ARCP 12.31.2013 - EX 10.42


Exhibit  10.42




ASSET PURCHASE AND SALE AGREEMENT
This ASSET PURCHASE AND SALE AGREEMENT (the “Agreement”) is entered into as of January 8th, 2014 by and among ARC Properties Operating Partnership, L.P., a Delaware limited partnership (the “Buyer”), and ARC Properties Advisors, LLC, a Delaware limited liability company (the “Seller”).
RECITALS
A.    In connection with (i) the termination of the Management Agreement between American Realty Capital Properties, Inc. (“ARCP”) and the Seller and (ii) ARCP becoming self-managed, the Seller wishes to sell and reimburse, and the Buyer wishes to purchase and accept, all of the Purchased Assets and the Reimbursed Expenses upon the terms and subject to the conditions set forth in this Agreement.
AGREEMENT
In consideration of the mutual agreements and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I 
 
SALE AND PURCHASE OF ASSETS; CLOSING
1.1    Certain Terms.  Certain capitalized terms used in this Agreement are defined in Article IV.
1.2    Sale and Purchase of the Purchased Assets and Payment of the Reimbursed Expenses.
(a)    Purchased Assets.  Upon the terms and subject to the conditions of this Agreement, the Seller hereby sells, conveys, assigns, transfers and delivers to the Buyer, and the Buyer hereby purchases, free and clear of all Encumbrances, all right, title and interest of the Seller in and to all of the Purchased Assets.
(b)    Excluded Assets and Liabilities.  Notwithstanding any other provision of this Agreement to the contrary, any Assets of the Seller other than the Purchased Assets are not part of the sale and purchase contemplated hereunder, are excluded from the Purchased Assets and shall remain the property of the Seller after the Closing.  The Buyer does not, and shall not be deemed to, assume or otherwise be responsible for any Liabilities of the Seller (including, without limitation, any Liabilities arising out of or relating to the Purchased Assets), all of which shall remain Liabilities of the Seller.  The Seller shall pay, perform and discharge all of its Liabilities encumbering directly or indirectly any of the Purchased Assets in full at or prior to the Closing.
1.3    Payment of Purchase Price.  The total consideration for the Purchased Assets and the payment of the Reimbursed Expenses is $10,000,000.00 (the “Purchase Price”), payable in cash, by wire transfer of immediately available funds to an account designated in writing by the Seller.









1.4    The Closing.  The purchase and sale provided for in this Agreement shall take place at a closing (the “Closing”) at the offices of Proskauer Rose LLP, Eleven Times Square, New York, New York, on the date hereof.
1.5    Payment of Purchase Price; Closing Deliveries.  
(a)    At or prior to the Closing, the Seller shall deliver to the Buyer:
(i)    the Purchased Assets;
(ii)    a Bill of Sale and General Assignment in the form of Exhibit A hereto dated the Closing Date and duly executed by the Seller;
(iii)    such other bills of sale, assignments, deeds, certificates of title, documents and other instruments of transfer and conveyance as may reasonably be requested by the Buyer to convey title to the Purchased Assets, each in form and substance satisfactory to the Buyer dated the Closing Date and duly executed by the Seller;
(iv)    releases of all Encumbrances, if any, on the Purchased Assets; and
(v)    such other documents as the Buyer may reasonably request to effect the transactions contemplated by this Agreement.
(b)    At or prior to the Closing, the Buyer shall deliver to the Seller the Purchase Price in accordance with Section 1.3.
1.6    AS-IS.  EXCEPT AS EXPRESSLY SET FORTH HEREIN, THE PURCHASED ASSETS ARE BEING PURCHASED AND SOLD ON AN “AS-IS” BASIS, FREE AND CLEAR OF ANY ENCUMBRANCES, WITHOUT ANY REPRESENTATION OR WARRANTY OF ANY KIND OR NATURE, EITHER EXPRESS, IMPLIED OR OTHERWISE.
ARTICLE II     
 
CERTAIN OTHER AGREEMENTS
Tax Matters.  All transfer, documentary, sales, use, stamp, registration and other taxes, and all conveyance fees, recording charges and other fees and charges (including any penalties and interest), incurred in connection with the transactions contemplated by this Agreement shall be paid when due by the Seller.
ARTICLE III     
 
DEFINITIONS
3.1    Certain Definitions.  In this Agreement, the following terms have the meanings set forth below, which shall be equally applicable to both the singular and plural forms.  Any agreement referred to below shall mean such agreement as amended, supplemented and modified from time to time to the extent permitted by the applicable provisions thereof and by this Agreement.
 “Agreement” means this Asset Purchase and Sale Agreement.

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“ARCP” has the meaning set forth in the recitals of this Agreement.
 “Assets” means all properties, assets and rights of every kind, nature and description whatsoever whether tangible or intangible, real, personal or mixed, fixed or contingent, choate or inchoate, known or unknown, wherever located of the Seller.
“Buyer” has the meaning set forth in the first paragraph of this Agreement.
“Closing” has the meaning set forth in Section 1.4.
“Closing Date” means the date and time as of which the Closing actually takes place.
 “Encumbrance” means any charge, claim, community property interest, condition, easement, covenant, Contract, commitment, warrant, demand, encumbrance, equitable interest, lien, mortgage, option, purchase right, pledge, security interest, right of first refusal, or other rights of third parties or restriction of any kind, including, without limitation, any restriction on use, voting, transfer, receipt of income or dividends, or exercise of any other attribute of ownership.
 “Liability” means any liabilities or obligations of any kind whatsoever (whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, due or to become due, and whether or not reflected or required by United States generally accepted accounting principles to be reflected as such).
 “Purchase Price” has the meaning set forth in Section 1.3.
“Purchased Assets” means the Assets set forth on Exhibit B hereto.
“Reimbursed Expenses” means the costs and expenses set forth on Exhibit B hereto.
“Seller” has the meaning set forth in the first paragraph hereof.
“Transaction” has the meaning set forth in the recitals of this Agreement. 
“Transaction Documents” means this Agreement, the Bill of Sale and General Assignment and all other instruments and certificates contemplated hereunder to be delivered by any party hereto at or prior to the Closing.


ARTICLE IV     
 
MISCELLANEOUS
4.1    Notices.  All notices, requests, communications and demands to or upon the respective parties hereto to be effective shall be in writing (including by fax), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered against receipt or upon actual receipt of (i) personal delivery, (ii) delivery by reputable overnight courier, (iii) delivery by facsimile transmission with telephonic confirmation or (iv) delivery by registered or certified mail, postage prepaid, return receipt requested, addressed as set forth below (or to such other address as may be hereafter notified by the respective parties hereto in accordance with this Section 5.2):
		
	The Buyer:
	ARC Properties Operating Partnership, L.P. 
405 Park Avenue, 15th Floor 




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New York, New York 10022 
Facsimile No.:  (212) 421-5799 
Attention:  Nicholas S. Schorsch
with a copy to:
Proskauer Rose LLP 
Eleven Times Square 
New York, New York 10036 
Facsimile No.:  (212) 969-2900
Attention:  Peter M. Fass, Esq. 
  Steven L. Lichtenfeld, Esq.
		
	The Seller:
	ARC Properties Advisors, LLC


c/o AR Capital, LLC
405 Park Avenue, 15th Floor 
New York, New York 10022 
Facsimile No.:  (212) 421-5799 
Attention:  William M. Kahane
with a copy to:
Proskauer Rose LLP 
Eleven Times Square 
New York, New York 10036 
Facsimile No.:  (212) 969-2900
Attention:  Peter M. Fass, Esq. 
  Steven L. Lichtenfeld, Esq.
4.2    Expenses.  Except with respect to the Reimbursed Expenses, each of the parties will bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby.
4.3    No Third-Party Beneficiaries.  This Agreement shall not confer any rights or remedies upon any Person other than the parties hereto and their respective successors and permitted assigns.
4.4    Consent to Jurisdiction; Service of Process.  Each party to this Agreement irrevocably consents and agrees that any Proceeding commenced by it arising out of or relating to this Agreement or any of the Transaction Documents shall be brought only in the United States District Court for the Southern District of New York or, in the event such court does not have subject matter jurisdiction over such Proceeding, in courts of the State of New York sitting in the Borough of Manhattan, City of New York.  Each party hereby (i) irrevocably accepts and submits to the jurisdiction of each of the aforesaid courts in personam, (ii) irrevocably and unconditionally waives any objection to the laying of venue in either of the aforesaid courts, and (iii) irrevocably and unconditionally waives and agrees not to plead or assert the claim that either of the aforesaid courts is not a convenient forum with respect to any such Proceeding or other similar defense or doctrine.  Process in any such Proceeding may be served on any party in any manner provided by law.
4.5    Governing Law.  This Agreement will be governed by the internal laws of the State of New York.
4.6    Further Assurances.  The parties agree, without further consideration, (i) to furnish upon request to each other such further information, (ii) to execute and deliver to each other such other 

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documents, and (iii) to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the transactions contemplated by this Agreement and the other Transaction Documents.  From and after the Closing, all mail, payments or other amounts, checks, documents and packages pertaining to the Purchased Assets received by the Seller shall be promptly delivered (unopened, if applicable) by the Seller to the Buyer.
4.7    Amendments and Waivers.  No amendment or waiver of any provision of this Agreement shall be valid unless in writing and signed by the party to be charged with such amendment or waiver.  No waiver by any party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.
4.8    Entire Agreement.  This Agreement supersedes all prior agreements between the parties with respect to its subject matter and constitutes (together with the other Transaction Documents and any other documents referred to in this Agreement) a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter.  The exhibits identified in and attached to this Agreement are incorporated herein by reference and shall be deemed as fully a part hereof as if set forth herein in full.
4.9    Assignments, Successors and No Third-Party Rights.  The Seller may not assign any of its rights or obligations under this Agreement without the prior consent of the Buyer except that the Buyer may assign any of its rights under this Agreement to any Affiliate of the Buyer.  Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of the successors and permitted assigns of the parties.  
4.10    Severability.  Any term of this Agreement which would be invalid or unenforceable as written shall be deemed limited in scope and/or duration to the extent necessary to render it enforceable.  The determination of any court that any provision is invalid or unenforceable shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity of the offending term or provision in any other situation or in any other jurisdiction.
4.11    Construction.  The parties have participated jointly in the drafting of this Agreement, and each party was represented by counsel in the negotiation of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.
4.12    Waiver of Legal Conflicts.  Each of the Seller and the Buyer acknowledges and agrees that, at their request, Proskauer Rose LLP acted as counsel to both such parties in connection with this Agreement, the other Transaction Documents, the sale of the Purchased Assets and the payment of the Reimbursed Expenses. Accordingly, each of the parties agrees to, and does, waive any conflict of interest which may be deemed to arise as the result of such representation and agrees not to seek to disqualify or otherwise prevent Proskauer Rose LLP from representing the other party hereto (or any other clients of Proskauer Rose LLP) in any matters by reason of its work on, or representation of, such party in connection with this Agreement, the other Transaction Documents, the purchase and sale of the Purchased Assets and the payment of the Reimbursed Expenses, or its possession of confidential information relating to such party.  Proskauer Rose LLP shall be entitled to rely upon this Section 5.14 as a third party beneficiary hereof.

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4.13    Counterparts; Facsimile.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument.  Original signatures hereto and to other Transaction Documents may be delivered by facsimile which shall be deemed originals.
* * *
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first written above.
	
		
	 
	BUYER:

	 
	 

	 
	ARC PROPERTIES OPERATING PARTNERSHIP, L.P. 


By:  AMERICAN REALTY CAPITAL PROPERTIES, INC.
        its general partner

	 
	

By: /s/ Nicholas S. Schorsch

	 
	Name: Nicholas S. Schorsch

	 
	Title:  Chief Executive Officer

	 
	 

	 
	 

	 
	SELLER:

	 
	 

	 
	ARC PROPERTIES ADVISORS, LLC



	 
	

By:  AR Capital, LLC 

	 
	        its sole member



	 
	By: /s/ William M. Kahane

	 
	Name: William M. Kahane

	 
	Title:   Manager

	 
	 










Exhibit A


BILL OF SALE AND GENERAL ASSIGNMENT




KNOW ALL MEN BY THESE PRESENTS, that ARC Properties Advisors, LLC, a Delaware limited liability company (the “Seller”), for and in consideration of the sum of One and No/100 Dollars ($1.00) and other good and valuable consideration paid to it by ARC Properties Operating Partnership, L.P., a Delaware limited partnership (the “Buyer”), pursuant to that certain Asset Purchase and Sale Agreement (the “Purchase Agreement”), dated as of January 8, 2014, by and between the Buyer and the Seller, the receipt and sufficiency of which are hereby acknowledged, does hereby sell, convey, transfer, grant, assign and deliver to the Buyer, on the terms and subject to the conditions in the Purchase Agreement, all of its right, title and interest in and to all of the Purchased Assets.  Capitalized terms used but not defined herein have the meanings given to them in the Purchase Agreement.


TO HAVE AND TO HOLD, all and singular, the aforesaid Purchased Assets unto the Buyer, its successors and assigns forever for it and their own use forever.


The Seller covenants and agrees to warrant and defend the sale, conveyance, transfer, grant, assignment and delivery of the Purchased Assets hereby made against all persons whomsoever, and to take all steps reasonably necessary to establish the record of the Buyer’s title to the Purchased Assets.


IN WITNESS WHEREOF, the Seller has executed and delivered this Bill of Sale and General Assignment as of this 8th day of January, 2014.




	
		
	 
	SELLER:

	 
	 

	 
	ARC PROPERTIES ADVISORS, LLC

	 
	 

	 
	BY: AR CAPITAL, LLC
       its sole member





	 
	By: /s/ William M. Kahane

	 
	Name:  William M. Kahane

	 
	Title:     Manager






Exhibit B


Purchased Assets and Reimbursed Expenses




	
												
	

Capitalized Furniture, Fixtures and Equipment
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	Tenant Improvements
	 
	 
	 
	 
	 

	 
	 
	Office fit out - principally NYC and Dresher, PA

	 
	 
	Includes common area, kitchens, bathrooms, IT cabling

	 
	 
	Server room configuration
	 
	 
	 

	 
	Office Furniture and Fixtures
	 
	 
	 
	 

	 
	 
	Desks
	 
	 
	 
	 

	 
	 
	Credenzas
	 
	 
	 
	 

	 
	 
	Chairs
	 
	 
	 
	 

	 
	 
	Conference tables and chairs
	 
	 
	 

	 
	Hardware
	 
	 
	 
	 
	 

	 
	 
	Laptops
	 
	 
	 
	 

	 
	 
	Desktops
	 
	 
	 
	 

	 
	 
	Routers and switches
	 
	 
	 

	 
	 
	Storage Area Network (SAN)
	 
	 
	 

	 
	 
	Mobile devices
	 
	 
	 
	 

	 
	 
	iPads
	 
	 
	 
	 

	 
	Software (license, support, maintenance)
	 
	 
	 

	 
	 
	Microsoft Office/ Outlook
	 
	 
	 

	 
	 
	MRI
	 
	 
	 
	 

	 
	 
	Virtual Premise
	 
	 
	 
	 

	 
	 
	System back-up
	 
	 
	 
	 

	 
	 
	Security/ firewall
	 
	 
	 
	 

	 
	 
	Anti-Virus
	 
	 
	 
	 

	 
	 
	FAS Fixed Assets
	 
	 
	 
	 

	 
	 
	Concur
	 
	 
	 
	 

	 
	 
	Cvent
	 
	 
	 
	 

	 
	Equipment
	 
	 
	 
	 
	 

	 
	 
	VOIP telephones and related hardware/software
	 

	 
	 
	TV presentation screens
	 
	 
	 

	 
	 
	SmartBoard
	 
	 
	 
	 

	 
	 
	Binding machine
	 
	 
	 
	 

	 
	 
	Postage machine
	 
	 
	 
	 

	 
	 
	Printers
	 
	 
	 
	 

	 
	 
	Kitchen appliances and other
	 
	 
	 






The above items are principally located within our New York, NY and Dresher, PA offices.




	
				
	Capitalized and Other Soft Costs


Marketing:
	 

	 
	 
Web site and related development  
	 

	 
	Collaboration with marketing consultants
	 

	 
	 Collateral (hard card, property photos,   
 etc.) 
	 

	 
	Logo design
	 

	 
	General marketing efforts
	 

	 
	 
	 
	 

	Software Customization:
	 

	 
	

MRI (Accounting & Asset Management)
	 

	 
	Virtual Premise
	 

	 
	FAS Fixed Assets
	 

	 
	Concur
	 

	 
	Cvent
	 

	 
	MS Office and related
	 








	
														
	Transaction Costs
	 
	 
	 
	 
	 

	



	Legal:
	 
	 
	 
	 
	 

	 
	 
	Preparation of various documents and filings -
	 
	 
	 

	 
	 
	Form S-4
	 
	 
	 
	 
	 

	 
	 
	Investor communications and press releases
	 
	 
	 

	 
	 
	Form 8-K's
	 
	 
	 
	 
	 

	 
	 
	Section 16 filings
	 
	 
	 
	 
	 

	 
	 
	Coordination with Proskauer/attorneys
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	Accounting:
	 
	 
	 
	 
	 

	 
	 
	Preparation of various documents and filings -
	 
	 
	 

	 
	 
	Form S-4 (including pro forma schedules)
	 
	 
	 

	 
	 
	Investor communications and press releases
	 
	 
	 

	 
	 
	Form 8-K's
	 
	 
	 
	 
	 

	 
	 
	Section 16 filings
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	Investor Relations (BD Operations):
	 
	 
	 
	 

	 
	 
	Retail client record reconfiguration
	 
	 
	 
	 

	 
	 
	Conversion of CRM database to interface
	 
	 
	 

	 
	 
	with new transfer agent requirements
	 
	 
	 
	 

	 
	 
	Analysis and communication to participating
	 
	 
	 

	 
	 
	independent broker-dealers and investment advisors
	 
	 

	 
	 
	Investor outreach and communications
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	Marketing and Event Planning:
	 
	 
	 
	 

	 
	 
	Preparing presentation material
	 
	 
	 

	 
	 
	Coordination of roadshow and related events
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	Executive Management (and support personnel):
	 
	 

	 
	 
	Negotiations with bankers
	 
	 
	 
	 

	 
	 
	Review of various documents
	 
	 
	 

	 
	 
	  Road show efforts






	 
	 
	 
	 







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