount(s) of Common Shares respectively purchased) in the
form required by the Exchange Act. The Company shall file the financial
statements required by Regulation S-X with respect to the GE Portfolio
Acquisition on or before 5:30 p.m., New York time, on the third (3rd) Trading
Day following execution of this Agreement. Thereafter, the Company shall timely
file any filings and notices required by the SEC or applicable law with respect
to the transactions contemplated hereby and provide copies thereof to the
Investors promptly after filing. Except as herein provided, neither the Company
nor any Subsidiary shall publicly disclose the name of any Investor, or include
the name of any Investor in any press release without the prior written consent
of such Investor (which consent shall not be unreasonably withheld or delayed),
unless otherwise required by law, regulatory authority or Trading Market,
including disclosing information with respect to the Investors as selling
stockholders in a Prospectus or Prospectus supplement. Neither the Company nor
any Subsidiary shall, and shall cause each of its their respective officers,
directors, employees and agents not to, provide any Investor with any material
nonpublic information regarding the Company or any Subsidiary from and after the
issuance of the above referenced press release without the express written
consent of such Investor.

 

-18-

 

 

4.6 Use of Proceeds. The Company intends to use the net proceeds from the sale
of the Common Shares for working capital and general corporate purposes,
including for the acquisition of real estate or companies. Pending these uses,
the Company intends to invest the net proceeds from this offering in short-term,
interest-bearing, investment-grade securities, or as otherwise pursuant to the
Company's customary investment policies.

 

4.7 Lock-Up. Each Investor agrees that it will not, without the prior written
consent of the Company, purchase, offer, sell, contract to sell, pledge or
otherwise dispose of or transact in (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by such Investor or any Affiliate of such Investor or
any Person in privity with such Investor or any Affiliate of such Investor),
directly or indirectly, including the filing (or participation in the filing) of
a registration statement with the SEC in respect of, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Exchange Act, and the rules and
regulations of the SEC promulgated thereunder with respect to, any shares of
capital stock of the Company or any securities convertible into, or exercisable
or exchangeable for such capital stock, or publicly announce an intention to
effect any such transaction, for a period from the date hereof until the Company
files a Current Report on Form 8-K disclosing the audited and pro form financial
information with respect to the GE Portfolio Acquisition.

 

4.8 Further Assurances. Each Investor agrees to promptly provide any and all
information reasonably requested by the Company in connection with the Company’s
compliance with the terms of its charter, including with respect to the
ownership limitations therein, and its continued qualification as a real estate
investment trust under the Code.

 

-19-

 

  

ARTICLE V
CONDITIONS

 

5.1 Conditions Precedent to the Obligations of the Investors. The obligation of
each Investor to acquire Common Shares at the Closing is subject to the
satisfaction or waiver by such Investor, at or before the Closing, of each of
the following conditions:

 

(a) Representations and Warranties. The representations and warranties of the
Company contained herein shall be true and correct in all material respects as
of the date when made and as of the Closing as though made on and as of such
date; and

 

(b) Performance. The Company and each other Investor shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by the Transaction Documents to be performed, satisfied
or complied with by it at or prior to the Closing.

 

(c)  No Suspensions of Trading in Common Stock; Listing. Trading in the Common
Stock shall not have been suspended by the SEC or any Trading Market (except for
any suspensions of trading of not more than one Trading Day solely to permit
dissemination of material information regarding the Company) at any time since
the date of execution of this Agreement, and the Common Stock shall have been at
all times since such date listed for trading on a Trading Market.

 

(d) Absence of Litigation. No action, suit or proceeding by or before any court
or any governmental body or authority, against the Company or any Subsidiary or
pertaining to the transactions contemplated by this Agreement or their
consummation, shall have been instituted on or before the Closing Date, which
action, suit or proceeding would, if determined adversely, have a Material
Adverse Effect.

 

(e) Preferred Stock Purchase Agreement. The Company shall have simultaneously
consummated the transactions contemplated by the Preferred Stock Purchase
Agreement.

 

5.2 Conditions Precedent to the Obligations of the Company. The obligation of
the Company to sell the Common Shares at the Closing is subject to the
satisfaction or waiver by the Company, at or before the Closing, of each of the
following conditions:

 

(a) Representations and Warranties. The representations and warranties of the
Investors contained herein shall be true and correct in all material respects as
of the date when made and as of the Closing Date as though made on and as of
such date; and

 

(b) Performance. The Investors shall have performed, satisfied and complied in
all material respects with all covenants, agreements and conditions required by
the Transaction Documents to be performed, satisfied or complied with by the
Investors at or prior to the Closing.

 

-20-

 

 

ARTICLE VI
REGISTRATION RIGHTS

 

6.1 Registration Statement.

 

(a) On or prior to the Filing Date, the Company shall prepare and file with the
SEC a Registration Statement or, if a Registration Statement is then effective,
a supplement to the Prospectus, in either case covering the resale of all
Registrable Securities for an offering to be made on a continuous basis pursuant
to Rule 415 (or any successor provision); provided, that the Company may, in its
sole discretion, extend the Filing Date for up to ten (10) days. The
Registration Statement shall be on Form S-3 (except if the Company is not then
eligible to register for resale the Registrable Securities on Form S-3, in which
case such registration shall be on another appropriate form in accordance with
the Securities Act and the Exchange Act). This Prospectus or supplement thereto,
as applicable, shall contain (except if otherwise directed by the Investors or
requested by the SEC) the “Plan of Distribution” in substantially the form
(subject to any changes that may be made in accordance with Section 6.2(a))
attached hereto as Exhibit E.

 

(b) The Company shall use its reasonable best efforts to keep the Registration
Statement continuously effective under the Securities Act until the earlier of
the date that all Registrable Securities covered by such Registration Statement
have been sold or can be sold publicly without any volume limitations under Rule
144 (the “Effectiveness Period”).

 

(c) Notwithstanding anything in this Agreement to the contrary, after 120
consecutive Trading Days of continuous effectiveness of the initial Registration
Statement filed and declared effective (or Prospectus filed, as appropriate)
pursuant to this Agreement, the Company may, by written notice to the Investors,
suspend sales under a Registration Statement after the Effective Date thereof
and/or require that the Investors immediately cease the sale of Registrable
Securities pursuant thereto and/or defer the filing of any subsequent
Registration Statement if the Company is engaged in a material merger,
acquisition or sale and the Company’s Board of Directors determines in good
faith, by appropriate resolutions, that, as a result of such activity, (A) it
would be materially detrimental to the Company (other than as relating solely to
the price of the Common Stock) to maintain a Registration Statement at such time
or (B) it is in the best interests of the Company to suspend sales under such
registration at such time. Upon receipt of such notice, each Investor shall
immediately discontinue any sales of Registrable Securities pursuant to such
registration until such Investor is advised in writing by the Company that the
current Prospectus or amended Prospectus, as applicable, may be used. In no
event, however, shall this right be exercised to suspend sales beyond the period
during which (in the good faith determination of the Company’s Board of
Directors) the failure to require such suspension would be materially
detrimental to the Company. The Company’s rights under this Section 6.1(c) may
be exercised for a period of no more than 20 Trading Days at a time and not more
than three times in any twelve-month period. Immediately after the end of any
suspension period under this Section 6.1(c), the Company shall take all
necessary actions (including filing any required supplemental Prospectus) to
restore the effectiveness of the applicable Registration Statement and the
ability of the Investors to publicly resell their Registrable Securities
pursuant to such effective Registration Statement.

 

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6.2 Registration Procedures. In connection with the Company’s registration
obligations hereunder, the Company shall:

 

(a) Not less than three Trading Days prior to the filing of a Registration
Statement or any related Prospectus or any amendment or supplement thereto,
furnish to the Investors copies of all such documents proposed to be filed,
which documents (other than any document that is incorporated or deemed to be
incorporated by reference therein) will be subject to the review of such
Investors. The Company shall reflect in each such document when so filed with
the SEC such comments regarding the description of the transactions contemplated
by this Agreement or the Preferred Stock Purchase Agreement, the Investors and
the plan of distribution as the Investors may reasonably and promptly propose no
later than two Trading Days after the Investors have been so furnished with
copies of such documents as aforesaid.

 

(b) (i) Subject to Section 6.1(c), prepare and file with the SEC such
amendments, including post-effective amendments, to each Registration Statement
and the Prospectus used in connection therewith as may be necessary to keep the
Registration Statement continuously effective, as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the SEC such
additional Registration Statements in order to register for resale under the
Securities Act all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement,
and as so supplemented or amended to be filed pursuant to Rule 424 (or any
successor provision); and (iii) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by the Registration Statement
during the applicable period in accordance with the intended methods of
disposition by the Investors thereof set forth in the Registration Statement as
so amended or in such Prospectus as so supplemented.

 

(c) Notify the Investors as promptly as reasonably possible, and (if requested
by the Investors confirm such notice in writing no later than two Trading Days
thereafter, of any of the following events: (i) the SEC issues any stop order
suspending the effectiveness of any Registration Statement or initiates any
Proceedings for that purpose; (ii) the Company receives notice of any suspension
of the qualification or exemption from qualification of any Registrable
Securities for sale in any jurisdiction, or the initiation or threat of any
Proceeding for such purpose; or (iii) the financial statements included in any
Registration Statement become ineligible for inclusion therein or any
Registration Statement or Prospectus or other document contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

 

(d) Use its reasonable best efforts to avoid the issuance of or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of any
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, as soon as possible.

 

-22-

 

 

(e) Promptly deliver to each Investor, without charge, as many copies of the
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request. The
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Investors in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto to the extent permitted by federal and state
securities laws and regulations.

 

(f) (i) In the manner required by each Trading Market, prepare and file with
such Trading Market an additional shares listing application (or applications)
covering all of the Registrable Securities; (ii) take all steps necessary to
cause such Common Shares to be approved for listing on each Trading Market as
soon as possible thereafter; (iii) provide to each Investor evidence of such
listing; and (iv) except as a result of events provided for in Section 6.1(d),
during the Effectiveness Period, maintain the listing of such Common Shares on
each such Trading Market or another Eligible Market.

 

(g) Prior to any public offering of Registrable Securities, use reasonable best
efforts to register or qualify or cooperate with the selling Investors in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any Investor requests in writing, to keep each such registration or
qualification (or exemption therefrom) effective for so long as required, but
not to exceed the duration of the Effectiveness Period, and to do any and all
other acts or things reasonably necessary or advisable to enable the disposition
in such jurisdictions of the Registrable Securities covered by a Registration
Statement; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.

 

(h) Cooperate with the Investors to facilitate the timely preparation and
delivery of certificates or book-entry records, as required by the Investors,
representing Registrable Securities to be delivered to a transferee pursuant to
a Registration Statement, which certificates or records, as applicable, shall be
free, to the extent permitted by this Agreement and under law, of all
restrictive legends, and to enable such certificates to be in such denominations
and registered in such names as any such Investors may reasonably request.

 

(i) Upon the occurrence of any event described in Section 6.2(c)(iii), as
promptly as reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

  

-23-

 

 

(j) Cooperate with any reasonable due diligence investigation undertaken by the
Investors in connection with the sale of Registrable Securities, including,
without limitation, by making available documents and information; provided,
that, the Company will not deliver or make available to any Investor material,
nonpublic information unless such Investor requests in advance in writing to
receive material, nonpublic information and agrees in writing to keep such
information confidential.

 

(k) Comply with all rules and regulations of the SEC applicable to the
registration of the Common Shares.

 

(l) It shall be a condition precedent to the obligations of the Company to
complete the registration or Prospectus supplement filing pursuant to this
Agreement with respect to the Registrable Securities of any particular Investor
that such Investor furnish to the Company the information specified in Exhibits
B-1, B-2 and B-3 hereto and such other information regarding itself, the
Registrable Securities and other Common Shares held by it and the intended
method of disposition of the Registrable Securities held by it (if different
from the Plan of Distribution set forth on Exhibit E hereto) as shall be
reasonably required to effect the registration of such Registrable Securities or
file a Prospectus supplement with respect to the Registrable Securities and
shall complete and execute such documents in connection with the foregoing as
the Company may reasonably request.

 

(m) The Company shall comply with all applicable rules and regulations of the
SEC under the Securities Act and the Exchange Act, including, without
limitation, Rule 172 (or any successor provision) under the Securities Act, file
any final Prospectus, including any supplement or amendment thereof, with the
SEC pursuant to Rule 424 (or any successor provision) under the Securities Act,
reasonably promptly inform the Investors in writing if, at any time during the
Effectiveness Period, the Company does not satisfy the conditions specified in
Rule 172 (or any successor provision) and, as a result thereof, the Investors
are required to make available a Prospectus in connection with any disposition
of Registrable Securities and take such other actions as may be reasonably
necessary to facilitate the registration of the Registrable Securities
hereunder.

 

6.3 Registration Expenses. The Company shall pay all fees and expenses (other
than Selling Expenses) incurred in connection with the performance of or
compliance with Article VI of this Agreement by the Company, including without
limitation (a) all registration and filing fees and expenses, including without
limitation those related to filings with the SEC, any Trading Market and in
connection with applicable state securities or Blue Sky laws, (b) printing
expenses (including without limitation expenses of printing certificates for
Registrable Securities), (c) messenger, telephone and delivery expenses,
(d) fees and disbursements of counsel for the Company, (e) fees and expenses of
all other Persons retained by the Company in connection with the consummation of
the transactions contemplated by this Agreement, and (f) all listing fees to be
paid by the Company to the Trading Market. All Selling Expenses incurred in
connection with the sale of Registrable Securities shall be borne by the
Investor or other holder selling such Registrable Securities. Each Investor or
other holder of Registrable Securities shall pay the expenses of its own counsel
and other advisers.

 

-24-

 

 

6.4 Indemnification

 

(a) Indemnification by the Company.

 

(i)          The Company shall, notwithstanding any termination of this
Agreement, indemnify and hold harmless each Investor, each Investor’s officers,
directors, agents and employees and each Person who controls any such Investor
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act), to the fullest extent permitted by applicable law, from and
against any and all Losses, as incurred, arising out of or based on (i) any
misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby or (ii) any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
Prospectus or any form of Company prospectus or in any amendment or supplement
thereto or in any Company preliminary prospectus, or arising out of or relating
to any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or supplement thereto, in the light of the
circumstances under which they were made) not misleading, except to the extent
that (A) such untrue statements, alleged untrue statements, omissions or alleged
omissions are based solely upon information regarding such Investor furnished in
writing to the Company by such Investor or its agent for use therein, or to the
extent that such information relates to such Investor or such Investor's
proposed method of distribution of Registrable Securities and was reviewed and
expressly approved by such Investor or its agent in writing expressly for use in
the Registration Statement, such Prospectus or such form of prospectus or in any
amendment or supplement thereto (it being understood that the information
provided by the Investor to the Company in Exhibits B-1, B-2 and B-3 and the
Plan of Distribution set forth on Exhibit E, as the same may be modified by such
Investor and other information provided by the Investor to the Company in or
pursuant to the Transaction Documents constitutes information reviewed and
expressly approved by such Investor in writing expressly for use in the
Registration Statement and Prospectus, as applicable), or (B) with respect to
any Prospectus, if the untrue statement or omission of material fact contained
in such Prospectus was corrected on a timely basis in the Prospectus, as then
amended or supplemented, if such corrected Prospectus was timely made available
by the Company to the Investor, and the Investor or its agent seeking indemnity
hereunder was advised in writing not to use the incorrect Prospectus prior to
the use giving rise to Losses.

 

(ii)         If (a) any holder of Common Shares (or, in the case of a holder
which is a partnership or disregarded entity for U.S. federal income tax
purposes, any direct or indirect partner, member or owner of such holder) (any
such person, a “Tax-Indemnified Person”) is advised by such Tax-Indemnified
Person’s tax advisors to pay, or (b) the U.S. taxing authorities seek to impose
on any Tax-Indemnified Person, a tax pursuant to Section 897 of the Code in
respect of (i) a sale or other disposition of such Common Shares, or (ii) a
payment of cash pursuant to the Contingent Value Rights Agreement, the Company
shall indemnify such Tax-Indemnified Person, on an after-tax basis, for the
amount of such tax, including any interest or penalties thereon; provided, that
the Company's indemnity obligation under this Section 6.4(a)(ii) shall survive
until ninety (90) days following the expiration of the applicable statute of
limitations.

 

-25-

 

 

(b) Indemnification by Investors. Each Investor shall, severally and not
jointly, notwithstanding any termination of this Agreement, indemnify and hold
harmless the Company, its directors, officers, agents and employees and each
Person who controls the Company (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act), to the fullest extent
permitted by applicable law, from and against all Losses (i) arising out of or
based on any misrepresentation or breach of any representation or warranty made
by such Investor in the Transaction Documents or any other certificate,
instrument or document contemplated hereby or thereby or (ii) arising out of (A)
any violation or purported violation of securities laws by such Investor in
connection with any resale of Common Shares and (B) any untrue statement of a
material fact contained in the Registration Statement, any Prospectus, or any
form of prospectus, or in any amendment or supplement thereto, or arising out of
or relating to any omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in the light of the circumstances under
which they were made) not misleading, but only to the extent that such untrue
statements or omissions are based solely upon information regarding such
Investor furnished to the Company by such Investor or its agent in writing
expressly for use therein, or to the extent that such information relates to
such Investor or such Investor’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Investor
or its agent expressly for use in the Registration Statement, such Prospectus or
such form of prospectus or in any amendment or supplement thereto (it being
understood that the information provided by the Investor to the Company in
Exhibits B-1, B-2 and B-3 and the Plan of Distribution set forth on Exhibit E,
as the same may be modified by such Investor and other information provided by
the Investor to the Company in or pursuant to the Transaction Documents
constitutes information reviewed and expressly approved by such Investor in
writing expressly for use in the Registration Statement and Prospectus, as
applicable). In no event shall the liability of any selling Investor hereunder
be greater in amount than the dollar amount of the net proceeds received by such
Investor upon the sale of the Registrable Securities giving rise to such
indemnification obligation.

 

(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought
or asserted against any Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person from whom
indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying
Party shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all fees and
expenses incurred in connection with defense thereof; provided, that, the
failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.

  

-26-

 

 

An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (i) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (ii) the Indemnifying Party shall have failed promptly to assume
the defense of such Proceeding and to employ counsel reasonably satisfactory to
such Indemnified Party in any such Proceeding; or (iii) the named parties to any
such Proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and such Indemnified Party shall have been
advised by counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in
which case, if such Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense
thereof and the reasonable fees and expenses of separate counsel shall be at the
expense of the Indemnifying Party). It shall be understood, however, that the
Indemnifying Party shall not, in connection with any one such Proceeding
(including separate Proceedings that have been or will be consolidated before a
single judge) be liable for the fees and expenses of more than one separate firm
of attorneys at any time for all Indemnified Parties, which firm shall be
appointed by a majority of the Indemnified Parties. The Indemnifying Party shall
not be liable for any settlement of any such Proceeding effected without its
written consent, which consent shall not be unreasonably withheld. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect the settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened Proceeding in respect of
which indemnification or contribution may be sought hereunder (whether or not
such Indemnified Party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of such Indemnified Party from all liability arising out of such action
or claim and (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the Indemnified Party.

 

All reasonable fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section 6.4(c)) shall be paid to the Indemnified Party, as incurred, within 20
Trading Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that, the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).

 

(d) Contribution. If a claim for indemnification under Section 6.4(a) or  (b) is
unavailable to an Indemnified Party (by reason of public policy or otherwise),
then each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well
as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Section 6.4(c), any reasonable attorneys’ or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section 6.4 was available to such party in
accordance with its terms.

 

-27-

 

 

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6.4(c) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6.4(c), no Investor shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the net proceeds actually received by such Investor from the sale of the
Registrable Securities subject to the Proceeding exceed the amount of any
damages that such Investor has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.

 

The indemnity and contribution agreements contained in this Section 6.4 are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

 

6.5 Dispositions. Each Investor agrees that it will comply with the prospectus
delivery requirements of the Securities Act as applicable to it in connection
with sales of Registrable Securities pursuant to the Registration Statement and,
to the extent any such sales are made under the Registration Statement, shall
sell its Registrable Securities in accordance with the Plan of Distribution set
forth in the Prospectus. Each Investor further agrees that, upon receipt of a
notice from the Company of the occurrence of any event of the kind described in
Section 6.2(c), such Investor will discontinue disposition of such Registrable
Securities under the Registration Statement until such Investor is advised in
writing by the Company that the use of the Prospectus, or amended Prospectus, as
applicable, may be resumed. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph. Each Investor, severally and not
jointly with the other Investors, agrees that the removal of the restrictive
legend from certificates or book-entry records representing Common Shares as set
forth in this Section 6.5 is predicated upon the Company’s reliance that the
Investor will comply with the provisions of this subsection. Both the Company
and the Transfer Agent, and their respective directors, officers, employees and
agents, may rely on this subsection.

  

-28-

 

 

ARTICLE VII

MISCELLANEOUS

 

7.1 Termination. This Agreement may be terminated by the Company or any
Investor, by written notice to the other parties, if the Closing has not been
consummated by the tenth (10th) Trading Day following the date of this
Agreement; provided, however, that the right to terminate this Agreement
pursuant to this Section 7.1 shall not be available to any party if the failure
of such party to perform any of its obligations under this Agreement has been a
principal cause of, or resulted in, the failure of the Closing to be consummated
on or before such date. No termination pursuant to this Section 7.1 will affect
the right of any party to sue for any breach by the other party (or parties).

 

7.2 Fees and Expenses. Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all Transfer
Agent fees, stamp taxes and other taxes and duties levied in connection with the
sale and issuance of the Common Shares.

 

The Company, whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, in accordance with the provisions
of Section 7.1 hereunder, will pay to Luxor Capital Group, LP, an Investor, on
the Closing Date in immediately available funds to an account designated in
writing by it all reasonable and customary out-of-pocket expenses incurred by it
and incident to the negotiation and performance of its obligations hereunder,
including reasonable fees and documented disbursements of its counsel
(“Reimbursable Expenses”), which Reimbursable Expenses, together with all
Reimbursable Expenses (as defined in the Preferred Stock Purchase Agreement)
pursuant to the Preferred Stock Purchase Agreement, in the aggregate, will not
exceed $200,000.

 

7.3 Entire Agreement. The Transaction Documents, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules. At or
after the Closing, and without further consideration, the Company will execute
and deliver to the Investors such further documents as may be reasonably
requested in order to give practical effect to the intention of the parties
under the Transaction Documents.

 

7.4 Notices. All notices, consents, approvals, waivers or other communications
(each, a “Notice”) required or permitted hereunder, except as herein otherwise
specifically provided, shall be in writing and shall be: (i) delivered
personally or by commercial messenger; (ii) sent via a recognized overnight
courier service, or (iii) sent by facsimile or e-mail transmission, provided
confirmation of receipt is received by sender and such Notice is sent or
delivered contemporaneously by an additional method provided in this Section
7.4; in each case so long as such Notice is addressed to the intended recipient
thereof as set forth below:

 

If to the Company:

 

American Realty Capital Properties, Inc.

405 Park Avenue

New York, New York 10022

Facsimile: (212) 421-5799 

Email: mweil@rcsecurities.com

Attention: Edward M. Weil, Jr.

 

-29-

 

 

with a copy to:

 

Proskauer Rose LLP

Eleven Times Square

New York, New York 10036

Facsimile No.: (212) 969-2900

Email: pfass@proskauer.com

Attention: Peter M. Fass, Esq.

 

If to Investor:

 

At its addresses on the signature page hereto;

 

Any party may change its address specified above by giving each party Notice of
such change in accordance with this Section 7.4. Any Notice shall be deemed
given upon actual receipt (or refusal of receipt).

 

7.5 Amendments; Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by the
Company and each of the Investors or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right hereunder in any
manner impair the exercise of any such right. Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Investors under Article VI may be
given by Investors holding at least a majority of the Registrable Securities to
which such waiver or consent relates.

 

7.6 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

 

7.7 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Investors. Any Investor may assign its
rights under this Agreement to any Person to whom such Investor assigns or
transfers any Common Shares, provided (i) such transferor agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement
is furnished to the Company after such assignment, (ii) the Company is furnished
with written notice of (x) the name and address of such transferee or assignee
and (y) the Registrable Securities with respect to which such registration
rights are being transferred or assigned, (iii) following such transfer or
assignment, the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act and applicable state securities
laws, (iv) such transferee agrees in writing to be bound, with respect to the
transferred Common Shares, by the provisions hereof that apply to the
“Investors” and (v) such transfer shall have been made in accordance with the
applicable requirements of this Agreement and with all laws applicable thereto.

 

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7.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except that each Indemnified Party is an intended third party
beneficiary of Section 6.4 and (in each case) may enforce the provisions of such
Section applicable to them directly against the parties with obligations
thereunder.

 

7.9 Governing Law; Venue; Waiver of Jury Trial. THE CORPORATE LAWS OF THE STATE
OF MARYLAND SHALL GOVERN ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE
COMPANY AND ITS STOCKHOLDERS. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE COMPANY
AND INVESTORS HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN
FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT BY THE COMPANY OR ANY INVESTOR
HEREUNDER, IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR
DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE
TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVE, AND AGREE NOT TO ASSERT IN
ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY OR ANY INVESTOR, ANY CLAIM
THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, OR THAT
SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY
WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY
SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR
CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY
AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT
SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY AND INVESTORS
HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.

 

7.10 Survival. The representations and warranties contained herein shall survive
the Closing for a period of one year following the Closing Date.

 

-31-

 

 

7.11 Execution. This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or email attachment, such signature shall create a valid
and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile or
email-attached signature page were an original thereof.

 

7.12 Severability. If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

 

7.13 Replacement of Stock Certificates. If any certificate or instrument
evidencing any Common Shares is mutilated, lost, stolen or destroyed, the
Company shall issue or cause to be issued in exchange and substitution for and
upon cancellation thereof, or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and the execution
by the holder thereof of a customary lost certificate affidavit of that fact and
an agreement to indemnify and hold harmless the Company for any losses in
connection therewith. The applicants for a new certificate or instrument under
such circumstances shall also pay any reasonable third-party costs associated
with the issuance of such replacement Stock Certificates.

 

7.14 Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of the Investors
and the Company will be entitled to seek specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agree to waive in any
action for specific performance of any such obligation (other than in connection
with any action for a temporary restraining order) the defense that a remedy at
law would be adequate.

 

7.15 Payment Set Aside. To the extent that the Company makes a payment or
payments to any Investor hereunder or any Investor enforces or exercises its
rights hereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company
by a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

 

-32-

 

 

7.16 Adjustments in Share Numbers and Prices. In the event of any stock split,
subdivision, dividend or distribution payable in Common Shares (or other
securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly Common Shares), combination or other similar
recapitalization or event occurring after the date hereof, each reference in any
Transaction Document to a number of shares or a price per share shall be amended
to appropriately account for such event.

 

7.17 Independent Nature of Investors' Obligations and Rights. The obligations of
each Investor under any Transaction Document are several and not joint with the
obligations of any other Investor, and no Investor shall be responsible in any
way for the performance of the obligations of any other Investor under any
Transaction Documents. The decision of each Investor to purchase Common Shares
pursuant to this Agreement has been made by such Investor independently of any
other Investor and independently of any information, materials, statements or
opinions as to the business, affairs, operations, assets, properties,
liabilities, results of operations, condition (financial or otherwise) or
prospects of the Company which may have been made or given by any other Investor
or by any agent or employee of any other Investor, and no Investor or any of its
agents or employees shall have any liability to any other Investor (or any other
person) relating to or arising from any such information, materials, statements
or opinions. Nothing contained herein or in any Transaction Document, and no
action taken by any Investor pursuant thereto, shall be deemed to constitute the
Investors as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Investors are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Document. Each Investor acknowledges that no
other Investor has acted as agent for such Investor in connection with making
its investment hereunder and that no other Investor will be acting as agent of
such Investor in connection with monitoring its investment hereunder. Each
Investor shall be entitled to independently protect and enforce its rights,
including without limitation the rights arising out of this Agreement or out of
the other Transaction Documents, and it shall not be necessary for any other
Investor to be joined as an additional party in any Proceeding for such purpose.

 

[SIGNATURE PAGES FOLLOW]

 

-33-

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

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

 

 

 

 

Investor Signature Page

 

By its execution and delivery of this signature page, the undersigned Investor
hereby joins in and agrees to be bound by the terms and conditions of the
Securities Purchase Agreement, dated as of June 4, 2013 (the “Purchase
Agreement”) by and among American Realty Capital Properties, Inc. and the
Investors (as defined therein), as to the number of Common Shares set forth
below, and authorizes this signature page to be attached to the Purchase
Agreement or counterparts thereof.

 

  Name of Investor:       Orange Capital LLC         By:     /s/ Daniel Lewis  
  Name:  Daniel Lewis     Title:    Managing Member

 

  Address: 1370 Avenue of the Americas     23rd Floor     New York, New York
10019

 

  Telephone No.: 212-375-6040

 

  Facsimile No.: 212-375-6042

 

  Email Address: dlewis@orangecap.com

 

  Number of Shares:  

 

  Aggregate Purchase Price: $20,000,000

  

Delivery Instructions (if different than above):

 

c/o: _________________________________________________________

 

Address: _________settlement@orangecap.com_____________________________

 

        ________________________________________________________

 

Telephone No.: _______________________________________________________

Facsimile No. : _______________________________________________________

 

 

 

Investor Signature Page

 

By its execution and delivery of this signature page, the undersigned Investor
hereby joins in and agrees to be bound by the terms and conditions of the
Securities Purchase Agreement, dated as of June 4, 2013 (the “Purchase
Agreement”) by and among American Realty Capital Properties, Inc. and the
Investors (as defined therein), as to the number of Common Shares set forth
below, and authorizes this signature page to be attached to the Purchase
Agreement or counterparts thereof.

 

  Name of Investor:       White Desert A, LLC         By:     /s/ Norris Nissim
    Name:  Norris Nissim     Title:    General Counsel, Luxor    
             Capital Group, LP, its investment manager

 

  Address: 1114 Avenue of the Americas     Fl. 29     New York, New York 10036

 

  Telephone No.: 212-763-8041

 

  Facsimile No.:

 

  Email Address: legal@luxorcap.com

 

  Number of Shares: 4,292,182

 

  Aggregate Purchase Price: $67,258,493

  

Delivery Instructions (if different than above):

 

c/o: _________________________________________________________

 

Address: __________________________________________________________

 

        ________________________________________________________

 

Telephone No.: _______________________________________________________

Facsimile No. : _______________________________________________________

 

 

 

Investor Signature Page

 

By its execution and delivery of this signature page, the undersigned Investor
hereby joins in and agrees to be bound by the terms and conditions of the
Securities Purchase Agreement, dated as of June 4, 2013 (the “Purchase
Agreement”) by and among American Realty Capital Properties, Inc. and the
Investors (as defined therein), as to the number of Common Shares set forth
below, and authorizes this signature page to be attached to the Purchase
Agreement or counterparts thereof.

 

  Name of Investor:       White Desert B, LLC         By:     /s/ Norris Nissim
    Name:  Norris Nissim     Title:    General Counsel, Luxor    
             Capital Group, LP, its investment manager

 

  Address: 1114 Avenue of the Americas     Fl. 29     New York, New York 10036

 

  Telephone No.: 212-763-8041

 

  Facsimile No.:

 

  Email Address: legal@luxorcap.com

 

  Number of Shares: 1,494,962

 

  Aggregate Purchase Price: $23,426,056

  

Delivery Instructions (if different than above):

 

c/o: _________________________________________________________

 

Address: __________________________________________________________

 

        ________________________________________________________

 

Telephone No.: _______________________________________________________

Facsimile No. : _______________________________________________________

 

 

 

Investor Signature Page

 

By its execution and delivery of this signature page, the undersigned Investor
hereby joins in and agrees to be bound by the terms and conditions of the
Securities Purchase Agreement, dated as of June 4, 2013 (the “Purchase
Agreement”) by and among American Realty Capital Properties, Inc. and the
Investors (as defined therein), as to the number of Common Shares set forth
below, and authorizes this signature page to be attached to the Purchase
Agreement or counterparts thereof.

 

  Name of Investor:       Luxor Wavefront, LP         By:     /s/ Norris Nissim
    Name:  Norris Nissim     Title:    General Counsel, Luxor    
             Capital Group, LP, its investment manager

 

  Address: 1114 Avenue of the Americas     Fl. 29     New York, New York 10036

 

  Telephone No.: 212-763-8041

 

  Facsimile No.:

 

  Email Address: legal@luxorcap.com

 

  Number of Shares: 2,519,906

 

  Aggregate Purchase Price: $39,486,928

  

Delivery Instructions (if different than above):

 

c/o: _________________________________________________________

 

Address: __________________________________________________________

 

        ________________________________________________________

 

Telephone No.: _______________________________________________________

Facsimile No. : _______________________________________________________

 

 

 

Investor Signature Page

 

By its execution and delivery of this signature page, the undersigned Investor
hereby joins in and agrees to be bound by the terms and conditions of the
Securities Purchase Agreement, dated as of June 4, 2013 (the “Purchase
Agreement”) by and among American Realty Capital Properties, Inc. and the
Investors (as defined therein), as to the number of Common Shares set forth
below, and authorizes this signature page to be attached to the Purchase
Agreement or counterparts thereof.

 

  Name of Investor:       Luxor Capital Partners, LP         By:     /s/ Norris
Nissim     Name:  Norris Nissim     Title:    General Counsel, Luxor    
             Capital Group, LP, its investment manager

 

  Address: 1114 Avenue of the Americas     Fl. 29     New York, New York 10036

 

  Telephone No.: 212-763-8041

 

  Facsimile No.:

 

  Email Address: legal@luxorcap.com

 

  Number of Shares: 7,966,083

 

  Aggregate Purchase Price: $124,828,523

  

Delivery Instructions (if different than above):

 

c/o: _________________________________________________________

 

Address: __________________________________________________________

 

        ________________________________________________________

 

Telephone No.: _______________________________________________________

Facsimile No. : _______________________________________________________

 

 

 

Investor Signature Page

 

By its execution and delivery of this signature page, the undersigned Investor
hereby joins in and agrees to be bound by the terms and conditions of the
Securities Purchase Agreement, dated as of June 4, 2013 (the “Purchase
Agreement”) by and among American Realty Capital Properties, Inc. and the
Investors (as defined therein), as to the number of Common Shares set forth
below, and authorizes this signature page to be attached to the Purchase
Agreement or counterparts thereof.

 

  Name of Investor:       BHR Master Fund, Ltd.         By:     /s/ William
Brown     Name:  William Brown     Title:    Partner, President & COO

 

  Address: 545 Madison Avenue     10th Floor     New York, New York 10022

 

  Telephone No.: 212-378-0834

 

  Facsimile No.: 646-556-8076

 

  Email Address: wbrown@bhrcap.com

 

  Number of Shares: 2,293,108

 

  Aggregate Purchase Price: $37,500,002.36

  

Delivery Instructions (if different than above):

 

_________________________________________________________________

 

Address: ___________________________________________________________

 

        ________________________________________________________

 

Telephone No.: _______________________________________________________

Facsimile No. : _______________________________________________________

 

 

 

Investor Signature Page

 

By its execution and delivery of this signature page, the undersigned Investor
hereby joins in and agrees to be bound by the terms and conditions of the
Securities Purchase Agreement, dated as of June 4, 2013 (the “Purchase
Agreement”) by and among American Realty Capital Properties, Inc. and the
Investors (as defined therein), as to the number of Common Shares set forth
below, and authorizes this signature page to be attached to the Purchase
Agreement or counterparts thereof.

 

  Name of Investor:       BHR OC Master Fund, Ltd.         By:     /s/ William
Brown     Name:  William Brown     Title:    Partner, President & COO

 

  Address: 545 Madison Avenue     10th Floor     New York, New York 10022

 

  Telephone No.: 212-378-0834

 

  Facsimile No.: 646-556-8076

 

  Email Address: wbrown@bhrcap.com

 

  Number of Shares: 797,702

 

  Aggregate Purchase Price: $12,499,990.34

  

Delivery Instructions (if different than above):

 

c/o: _________________________________________________________

 

Address: ___________________________________________________________

 

        ________________________________________________________

 

Telephone No.: _______________________________________________________

Facsimile No. : _______________________________________________________

 

 

 

Investor Signature Page

 

By its execution and delivery of this signature page, the undersigned Investor
hereby joins in and agrees to be bound by the terms and conditions of the
Securities Purchase Agreement, dated as of June 4, 2013 (the “Purchase
Agreement”) by and among American Realty Capital Properties, Inc. and the
Investors (as defined therein), as to the number of Common Shares set forth
below, and authorizes this signature page to be attached to the Purchase
Agreement or counterparts thereof.

 

  Name of Investor:       Senator Global Opportunity Fund LP         By:     /s/
Evan Gartenlaub     Name:  Evan Gartenlaub     Title:    General Counsel

 

  Address: Attn: General Counsel     510 Madison Avenue, 28th Fl     New York,
New York 10022

 

  Telephone No.: 212-376-4300

 

  Facsimile No.: 855-376-43466

 

  Email Address: egartenlaub@senatorlp.com

 

  Number of Shares:  

 

  Aggregate Purchase Price: $20,400

  

Delivery Instructions (if different than above):

 

c/o: _________________________________________________________

 

Address: ___________________________________________________________

 

        ________________________________________________________

 

Telephone No.: _______________________________________________________

Facsimile No. : _______________________________________________________

 

 

 

Investor Signature Page

 

By its execution and delivery of this signature page, the undersigned Investor
hereby joins in and agrees to be bound by the terms and conditions of the
Securities Purchase Agreement, dated as of June 4, 2013 (the “Purchase
Agreement”) by and among American Realty Capital Properties, Inc. and the
Investors (as defined therein), as to the number of Common Shares set forth
below, and authorizes this signature page to be attached to the Purchase
Agreement or counterparts thereof.

 

  Name of Investor:       Senator Global Opportunity Intermediate Fund LP.      
  By:     /s/ Evan Gartenlaub     Name:  Evan Gartenlaub     Title:    General
Counsel

 

  Address: Attn: General Counsel     510 Madison Avenue, 28th Fl     New York,
New York 10022

 

  Telephone No.: 212-376-4300

 

  Facsimile No.: 855-376-43466

 

  Email Address: egartenlaub@senatorlp.com

 

  Number of Shares:  

 

  Aggregate Purchase Price: $39,600,000

  

Delivery Instructions (if different than above):

 

c/o: _________________________________________________________

 

Address: ___________________________________________________________

 

        ________________________________________________________

 

Telephone No.: _______________________________________________________

Facsimile No. : _______________________________________________________

 

 

 

 

 

 

Investor Signature Page

 

By its execution and delivery of this signature page, the undersigned Investor
hereby joins in and agrees to be bound by the terms and conditions of the
Securities Purchase Agreement, dated as of June 4, 2013 (the “Purchase
Agreement”) by and among American Realty Capital Properties, Inc. and the
Investors (as defined therein), as to the number of Common Shares set forth
below, and authorizes this signature page to be attached to the Purchase
Agreement or counterparts thereof.

 

  Name of Investor:       Perry Arc LLC         By:     /s/ Michael C. Neus    
Name:  Michael C. Neus     Title:    Manager

 

  Address: c/o Perry Capital LLC     767 Fifth Avenue, 19th Floor     New York,
New York 10153

 

  Telephone No.: 212-583-4123

 

  Facsimile No.: 855-583-4146

 

  Email Address: mneus@senatorlp.com

 

  Number of Shares:  

 

  Aggregate Purchase Price: $70,000,000

  

Delivery Instructions (if different than above):

 

c/o: _________________________________________________________

 

Address: ___________________________________________________________

 

        ________________________________________________________

 

Telephone No.: _______________________________________________________

Facsimile No. : _______________________________________________________

 

 

 

 

 

Exhibits:

 

AInstruction Sheet for Investors

B-1Stock Certificate/Registration Questionnaire

B-2Registration Statement/Prospectus Questionnaire

B-3Certificate for Corporate, Partnership, Limited Liability Company, Trust,
Foundation and Joint Investors

C-1Opinion of Company Counsel

C-2Opinion of Venable LLP  DForm of Contingent Value Rights Agreement

EPlan of Distribution

FCompany Transfer Agent Instructions

 

 

 

 

Schedule 3.1(f)

 

·Current Report on Form 8-K, filed with the Securities and Exchange Commission
on April 22, 2013, was filed late.

 

·The Company plans to file separate Current Reports on Form 8-K including the
financial statements for (a) the GE Portfolio Acquisition and (b) the CapLease
Acquisition.

 

 

 

 

Schedule 3.1(g)

 

·On May 28, 2013, the Company entered into an Agreement and Plan of Merger (the
“Merger Agreement”) with CapLease, Inc., a Maryland corporation (“CapLease”),
Safari Acquisition, LLC, a Delaware limited liability company and wholly owned
subsidiary of the Company (“Merger Sub”), Caplease, LP, a Delaware limited
partnership and the operating partnership of the Company (the “CapLease
Operating Partnership”), CLF OP General Partner LLC, a Delaware limited
liability company and the sole general partner of the CapLease Operating
Partnership, and ARC Properties Operating Partnership, L.P., a Delaware limited
partnership and the operating partnership of Parent (the “Operating
Partnership”). The Merger Agreement provides for (i) the merger of CapLease with
and into Merger Sub, with Merger Sub surviving as a wholly owned subsidiary of
the Company, and (ii) the merger of the CapLease Operating Partnership with and
into the Operating Partnership, with the Operating Partnership surviving.

 

·On May 31, 2013, the Company, through the Operating Partnership, entered into a
purchase and sale agreement to acquire a portfolio comprised of 471 properties
including 468 restaurants (including three other revenue generating assets) and
three retail tenants located in 44 states representing 2,136,025 square feet.
The sellers of the properties are subsidiaries of GE Capital.

 

 

 

 

Exhibit A

 

INSTRUCTION SHEET FOR INVESTOR

 

(to be read in conjunction with the entire Securities Purchase Agreement)

 

A.Complete the following items in the Securities Purchase Agreement:

 

1.Complete and execute the Investor Signature Page. The Agreement must be
executed by an individual authorized to bind the Investor.

 

2.Exhibit B-1 - Stock Certificate/Registration Questionnaire:

 

Provide the information requested by the Stock Certificate/Registration
Questionnaire;

 

3.Exhibit B-2 - Registration Statement/Prospectus Questionnaire:

 

Provide the information requested by the Registration Statement/Prospectus
Questionnaire.

 

4.Exhibit B-3 - Investor Certificate:

 

Provide the information requested by the Investor Certificate.

 

5.Return, via facsimile, the signed Securities Purchase Agreement including the
properly completed Exhibits B-1 through B-3, to:

 

E-mail: lvolchyok@proskauer.com

Telephone: 212-969-3434

Attn: Leon Volchyok

 

B.Instructions regarding the wire transfer of funds for the purchase of the
Common Shares will be e-mailed to the Investor by the Company at a later date.

 

 

 

 

Exhibit B-1

 

AMERICAN REALTY CAPITAL PROPERTIES, INC.

 

STOCK CERTIFICATE/REGISTRATION QUESTIONNAIRE

 

    Please provide us with the following information:               1.   The
exact name that the Common Shares are to be registered in (this is the name that
will appear on the records of the Company, or, if required, stock
certificate(s)).  You may use a nominee name if appropriate:               2.  
The relationship between the Investor of the Common Shares and the Registered
Holder listed in response to item 1 above:               3.   The mailing
address, telephone and telecopy number and email address of the Registered
Holder listed in response to item 1 above:                                      
                                                        4.   The Tax
Identification Number of the Registered Holder listed in response to item 1
above:  

 

 

 

 

Exhibit B-2

 

AMERICAN REALTY CAPITAL PROPERTIES, INC.

 

REGISTRATION STATEMENT/PROSPECTUS QUESTIONNAIRE

 

In connection with the Registration Statement/Prospectus, please provide us with
the following information regarding the Investor.

 

1.          Please state your organization’s name exactly as it should appear in
the Registration Statement/Prospectus:

 

_______________________________________________________________________________________

 

Except as set forth below, your organization does not hold any equity securities
of the Company on behalf of another person or entity.

 

State any exceptions here:

 

_______________________________________________________________________________________

 

If the Investor is not a natural person, please identify the natural person or
persons who will have voting and investment control over the Common Shares owned
by the Investor:

 

_______________________________________________________________________________________

 

2.          Address of your organization:

 

______________________________________________________

 

______________________________________________________

 

Telephone: __________________________

 

Fax: ________________________________

 

Contact Person: _______________________

 

 

 

 

3.          Have you or your organization had any position, office or other
material relationship within the past three years with the Company or its
affiliates? (Include any relationships involving you or any of your affiliates,
officers, directors, or principal equity holders (5% or more) that has held any
position or office or has had any other material relationship with the Company
(or its predecessors or affiliates) during the past three years.)

 

_______ Yes _______ No        

 

If yes, please indicate the nature of any such relationship below:

 

4.          Are you the beneficial owner of any other securities of the Company?
(Include any equity securities that you beneficially own or have a right to
acquire within 60 days after the date hereof, and as to which you have sole
voting power, shared voting power, sole investment power or shared investment
power.)

 

_______ Yes _______ No        

 

If yes, please describe the nature and amount of such ownership as of a recent
date.

 

5.          Except as set forth below, you wish that all the shares of the
Company’s common stock beneficially owned by you or that you have the right to
acquire from the Company be offered for your account in the Registration
Statement/Prospectus.

 

State any exceptions here:

 

6.          Have you made or are you aware of any arrangements relating to the
distribution of the shares of the Company pursuant to the Registration
Statement/Prospectus?

 

_______ Yes _______ No        

 

If yes, please describe the nature and amount of such arrangements.

 

-2-

 

 

7.FINRA Matters

 

(a)          State below whether (i) you or any associate or affiliate of yours
are a member of the FINRA, a controlling shareholder of an FINRA member, a
person associated with a member, a direct or indirect affiliate of a member, or
an underwriter or related person with respect to the proposed offering; (ii) you
or any associate or affiliate of yours owns any stock or other securities of any
FINRA member not purchased in the open market; or (iii) you or any associate or
affiliate of yours has made any outstanding subordinated loans to any FINRA
member. If you are a general or limited partnership, a no answer asserts that no
such relationship exists for you as well as for each of your general or limited
partners.

 

_______ Yes: _______ No:        

 

If “yes,” please identify the FINRA member and describe your relationship,
including, in the case of a general or limited partner, the name of the partner:

 

If you answer “no” to Question 7(a), you need not respond to Question 7(b).

 

(b)          State below whether you or any associate or affiliate of yours has
been an underwriter, or a controlling person or member of any investment banking
or brokerage firm which has been or might be an underwriter for securities of
the Corporation or any affiliate thereof including, but not limited to, the
common stock now being registered.

 

_______ Yes: _______ No:        

 

If “yes,” please identify the FINRA member and describe your relationship,
including, in the case of a general or limited partner, the name of the partner.

 

-3-

 

 

ACKNOWLEDGEMENT

 

The undersigned hereby agrees to notify the Company promptly of any changes in
the foregoing information which should be made as a result of any developments,
including the passage of time. The undersigned also agrees to provide the
Company and the Company’s counsel any and all such further information regarding
the undersigned promptly upon request in connection with the preparation,
filing, amending, and supplementing of the Registration Statement (or any
prospectus contained therein). The undersigned hereby consents to the use of all
such information in the Registration Statement/Prospectus.

 

The undersigned understands and acknowledges that the Company will rely on the
information set forth herein for purposes of the preparation and filing of the
Registration Statement/Prospectus.

 

The undersigned understands that the undersigned may be subject to serious civil
and criminal liabilities if the Registration Statement, when it becomes
effective, or Prospectus either contains an untrue statement of a material fact
or omits to state a material fact required to be stated in the Registration
Statement/Prospectus or necessary to make the statements in the Registration
Statement/Prospectus not misleading. The undersigned represents and warrants
that all information it provides to the Company and its counsel is currently
accurate and complete and will be accurate and complete at the time the
Registration Statement becomes effective or the Prospectus is filed and at all
times subsequent thereto, and agrees during the Effectiveness Period and any
additional period in which the undersigned is making sales of Registrable
Securities under and pursuant to the Registration Statement/Prospectus, and
agrees during such periods to notify the Company immediately of any misstatement
of a material fact in the Registration Statement/Prospectus, and of the omission
of any material fact necessary to make the statements contained therein not
misleading.

 

Dated: __________

 

      Name           Signature           Name and Title of Signatory

 

-4-

 

 

Exhibit B-3

 

AMERICAN REALTY CAPITAL PROPERTIES, INC.

 

CERTIFICATE FOR CORPORATE, PARTNERSHIP, LIMITED LIABILITY COMPANY, 

TRUST, FOUNDATION AND JOINT INVESTORS

 

If the Investor is a corporation, partnership, limited liability company, trust,
pension plan, foundation, joint Investor (other than a married couple) or other
entity, an authorized officer, partner, or trustee must complete, date and sign
this Certificate.

 

CERTIFICATE

 

The undersigned certifies that the representations and responses below are true
and accurate:

 

(a)          The Investor has been duly formed and is validly existing and has
full power and authority to invest in the Company. The person signing on behalf
of the undersigned has the authority to execute and deliver the Securities
Purchase Agreement on behalf of the Investor and to take other actions with
respect thereto.

 

(b)          Indicate the form of entity of the undersigned:

 

____     Limited Partnership

 

____     General Partnership

 

____     Limited Liability Company

 

____     Corporation

 

____     Revocable Trust (identify each grantor and indicate under what
circumstances the trust is revocable by the grantor):
______________________________________________________________________________________

 

(Continue on a separate piece of paper, if necessary.)

 

____     Other type of Trust (indicate type of trust and, for trusts other than
pension trusts, name the grantors and beneficiaries):
_____________________________________________________________________________

 

(Continue on a separate piece of paper, if necessary.)

 

____     Other form of organization (indicate form of organization
(______________________________
_______________________________________________________________________________________________).

 

-5-

 

 

(c)          Indicate the approximate date the undersigned entity was formed:
________________________.

 

(d)          In order for the Company to offer and sell the Common Shares in
conformance with state and federal securities laws, the following information
must be obtained regarding your investor status. Please initial each category
applicable to you as an investor in the Company.

 

___1.          A bank as defined in Section 3(a)(2) of the Securities Act, or
any savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary
capacity;

 

___2.          A broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934;

 

___3.          An insurance company as defined in Section 2(a)(13) of the
Securities Act;

 

___4.          An investment company registered under the Investment Company Act
of 1940 or a business development company as defined in Section  2(a)(48) of
that Act;

 

___5.          A Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958;

 

___6.          A plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in
excess of $5,000,000;

 

___7.          An employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, if the investment decision is made by a
plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank,
savings and loan association, insurance company, or registered investment
advisor, or if the employee benefit plan has total assets in excess of
$5,000,000 or, if a self-directed plan, with investment decisions made solely by
persons that are accredited investors;

 

___8.          A private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940;

 

___9.          Any partnership or corporation or any organization described in
Section 501(c)(3) of the Internal Revenue Code or similar business trust, not
formed for the specific purpose of acquiring the Shares, with total assets in
excess of $5,000,000;

 

___10.          A trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the Shares, whose purchase is directed by
a sophisticated person as described in Rule  506(b)(2)(ii) of the Exchange Act;

 

-6-

 

 

___11.          An entity in which all of the equity owners qualify under any of
the above subparagraphs. If the undersigned belongs to this investor category
only, list the equity owners of the undersigned, and the investor category which
each such equity owner satisfies: _____________________________________

 

  (Continue on a separate piece of paper, if necessary.)

 

Please set forth in the space provided below the (i) states, if any, in the U.S.
in which you maintained your principal office during the past two years and the
dates during which you maintained your office in each state, (ii) state(s), if
any, in which you are incorporated or otherwise organized and (iii) state(s), if
any, in which you pay income taxes.

 

                   

 

Dated:__________________________, 2013

 

    Print Name of Investor           Name:   Title:   (Signature and title of
authorized officer, partner or trustee)  

 

-7-

 

 

Exhibit C-1

 

OPINION OF COMPANY COUNSEL

 

-8-

 

 

Exhibit C-2

 

OPINION OF VENABLE LLP

 

-9-

 

 

Exhibit D

 

FORM OF CONTINGENT VALUE RIGHTS AGREEMENT

 

This CONTINGENT VALUE RIGHTS AGREEMENT (this “Agreement”), dated as of June
[__], 2013, is by and among American Realty Capital Properties, Inc., a Maryland
corporation (the “Company”), and the holder set forth on the signature page
hereto (together with their successor and their permitted assigns, the
“Holder”).

 

WHEREAS, in connection with the issuance by the Company of 29,411,764 shares of
the Company’s common stock, par value $0.01 per share (the “Common Stock”) on
the date hereof pursuant to that certain Stock Purchase Agreement, dated as of
June 4, 2013 (the “Stock Purchase Agreement”), by and among the Company and the
investors party thereto (the “Investors”), the Company is obligated to issue
29,411,764 contingent value rights subject to the terms and conditions contained
herein (each such right, a “Contingent Value Right”), including [______]
Contingent Value Rights to the Holder (which initially is an Investor) pursuant
to this Agreement. Capitalized terms used but not defined in this Agreement
shall have the respective meanings assigned thereto in the Stock Purchase
Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and undertakings
contained herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

 

1)Definitions. In addition to the terms defined elsewhere in this Agreement, the
following terms have the meanings indicated:

 

“Purchase Price” shall initially equal $15.47; provided that such amount shall
be equitably adjusted upon the occurrence of any event that would have resulted
in the adjustment of the “Fixed Conversion Price” (as defined in the Articles
Supplementary for the Company’s Series C Convertible Preferred Stock (the
“Series C Preferred Stock”) and to the same extent of such adjustment (the
“Articles Supplementary”).

 

“Test Date” means the sixty-first (61st) trading day following the Closing.

 

“VWAP” means the dollar volume-weighted average price for the Common Stock on
its Trading Market during the period beginning at 9:30:01 a.m., New York time
(or such other time as the Trading Market publicly announces is the official
open of trading), and ending at 4:00:00 p.m., New York time (or such other time
as the Trading Market publicly announces is the official close of trading), as
reported by Bloomberg, L.P. through its “Volume at Price” function or, if the
foregoing does not apply, the dollar volume-weighted average price of such
security in the over-the-counter market on the electronic bulletin board for
such security during the period beginning at 9:30:01 a.m., New York time (or
such other time as the Trading Market publicly announces is the official open of
trading), and ending at 4:00:00 p.m., New York City Time (or such other time as
the Trading Market publicly announces is the official close of trading), as
reported by Bloomberg, L.P., or, if no dollar volume-weighted average price is
reported for such security by Bloomberg, L.P. for such hours, the average of the
highest closing bid price and the lowest closing ask price of any of the market
makers for such security as reported in the “pink sheets” by Pink Sheets LLC
(formerly the National Quotation Bureau, Inc.). If the VWAP cannot be calculated
for the Common Stock on a particular date on any of the foregoing bases, the
VWAP of the Common Stock shall be the fair market value of the Common Stock on
such date as determined by the Company’s Board of Directors in good faith.

 

 

 

 

2)Contingent Value Rights.

 

(a)    On the Test Date, the Company shall calculate the VWAP per Common Share
for the period covering the 30th through the 60th trading days after the Closing
(the “CVR Period VWAP”).

 

(b)   Within five (5) Business Days following the Test Date, the Company shall
pay to the Holder, in immediately available funds to an account designated in
writing by such Holder, an amount equal to (a) the number of Contingent Value
Rights held by the Holder on the Test Date multiplied by (ii) the amount (the
“Settlement Amount”), which shall not be less than zero nor greater than $1.50,
equal to the difference between (A) the Purchase Price and (B) the CVR Period
VWAP.

 

(c)    If the number of shares of Common Stock is adjusted upon the occurrence
of any event that would have resulted in the adjustment of the Fixed Conversion
Price (as defined in the Articles Supplementary), the number of Contingent Value
Rights shall be adjusted proportionately.

 

3)Termination. This Agreement shall terminate and no Holder shall have any
rights hereunder (to payment or otherwise) upon the payment by the Company of
the Settlement Amount, if any, due to the Holder pursuant to Section 2.    
4)Assignment. This Agreement shall be binding upon and inure to the benefit of
the parties and their successors and permitted assigns. The Company may not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the Holder. Any Holder may assign all or a portion of its
rights under this Agreement to any Person, provided (i) such transferee is a
“qualified institutional buyer” (as defined in Rule 144A under the Securities
Act of 1933, as amended (the “Securities Act”), (ii) such transferor agrees in
writing with the transferee or assignee to assign such rights, and a copy of
such agreement is furnished to the Company after such assignment, (iii) the
Company is furnished with written notice of the name and address of such
transferee or assignee, (iv) such transferee agrees in writing to be bound by
the provisions hereof that apply to the “Holder”, (v) such transfer shall have
been made pursuant to the safe harbor for the resale of restricted securities
provided by Rule 144A under the Securities Act provided, however, that for
purposes of this clause (v): (1) this Agreement or any rights or obligations
hereunder shall be deemed not to be the same class of securities as the Common
Stock for purposes of Rule 144A(d)(3)(i) and (2) if the Company as the “issue”
does not meet the requirements of Rule 144A(d)(4), then the Agreement or any
rights or obligations hereunder may be assigned pursuant to any other exemption
from registration under the Securities Act and (vi) such transfer shall have
been made pursuant to and in accordance with the applicable requirements of this
Agreement and with all laws applicable thereto.

 

 

 

 

5)No Rights as Shareholders. This Agreement shall not entitle the Holder (or its
successors or permitted assigns) to any voting rights or other rights as a
stockholder of the Company.     6)Incorporation of Certain Sections By
Reference. The following sections from the Stock Purchase Agreement shall be
deemed incorporated by reference into this Agreement, with appropriate changes
as the context requires: Sections 7.4, 7.5, 7.6, 7.8, 7.9, 7.11, 7.12, 7.14 and
7.17.

 

 

[Signature pages follow.]

 

 

IN WITNESS WHEREOF, each party hereto has duly executed this Agreement or has
caused this Agreement to be duly executed by an authorized officer as of the day
and year first above written.

 

  AMERICAN REALTY CAPITAL PROPERTIES, INC.         By:       Name:     Title:

 

 

 

 

  [NAME OF HOLDER]         By:       Name:     Title:

 

 

 

 

Exhibit E

 

PLAN OF DISTRIBUTION

 

The selling stockholders may, from time to time, sell any or all of the shares
of our common stock beneficially owned by them and offered hereby directly or
through one or more underwriters, broker-dealers, agents or directly. The
selling stockholders will be responsible for any underwriting discounts or
agent’s commissions. The common stock may be sold in one or more transactions at
fixed prices, at prevailing market prices at the time of the sale, at varying
prices determined at the time of sale, or at negotiated prices. The selling
stockholders may use any one or more of the following methods when selling
shares:

 

·on NASDAQ or any other national securities exchange or quotation service on
which the securities may be listed or quoted at the time of sale;

·in the over-the-counter market;

·in transactions otherwise than on these exchanges or systems or in the
over-the-counter market;

·through the writing of options, whether such options are listed on an options
exchange or otherwise;

·through ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

·through block trades in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal to
facilitate the transaction;

·through purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;

·in an exchange distribution in accordance with the rules of the applicable
exchange;

·in privately negotiated transactions;

·through the settlement of short sales;

·a combination of any such methods of sale; and

·any other method permitted pursuant to applicable law.

 

The selling stockholders also may sell shares under Rule 144 promulgated under
the Securities Act of 1933, as amended, or the Securities Act, rather than under
this prospectus supplement.

 

In addition, the selling stockholders may enter into hedging transactions with
broker-dealers which may engage in short sales of shares in the course of
hedging the positions they assume with the selling stockholders. The selling
stockholders also may sell shares short and deliver the shares to close out such
short position. The selling stockholders also may enter into option or other
transactions with broker-dealers that require the delivery by such
broker-dealers of the shares, which shares may be resold thereafter pursuant to
this prospectus supplement.

 

-2-

 

 

Broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in sales. If the selling stockholders effect such
transactions through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive compensation in the form of discounts,
concessions or commissions from the selling stockholders or commissions from
purchasers of the shares of our common stock for whom they may act as agent or
to whom they may sell as principal, or both (which discounts, concessions or
commissions as to particular underwriters, broker-dealers or agents may be less
than or in excess of those customary in the types of transactions involved).

 

The selling stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any compensation
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. While neither we nor any selling stockholder
can presently estimate the amount of such compensation, if applicable, in
compliance with the guidelines of the Financial Industry Regulatory Authority,
Inc., or FINRA, the aggregate maximum discount, commission, agency fees or other
items constituting underwriting compensation to be received by any FINRA member
or independent broker-dealer will not exceed 8% of any offering pursuant to this
prospectus supplement or pricing supplement, as the case may be. However, it is
anticipated that the maximum commission or discount to be received in any
particular offering of securities will be less than this amount.

 

We have agreed to indemnify the selling stockholders against certain
liabilities, including liabilities arising under the Securities Act. The selling
stockholders may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of shares of common stock against
certain liabilities, including liabilities arising under the Securities Act.

 

Because selling stockholders may be deemed to be “underwriters” within the
meaning of Section 2(a)(11) of the Securities Act, the selling stockholders will
be subject to the prospectus delivery requirements of the Securities Act, which
may include delivery through the facilities of NASDAQ pursuant to Rule 153 under
the Securities Act.

 

The selling stockholders will be subject to the Securities Exchange Act of 1934,
as amended, or the Exchange Act, including Regulation M promulgated thereunder,
which may limit the timing of purchases and sales of common stock by the selling
stockholders and their affiliates.

 

Upon being notified by a selling stockholder that any material arrangement has
been entered into with a broker-dealer or underwriter for the sale of shares of
common stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, we will file a
supplement to this prospectus supplement, if required, pursuant to Rule 424(b)
under the Securities Act, disclosing (i) the name of each such selling
stockholder and of the participating broker-dealer(s) or underwriter(s), (ii)
the number of shares of common stock involved, (iii) the price at which such
shares were or will be sold, (iv) the commissions paid or to be paid or
discounts or concessions allowed to such broker-dealer(s) or underwriter(s),
where applicable, (v) that, as applicable, such broker-dealer(s) or
underwriter(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this prospectus supplement or the
accompanying prospectus and (iv) other facts material to the transaction.

 

-3-

 

 

There can be no assurance that the selling stockholders will sell any or all of
the shares of common stock registered pursuant to the registration statement, of
which this prospectus supplement or the accompanying prospectus form a part.

 

-4-

 

 

Exhibit F

 

COMPANY TRANSFER AGENT INSTRUCTIONS

 

Computershare Trust Company, N.A.

[ADDRESS]

Attention:     [_________], Account Representative

 

Ladies and Gentlemen:

 

Reference is made to that certain Securities Purchase Agreement, dated as of
June 4, 2013 (the “Agreement”), by and among American Realty Capital Properties,
Inc., a Maryland corporation (the “Company”), and the investors named on the
Schedule of Investors attached thereto (collectively, the “Holders”), pursuant
to which the Company is issuing to the Holders shares (the “Common Shares”) of
Common Stock of the Company, par value $0.01 per share (the “Common Stock”).

 

In connection with the consummation of the transactions contemplated by the
Agreement, this letter shall serve as our irrevocable authorization and
direction to you:

 

(i) to issue an aggregate of 29,411,764 shares of our Common Stock in the names
and denominations set forth on Annex I attached hereto. The certificates or
book-entry records should bear the legend set forth on Annex II attached hereto
and “stop transfer” instructions should be placed against their subsequent
transfer. Kindly make a book-entry record or deliver the certificates to the
respective delivery addresses set forth on Annex I via hand delivery or
overnight courier, as instructed by the Company. We confirm that these shares
will be validly issued, fully paid and non-assessable upon issuance; and

 

(ii)  to issue or record, as applicable (provided that you are the transfer
agent of the Company at such time), certificates or book-entry records, as
applicable, for Common Shares upon transfer or resale of the Common Shares and
receipt by you of certificate(s), if any, for the Common Shares so transferred
or sold (duly endorsed or accompanied by stock powers duly endorsed, in each
case with signatures guaranteed and otherwise in form eligible for transfer).

 

You acknowledge and agree that so long as you have previously received written
instruction from the Company’s legal counsel to remove the restrictive legend(s)
with respect to the Common Shares, then, unless otherwise required by law,
within three (3) business days of your receipt of certificates, if any,
representing the Common Shares, you shall issue the certificates or book-entry
records, as then instructed by the Company, representing the Common Shares to
the Holders or their transferees, as the case may be, registered in the names of
such Holders or transferees, as the case may be, and such certificates or
book-entry records, as applicable, shall not bear any legend restricting
transfer of the Common Shares thereby and should not be subject to any
stop-transfer restriction. Any certificates tendered for transfer shall be
endorsed or with stock powers attached, signatures guaranteed, and otherwise in
form necessary to affect transfer.

 

-5-

 

 

Please be advised that the Holders are relying upon this letter as an inducement
to enter into the Agreement and, accordingly, each Holder is a third party
beneficiary to these instructions.

 

Please execute this letter in the space indicated to acknowledge your agreement
to act in accordance with these instructions. Should you have any questions
concerning this matter, please contact our counsel, Peter M. Fass, Esq., at
(212) 969-3445.

 

  Very truly yours,         AMERICAN REALTY CAPITAL
PROPERTIES, INC.         By:       Name:     Title:

 

THE FOREGOING INSTRUCTIONS ARE

ACKNOWLEDGED AND AGREED TO

this [___] day of [________], 2013

 

computershare trust company, n.a.

 

By:         Name:       Title:    

 

Enclosures

 

-6-

 

 

ANNEX I

 

SCHEDULE OF INVESTORS

 

-7-

 

 

ANNEX II

 

LEGEND TO BE BORNE ON CERTIFICATES AND BOOK-ENTRY RECORDS

 

-8-