vereit9302019-ex102






                                                                          Exhibit 10.2      Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 2 of 136                                                             EXECUTION COPY   UNITED STATES DISTRICT COURT  SOUTHERN DISTRICT OF NEW YORK   JOANNE WITCHKO, Derivatively on Behalf  of Nominal Defendant AMERICAN REALTY           Lead Case No. 1:15-cv-06043-AKH  CAPITAL PROPERTIES, INC.,                                                 (Consolidated with Case No.                    Plaintiff,                   1:15-cv-08563-AKH)         v.   NICHOLAS S. SCHORSCH, et al.,                     Defendants,         -and-  AMERICAN REALTY CAPITAL  PROPERTIES, INC.,                     Nominal Defendant.                 STIPULATION AND AGREEMENT OF SETTLEMENT         This Stipulation and Agreement of Settlement dated September 27, 2019 (the   “Stipulation”) is made and entered into by and among the following Settling Parties (as defined   herein), each by and through their respective counsel: (i) plaintiffs to the above-captioned   consolidated stockholder derivative action (the “Action”), Joanne Witchko (“Witchko”), Edward   Froehner, and Jeffrey Turner as trustee for Michele Graham Turner 1995 Revocable Trust   (together, “Plaintiffs”), each acting derivatively on behalf of American Realty Capital Properties,   Inc. (n/k/a VEREIT, Inc.) (“VEREIT” or the “Company”); (ii) defendants Nicholas S. Schorsch   (“Schorsch”); Brian S. Block (“Block”); David Kay; Lisa P. McAlister (“McAlister”); Scott J.   Bowman; Peter M. Budko; Brian D. Jones; William M. Kahane (“Kahane”); Edward M. Weil   (“Weil”); Lisa Beeson; Scott P. Sealy Sr.; Thomas A. Andruskevich; Leslie D. Michelson; Edward                                        142350.00400 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 3 of 136                                                             EXECUTION COPY    G. Rendell; William G. Stanley; Bruce D. Frank; Grant Thornton LLP (“GT”); AR Capital, LLC;   and ARC Properties Advisors, LLC (collectively, the “Non-VEREIT Settling Defendants”); and   (iii) nominal defendant VEREIT (together with the Non-VEREIT Settling Defendants,   “Defendants”).         This Stipulation, subject to the approval of the United States District Court for the Southern   District of New York (the “Court”), is intended by the Settling Parties to fully, finally, and forever   compromise, resolve, discharge, and settle the Released Claims, the Defendant Parties’ Released   Claims, and the NVSD Released Claims (each as defined herein) and to result in the complete   dismissal of the Action with prejudice, upon the terms and subject to the conditions set forth herein,   and without any admission or concession as to the merits of any of the Settling Parties’ claims or   defenses.   I.    INTRODUCTION         A.    Background of the Action         VEREIT is a full-service real estate operating company which owns and manages one of   the largest portfolios of single-tenant commercial properties in the United States.  Plaintiffs have   alleged or believe that they have grounds to allege that the Non-VEREIT Settling Defendants   breached their fiduciary duties or other obligations or duties owed to VEREIT.         On November 17, 2014, plaintiff Witchko served a litigation demand pursuant to Maryland   law on the Board of Directors of VEREIT (the “Board”) asking the Board to investigate alleged   wrongdoing by certain of the Non-VEREIT Settling Defendants and sue the alleged wrongdoers   for violation of their fiduciary duties under Maryland law.  On June 18, 2015, the Board refused   the demand.           On July 31, 2015, plaintiff Witchko, derivatively on behalf of VEREIT, filed a verified   stockholder derivative complaint in the Court, initiating the Action.                                         2 





 






      Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 4 of 136                                                              EXECUTION COPY            On October 30, 2015, plaintiffs Thomas Serafin, Michele Graham Turner 1995 Revocable    Trust, Jeffrey Turner as Trustee, and Edward L. Froehner, derivatively on behalf of VEREIT, filed    a verified stockholder derivative complaint in the Court, initiating the action captioned Serafin, et    al. v. Schorsch, et al., No. 1:15-cv-08563 (the “Serafin Action”).          On December 15, 2015, the Court entered an order consolidating the Action and the Serafin    Action for all purposes and appointing Harwood Feffer LLP, now Glancy Prongay & Murray LLP,    to lead the litigation of the Derivative Action on behalf of the Plaintiffs.          On January 5, 2016, Plaintiffs designated the complaint in the Action as the operative    complaint.          On February 12, 2016, VEREIT and certain of the Non-VEREIT Settling Defendants filed    a motion to dismiss the Action pursuant to Fed. R. Civ. P. 23.1 for failure to sufficiently allege    improper refusal of demand, and under Fed. R. Civ. P. 12(b)(6) for failure to state a claim.            On March 15, 2016, Plaintiffs filed a memorandum of law in opposition to the motion to    dismiss.          On April 5, 2016, VEREIT and certain of the Non-VEREIT Settling Defendants filed a   reply memorandum of law in further support of their motion to dismiss the Action.         On June 2, 2016, the Court held oral argument on the motion to dismiss.         On June 9, 2016, the Court entered an order denying the motion to dismiss pursuant to Fed.   R. Civ. P. 23.1 because the operative complaint sufficiently alleged that plaintiff Witchko’s   demand had been improperly denied, and granting with leave to amend the motion to dismiss   pursuant to Rule 12(b)(6) because the operative complaint failed to state certain claims.            On June 30, 2016, Plaintiffs, derivatively on behalf of VEREIT, filed an amended verified    stockholder derivative complaint in the Court (the “Amended Complaint”).                                           3 





 






      Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 5 of 136                                                              EXECUTION COPY            On July 11, 2016 and July 25, 2016, Kahane, Weil, Schorsch, Block, and McAlister filed    notices of interlocutory appeal of the Court’s order granting in part and denying in part the motion   to dismiss (the “Appeals”).          On July 20, 2016, Plaintiffs moved to dismiss the Appeals for lack of appellate jurisdiction.            On July 22, 2016, VEREIT and certain of the Non-VEREIT Settling Defendants filed   answers to the Amended Complaint.         On August 1, 2016, Kahane and Weil filed their opposition to Plaintiffs’ motion to dismiss   the Appeals for lack of appellate jurisdiction.         On August 8, 2016, Plaintiffs filed their replies in further support of their motion to dismiss   the Appeals.           On August 11, 2016, in the Appeals, Kahane and Weil filed a motion for leave to file a sur-  reply or, in the alternative, strike, and sur-reply to Plaintiffs’ motion to dismiss.         On August 12, 2016, in the Appeals, Plaintiffs filed an opposition to Kahane and Weil’s   motion for leave to file the sur-reply or strike.         On September 1, 2016, VEREIT filed a motion to stay the Action.         On September 8, 2016, the Court entered an order denying VEREIT’s motion to stay the   Action.          On September 16, 2016, document discovery commenced in the Action, the consolidated    class actions pending before the Court, captioned In re American Realty Capital Properties, Inc.    Litigation, Civil Action No. 1:15-mc-00040-AKH (S.D.N.Y.) (the “Class Action”), and the then-   pending Direct Actions (defined herein) arising from substantially the same facts (together, the    “Coordinated Actions”).  Discovery in the Action was thereafter coordinated for all purposes with    discovery in the Class Action.                                           4 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 6 of 136                                                             EXECUTION COPY          During document discovery, over seventy parties and non-parties, including each of the   Non-VEREIT Settling Defendants, cumulatively produced more than 846,000 documents totaling   several million pages.           On November 15, 2016, the United States Court of Appeals for the Second Circuit entered   an order dismissing the Appeals for lack of jurisdiction.         On January 20, 2017, the office of the U.S. Attorney for the Southern District of New York   (the “Government”) moved to stay the Action and the Coordinated Actions until the conclusion of   Block’s criminal trial, scheduled for the summer of 2017.         On January 25, 2017, the Court denied the Government’s stay motion.         On May 11, 2017, the Government renewed its motion for a partial stay of discovery until   completion of Block’s criminal trial.         On May 15, 2017, the Court again denied the Government’s request for a partial stay of   discovery.         On May 31, 2017, document discovery in the Action and the then-pending Coordinated   Actions concluded.         On January 22, 2018, fact witness depositions in the Action and the then-pending   Coordinated Actions commenced.         Between January 22, 2018 and December 18, 2018, Plaintiffs’ Counsel attended thirty-four   fact depositions of witnesses, including each  individual Non-VEREIT Settling Defendant, ex-  VEREIT employees, former VEREIT directors, former VEREIT officers, current and former   employees of Grant Thornton, and third parties.  During the depositions, Plaintiffs’  Counsel   conducted non-duplicative examinations of thirty-one  of the deponents regarding related-party                                          5 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 7 of 136                                                             EXECUTION COPY    transactions, executive compensation payments, and corporate governance allegations at issue in   the Action.         On February 8, 2019, Plaintiffs filed motions for summary judgment against Block and   McAlister.  The same day, several of the Non-VEREIT Settling Defendants filed summary   judgment motions against Plaintiffs.         On March 15, 2019, the parties filed their oppositions to the motions for summary   judgment.         On April 5, 2019, the parties filed replies in support of their motions for summary   judgment.         On May 10, 2019, the Court entered an order denying the motions for summary judgment   in the Action without prejudice to renewal.         B.    Settlement Negotiations         In March 2017, certain of the parties conducted a mediation session with the Honorable   Layn R. Phillips, United States District Judge (Ret.), an experienced mediator of complex disputes.    In advance of the mediation session, Plaintiffs retained a forensic accounting expert who prepared   a report on damages in the derivative action.  Plaintiffs state that, based in part on the expert’s   report, Plaintiffs submitted a confidential mediation statement to Judge Phillips.  The first   mediation session failed to produce a settlement, although the parties expended significant time   and effort preparing for and attending the two-day mediation.         On July 16, 2019, Plaintiffs’ Counsel met with VEREIT’s Chief Executive Officer, General   Counsel, and VEREIT’s counsel.  Plaintiffs’ Counsel made a detailed presentation regarding the   claims alleged in the Action and Plaintiffs’ calculation of damages.  During the meeting, Plaintiffs’                                          6 





 






      Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 8 of 136                                                              EXECUTION COPY      Counsel answered questions from VEREIT’s Chief Executive Officer, General Counsel, and    VEREIT’s counsel regarding particular theories of harm and the calculation of damages.          On August 15, 2019, Plaintiffs’ Counsel, VEREIT’s counsel, certain of the Non-VEREIT   Settling Defendants’ counsel, and counsel for the lead plaintiff in the Class Action held a mediation   session with Judge Phillips at the office of VEREIT’s counsel.  Certain of the Settling Parties   thereafter engaged in further extensive negotiations that included numerous email exchanges and   telephonic conferences.         On August 19, 2019, the Plaintiffs met for a second time with VEREIT’s Chief Executive   Officer, General Counsel, and VEREIT’s counsel.         Over the following weeks, the parties engaged in extensive, arm’s-length negotiations   regarding the terms of a potential resolution of the Action.         On September 8, 2019, the Settling Parties signed and entered into a binding Memorandum   of Understanding setting forth certain key terms of the Settlement.   II.   PLAINTIFFS’ CLAIMS AND STATEMENT OF SETTLEMENT BENEFITS          Plaintiffs believe that the Released Claims have substantial merit.  Nonetheless, Plaintiffs   acknowledge the expense and delay of continued proceedings necessary to prosecute the claims   through trial and appeal.  Plaintiffs have also considered the uncertain outcome inherent in any   litigation, especially complex actions such as the Action, as well as the delay and difficulties of   such litigation.  Plaintiffs were also mindful of the onerous burdens of proof under, and possible   defenses to, the claims asserted.         Based upon (i) investigation into and evaluation of the facts and laws relating to the claims    released herein and alleged in the Derivative Actions, (ii) factual information to which Plaintiffs    and Plaintiffs’ Counsel had access prior to the execution of this Stipulation, (iii) the contribution    of two hundred  eighty six million five hundred thousand dollars ($286,500,000) by the Non-                                         7 





 






      Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 9 of 136                                                              EXECUTION COPY      VEREIT Settling Defendants as part of the global settlement of the claims in the Derivative    Actions and the Class Action, (iv) the Supplementary Agreements that preserve VEREIT’s control    over the settlement contributions by the Non-VEREIT Settling Defendants even if the Settlement    is overturned on appeal, (v) investigations, document review and depositions conducted during the    pendency of the Action, (vi) admissions made by and judgments obtained against certain of the   Non-VEREIT Settling Defendants, (vii) legal analysis and briefing submitted by Plaintiffs and   subsequent orders entered by the Court, (viii) advice provided by the Plaintiffs’ various consultants   and experts, including forensic accountants and individuals with expertise in corporate governance   issues, (ix) mediation sessions with Judge Phillips, and (x) Plaintiffs’ and Plaintiffs’ Counsel’s    determination (subject to the final approval by the Court) that the terms of the proposed Settlement    as set out in this Stipulation are fair, reasonable and adequate and in the best interests of VEREIT   and Current VEREIT  Stockholders, Plaintiffs have agreed to settle the Derivative Actions (as   defined herein) and to release the Released Claims pursuant to the terms of this Stipulation.    III.  THE BENEFIT OF SETTLEMENT TO VEREIT          VEREIT has determined that the Settlement confers substantial benefits upon VEREIT and    Current VEREIT  Stockholders because, for among other reasons, the Settlement reduces the    amount VEREIT is paying to settle the Class Action which in fact made the Settlement possible,    eliminates the risk of adverse judgments at trial, puts an end to timing uncertainties, and removes    the burdens and costs of the Derivative Actions and the Class Action.          VEREIT’s alleged and/or potential claims against the AR Capital Parties (as defined    herein), Block and GT that were the subject of the Derivative Actions, and the defenses that could    be asserted with respect to such claims, as well as the potential counterclaims that could be brought    against VEREIT by, in particular, GT, were a central issue in the negotiations over the amounts    that the AR Capital Parties, Block and GT would contribute to the global settlement of the claims                                          8 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 10 of 136                                                              EXECUTION COPY      that have been asserted or could have been asserted in the Derivative Actions and the Class Action.     VEREIT believes the claims being pursued in the Derivative Actions had significant value to    VEREIT and that those claims were a substantial factor behind the willingness of the AR Capital    Parties, Block and GT to make the settlement payments that they agreed to make.  The AR Capital    Parties, Block and GT made clear throughout the settlement negotiations that but for resolution of    VEREIT’s claims at issue in the Derivative Actions, they would not agree to any contribution to    the Class Settlement (as defined herein), and that GT would not agree to provide VEREIT with a    release as to counterclaims GT intended to assert against VEREIT in the Derivative Actions.     Without those contributions, VEREIT would have been required to make a substantially larger    payment to settle the Class Action, and may not, in fact, have been able to reach resolution.  In    addition, without the release from GT, VEREIT would continue to bear litigation risk, which    VEREIT sought to finally and fully resolve through the global settlement.  Consistent with the    foregoing, VEREIT believes that the claims at issue in the Derivative Actions played a significant    role in securing the settlement contributions from the AR Capital Parties, Block and GT, as well    as the releases, which VEREIT believes are in the best interest of VEREIT.          As to the Non-VEREIT Settling Defendants other than the AR Capital Parties, Block and   GT, VEREIT determined that the Settlement confers substantial benefits upon VEREIT and   Current VEREIT Stockholders because of the substantial cost of continued litigation and trial, the   risks associated with the outcome of a trial and appeal, and the risk of uncollectable judgments in   the event of a judgment favorable to VEREIT.   IV.   DEFENDANTS’ DENIALS OF WRONGDOING AND LIABILITY         The Non-VEREIT Settling Defendants have denied, and continue to deny, each and every   claim and contention alleged by Plaintiffs in the Derivative Actions, and affirm that they have   acted properly, lawfully, and in full accord with their fiduciary duties, to the extent they owed any                                          9 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 11 of 136                                                              EXECUTION COPY      such duties to VEREIT, and other legal obligations, at all times.  Further, the Non-VEREIT    Settling Defendants have denied expressly, and continue to deny, all allegations of wrongdoing,    fault, liability, or damage against them arising out of any of the conduct, statements, acts or    omissions alleged, or that could have been alleged, in the Derivative Actions, and deny that they    have ever committed or attempted to commit any violations of law, any breach of fiduciary duty    owed to VEREIT or its stockholders, or any wrongdoing whatsoever.  Had the terms of this    Stipulation not been reached, the Non-VEREIT Settling Defendants would have continued to    contest vigorously the allegations in the Derivative Actions, and the Non-VEREIT Settling    Defendants maintain that they had and have meritorious defenses to all claims alleged or claims    that could have been alleged in the Derivative Actions, as well as counterclaims against VEREIT    they believe to be meritorious.  Without admitting the validity of any of the claims that have been    asserted in the Derivative Actions, or any liability with respect thereto, the Non-VEREIT Settling    Defendants have concluded that it is desirable that the claims be settled on the terms and subject    to the conditions set forth herein.  The Non-VEREIT Settling Defendants are entering into this    Settlement because it will eliminate the uncertainty, distraction, disruption, burden, and expense    of further litigation of the Derivative Actions.1          Neither this Stipulation, nor any of its terms or provisions, nor any act performed or    document executed pursuant to or in furtherance of the Settlement: (a) is, may be construed as, or    may be used as an admission of, or evidence of, the truth or validity of any of the Released Claims,    of any claims or allegations made in the Derivative Actions, or of any purported acts or omissions    by the Non-VEREIT Settling Defendants; (b) is, may be construed as, or may be used as an                                                       1 Notwithstanding the foregoing, McAlister, and only McAlister, acknowledges, as she has at other times in the Action,   her plea of guilty to certain offenses in United States v. Lisa McAlister, 16-cr-00653 (S.D.N.Y.), and does not intend  anything in the foregoing to be inconsistent with her plea.                                          10 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 12 of 136                                                              EXECUTION COPY      admission of, or evidence of, any fault, omission, negligence, or wrongdoing by the Non-VEREIT    Settling Defendants, or any concession of liability whatsoever; or (c) is, may be construed as, or   may be used as an admission of, or evidence of, a concession by any Non-VEREIT Settling    Defendant of any infirmity in the defenses or counterclaims that any Non-VEREIT Settling   Defendant asserted or could have asserted in the Derivative Actions or otherwise.    V.    TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT          Plaintiffs, derivatively on behalf of VEREIT, the Non-VEREIT Settling Defendants, and   nominal defendant VEREIT, by and through their respective counsel or attorneys of record, hereby   stipulate and agree that, subject to approval by the Court, in consideration of the benefits flowing   to the Settling Parties hereto, the Action and all of the Released Claims shall be fully, finally, and   forever compromised, settled, released, discharged, and dismissed with prejudice, upon the terms   and subject to the conditions set forth herein as follows:          1.    Definitions          As used in this Stipulation, the following terms have the meanings specified below.  In the    event of any inconsistency between any definition set forth below and any definition set forth in    any document attached as an exhibit to this Stipulation, the definitions set forth below shall control.          1.1   “Action” means  the  consolidated  stockholder derivative actions captioned as    Witchko v. Schorsch, et al., No. 1:15-cv-06043-AKH, currently pending in the United States   District Court for the Southern District of New York.          1.2   “Amended Complaint” means the amended verified stockholder  derivative    complaint filed in the Action on June 30, 2016 by Plaintiff Joanne Witchko, derivatively on behalf    of VEREIT.                                           11 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 13 of 136                                                              EXECUTION COPY          1.3 “Appeals” means the notices of interlocutory appeal of the Court’s order granting    in part and denying in part the motion to dismiss filed  by Kahane, Weil, Schorsch, Block, and    McAlister.         1.4 R C “A  apital Parties” means Schorsch, Peter M. Budko, Kahane, Weil, AR Capital,    LLC, and ARC  Properties Advisors, LLC.          1.5 “AR Capital Parties Settlement, Contribution, and Release Agreement” means the    agreement regarding settlement, contribution, and release made and entered into on August 23,   2019, between and among VEREIT; VEREIT Operating Partnership, L.P., formerly known as    ARC Properties Operating Partnership, L.P.; Schorsch; Shelley Schorsch; Peter M. Budko;    Kahane; Weil; AR Capital, LLC; and ARC Properties Advisors, LLC, attached hereto as    Exhibit E.          1.6 “AR Capital Parties Side Letter” means the side agreement entered into on   September 8, 2019, between and among VEREIT; Nick S. Schorsch; Shelley Schorsch; Peter M.    Budko; Kahane; Weil; AR Capital, LLC; and ARC Properties Advisors, LLC, attached hereto as    Exhibit F.          1.7   “Block” means Brian S. Block.          1.8   “Block Side Agreement” means the side agreement entered into between Block and    VEREIT on September 7, 2019, attached hereto as Exhibit G.          1.9   “Board” means the Board of Directors of VEREIT.          1.10  “Class Action” means the federal securities class action lawsuit filed in the United    States District Court for the Southern District of New York, captioned In re American Realty    Capital Properties, Inc. Litigation, Civil Action No. 1:15-mc-00040-AKH.                                           12 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 14 of 136                                                              EXECUTION COPY            1.11  “Class Settlement” means the settlement of the Class Action pursuant to the terms    of a stipulation to be submitted to the Court by the parties in the Class Action contemporaneously    herewith.          1.12  “Contribution Claims” means any claims for contribution that VEREIT may have    against any of the Non-VEREIT Settling Defendants by virtue of VEREIT’s settlement of the    Class Action or settlement with any person or entity that entered into a settlement agreement with    or otherwise provided a release to VEREIT relating to or arising from the purchase or other    acquisition of ARCP Securities prior to October 29, 2014, including but not limited to settlement    of the Direct Actions.  For the avoidance of doubt, Contribution Claims do not include any claims    for contribution that VEREIT may acquire in the event this Settlement does not become Final, as    provided for in the Class Settlement.          1.13  “Coordinated Actions” means, collectively, the Class Action and the Direct   Actions.         1.14  “Court” means the United States District Court for the Southern District of New    York.          1.15  “Current VEREIT  Stockholders” means, for purposes of this Stipulation, any    Person (defined below) who owned VEREIT common stock as of the date of the execution of this   Stipulation and who continued to hold their VEREIT common stock as of the date of the Settlement   Hearing, and any of their legal representatives, heirs, successors, or assigns, excluding the Non-   VEREIT Settling Defendants, current and former officers and directors of VEREIT, members of   their immediate families, and their legal representatives, heirs, successors, or assigns, and any   entity in which the Non-VEREIT Settling Defendants have or had a controlling interest.                                           13 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 15 of 136                                                             EXECUTION COPY          1.16  “Defendants” means, collectively, the Non-VEREIT Settling Defendants and   nominal defendant VEREIT.         1.17  “Defendants’ Counsel” means the respective undersigned counsel for VEREIT and   the Non-VEREIT Settling Defendants.         1.18  “Defendant Parties’ Released Claims” means any and all claims, debts, rights, or   causes of action or liabilities, including Unknown Claims, that could be asserted in any forum by   the Released Persons or the VEREIT Released Persons against Plaintiffs, their beneficiaries, or   Plaintiffs’ Counsel that arise out of or relate in any way to the Released Claims or NVSD Released   Claims or the institution, prosecution, or settlement of the Derivative Actions.  Defendant Parties’   Released Claims shall not include claims to enforce the Settlement;  the AR Capital Parties   Settlement, Contribution, and Release Agreement; the AR Capital Parties Side Letter; the Block   Side Agreement; or the GT Side Agreement.         1.19  “Derivative Actions” means, collectively, the (i) Action; (ii) stockholder derivative   action filed in the Circuit Court for Baltimore City, Maryland, captioned Frampton v. Schorsch, et   al., No. 24-C-15-006269; (iii) stockholder derivative action filed in the Supreme Court of the State   of New York, captioned Fran Kosky Roth IRA v. Schorsch, et al., No. 653093/2016; and   (iv) stockholder derivative action filed in the United States District Court for the District of   Maryland, captioned Meloche, et al. v. Schorsch, et al., No. 1:16-cv-03366-ELH.         1.20  “Direct Actions” means Archer Capital Master Fund, L.P. et al. v. American Realty   Capital Properties, Inc., et al., No. 1:16-cv-05471-AKH (S.D.N.Y.); Atlas Master Fund, Ltd. et   al. v. American Realty Capital Properties, Inc., et al., No. 1:16-cv-05475-AKH (S.D.N.Y.);   BlackRock ACS US Equity Tracker Fund et al. v. American Realty Capital Properties, Inc., et al.,   No. 1:15-cv-08464-AKH (S.D.N.Y.); Clearline Capital Partners LP et al. v. American Realty                                          14 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 16 of 136                                                              EXECUTION COPY      Capital Properties, Inc., et al., No. 1:15-cv-08467-AKH (S.D.N.Y.); Cohen & Steers Institutional   Realty Shares, Inc. et al. v. American Realty Capital Properties, Inc., et al., No. 1:18-cv-06770-   AKH (S.D.N.Y.); Eton Park Fund, L.P. et al. v. American Realty Capital Properties, Inc., et al.,    No. 1:16-cv-09393-AKH (S.D.N.Y.); Fir Tree Capital Opportunity Master Fund, L.P. et al. v.    American Realty Capital Properties, Inc. et al., No. 1:17-cv-04975 (S.D.N.Y.); HG Vora Special   Opportunities Master Fund, Ltd. v. American Realty Capital Properties, Inc., et al., No. 1:15-cv-  04107-AKH (S.D.N.Y.); Jet Capital Master Fund, L.P., et al. v. American Realty Capital    Properties, Inc., et al., No. 1:15-cv-00307-AKH (S.D.N.Y.); Lakewood Capital Partners, LP v.    American Realty Capital Properties, Inc., et al., Index. No. 653676/2019 (N.Y. Sup. Ct.);    Pentwater Equity Opportunities Master Fund Ltd. et al. v. American Realty Capital Properties,    Inc., et al., No. 1:15-cv-08510-AKH (S.D.N.Y.); PIMCO Funds: PIMCO Diversified Income    Fund et al. v. American Realty Capital Properties, Inc., et al., No. 1:15-cv-08466-AKH   (S.D.N.Y.); Reliance Standard Life Insurance Company et al. v. American Realty Capital   Properties, Inc., et al., No. 1:17-cv-02796-AKH (S.D.N.Y.); Twin Securities, Inc. et al. v.   American Realty Capital Properties, Inc., et al., No. 1:15-cv-01291-AKH (S.D.N.Y.); and   Vanguard Specialized Funds et al v. VEREIT Incorporated, et al., 2:15-cv-02157-JAS (D. Ariz.).          1.21  “Effective Date” means the first date by which all of the events and conditions    specified in ¶ 6.1 herein have been met and have occurred.          1.22  “Fee Award” means the monetary compensation to be paid to Plaintiffs’ Counsel    for their attorneys’ fees and expenses, as detailed in ¶¶ 5.1-5.2 of this Stipulation, subject to   approval by the Court.         1.23  “Final” means, with respect to any order or Judgment of the Court, that such order   or Judgment represents a final and binding determination of all issues within its scope and has not                                           15 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 17 of 136                                                              EXECUTION COPY    been reversed, vacated, or modified in any way and is no longer subject to appellate review, either    because of disposition on appeal and conclusion of the appellate process or because of passage,    without action, of time for seeking appellate review.  Without limitation, an order or Judgment    becomes Final when: (a) either no appeal therefrom has been filed and the time has passed for any   notice of appeal to be timely filed therefrom; or (b) an appeal has been filed and either (i) the court   of appeals has either affirmed the order or Judgment or dismissed that appeal and the time for any   reconsideration or further appellate review has passed; or (ii) a higher court has granted further   appellate review and that court has either affirmed the underlying order or judgment or affirmed   the court of appeals’ decision affirming the Judgment or dismissing the appeal.  For purposes of   this paragraph, an “appeal” shall include any motion for reconsideration or petition for a writ of   certiorari or other writ that may be filed in connection with approval or disapproval of this   Settlement.  Any appeal or proceeding seeking subsequent judicial review pertaining solely to the   Fee Award shall not in any way delay, affect, or preclude the time set forth above for the Judgment   to become Final, or otherwise preclude the Judgment from becoming Final.         1.24  “Government” means the office of the U.S. Attorney for the Southern District of   New York.         1.25  “GPM” means Glancy Prongay & Murray LLP.         1.26  “GT” means Grant Thornton LLP.          1.27  “GT Side Agreement” means the side agreement entered into between GT and    VEREIT on September 9, 2019, attached hereto as Exhibit H.          1.28  “Judgment” means the final order and judgment to be rendered by the Court,   substantially in the form attached hereto as Exhibit C.          1.29  “Kahane” means William M. Kahane.                                           16 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 18 of 136                                                              EXECUTION COPY            1.30  “McAlister” means Lisa P. McAlister.          1.31  “Non-VEREIT Settling Defendants” means, collectively: Nicholas S. Schorsch;    Brian S. Block; David Kay; McAlister; Scott J. Bowman; Peter M. Budko; Brian D. Jones; Kahane;    Weil; Lisa Beeson; Scott P. Sealy Sr.; Thomas A. Andruskevich; Leslie D. Michelson; Edward G.    Rendell; William G. Stanley; Bruce D. Frank; Grant Thornton LLP; AR Capital, LLC; and ARC    Properties Advisors, LLC.          1.32  “Notice” means, collectively, the Notice to Current VEREIT  Stockholders,    substantially in the form attached hereto as Exhibit A-1 (“Long Form Notice”), and the Summary    Notice of Proposed Settlement of Stockholder Derivative Action, substantially in the form attached   hereto as Exhibit A-2 (“Summary Notice”).          1.33  “NVSD  Released Claims” means, collectively, all claims (including Unknown    Claims and claims for contribution), demands, debts, losses, damages, duties, rights, disputes,    actions, causes of action, liabilities, obligations, judgments, suits, matters, controversies,    proceedings, or issues, of any kind, nature, character, or description whatsoever (and including,    but not limited to, any claims for damages, whether compensatory, consequential, special,    punitive, exemplary, or otherwise, and any and all fees, costs, interest, expenses, or charges),    whether known or unknown, at law or in equity, that arise out of, are based upon, or relate to in    any way  any of the allegations, acts, transactions, facts, events, matters, occurrences,    representations or omissions involved, set forth, alleged or referred to, in the Derivative Actions   or the Class Action, including but not limited to all claims, demands, losses, rights, and causes of   action of any nature whatsoever that (i) have been or could have been asserted by the Non-VEREIT    Settling Defendants in the Derivative Actions, or (ii) could have been asserted by the Non-VEREIT    Settling Defendants against the VEREIT Released Persons or other Non-VEREIT Settling                                           17 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 19 of 136                                                              EXECUTION COPY      Defendants.  Notwithstanding the foregoing, “NVSD Released Claims” shall not include (i) any   rights that the Non-VEREIT Settling Defendants have or might have to advancement or   indemnification, whether under any prior written agreements with VEREIT or under applicable   law, for any claims, demands, losses or proceedings that arise out of, are based upon, or relate to   in any way the allegations, acts, transactions, facts, events, matters, occurrences, representations   or omissions involved, set forth, alleged or referred to, in the Class Action or the Derivative   Actions, including but not limited to any claims asserted or threatened to be asserted by an investor   who elects not to participate in the settlement of the Class Action or is not a member of the   settlement class, (ii) Block’s rights to advancement and indemnification by VEREIT of legal fees   and expenses incurred by Block for services rendered after September 8, 2019, in connection with   the Derivative Actions, the Class Action, and the action caption United States v. Brian Block, 16-  cr-00595 (JPO) (S.D.N.Y.), consistent with applicable law and subject to VEREIT’s rights to seek   a claw back of such fees and expenses, pursuant to the Block Side Agreement, or (iii) claims to   enforce the Settlement, the AR Capital Parties Settlement, Contribution, and Release Agreement,   the AR Capital Parties Side Letter, the Block Side Agreement, or the GT Side Agreement.    Notwithstanding the foregoing, “NVSD Released Claims” shall include any rights that the AR   Capital Parties have or may have to indemnification or advancement for any action that relates   predominantly to RCS Capital Corporation, including without limitation, the action captioned RCS   Creditor Trust v. Schorsch et al., C.A. No. 2017-0178-SG (Del. Ch.).         1.34  “Person(s)” means an individual, corporation (including all its divisions and   subsidiaries thereof), limited liability corporation, professional corporation, partnership, limited   partnership, limited liability partnership, limited liability company, joint venture, association, joint   stock company, estate, legal representative, trust, unincorporated association, government or any                                           18 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 20 of 136                                                              EXECUTION COPY      political subdivision or agency thereof, and any business or legal entity and all of their respective    spouses, heirs, beneficiaries, executors, administrators, predecessors, successors, representatives,    or assignees.         1.35   “Plaintiffs” means Joanne Witchko, Edward Froehner, and Jeffrey Turner as trustee    for Michele Graham Turner 1995 Revocable Trust.          1.36  “Plaintiffs’ Counsel” means the undersigned counsel for Plaintiffs.          1.37  “Preliminary Approval Order” means the Order to be entered by the Court,    substantially in the form of Exhibit B attached hereto, including, inter alia, preliminarily approving   the terms and conditions of the Settlement as set forth in this Stipulation, directing that the Notice   be provided to Current VEREIT Stockholders, and scheduling a Settlement Hearing to consider   whether the Settlement and Fee Award should be finally approved.         1.38  “Related Parties” means each Defendant’s respective present and former parents,   subsidiaries, divisions, controlling persons, associates, entities and affiliates and each and all of   their respective present and former employees, members, partners, principals, officers, directors,   controlling stockholders, agents, attorneys, advisors (including financial or investment advisors),   accountants, auditors, consultants, underwriters, investment bankers, commercial bankers, entities   providing fairness opinions, general or limited partners or partnerships, limited liability   companies, members, joint ventures and insurers and reinsurers of each of them; as well as the   predecessors, successors, assigns, estates, immediate family members, spouses, heirs, executors,   trusts, trustees, administrators, agents, legal or personal representatives, assigns, and assignees of   each of them, in their capacity as such.         1.39  “Released Claims” means, collectively, all claims (including Contribution Claims   and Unknown Claims), demands, debts, losses, damages, duties, rights, disputes, actions, causes                                           19 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 21 of 136                                                             EXECUTION COPY    of action, liabilities, obligations, judgments, suits, matters, controversies, proceedings, or issues,   of any kind, nature, character, or description whatsoever (and including, but not limited to, any   claims for damages, whether compensatory, consequential, special, punitive, exemplary, or   otherwise, and any and all fees, costs, interest, expenses, or charges), whether known or unknown,   at law or in equity, that arise out of, are based upon, or relate to in any way any of the allegations,   acts, transactions, facts, events, matters, occurrences, representations or omissions involved, set   forth, alleged or referred to, in the Derivative Actions or the Class Action, including but not limited   to all claims, demands, losses, rights, and causes of action of any nature whatsoever that (i) have   been or could have been asserted in the Derivative Actions, or (ii) could have been asserted by   VEREIT.  Notwithstanding the foregoing, “Released Claims” shall not include (i) claims brought   in the Class Action, (ii) claims to enforce the Settlement, or (iii) VEREIT’s right to seek a claw   back of legal fees and expenses incurred by Block after September 8, 2019, consistent with   applicable law.         1.40  “Released Person(s)” means, collectively, each and all of the Non-VEREIT Settling   Defendants and their Related Parties.         1.41  “Schorsch” means Nicholas S. Schorsch.         1.42  “Secondary Agreement” means the Secondary Agreement dated September 27,   2019, between and among VEREIT and the Non-VEREIT Settling Defendants attached hereto as   Exhibit D.         1.43  “Serafin Action” means the stockholder derivative action filed in the United States   District Court for the Southern District of New York, captioned Serafin, et al. v. Schorsch, et al.,   No. 1:15-cv-08563.         1.44  “Settlement” means the settlement of the Action as documented in this Stipulation.                                          20 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 22 of 136                                                              EXECUTION COPY            1.45  “Settlement Hearing” means a hearing by the Court to review the adequacy,    fairness, and reasonableness of the Settlement set forth in this Stipulation and to determine:    (i) whether to enter the Judgment; and (ii) all other matters properly before the Court.          1.46  “Settling Parties” means, collectively, each of the Plaintiffs (derivatively on behalf    of VEREIT), each of the Non-VEREIT Settling Defendants, and nominal defendant VEREIT.          1.47  “Stipulation” means this Stipulation and Agreement of Settlement.         1.48  “Supplementary Agreements” means, collectively, (i)  the AR Capital Parties   Settlement, Contribution, and Release Agreement; (ii) the AR Capital Parties Side Letter; (iii) the    Block Side Agreement; (iv) the GT Side Agreement; and (v) the Secondary Agreement.          1.49  “Unknown Claims” means any and all claims that were alleged or could have been    asserted in the Derivative Actions, including as counterclaims or cross-claims, by the Plaintiffs,    VEREIT, the Non-VEREIT Settling Defendants, or any VEREIT stockholder derivatively on    behalf of VEREIT, which any Plaintiff, VEREIT, any Non-VEREIT Settling Defendant, or any    VEREIT stockholder derivatively on behalf of VEREIT does not know or suspect to exist in his,    her or its favor at the time of the release of the Released Persons or the VEREIT Released Persons,    including claims which, if known by him, her or it, might have affected his, her or its settlement    with and release of the Released Persons, Plaintiffs, their beneficiaries, Plaintiffs’ Counsel, or the    VEREIT Released Persons, or might have affected his, her or its decision not to object to this    settlement.  With respect to any and all Released Claims, the Settling Parties stipulate and agree    that, upon the Effective Date, Plaintiffs, VEREIT, and Non-VEREIT Settling Defendants shall    expressly waive, and each of VEREIT’s stockholders shall be deemed to have, and by operation    of the Judgment shall have, expressly waived the provisions, rights and benefits of California Civil    Code § 1542, which provides:                                           21 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 23 of 136                                                              EXECUTION COPY                        A general release does not extend to claims that the creditor                     or releasing party does not know or suspect to exist in his or                     her favor at the time of executing the release and that, if                     known by him or her, would have materially affected his or                     her settlement with the debtor or released party.          Plaintiffs, VEREIT, and Non-VEREIT Settling Defendants shall expressly waive, and each    of VEREIT’s stockholders shall be deemed to have, and by operation of the Judgment shall have,    expressly waived any and all provisions, rights, and benefits conferred by any U.S. federal law or    any law of any state or territory of the United States, or principle of common law or foreign law,    which is similar, comparable or equivalent in effect to California Civil Code § 1542.  The Settling    Parties acknowledge that they may discover facts in addition to or different from those now known    or believed to be true by them with respect to the Released Claims, but it is the intention of the    Settling Parties to completely, fully, finally, and forever compromise, settle, release, discharge,    and extinguish any and all of the Released Claims, Defendant Parties’ Released Claims, and NVSD    Released Claims, known or unknown, which now exist, or heretofore existed, or may hereafter    exist, and without regard to the subsequent discovery of additional or different facts.  Plaintiffs,    VEREIT, and Non-VEREIT Settling Defendants acknowledge, and VEREIT’s stockholders shall    be deemed by operation of the Judgment to have acknowledged, that the foregoing waiver was    separately bargained for and was a material element of the Settlement.          1.50  “VEREIT” or the “Company” means nominal defendant American Realty Capital   Properties, Inc. (n/k/a VEREIT, Inc.) and includes all of its subsidiaries, predecessors, successors,   affiliates, officers, directors, employees, and agents.         1.51  “VEREIT Released Persons” means VEREIT and VEREIT’s parent and subsidiary   entities, and each of their respective current and former stockholders, directors, officers,    employees, agents, auditors, accountants, attorneys, advisors and underwriters, and the successors    and assigns of each of the foregoing persons and entities.                                          22 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 24 of 136                                                              EXECUTION COPY            1.52  “Weil” means Edward M. Weil.          1.53  “Witchko” means Joanne Witchko.          2.    Terms of the Settlement          2.1   The AR Capital Parties have agreed to contribute consideration with a value of two-   hundred and twenty-five million dollars ($225,000,000) (inclusive of the value of certain operating    partnership units in VEREIT Operating Partnership, L.P., and related dividends previously    surrendered by some of the AR Capital Parties as part of a settlement with the Securities and    Exchange Commission, which total $31,972,934 in value) to a global settlement to settle the Class    Action, as well as any and all claims in the Derivative Actions; Block has agreed to contribute    consideration with a value of twelve million, five hundred thousand dollars ($12,500,000) to a    global settlement to settle the Class Action, as well as any and all claims in the Derivative Actions;    and GT has agreed to contribute forty-nine million dollars ($49,000,000) to a global settlement to    settle the Class Action, as well as any and all claims in the Derivative Actions.  The Settling Parties    agree that the claims in the Derivative Actions, as well as potential counterclaims that could be   brought against VEREIT, were a central issue in the negotiations regarding the amounts that the   AR Capital Parties, Block, and GT would contribute to the global settlement.  Specifically,   VEREIT believes the claims being pursued in the Derivative Actions had significant value to   VEREIT and that those claims were a substantial factor behind the willingness of the AR Capital   Parties, Block and GT to make the settlement payments that they agreed to make.  The AR Capital   Parties, Block and GT made clear throughout the settlement negotiations that but for resolution of   VEREIT’s claims at issue in the Derivative Actions, they would not agree to any contribution to   the settlement of the Class Action, and that GT would not agree to provide VEREIT with a release   as to counterclaims GT intended to assert against VEREIT in the Derivative Actions.  Without   those contributions, VEREIT would have been required to make a substantially larger payment to                                          23 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 25 of 136                                                              EXECUTION COPY      settle the Class Action, and may not, in fact, have been able to reach resolution.  In addition,    without the release from GT, VEREIT would continue to bear litigation risk, which VEREIT    sought to finally and fully resolve through the global settlement.  Consistent with the foregoing,    VEREIT believes that the claims at issue in the Derivative Actions played a significant role in    securing the settlement contributions from the AR Capital Parties, Block and GT, as well as the    releases, which VEREIT believes are in the best interest of VEREIT and its stockholders.          3.    Procedure for Implementing the Settlement          3.1   Promptly after execution of this Stipulation, Plaintiffs shall submit this Stipulation,    together with its exhibits, to the Court and apply for entry of the Preliminary Approval Order in    the Court, substantially in the form of Exhibit B attached hereto, requesting, inter alia:    (i) preliminary approval of the Settlement set forth in this Stipulation; (ii) approval of the method    of providing notice of the proposed Settlement to Current VEREIT Stockholders; (iii) approval of   the Notice procedure set forth in ¶ 3.2; and (iv) a date for the Settlement Hearing.         3.2   Within ten (10) calendar days after the Court’s entry of the Preliminary Approval   Order, VEREIT shall cause a press release to be issued that contains the contents of the Long Form   Notice  (attached hereto as Exhibit  A-1), and referring the Current VEREIT  Stockholders to   VEREIT’s Investor Relations webpage, located at http://ir.vereit.com/, for more information, as   well as file a current report on Form 8-K with the Securities & Exchange Commission referencing   such press release.  VEREIT’s Investor Relations webpage shall include a link to the   aforementioned press release, this Stipulation, and the Preliminary Approval Order.  Within ten   (10) calendar days after the Court’s entry of the Preliminary Approval Order, VEREIT shall cause   the Summary Notice (attached hereto as Exhibit A-2) to be published once in Investor’s Business   Daily.  The Settling Parties believe the contents of the Notice and the manner of the notice                                           24 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 26 of 136                                                              EXECUTION COPY      procedures set forth in this paragraph constitute adequate and reasonable notice to Current    VEREIT Stockholders pursuant to applicable law and due process.           3.3   Plaintiffs’ Counsel shall request that the Court hold the Settlement Hearing  to    approve the Settlement and the Fee Award after the Court holds a final approval hearing to review   the adequacy, fairness, and reasonableness of the Class Settlement, but in no event fewer than    forty-five (45) calendar days after the notice described in ¶ 3.2 above is given to Current VEREIT    Stockholders.          3.4   Pending the Court’s determination as to final approval of the Settlement, Plaintiffs    and Plaintiffs’ Counsel, and all other Persons, including, but not limited to, any Current VEREIT    Stockholders, are barred and enjoined from commencing, prosecuting, instigating, or in any way    participating in the commencement or prosecution of any action asserting any Released Claims    against any of the Released Persons, in any court or tribunal, including but not limited to, any of    the Derivative Actions.          3.5   Upon entry of Judgement by the Court, VEREIT shall promptly seek to have    dismissed or otherwise terminated, to the extent they have not been already, any Derivative    Actions still pending.          4.    Releases          4.1   Upon the Effective Date, VEREIT, Plaintiffs, and each of the Current VEREIT    Stockholders shall be deemed to have, and by operation of the Judgment shall have, fully, finally,    and forever released, relinquished, and discharged the Released Claims against the Released    Persons.  VEREIT, Plaintiffs, and each of the Current VEREIT Stockholders shall be deemed to    have, and by operation of the Judgment shall have, covenanted not to sue any Released Person    with respect to any Released Claims, and shall be permanently barred and enjoined from    instituting, commencing or prosecuting the Released Claims against the Released Persons except                                          25 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 27 of 136                                                              EXECUTION COPY      to enforce the releases and other terms and conditions contained in this Stipulation and/or the    Judgment entered pursuant thereto.          4.2   Upon the Effective Date, VEREIT and each of the Released Persons shall be    deemed to have, and by operation of the Judgment shall have, fully, finally, and forever released,    relinquished and discharged each and all of Plaintiffs, their beneficiaries, and Plaintiffs’ Counsel    from any and all Defendant Parties’ Released Claims.  VEREIT and the Released Persons shall be    deemed to have, and by operation of the Judgment shall have, covenanted not to sue Plaintiffs,    their beneficiaries, or Plaintiffs’ Counsel with respect to any claims arising out of, relating to, or   in connection with their institution, prosecution, assertion, settlement, or resolution of the Action    or any Defendant Parties’ Released Claims, and shall be permanently barred and enjoined from    instituting, commencing or prosecuting the Defendant Parties’ Released Claims against Plaintiffs,    their beneficiaries, or Plaintiffs’ Counsel except to enforce the releases and other terms and    conditions contained in this Stipulation and/or the Judgment entered pursuant thereto.          4.3   Upon the Effective Date, the Non-VEREIT Settling Defendants shall be deemed to    have, and by operation of the Judgment shall have, fully, finally, and forever released,    relinquished, and discharged the NVSD Released Claims against each respective Non-VEREIT    Settling Defendant and the VEREIT Released Persons. The Non-VEREIT Settling Defendants   shall be deemed to have, and by operation of the Judgment shall have, covenanted not to sue each   respective Non-VEREIT Settling Defendant and the VEREIT Released Persons with respect to    any NVSD Released Claims, and shall be permanently barred and enjoined from instituting,   commencing or prosecuting the NVSD Released Claims against the VEREIT Released Persons    except to enforce the releases and other terms and conditions contained in this Stipulation and/or    the Judgment entered pursuant thereto.                                           26 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 28 of 136                                                             EXECUTION COPY          4.4   Notwithstanding ¶ 4.3, in the event that any Derivative Action other than the   Action, or any derivative proceeding filed subsequent to execution of this Stipulation alleging   claims that arise out of, are based upon, or relate to in any way any of the allegations, acts,   transactions, facts, events, matters, occurrences, representations or omissions involved, set forth,   alleged or referred to, in the Derivative Actions or the Class Action, is permitted to proceed against   any Non-VEREIT Settling Defendant: (i) VEREIT shall not be released from any rights of   advancement, indemnification, contribution, or any other rights that such Non-VEREIT Settling   Defendant has or may have for any claims, demand or losses (all subject to meeting applicable   laws, requirements, and standards) arising out of such derivative proceeding; and (ii) GT shall be   entitled to receive from VEREIT indemnification for and advancement of reasonable fees, costs,   and expenses incurred or paid by GT in defending such derivative proceeding, and (subject to   meeting applicable laws) amounts paid by GT in settlement of or in satisfaction of a judgment   rendered in such derivative proceeding.         4.5   Nothing herein shall in any way impair or restrict the rights of any Settling Party to   enforce the terms of the Stipulation.         5.    Payment of Plaintiffs’ Counsel’s Fees and Expenses         5.1   Plaintiffs intend to seek payment of a fee in an amount not to exceed twenty-six   million dollars ($26,000,000) and expenses through application to the Court.  VEREIT reserves   its right to object to Plaintiffs’ Counsel’s application for fees and expenses.           5.2   Not later than ten (10) business days following the date on which the Court   approves the Fee Award, VEREIT will pay Plaintiffs’ Counsel (through GPM) the amount   approved by the Court (in an amount not to exceed twenty-six million dollars ($26,000,000) and   expenses).  Such monies shall be kept by GPM in a segregated escrow account and not distributed   to GPM or anyone else until such time as the Fee Award becomes Final.  For the avoidance of                                         27 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 29 of 136                                                              EXECUTION COPY      doubt, only VEREIT is liable for the Fee Award; none of the Non-VEREIT Settling Defendants   are liable to the Plaintiffs or any other person for the Fee Award.         5.3   In the event of any failure to obtain final approval of the full amount of the Fee   Award, or upon any appeal and/or further proceedings on remand, or successful collateral attack,   which results in the Fee Award being overturned or substantially modified, Plaintiffs’ Counsel and   their successors shall be obligated to repay within fifteen (15) business days the portion of the Fee   Award held in escrow that was ultimately not awarded to Plaintiffs’ Counsel.  Plaintiffs’ Counsel    is subject to the Court’s jurisdiction for the purposes of enforcing this paragraph and the provisions    related to the Fee Award.          5.4   Payment of the Fee Award in the amount approved by the Court shall constitute    final and complete payment for Plaintiffs’ Counsel’s attorneys’ fees and expenses that have been   incurred or will be incurred in connection with the filing and prosecution of the Action and the   resolution of the claims alleged therein.  Defendants and Defendants’ Counsel shall have no    responsibility for the allocation or distribution of the Fee Award amongst Plaintiffs’  Counsel.    Defendants, including VEREIT, shall have no obligation to make any payment to any Plaintiffs’   Counsel other than the payment provided in ¶¶ 5.1-5.2 herein.         5.5   Except as otherwise provided herein, or a separate agreement concerning    advancement or indemnification among any Defendants, each of the Settling Parties shall bear his,    her, or its own costs and attorneys’ fees.  This ¶ 5.5 is not intended to affect the rights of any Non-   VEREIT Settling Defendant to indemnification or advancement of costs and attorney’s fees.          6.    Conditions of Settlement, Effect of Disapproval, Cancellation, or Termination           6.1   The Effective Date of the Settlement shall be conditioned on the occurrence of all    of the following events:                (i)   the Court’s entry of the Judgment;                                          28 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 30 of 136                                                             EXECUTION COPY                (ii)  the Judgment has become Final;               (iii) the Court’s approval of a settlement and entry of a judgment in the Class                    Action; and               (iv)  the judgment in the Class Action becomes Final.         6.2   If any condition specified in ¶ 6.1 is not met, then the Stipulation shall be canceled   and terminated subject to ¶ 6.4, and the Settling Parties shall be restored to their respective   positions in the Action as of the date immediately preceding the date of this Stipulation, unless   Plaintiffs’ Counsel and Defendants’ Counsel mutually agree in writing to proceed with the   Stipulation; provided, however, that the Court’s failure to approve the Fee Award shall not be   grounds for termination or cancellation of the Settlement.         6.3   Each of the Settling Parties shall have the right to terminate the Settlement by   providing written notice of their election to do so to all other Settling Parties within twenty (20)   calendar days of the date on which: (i) the Court refuses to approve this Stipulation, or the terms   contained herein, in any material respect; (ii) the Preliminary Approval Order is not entered in   substantially the form attached as Exhibit B hereto; (iii) the Judgment is not entered in substantially   the form attached as Exhibit C hereto; (iv) the Judgment is reversed, vacated, or substantially   modified on appeal, reconsideration, or otherwise; (v) the Court refuses to enter a judgment in the   Class Action; (vi) the judgment in the Class Action is reversed, vacated, or substantially modified   on appeal, reconsideration, or otherwise; or (vii) the Effective Date of the Settlement cannot   otherwise occur; except that such termination shall not be effective unless and until the terminating   Settling Party has, within twenty (20) calendar days of the date on which notice of the termination   event has been provided to all other Settling Parties, attempted in good faith to confer with the   other Settling Parties to attempt to remedy the issue.  Any order or proceeding relating to the Fee   Award, or any appeal from any order relating thereto or reversal or modification thereof, shall not                                          29 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 31 of 136                                                              EXECUTION COPY      operate to cancel the Stipulation, allow for the termination of the Settlement, or affect or delay the    finality of the Judgment approving the Settlement.          6.4   In the event that the Stipulation is not approved by the Court, or the Settlement is    terminated for any reason, including pursuant to ¶ 6.3 above, the Settling Parties shall be restored    to their respective positions as of the date immediately preceding the date of this Stipulation, and    all negotiations, proceedings, documents prepared and statements made in connection herewith    shall be without prejudice to the Settling Parties, shall not be deemed or construed to be an    admission by any of the Settling Parties of any act, matter, or proposition, and shall not be used in    any manner for any purpose in any subsequent proceeding in the Derivative Actions or in any other   action or proceeding.  In such event, the terms and provisions of the Stipulation, with the exception   of ¶¶ 1.1-1.53, 5.5, 6.2-6.4, 7.2, 7.4-7.16, and 7.18 herein, shall have no further force and effect   with respect to the Settling Parties and shall not be used in the Derivative Actions or in any other   proceeding for any purpose, and any judgment or orders entered by the Court in accordance with   the terms of the Stipulation shall be treated as vacated, nunc pro tunc.          7.    Miscellaneous Provision          7.1   The Settling Parties: (i) acknowledge that it is their intent to consummate this    Stipulation; and (ii) agree to cooperate to the extent reasonably necessary to effectuate and    implement all terms and conditions of the Stipulation and to exercise their best efforts to    accomplish the foregoing terms and conditions of the Stipulation.          7.2   The Settling Parties agree that the terms of the Settlement were negotiated in good    faith and at arm’s length by the Settling Parties, and reflect a settlement that was reached    voluntarily based upon adequate information and after consultation with competent legal counsel.     Except in the event of termination of the Settlement, the Settling Parties agree not to assert under    Rule 11 of the Federal Rules of Civil Procedure or any similar law, rule or regulation, that the                                          30 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 32 of 136                                                              EXECUTION COPY      Action was brought or defended in bad faith or without a reasonable basis.  The Settling Parties    also will request that the Judgment contain a finding that during the course of the Action, the    Settling Parties and their respective counsel at all times complied with the requirements of Fed. R.    Civ. P. 11 and all other similar rules of professional conduct.          7.3   While maintaining their positions that the claims and defenses asserted in the    Derivative Actions are meritorious, Plaintiffs and Plaintiffs’ Counsel, on the one hand, and    Defendants and Defendants’ Counsel, on the other hand, shall not make any public statements or    statements to the media (whether or not for attribution) that disparage the other’s business,    conduct, or reputation, or that of their counsel, based on the subject matter of the Action.     Notwithstanding the foregoing, each of the Settling Parties reserves their right to rebut, in a manner    that such party determines to be reasonable and appropriate, any contention made in any public    forum that the Action was brought or defended in bad faith or without a reasonable basis.          7.4   Whether or not the Settlement is approved by the Court, and whether or not the    Settlement is consummated, the fact and terms of this Stipulation, including any exhibits attached    hereto, all proceedings in connection with the Settlement, and any act performed or document    executed pursuant to or in furtherance of the Stipulation or the Settlement:          (a)   shall not be offered, received, or used in any way against the Settling Parties as    evidence of, or be deemed to be evidence of, a presumption, concession, or admission by any of    the Settling Parties with respect to the truth of any fact alleged by Plaintiffs or the validity, or lack   thereof, of any claim that has been or could have been asserted in the Derivative Actions or in any    litigation, or the deficiency or infirmity of any defense that has been or could have been asserted    in the Derivative Actions or in any litigation, or of any fault, wrongdoing, negligence, or liability    of any of the Released Persons or the VEREIT Released Persons;                                           31 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 33 of 136                                                              EXECUTION COPY            (b)   shall not be offered, received, or used in any way against any of the Released    Persons or the VEREIT Released Persons as evidence of, or be deemed to be evidence of, a    presumption, concession, or admission of any fault, misrepresentation or omission with respect to    any statement or written document approved, issued, or made by any Released Person or any   VEREIT Released Person, or against Plaintiffs as evidence of any infirmity in their claims;         (c)   shall not be offered, received, or used in any way against any of the Released   Persons or any of the VEREIT Released Persons as evidence of, or be deemed to be evidence of,    a presumption, concession, or admission of any liability, fault, negligence, omission or    wrongdoing, or in any way referred to for any other reason as against the Released Persons or the    VEREIT Released Persons, in any arbitration proceeding or other civil, criminal, or administrative    action or proceeding in any court, administrative agency, or other tribunal.  Neither this Stipulation    nor the Settlement, nor any act performed or document executed pursuant to or in furtherance of    this Stipulation, or the Settlement, shall be admissible in any proceeding for any purpose, except    to enforce the terms of the Settlement; provided, however, that the Released Persons and the    VEREIT Released Persons may refer to the Settlement, and file the Stipulation and/or the    Judgment, in any action that may be brought against them to effectuate the liability protections    granted to them hereunder, including, without limitation, to support a defense or claim based on    principles of res judicata, collateral estoppel, full faith and credit, release, standing, good faith    settlement, judgment bar or reduction or any other theory of claim preclusion or issue preclusion    or similar defense or claim under U.S. federal or state law or foreign law.          7.5   The exhibits to the Stipulation are material and integral parts hereof and are fully    incorporated herein by this reference.                                           32 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 34 of 136                                                              EXECUTION COPY            7.6   This Stipulation may be amended or modified only by a written instrument signed    by or on behalf of all the Settling Parties or their respective successors-in-interest.  After prior   notice to the Court, but without further order of the Court, the Settling Parties may agree to   reasonable extensions of time to carry out any provisions of this Stipulation.         7.7   With the exception of the  Supplementary Agreements,  this Stipulation and the   exhibits attached hereto represent the complete and final resolution of all disputes among the   Settling Parties with respect to the Action, constitute the entire agreement among the Settling   Parties, and supersede any and all prior negotiations, discussions, agreements, or undertakings,   whether oral or written, with respect to such matters.         7.8   The waiver by one party of any breach of the Settlement by any other party shall   not be deemed a waiver of any other prior or subsequent breach of the Settlement.  The provisions   of the Settlement may not be waived except by a writing signed by the affected party, or counsel   for that party.         7.9   The headings in this Stipulation and its exhibits are used for the purpose of   convenience only and are not meant to have legal effect.  Such headings shall not be considered a   part of this Stipulation, and neither shall they limit, modify, or affect in any way the meaning or   interpretation of this Stipulation.         7.10  This Stipulation and the Settlement shall be binding upon, and inure to the benefit   of, the successors and assigns of the Settling Parties, the Released Persons, and the VEREIT   Released Persons.  The Settling Parties agree that this Stipulation will run to their respective   successors-in-interest, and they further agree that any planned, proposed or actual sale, merger or   change-in-control of VEREIT shall not void this Stipulation, and that in the event of a planned,   proposed or actual sale, merger or change-in-control of VEREIT, they will continue to seek final                                           33 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 35 of 136                                                             EXECUTION COPY    approval of this Stipulation expeditiously, including, but not limited to, the Settlement terms   reflected in this Stipulation and the Fee Award.         7.11  The Stipulation and the exhibits attached hereto shall be considered to have been   negotiated, executed, and delivered, and to be wholly performed, in the State of New York and the   rights and obligations of the Settling Parties to the Stipulation shall be construed and enforced in   accordance with, and governed by, the internal, substantive laws of the State of New York without   giving effect to that State’s choice of law principles.  No representations, warranties, or   inducements have been made to any party concerning the Stipulation or its exhibits other than the   representations, warranties, and covenants contained and memorialized in such documents.         7.12  This Stipulation shall not be construed more strictly against one Settling Party than   another merely by virtue of the fact that it, or any part of it, may have been prepared by counsel   for one of the Settling Parties, it being recognized that it is the result of arm’s-length negotiations   among the Settling Parties and all Settling Parties have contributed substantially and materially to   the preparation of this Stipulation.         7.13  All agreements made and orders entered during the course of the Derivative Actions   relating to the confidentiality of information and documents shall survive this Stipulation.         7.14  Nothing in this Stipulation, or the negotiations or proceedings relating to the   Settlement, is intended to or shall be deemed to constitute a waiver of any applicable privilege or   immunity, including, without limitation, the attorney-client privilege, the joint defense privilege,   the accountants’ privilege, or work product immunity; further, all information and documents   transmitted between Plaintiffs’ Counsel and Defendants’ Counsel in connection with the   Settlement shall be kept confidential and shall be inadmissible in any proceeding in any U.S.                                          34 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 36 of 136                                                             EXECUTION COPY    federal or state court or other tribunal or otherwise, in accordance with Rule 408 of the Federal   Rules of Evidence as if such Rule applied in all respects in any such proceeding or forum.         7.15  The Settling Parties intend that the Court retain jurisdiction for the purpose of   effectuating and enforcing the terms of the Settlement.         7.16  Each counsel or other Person executing the Stipulation or its exhibits on behalf of   any of the Settling Parties hereby warrants that such Person has the full authority to do so.  The   Stipulation shall be binding upon, and inure to the benefit of, the successors and assigns of the   Settling Parties and their Related Parties.         7.17  Any notice required by this Stipulation shall be submitted by overnight mail and   email to each of the signatories below.         7.18  The Stipulation may be executed in one or more counterparts, including by   signature transmitted via facsimile, or by a .pdf/.tif image of the signature transmitted via e-mail.    All executed counterparts and each of them shall be deemed to be one and the same instrument.           IN WITNESS WHEREOF, the Settling Parties hereto have caused this Stipulation to be   executed, by their duly authorized attorneys, as of September 27, 2019.                                                                     35 





 






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     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 41 of 136                                                               EXBCU'IION  COPY  EXEÇUTED    ANDéGR]EED:   GLANCY   PRONGAY   & MURIìAY LLP,  OTT   MILBANK LLP" on behall'ol'VEREIT  behalf of Joanne Witchko, Edward Froehner,  and .leff}ey Turner as trustee fbr Michele  Grahaln 'lurner 1995 Revocable Trust   By                                       By:   PAUL, WEISS, RIþ-KIND,  WHARTON    &     KIRKLAND & ELLIS LLP. on behalf     o1'  GARRISON   Ll-P. on behall'of Nicholas S. David Kay  Schorsch    B                                        By   KELLOGG. I-{ANSEN. TODD.  F'IGI]L &      PETRILLO KLEIN & BOXER    LLP. on behalf  FREDERICK, P.L.L.C..  or-r bel-ralf of AR of Lisa Beeson  Capital. LLC, ARC Properties Advisors. LLC,  Scott J. Borvman,  Peter M. Budko, Brian D.  Jones. William M. Kahane, and Edward M.  Weil   By                                       B)'   STEPTOE   & JOIINSON  LLP. on behalf of  WEIL, GOTSIJAL   &. MANGES LLP, ON  Brian Block                              belialf of Tholnas A. Andruskevich,  Leslie D.                                           Michelson,  Edward G. Rendell. William G.                                           Stanley, and llrr"rce D. F'rank   By                                       Bv   MOIìRIS, MANNING   & I\4ARTIN LLP. on    SIDLEY  AUSTIN LLP. on behalf of Grant  behall'ol Scott P. Sealy Sr.             Thornton LLP    13v                                      By   ZUCKERMAN    SPAEDER LLP.  on behalf of  Lisa McAlister   Il)'                                         36





 






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    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 43 of 136                                                             EXECUTION COPY   EXECUTED AND AGREED:  GLANCY PRONGAY & MURRAY LLP, on          MILBANK LLP, on behalf of VEREIT  behalf of Joanne Witchko, Edward Froehner,  and  Jeffrey  Turner  as  trustee  for  Michele  Graham Turner 1995 Revocable Trust   By:                                      By:   PAUL,  WEISS,  RIFKIND,  WHARTON  &      KIRKLAND  &  ELLIS  LLP,  on  behalf  of  GARRISON  LLP,  on  behalf  of  Nicholas  S. David Kay  Schorsch   By:                                      By:   KELLOGG, HANSEN, TODD, FIGEL &           PETRILLO KLEIN & BOXER LLP, on behalf  FREDERICK,  P.L.L.C.,  on  behalf  of  AR of Lisa Beeson  Capital, LLC, ARC Properties Advisors, LLC,  Scott J. Bowman, Peter M. Budko, Brian D.  Jones,  William  M.  Kahane,  and  Edward  M.  Weil   By:                                      By:   STEPTOE  &  JOHNSON  LLP,  on  behalf  of WEIL,  GOTSHAL  &  MANGES  LLP,  on  Brian Block                              behalf of Thomas A. Andruskevich, Leslie D.                                           Michelson,  Edward  G.  Rendell,  William  G.                                           Stanley, and Bruce D. Frank   By:                                      By:   MORRIS, MANNING & MARTIN LLP, on         SIDLEY  AUSTIN  LLP,  on  behalf  of  Grant  behalf of Scott P. Sealy Sr.             Thornton LLP   By:                                      By:   ZUCKERMAN SPAEDER LLP, on behalf of  Lisa McAlister   By:                                          36 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 44 of 136                                                             EXECUTION COPY   EXECUTED AND AGREED:  GLANCY PRONGAY & MURRAY LLP, on          MILBANK LLP, on behalf of VEREIT  behalf of Joanne Witchko, Edward Froehner,  and Jeffrey Turner as trustee for Michele  Graham Turner 1995 Revocable Trust   By:                                      By:   PAUL, WEISS, RIFKIND, WHARTON       &    KIRKLAND & ELLIS LLP, on behalf of  GARRISON LLP, on behalf of Nicholas S.   David Kay  Schorsch   By:                                      By:   KELLOGG, HANSEN, TODD, FIGEL &           PETRILLO KLEIN & BOXER LLP, on behalf  FREDERICK, P.L.L.C., on behalf of AR     of Lisa Beeson  Capital, LLC, ARC Properties Advisors, LLC,  Scott J. Bowman, Peter M. Budko, Brian D.  Jones, William M. Kahane, and Edward M.  Weil   By:                                      By:   STEPTOE & JOHNSON LLP, on behalf of      WEIL, GOTSHAL & MANGES LLP, on  Brian Block                              behalf of Thomas A. Andruskevich, Leslie D.                                           Michelson, Edward G. Rendell, William G.                                           Stanley, and Bruce D. Frank   By:                                      By:   MORRIS, MANNING & MARTIN LLP, on         SIDLEY AUSTIN LLP, on behalf of Grant  behalf of Scott P. Sealy Sr.             Thornton LLP   By:                                      By:   ZUCKERMAN SPAEDER LLP, on behalf of  Lisa McAlister   By:                                          36 





 






  Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 45 of 136                                                                   EXECUTION COPY  EXECUTED     AND AGREED:  GLANCY    PRONGAY   & MURRAY    LLP, on    MILBANK    LLP, on behalf of VEREIT  behalf of Joanne Witchko, Edward Froehner,  and Jeffrey Tumer  as trustee for Michele  Graham Turner 1995 Revocable Trust    PAUL,  WEISS,  R[FKIND,  WHARTON     &     KIRKLAND    & ELLIS LLP, on behalf    of  GARRISON LLP,    on behalf of Nicholas S.  David Kay  Schorsch    KELLOGG, HANSEN,  TODD,     FIGEL &        PETRILLO   KLEIN & BOXER  LLP.  on behalf  FREDERICK,    P.L.L.C., on behalf of AR    of Lisa Beeson  Capital, LLC, ARC Properties Advisors, LLC,  Scott J. Bowman, Peter M. Budko, Brian D.  Jones, William M. Kahane, and Edward M.  Weil    STEPTOE & JOHNSON      LLP, on behalf of   WEIL, GOTSHAL      & MANGES     LLP,  on  Brian Block                                behalf of Thomas A. Andruskevich, Leslie D.                                             Michelson, Edward G. Rendell, William G.                                             Stanley,  and Bruce D. Frank   B   MORR[S, MANNING     & MARTIN    LLP, ON    SIDLEY   AUSTIN  LLP, on behalf of Grant  behalf of Scott P. Sealy Sr.               Thornton LLP    ZUCKERMAN     SPAEDER   LLP, on hhalf of  Lisa McAlister                                           36





 






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Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 48 of 136             EXHIBIT A-1                                   42350.00400





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 49 of 136   UNITED STATES DISTRICT COURT  SOUTHERN DISTRICT OF NEW YORK                                               JOANNE WITCHKO, Derivatively on Behalf     of Nominal Defendant AMERICAN REALTY           Lead Case No. 1:15-cv-06043-AKH  CAPITAL PROPERTIES, INC.,                                                                       (Consolidated with Case No.                    Plaintiff,                   1:15-cv-08563-AKH)                                                   v.                                                                              NICHOLAS S. SCHORSCH, et al.,                      Defendants,          -and-    AMERICAN REALTY CAPITAL  PROPERTIES, INC.,                      Nominal Defendant.                                               NOTICE TO CURRENT VEREIT STOCKHOLDERS   TO:   ALL OWNERS OF VEREIT, INC.      (“VEREIT”)  (F/K/A AMERICAN REALTY        CAPITAL PROPERTIES INC.        (“ARCP”))  COMMON STOCK         (TICKER        SYMBOL: VER) AND PREFERRED STOCK (TICKER SYMBOL: VERPF) AS OF       SEPTEMBER 27, 2019, WHO CONTINUE TO OWN SUCH SHARES.        PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY.  YOUR       RIGHTS MAY BE AFFECTED.        THIS NOTICE RELATES TO A PROPOSED       SETTLEMENT AND DISMISSAL OF STOCKHOLDER DERIVATIVE       LITIGATION AND CONTAINS IMPORTANT INFORMATION REGARDING       YOUR RIGHTS.  YOUR RIGHTS MAY               BE AFFECTED BY LEGAL       PROCEEDINGS IN THIS ACTION.        IF THE COURT APPROVES THE SETTLEMENT AND DISMISSAL OF THE       ACTION, STOCKHOLDERS OF VEREIT WILL BE FOREVER BARRED FROM       CONTESTING THE APPROVAL OF THE PROPOSED SETTLEMENT AND       FROM PURSUING THE SETTLED CLAIMS.        THE COURT HAS MADE NO FINDINGS OR DETERMINATIONS       RESPECTING THE MERITS OF THE ACTION.          THE RECITATION OF THE       BACKGROUND AND CIRCUMSTANCES OF THE SETTLEMENT CONTAINED                                         1 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 50 of 136          HEREIN DOES NOT CONSTITUTE THE FINDINGS OF THE COURT.              IT IS         BASED ON REPRESENTATIONS MADE TO THE COURT BY COUNSEL FOR        THE PARTIES.          YOU ARE HEREBY NOTIFIED, pursuant to Federal Rule of Civil Procedure 23.1 and    an Order from the Honorable Alvin K. Hellerstein of the U.S. District Court for the Southern    District of New York (the “Court”), that a proposed settlement agreement has been reached among    Plaintiffs,1 derivatively on behalf of VEREIT, VEREIT, and the Non-VEREIT Settling     Defendants in connection with the above-captioned consolidated stockholder derivative action    titled Witchko v. Schorsch, et al., No. 1:15-cv-06043-AKH (S.D.N.Y.) (the “Action”).          Plaintiffs filed the Action derivatively on behalf of VEREIT to remedy the alleged harm    caused to the Company by certain of the Non-VEREIT Settling Defendants’ alleged breaches of    their fiduciary duties or other obligations or duties owed to VEREIT.  The proposed Settlement, if    approved by the Court, would fully, finally and forever resolve the Action on the terms set forth    in the Stipulation and summarized in this Notice, including the dismissal of the Action with    prejudice.          As explained below, a Settlement Hearing shall be held before the Court on __________    at __:__ _.m., before the Honorable Alvin K. Hellerstein, at the U.S. District Court for the Southern    District of New York, Courtroom 14D, 500 Pearl Street, New York, New York 10007, to determine    whether, inter alia, the proposed Settlement is fair, reasonable, and adequate, and should be finally   approved by the Court and whether Plaintiffs’ Counsel’s Fee Award,  should be finally approved.    You have the right to object to the Settlement and the Fee Award, in the manner provided herein.                                                        1    For purposes of this Notice, the Court incorporates by reference the definitions in the Settling Parties’  Stipulation and Agreement of Settlement, fully executed as of September 27, 2019 (the “Stipulation”), and all   capitalized terms used herein, unless otherwise defined herein, shall have the same meanings as set forth in the   Stipulation.  A copy of the Stipulation may be inspected at the Clerk of the Court’s Office for the United States District   Court for the Southern District of New York, 500 Pearl Street, New York, NY 10007 or by visiting the investor  relations portion of VEREIT’s website at http://ir.VEREIT.com.                                          2 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 51 of 136    If you fail to object in the manner provided herein at least twenty-one (21) calendar days prior to    the Settlement Hearing, you will be deemed to have waived your objections and will be forever    bound by the Judgment to be entered and the releases to be given, unless otherwise ordered by the    Court.          This Notice is not intended to be and should not be construed as an expression of any    opinion by the Court with respect to the merits of the claims made in the Action, but is merely to    advise one of the proposed Settlement and of one’s rights if he, she or it owned VEREIT stock as    of September 27, 2019 and continues to hold VEREIT stock through the date of the filing of the    objection (“Current VEREIT Stockholder”).    I.    INTRODUCTION          A.    Background of the Action          VEREIT is a full-service real estate operating company which owns and manages one of    the largest portfolios of single-tenant commercial properties in the United States.  Plaintiffs have    alleged or believe that they have grounds to allege that the Non-VEREIT Settling Defendants    breached their fiduciary duties or other obligations or duties owed to VEREIT.           On November 17, 2014, plaintiff Witchko served a litigation demand pursuant to Maryland    law on the Board of Directors of VEREIT (the “Board”) asking the Board to investigate alleged    wrongdoing by certain of the Non-VEREIT Settling Defendants and sue the alleged wrongdoers    for violation of their fiduciary duties under Maryland law.  On June 18, 2015, the Board refused    the demand.          On July 31, 2015, plaintiff Witchko, derivatively on behalf of VEREIT, filed a verified   stockholder derivative complaint in the Court, initiating the Action.         On October 30, 2015, plaintiffs Thomas Serafin, Michele Graham Turner 1995 Revocable   Trust, Jeffrey Turner as Trustee, and Edward L. Froehner, derivatively on behalf of VEREIT, filed                                          3 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 52 of 136    a verified stockholder derivative complaint in the Court, initiating the action captioned Serafin, et    al. v. Schorsch, et al., No. 1:15-cv-08563 (the “Serafin Action”).          On December 15, 2015, the Court entered an order consolidating the Action and the Serafin    Action for all purposes and appointing Harwood Feffer LLP, now Glancy Prongay & Murray LLP,    to lead the litigation of the Derivative Action on behalf of the Plaintiffs.          On January 5, 2016, Plaintiffs designated the complaint in the Action as the operative    complaint.          On February 12, 2016, VEREIT and certain of the Non-VEREIT Settling Defendants filed    a motion to dismiss the Action pursuant to Fed. R. Civ. P. 23.1 for failure to sufficiently allege    improper refusal of demand, and under Fed. R. Civ. P. 12(b)(6) for failure to state a claim.            On March 15, 2016, Plaintiffs filed a memorandum of law in opposition to the motion to    dismiss.          On April 5, 2016, VEREIT and certain of the Non-VEREIT Settling Defendants filed a    reply memorandum of law in further support of their motion to dismiss the Action.          On June 2, 2016, the Court held oral argument on the motion to dismiss.          On June 9, 2016, the Court entered an order denying the motion to dismiss pursuant to Fed.    R. Civ. P. 23.1 because the operative complaint sufficiently alleged that plaintiff Witchko’s    demand had been improperly denied, and granting with leave to amend the motion to dismiss    pursuant to Rule 12(b)(6) because the operative complaint failed to state certain claims.          On June 30, 2016, Plaintiffs, derivatively on behalf of VEREIT, filed an amended verified   stockholder derivative complaint in the Court (the “Amended Complaint”).                                           4 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 53 of 136          On July 11, 2016 and July 25, 2016, Kahane, Weil, Schorsch, Block, and McAlister filed    notices of interlocutory appeal of the Court’s order granting in part and denying in part the motion    to dismiss (the “Appeals”).          On July 20, 2016, Plaintiffs moved to dismiss the Appeals for lack of appellate jurisdiction.           On July 22, 2016, VEREIT and certain of the Non-VEREIT Settling Defendants filed   answers to the Amended Complaint.         On August 1, 2016, Kahane and Weil filed their opposition to Plaintiffs’ motion to dismiss   the Appeals for lack of appellate jurisdiction.         On August 8, 2016, Plaintiffs filed their replies in further support of their motion to dismiss   the Appeals.         On August 11, 2016, in the Appeals, Kahane and Weil filed a motion for leave to file a sur-  reply or, in the alternative, strike, and sur-reply to Plaintiffs’ motion to dismiss.         On August 12, 2016, in the Appeals, Plaintiffs filed an opposition to Kahane and Weil’s   motion for leave to file the sur-reply or strike.          On September 1, 2016, VEREIT filed a motion to stay the Action.         On September 8, 2016, the Court entered an order denying VEREIT’s motion to stay the   Action.          On September 16, 2016, document discovery commenced in the Action, the consolidated    class actions pending before the Court, captioned In re American Realty Capital Properties, Inc.   Litigation, Civil Action No. 1:15-mc-00040-AKH (S.D.N.Y.) (the “Class Action”), and the then-   pending Direct Actions arising from substantially the same facts (together, the “Coordinated    Actions”).  Discovery in the Action was thereafter coordinated for all purposes with discovery in    the Class Action.                                           5 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 54 of 136          During document discovery, over seventy parties and non-parties, including each of the    Non-VEREIT Settling Defendants, cumulatively produced more than 846,000 documents totaling    several million pages.           On November 15, 2016, the United States Court of Appeals for the Second Circuit entered    an order dismissing the Appeals for lack of jurisdiction.          On January 20, 2017, the office of the U.S. Attorney for the Southern District of New York    (the “Government”) moved to stay the Action and the Coordinated Actions until the conclusion of    Block’s criminal trial, scheduled for the summer of 2017.          On January 25, 2017, the Court denied the Government’s stay motion.          On May 11, 2017, the Government renewed its motion for a partial stay of discovery until    completion of Block’s criminal trial.           On May 15, 2017, the Court again denied the Government’s request for a partial stay of    discovery.          On May 31, 2017, document discovery in the Action and the then-pending Coordinated   Actions concluded.         On January 22, 2018, fact witness depositions in the Action and the then-pending   Coordinated Actions commenced.         Between January 22, 2018 and December 18, 2018, Plaintiffs’ Counsel attended thirty-four    fact depositions of witnesses including each individual Non-VEREIT Settling Defendant, ex-   VEREIT employees, former VEREIT directors, former VEREIT officers, current and former    employees of Grant Thornton, and third parties.  During the depositions, Plaintiffs’ Counsel    conducted non-duplicative examinations of thirty-one of the deponents regarding related-party                                           6 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 55 of 136    transactions, executive compensation payments, and corporate governance allegations at issue in    the Action.          On February 8, 2019, Plaintiffs filed motions for summary judgment against Block and    McAlister.  The same day, several of the Non-VEREIT Settling Defendants filed summary    judgment motions against  Plaintiffs.          On March 15, 2019, the parties filed their oppositions  to  the motions for summary   judgment.On April 5, 2019, the parties filed replies in support of their motions for summary   judgment.          On May 10, 2019, the Court entered an order denying the motions for summary judgment   in the Action without prejudice to renewal.         B.    Settlement Negotiations         In March 2017, certain of the parties conducted a mediation session with the Honorable   Layn R. Phillips, United States District Judge (Ret.), an experienced mediator of complex disputes.    In advance of the mediation session, Plaintiffs retained a forensic accounting expert who prepared   a report on damages in the derivative action.  Plaintiffs state that, based in part on the expert’s   report, Plaintiffs submitted a confidential mediation statement to Judge Phillips.  The first   mediation session failed to produce a settlement, although the parties expended significant time   and effort preparing for and attending the two-day mediation.         On July 16, 2019, Plaintiffs’ Counsel met with VEREIT’s Chief Executive Officer, General   Counsel, and VEREIT’s counsel.  Plaintiffs’ Counsel made a detailed presentation regarding the   claims alleged in the Action and Plaintiffs’ calculation of damages.  During the meeting, Plaintiffs’   Counsel answered questions from VEREIT’s Chief Executive Officer, General Counsel, and   VEREIT’s counsel regarding particular theories of harm and the calculation of damages.                                           7 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 56 of 136          On August 15, 2019, Plaintiffs’ Counsel, VEREIT’s counsel, certain of the Non-VEREIT   Settling Defendants’ counsel, and counsel for the lead plaintiff in the Class Action held a mediation   session with Judge Phillips at the office of VEREIT’s counsel.  Certain of the Settling Parties    thereafter engaged in further extensive negotiations that included numerous email exchanges and    telephonic conferences.          On August 19, 2019, the Plaintiffs met for a second time with VEREIT’s Chief Executive    Officer, General Counsel, and VEREIT’s counsel.          Over the following weeks, the parties engaged in extensive, arm’s-length negotiations    regarding the terms of a potential resolution of the Action.          On September 8, 2019, the Settling Parties signed and entered into a binding Memorandum    of Understanding setting forth certain key terms of the Settlement.    II.   PLAINTIFFS’ CLAIMS AND STATEMENT OF SETTLEMENT BENEFITS            Plaintiffs believe that the Released Claims have substantial merit.  Nonetheless, Plaintiffs   acknowledge the expense and delay of continued proceedings necessary to prosecute the claims   through trial and appeal.  Plaintiffs have also considered the uncertain outcome inherent in any   litigation, especially complex actions such as the Action, as well as the delay and difficulties of   such litigation.  Plaintiffs were also mindful of the onerous burdens of proof under, and possible   defenses to, the claims asserted.         Based upon (i) investigation into and evaluation of the facts and laws relating to the claims    released herein and alleged in the Derivative Actions, (ii) factual information to which Plaintiffs    and Plaintiffs’ Counsel had access prior to the execution of this Stipulation, (iii) the contribution    of two hundred  eighty six million five hundred thousand dollars ($286,500,000) by the Non-   VEREIT Settling Defendants as part of the global settlement of the claims in the Derivative    Actions and the Class Action, (iv) the Supplementary Agreements that preserve VEREIT’s control                                          8 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 57 of 136    over the settlement contributions by the Non-VEREIT Settling Defendants even if the Settlement    is overturned on appeal, (v) investigations, document review and depositions conducted during the    pendency of the Action, (vi) admissions made by and judgments obtained against certain of the    Non-VEREIT Settling Defendants, (vii) legal analysis and briefing submitted by Plaintiffs and    subsequent orders entered by the Court, (viii) advice provided by the Plaintiffs’ various consultants    and experts, including forensic accountants and individuals with expertise in corporate governance    issues, (ix) mediation sessions with Judge Phillips, and (x) Plaintiffs’ and Plaintiffs’ Counsel’s    determination (subject to the final approval by the Court) that the terms of the proposed Settlement    as set out in this Stipulation are fair, reasonable and adequate and in the best interests of VEREIT    and Current VEREIT Stockholders, Plaintiffs have agreed to settle the Derivative Actions (as   defined herein) and to release the Released Claims pursuant to the terms of this Stipulation.    III.  THE BENEFIT OF SETTLEMENT TO VEREIT          VEREIT has determined that the Settlement confers substantial benefits upon VEREIT and    Current VEREIT  Stockholders because, for among other reasons, the Settlement reduces the    amount VEREIT is paying to settle the Class Action which in fact made the Settlement possible,    eliminates the risk of adverse judgments at trial, puts an end to timing uncertainties, and removes    the burdens and costs of the Derivative Actions and the Class Action.          VEREIT’s alleged and/or potential claims against the AR Capital Parties, Block and GT    that were the subject of the Derivative Actions, and the defenses that could be asserted with respect    to such claims, as well as the potential counterclaims that could be brought against VEREIT by,    in particular, GT, were a central issue in the negotiations over the amounts that the AR Capital    Parties, Block and GT would contribute to the global settlement of the claims that have been    asserted or could have been asserted in the Derivative Actions and the Class Action.  VEREIT    believes the claims being pursued in the Derivative Actions had significant value to VEREIT and                                          9 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 58 of 136    that those claims were a substantial factor behind the willingness of the AR Capital Parties, Block    and GT to make the settlement payments that they agreed to make.  The AR Capital Parties, Block    and GT made clear throughout the settlement negotiations that but for resolution of VEREIT’s    claims at issue in the Derivative Actions, they would not agree to any contribution to the Class    Settlement, and that GT would not agree to provide VEREIT with a release as to counterclaims    GT intended to assert against VEREIT in the Derivative Actions.  Without those contributions,    VEREIT would have been required to make a substantially larger payment to settle the Class    Action, and may not, in fact, have been able to reach resolution.  In addition, without the release    from GT, VEREIT would continue to bear litigation risk, which VEREIT sought to finally and    fully resolve through the global settlement.  Consistent with the foregoing, VEREIT believes that    the claims at issue in the Derivative Actions played a significant role in securing the settlement    contributions from the AR Capital Parties, Block and GT, as well as the releases, which VEREIT    believes are in the best interest of VEREIT.          As to the Non-VEREIT Settling Defendants other than the AR Capital Parties, Block and    GT, VEREIT determined that the Settlement confers substantial benefits upon VEREIT and    Current VEREIT Stockholders because of the substantial cost of continued litigation and trial, the   risks associated with the outcome of a trial and appeal, and the risk of uncollectable judgments in   the event of a judgment favorable to VEREIT.   IV.   DEFENDANTS’ DENIALS OF WRONGDOING AND LIABILITY         The Non-VEREIT Settling Defendants have denied, and continue to deny, each and every   claim and contention alleged by Plaintiffs in the Derivative Actions and affirm that they have acted    properly, lawfully, and in full accord with their fiduciary duties, to the extent they owed any such    duties to VEREIT, and other legal obligations, at all times.  Further, the Non-VEREIT Settling    Defendants have denied expressly, and continue to deny, all allegations of wrongdoing, fault,                                          10 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 59 of 136    liability, or damage against them arising out of any of the conduct, statements, acts or omissions    alleged, or that could have been alleged, in the Derivative Actions and deny that they have ever   committed or attempted to commit any violations of law, any breach of fiduciary duty owed to   VEREIT or its stockholders, or any wrongdoing whatsoever.  Had the terms of the Stipulation not   been reached, the Non-VEREIT Settling Defendants would have continued to contest vigorously   the allegations in the Derivative Actions, and the Non-VEREIT Settling Defendants maintain that   they had and have meritorious defenses to all claims alleged or claims that could have been alleged   in the Derivative Actions, as well as counterclaims against VEREIT they believe to be meritorious.    Without admitting the validity of any of the claims that have been asserted in the Derivative   Actions, or any liability with respect thereto, the Non-VEREIT Settling Defendants have   concluded that it is desirable that the claims be settled on the terms and subject to the conditions   set forth herein.  The Non-VEREIT Settling Defendants are entering into this Settlement because   it will eliminate the uncertainty, distraction, disruption, burden, and expense of further litigation   of the Derivative Actions.2            Neither the Stipulation, nor any of its terms or provisions, nor any act performed or    document executed pursuant to or in furtherance of the Settlement: (a) is, may be construed as, or    may be used as an admission of, or evidence of, the truth or validity of any of the Released Claims,    of any claims or allegations made in the Derivative Actions, or of any purported acts or omissions    by the Non-VEREIT Settling Defendants; (b) is, may be construed as, or may be used as an    admission of, or evidence of, any fault, omission, negligence, or wrongdoing by the Non-VEREIT    Settling Defendants, or any concession of liability whatsoever; or (c) is, may be construed as, or                                                       2 Notwithstanding the foregoing, McAlister, and only McAlister, acknolwedges, as she has at other times in the Action,   her plea of guilty to certain offenses in United States v. Lisa McAlister, 16-cr-00653 (S.D.N.Y.), and does not intend  anything in the foregoing to be inconsistent with her plea.                                           11 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 60 of 136    may be used as an admission of, or evidence of, a concession by any Non-VEREIT Settling    Defendant of any infirmity in the defenses or counterclaims that any Non-VEREIT Settling    Defendant asserted or could have asserted in the Derivative Actions or otherwise.    V.    THE SETTLEMENT HEARING          The Settlement Hearing will be held before the Honorable Alvin K. Hellerstein  on    _______________ at __:__ _.m. in Courtroom 14D of the U.S. District Court for the Southern   District of New York, 500 Pearl Street, New York, New York 10007 to determine: (i) whether the   proposed Settlement, upon the terms set forth in the Stipulation, should be finally approved in all   respects as fair, reasonable, and adequate; (ii) whether the Judgment approving the Settlement,   substantially in the form of Exhibit C attached to the Stipulation, should be entered, dismissing the   Action with prejudice and releasing and enjoining the prosecution of any and all Released Claims;   and (iii) whether Plaintiffs’ Counsel’s Fee Award should be finally approved.  At the Settlement   Hearing, the Court may hear or consider such other matters as the Court may deem necessary and   appropriate.  The Court may adjourn the date of the Settlement Hearing without further notice to   Current VEREIT Stockholders, and the Settlement Hearing may be continued by the Court at the   Settlement Hearing, or at any adjourned session thereof, without further notice.   VI.   THE TERMS OF SETTLEMENT         The AR Capital Parties have agreed to contribute consideration with a value of two-  hundred and twenty-five million dollars ($225,000,000) (inclusive of the value of certain operating   partnership units in VEREIT Operating Partnership, L.P., and related dividends previously   surrendered by some of the AR Capital Parties as part of a settlement with the Securities and   Exchange Commission, which total $31,972,934 in value) to a global settlement to settle the Class   Action, as well as any and all claims in the Derivative Actions; Block has agreed to contribute   consideration with a value of twelve million, five hundred thousand dollars ($12,500,000) to a                                          12 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 61 of 136    global settlement to settle the Class Action, as well as any and all claims in the Derivative Actions;    and GT has agreed to contribute forty-nine million dollars ($49,000,000) to a global settlement to    settle the Class Action, as well as any and all claims in the Derivative Actions.  The Settling Parties    agree that the claims in the Derivative Actions, as well as potential counterclaims that could be    brought against VEREIT, were a central issue in the negotiations regarding the amounts that the    AR Capital Parties, Block, and GT would contribute to the global settlement.  Specifically,    VEREIT believes the claims being pursued in the Derivative Actions had significant value to    VEREIT and that those claims were a substantial factor behind the willingness of the AR Capital    Parties, Block and GT to make the settlement payments that they agreed to make.  The AR Capital    Parties, Block and GT made clear throughout the settlement negotiations that but for resolution of    VEREIT’s claims at issue in the Derivative Actions, they would not agree to any contribution to   the settlement of the Class Action, and that GT would not agree to provide VEREIT with a release   as to counterclaims GT intended to assert against VEREIT in the Derivative Actions.  Without   those contributions, VEREIT would have been required to make a substantially larger payment to   settle the Class Action, and may not, in fact, have been able to reach resolution.  In addition,   without the release from GT, VEREIT would continue to bear litigation risk, which VEREIT   sought to finally and fully resolve through the global settlement.  Consistent with the foregoing,   VEREIT believes that the claims at issue in the Derivative Actions played a significant role in   securing the settlement contributions from the AR Capital Parties, Block and GT, as well as the   releases, which VEREIT believes are in the best interest of VEREIT and its stockholders.   VII.  DISMISSAL AND RELEASES         In connection with the Court’s approval of the Settlement, the Settling Parties will jointly   request entry of the Judgment by the Court, dismissing with prejudice all claims that Plaintiffs                                           13 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 62 of 136    have alleged in the Action and any other Released Claims, as well as Defendants’ Released Claims    and the NVSD Released Claims.         Upon the Effective Date, VEREIT, Plaintiffs, and each of the Current VEREIT   Stockholders shall be deemed to have, and by operation of the Judgment shall have, fully, finally,   and forever released, relinquished, and discharged the Released Claims against the Released   Persons.  VEREIT, Plaintiffs, and each of the Current VEREIT Stockholders shall be deemed to   have, and by operation of the Judgment shall have, covenanted not to sue any Released Person   with respect to any Released Claims, and shall be permanently barred and enjoined from   instituting, commencing or prosecuting the Released Claims against the Released Persons except   to enforce the releases and other terms and conditions contained in this Stipulation and/or the   Judgment entered pursuant thereto.         Upon the Effective Date, VEREIT and each of the Released Persons shall be deemed to   have, and by operation of the Judgment shall have, fully, finally, and forever released, relinquished   and discharged each and all of Plaintiffs, their beneficiaries, and Plaintiffs’ Counsel from any and    all Defendant Parties’ Released Claims.  VEREIT and the Released Persons shall be deemed to    have, and by operation of the Judgment shall have, covenanted not to sue Plaintiffs, their    beneficiaries, or Plaintiffs’ Counsel with respect to any claims arising out of, relating to, or in    connection with their institution, prosecution, assertion, settlement, or resolution of the Action or    any Defendant Parties’ Released Claims, and shall be permanently barred and enjoined from    instituting, commencing or prosecuting the Defendant Parties’ Released Claims against Plaintiffs,    their beneficiaries, or Plaintiffs’ Counsel except to enforce the releases and other terms and    conditions contained in the Stipulation and/or the Judgment entered pursuant thereto.                                           14 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 63 of 136          Upon the Effective Date, the Non-VEREIT Settling Defendants shall be deemed to have,   and by operation of the Judgment shall have, fully, finally, and forever released, relinquished, and   discharged the NVSD Released Claims against each respective Non-VEREIT Settling Defendant   and the VEREIT Released Persons. The Non-VEREIT Settling Defendants shall be deemed to   have, and by operation of the Judgment shall have, covenanted not to sue each respective Non-  VEREIT Settling Defendant and the VEREIT Released Persons with respect to any NVSD   Released Claims, and shall be permanently barred and enjoined from instituting, commencing or   prosecuting the NVSD Released Claims against the VEREIT Released Persons except to enforce   the releases and other terms and conditions contained in the Stipulation and/or the Judgment   entered pursuant thereto.         Notwithstanding the foregoing, in the event that any Derivative Action other than the   Action, or any derivative proceeding filed subsequent to execution of the Stipulation alleging   claims that arise out of, are based upon, or relate to in any way any of the allegations, acts,   transactions, facts, events, matters, occurrences, representations or omissions involved, set forth,   alleged or referred to, in the Derivative Actions or the Class Action, is permitted to proceed against   any Non-VEREIT Settling Defendant: (i) VEREIT shall not be released from any rights of   advancement, indemnification, contribution, or any other rights that such Non-VEREIT Settling   Defendant has or may have for any claims, demand or losses (all subject to meeting applicable   laws, requirements, and standards) arising out of such derivative proceeding; and (ii) GT shall be   entitled to receive from VEREIT indemnification for and advancement of reasonable fees, costs,   and expenses incurred or paid by GT in defending such derivative proceeding, and (subject to   meeting applicable laws) amounts paid by GT in settlement of or in satisfaction of a judgment   rendered in such derivative proceeding.                                           15 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 64 of 136    VIII. PAYMENT OF PLAINTIFFS’ COUNSEL’S FEES AND EXPENSES          Plaintiffs intend to seek payment of a fee in an amount not to exceed twenty-six million   dollars ($26,000,000) and expenses through application to the Court.  VEREIT reserves its right   to object to Plaintiffs’ Counsel’s application for fees and expenses.         Not later than ten (10) business days following the date on which the Court approves the   Fee Award, VEREIT will pay Plaintiffs’ Counsel (through GPM) the amount approved by the   Court (in an amount not to exceed twenty-six million dollars ($26,000,000) and expenses).  Such   monies shall be kept by GPM in a segregated escrow account and not distributed to GPM or anyone   else until such time as the Fee Award becomes Final.  For the avoidance of doubt, only VEREIT   is liable for the Fee Award; none of the Non-VEREIT Settling Defendants are liable to the   Plaintiffs or any other person for the Fee Award.         In the event of any failure to obtain final approval of the full amount of the Fee Award, or   upon any appeal and/or further proceedings on remand, or successful collateral attack, which   results in the Fee Award being overturned or substantially modified, Plaintiffs’ Counsel and their   successors shall be obligated to repay within fifteen (15) business days the portion of the Fee   Award held in escrow that was ultimately not awarded to Plaintiffs’ Counsel.  Plaintiffs’ Counsel   is subject to the Court’s jurisdiction for the purposes of enforcing this paragraph and the provisions   related to the Fee Award.         Payment of the Fee Award in the amount approved by the Court shall constitute final and   complete payment for Plaintiffs’ Counsel’s attorneys’ fees and expenses that have been incurred   or will be incurred in connection with the filing and prosecution of the Action and the resolution   of the claims alleged therein.  Defendants and Defendants’ Counsel shall have no responsibility   for the allocation or distribution of the Fee Award amongst Plaintiffs’ Counsel. Defendants,                                           16 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 65 of 136    including VEREIT, shall have no obligation to make any payment to any Plaintiffs’ Counsel other    than the payment provided in ¶¶ 5.1-5.2 of the Stipulation.          Except as otherwise provided in the Stipulation, or a separate agreement concerning    advancement or indemnification among any Defendants, each of the Settling Parties shall bear his,    her, or its own costs and attorneys’ fees.  The Stipulation ¶ 5.5 is not intended to affect the rights    of any Non-VEREIT Settling Defendant to indemnification or advancement of costs and attorney’s   fees.    IX.   THE RIGHT TO OBJECT AND/OR BE HEARD AT THE SETTLEMENT         HEARING          Any Current VEREIT Stockholder may object and/or appear and show cause, if he, she, or    it has any concern, why the Settlement should not be approved as fair, reasonable, and adequate,    why Judgment should not be entered thereon, or why the Fee Award, should not be finally    approved; provided, however, unless otherwise ordered by the Court, that no Current VEREIT    Stockholder shall be heard or entitled to contest the approval of the terms and conditions of the    Settlement, or, if approved, the Judgment to be entered approving the Settlement, or the Fee    Award, unless that Stockholder has, at least twenty-one (21) calendar days prior to the Settlement   Hearing: (1) filed with the Clerk of the Court a written objection to the Settlement setting forth:   (a) the stockholder’s name, legal address, telephone number and e-mail address;  (b) proof of    ownership of VEREIT common stock on September 27, 2019 and through the date of filing of the    objection, including the number of shares of VEREIT common stock held and the date of purchase;    (c) the nature of the objection; including any and all documentation or evidence in support of such    objection; (d) the identities of any cases, by name, court, and docket number, in which the    stockholder or his, her, or its attorney has objected to a settlement in the last three years; and (e)    the signature of the stockholder making the objection or his, her, or its counsel; and (2) if a Current                                           17 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 66 of 136   VEREIT Stockholder intends to appear and requests to be heard at the Settlement Hearing, such   stockholder must have, in addition to the requirements of (1) above, filed with the Clerk of the   Court: (a) a written notice of such stockholder’s intention to appear at the Settlement Hearing; (b)   a statement that indicates the basis for such appearance; (c) the identities of any witnesses the   stockholder intends to call at the Settlement Hearing and a statement as to the subjects of their   testimony; and (d) any and all evidence that would be presented at the Settlement Hearing.  If a   Current VEREIT Stockholder files a written objection and/or written notice of intent to appear,   such stockholder must also simultaneously serve copies of such notice, proof, statement, and   documentation, together with copies of any other papers or briefs such stockholder files with the   Court (either by hand delivery or by first class mail) upon each of the following:   Robert I. Harwood                        Scott A. Edelman   Matthew M. Houston                       Antonia M. Apps   Benjamin I. Sachs-Michaels               Jed M. Schwartz   GLANCY PRONGAY & MURRAY LLP              Jonathan Ohring  712 Fifth Avenue, 31st Floor             MILBANK LLP  New York, NY 10019                       55 Hudson Yards  Tel: (212) 935-7400                      New York, New York 10001                                           Tel: (212) 530-5000                                             Plaintiff’s Counsel                      Counsel for Nominal Defendant American                                           Realty Capital Properties, Inc. (n/k/a                                            VEREIT, Inc.)                                             Theodore V. Wells Jr.                    James P. Gillespie   Daniel J. Kramer                         Beth Mueller  Lorin L. Reisner                         KIRKLAND & ELLIS LLP  Audra J. Soloway                         1301 Pennsylvania Avenue  Christopher L. Filburn                   NW Washington, D.C. 20004  PAUL, WEISS, RIFKIND, WHARTON &          Tel: (202) 389-5000  GARRISON LLP                               1285 Avenue of the Americas   New York, NY 10019-6064  Tel: (212) 373-3000  Counsel for Nicholas S. Schorsch         Counsel for David Kay                                                                                     18 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 67 of 136   Reid M. Figel                            Guy Petrillo   Rebecca A. Beynon                        Dan Goldman  Andrew E. Goldsmith                      PETRILLO KLEIN & BOXER LLP  Bradley E. Oppenheimer                   655 Third Avenue, 22nd Floor   KELLOGG, HANSEN, TODD, FIGEL &           New York, NY 10017   FREDERICK, P.L.L.C.                      Tel: (212) 370-0330  1615 M Street N.W., Suite 400              Washington, D.C. 20036  Tel: (202) 326-7900                                             Counsel for AR Capital LLC, ARC          Counsel for Lisa Beeson  Properties Advisors LLC, Scott J. Bowman,   Peter M. Budko, Brian D. Jones, William  M. Kahane, and Edward M. Weil                                             John P. MacNaughton                      Gary F. Bendinger  Eric A. Larson                           SIDLEY AUSTIN LLP  1600 Atlanta Financial Center            787 Seventh Avenue   343 Peachtree Road, N.E.                 New York, NY 10019  Atlanta, GA 30326                        Tel: (212) 839-5300  Tel: (404) 233-7000                                                                 Bruce R. Braun                                            Melanie E. Walker                                            Kendra L. Stead                                            SIDLEY AUSTIN LLP                                           One South Dearborn                                            Chicago, IL 60603                                           Tel: (312) 853-7000                                             Counsel for Scott P. Sealy, Sr.           Counsel for Grant Thornton LLP                                             Christopher L. Garcia                    Michael C. Miller   Richard W. Slack                         Michael G. Scavelli  Evert J. Christensen, Jr.                STEPTOE & JOHNSON LLP  Adam Bookman                             1114 Avenue of the Americas   Raquel Kellert                           New York, NY 10036   WEIL, GOTSHAL & MANGES LLP               Tel: (212) 506-3900  767 Fifth Avenue                           New York, NY 10153                                             Counsel for Thomas A. Andruskevich,      Counsel for Brian Block  Leslie D. Michelson, Edward G. Rendell,   William G. Stanley, and Bruce D. Frank                                          19 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 68 of 136   Adam L. Fotiades                           ZUCKERMAN SPAEDER LLP  1800 M Street NW, Suite 1000  Washington, DC 20036-5807  Tel: (202) 778-1800    Daniel P. Moylan  ZUCKERMAN SPAEDER LLP  100 East Pratt Street, Suite 2440  Baltimore, MD 21202-1031  Tel: (410) 332-0444                                             Counsel for Lisa McAlister          Any Current VEREIT Stockholder who does not make his, her, or its objection in the   manner provided herein shall be deemed to have waived such objection and shall forever be   foreclosed from making any objection to the fairness, reasonableness, or adequacy of the   Settlement and the Fee Award, as set forth in the Stipulation, unless otherwise ordered by the   Court, but shall be forever bound by the Judgment to be entered, the dismissal of the Action with   prejudice, and any and all of the releases set forth in the Stipulation.   X.    CONDITIONS FOR SETTLEMENT         The Settlement is conditioned upon the occurrence of certain events described in the   Stipulation, which requires, among other things: (1) entry of the requested Judgment by the Court;   (2) the Judgment has become Final; (3) the Court’s approval of a settlement and entry of a   judgment in the Class Action, and (4) such approved judgment in the Class Action becoming Final.   XI.   EXAMINATION OF PAPERS AND INQUIRIES         This Notice contains only a summary of the terms of the Settlement.  For a more detailed   statement of the matters involved in the Action, reference is made to the Stipulation, which may   be inspected at the Clerk of the Court’s Office, U.S. District Court for the Southern District of   New York, 500 Pearl Street, New York 10007, during business hours of each business day or by   visiting the investor relations portion of VEREIT’s website at http://ir.VEREIT.com/.                                         20 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 69 of 136         Any other inquiries regarding the Settlement or the Action should be addressed in writing   to Counsel for Plaintiffs in the Action:  Matthew M. Houston, Esq., Glancy Prongay & Murray   LLP, 712 Fifth Avenue, 31st Floor, New York, NY 10019, Telephone: (212) 935-7400.                  PLEASE DO NOT TELEPHONE THE COURT REGARDING THIS NOTICE.                                          21 





 






Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 70 of 136             EXHIBIT A-2                                   42350.00400





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 71 of 136   UNITED STATES DISTRICT COURT  SOUTHERN DISTRICT OF NEW YORK                                                    JOANNE WITCHKO, Derivatively on Behalf of        Nominal Defendant AMERICAN REALTY CAPITAL        PROPERTIES, INC.,                                Lead Case No. 1:15-cv-06043-                                                            AKH              Plaintiff,                                                                                           (Consolidated with Case No.        v.                                             1:15-cv-08563-AKH)                                                                 NICHOLAS S. SCHORSCH, et al.,                                  Defendants,    and          AMERICAN REALTY CAPITAL PROPERTIES,  INC.,                Nominal Defendant.                   SUMMARY NOTICE OF PROPOSED SETTLEMENT OF                       STOCKHOLDER DERIVATIVE ACTION    TO:   ALL OWNERS OF VEREIT, INC.      (“VEREIT”)  (F/K/A AMERICAN REALTY        CAPITAL PROPERTIES INC. (“ARCP”)) COMMON STOCK                 (TICKER        SYMBOL:   VER) AND PREFERRED STOCK (TICKER SYMBOL: VERPF)            AS        OF SEPTEMBER 27, 2019, WHO CONTINUE TO OWN SUCH SHARES.         PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY.  YOUR        RIGHTS MAY BE AFFECTED.       THIS NOTICE RELATES TO A PROPOSED       SETTLEMENT AND DISMISSAL OF STOCKHOLDER DERIVATIVE       LITIGATION AND CONTAINS IMPORTANT INFORMATION REGARDING       YOUR RIGHTS.  YOUR RIGHTS MAY BE AFFECTED BY LEGAL        PROCEEDINGS IN THIS ACTION.         IF THE COURT APPROVES THE SETTLEMENT AND DISMISSAL OF THE        ACTION, STOCKHOLDERS OF VEREIT WILL BE              FOREVER BARRED        FROM CONTESTING THE APPROVAL OF THE PROPOSED SETTLEMENT        AND FROM PURSUING THE SETTLED CLAIMS.         THE COURT HAS MADE NO FINDINGS OR DETERMINATIONS        RESPECTING THE    MERITS OF THE ACTION.      THE RECITATION OF THE       BACKGROUND AND CIRCUMSTANCES OF THE SETTLEMENT                                        42350.00400                                        1 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 72 of 136                                                                                          CONTAINED HEREIN DOES NOT CONSTITUTE THE FINDINGS OF THE         COURT.   IT IS BASED ON REPRESENTATIONS MADE TO THE COURT BY        COUNSEL FOR THE PARTIES.          PLEASE  TAKE  NOTICE  that the consolidated stockholder derivative action captioned   Witchko v. Schorsch, et al., Case No. 1:15-cv-06043-AKH (the “Action”) is being settled and the   parties  have entered  into  a Stipulation  of Settlement, dated September  27,  2019 (the   “Stipulation”).  The terms of the proposed settlement of the Action are set forth in the Stipulation   and all capitalized terms herein have the same meaning as defined in the Stipulation.  This notice   should be read in conjunction with, and is qualified in its entirety by reference to, the text of the   Stipulation, which has been filed with the Court.  A further notice describing the Action along   with the text of the Stipulation is available on VEREIT’s Investor Relations webpage, located at   http://ir.VEREIT.com/.                  The AR Capital Parties  have agreed to  contribute  consideration with  a  value  of two-  hundred and twenty-five million  dollars  ($225,000,000)  (inclusive  of  the  value of certain   operating  partnership  units in  VEREIT Operating  Partnership,  L.P.,  and related  dividends   previously surrendered by  some  of  the AR Capital Parties as part  of  a settlement with  the   Securities and Exchange Commission, which total $31,972,934 in value) to a global settlement to   settle any and all claims in the Derivative Actions, as well as the Class Action; Block has agreed   to  contribute  consideration with  a  value  of twelve million, five  hundred  thousand  dollars   ($12,500,000) to  a global settlement to settle any and all claims in  the Derivative  Actions, as   well as  the Class Action; and GT has agreed to  contribute forty-nine million  dollars   ($49,000,000) to  a global settlement to settle any and all claims in  the Derivative  Actions, as   well as the Class Action.                  IF YOU  ARE  A  CURRENT   RECORD   OR  BENEFICIAL   OWNER    OF VEREIT   COMMON    STOCK   OR  PREFERRED   STOCK   AS  OF  SEPTEMBER  27,  2019, YOUR   RIGHTS MAY BE AFFECTED BY PROCEEDINGS IN THIS LITIGATION.                  On [DATE] at  _______,  a hearing  (the “Settlement Hearing”) will  be held before  the   Honorable Alvin K. Hellerstein in Courtroom 14D of the U.S. District Court for the Southern   District of New York, 500 Pearl Street, New York, New York 10007 to determine: (i) whether   the proposed Settlement, upon the terms set forth in the Stipulation, should be finally approved   in all respects as fair, reasonable, and adequate; (ii)  whether  the  Judgment  approving  the   Settlement, substantially in the form of Exhibit C attached to the Stipulation, should be entered,   dismissing the Action with prejudice and releasing and enjoining the prosecution of any and all   Released Claims, Defendant Parties’ Released Claims, and NVSD Released Claims; and (iii)   whether Plaintiffs’ Counsel’s Fee Award should be finally approved.  At the Settlement Hearing,   the  Court may hear  or  consider such  other matters as  the  Court may deem necessary and   appropriate.  The Court may adjourn the date of the Settlement Hearing without further notice to   Current VEREIT Stockholders, and the Settlement Hearing may be continued by the Court at the   Settlement Hearing, or at any adjourned session thereof, without further notice.                  Any Current VEREIT Stockholder as of September 27, 2019 shall have a right to appear   and to  be heard at  the Settlement Hearing.  However,  no  stockholder shall  be heard at  the  Settlement Hearing  unless, at least twenty-one  (21) calendar days  prior to  the date  of  the                                          2     





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 73 of 136                                                                                    Settlement Hearing, such stockholder has filed with the Court and delivered to counsel for the  Parties  a written  notice  of  objection in accordance with  the requirements  below.  Only  stockholders who have filed and delivered validly and timely written notices of objection will be  entitled to be heard at the Settlement Hearing unless the Court orders otherwise.                Any written notice of objection must contain the following information:                1.    Your name, legal address, telephone number, and e-mail address;         2.    Proof  of  ownership  of VEREIT  common stock  on September  27,  2019 and         through the date of the filing of the objection, including the number of shares of VEREIT         common stock held and the date of purchase;         3.     Nature  of  the  objection,  including any and all  documentation  or evidence in         support of such objection;           4.    Identities  of any cases, by name,  court, and  docket  number, in which  the         stockholder or his, her, or its attorney has objected to a settlement in the last three years;          5.    If a Current VEREIT Stockholder intends to appear and requests to be heard at the         Settlement Hearing, such stockholder must have, in addition to the requirements of (1)         through (4)  above,  filed with  the Clerk  of the  Court: (a)  a written  notice  of such         stockholder’s intention to appear at the Settlement Hearing; (b) a statement that indicates         the basis for such appearance; (c) the identities of any witnesses the stockholder intends         to call at the Settlement Hearing and a statement as to the subjects of their testimony; and         (d) any and all evidence that would be presented at the Settlement Hearing (appearance is         not required if you  have  lodged your  objection with  the  Court). If  a Current VEREIT         Stockholder files  a written  objection  and/or written  notice  of  intent to appear, such         stockholder must also simultaneously serve copies of such notice, proof, statement, and         documentation, together with copies of any other papers or briefs such stockholder files         with the Court (either by hand delivery or by first class mail) upon counsel listed below.          6.    Signature of the stockholder making the objection.          If you wish to object to the settlement, you must file a written objection setting forth the   grounds for such objection and the information listed above with the Court on or before [DATE]   21 calendar days before the Settlement Hearing, with service to: (a) counsel to Plaintiffs in the   Action, Matthew M. Houston, Glancy Prongay & Murray LLP, 712 Fifth Avenue, New York,  NY  10019;  (b) counsel to Defendants American Realty Capital Properties, Inc. and ARC   Properties Operating Partnership, L.P., Jed M. Schwartz, Milbank LLP, 55 Hudson Yards, New   York, NY 10001; (c) counsel to Defendants AR Capital, LLC, ARC Properties Advisors, LLC,  Scott J. Bowman, Peter M. Budko, Brian D. Jones, William M. Kahane, and Edward M. Weil,  Reid M. Figel, Kellogg, Hansen, Todd, Figel & Frederick, P.L.L.C., 1615 M Street N.W., Suite  400, Washington, D.C. 20036; (d) counsel to Defendant Lisa Beeson, Guy Petrillo, Petrillo Klein  & Boxer LLP, 655 Third Avenue, 22nd Floor, New York, NY 10017; (e) counsel to Defendant  Brian S. Block, Michael C. Miller, Steptoe & Johnson, LLP, 1114 Avenue of the Americas, New  York, NY  10036;  (f) counsel to Defendant Grant  Thornton LLP, Melanie E. Walker, Sidley                                          3     





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 74 of 136                                                                                  Austin LLP, One South Dearborn, Chicago, IL 60603; (g) counsel to Defendant David Kay, Beth  Mueller, Kirkland & Ellis LLP, 1301 Pennsylvania Avenue, N.W. Washington, DC 20004; (h)  counsel to Defendant Lisa P. McAlister, Adam L. Fotiades, Zuckerman Spaeder LLP, 1800 M  Street NW, Suite 1000, Washington, DC 20036; (i) counsel to Defendant Nicholas S. Schorsch,  Audra J.  Soloway, Paul, Weiss,  Rifkind,  Wharton  & Garrison LLP,  1285  Avenue  of  the  Americas, New  York, NY  10019-6064;  (j)  counsel to Defendant Scott P. Sealy, Sr.,  John P.  MacNaughton, Morris, Manning & Martin LLP, 3343 Peachtree Road, N.E., Suite 1600, Atlanta,  GA  30326;  (k)  counsel to Defendants  Thomas A.  Andruskevich, Bruce D.  Frank, Leslie D.  Michelson, Edward G. Rendell and William G. Stanley, Christopher L. Garcia, Weil, Gotshal &  Manges LLP, 767 Fifth Avenue, New York, NY 10153.                 Unless  the  Court orders otherwise, your  objection will  not  be  considered  unless it is  timely filed with the Court and delivered to the above counsel.  Any Person or entity who fails  to object in the manner  provided  shall  be deemed to have waived such  objection  and shall  forever be foreclosed from making any objection to the fairness, reasonableness, or adequacy  of the proposed settlement as set forth in the Stipulation and the Final Judgment Order, or to  the award of attorneys’ fees and expenses to Plaintiff’s Counsel, unless otherwise ordered by  the  Court.  VEREIT  stockholders who have no  objection to the settlement  do  not need to  appear at the Settlement Hearing or take any other action.          Inquiries may be made to Plaintiffs’ Counsel: Glancy Prongay & Murray LLP, 712 Fifth  Avenue, New York, NY 10019.          PLEASE DO NOT CONTACT THE COURT REGARDING THIS NOTICE         DATED: ______________________, 2019     BY  ORDER   OF  THE  DISTRICT  COURT,                                          UNITED  STATES   DISTRICT  COURT  FOR                                          THE   SOUTHERN    DISTRICT   OF   NEW                                          YORK                                            4    





 






Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 75 of 136             EXHIBIT B                                   42350.00400





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 76 of 136    UNITED STATES DISTRICT COURT   SOUTHERN DISTRICT OF NEW YORK                                                  JOANNE WITCHKO, Derivatively on Behalf      of Nominal Defendant AMERICAN REALTY           Lead Case No. 1:15-cv-06043-AKH   CAPITAL PROPERTIES, INC.,                                                                        (Consolidated with Case No.                     Plaintiff,                   1:15-cv-08563-AKH)                                                     v.                                                                                NICHOLAS S. SCHORSCH, et al.,                        Defendants,            -and-      AMERICAN REALTY CAPITAL   PROPERTIES, INC.,                        Nominal Defendant.                                                      [PROPOSED] ORDER PRELIMINARILY APPROVING              DERIVATIVE SETTLEMENT AND PROVIDING FOR NOTICE           WHEREAS, the parties to the above-captioned consolidated stockholder derivative action   (the “Action”) have made an application, pursuant to Federal Rule of Civil Procedure 23.1, for an    order: (i) preliminarily approving the Stipulation and Agreement of Settlement dated September    27, 2019 (the “Stipulation”), which, together with the exhibits annexed thereto, sets forth the terms    and conditions for the proposed settlement and dismissal of the Action with prejudice; and    (ii) approving the form and content of the Notice to Current VEREIT Stockholders, substantially   in the form attached to the Stipulation as Exhibit A-1 (“Long Form Notice”), and the Summary    Notice of Proposed Settlement of Stockholder Derivative Action, substantially in the form attached    to the Stipulation as Exhibit A-2 (“Summary Notice”) (collectively, “Notice”);                                            1 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 77 of 136          WHEREAS, all capitalized terms contained herein shall have the same meanings as set    forth in the Stipulation (unless otherwise defined herein); and          WHEREAS, the Court has read and considered the Stipulation and the exhibits annexed    thereto, and all Settling Parties have consented to the entry of this Preliminary Approval Order.          NOW THEREFORE, IT IS HEREBY ORDERED:          1.    The Court does hereby preliminarily approve, subject to further consideration at the    Settlement Hearing described below, the Stipulation and the Settlement set forth therein, including    the terms and conditions for settlement and dismissal with prejudice of the Action.          2.    A hearing (the “Settlement Hearing”) shall be held before the Court and the    Honorable Alvin K. Hellerstein on _______________, 2020 at __:__ _.m.,1 at the U.S. District    Court for the Southern District of New York, Courtroom 14D, 500 Pearl Street, New York, New    York 10007, to determine: (i) whether the terms and conditions of the Settlement set forth in the    Stipulation are fair, reasonable, and adequate to VEREIT and Current VEREIT Stockholders and    should be finally approved by the Court; (ii) whether a Judgment finally approving the Settlement,    substantially in the form of Exhibit C attached to the Stipulation, should be entered, dismissing the    Action with prejudice and releasing and enjoining the prosecution of any and all Released Claims,    Defendant Parties’ Released Claims, and NVSD Released Claims, except as otherwise set forth in    the Stipulation; and (iii) whether the Fee Award should be finally approved.  At the Settlement    Hearing, the Court may hear or consider such other matters as the Court may deem necessary and    appropriate.                                                        1 The Settling Parties respectfully request that the Settlement Hearing be scheduled at least forty-five (45) days after  the deadline for providing notice of the proposed Settlement to Current VEREIT Stockholders, but in no event before  the settlement hearing in the Class Action.                                          2 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 78 of 136          3.    The Court approves, as to form and content, the Long Form Notice attached as    Exhibit A-1 to the Stipulation and the Summary Notice attached as Exhibit A-2 to the Stipulation,    and finds that the posting of the Long Form Notice and the Summary Notice substantially in the    manner and form set forth in this Order meets the requirements of Federal Rule of Civil Procedure    23.1 and due process, is the best notice practicable under the circumstances, and shall constitute    due and sufficient notice to Current VEREIT Stockholders and all other Persons entitled thereto.          4.    Within ten (10) calendar days after the Court’s entry of the Preliminary Approval    Order, VEREIT shall cause a press release to be issued that contains the contents of the Long Form    Notice, and referring the Current VEREIT Stockholders to VEREIT’s Investor Relations webpage,    located at http://ir.vereit.com/, for more information, as well as file a current report on Form 8-K   with the Securities & Exchange Commission referencing such press release.  VEREIT’s Investor   Relations webpage shall include a link to the aforementioned press release, the Stipulation, and   the Preliminary Approval Order.  In addition, within ten (10) calendar days after the Court’s entry   of the Preliminary Approval Order, VEREIT shall cause the Summary Notice to be published once   in Investor’s Business Daily.         5.    All papers in support of the Settlement and the Fee Award shall be filed with the   Court and served at least thirty-five (35) calendar days prior to the Settlement Hearing, any papers   in opposition to the Settlement or the Fee Award shall be filed with the Court and served at least   twenty-one (21) calendar days prior to the Settlement Hearing, and any reply papers shall be filed   with the Court at least seven (7) calendar days prior to the Settlement Hearing.           6.    Any Current VEREIT Stockholder may object and/or appear and show cause, if he,   she, or it has any concern regarding why the Settlement should not be finally approved as fair,   reasonable, and adequate, why the Judgment should not be entered thereon, or why the Fee Award                                           3 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 79 of 136    should not be finally approved; provided, however, that unless otherwise ordered by the Court, no    Current VEREIT Stockholder shall be heard or entitled to contest the approval of the terms and   conditions of the Settlement, or, if approved, the Judgment to be entered thereon approving the   same, or the Fee Award, unless that stockholder has, at least twenty-one (21) calendar days prior    to the Settlement Hearing: (1) filed with the Clerk of the Court a written objection to the Settlement    setting forth: (a) the stockholder’s name, legal address, telephone number and e-mail address;    (b) proof of ownership of VEREIT common stock on September 27, 2019 and through the date of    the filing of the objection, including the number of shares of VEREIT common stock held and the    date of purchase; (c) the nature of the objection; including any and all documentation or evidence    in support of such objection; (d) the identities of any cases, by name, court, and docket number, in    which the stockholder or his, her, or its attorney has objected to a settlement in the last three years;    and (e) the signature of the stockholder making the objection or his, her, or its counsel; and (2) if    a Current VEREIT Stockholder intends to appear and requests to be heard at the Settlement    Hearing, such stockholder must have, in addition to the requirements of (1) above, filed with the    Clerk of the Court: (a) a written notice of such stockholder’s intention to appear at the Settlement    Hearing; (b) a statement that indicates the basis for such appearance; (c) the identities of any    witnesses the stockholder intends to call at the Settlement Hearing and a statement as to the    subjects of their testimony; and (d) any and all evidence that would be presented at the Settlement    Hearing.  If a Current VEREIT Stockholder files a written objection and/or written notice of intent   to appear, such stockholder must also simultaneously serve copies of such notice, proof, statement,   and documentation, together with copies of any other papers or briefs such stockholder files with   the Court (either by hand delivery or by first class mail) upon each of the following:                                           4 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 80 of 136   Robert I. Harwood                        Scott A. Edelman   Matthew M. Houston                       Antonia M. Apps   Benjamin I. Sachs-Michaels               Jed M. Schwartz   GLANCY PRONGAY & MURRAY LLP              Jonathan Ohring  712 Fifth Avenue, 31st Floor             MILBANK LLP  New York, NY 10019                       55 Hudson Yards  Tel: (212) 935-7400                      New York, New York 10001                                           Tel: (212) 530-5000                                             Plaintiff’s Counsel                      Counsel for Nominal Defendant American                                           Realty Capital Properties, Inc. (n/k/a                                            VEREIT, Inc.)                                             Theodore V. Wells Jr.                    James P. Gillespie   Daniel J. Kramer                         Beth Mueller  Lorin L. Reisner                         KIRKLAND & ELLIS LLP  Audra J. Soloway                         1301 Pennsylvania Avenue NW   Christopher L. Filburn                   Washington, D.C. 20004  PAUL, WEISS, RIFKIND, WHARTON &          Tel: (202) 389-5000  GARRISON LLP                               1285 Avenue of the Americas   New York, NY 10019-6064  Tel: (212) 373-3000                                             Counsel for Nicholas S. Schorsch         Counsel for David Kay                                             Reid M. Figel                            Guy Petrillo   Rebecca A. Beynon                        Dan Goldman  Andrew E. Goldsmith                      PETRILLO KLEIN & BOXER LLP  Bradley E. Oppenheimer                   655 Third Avenue, 22nd Floor   KELLOGG, HANSEN, TODD, FIGEL &           New York, NY 10017   FREDERICK, P.L.L.C.                      Tel: (212) 370-0330  1615 M Street N.W., Suite 400              Washington, D.C. 20036  Tel: (202) 326-7900                                             Counsel for AR Capital, LLC, ARC         Counsel for Lisa Beeson  Properties Advisors, LLC, Scott J. Bowman,   Peter M. Budko, Brian D. Jones, William  M. Kahane, and Edward M. Weil                                          5 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 81 of 136   John P. MacNaughton                      Gary F. Bendinger  Eric A. Larson                           SIDLEY AUSTIN LLP  1600 Atlanta Financial Center            787 Seventh Avenue   343 Peachtree Road, N.E.                 New York, NY 10019  Atlanta, GA 30326                        Tel: (212) 839-5300  Tel: (404) 233-7000                                                                 Bruce R. Braun                                            Melanie E. Walker                                            Kendra L. Stead                                            SIDLEY AUSTIN LLP                                           One South Dearborn                                            Chicago, IL 60603                                           Tel: (312) 853-7000                                             Counsel for Scott P. Sealy, Sr.           Counsel for Grant Thornton LLP                                             Christopher L. Garcia                    Michael C. Miller   Richard W. Slack                         Michael G. Scavelli  Evert J. Christensen, Jr.                STEPTOE & JOHNSON LLP  Adam Bookman                             1114 Avenue of the Americas   Raquel Kellert                           New York, NY 10036   WEIL, GOTSHAL & MANGES LLP               Tel: (212) 506-3900  767 Fifth Avenue                           New York, NY 10153                                             Counsel for Thomas A. Andruskevich,      Counsel for Brian Block  Leslie D. Michelson, Edward G. Rendell,   William G. Stanley, and Bruce D. Frank                                             Adam L. Fotiades  ZUCKERMAN SPAEDER LLP  1800 M Street NW, Suite 1000  Washington, DC 20036-5807  Tel: (202) 778-1800    Daniel P. Moylan  ZUCKERMAN SPAEDER LLP  100 East Pratt Street, Suite 2440  Baltimore, MD 21202-1031  Tel: (410) 332-0444                                             Counsel for Lisa McAlister                                                  6 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 82 of 136          Any Current VEREIT Stockholder who does not make his, her, or its objection in the    manner provided herein shall be deemed to have waived such objection and shall forever be    foreclosed from making any objection to the fairness, reasonableness, or adequacy of the    Settlement and the Fee Award as set forth in the Stipulation, unless otherwise ordered by the Court,    but shall be forever bound by the Judgment to be entered, the dismissal of the Action with    prejudice, and any and all of the releases set forth in the Stipulation.          7.    At least ten (10) business days prior to the Settlement Hearing, VEREIT’s Counsel    shall serve on Matthew M. Houston, Glancy Prongay & Murray LLP, 712 Fifth Avenue, 31st Floor,   New York, NY 10019 and file with the Court, proof, by affidavit or declaration, of the publication,   filing, and posting of the Notice.         8.    All Current VEREIT Stockholders shall be bound by all orders, determinations, and   judgments in the Action concerning the Settlement, whether favorable or unfavorable to Current   VEREIT Stockholders.         9.    Pending final determination of whether the Settlement should be approved, none of    Plaintiffs, Plaintiffs’ Counsel, VEREIT or any Current VEREIT Stockholders or other Persons    shall commence, continue, or prosecute, or in any way instigate or participate in the    commencement, continuation, or prosecution of, any action or proceeding asserting any Released    Claims against any of the Non-VEREIT Settling Defendants, or any other Released Person, in any    court or tribunal.          10.   Pending final determination of whether the Settlement should be approved, the    Non-VEREIT Settling Defendants shall not commence, continue, prosecute, or in any way    instigate or participate in the commencement, continuation, or prosecution of, any action or                                           7 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 83 of 136    proceeding asserting any NVSD Released Claims against VEREIT Released Persons, in any court   or tribunal.         11.   The fact and terms of the Stipulation, including any exhibits attached thereto, all   proceedings in connection with the Settlement, and any act performed or document executed   pursuant to or in furtherance of the Stipulation or the Settlement:         (a)   shall not be offered, received, or used in any way against the Settling Parties as         evidence of, or be deemed to be evidence of, a presumption, concession, or admission by         any of the Settling Parties with respect to the truth of any fact alleged by Plaintiffs or the         validity, or lack thereof, of any claim that has been or could have been asserted in the         Derivative Actions or in any litigation, or the deficiency or infirmity of any defense that         has been or could have been asserted in the Derivative Actions or in any litigation, or of         any fault, wrongdoing, negligence, or liability of any of the Released Persons or VEREIT         Released Persons;         (b)   shall not be offered, received, or used in any way against any of the Released         Persons or VEREIT Released Persons as evidence of, or be deemed to be evidence of, a         presumption, concession, or admission of any fault, misrepresentation or omission with         respect to any statement or written document approved, issued, or made by any Released         Person or VEREIT Released Persons, or against Plaintiffs as evidence of any infirmity in         their claims; or         (c)   shall not be offered, received, or used in any way against any of the Released         Persons or VEREIT Released Persons as evidence of, or be deemed to be evidence of, a         presumption, concession, or admission of any liability, fault, negligence, omission or         wrongdoing, or in any way referred to for any other reason as against the Released Persons                                           8 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 84 of 136          or VEREIT Released Persons, in any arbitration proceeding or other civil, criminal, or          administrative action or proceeding in any court, administrative agency, or other tribunal.          Neither the Stipulation nor the Settlement, nor any act performed or document executed          pursuant to or in furtherance thereof, shall be admissible in any proceeding for any purpose,          except to enforce the terms of the Settlement; provided, however, the Released Persons and          VEREIT Released Persons may refer to the Settlement, and file the Stipulation and/or the          Judgment, in any action that may be brought against them to effectuate the liability          protections granted them thereunder, including, without limitation, to support a defense or          claim based on principles of res judicata, collateral estoppel, full faith and credit, release,          standing, good faith settlement, judgment bar or reduction or any other theory of claim          preclusion or issue preclusion or similar defense or claim under U.S. federal or state law          or foreign law.          12.   If the Stipulation is terminated pursuant to its terms, or the Effective Date does not    otherwise occur, all proceedings in the Action will revert to their status as of the date immediately    preceding the date of the Stipulation.          13.   The Court reserves the right to adjourn the date of the Settlement Hearing or modify    any other dates set forth herein without further notice to Current VEREIT Stockholders, and retains   jurisdiction to consider all further applications arising out of or connected with the Settlement.     The Court may approve the Settlement and any of its terms, with such modifications as may be    agreed to by the Settling Parties, if appropriate, without further notice to Current VEREIT    Stockholders.          IT IS SO ORDERED.    DATED:  ______________________      __________________________________________                                          HONORABLE ALVIN K. HELLERSTEIN                                           9 





 






Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 85 of 136                                           10 





 






Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 86 of 136             EXHIBIT C                                   42350.00400





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 87 of 136    UNITED STATES DISTRICT COURT   SOUTHERN DISTRICT OF NEW YORK    JOANNE WITCHKO, Derivatively on Behalf   of Nominal Defendant AMERICAN REALTY           Lead Case No. 1:15-cv-06043-AKH   CAPITAL PROPERTIES, INC.,                                                  (Consolidated with Case No.                     Plaintiff,                   1:15-cv-08563-AKH)          v.    NICHOLAS S. SCHORSCH, et al.,                      Defendants,          -and-   AMERICAN REALTY CAPITAL   PROPERTIES, INC.,                      Nominal Defendant.        [PROPOSED] FINAL ORDER AND JUDGMENT APPROVING SETTLEMENT          This  matter  came  before  the  Court  for  hearing  pursuant  to  this  Court’s  Order    Preliminarily Approving  Derivative  Settlement and  Providing  for  Notice, dated _______    (the “Preliminary Approval Order”), on the application of the Settling Parties for final approval    of the Settlement set forth in the Stipulation and Agreement of Settlement dated September 27,    2019 (the “Stipulation”). Due  and adequate  notice  having  been  given  to  Current VEREIT    Stockholders as required in the Preliminary Approval Order, and the Court having considered all   papers filed and proceedings had herein and otherwise being fully informed of the premises and   good  cause  appearing  therefore,  IT IS  HEREBY  ORDERED,  ADJUDGED,  AND  DECREED   that:                                           1 





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 88 of 136          1.    This Final Order and Judgment (“Judgment”) incorporates by reference the    definitions in the Stipulation, and except where otherwise specified herein, all capitalized terms    used herein shall have the same meanings as set forth in the Stipulation.          2.    This Court has jurisdiction over the subject matter of the Action, including all   matters necessary to effectuate the Settlement.          3.    The Court finds that the Settlement set forth in the Stipulation is fair, reasonable,   and adequate as to each of the Settling Parties and Current VEREIT Stockholders, and hereby    finally approves the Settlement in all respects and orders the Settling Parties to perform its terms    to the extent the Settling Parties have not already done so.          4.    The Action, all claims contained therein, and any other Released Claims, any    NVSD Released Claims, and any Defendant Parties’ Released Claims, are hereby ordered as fully,    finally, and forever compromised, settled, released, discharged and dismissed on the merits and    with prejudice by virtue of the proceedings herein and this Judgment.  The Settling Parties are to    bear their own costs, except as otherwise provided in the Stipulation.          5.    Upon the Effective Date, VEREIT, Plaintiffs, and each of VEREIT’s stockholders    shall be deemed to have, and by operation of this Judgment shall have, fully, finally, and forever    released, relinquished, and discharged the Released Claims against the Released Persons.     VEREIT, Plaintiffs, and each of VEREIT’s stockholders shall be deemed to have, and by operation    of this Judgment shall have, covenanted not to sue any Released Person with respect to any    Released Claims, and shall be permanently barred and enjoined from instituting, commencing or    prosecuting the Released Claims against the Released Persons except to enforce the releases and    other terms and conditions contained in the Stipulation and/or this Judgment entered pursuant    thereto.                                           2 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 89 of 136         6.    Upon the Effective Date, VEREIT and each of the Released Persons shall be   deemed to have, and by operation of this Judgment shall have, fully, finally, and forever released,   relinquished and discharged each and all of Plaintiffs, their beneficiaries, and Plaintiffs’ Counsel   from any and all Defendant Parties’ Released Claims.  VEREIT and the Released Persons shall be   deemed to have, and by operation of this Judgment shall have, covenanted not to sue Plaintiffs,   their beneficiaries, or Plaintiffs’ Counsel with respect to any claims arising out of, relating to, or   in connection with their institution, prosecution, assertion, settlement, or resolution of the Action   or any Defendant Parties’ Released Claims, and shall be permanently barred and enjoined from   instituting, commencing or prosecuting the Defendant Parties’ Released Claims against Plaintiffs,   their beneficiaries, or Plaintiffs’  Counsel except to enforce the releases and other terms and   conditions contained in the Stipulation and/or this Judgment entered pursuant thereto.         7.    Upon the Effective Date, the Non-VEREIT Settling Defendants shall be deemed to   have, and by operation of this  Judgment shall have, fully, finally, and forever released,   relinquished, and discharged the NVSD Released Claims against each respective Non-VEREIT   Settling Defendant and the VEREIT Released Persons. The Non-VEREIT Settling Defendants   shall be deemed to have, and by operation of this Judgment shall have, covenanted not to sue each   respective Non-VEREIT Settling Defendant and the VEREIT Released Persons with respect to   any NVSD Released Claims, and shall be permanently barred and enjoined from instituting,   commencing or prosecuting the NVSD Released Claims against the VEREIT Released Persons   except to enforce the releases and other terms and conditions contained in the Stipulation and/or   this Judgment entered pursuant thereto.         8.    Notwithstanding Paragraph 7 of this Judgment, in the event that any Derivative   Action other than the Action, or any derivative proceeding filed subsequent to execution of the                                          3 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 90 of 136   Stipulation alleging claims that arise out of, are based upon, or relate to in any way any of the   allegations, acts, transactions, facts, events, matters, occurrences, representations or omissions   involved, set forth, alleged or referred to, in the Derivative Actions or Class Action, is permitted   to proceed against any Non-VEREIT Settling Defendant: (i) VEREIT shall not be released from   any rights of advancement, indemnification, contribution, or any other rights that such Non-  VEREIT Settling Defendant has or may have for any claims, demand or losses (all subject to   meeting applicable laws, requirements, and standards) arising out of such derivative proceeding;   and (ii) GT shall be entitled to receive from VEREIT indemnification for and advancement of   reasonable fees, costs, and expenses incurred or paid by GT in defending such derivative   proceeding, and (subject to meeting applicable laws) amounts paid by GT in settlement of or in   satisfaction of a judgment rendered in such derivative proceeding.         9.    Nothing herein shall in any way impair or restrict the rights of any Settling Party to   enforce the terms of the Supplementary Agreements.         10.   The Court finds that Notice was made in accordance with the Preliminary Approval   Order and provided the best notice practicable under the circumstances to all Persons entitled to   such notice, and said notice fully satisfied the requirements of Federal Rule of Civil Procedure   23.1 and the requirements of due process.         11.   The Court finds that during the course of the Action, the Settling Parties and their   counsel at all times complied with Federal Rule of Civil Procedure 11.         12.   The Court finds that the Fee Award of __________ dollars ($________.00) is fair   and reasonable, in accordance with the Stipulation, and finally approves the Fee Award.                                          4 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 91 of 136         13.   This Judgment, the fact and terms of the Stipulation, including any exhibits attached   thereto, all proceedings in connection with the Settlement, and any act performed or document   executed pursuant to or in furtherance of the Stipulation or the Settlement:         (a)   shall not be offered, received, or used in any way against the Settling Parties as         evidence of, or be deemed to be evidence of, a presumption, concession, or admission by         any of the Settling Parties with respect to the truth of any fact alleged by Plaintiffs or the         validity, or lack thereof, of any claim that has been or could have been asserted in the         Derivative Actions or in any litigation, or the deficiency or infirmity of any defense that         has been or could have been asserted in the Derivative Actions or in any litigation, or of        any fault, wrongdoing, negligence, or liability of any of the Released Persons or VEREIT        Released Persons;        (b)   shall not be offered, received, or used in any way against any of the Released        Persons or VEREIT Released Persons as evidence of, or be deemed to be evidence of, a         presumption, concession, or admission of any fault, misrepresentation or omission with         respect to any statement or written document approved, issued, or made by any Released         Person or VEREIT Released Persons, or against Plaintiffs as evidence of any infirmity in        their claims; or        (c)   shall not be offered, received, or used in any way against any of the Released        Persons or VEREIT Released Persons as evidence of, or be deemed to be evidence of, a         presumption, concession, or admission of any liability, fault, negligence, omission or         wrongdoing, or in any way referred to for any other reason as against the Released Persons         or VEREIT Released Persons, in any arbitration proceeding or other civil, criminal, or         administrative action or proceeding in any court, administrative agency, or other tribunal.                                          5 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 92 of 136         None of this Judgment, the Stipulation, or the Settlement, nor any act performed or         document executed pursuant to or in furtherance thereof, shall be admissible in any        proceeding for any purpose, except to enforce the terms of the Settlement; provided,        however, that the Released Persons and VEREIT Released Persons may refer to the         Settlement, the Stipulation, and the Judgment,  and may file the Stipulation and/or this         Judgment, in any action to effectuate the liability protections granted them thereunder,         including, without limitation, to support a defense or claim based on principles of res         judicata, collateral estoppel, full faith and credit, release, standing, good faith settlement,        judgment bar or reduction or any other theory of claim preclusion or issue preclusion or        similar defense or claim under U.S. federal or state law or foreign law.         14.   Without affecting the finality of this Judgment in any way, the Court hereby retains   continuing jurisdiction over: (a) implementation of the Settlement; and (b) all Settling Parties for   the purpose of construing, enforcing, and administering the Stipulation and this Judgment,   including, if necessary, setting aside and vacating this Judgment, on motion of a Settling Party, to   the extent consistent with and in accordance with the Stipulation if the Effective Date fails to occur   in accordance with the Stipulation.         15.   This Judgment is a final, appealable judgment and should be entered forthwith by   the Clerk in accordance with Federal Rule of Civil Procedure 58.         IT IS SO ORDERED.   DATED:                                       __________________________________________                                         HONORABLE ALVIN K. HELLERSTEIN                                          6 





 






Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 93 of 136             EXHIBIT D                                   42350.00400





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 94 of 136                                                              EXECUTION COPY                             SECONDARY AGREEMENT          This  springing  Secondary  Agreement  (“Secondary  Agreement”),  dated  as  of   September 27, 2019 (the “Effective Date”), is entered into by and between:                  A.    VEREIT, Inc. (“VEREIT”);                   B.    Nicholas  S.  Schorsch  (“Schorsch”);  Peter  M.  Budko  (“Budko”);  William  M.               Kahane  (“Kahane”);  Edward  M.  Weil  (“Weil”);  AR  Capital,  LLC  and ARC               Properties Advisors, LLC (together, the “AR Capital Parties”); Scott J. Bowman;               Brian D. Jones; David Kay; Lisa P. McAlister; Lisa Beeson; Scott P. Sealy, Sr.;               Thomas A. Andruskevich; Leslie D. Michelson; Edward G. Rendell; William G.               Stanley;  Bruce  D.  Frank;  Brian  S.  Block  (“Block”);  and  Grant  Thornton  LLP               (“GT”) (collectively, with all other individuals and entities listed in Paragraph B,               the “Derivative Defendants”).             Each of VEREIT and the Derivative Defendants is referred to as a “Party” and collectively   as the “Parties”.  Although they are not a Party to this Secondary Agreement, each of Joanne   Witchko,  Edward  Froehner,  and  Jeffrey  Turner  as  trustee  for  Michele  Graham  Turner  1995   Revocable Trust (“Witchko Derivative Plaintiffs”), through their undersigned attorneys, approves   of the terms contained herein.                                              RECITALS          As a preamble to this Secondary Agreement, the Parties state as follows:          A.    WHEREAS,  on  September  8,  2019,  the  Parties,  and  the  Witchko  Derivative   Plaintiffs, entered into a binding Memorandum of Understanding reflecting the intent of the Parties   and the Witchko Derivative Plaintiffs to fully and finally resolve all of the claims that have been   or  could  have  been  asserted  on  behalf of VEREIT against the Derivative  Defendants  (the   “Derivative Settlement”), including but not limited to claims that have been or could have been   asserted on behalf of VEREIT against  the  Derivative  Defendants in  (i)  the  consolidated   shareholder derivative actions captioned as Witchko v. Schorsch, et al., No. 1:15-cv-06043-AKH   (the “Witchko Action”), currently pending in the United States District Court for the Southern   District of New York (the “Court”), (ii) the shareholder derivative action filed in the Circuit Court   for  Baltimore  City,  Maryland,  captioned Frampton v. Schorsch, et al., No.  24-C-15-006269,   (iii) the  shareholder  derivative  action  filed  in  the  Supreme  Court  of  the  State  of  New  York,   captioned Fran Kosky Roth IRA v. Schorsch, et al., No. 653093/2016, and (iv) the shareholder   derivative action filed in the United States District Court for the District of Maryland, captioned   Meloche, et al. v. Schorsch, et al.,  No.  1:16-cv-03366-ELH  (collectively,  the  “Derivative   Actions”).          B.    WHEREAS,    the  Parties  and  the  Witchko  Derivative  Plaintiffs  have  contemporaneously herewith submitted to the Court a Stipulation and Agreement of Settlement  (“Stipulation”) seeking a final judgment of the Court resolving the Witchko Action, and the claims   that have been or could have been asserted on behalf of VEREIT against the Derivative Defendants     42350.00200                                         1





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 95 of 136                                                             EXECUTION COPY   in the Derivative Actions, in accordance with the terms and provisions  of  the  Stipulation  (the  “Judgment”);         C.    WHEREAS, recognizing VEREIT’s ability to settle and compromise claims that  have been or could have been asserted in the Derivative Actions (see, e.g., Wolf v. Barkes, 348  F.2d 994 (2d Cir. 1965)), the Parties have entered into this Secondary Agreement to settle and  compromise those claims in the event that the Judgment is reversed or vacated on appeal;          D.    NOW,  THEREFORE,  in  consideration  of  the  mutual  promises,  covenants,  obligations,  agreements,  conditions,  and  undertakings  set  forth  herein,  as  well  as  other  consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending  to be legally bound, hereby agree as follows:                             TERMS AND CONDITIONS          1.    No  Admission.   No  Party  admits  any  factual  or  legal  assertion  that  has  been  advanced  in  the  Derivative  Actions,  and  this  Secondary  Agreement  shall  not  constitute  or  be  deemed an admission by any Party with respect to any factual or legal assertion that has been  advanced in the Derivative Actions.         2.    Class Settlement and Derivative Settlement.  Concurrently with the Derivative  Settlement, VEREIT and certain of the Derivative Defendants have agreed to settle the action  captioned In re American Realty Capital Properties, Inc. Litigation, Civil Action No. 1:15-mc- 00040-AKH (the “Class Action” and related “Class Settlement”).  GT has agreed to contribute  forty-nine million dollars ($49,000,000) to a global settlement to settle the Class Action, as well  as  any  and  all  claims  in  the  Derivative  Actions  (the  “GT  Contribution”).   Certain  Derivative  Defendants, including Schorsch, Budko, Kahane, and Weil (“ARC Individuals”) as well as the AR  Capital Parties (collectively, the “ARC Parties”) have agreed to contribute consideration with a  value of two-hundred and twenty-five million dollars ($225,000,000) (inclusive of the value of  certain operating partnership units in VEREIT Operating Partnership, L.P., and related dividends  previously surrendered by some of the ARC Individuals as part of a settlement with the Securities  and Exchange Commission, which total $31,972,934 in value) to a global settlement to settle the  Class Action, as well as any and all claims in the Derivative Actions (the “ARC Contribution”).   Block has agreed to contribute consideration with a value of twelve million, five hundred thousand  dollars ($12,500,000) to a global settlement to settle the Class Action, as well as any and all claims  in the Derivative Actions (the “Block Contribution”).           3.    Conditions Precedent.                 a.    This Secondary Agreement shall have no force and effect in any respect to                    any Derivative Defendant or VEREIT unless the Court enters the Judgment.               b.    In the event that the Court enters the Judgment, the Secondary Agreement                    shall  have  force  and  effect  with  respect  to  VEREIT  and  any  particular                    Derivative Defendant only if the Judgment is reversed, modified, or vacated                    (in whole or in part) by the United States Court of Appeals for the Second                    Circuit or the Supreme Court of the United States as to VEREIT or as to    42350.00200                                        2





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 96 of 136                                                             EXECUTION COPY                     that  particular  Derivative  Defendant,  who  thereafter  shall  be  an                   “Unresolved Defendant.”  Notwithstanding the foregoing, this Secondary                    Agreement shall have no force and effect with respect to VEREIT or any                    Derivative Defendant if the United States Court of Appeals for the Second                    Circuit or the Supreme Court of the United States reverses, modifies, or                   vacates  provisions  of  the  Judgment  concerning  only  the  Fee  Award  (as                   defined in the Stipulation).              c.    For  the  avoidance  of  doubt,  if  any  of  the  ARC  Parties  becomes  an                   Unresolved  Defendant  then  each  of  the  ARC  Parties  shall  become an                   Unresolved Defendant within the meaning of this Secondary Agreement.        4.    Reimbursement and Payment of Settlement Consideration.                 a.    If the ARC Parties become Unresolved Defendants, the ARC Parties shall                    be  deemed  to  have  been  immediately  reimbursed  by  VEREIT  for  the                    amount of the ARC Contribution, and the ARC Parties shall immediately                    thereafter be deemed to have paid such amounts to VEREIT.  Solely for                    United States federal and applicable state and local income tax purposes,                    any deemed reimbursement and payment pursuant to this Paragraph 4(a)                    shall be treated by the ARC Parties as a refund of the ARC Contribution to                    the  ARC  Parties  in  accordance  with  the  terms  and  provisions  of the                    Stipulation  followed  by  a  payment  by  the  ARC  Parties  to  VEREIT in                    settlement of, and allocable to, the Derivative Actions.               b.    If Block becomes an Unresolved Defendant, Block shall be deemed to have                    been  immediately  reimbursed  by  VEREIT  for  the  amount  of  the  Block                    Contribution, and Block shall immediately thereafter be deemed to have                    paid such amounts to VEREIT.               c.    If GT becomes an Unresolved Defendant, GT shall be deemed to have been                    immediately  reimbursed  by  VEREIT  for  the  amount  of  the  GT                    Contribution, and GT shall immediately thereafter be deemed to have paid                    such amounts to VEREIT.               d.    In the event that any Derivative Action other than the Witchko Action, or                    any derivative proceeding filed subsequent to execution of the Stipulation                    alleging claims that arise out of, are based upon, or relate to in any way any                    of  the  allegations,  acts,  transactions,  facts,  events,  matters,  occurrences,                    representations or omissions involved, set forth, alleged or referred to, in                    the Derivative Actions or the Class Action, is permitted to proceed against                    any  Unresolved  Defendant:  (i) VEREIT  shall  not  be  released  from any                    rights of advancement, indemnification, contribution, or any other rights                    that such Unresolved Defendant has or may have for any claims, demand or                    losses (all subject to meeting applicable laws, requirements, and standards)                    arising out of such derivative proceeding; and (ii) GT shall be entitled to                    receive from VEREIT indemnification for and advancement of reasonable    42350.00200                                        3





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 97 of 136                                                             EXECUTION COPY                     fees,  costs,  and  expenses  incurred  or  paid  by  GT  in  defending  such                    derivative proceeding, and (subject to meeting applicable laws) amounts                    paid by GT in settlement of or in satisfaction of a judgment rendered in such                    derivative proceeding.         5.    Releases.  Upon this Secondary Agreement coming into full force and effect, the  following releases between VEREIT and any Unresolved Defendant (each an “Unresolved Party”  and collectively the “Unresolved Parties”) shall automatically and irrevocably be deemed to be  valid, in full force and effect, and binding on the Unresolved Parties:               a.    Unresolved Defendants Releases.  The Unresolved Defendants shall be        deemed to have fully, finally, and forever released, relinquished, and discharged the NVSD        Released  Claims  (as  defined  in  the  Stipulation)  against  each  respective  Non-VEREIT        Settling Defendant (as defined in the Stipulation) and the VEREIT Released Persons (as        defined  in  the  Stipulation).  The  Unresolved  Defendants  shall  be  deemed  to  have        covenanted not to sue each respective Non-VEREIT Settling Defendant and the VEREIT        Released Persons with respect to any NVSD Released Claims, and shall be permanently        barred  and  enjoined  from  instituting,  commencing  or  prosecuting  the  NVSD  Released        Claims against the VEREIT Released Persons except to enforce the  releases  and other        terms and conditions contained in this Secondary Agreement.               b.    VEREIT Releases.  VEREIT shall be deemed to have fully, finally, and        forever  released,  relinquished, and  discharged  the  Released  Claims  (as  defined  in  the        Stipulation)  against  the  Unresolved  Defendants.   VEREIT  shall  be  deemed  to  have        covenanted not to sue any Unresolved Defendant with respect to any Released Claims, and        shall be permanently barred and enjoined from instituting, commencing or prosecuting the        Released Claims against the Unresolved Defendants except to enforce the releases and        other terms and conditions contained in this Secondary Agreement.               c.    Dismissal.  VEREIT shall promptly seek to have dismissed or otherwise        terminated, to the extent they have not been already, the Derivative Actions.  In the event        that,  subsequent  to  the  execution  of  this  agreement,  any  derivative  proceeding  is  filed        alleging  claims  that  arise  out  of,  are  based  upon,  or  relate  to  in  any  way  any  of  the        allegations,  acts,  transactions,  facts,  events,  matters,  occurrences,  representations  or        omissions involved, set forth, alleged or referred to, in the Derivative Actions or the Class        Action,  VEREIT  shall  promptly  seek  to  have  dismissed  or  otherwise  terminated  such        subsequent derivative proceeding.         6.    Unknown Claims.  The Parties acknowledge that there is a risk that subsequent to  the execution of this Secondary Agreement, a Party may discover, incur, or suffer from claims that  were unknown or unanticipated at the time this Settlement Agreement was executed, including,  without  limitation,  unknown  or  unanticipated  claims  which,  if  known,  may  have  materially  affected a Party’s decision to execute this Settlement Agreement (the “Unknown Claims”).  The  Parties acknowledge that, subject to any exceptions set forth in this Secondary Agreement, they  are  assuming  the  risk  of  such  Unknown  Claims.   The  Parties  expressly  waive  the  benefits  of  California Civil Code § 1542, which provides:    42350.00200                                        4





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 98 of 136                                                             EXECUTION COPY         A general release does not extend to claims that the creditor or releasing party does not        know or suspect to exist in his or her favor at the time of executing the release and that, if        known by him or her, would have materially affected his or her settlement with the debtor        or released party.   The Parties likewise expressly waive the benefits conferred by any law or principle of common  law that, similar or equivalent to California Civil Code § 1542, preserves claims not known or  suspected to exist in their favor which, if known or anticipated, would have materially affected the  execution of this Secondary Agreement.  The Parties hereby represent that they are not aware of  any such Unknown Claims at this time, and the Parties agree that this representation is a material  term of this release of Unknown Claims.         7.    Survival.  Anything else in this Secondary Agreement notwithstanding, the Parties  do not release any Party from any claims related to the enforcement of this Secondary Agreement.         8.    Confidentiality.  The Parties agree that there will be no public announcements or  disclosure regarding this Secondary Agreement until its terms and contents are disclosed to the  Court.         9.    Binding Effect.  The Parties intend for this Secondary Agreement to be binding to  the fullest extent allowable under law.          10.    Headings.  The headings set forth in this Secondary Agreement have been inserted  for  the  convenience  of  reference  only.   Such  headings  shall  not be considered a part of this  Secondary Agreement, and neither shall they limit, modify, or affect in any way the meaning or  interpretation of this Secondary Agreement.         11.   Severability.  If any provision of this Secondary Agreement, other than Paragraphs  1 through 7, is determined by a final, non-appealable judgment of a court of competent jurisdiction  to  be illegal,  invalid,  or  unenforceable,  such  determination shall not affect the balance of this  Secondary  Agreement,  which  shall  remain  in  full  force  and  effect  as  such  illegal,  invalid,  or  unenforceable provision shall be deemed severable.  If one or more of Paragraphs 1 through 7 is  determined by a final, non-appealable judgment of a court of competent jurisdiction to be illegal,  invalid, or unenforceable, Paragraph 12 will remain in full force and effect.         12.   Impact of Invalidity.  In the event that this Secondary Agreement is determined  by a final, non-appealable judgment of a court of competent jurisdiction to be illegal, invalid, or  unenforceable in its entirety or as to any of Paragraphs 1 through 7, then:               a.    VEREIT  shall  deposit  one  hundred  ninety-three  million,  twenty-seven                    thousand, and sixty-six dollars ($193,027,066) into an escrow account that                    (along  with  interest  earned  thereon)  shall  remain  under  VEREIT’s  sole                    possession,  custody,  and  control pending  the  resolution  of  any litigation                    between any of the ARC Parties and VEREIT;               b.    VEREIT  shall  deposit  twelve  million,  five  hundred  thousand  dollars                    ($12,500,000)  into  an  escrow  account  that  (along  with  interest earned                    thereon)  shall  remain  under  VEREIT’s  sole  possession,  custody, and    42350.00200                                        5





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 99 of 136                                                             EXECUTION COPY                     control  pending  the  resolution of  any  litigation  between  Block and                    VEREIT;               c.    VEREIT  shall  deposit  forty-nine  million  dollars  ($49,000,000)  into  an                    escrow account that (along with interest earned thereon) shall remain under                    VEREIT’s sole possession, custody, and control pending the resolution of                    any litigation between GT and VEREIT; and               d.    any releases provided by VEREIT to Derivative Defendants, any releases                    provided by Derivative Defendants to VEREIT, and any releases provided                    by Derivative Defendants to each other, shall be null and void.  For the                    avoidance of doubt, VEREIT shall be entitled to pursue any and all claims                    against the Derivative Defendants, including but not limited to, claims for                    contribution  in  respect  of  the  Class  Settlement,  and  the  Derivative                   Defendants  shall  be  entitled  to  assert  any  rights  to  indemnification  or                   advancement of fees that they would have otherwise been entitled to assert,                   and  GT  shall  be  entitled  to  pursue  its  claims.   Nothing  in  this                    Paragraph 12(d) shall affect the terms agreed to in any separate agreement                    by any of the Parties to the Stipulation.         13.   Drafter.  None of the Parties to this Secondary Agreement shall be considered to  be the drafter of this Settlement Agreement or any of its provisions for the purpose of any statute,  case law, or rule of interpretation or construction that would or might cause any provision to be  construed against the drafter.         14.   Governing Law.  This Secondary Agreement is governed by the laws of the State  of New York, without regard to any principles of conflicts of law.         15.   Disputes  Regarding  the  Secondary  Agreement.   Any  dispute  regarding  the  interpretation or implementation or operation of this Secondary Agreement shall be decided by the  Hon.  Layn  Phillips,  acting  as  arbitrator,  whose  determinations  shall  be  binding  and  non- appealable.         16.   Counterparts.  This Secondary Agreement may be executed in counterparts and,  as so executed, shall constitute one and the same agreement, and shall be binding on the Parties.   A copy, PDF, or facsimile of a signature on this Settlement Agreement shall have the same force  and effect as an original signature.                               [Execution Pages Follow]        42350.00200                                        6





 






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    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 102 of 136                                                                     ltXf-,clt'fIoN c()t)Y  EX_ECUTEI)   Al\t¡ A{; REE I}   PATJI,. WL.ISS. RIITI(IND. \\¡II¡\IìI'Ohi &  l\4ll.lÌ¡\NK [,1.P. on bcha]l o1'VEI{I:l-[-  GAIìl{IÍiOl\ LLP. on behalf' of Nicholas S.  Scholsch    Iì,v                                         I]:,   K1;1.LOGG. II.,\l.iS[iN" 1-0ÐD. [ìIGl:]'l. & KII{KLANII   & ELl,lS   L[,P. on bchalf o{'  FIìLlDlilllCK. P.1..1, C.. on bchalf of ;\lì David Kav  Capital. LLC. ,,\RC Pro¡relties .,\dvisol's. I -LC.  Sr:ott J. Bon'nran. Peter'ìt,1. Ruclko. Rrian D.  Jones, Willianl M. Kahanc, ancl Uchvard l\4.  Weil    Bv                                           B1'               UO  STlrPl'Oll & JOIIi\SON  LI-P. on behalf'o{   PIITRII.LO KI-.EIN & tlOXEiì l.Ì.P, on behalf'  Ilri¿rn Block                                of Lisa Beeson    tlv                                          Iì1'                                                                                 't.l.P.   \.{ORRIS. N4ANNING   & \,i¡\I{l-lN [,1.P^ on WEII,. GOI-SIT¡\1. &   \,{¡\NGI::S     orr                                                        '["hollas   behalf ol'Scott P. Seah,. Sr.                beh¿rll of       ¡\. Ancl'uskevich, [.esìie D.                                               lV{ichelson, Eclrvarcl G. Tleudell. \-,¡illianr Ci.                                               Sftnle-y, anci fjruce D. Flank   B_v                                           tsv  ZIJCKERVIAT.T- SPAIDER    LLI'. on bchalf of  SIDLEY   AUS'|IN I-LI'. on bchalf of Cìrauf  Lisa i\,'lcAlister                           'l'llornton LLP    B\,                                          B,r,                                             7





 






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  Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 106 of 136                                                                   EXECUTION COPY  EXECUTED    AND AGREED:   PAUL, WEISS,   R[FK[ND,  WHARTON     &     MILBANK   LLP. on behalf of VEREIT  GARRISON LLP, on behalf   of Nicholas S.  Schorsch    KELLOGG, HANSEN,  TODD,    FIGEL  &        KIRKLAND    & ELLIS LLP, on behalf of  FREDERICK, P.L.L.C., ou behalf of AR       David Kay  Capital, LLC, ARC Properties Advisors, LLC,  Scott  J. Bowman, Peter M. Budko, Brian D.  Jones, William M. Kahane, and Edward M.  Weil    STEPTOE   & JOHNSON    LLP, on behalf of   PETRILLO  KLEIN  & BOXER LLP,  on behalf  Brian Block                                of Lisa Beeson    Ry:    MORRIS, MANNING     & MARTIN   LLP, ON     WEIL, GOTSHAL     & MANGES LLP,      ON  behalf of Scott P. Sealy, Sr.              behalf of Thomas A. Andruskevich, Leslie D,                                             Michelsoa, Edward G. Rendell, William G.                                             Stanley,  and Bruce D. Frank   By                                         By:   ZUCKERMAN  SPAEDERLLP, onbehalf of         SIDLEY AUSTIN    LLP, on behalf of Grant  Lisa McAlister                             Thornton LLP    By:                                            7





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 107 of 136                                                             EXECUTION COPY   EXECUTED AND AGREED:  PAUL,  WEISS,  RIFKIND,  WHARTON  &      MILBANK LLP, on behalf of VEREIT  GARRISON  LLP,  on  behalf  of  Nicholas  S.  Schorsch   By:                                      By:   KELLOGG, HANSEN, TODD, FIGEL &           KIRKLAND  &  ELLIS   LLP,  on  behalf  of  FREDERICK,  P.L.L.C.,  on  behalf  of  AR David Kay  Capital, LLC, ARC Properties Advisors, LLC,  Scott J. Bowman, Peter M. Budko, Brian D.  Jones,  William  M.  Kahane,  and  Edward  M.  Weil   By:                                      By:   STEPTOE  &  JOHNSON  LLP,  on  behalf  of PETRILLO KLEIN & BOXER LLP, on behalf  Brian Block                              of Lisa Beeson    By:                                      By:   MORRIS, MANNING & MARTIN LLP, on         WEIL,  GOTSHAL  &  MANGES  LLP,  on  behalf of Scott P. Sealy, Sr.            behalf of Thomas A. Andruskevich, Leslie D.                                           Michelson,  Edward  G.  Rendell,  William  G.                                           Stanley, and Bruce D. Frank   By:                                      By:   ZUCKERMAN SPAEDER LLP, on behalf of      SIDLEY  AUSTIN  LLP,  on  behalf  of  Grant  Lisa McAlister                           Thornton LLP    By: ___________________________          By:    42350.00200                           7





 






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Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 111 of 136             EXHIBIT E                                   42350.00400





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 112 of 136                                                               DATED: 8/23/2019                                                              EXECUTION COPY      AGREEMENT REGARDING SETTLEMENT, CONTRIBUTION, AND RELEASE          This binding Agreement Regarding Settlement, Contribution, and Release (the “Settlement   Agreement”) is made and entered into between and among (i) VEREIT, Inc., formerly known as   American  Realty  Capital  Properties,  Inc.,  and  VEREIT  Operating Partnership,  L.P.,  formerly   known as ARC Properties Operating Partnership, L.P. (“VEREIT OP” and, with VEREIT, Inc.,   collectively “VEREIT”), (ii) Nicholas S. Schorsch, Shelley Schorsch, Peter M. Budko, William   K. Kahane, Edward M. Weil, AR Capital, LLC (“AR Capital”), and ARC Properties Advisors,   LLC (together, the “AR Capital Parties”).  Each of the foregoing individually is referred to as a   “Party” and collectively they are referred to as the “Parties”.                                             RECITALS            WHEREAS, many of the Parties are parties to one or all of (i) the action captioned In re   American Realty Capital Properties, Inc. Litigation,  Civil  Action  No.  1:15-mc-00040-AKH   (S.D.N.Y.)  (the  “Class  Action”),  currently  pending  in  the  United  States  District  Court  for  the   Southern  District  of  New  York  (the  “Court”),  and  (ii)  the  consolidated  actions  captioned  as   Witchko v. Schorsch, No. 1:15-cv-06043-AKH (S.D.N.Y.), currently pending in the Court, the  action captioned as Frampton v. Schorsch, No. 24-C-15-006269 (Md. Cir. Ct.), currently pending  in the Circuit Court for Baltimore City, Maryland, the action captioned as Fran Kosky Roth IRA v.  Schorsch, No. 653093/2016 (N.Y. Sup. Ct.), currently pending in the Supreme Court of the State  of New York, and the action captioned as Meloche v. Schorsch, No. 1:16-cv-03366-ELH (D. Md.),  currently pending in the United States District Court for the District of Maryland (together, the  “Derivative Actions” and with the Class Action, the “Actions”);                  WHEREAS, with the exception of the matters specifically identified and described herein,   the Parties wish to fully and finally resolve all claims, demands, losses, rights, and causes of action   of any nature whatsoever that (i) VEREIT has against any of the AR Capital Parties, and (ii) that   any  of  the  AR  Capital  Parties  has  against  VEREIT,  including  but  not  limited  to,  all  claims,   demands, losses, rights, and causes of action of any nature whatsoever that arise out of, are based   upon,  or  relate  to  in  any  way  any of  the  allegations,  acts,  transactions,  facts,  events,  matters,   occurrences, representations or omissions involved, set forth, alleged or referred to, in the Actions;                   WHEREAS, the Parties have not reached agreement with the plaintiffs in the Derivative   Actions,  and  final  consummation  of the agreement set forth herein  is  contingent  upon  a  final   resolution of the Derivative Actions being achieved; and                  WHEREAS, the Parties have reached agreement on the terms and conditions for which   the AR Capital Parties would contribute to a fund to settle the Actions (“Settlement Fund”).                  NOW THEREFORE, in consideration of the mutual promises, covenants, obligations,   agreements,  conditions,  and  undertakings  set  forth  herein,  as  well  as  other  considerations,  the   receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally   bound, hereby agree as follows:    





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 113 of 136                                                                                                                                             EXECUTION COPY                               TERMS AND CONDITIONS          1.    AR Capital Settlement Amount.  The Parties agree that the AR Capital Parties  collectively shall contribute $225,000,000 to the Settlement Fund (the “AR Capital Settlement  Amount”), which amount shall represent the AR Capital Parties’ sole contribution to the settlement  of  the  Actions.   VEREIT  acknowledges  that  the  AR  Capital  Parties  already  have  funded  $31,972,934 of the AR Capital Settlement Amount.  The balance of the AR Capital Settlement  Amount will be paid by the AR Capital Parties at the same time that VEREIT provides funds to  settle the Class Action pursuant to an agreement to be reached by the plaintiffs in the Class Action,  VEREIT, and the AR Capital Parties (“Plaintiffs’ Settlement Agreement”).         2.    Source of Funds.  The AR Capital Parties may fund the AR Capital Settlement  Amount  with  any  combination,  at  their  election,  of  (i)  cash,  (ii)  surrender  and  assignment  to  VEREIT of any of the 19,644,581 operating partnership units in VEREIT OP (“OP Units”) owned  or controlled by the AR Capital Parties, (iii) dividends/distributions on account of the OP Units,  and (iv) interest on dividends/distributions (in an amount no greater than the limit in Paragraph 5  of this Settlement Agreement).         3.    Valuation of OP Units.  To the extent that any of the AR Capital Parties fund the  AR Capital Settlement Amount with OP Units as described in clause (ii) of Paragraph 2, each OP  Unit will be valued based on the volume weighted average price of VEREIT common stock on the  fifth trading day after the agreement to settle the Class Action is publicly announced.  No later  than three (3) days after such trading day, the AR Capital Parties shall provide notice to VEREIT  of the number of OP Units, amount of dividends/distributions, amount of interest, and amount of  cash that they will elect to use to fund the AR Capital Settlement Amount in accordance with  Paragraph 2.         4.    Valuation of Dividends/Distributions.  The Parties agree that the value of the  dividends/distributions referred to in clause (iii) of Paragraph 2 is $42,684,838 as of the date of  execution of this Settlement Agreement, and that such value is subject to upward adjustment for  dividends/distributions  on  the  OP  Units  designated  as  being  used  to  fund  the  AR  Capital  Settlement Amount based on any additional dividends/distributions declared by VEREIT to its  common shareholders for which the record date occurs before the date of funding as described in  Paragraph 1.  For the avoidance of doubt, this upward adjustment for dividends/distributions on  the OP Units designated as being used to fund the AR Capital Settlement Amount will include the  dividend/distribution announced by VEREIT on August 5, 2019, scheduled to be paid on October  15, 2019.         5.    Valuation  of  Interest.  The Parties agree that the value of interest on  dividends/distributions referred to in clause (iv) of Paragraph 2 is $2,500,000.         6.    Side A Insurance Proceeds.                 a.    VEREIT  acknowledges  that  the  AR  Capital  Parties  will  seek  to  recover        proceeds under the following excess difference in conditions insurance policies covering a        policy period from February 7, 2014 through February 7, 2015 (the “Side A Policies”): (i)        Westchester Fire Insurance Company Policy No. G243714402002, (ii) STARR Policy No.    42350.0020042350.00200                                        2





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 114 of 136                                                                                                                                             EXECUTION COPY           SISIXFL21156814,  (iii)  RSUI  Policy  No.  NHS655965,  and  (iv)  AXIS  Policy  No.        MNH779259/01/2014.  VEREIT will cooperate fully with the AR Capital Parties in their        pursuit of coverage under the Side A Policies, including providing written confirmation as       soon as practicable to the Side A insurers which parties VEREIT does not believe it has a       duty to indemnify.  The AR Capital Parties shall be entitled to obtain such proceeds under       the Side A Policies (in an allocation to be determined by the AR Capital Parties), if and       only if, in the event that the Actions are settled, the AR Capital Parties have used their best       efforts to obtain for VEREIT from the insurance carriers who issued the Side A Policies,       full and complete releases from all claims, demands, losses, rights, and causes of action of        any nature whatsoever that arise out of, are based upon, or relate to in any way any of the        Side A Policies, that could potentially be brought against VEREIT.                 b.    In  the  event  the  AR  Capital  Parties  cannot  obtain  the  settlement  and/or       release contemplated in Paragraph 6.a, and VEREIT is made a party or threatened to be       made a party to any action by the insurers that issued or hold the Side A Policies (or anyone       acting at their direction, collectively the “Side A insurers”) or in connection with any third        party discovery to which VEREIT is subject in connection with the litigation between the        Side A Insurers and the AR Capital Parties:                     i.    the AR Capital Parties, jointly and severally, agree to indemnify and              hold harmless VEREIT and VEREIT’s directors, officers, employees, and agents              (collectively, the “Indemnitees”) from and against any losses, claims, damages or              liabilities  (including,  without  limitation,  advancement  and  indemnification  of             reasonable  legal  fees  and  other  expenses  incurred  in  connection  with  any  suit,             action or proceeding or any claim asserted as such fees and expenses are incurred,             joint or several, to which any of the Indemnitees may become subject, insofar as             such losses, claims, damages or liabilities) arising out of or are based upon any             action related to the Side A Policies;                    ii.   at their election, the AR Capital Parties may assume control of the             defense against any such losses, claims, damages or liabilities.  If the AR Capital             Parties assume control of the defense of such claim, VEREIT shall have the right             to  employ  separate  counsel  (selected  in  its  reasonable  discretion subject to             subsection (iv) below) and to participate in the defense thereof and have fees of             separate counsel advanced by the AR Capital Parties, if (i) the AR Capital Parties             have failed diligently to pursue or defend such claim or (ii) if the AR Capital Parties             counsel  determines  that  a  conflict  of  interest  has  arisen  that requires  separate             representation.  If VEREIT believes, contrary to the view of the AR Capital Parties’              counsel, that a conflict of interest has arisen, the General Counsel of VEREIT and              the Deputy General Counsel of AR Global shall meet and confer to resolve any              disagreement.   If  they  are  unable  to  resolve  such  disagreement,  VEREIT  may              invoke the dispute resolution procedures of Paragraph 21 for binding arbitration;              the prevailing party attorneys’ fees provision of Paragraph 22 shall apply to any              such arbitration; and                     iii.  in the event the AR Capital Parties do not assume control of the              defense of such claim, the AR Capital Parties will advance all costs and expenses    42350.0020042350.00200                                        3





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 115 of 136                                                                                                                                             EXECUTION COPY                 (including, without limitation, legal fees and other expenses incurred in connection              with any suit, action or proceeding) incurred by any of the Indemnitees arising out              of or related to the foregoing; and                     iv.   if VEREIT retains as outside counsel Milbank LLP and seeks any              indemnification or advancement of reasonable attorneys’ fees as provided for under              Paragraph  6(b),  VEREIT  agrees  that  it  will  not  seek  indemnification  or              advancement  at  a  rate  that  exceeds  a  ten  (10)  %  discount  on  Milbank  LLP’s              standard rates.               c.    VEREIT shall have no obligation to advance to the AR Capital Parties, or        to indemnify the AR Capital Parties for, any fees or expenses, legal or otherwise, incurred        in connection with litigating against, or negotiating or settling with, the insurers that issued        the Side A Policies.               d.    Each of the AR Capital Parties represent and warrant that, as of the date of        this  Agreement,  other  than  as  set  forth  in  this  Agreement, they are not aware of any        threatened or pending action by any insurer against VEREIT relating to the Actions.         7.     SEC Disgorgement or Penalties.  For the avoidance of doubt, to the extent that  VEREIT recovers or receives any of the disgorgement or penalty amounts paid by the AR Capital  Parties or Brian Block to the U.S. Securities and Exchange Commission (“SEC”) in connection  with the matter captioned SEC v. AR Capital, LLC, Nicholas Schorsch and Brian Block, 19 Civ.  6603 (S.D.N.Y.) (the “SEC Action”), such amounts are intended to be for the benefit of VEREIT  only and will not be credited in any way towards the obligation of the AR Capital Parties to fund  the AR Capital Settlement Amount.  This Paragraph 7 does not apply to the OP Units already  surrendered to VEREIT with the value of $31,972,934, as referenced in Paragraph 1 hereof.         8.    ARCT III & ARCT IV Insurance.  For the avoidance of doubt, the Parties agree  that, with respect to amounts received going forward from XL Specialty Insurance Company under  Management Liability and Company Reimbursement Insurance Policy Numbers ELU125019-12  and ELU127059-12 issued to American Realty Capital Trust III, Inc., and American Realty Capital  Trust IV, Inc., respectively (the “ARCT III/IV Insurance”):               a. the AR Capital Parties will receive the first $2,270,887.52 of any such amounts,        such that the amount of $2,270,887.52 to be received by the AR Capital Parties and the        amount of $567,721.88 previously received by VEREIT, which together will comprise the        first $2,838,609.40 paid out of the ARCT III/IV Insurance, will have been split between        the Parties, with 80% going to the AR Capital Parties and 20% going to VEREIT; and               b. the Parties will split all amounts received from the ARCT III/IV Insurance above        and beyond this initial $2,838,609.40, with 80% of such amounts going to the AR Capital        Parties and 20% of such amounts going to VEREIT.    42350.0020042350.00200                                        4





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 116 of 136                                                                                                                                               EXECUTION COPY             9.    Conditions Precedent.  In the event that either of the following two conditions:                i.   that the Court shall have finally approved settlement of the Class Action         pursuant to Federal Rule of Civil Procedure 23, with such approval becoming final after         exhaustion of any appeals or the time for such appeals having expired; or                ii.  that  the  courts  shall  have  finally  approved  resolutions  of the  Derivative        Actions  pursuant  to  Federal  Rule  of  Civil  Procedure  23.1  or  applicable  state  laws  and        procedures, or otherwise have dismissed the Derivative Actions, with such orders resolving        the Derivative Actions becoming final after exhaustion of any appeals or the time for such        appeals having expired;   are not met and are no longer capable of being met, then the Settlement Agreement shall be null  and void and of no force and effect in any respect except that the Parties will revert to the original  positions that they were in before any amounts transferred in Paragraph 2 above or Paragraph 13  below.  The Parties agree to use reasonable efforts to ensure that any exchange provides each Party  with value equivalent to that it possessed at the time of execution of this Settlement Agreement,  and that any disputes over value will be subject to binding arbitration before Layn Philips.         10.   Releases;  Unknown  Claims.   Upon  the  occurrence  of  all  of  the  conditions   precedent set forth in this Settlement Agreement (including those in Paragraph 9), the following   releases shall automatically and irrevocably be deemed to be valid, in full force and effect, and   binding on the Parties:                a.    AR  Capital  Parties  Releases.   The  AR  Capital  Parties,  on  behalf  of         themselves and their descendants, successors, heirs, legatees, devisees or trusts or family         limited partnerships created for the benefit of any of the foregoing, as well as on behalf of        the  AR  Capital  Parties’  parent  and  subsidiary  entities,  and  any  of  the  aforementioned        parties’ directors, officers, employees, agents, attorneys, advisors, and the successors and        assigns  of  each  of  the  foregoing  persons  and  entities  (collectively,  the  “AR  Capital         Released Parties”) hereby fully, finally, and forever compromise, settle, release, resolve,         relinquish, waive, and discharge VEREIT and VEREIT’s parent and subsidiary entities,         and each of their respective current and former shareholders, directors, officers, employees,         agents, auditors, accountants, attorneys, advisors and underwriters, and the successors and        assigns of each of the foregoing persons and entities (collectively, the “VEREIT Released         Parties”), from and against any and all claims, causes of action, liabilities, remedies, losses,         or obligations of every nature and description, whether known or unknown, whether or not         inchoate, whether arising under federal, state, common or foreign law, whether class or        individual in nature that the AR Capital Released Parties have or might have against any        of  the  VEREIT  Released  Parties,  including,  but  not  limited  to, all  rights,  claims,  or        obligations arising under (i) the Conformed Articles of Amendment and Restatement for        American Realty Capital Properties, Inc., (ii) the Bylaws of American  Realty  Capital        Properties, Inc., (iii) the Third Amended and Restated Agreement of Limited Partnership        of  ARC  Properties  Operating  Partnership,  L.P.,  (iv)  the  indemnification  agreements        between VEREIT, on the one hand, and the individual AR Capital Parties, on the other        hand,  (v)  the  employment  agreements  between  VEREIT,  on  the  one hand,  and  the        individual  AR  Capital  Parties,  on  the  other  hand,  (vi)  the  Amended  and  Restated     42350.0020042350.00200                                         5





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 117 of 136                                                                                                                                             EXECUTION COPY           Management  Agreement  by  and  between  American  Realty Capital  Properties,  Inc.  and        ARC  Properties  Advisors,  LLC,  dated  as  of  February  28,  2013  (the  “Management        Agreement”),  (vii)  the  Acquisition  and  Capital  Services  Agreement  by  and  between        American Realty Capital Properties, Inc. and American Realty Capital II, LLC, dated as of        September  6,  2011  (the  “Services  Agreement”),  (viii)  any  successor,  predecessor,  or        amended  contracts,  or  any  other  contracts,  agreements,  or  other  legally  operative        documents, and (ix) Maryland, Delaware, or New York state law.  Notwithstanding the        foregoing, the AR Capital Released Parties do not release any rights to advancement or        indemnification, whether under any prior written agreements with VEREIT including the        foregoing  (i)  through  (ix)  or  under  applicable  law,  for  any  claims,  demands,  losses  or        proceedings that arise out of, are based upon, or relate to in any way the allegations, acts,        transactions, facts, events, matters, occurrences, representations or omissions involved, set        forth, alleged or referred to, in the Actions, including but not limited to any claims asserted        or threatened to be asserted by an investor who elects not to participate in the settlement of        the Class Action or is not a member of the settlement class, including but not limited to the        claims asserted in the matters of Jet Capital Master Fund, L.P. v. American Realty Capital        Properties, Inc.,  No.  15  Civ.  307  (S.D.N.Y.)  and Lakewood Capital Partners, L.P. v.       American Realty Capital Properties, Inc., Index No. 653676-2019 (N.Y. Sup. Ct.) (the Jet        Capital and Lakewood actions, collectively, the “Opt-Out Actions”), and VEREIT will not        seek  any  separate  contribution  from  the  AR  Capital  Released  Parties  in  any  future        settlements of any such matters.  Each of the AR Capital Parties represent and warrant that,        as of the date of this Agreement, other than the Opt-Out Actions, they have not been sued        in any action, and they are not aware of any threatened action or pending investigation that        is unknown to VEREIT, that could give rise to advancement or indemnification under the        prior  sentence.   For  the  avoidance  of  doubt,  the  AR  Capital  Parties  agree  not  to  seek        indemnification or advancement for any action that relates predominantly to RCS Capital        Corporation,  including  without  limitation,  the  action  captioned RCS Creditor Trust v.        Schorsch et al., C.A. No. 2017-0178-SG (Del. Ch.).  The Parties also agree that unless and        until the AR Capital Parties obtain the release for VEREIT from the insurers that issued        the Side A Policies as contemplated in Paragraph 6.a, the AR Capital Parties’ rights to        indemnification (if any) for amounts paid out under the Side A Policies remain in full force        and effect, including, but not limited to, any rights of subrogation granted to the insurers        that issued the Side A Policies.  The Parties further agree that no release in this clause or        any other provision of this Settlement Agreement will limit the AR Capital Parties rights        to enforce Paragraphs 12 and 13 of this Settlement Agreement.               b.    VEREIT Releases.  VEREIT, on behalf of themselves and their parent and        subsidiary entities, and the successors and assigns of each of the foregoing persons and        entities (collectively, the “VEREIT Releasing Parties”) hereby fully, finally, and forever        compromise,  settle,  release,  resolve,  relinquish,  waive,  and  discharge  the  AR  Capital        Released Parties (as defined above) from and against any and all claims, causes of action,        liabilities, remedies, losses, or obligations of every nature and description, whether known        or unknown, whether or not inchoate, whether arising under federal, state, common or        foreign law, whether class or individual in nature that the VEREIT Releasing Parties have        or might have against any of the AR Capital Released Parties.  For the avoidance of any        doubt, pursuant to the foregoing VEREIT fully, finally and forever releases any rights,    42350.0020042350.00200                                        6





 






     Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 118 of 136                                                                                                                                               EXECUTION COPY             remedies, claims or causes of action related to the Subject Shares, as defined in Paragraph         9 of the Schorsch Agreement, dated December 12, 2014.                c.    Unknown Claims.  The Parties hereto acknowledge that there is a risk that         subsequent to the execution of this Settlement Agreement, a Party may discover, incur, or         suffer  from  claims  which  were  unknown  or  unanticipated  at  the  time  this  Settlement         Agreement was executed, including, without limitation, unknown or unanticipated claims         which, if known, may have materially affected a Party’s decision to execute this Settlement         Agreement (the “Unknown Claims”).  The Parties acknowledge that, subject to exceptions         set forth in the above clauses of this paragraph, they are assuming the risk of such Unknown         Claims.  The Parties expressly waive the benefits of any law that preserves claims not         known  or  suspected  to exist  in  their  favor  which,  if  known  or anticipated,  would  have         materially  affected  the  execution  of  this  Settlement  Agreement.  The Parties hereby         represent that they are not aware of any such Unknown Claims at this time, and the Parties         agree that this representation is a material term of this release of Unknown Claims.               d.    Bar Order.  VEREIT hereby agrees that, in connection with any resolution         of the Class Action involving entry of a bar order under the Private Securities Litigation         Reform Act or other applicable law, it will not seek any releases of claims against the AR         Capital Releasing Parties that are broader in scope than the releases set forth in subsection         (a) of this Paragraph.                e.    Survival.  Anything else in this Settlement Agreement notwithstanding, the         Parties  do  not  release  any  Party  from  any  claims  related  to  the  enforcement  of  this         Settlement Agreement.          11.   Covenant Not to Sue.  The AR Capital Released Parties covenant and agree not to   bring or maintain any claim against the VEREIT Releasing Parties that is released by Paragraph   10 of this Settlement Agreement.  The VEREIT Releasing Parties covenant and agree not to bring   or maintain any claim against the AR Capital Released Parties that is released by Paragraph 10 of   this Settlement Agreement.          12.   Fitracks.  The Parties agree that they will continue to comply with the orders of   the Delaware Court in the matter of Edward M. Weil v. VEREIT Operating Partnership, L.P., No.   CA 02017-0613-JTL, regarding fees incurred by counsel to the AR Capital Parties, including any   fees incurred through the date on which the conditions of Paragraph 9 of this Settlement Agreement   are met, but only for fees incurred (i) in connection with the Actions until the date on which the   conditions of Paragraph 9 of this Settlement Agreement are met, (ii) in connection with the Opt-  Out  Actions  until  such  time  as  resolution  of  the  Opt-Out  Actions  is  completed,  and  (iii)  in  connection with any newly filed action contemplated by the continuing indemnity set forth in  Paragraph 10.a.         13.   Sources Not Used to Fund Settlement.                a.    OP Units.  With respect to any existing OP Units held by the AR Capital         Released Parties not used by the AR Capital Parties to fund the AR Capital Settlement         Amount  (the  “Remaining  OP  Units”),  the  Parties  agree  that  VEREIT  will  redeem  the     42350.0020042350.00200                                         7





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 119 of 136                                                                                                                                             EXECUTION COPY           Remaining OP Units for cash or stock, at the election of VEREIT as set forth herein.  For        Remaining OP Units redeemed for cash, VEREIT will pay to the AR Capital Parties cash,        at the per-unit value as determined by the formula provided in Paragraph 3, on the date of        funding as described in Paragraph 1.  For Remaining OP Units redeemed  for common        stock, VEREIT will take the steps necessary to convert the OP Units and issue the common        stock  to  the  AR  Capital  Parties  on  the  later  of  (i)  the  date  of  funding  as  described  in        Paragraph  1  or  (ii)  the  first  business  day  following  January  1,  2020.   The  Parties  will        cooperate to agree upon the necessary and appropriate documentation to effectuate any        such  redemption,  including  any  redemption  notice  in  accordance with  the  Limited        Partnership Agreement of VEREIT Operating Partnership.               b.    Dividends/Distributions.  VEREIT agrees that to the extent any        dividends/distributions identified in Paragraph 2(iii) are not used by the AR Capital Parties        to fund the AR Capital Settlement Amount (the “Remaining Dividends/Distributions”),        such Remaining Dividends/Distributions will be paid to the AR Capital Parties on the date        of  funding  as  described  in  Paragraph  1.   The  value  of  the  Remaining        Dividends/Distributions is subject to upward adjustment for dividends/distributions on the        Remaining OP Units based on any additional dividends/distributions declared by VEREIT        to its common shareholders for which the record date occurs before the date of funding as       described in Paragraph 1.              c.    Interest.  VEREIT agrees that to the extent any interest is not used by the        AR Capital Parties to fund the AR Capital Settlement Amount (the “Remaining Interest”),        such Remaining Interest will be paid to the AR Capital Parties on the date of funding as        described in Paragraph 1.               d.    No  Defenses.   VEREIT  hereby  waives  any  argument  for  avoiding        compliance with the terms of this Paragraph 13 based on any claims or causes of actions        that were or could have been asserted in the Actions, including but not limited to any claims        for contribution, cross-claims, or claims that might have been brought by plaintiffs in the        Derivative Actions.         14.   Non-Disparagement.  Neither VEREIT nor the AR Capital Parties shall (i) make  any statement or comment which disparages, denigrates, impugns, or discredits any Party hereto,  or its business skills, practices, procedures or policies, relations with past or present employees, or  compliance or non-compliance with any laws or regulations, or (ii) act in any manner which is  intended to or does damage to business or personal reputation of any Party hereto; provided, that  nothing in clause (ii) shall limit any Party from conducting its business and affairs in the ordinary  course  even  if  such  ordinary  course  activity  has  or  may  have  an  adverse  effect  on  any  Party.  Nothing contained herein shall prohibit  any Party  from giving a  truthful response  to any  duly  served subpoena or discovery request in a pending litigation.  In addition, nothing contained herein  shall  prohibit  any  Party  from  making  truthful  statements  in  connection  with  any  litigation  concerning  the  Side  A  Policies  referred  to  in  Paragraph  6  hereof,  or  in  connection  with  any  communications with any regulator or government agency, or to any court in connection with any  matter, including the SEC Action.    42350.0020042350.00200                                        8





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 120 of 136                                                                                                                                             EXECUTION COPY           15.   Requirement to Reach Agreement in the Actions.  Notwithstanding any other  provision in this Settlement Agreement, unless agreement is reached within 15 calendar days of  the execution of this Settlement Agreement by all of the Parties to this Settlement Agreement on  the one hand, with all of the plaintiffs in the Actions on the other hand, to resolve all of the Actions  to the full satisfaction of all of the Parties to this Settlement Agreement, subject to agreement for  extensions of this period in writing among the Parties, then this Settlement Agreement will be  deemed terminated, will be null and void and will have no further force or effect.         16.   Binding Effect.  This Settlement Agreement, including the releases herein, shall  be binding upon and inure to the benefit of the Parties and their respective legal representatives,  successors, and assigns, and the other specified persons who are the beneficiaries of the releases.   Notwithstanding the foregoing, the terms of this Settlement Agreement may be enforced solely by  the  Parties  or  any  legal  representative,  successor,  or  assignee  of  any  Party  to  this  Settlement  Agreement, including by such person on behalf of any released person or entity that is not a party  to this Settlement Agreement.         17.   Entire  Agreement;  Written  Modifications  Only.   This  Settlement  Agreement  constitutes the entire agreement and understanding of the Parties relating to the subject matter  described herein, and shall supersede any prior and contemporaneous undertakings of the Parties  in  connection  therewith.   No  Party  has  made  any  representation or  warranty  to  another  Party  concerning the subject matter of the Settlement Agreement, except as expressly set forth herein.  This Settlement Agreement may not be altered, amended, or modified in any respect whatsoever,  except by a writing duly executed by the Parties.  This provision cannot be waived by subsequent  parol agreement or any actions or conduct of the Parties.         18.   Knowledge, Non-Reliance, and Assumption of Risk.  Each Party acknowledges,  represents  and  warrants  that  it  has  read  the  Settlement  Agreement  and  has  consulted  with  its  attorneys concerning the terms, conditions, and consequences of the Settlement Agreement, and,  based  on  that  review,  fully  comprehends  the  legal  and  practical  import  of  the  Settlement  Agreement.  Each Party further acknowledges and represents that such Party is entering into the  Settlement  Agreement  voluntarily  and  in  reliance  upon  its  respective  judgment,  belief,  and  knowledge of the Settlement Agreement, and on the advice of its own selected attorneys.         19.   Severability.  If any provision of this Settlement Agreement, other than Paragraphs  1  through  15,  is  determined  by  a  final,  non-appealable  judgment  of  a  court  of  competent  jurisdiction to be illegal, invalid, or unenforceable, such determination shall not affect the balance  of this Settlement Agreement, which shall remain in full force and effect as such illegal, invalid,  or unenforceable provision shall be deemed severable.         20.   Drafter.  None of the Parties to this Settlement Agreement shall be considered to  be the drafter of this Settlement Agreement or any of its provisions for the purpose of any statute,  case law, or rule of interpretation or construction that would or might cause any provision to be  construed against the drafter.         21.   Choice  of  Law;  Binding  Arbitration.   This  Settlement  Agreement  shall  be  governed by and construed, enforced, and performed in accordance with the law of the State of  New York, without regard to any otherwise applicable rules relating to conflicts of laws.  With    42350.0020042350.00200                                        9





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 121 of 136                                                                                                                                             EXECUTION COPY     respect to any dispute between the Parties regarding, related to, or arising out of this Settlement  Agreement, the Parties agree to submit to the exclusive jurisdiction of Judge Layn R. Phillips of  Phillips ADR for binding arbitration.  Any petition to confirm or vacate an award arising from  such arbitration shall be brought in the United States District Court for the Southern District of  New York, if it has or can acquire jurisdiction, or if it does not or cannot acquire jurisdiction, then  the courts of the State of New York in New York County.         22.   Prevailing  Party  Attorneys’  Fees.   Should  any  Party  institute  any  action  or  proceeding to enforce any provision of this Settlement Agreement or for damages by reason of any  alleged breach of any provision of this Settlement Agreement, the prevailing Party shall be entitled  to  recover  from  the  other  Party  all  costs  and  expenses  (including  reasonable  attorneys’  fees)  incurred by such prevailing Party in connection with such action or proceeding.         23.   Authority.  Each person signing this Settlement Agreement hereby represents and  warrants that she or he is authorized to sign this Settlement Agreement on behalf of the applicable  Party or Parties listed below.          24.   Headings. The headings set forth in this Settlement Agreement have been inserted  for  the  convenience  of  reference  only.   Such  headings  shall  not be considered a part of this  Settlement Agreement, and neither shall they limit, modify, or affect in any way the meaning or  interpretation of this Settlement Agreement.         25.   Counterparts.  This Settlement Agreement may be executed in counterparts and,  as so executed, shall constitute one and the same agreement, and shall be binding on the Parties.   A copy, PDF, or facsimile of a signature on this Settlement Agreement shall have the same force  and effect as an original signature                               [Execution Pages Follow]    42350.0020042350.00200                                        10





 






Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 122 of 136                                                         EXECUTION COPY





 






Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 123 of 136                                                                       EXECUTION COPY     Edward M. Weil, Jr.      Chief Executive Officer     Edward M. Weil, Jr.      Chief Executive Officer





 






Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 124 of 136             EXHIBIT F                                   42350.00400





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 125 of 136                                                     EXECUTION COPY 9/8/2019                     SIDE LETTER TO SETTLEMENT AGREEMENT         Reference is made to the Agreement Regarding Settlement, Contribution, and Release (the  “Settlement  Agreement”),  executed on  August  23,  2019,  between  and  among  the  undersigned  Parties.   Capitalized  terms  used  herein  have  the  same  meaning  as  provided  in  the  Settlement  Agreement.  This side letter, dated September 8, 2019 (the “Side Letter”), is executed between and  among the Parties to the Settlement Agreement.  The Parties hereby agree as follows:         1.    Class Action Payment.  The Parties agree that VEREIT will be solely responsible  for funding $31,972,934 of the $225,000,000 set forth in paragraph 2(a)(ii) of the memorandum  of understanding with the plaintiffs in the Class Action (the “Class MOU”).         2.    Derivative Actions.  With respect to the Derivative Actions, the Parties agree, in  addition to the applicable terms of the Settlement Agreement, that:               a. the final release agreed to for the Derivative Action before the Court (Witchko)                 will be drafted to make clear that (i) the release includes all claims that were or                 could have been brought in any of the Derivative Actions and (ii) in the event                 that any Derivative Action is not resolved, VEREIT will provide advancement                 and indemnification to the AR Capital Parties to the fullest extent permitted                 under the Parties’ prior written agreements or applicable law;               b. VEREIT  will  argue,  in  any  Derivative  Action  that  is  not  resolved,  that  the                 release described in Paragraph 2(a) should extinguish such Derivative Action;               c. in the event any Derivative Action remains unresolved following Paragraphs                 2(a) and 2(b), VEREIT will (i) enter into a separate settlement agreement to                 resolve any such Derivative Action based entirely on the AR Capital Parties’                 prior payment of the AR Capital Settlement Amount and (ii) take the position                 in any such Derivative Action that no further contribution is required from the                 AR Capital Parties to resolve such Derivative Action;               d. in the event any Derivative Action remains unresolved following Paragraphs                 2(a), 2(b) and 2(c), VEREIT will take the position in any such Derivative Action                 that the AR Capital Settlement Amount must be credited as having been paid                 by the AR Capital Parties to any future resolution of such Derivative Action;                e. in the event any Derivative Action remains unresolved following Paragraphs                 2(a),  2(b),  2(c)  and  2(d),  and  a final,  non-appealable  judgment  is  rendered                 against any one or more of the AR Capital Parties, which the AR Capital Parties                 are  required  to  pay,  then  the  AR  Capital  Parties  shall  be  entitled  to                 reimbursement of that portion of their previous contributions to the Settlement                 Fund  necessary  to  fund  such  judgment  up  to  a  maximum  amount  of $225                 million.    For the avoidance of doubt, no such reimbursement will be required                 to the extent that the AR Capital Parties are reimbursed by VEREIT pursuant                 to some other agreement, right of indemnification or otherwise; 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 126 of 136                                                     EXECUTION COPY 9/8/2019                  f. the  Settlement  Agreement  shall  not  terminate  (and  therefore,  shall  not  be                 deemed to be null and void or of no force or effect) on account of the fact that                 resolution of any of the Derivative Actions, other than the Witchko Action, has                 not been finally approved by the court in which such action is pending and is                 not capable of being so approved.         3.    Secondary Agreement.  In the event that the Secondary Agreement, as defined in  the memorandum of understanding for the Derivative Action before the Court (the “Derivative  MOU”),  is  determined  to  be  invalid  and  the  circumstances  set  forth  in  Paragraph  9(d)  of  the  Derivative MOU become operative, the Parties agree that in connection with any resolution of, or  judgment in, any litigation between the ARC Parties and VEREIT, VEREIT will apply a credit to  any amount owed by the ARC Parties as part of the litigation, whether by settlement or litigation,  of  $31,972,934,  representing  the  value  of  the  OP  Units  and  associated  dividends/distributions  surrendered to VEREIT  in connection with the settlement entered into by certain of the ARC  Parties with the Securities and Exchange Commission in July 2019.         4.    OP Unit Disposition.  VEREIT represents that, for any OP Units surrendered by  the  AR  Capital  Parties  to  fund  the  AR  Capital  Settlement  Amount  under  Paragraph  2  of  the  Settlement  Agreement,  VEREIT’s  current  intention  is  to  cancel  such  OP  Units  at  the  time  of  funding  as  provided  in  Paragraph  1  of  the  Settlement  Agreement.   VEREIT  agrees  to  use  commercially reasonable efforts to effectuate its current intention as stated in this Paragraph.         5.    OP Unit Dividends/Distributions.  The Parties agree that, to the extent that the  AR Capital Parties elect to fund the AR Capital Settlement Amount with dividends/distributions  as described in Clause (iii) of Paragraph 2 of the Settlement Agreement, VEREIT shall treat such  dividends/distributions as distributions with respect to the OP Units for U.S. federal income tax  purposes and shall take no position inconsistent with such treatment.         6.    Remaining OP Units.  The Parties agree that at the time the AR Capital Parties  provide notice to VEREIT of the OP Units to be used to fund the AR Capital Settlement Amount  as provided in Paragraph 3 of the Settlement Agreement, the AR Capital Parties will provide notice  of:  (i)  how  many  OP  Units  should  be  cancelled  and  used  directly  to  fund  the  settlement  (the  “Cancelled OP Units”); and (ii) how many OP Units should be redeemed in exchange for the cash  value as determined in Paragraph 3 of the Settlement Agreement (the “Redeemed OP Units”).  The  Redeemed OP Units cannot exceed 5 million units.  No later than 10:00a.m. EST two (2) business  days before the funding date as defined in Paragraph 2 of the Class MOU, the AR Capital Parties  will  specify  (i)  what  portion  of  the  Redeemed  OP  Units  will  be used  to  fund  the  AR  Capital  Settlement Amount and (ii) what portion of the Redeemed OP Units will not be used to fund the  AR Capital Settlement Amount.  No later than 10:00a.m. EST on the business day prior to the  funding date as defined in Paragraph 2 of the Class MOU, VEREIT will (i) pay the cash value (as  determined by Paragraph 3 of the Settlement Agreement) of the portion of the Redeemed OP Units  used to fund the AR Capital Settlement Amount into an escrow account designated by counsel for  the  AR  Capital  Parties  for  use solely  in  connection  with  funding  the  AR  Capital  Settlement  Amount and (ii) pay the cash value (as determined by Paragraph 3 of the Settlement Agreement)  of the portion of the Redeemed OP Units not used to fund the AR Capital Settlement Amount  directly to the AR Capital Parties as specified by their counsel.  As long as the AR Capital Parties  provide a FIRPTA Certificate as defined in, and in accordance with, Section 8.04(e) of the Third                                         2 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 127 of 136                                                     EXECUTION COPY 9/8/2019      Amended and Restated Agreement of Limited Partnership of VEREIT Operating Partnership, LP,  VEREIT agrees that it will not withhold any portion of these amounts for U.S. federal, state or  local income tax purposes, nor any portion of any amounts paid pursuant to Paragraph 13 of the  Settlement Agreement for U.S. federal, state or local income tax purposes.  The Parties agree that  the total cash value of the Cancelled OP Units and the Redeemed OP Units will not exceed $200  million.  Any OP Units not included as Cancelled OP Units or Redeemed OP Units will be treated  as Remaining OP Units in accordance with Paragraph 13(a) of the Settlement Agreement.  For all  Remaining OP Units for which the AR Capital Parties elect to redeem on the date provided in  Paragraph 3 of the Settlement Agreement other than the Redeemed OP Units:               a. if VEREIT elects to redeem for cash, at its discretion, such redemption will be                 subject to the terms of Paragraph 13(a) of the Settlement Agreement; and               b. if VEREIT elects to redeem for common stock, VEREIT will take the steps                 necessary to convert the Remaining OP Units and issue common stock to the                 AR Capital Parties by either, at the election of the AR Capital Parties, (i) the                 date of funding as defined in paragraph 1 of the Settlement Agreement or (ii)                 the first business day following January 1, 2020.  The AR Capital Parties must                 provide notice of whether they choose option (i) or (ii) in this paragraph at the                 time  they  provide  the  notice  required  by  paragraph  3  of  the  Settlement                 Agreement.         7.    Retained OP Units.  The Parties agree that the AR Capital Parties are not required  to provide notice of redemption of all Remaining OP Units on the date provided in Paragraph 3 of  the  Settlement  Agreement,  and  that  the  AR  Capital  Parties  may  retain  possession  of  certain  Remaining OP Units (the “Retained OP Units”).  As to the Retained OP Units, the Parties agree:               a.    Upon receipt of written notice of a redemption of all or any portion of the                    Retained OP Units, VEREIT will redeem such Retained OP Units per the                    terms of Section 8.04(a) of VEREIT’s limited partnership agreement as it                    exists on the date of execution of this Side Letter; provided that, for any                    redemption made pursuant to this Paragraph, VEREIT hereby waives any                    and  all  rights  under  Paragraphs  8.04(b)  and  (d)  of  the  VEREIT  limited                    partnership  agreement  as  it  exists  on  the  date  of  execution  of this  Side                    Letter, subject to any change required by law.               b.    VEREIT acknowledges that the releases provided by VEREIT to the AR                    Capital  Parties  in  paragraph  10(b)  of  the  Settlement  Agreement include                    releases of any rights or claims to return of the Retained OP Units.  VEREIT                    expressly  waives  any  argument  for  avoiding  compliance  with  this                    Paragraph of the Side Letter based on any claims or causes of action that                    were or could have been asserted in the Actions, including but not limited                    to any claims for contribution, cross-claims, or claims that might have been                    brought by plaintiffs in the Derivative Actions.              c.    To  the  extent  legally  permissible  under  U.S.  federal  income  tax laws,                    VEREIT will continue to treat each of the AR Capital Parties that holds                                         3 





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 128 of 136                                                     EXECUTION COPY 9/8/2019                        Retained OP Units as having a deficit restoration obligation under Section                    5.06(d)  of  the  Third  Amended  and  Restated  Agreement  of  Limited                    Partnership  of  VEREIT  Operating Partnership,  L.P.  (the  “LPA”)  and  a                    corresponding debt allocation at least equal to the amount of such deficit                    restoration obligation.  VEREIT and the AR Capital Parties agree to work                    in good faith to execute within seven (7) days following the execution of                    this Side Letter, but in any event no later than one day prior to the date of                    funding  under  this  Side  Letter,  a  side  letter  (the  “DRO  Side  Letter”)  to                    increase  the  AR  Capital  Parties’  deficit  restoration  obligations  under                    Section 5.06(d) of the LPA to an amount not to exceed $92,000,000.  The                    Parties agree that the deficit restoration obligations under the DRO Side                    Letter  are  intended  to comply  with  Treasury Regulations  Section  1.704-                   1(b)(2)(ii).         8.    Interest on Class Settlement.  The Parties agree that to the extent any obligation  to pay interest under paragraph 2(a)(ii) of the memorandum of understanding entered into with the  plaintiffs in the Class Action arises, that VEREIT will reimburse the AR Capital Parties for such  interest obligation on (i) the $31,972,934 already deemed to be in VEREIT’s custody, and (ii) 50%  of such obligation on the remaining $193,027,066, with such reimbursement provided to the AR  Capital Parties no later than one (1) business day after such amounts come due.         9.    Conflict  with  Class  and  Derivative  Memoranda  of  Understanding.  Contemporaneously  herewith, the Parties are  entering  into the  Class  MOU  and  the  Derivative  MOU (collectively, the “MOUs”).  The Parties agree that to the extent there is any conflict between  the MOUs (or the further definitive agreements contemplated by the MOUs) and a provision of  the Settlement Agreement that has not been modified by this Side Letter, the MOUs (or the further  definitive agreements contemplated by the MOUs) shall control.         10.   Requirement  to  Reach  Agreement  in  the  Actions.   The  Parties  agree  that  Paragraph 15 of the Settlement Agreement, including its heading, shall be amended as follows:               a. the  word  “Actions”  is  replaced  with  the  phrase  “the  Class  Action  and  the                 Witchko Action”; and               b. the phrase “15 calendar days” is replaced with the phrase “20 calendar days”.         11.   Written Modifications Only.  The Parties agree that this Side Letter constitutes a  written modification as permitted by Paragraph 17 of the Settlement Agreement.           12.   Incorporation of Terms.  The Parties agree to incorporate the terms of Paragraphs  16, and 18 through 25 of the Settlement Agreement into this Side Letter, and agree that those terms  will apply as though they had been separately set out in this Side Letter.                               [Execution Pages Follow]                                                                                     4 





 






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    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19EXECUTIO   PageN 130COP ofY 1369/8/2019    EXECUTED AND AGREED:    VEREIT, INC.    By:                                       NICHOLAS  S. SCHORSCH   Title:    VEREIT OPERATING PARTNERSHIP,   L.P.    By:  VEREIT, INC.                                             SHELLEY  SCHORSCH    By:   Title:    AR CAPITAL, LLC                                             PETER M. BUDKO    By:   Title:    ARC PROPERTIES ADVISORS, LLC    By:                                       WILLIAM M. KAHANE   Title:                                               EDWARD M. WEIL 





 






Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 131 of 136             EXHIBIT G                                   42350.00400





 






 Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 132 of 136        SIDE LETTER AGREEMENT BETWEEN           BRIAN BLOCK AND VEREIT,       INC.                                   September 7,  2019   This email reflects the terms on which Br1an Block and VEREIT have agreed to settle  the class and derivative actions, consistent with the terms of the Derivative MOU and  the Class MOU  that are being entered into contemporaneously herewith:          First, the releases are set forth in the Class MOU and Derivative MOU.         Additionally, Brian has been released or will be released from any settled or         pending opt-out actions, including Jet Capital and Lakewood.      •   Second, Brian agrees that, as part of a Global Settlement, he will surrender to         VEREIT the 631,872 ARCP   OP  units that he claims to own (the "OP Units") and        to relinquish to VEREIT his rights to the dividends allegedly due and payable on        the aforementioned ARCP   OP  units in the amount of $1,369,577. The OP Units        will be valued based on the average trading price of one share of VEREIT         common  stock on the flfth trading day after the agreement to settle the class         action is publicly announced.      •   Third, Brian agrees that, as part of a Global Settlement, he will also pay to         VERE IT cash sufficient to bring the value of the OP Units and cash to a total of         $12.5 million.      •   Fourth, Brian agrees that, as part of a Global Settlement, he will release VEREIT        from all claims that he has against VEREIT and its affiliates, including but not         limited to his claims related to the accrued benefits that he alleges they have        failed to pay to him - in particular approximately $20,000 in expense         reimbursements and  $1,400,000 in life insurance premium payments, payments        that were specifically contemplated by ARCP in Brian's resignation letter. For         your reference, we have excerpted the relevant passage of the resignation letter        below:             o  I hereby confirm that beginning immediately I am not entitled to any               payments or benefits of any kind from the Company, other than (a) any               earned and unpaid Base Salary, expense reimbursements,    and pay in               lieu of any accrued but unused vacation, in each case, due and owing only               up to and including October 27, 2014, and (b) other accrued and vested               benefits due in accordance with the Company's retirement, pension or               benefit plans (other than the Retention Award, the OPP Award and any               other Equity Unit awards referenced in the Employment Agreement.)                   •  Section 5(d)(iv) under the heading "BENEFITS," states in relevant                     part that "As soon as practicable after the Effective Date, the                     Company shall  purchase an additional whole life policy on the life of                      the Executive in the amount of $7.5 million." In addition 1 on the                                            - 1 - 4811-2652-6626v2 





 






 Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 133 of 136                       night of October 28, 2014, Mr. Block had contemporaneous                     conversations with Nicholas Schorsch, David Kay, and Richard                      Silfen who confirmed that the life insurance policy was covered by                     this provision.      •   Fifth, VEREIT agrees that following the date on which all parties sign the         Memorandum of Understanding memorializing the terms of the Global Settlement         ("MOU" "MOU   Execution Date") VERE IT will promptly meet any advancement         obligations for legal fees and expenses incurred by Brian on any date up to and         including the MOU Execution Date ("Pre-MOU  Fees and Expenses") consistent         with past practice and procedures that VEREIT has employed until the MOU         Execution Date for advancing fees. VERE IT agrees to surrender whatever rights         it has to clawback any Pre-MOU Fees and Expenses and  Block releases any         claim to any amounts that were deducted by VEREIT for invoices already paid as         of the MOU Execution Date. VE REIT  agrees that it will continue to indemnify         and advance funds sufficient to cover the legal fees and expenses incurred by         Brian for services rendered after the MOU Execution Date ("Post-MOU Fees and         Expenses") in connection with the pending criminal matter and the actions that         are the subject of this Global Settlement, consistent with past practices and         procedures, but VERE IT will maintain its rights to seek a claw back of the Post-        MOU  Fees and  Expenses consistent with applicable law. Otherwise, Brian will         release any further claims to indemnity or advancement.      •   Sixth, Brian agrees to waive and release any claim of any kind whatsoever on         any insurance policy that might be used to satisfy any or all of a settlement,        judgment,  or verdict in any action arising from or related to the subject matters at         issue in the actions listed in Paragraph "Firsf' above, including, but not limited to,         the following excess difference in conditions insurance policies covering a policy         period from February 7, 2014 through February 7, 2015: (i) Westchester Fire         Insurance Company Policy No. G243714402002,    (ii) STARR Policy No.         SISIXFL21156814,  (iii) RSUI Policy No. NHS655965, and (iv) AXIS Policy No.         MN H779259/01 /2014.      •  Finally, VEREIT represents that it has not assigned, subrogated, or in any way        transferred or encumbered any rights it has to pursue damages from Brian,         including, but not limited to VEREIT's rights to seek a clawback of Pre-MOU         Fees and Expenses and  Post-MOU   Fees and Expenses.    EXECUTED AND AGREED:                                            - 2 - 4811-2 652-6626v2 





 






  Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 134 of 136                                             MILBANK LLP, on behalf ofVEREIT                                        . 3 .  4811-2652-6626v2 





 






Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 135 of 136             EXHIBIT H                                   42350.00400





 






    Case 1:15-cv-06043-AKH   Document 287-1   Filed 10/02/19   Page 136 of 136   Notwithstanding Paragraph 12 of the Memorandum of Understanding among the parties to the  Derivative Actions (Derivative Action MOU), Grant Thornton and VEREIT enter into this side  agreement which contains the following additional terms, which are binding between the parties.  The defined terms of the Derivative MOU shall have the same meaning here.    The parties agree that:       (1) After the execution of the Derivative Action MOU, VEREIT and its counsel will use      commercially reasonable efforts to settle or otherwise terminate any Derivative Action      naming Grant Thornton prior to the approval of the Derivative Settlement or the Secondary      Agreement becoming effective as set forth in Paragraph 4 of the Derivative MOU.       (2) VEREIT has had or will seek to have its Board of Directors exercise its reasonable      business judgment to determine whether it is in the best interests of VEREIT to resolve      claims asserted against Grant Thornton in any Derivative Action naming Grant Thornton      on the terms as set forth in the Derivative MOU, given, among other things, the strength      and weakness of VEREIT’s claims and defenses against Grant Thornton, the strength and      weakness of the defenses and counterclaims of Grant Thornton, the value of finality of the      matters arising from the events in question and the value of avoiding additional time and      expense of continued litigation.