(Mark One) | ||
x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Maryland | 45-2771978 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
405 Park Ave., 14th Floor New York, NY | 10022 | |
(Address of principal executive offices) | (Zip Code) | |
(212) 415-6500 | ||
(Registrant’s telephone number, including area code) | ||
Securities registered pursuant to section 12(b) of the Act: None | ||
Securities registered pursuant to section 12(g) of the Act: Common stock, $0.01 par value per share (Title of class) |
Large accelerated filer ¨ | Accelerated filer ¨ | |
Non-accelerated filer x | (Do not check if a smaller reporting company) | Smaller reporting company ¨ |
Page | ||
• | All of our executive officers are also officers, managers and/or holders of a direct or indirect controlling interest in American Realty Capital Global Advisors, LLC (the "Advisor"), our dealer manager, Realty Capital Securities, LLC (the "Dealer Manager") and other American Realty Capital-affiliated entities. As a result, our executive officers, our Advisor and its affiliates face conflicts of interest, including significant conflicts created by our Advisor's compensation arrangements with us and other investment programs advised by American Realty Capital affiliates and conflicts in allocating time among these investment programs and us. These conflicts could result in unanticipated actions. |
• | Because investment opportunities that are suitable for us may also be suitable for other American Realty Capital- advised investment programs, our Advisor and its affiliates face conflicts of interest relating to the purchase of properties and other investments and such conflicts may not be resolved in our favor, meaning that we could invest in less attractive assets, which could reduce the investment return to our stockholders. |
• | No public market currently exists, or may exist, for shares of our common stock and our shares are, and may continue to be, illiquid. |
• | We may be unable to pay or maintain cash distributions or increase distributions over time. |
• | We are obligated to pay fees which may be substantial to our Advisor and its affiliates. |
• | We depend on tenants for our rental revenue and, accordingly, our rental revenue is dependent upon the success and economic viability of our tenants. |
• | Increases in interest rates could increase the amount of our debt payments and limit our ability to pay distributions to our stockholders. |
• | We are permitted to pay distributions from unlimited amounts of any source. Until substantially all the proceeds from our initial public offering ("IPO" or "offering") are invested, we may use proceeds from our IPO and financings to fund distributions until we have sufficient cash flow. There are no established limits on the amounts of net proceeds and borrowings that we may use to fund such distribution payments, except in accordance with our organizational documents and Maryland law. |
• | Any of these distributions may reduce the amount of capital we ultimately invest in properties and other permitted investments and negatively impact the value of our common stock. |
• | We have not generated cash flows sufficient to pay our distributions to stockholders, as such we may be forced to borrow at unattractive rates or depend on our Advisor to waive reimbursement of certain expenses and fees to fund our operations. There is no assurance that our Advisor will waive reimbursement of expenses or fees. |
• | We are subject to risks associated with our international investments, including risks associated with compliance with and changes in foreign laws, fluctuations in foreign currency exchange rates and inflation. |
• | We are subject to risks associated with any dislocations or liquidity disruptions that may exist or occur in the credit markets of the United States of America and Europe from time to time. |
• | We may fail to qualify, or continue to qualify, to be treated as a real estate investment trust ("REIT") for U.S. federal income tax purposes, which would result in higher taxes, may adversely affect operations and would reduce our NAV and cash available for distributions. |
• | We may be deemed to be an investment company under the Investment Company Act of 1940, as amended ("the Investment Company Act"), and thus subject to regulation under the Investment Company Act. |
• | We may be exposed to risks due to a lack of tenant diversity, investment types and geographic diversity. |
• | We may be exposed to changes in general economic, business and political conditions, including the possibility of intensified international hostilities, acts of terrorism, and changes in conditions of United States or international lending, capital and financing markets. |
• | to acquire a portfolio of commercial properties that is diversified with respect to the credit risk associated with any one tenant or any one tenant industry; |
• | to acquire primarily commercial properties and lease the properties back to the seller-occupants pursuant to triple net leases with a focus, with respect to investments in the United States, on acquisitions of net lease properties with tenants in the office, industrial and special purpose sectors; |
• | to preserve, protect and return investors’ capital contributions; |
• | to generate cash flow that will support a stable distribution to investors with potential for growth through leases with rent escalations such as inflation adjustments; |
• | to diversify our assets by investing in different geographic areas both in the United States, Europe and elsewhere internationally; and |
• | to seek investments through a European service provider of up to 40% of our capital in Europe and 10% elsewhere internationally that have an opportunity for greater asset diversity, a broader range of investments, and, in the case of European investments, an opportunity to make real estate investments through leases that may be indexed to an inflation index. |
December 31, | ||||||
Tenant | 2014 | 2013 | 2012 | |||
Encanto Restaurants, Inc. | * | 19.4% | —% | |||
Western Digital Corporation | * | 14.6% | —% | |||
Thames Water Utilities Limited | * | 11.7% | —% | |||
McDonald's Property Company Limited | * | * | 100% |
• | identify and acquire investments that further our investment strategies; |
• | increase awareness of the American Realty Capital Global Trust, Inc. name within the investment products market; |
• | attract, integrate, motivate and retain qualified personnel to manage our day-to-day operations; |
• | respond to competition for our targeted real estate properties and other investments as well as for potential investors; |
• | continue to build and expand our operations structure to support our business. |
Tenant | Number of Properties | December 31, 2014 | ||
RWE AG | 3 | 6.1% | ||
Government Services Administration (GSA I - IX) | 11 | 6.0% |
Country | December 31, 2014 | |
United Kingdom | 22.0% | |
Germany | 10.9% | |
United States | ||
California | 6.8% | |
Michigan | 8.8% | |
Texas | 10.4% |
• | business lay offs, downsizing or relocations; |
• | industry slowdowns; |
• | changing demographics; |
• | increased telecommuting and use of alternative work places; |
• | infrastructure quality; |
• | any oversupply of, or reduced demand for, real estate; |
• | concessions or reduced rental rates under new leases for properties where tenants defaulted; and |
• | increased insurance premiums. |
• | the burden of complying with a wide variety of foreign laws; |
• | changing governmental rules and policies, including changes in land use and zoning laws, more stringent environmental laws or changes in such laws; |
• | existing or new laws relating to the foreign ownership of real property or loans and laws restricting the ability of foreign persons or companies to remove profits earned from activities within the country to the person's or company's country of origin; |
• | the potential for expropriation; |
• | possible currency transfer restrictions; |
• | imposition of adverse or confiscatory taxes; |
• | changes in real estate and other tax rates and changes in other operating expenses in particular countries; |
• | possible challenges to the anticipated tax treatment of the structures that allow us to acquire and hold investments; |
• | adverse market conditions caused by terrorism, civil unrest and changes in national or local governmental or economic conditions; |
• | the willingness of domestic or foreign lenders to make loans in certain countries and changes in the availability, cost and terms of loan funds resulting from varying national economic policies; |
• | general political and economic instability in certain regions; |
• | the potential difficulty of enforcing obligations in other countries; |
• | our limited experience and expertise in foreign countries relative to our experience and expertise in the United States; and |
• | our dependence on the Service Provider. |
• | changing supply and demand for a particular currency; |
• | monetary policies of governments (including exchange control programs, restrictions on local exchanges or markets and imitations on foreign investment in a country or an investment by residents of a country in other countries); |
• | changes in balances of payments and trade; |
• | trade restrictions; and |
• | currency devaluations and revaluations. |
Industry | December 31, 2014 | |
Financial Services | 11.4% | |
Discount Retail | 10.0% | |
Technology | 8.9% | |
Utilities | 7.2% | |
Healthcare | 6.8% | |
Government | 6.1% | |
Energy | 5.9% | |
Freight | 5.2% | |
Pharmaceuticals | 5.1% |
• | any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the corporation’s outstanding voting stock; |
• | an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then outstanding stock of the corporation. |
• | 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and |
• | two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder. |
• | limitations on capital structure; |
• | restrictions on specified investments; |
• | prohibitions on transactions with affiliates; and |
• | compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly change our operations. |
• | changes in general economic or local conditions; |
• | changes in supply of or demand for similar or competing properties in an area; |
• | changes in interest rates and availability of permanent mortgage funds that may render the sale of a property difficult or unattractive; |
• | changes in tax, real estate, environmental and zoning laws; and |
• | periods of high interest rates and tight money supply. |
• | decreased demand for our properties due to significant job losses that have occurred and may occur in the future, resulting in lower occupancy levels, which decreased demand will result in decreased revenues and which could diminish the value of our portfolio, which depends, in part, upon the cash flow generated by our properties; |
• | an increase in the number of bankruptcies or insolvency proceedings of our tenants and lease guarantors, which could delay or preclude our efforts to collect rent and any past due balances under the relevant leases; |
• | widening credit spreads for major sources of capital as investors demand higher risk premiums, resulting in lenders increasing the cost for debt financing; |
• | reduction in the amount of capital that is available to finance real estate, which, in turn, could lead to a decline in real estate values generally, slow real estate transaction activity, a reduction the loan-to-value ratio upon which lenders are willing to lend, and difficulty refinancing our debt; |
• | a decrease in the value of certain of our properties below the amounts we pay for them, which may limit our ability to dispose of assets at attractive prices or to obtain debt financing secured by our properties and may reduce the availability of unsecured loans; and |
• | reduction in the value and liquidity of our short-term investments as a result of the dislocation of the markets for our short-term investments and increased volatility in market rates for such investments or other factors. |
• | increased costs, added costs imposed by franchisors for improvements or operating changes required, from time to time, under the franchise agreements; |
• | property management decisions; |
• | property location and condition; |
• | competition from comparable types of properties; |
• | changes in specific industry segments; |
• | declines in regional or local real estate values, or occupancy rates; and |
• | increases in interest rates, real estate tax rates and other operating expenses. |
Portfolio | Acquisition Date | Country | Number of Properties | Square Feet | Remaining Lease Term (1) | Base Purchase Price (2) (In thousands) | |||||||||
McDonald's | Oct. 2012 | UK | 1 | 9,094 | 9.2 | $ | 2,566 | ||||||||
Wickes Building Supplies I | May 2013 | UK | 1 | 29,679 | 9.8 | 6,058 | |||||||||
Everything Everywhere | Jun. 2013 | UK | 1 | 64,832 | 12.5 | 12,365 | |||||||||
Thames Water | Jul. 2013 | UK | 1 | 78,650 | 7.7 | 18,233 | |||||||||
Wickes Building Supplies II | Jul. 2013 | UK | 1 | 28,758 | 12.0 | 5,054 | |||||||||
PPD Global Labs | Aug. 2013 | US | 1 | 76,820 | 9.9 | 9,283 | |||||||||
Northern Rock | Sep. 2013 | UK | 2 | 86,290 | 8.7 | 16,322 | |||||||||
Kulicke & Soffa | Sep. 2013 | US | 1 | 88,000 | 8.8 | 13,415 | |||||||||
Wickes Building Supplies III | Nov. 2013 | UK | 1 | 28,465 | 13.9 | 6,067 | |||||||||
Con-way Freight | Nov. 2013 | US | 7 | 105,090 | 8.9 | 12,266 | |||||||||
Wolverine | Dec. 2013 | US | 1 | 468,635 | 8.1 | 17,201 | |||||||||
Western Digital | Dec. 2013 | US | 1 | 286,330 | 5.9 | 28,574 | |||||||||
Encanto | Dec. 2013 | Puerto Rico | 18 | 65,262 | 10.5 | 37,556 | |||||||||
Rheinmetall | Jan. 2014 | Germany | 1 | 320,102 | 9.0 | 28,924 | |||||||||
GE Aviation | Jan. 2014 | US | 1 | 369,000 | 11.0 | 38,857 | |||||||||
Provident Financial | Feb. 2014 | UK | 1 | 117,003 | 10.9 | 41,812 | |||||||||
Crown Crest | Feb. 2014 | UK | 1 | 805,530 | 24.1 | 63,587 | |||||||||
Trane | Feb. 2014 | US | 1 | 25,000 | 8.9 | 3,072 | |||||||||
Aviva | Mar. 2014 | UK | 1 | 131,614 | 14.5 | 52,517 | |||||||||
DFS Trading | Mar. 2014 | UK | 5 | 240,230 | 15.2 | 34,050 | |||||||||
GSA I | Mar. 2014 | US | 1 | 135,373 | 7.6 | 43,250 | |||||||||
National Oilwell Varco | Mar. 2014 | US | 1 | 24,450 | 8.6 | 4,888 | |||||||||
Talk Talk | Apr. 2014 | UK | 1 | 48,415 | 10.2 | 14,274 | |||||||||
OBI DIY | Apr. 2014 | Germany | 1 | 143,633 | 8.9 | 13,216 | |||||||||
GSA II | Apr. 2014 | US | 2 | 24,957 | 8.2 | 9,525 | |||||||||
DFS Trading | Apr. 2014 | UK | 2 | 39,331 | 15.2 | 6,275 | |||||||||
GSA III | Apr. 2014 | US | 2 | 28,364 | 10.5 | 9,700 | |||||||||
GSA IV | May 2014 | US | 1 | 33,000 | 10.6 | 14,828 | |||||||||
Indiana Department of Revenue | May 2014 | US | 1 | 98,542 | 8.0 | 11,654 | |||||||||
National Oilwell Varco | May 2014 | US | 1 | 7,500 | 14.4 | 2,360 | |||||||||
Nissan | May 2014 | US | 1 | 462,155 | 8.8 | 25,838 | |||||||||
GSA V | Jun. 2014 | US | 1 | 26,533 | 8.3 | 11,556 | |||||||||
Lippert Components | Jun. 2014 | US | 1 | 539,137 | 11.7 | 14,776 | |||||||||
Select Energy Services I | Jun. 2014 | US | 3 | 135,877 | 12.0 | 24,112 | |||||||||
Bell Supply Co I | Jun. 2014 | US | 6 | 79,829 | 14.0 | 12,225 | |||||||||
Axon Energy Products | Jun. 2014 | US | 3 | 213,634 | 12.1 | 20,709 | |||||||||
Lhoist | Jun. 2014 | US | 1 | 22,500 | 8.0 | 3,264 | |||||||||
GE Oil & Gas | Jun. 2014 | US | 2 | 69,846 | 8.7 | 10,956 | |||||||||
Select Energy Services II | Jun. 2014 | US | 4 | 143,417 | 11.9 | 20,789 | |||||||||
Bell Supply Co II | Jun. 2014 | US | 2 | 19,136 | 14.0 | 3,407 | |||||||||
Superior Energy Services | Jun. 2014 | US | 2 | 42,470 | 9.5 | 2,455 | |||||||||
Amcor Packaging | Jun. 2014 | UK | 7 | 294,580 | 9.9 | 13,290 | |||||||||
GSA VI | Jun. 2014 | US | 1 | 6,921 | 9.3 | 1,450 | |||||||||
Nimble Storage | Jun. 2014 | US | 1 | 164,608 | 6.8 | 52,500 | |||||||||
FedEx -3-Pack | Jul. 2014 | US | 3 | 338,862 | 7.7 | 46,100 | |||||||||
Sandoz, Inc. | Jul. 2014 | US | 1 | 154,101 | 11.6 | 63,582 | |||||||||
Wyndham | Jul. 2014 | US | 1 | 31,881 | 10.3 | 5,200 |
Portfolio | Acquisition Date | Country | Number of Properties | Square Feet | Remaining Lease Term (1) | Base Purchase Price (2) (In thousands) | |||||||||
Valassis | Jul. 2014 | US | 1 | 100,597 | 8.3 | $ | 13,614 | ||||||||
GSA VII | Jul. 2014 | US | 1 | 25,603 | 9.9 | 12,000 | |||||||||
AT&T Services | Jul. 2014 | US | 1 | 401,516 | 11.6 | 61,000 | |||||||||
PNC - 2-Pack | Jul. 2014 | US | 2 | 210,256 | 14.6 | 17,412 | |||||||||
Fujitisu | Jul. 2014 | UK | 3 | 162,888 | 10.2 | 70,651 | |||||||||
Continental Tire | Jul. 2014 | US | 1 | 90,994 | 7.6 | 18,500 | |||||||||
Achmea | Jul. 2014 | Netherlands | 2 | 190,252 | 9.0 | 38,790 | |||||||||
BP Oil | Aug. 2014 | UK | 1 | 2,650 | 10.8 | 4,951 | |||||||||
Malthurst | Aug. 2014 | UK | 2 | 3,784 | 10.9 | 5,914 | |||||||||
HBOS | Aug. 2014 | UK | 3 | 36,071 | 10.6 | 18,109 | |||||||||
Thermo Fisher | Aug. 2014 | US | 1 | 114,700 | 9.7 | 14,000 | |||||||||
Black & Decker | Aug. 2014 | US | 1 | 71,259 | 7.1 | 10,350 | |||||||||
Capgemini | Aug. 2014 | UK | 1 | 90,475 | 8.3 | 24,947 | |||||||||
Merck & Co. | Aug. 2014 | US | 1 | 146,366 | 10.7 | 53,325 | |||||||||
Family Dollar - 65-Pack | Aug. 2014 | US | 65 | 541,472 | 14.7 | 77,360 | |||||||||
GSA VIII | Aug. 2014 | US | 1 | 23,969 | 9.6 | 8,319 | |||||||||
Garden Ridge | Sep. 2014 | US | 4 | 564,910 | 14.7 | 40,936 | |||||||||
Waste Management | Sep. 2014 | US | 1 | 84,119 | 8.0 | 4,650 | |||||||||
Intier Automotive Interiors | Sep. 2014 | UK | 1 | 152,711 | 9.4 | 15,301 | |||||||||
HP Enterprise Services | Sep. 2014 | UK | 1 | 99,444 | 11.2 | 30,951 | |||||||||
Shaw Aero Devices, Inc. | Sep. 2014 | US | 1 | 130,581 | 7.8 | 27,000 | |||||||||
FedEx Freight | Sep. 2014 | US | 1 | 11,501 | 9.3 | 2,250 | |||||||||
Hotel Winston | Sep. 2014 | Netherlands | 1 | 24,283 | 14.7 | 17,292 | |||||||||
Dollar General - 39-Pack | Sep. 2014 | US | 39 | 369,644 | 13.3 | 52,004 | |||||||||
FedEx III | Sep. 2014 | US | 2 | 221,260 | 9.6 | 36,490 | |||||||||
Mallinkrodt Pharmaceuticals | Sep. 2014 | US | 1 | 89,900 | 9.7 | 22,800 | |||||||||
Kuka | Sep. 2014 | US | 1 | 200,000 | 9.5 | 14,850 | |||||||||
CHE Trinity | Sep. 2014 | US | 2 | 373,593 | 7.6 | 51,000 | |||||||||
FedEx IV | Sep. 2014 | US | 2 | 255,037 | 8.1 | 21,780 | |||||||||
GE Aviation | Sep. 2014 | US | 1 | 102,000 | 8.0 | 14,178 | |||||||||
DNV GL | Oct. 2014 | US | 1 | 82,000 | 10.2 | 7,850 | |||||||||
Bradford & Bingley | Oct. 2014 | UK | 1 | 120,618 | 14.8 | 24,482 | |||||||||
Rexam | Oct. 2014 | Germany | 1 | 175,615 | 10.2 | 14,725 | |||||||||
FedEx | Oct. 2014 | US | 1 | 76,035 | 9.5 | 9,532 | |||||||||
CJ Energy | Oct. 2014 | US | 1 | 96,803 | 11.3 | 17,925 | |||||||||
Family Dollar II | Oct. 2014 | US | 34 | 282,730 | 14.8 | 49,000 | |||||||||
Panasonic | Oct. 2014 | US | 1 | 48,497 | 13.6 | 10,375 | |||||||||
Onguard | Oct. 2014 | US | 1 | 120,000 | 9.0 | 10,800 | |||||||||
Metro Tonic | Oct. 2014 | Germany | 1 | 636,066 | 10.8 | 67,511 | |||||||||
Axon Energy Products | Oct. 2014 | US | 1 | 26,400 | 9.8 | 3,620 | |||||||||
Tokmanni | Oct. 2014 | Finland | 1 | 800,834 | 18.7 | 72,964 | |||||||||
Fife Council | Nov. 2014 | UK | 1 | 37,331 | 9.1 | 6,519 | |||||||||
Family Dollar III | Nov. 2014 | US | 2 | 16,442 | 14.7 | 2,727 | |||||||||
GSA IX | Nov. 2014 | US | 1 | 28,300 | 7.3 | 10,385 | |||||||||
KPN BV | Nov. 2014 | Netherlands | 1 | 133,053 | 12.0 | 27,351 | |||||||||
RWE AG | Nov. 2014 | Germany | 3 | 594,415 | 9.9 | 154,492 | |||||||||
Follett School | Nov. 2014 | US | 1 | 486,868 | 10.0 | 23,900 | |||||||||
Quest Diagnostics | Dec. 2014 | US | 1 | 223,894 | 9.7 | 96,000 | |||||||||
Family Dollar IV | Dec. 2014 | US | 1 | 8,030 | 14.7 | 1,779 |
Portfolio | Acquisition Date | Country | Number of Properties | Square Feet | Remaining Lease Term (1) | Base Purchase Price (2) (In thousands) | |||||||||
Diebold | Dec. 2014 | US | 1 | 158,330 | 7.0 | $ | 11,500 | ||||||||
Dollar General | Dec. 2014 | US | 1 | 12,406 | 13.2 | 2,050 | |||||||||
Weatherford Intl | Dec. 2014 | US | 1 | 19,855 | 10.8 | 3,190 | |||||||||
AM Castle | Dec. 2014 | US | 1 | 127,600 | 9.8 | 9,270 | |||||||||
FedEx | Dec. 2014 | US | 1 | 27,771 | 9.7 | 9,300 | |||||||||
Constellium Auto | Dec. 2014 | US | 1 | 320,680 | 14.9 | 20,625 | |||||||||
Total | 307 | 16,305,844 | 11.6 | $ | 2,378,554 |
Country | Acquisition Date | Number of Properties | Square Feet | Percentage of Properties by Square Feet | Remaining Lease Term (1) | Base Purchase Price (2) (In thousands) | |||||||||
Finland | Nov. 2014 | 1 | 800,834 | 4.9% | 18.7 | $ | 72,964 | ||||||||
Germany | Jan. 2014 - Nov. 2014 | 7 | 1,869,831 | 11.5% | 10.0 | 278,868 | |||||||||
Netherlands | Jul. 2014 - Nov. 2014 | 4 | 347,588 | 2.1% | 10.6 | 83,433 | |||||||||
United Kingdom | Oct. 2012 - Nov. 2014 | 40 | 2,708,443 | 16.6% | 15.2 | 494,295 | |||||||||
United States | Aug. 2013 - Dec. 2014 | 237 | 10,513,886 | 64.5% | 10.5 | 1,411,438 | |||||||||
Puerto Rico | Dec. 2013 | 18 | 65,262 | 0.4% | 10.5 | 37,556 | |||||||||
Total | 307 | 16,305,844 | 100.0% | 11.6 | $ | 2,378,554 |
Industry | Number of Properties | Square Feet | Square Feet as a Percentage of the Total Portfolio | Annualized Rental Income (1) | Annualized Rental Income as a Percentage of the Total Portfolio | ||||||||||
(In thousands) | |||||||||||||||
Aerospace | 3 | 601,581 | 3.7 | % | $ | 5,777 | 3.0 | % | |||||||
Auto Manufacturing | 2 | 1,001,292 | 6.1 | % | 2,729 | 1.4 | % | ||||||||
Automation | 1 | 200,000 | 1.2 | % | 1,092 | 0.6 | % | ||||||||
Automotive Parts Manufacturing | 1 | 152,711 | 0.9 | % | 1,201 | 0.6 | % | ||||||||
Automotive Parts Supplier | 2 | 411,096 | 2.5 | % | 3,617 | 1.9 | % | ||||||||
Biotechnology | 1 | 114,700 | 0.7 | % | 1,014 | 0.5 | % | ||||||||
Consulting | 1 | 82,000 | 0.5 | % | 602 | 0.3 | % | ||||||||
Consumer Goods | 3 | 271,874 | 1.7 | % | 2,133 | 1.1 | % | ||||||||
Contract Research | 1 | 80,420 | 0.5 | % | 908 | 0.5 | % | ||||||||
Discount Retail | 143 | 2,031,558 | 12.5 | % | 18,891 | 10.0 | % | ||||||||
Education | 1 | 486,868 | 3.0 | % | 1,935 | 1.0 | % | ||||||||
Electronics | 1 | 48,497 | 0.3 | % | 686 | 0.4 | % | ||||||||
Energy | 28 | 901,717 | 5.5 | % | 11,204 | 5.9 | % | ||||||||
Financial Services | 11 | 1,650,429 | 10.1 | % | 21,564 | 11.4 | % | ||||||||
Foot Apparel | 2 | 588,635 | 3.6 | % | 2,141 | 1.1 | % | ||||||||
Freight | 17 | 1,035,556 | 6.4 | % | 9,917 | 5.2 | % | ||||||||
Government | 11 | 333,020 | 2.0 | % | 11,572 | 6.1 | % | ||||||||
Government Services | 2 | 135,873 | 0.8 | % | 1,444 | 0.8 | % | ||||||||
Healthcare | 3 | 593,633 | 3.6 | % | 12,920 | 6.8 | % | ||||||||
Home Decor | 4 | 564,910 | 3.5 | % | 3,256 | 1.7 | % | ||||||||
Home Maintenance | 4 | 230,535 | 1.4 | % | 2,631 | 1.4 | % | ||||||||
Hospitality | 2 | 56,164 | 0.3 | % | 1,844 | 1.0 | % | ||||||||
Marketing | 1 | 100,597 | 0.6 | % | 1,194 | 0.6 | % | ||||||||
Metal Processing | 2 | 448,280 | 2.7 | % | 2,862 | 1.5 | % | ||||||||
Packaging Goods | 7 | 294,580 | 1.8 | % | 1,357 | 0.7 | % | ||||||||
Petroleum Services | 3 | 6,434 | — | % | 821 | 0.4 | % | ||||||||
Pharmaceuticals | 3 | 390,367 | 2.4 | % | 9,734 | 5.1 | % | ||||||||
Restaurant - Quick Service | 19 | 74,356 | 0.5 | % | 3,429 | 1.8 | % | ||||||||
Retail Banking | 3 | 36,071 | 0.2 | % | 1,328 | 0.7 | % | ||||||||
Retail Food Distribution | 1 | 805,530 | 4.9 | % | 6,180 | 3.3 | % | ||||||||
Specialty Retail | 7 | 279,561 | 1.7 | % | 3,557 | 1.9 | % | ||||||||
Technology | 8 | 891,745 | 5.5 | % | 16,842 | 8.9 | % | ||||||||
Telecommunications | 4 | 647,816 | 4.0 | % | 9,141 | 4.8 | % | ||||||||
Utilities | 4 | 673,065 | 4.1 | % | 13,571 | 7.2 | % | ||||||||
Waste Management | 1 | 84,373 | 0.5 | % | 358 | 0.2 | % | ||||||||
Total | 307 | 16,305,844 | 100 | % | $ | 189,452 | 100 | % |
(1) | Annualized rental income converted from local currency into USD as of December 31, 2014 for the in-place lease in the property on a straight-line basis, which includes tenant concessions such as free rent, as applicable. |
Country | State | Number of Properties | Square Feet | Square Feet as a Percentage of the Total Portfolio | Annualized Rental Income (1) | Annualized Rental Income as a Percentage of the Total Portfolio | ||||||||||
(In thousands) | ||||||||||||||||
Finland | 1 | 800,834 | 4.7 | % | $ | 6,261 | 3.3 | % | ||||||||
Germany | 7 | 1,869,831 | 11.5 | % | 20,727 | 10.9 | % | |||||||||
Netherlands | 4 | 347,588 | 2.1 | % | 7,072 | 3.7 | % | |||||||||
Puerto Rico | 18 | 65,262 | 0.4 | % | 3,212 | 1.7 | % | |||||||||
United Kingdom | 40 | 2,708,443 | 16.6 | % | 41,476 | 22.0 | % | |||||||||
United States: | ||||||||||||||||
Alabama | 9 | 73,554 | 0.5 | % | 791 | 0.4 | % | |||||||||
Arizona | 3 | 158,876 | 1.0 | % | 982 | 0.5 | % | |||||||||
Arkansas | 1 | 8,320 | 0.1 | % | 89 | |||||||||||
California | 3 | 674,832 | 4.1 | % | 12,890 | 6.8 | % | |||||||||
Colorado | 1 | 26,533 | 0.2 | % | 1,088 | 0.6 | % | |||||||||
Delaware | 1 | 9,967 | 0.1 | % | 359 | 0.2 | % | |||||||||
Florida | 15 | 243,596 | 1.5 | % | 3,420 | 1.8 | % | |||||||||
Georgia | 5 | 41,320 | 0.3 | % | 449 | 0.2 | % | |||||||||
Idaho | 2 | 16,267 | 0.1 | % | 201 | 0.1 | % | |||||||||
Illinois | 3 | 509,939 | 3.1 | % | 2,152 | 1.1 | % | |||||||||
Indiana | 3 | 646,329 | 4.0 | % | 1,991 | 1.1 | % | |||||||||
Iowa | 2 | 32,399 | 0.2 | % | 296 | 0.2 | % | |||||||||
Kansas | 6 | 178,807 | 1.1 | % | 1,275 | 0.7 | % | |||||||||
Kentucky | 7 | 517,420 | 3.2 | % | 3,687 | 1.9 | % | |||||||||
Louisiana | 7 | 136,850 | 0.8 | % | 1,260 | 0.7 | % | |||||||||
Maine | 2 | 49,572 | 0.3 | % | 1,871 | 1.0 | % | |||||||||
Maryland | 1 | 120,000 | 0.7 | % | 785 | 0.4 | % | |||||||||
Massachusetts | 2 | 127,456 | 0.8 | % | 1,772 | 0.9 | % | |||||||||
Michigan | 12 | 2,000,300 | 12.3 | % | 16,704 | 8.8 | % | |||||||||
Minnesota | 3 | 58,661 | 0.4 | % | 1,601 | 0.8 | % | |||||||||
Mississippi | 10 | 80,968 | 0.5 | % | 800 | 0.4 | % | |||||||||
Missouri | 4 | 138,536 | 0.9 | % | 2,582 | 1.4 | % | |||||||||
Nebraska | 6 | 57,572 | 0.4 | % | 564 | 0.3 | % | |||||||||
New Jersey | 3 | 348,964 | 2.1 | % | 8,450 | 4.5 | % | |||||||||
New Mexico | 5 | 46,405 | 0.3 | % | 556 | 0.3 | % | |||||||||
New York | 2 | 221,260 | 1.4 | % | 2,398 | 1.3 | % | |||||||||
North Carolina | 7 | 242,575 | 1.4 | % | 1,467 | 0.8 | % | |||||||||
North Dakota | 3 | 47,330 | 0.3 | % | 884 | 0.5 | % | |||||||||
Ohio | 12 | 508,375 | 3.1 | % | 4,229 | 2.2 | % | |||||||||
Oklahoma | 16 | 159,008 | 1.0 | % | 1,617 | 0.9 | % | |||||||||
Pennsylvania | 11 | 376,368 | 2.3 | % | 3,900 | 2.1 | % | |||||||||
South Carolina | 13 | 189,081 | 1.2 | % | 2,353 | 1.2 | % | |||||||||
South Dakota | 1 | 28,300 | 0.2 | % | 946 | 0.5 | % | |||||||||
Tennessee | 10 | 662,312 | 4.0 | % | 6,520 | 3.4 | % | |||||||||
Texas | 44 | 1,759,932 | 10.8 | % | 19,608 | 10.4 | % | |||||||||
Utah | 1 | 7,948 | — | % | 91 | — | % | |||||||||
Virginia | 1 | 7,954 | — | % | 76 | — | % | |||||||||
Total | 307 | 16,305,844 | 100 | % | $ | 189,452 | 100 | % |
(1) | Annualized rental income converted from local currency into USD as of December 31, 2014 for the in-place lease in the property on a straight-line basis, which includes tenant concessions such as free rent, as applicable. |
(In thousands) | Future Minimum Base Rent Payments (1) | |||
2015 | $ | 175,154 | ||
2016 | 179,154 | |||
2017 | 182,643 | |||
2018 | 185,137 | |||
2019 | 187,586 | |||
2020 | 189,854 | |||
2021 | 187,953 | |||
2022 | 178,180 | |||
2023 | 155,401 | |||
2024 | 132,311 | |||
Thereafter | 376,735 | |||
Total | $ | 2,130,108 |
(1) | Based on the exchange rate as of December 31, 2014. |
Year of Expiration | Number of Leases Expiring | Annualized Rental Income (1) | Annualized Rental Income as a Percentage of the Total Portfolio | Leased Rentable Square Feet | Percent of Portfolio Rentable Square Feet Expiring | ||||||||||
(In thousands) | |||||||||||||||
2015 | — | $ | — | — | % | — | — | % | |||||||
2016 | — | — | — | % | — | — | % | ||||||||
2017 | — | — | — | % | — | — | % | ||||||||
2018 | — | — | — | % | — | — | % | ||||||||
2019 | — | — | — | % | — | — | % | ||||||||
2020 | 2 | 3,482 | 1.8 | % | 386,015 | 2.4 | % | ||||||||
2021 | 2 | 5,003 | 2.6 | % | 322,938 | 2.0 | % | ||||||||
2022 | 16 | 22,013 | 11.6 | % | 1,552,953 | 9.5 | % | ||||||||
2023 | 26 | 21,176 | 10.5 | % | 2,352,720 | 14.4 | % | ||||||||
2024 | 33 | 38,010 | 20.6 | % | 3,173,767 | 19.5 | % | ||||||||
Total | 79 | $ | 89,684 | 47.1 | % | 7,788,393 | 47.8 | % |
(1) | Annualized rental income converted from local currency into USD as of December 31, 2014 for the in-place lease in the property on a straight-line basis, which includes tenant concessions such as free rent, as applicable. |
Outstanding Loan Amount(1) | ||||||||||||||||||
Country | Portfolio | Encumbered Properties | December 31, 2014 | December 31, 2013 | Effective Interest Rate | Interest Rate | Maturity | |||||||||||
(In thousands) | (In thousands) | |||||||||||||||||
Germany: | ||||||||||||||||||
Rheinmetall | 1 | $ | 12,884 | $ | — | 2.5% | (2) | Fixed | Jan. 2019 | |||||||||
OBI DIY | 1 | 5,470 | — | 2.4% | Fixed | Jan. 2019 | ||||||||||||
RWE AG | 3 | 75,969 | — | 1.6% | Fixed | Oct. 2019 | ||||||||||||
Rexam | 1 | 6,394 | — | 1.9% | Fixed | Oct. 2019 | ||||||||||||
Metro Tonic | 1 | 32,211 | — | 1.7% | Fixed | Dec. 2019 | ||||||||||||
United Kingdom: | ||||||||||||||||||
McDonald's | 1 | 1,180 | 1,253 | 4.1% | (2) | Fixed | Oct. 2017 | |||||||||||
Wickes Building Supplies I | 1 | 3,024 | 3,209 | 3.7% | (2) | Fixed | May 2018 | |||||||||||
Everything Everywhere | 1 | 6,213 | 6,596 | 4.0% | (2) | Fixed | Jun. 2018 | |||||||||||
Thames Water | 1 | 9,319 | 9,894 | 4.1% | (2) | Fixed | Jul. 2018 | |||||||||||
Wickes Building Supplies II | 1 | 2,563 | 2,721 | 4.2% | (2) | Fixed | Jul. 2018 | |||||||||||
Northern Rock | 2 | 8,155 | 8,657 | 4.4% | (2) | Fixed | Sep. 2018 | |||||||||||
Wickes Building Supplies III | 1 | 2,951 | 3,133 | 4.3% | (2) | Fixed | Nov. 2018 | |||||||||||
Provident Financial | 1 | 19,804 | — | 4.1% | (2) | Fixed | Feb. 2019 | |||||||||||
Crown Crest | 1 | 29,901 | — | 4.2% | (2) | Fixed | Feb. 2019 | |||||||||||
Aviva | 1 | 24,387 | — | 3.8% | (2) | Fixed | Mar. 2019 | |||||||||||
United States: | Western Digital | 1 | 18,269 | 18,541 | 3.7% | Fixed | Jul. 2021 | |||||||||||
Puerto Rico: | Encanto Restaurants | 18 | 22,492 | 22,900 | 3.0% | Fixed | Jun. 2017 | |||||||||||
Total | 37 | $ | 281,186 | $ | 76,904 | 3.7% |
(1) | Based on the ending exchange rate at December 31, 2014 and 2013, as applicable. |
(In thousands) | Distributions Paid in Cash (1) | Distributions Reinvested through DRIP (1) | Total Distributions Paid (1) | Distributions Declared (1) | ||||||||||||
Q1 2014 | $ | 2,028 | $ | 1,937 | $ | 3,965 | $ | 6,730 | ||||||||
Q2 2014 | 6,524 | 8,286 | 14,810 | 20,231 | ||||||||||||
Q3 2014 | 13,083 | 17,120 | 30,203 | 31,443 | ||||||||||||
Q4 2014 | 13,780 | 17,543 | 31,323 | 31,760 | ||||||||||||
Total | $ | 35,415 | $ | 44,886 | $ | 80,301 | $ | 90,164 |
(In thousands) | Distributions Paid in Cash (1) | Distributions Reinvested through DRIP (1) | Total Distributions Paid (1) | Distributions Declared (1) | ||||||||||||
Q1 2013 | $ | 46 | $ | 3 | $ | 49 | $ | 78 | ||||||||
Q2 2013 | 187 | 102 | 289 | 498 | ||||||||||||
Q3 2013 | 594 | 441 | 1,035 | 1,264 | ||||||||||||
Q4 2013 | 935 | 774 | 1,709 | 2,065 | ||||||||||||
Total | $ | 1,762 | $ | 1,320 | $ | 3,082 | $ | 3,905 |
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Right | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a) | |||||||
(a) | (b) | (c) | ||||||||
Equity Compensation Plans approved by security holders | — | $ | — | — | ||||||
Equity Compensation Plans not approved by security holders | — | — | 500,000 | |||||||
Total | — | $ | — | 500,000 |
Year Ended December 31, | ||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||
Selling commissions and dealer manager fees | $ | 148,372 | $ | 14,024 | $ | 3 | ||||||
Other offering costs | 19,321 | 3,900 | 1,988 | |||||||||
Total offering costs | $ | 167,693 | $ | 17,924 | $ | 1,991 |
Year Ended December 31, | ||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||
Total commissions paid to the Dealer Manager | $ | 148,372 | $ | 14,024 | $ | 3 | ||||||
Less: | ||||||||||||
Commissions to participating brokers | (101,421 | ) | (8,733 | ) | (2 | ) | ||||||
Reallowance to participating broker dealers | (15,275 | ) | (1,181 | ) | — | |||||||
Net to the Dealer Manager | $ | 31,676 | $ | 4,110 | $ | 1 |
• | the lower of $9.25 or 92.5% of the price paid to acquire the shares, for stockholders who have continuously held their shares for at least one year; |
• | the lower of $9.50 and 95.0% of the price paid to acquire the shares for stockholders who have continuously held their |
• | the lower of $9.75 and 97.5% of the price paid to acquire the shares for stockholders who have continuously held their |
• | the lower of $10.00 and 100.0% of the price paid to acquire the shares for stockholders who have continuously held their shares for at least four years (in each case, as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock). |
December 31, | ||||||||||||||||
Balance sheet data (In thousands) | 2014 | 2013 | 2012 | 2011 | ||||||||||||
Total real estate investments, at cost | $ | 2,340,039 | $ | 196,908 | $ | 2,585 | $ | — | ||||||||
Total assets | 2,428,797 | 214,927 | 2,933 | 559 | ||||||||||||
Mortgage notes payable | 281,186 | 76,904 | 1,228 | — | ||||||||||||
Credit facility | 659,268 | — | — | — | ||||||||||||
Total liabilities | 1,012,128 | 92,207 | 3,729 | 375 | ||||||||||||
Total stockholders' equity (deficit) | $ | 1,416,669 | $ | 122,720 | $ | (796 | ) | $ | 184 |
Operating data (In thousands, except share and per share data) | Year Ended December 31, | Period from July 13, 2011 (date of inception) to December 31, 2011 | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Total revenues | $ | 93,383 | $ | 3,951 | $ | 30 | $ | — | ||||||||
Operating expenses: | ||||||||||||||||
Property operating | 7,947 | 42 | — | — | ||||||||||||
Operating fees to affiliates | 797 | 50 | 1 | — | ||||||||||||
Acquisition and transaction related | 83,498 | 7,745 | 228 | — | ||||||||||||
General and administrative | 4,314 | 58 | 183 | 16 | ||||||||||||
Depreciation and amortization | 40,387 | 2,112 | 21 | — | ||||||||||||
Income tax benefit | (1,431 | ) | — | — | — | |||||||||||
Total expenses | 135,512 | 10,007 | 433 | 16 | ||||||||||||
Operating loss | (42,129 | ) | (6,056 | ) | (403 | ) | (16 | ) | ||||||||
Other Income (Expense): | ||||||||||||||||
Interest expense | (14,852 | ) | (969 | ) | (10 | ) | — | |||||||||
Income from investments | 14 | — | 14 | — | ||||||||||||
Unrealized gain (loss) on foreign currency | (186 | ) | 35 | — | — | |||||||||||
Gains (losses) on derivative instruments | 1,881 | — | — | — | ||||||||||||
Gain (loss) on hedging instruments deemed ineffective | 1,387 | — | — | — | ||||||||||||
Other income | 291 | 1 | — | — | ||||||||||||
Net loss | $ | (53,594 | ) | $ | (6,989 | ) | $ | (399 | ) | $ | (16 | ) | ||||
Other data: | ||||||||||||||||
Cash flows used in operations | $ | (9,693 | ) | $ | (3,647 | ) | $ | (418 | ) | $ | — | |||||
Cash flows used in investing activities | (1,517,175 | ) | (111,500 | ) | (1,357 | ) | — | |||||||||
Cash flows provided by financing activities | 1,582,907 | 124,209 | 2,027 | — | ||||||||||||
Per share data: | ||||||||||||||||
Weighted-average number of common shares outstanding, basic and diluted | 126,079,369 | 5,453,404 | 64,252 | 22,222 | ||||||||||||
Dividends declared per common share | $ | 0.71 | $ | 0.71 | $ | 0.71 | — | |||||||||
Net loss per common share - basic and diluted | $ | (0.43 | ) | $ | (1.28 | ) | $ | (6.43 | ) | NM |
Three Months Ended | Year Ended | |||||||||||||||||||
(In thousands) | March 31, 2014 | June 30, 2014 | September 30, 2014 | December 31, 2014 | December 31, 2014 | |||||||||||||||
Net loss (in accordance with GAAP) | $ | (16,349 | ) | $ | (7,479 | ) | $ | (24,558 | ) | $ | (5,208 | ) | $ | (53,594 | ) | |||||
Depreciation and amortization(1) | 4,354 | 7,640 | 15,126 | 13,267 | 40,387 | |||||||||||||||
FFO | (11,995 | ) | 161 | (9,432 | ) | 8,059 | (13,207 | ) | ||||||||||||
Acquisition fees and expenses (2) | 16,516 | 8,244 | 29,124 | 29,614 | 83,498 | |||||||||||||||
Amortization of above or below market leases and liabilities (3) | 66 | 348 | 393 | (775 | ) | 32 | ||||||||||||||
Mark-to-market adjustments | 79 | 171 | (849 | ) | (1,282 | ) | (1,881 | ) | ||||||||||||
Straight-line rent (4) | (592 | ) | (906 | ) | (1,670 | ) | (5,517 | ) | (8,685 | ) | ||||||||||
Amortization of mortgage premiums | (124 | ) | (124 | ) | (125 | ) | (125 | ) | (498 | ) | ||||||||||
Losses (gains) on foreign currency, net (5) | (6 | ) | 26 | 737 | (571 | ) | 186 | |||||||||||||
MFFO | $ | 3,944 | $ | 7,920 | $ | 18,178 | $ | 29,403 | $ | 59,445 |
(2) | In evaluating investments in real estate, management differentiates the costs to acquire the investment from the operations derived from the investment. Such information would be comparable only for non-listed REITs that have completed their acquisition activity and have other similar operating characteristics. By excluding expensed acquisition costs, management believes MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management's analysis of the investing and operating performance of our properties. Acquisition fees and expenses include payments to our Advisor or third parties. Acquisition fees and expenses under GAAP are considered operating expenses and as expenses included in the determination of net income and income from continuing operations, both of which are performance measures under GAAP. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to the property. |
Three Months Ended | Year Ended | ||||||||||||||||||||||||||||||||||
March 31, 2014 | June 30, 2014 | September 30, 2014 | December 31, 2014 | December 31, 2014 | |||||||||||||||||||||||||||||||
(In thousands) | Percentage of Distributions | Percentage of Distributions | Percentage of Distributions | Percentage of Distributions | Percentage of Distributions | ||||||||||||||||||||||||||||||
Distributions: | |||||||||||||||||||||||||||||||||||
Distributions paid in cash | $ | 2,028 | $ | 6,524 | $ | 13,083 | $ | 13,780 | $ | 35,415 | |||||||||||||||||||||||||
Distributions reinvested | 1,937 | 8,286 | 17,120 | 17,543 | 44,886 | ||||||||||||||||||||||||||||||
Distributions on unvested restricted stock | 3 | 3 | 2 | 4 | 12 | ||||||||||||||||||||||||||||||
Total distributions | $ | 3,968 | $ | 14,813 | $ | 30,205 | $ | 31,327 | $ | 80,313 | |||||||||||||||||||||||||
Source of distribution coverage: | |||||||||||||||||||||||||||||||||||
Cash flows provided by operations | $ | — | — | % | $ | 6,527 | 44.1 | % | $ | (6,416 | ) | (21.2 | )% | $ | (45 | ) | (0.1 | )% | $ | 66 | 0.1 | % | |||||||||||||
Proceeds from issuance of common stock | 2,031 | 51.2 | % | — | — | % | 19,501 | 64.6 | % | 13,829 | 44.1 | % | 35,361 | 44.0 | % | ||||||||||||||||||||
Common stock issued under the DRIP / offering proceeds | 1,937 | 48.8 | % | 8,286 | 55.9 | % | 17,120 | 56.7 | % | 17,543 | 56.0 | % | 44,886 | 55.9 | % | ||||||||||||||||||||
Total sources of distribution coverage | $ | 3,968 | 100.0 | % | $ | 14,813 | 100.0 | % | $ | 30,205 | 100.1 | % | $ | 31,327 | 100.0 | % | $ | 80,313 | 100.0 | % | |||||||||||||||
Cash flows provided by (used in) operations (GAAP basis) (1) | $ | (18,542 | ) | $ | 15,310 | $ | (6,416 | ) | $ | (45 | ) | $ | (9,693 | ) | |||||||||||||||||||||
Net loss (in accordance with GAAP) | $ | (16,349 | ) | $ | (7,479 | ) | $ | (24,558 | ) | $ | (5,208 | ) | $ | (53,594 | ) |
July 13, 2011 (date of inception) to December 31, 2014 | ||||
(In thousands) | ||||
Distributions paid: | ||||
Common stockholders in cash | $ | 37,178 | ||
Common stockholders pursuant to DRIP / offering proceeds | 46,206 | |||
Unvested restricted stockholders in cash | 18 | |||
Total distributions paid | $ | 83,402 | ||
Reconciliation of net loss: | ||||
Revenues | $ | 97,364 | ||
Acquisition and transaction-related expenses | (91,471 | ) | ||
Depreciation and amortization | (42,520 | ) | ||
Other operating expenses | (13,408 | ) | ||
Income tax benefit | 1,431 | |||
Other non-operating expense | (12,408 | ) | ||
Net loss (in accordance with GAAP) (1) | $ | (61,012 | ) |
2015 | Years Ended December 31, | |||||||||||||||||||
(In thousands) | Total | 2016 — 2017 | 2018 — 2019 | Thereafter | ||||||||||||||||
Principal on mortgage notes payable | $ | 281,186 | $ | 721 | $ | 23,857 | $ | 239,936 | $ | 16,672 | ||||||||||
Interest on mortgage notes payable | 39,108 | 8,976 | 17,552 | 11,198 | 1,382 | |||||||||||||||
Principal on credit facility (a) | 659,268 | — | 659,268 | — | — | |||||||||||||||
Interest on credit facility (a) | 20,122 | 12,840 | 7,282 | — | — | |||||||||||||||
Ground lease rental payments due | 2,270 | 20 | 40 | 42 | 2,168 | |||||||||||||||
Total (b) | $ | 1,001,954 | $ | 22,557 | $ | 707,999 | $ | 251,176 | $ | 20,222 |
Exhibit No. | Description | |
3.1* | Articles of Amendment and Restatement for American Realty Capital Global Trust, Inc. | |
3.2 * | Bylaws of American Realty Capital Global Trust, Inc. | |
4.1 (7) | Amended and Restated Agreement of Limited Partnership of American Realty Capital Global Operating Partnership, L.P., dated July 2, 2013 | |
4.2 (9) | First Amendment to Amended and Restated Agreement of Limited Partnership of American Realty Capital Global Operating Partnership, L.P. | |
10.1(7) | Third Amended and Restated Advisory Agreement, dated July 15, 2013, by and among American Realty Capital Global Trust, Inc., American Realty Capital Global Operating Partnership, L.P. and American Realty Capital Global Advisors, LLC | |
10.2(4) | Property Management and Leasing Agreement, among American Realty Capital Global Trust, Inc., American Realty Capital Global Operating Partnership, L.P. and American Realty Capital Global Properties, LLC | |
10.3 (4) | Company’s Restricted Share Plan | |
10.4 (4) | Company’s Stock Option Plan | |
10.5 (3) | Valuation Services Agreement, dated August 13, 2012, between American Realty Capital Global Trust, Inc. and Duff & Phelps, LLC | |
10.6 (5) | Agreement for the Sale and Purchase of Wickes Store, dated April 12, 2013, between Aviva Investors Pensions Limited and ARC WKBPLUK001, LLC | |
10.7 (5) | Facility Letter, dated May 3, 2013, by and between ARC WKBPLUK001, LLC and Santander UK plc | |
10.8 (6) | Asset Sale Contract, dated as of May 22, 2013, by and among Mapeley Acquisition Co (5) Limited, Jemma McAndrew and Richard Stanley and ARC EEMTRUK001, LLC | |
10.9 (6) | Facility Letter, dated June 7, 2013, by and between ARC EEMTRUK001, LLC and SantanderUK plc | |
10.10 (6) | Agreement for Sale of 1, 2 and 3 Walnut Court, Kembrey Park, Swindon SN2 8BW | |
10.11 (6) | Facility Letter, dated July 19, 2013, by and between ARC TWSWDUK001, LLC and Santander UK plc | |
10.12 (6) | Agreement for the Sale of Land Lying to the North West of Reginald Mitchell Way, Tunstall, dated July 23, 2013, by and among (1) St James Place UK PLC and ARC WKSOTUK001, LLC | |
10.13 (6) | Facility Letter, dated July 22, 2013, by and between ARC WKSOTUK001, LLC and Santander UK plc | |
10.14 (6) | Credit Agreement, dated as of July 25, 2013, by and among American Realty Capital Global Partnership, L.P., JPMorgan Chase Bank, N.A., and the lenders and agents party thereto. | |
10.15 (7) | Agreement for Purchase and Sale of Real Property, dated as of August 19, 2013, by and between AR Capital, LLC and Alliance HSP Fort Washington Office I Limited Partnership |
Exhibit No. | Description | |
10.16 (7) | Agreement for Purchase and Sale of Real Property, dated as of August 24, 2013, by and between AR Capital, LLC and Stein Family, LLC | |
10.17 (7) | Agreement related to the sale and leasback of Solar House, dated 4th September, 2013, by Northern Rock (Asset Management) PLC and ARC NRSLDUK001, LLC | |
10.18 (7) | First Amendment to Agreement for Purchase and Sale of Real Property dated as of September 10, 2013, by and between Alliance AR Capital, LLC and Alliance HSP Fort Washington Office I Limited Partnership | |
10.19 (7) | Facility Letter, dated September 4, 2013, by and between ARC NRSLDUK001, LLC and Santander UK plc | |
10.20 (8) | Purchase and Sale Agreement by and among ARC PADRBPA001, LLC and AR Capital, LLC and the sellers described on schedules thereto, dated as of July 24, 2013 | |
10.21 (9) | Agreement for Purchase and Sale of Real Property, dated September 3, 2013, by and between AR Capital, LLC and Towers Partners, L.L.C. | |
10.22 (9) | Amendment to Agreement for Purchase and Sale of Real Property, by and between AR Capital, LLC and Towers Partners, LLC | |
10.23 (9) | Agreement to Assign Agreements of Sale, dated November 12, 2013, by and between Setzer Properties XCW, LLC and AR Capital, LLC | |
10.24 (9) | Agreement for Purchase and Sale of Real Property, dated December 3, 2013, by and between AR Capital, LLC and 3W Development II, L.L.C. | |
10.25 (10) | Sale and purchase agreement, dated November 19, 2013, between Axiom Asset 1 GmbH & Co. KG and ARC RMNUSBER01, LLC | |
10.26 (10) | Agreement for lease, dated December 24, 2013, between Coolatinney Developments Limited and ARC PFBFDUK001, LLC | |
10.27 (10) | Sale and purchase agreement, dated December 31, 2013, among Crown Crest Property Developments Limited, ARC CCLTRUK001, LLC, Crown Crest (Leicester) Plc and Crown Crest Group Limited and Poundstretcher Limited | |
10.28 (10) | Sale and purchase agreement, dated January 21, 2014, between Holaw (472) Limited and ARC ALSFDUK001, LLC | |
10.29 (10) | Loan Agreement, dated February 5, 2014, between ARC RMNUSGER01 LLC and Deutsche Pfandbriefbank AG | |
10.30 (10) | Facility Letter, dated January 30, 2014, between Santander UK Plc and ARC PFBDUK001, LLC | |
10.31 (10) | Facility Letter, dated February 13, 2014, between Santander UK Plc and ARC CCLTRUK001, LLC | |
10.32 (10) | Facility Agreement, dated March 7, 2014, among ARC ALSFDUK001, LLC, Royal Bank of Scotland International Limited and the other parties named therein | |
10.33 (10) | Omnibus Amendment to Loan Documents, dated as of March 26, 2014, among American Realty Capital Global Partnership, L.P., JPMorgan Chase Bank, N.A., and the lenders and agents party thereto. | |
10.34 (11) | Agreement for Purchase and Sale of Real Property, dated April 29, 2014, between AR Capital, LLC and Mesa Real Estate Partners, L.P. | |
10.35 (11) | Third Amendment to Credit Agreement, dated as of June 24, 2014, among American Realty Capital Global Operating Partnership, the Company, ARC Global Holdco, LLC, JPMorgan Chase Bank, N.A. and the other parties named thereto | |
10.36 * | Indemnification Agreement between the Company and each of Scott J. Bowman, Peter M. Budko, Patrick J. Goulding, William M. Kahane, Nicholas Radesca, Edward G. Rendell, Nicholas S. Schorsch, Abby M. Wenzel, Andrew Winer, Edward M. Weil, Jr., American Realty Capital Global Advisors, LLC, AR Capital, LLC and RCS Capital Corporation, dated as of December 31, 2014 | |
10.37 * | Indemnification Agreement between the Company and P. Sue Perrotty, dated as of March 30, 2015 | |
14 (4) | Code of Ethics | |
21 * | List of Subsidiaries | |
16.1 (12) | Letter from Grant Thornton LLP to the Securities and Exchange Commission dated January 20, 2015. | |
23.1* | Consent of PricewaterhouseCoopers LLP | |
23.2* | Consent of Grant Thornton LLP | |
31.1 * | Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
Exhibit No. | Description | |
31.2 * | Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32 * | Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.1 * | XBRL (eXtensible Business Reporting Language). The following materials from American Realty Capital Global Trust, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2014, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Loss, (iii) the Consolidated Statement of Changes in Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements. |
(1) | Filed as an exhibit to Post-Effective Amendment No. 2 to our Registration Statement on Form S-11 filed with the SEC on October 15, 2012, and incorporated by reference herein. |
(2) | Filed as an exhibit to our Registration Statement on Form S-11 filed with the SEC on October 27, 2011, and incorporated by reference herein. |
(3) | Filed as an exhibit to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 1 to our Registration Statement on Form S-11 filed with the SEC on August 14, 2012, and incorporated by reference herein. |
(4) | Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2012 filed with the SEC on March 11, 2013, and incorporated by reference herein. |
(5) | Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 filed with the SEC on May 10, 2013, and incorporated by reference herein. |
(6) | Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 filed with the SEC on August 13, 2013, and incorporated by reference herein. |
(7) | Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 filed with the SEC on November 13, 2013, and incorporated by reference herein. |
(8) | Filed as an exhibit to our Current Report on Form 8-K/A filed with the SEC on January 3, 2014 and incorporated by reference herein. |
(9) | Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC on March 7, 2014, and incorporated by reference herein. |
(10) | Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended March 30, 2014 filed with the SEC on May 15, 2014, and incorporated by reference herein. |
(11) | Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 filed with the SEC on August 11, 2014, and incorporated by reference herein. |
(12) | Filed as an exhibit to our Current Report on form 8-K filed with the SEC on January 20, 2015, and incorporated by reference herein. |
AMERICAN REALTY CAPITAL GLOBAL TRUST, INC. | ||
By: | /s/ Scott J. Bowman | |
Scott J. Bowman | ||
CHIEF EXECUTIVE OFFICER |
Name | Capacity | Date | ||
/s/ P. Sue Perrotty | Non-Executive Chair of The Board of Directors | April 2, 2015 | ||
P. Sue Perrotty | ||||
/s/ William M. Kahane | Director | April 2, 2015 | ||
William M. Kahane | ||||
/s/ Scott J. Bowman | Chief Executive Officer (Principal Executive Officer) | April 2, 2015 | ||
Scott J. Bowman | ||||
/s/ Andrew Winer | President and Chief Investment Officer | April 2, 2015 | ||
Andrew Winer | ||||
/s/ Patrick J. Goulding | Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer) | April 2, 2015 | ||
Patrick J. Goulding | ||||
/s/ Edward G. Rendell | Independent Director | April 2, 2015 | ||
Edward G. Rendell | ||||
/s/ Abby M. Wenzel | Independent Director | April 2, 2015 | ||
Abby M. Wenzel |
Page | |
Financial Statement Schedule: | |
December 31, | |||||||
2014 | 2013 | ||||||
ASSETS | |||||||
Real estate investments, at cost: | |||||||
Land | $ | 326,696 | $ | 44,647 | |||
Buildings, fixtures and improvements | 1,519,558 | 104,362 | |||||
Construction in progress | 9,706 | — | |||||
Acquired intangible lease assets | 484,079 | 47,899 | |||||
Total real estate investments, at cost | 2,340,039 | 196,908 | |||||
Less accumulated depreciation and amortization | (42,568 | ) | (2,307 | ) | |||
Total real estate investments, net | 2,297,471 | 194,601 | |||||
Cash and cash equivalents | 64,684 | 11,500 | |||||
Restricted cash | 6,104 | 737 | |||||
Derivatives, at fair value | 13,638 | 734 | |||||
Investment securities, at fair value | 490 | — | |||||
Receivable for sale of common stock | — | 1,766 | |||||
Prepaid expenses and other assets | 24,873 | 3,454 | |||||
Due from affiliates | 500 | — | |||||
Deferred tax asset | 2,102 | — | |||||
Goodwill and other intangible assets | 3,665 | — | |||||
Deferred costs, net | 15,270 | 2,135 | |||||
Total assets | $ | 2,428,797 | $ | 214,927 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Mortgage notes payable | $ | 281,186 | $ | 76,904 | |||
Mortgage premium, net | 1,165 | 1,663 | |||||
Credit facility | 659,268 | — | |||||
Below-market lease liability, net | 21,676 | 5,854 | |||||
Derivatives, at fair value | 6,115 | 2,565 | |||||
Due to affiliates | 400 | — | |||||
Accounts payable and accrued expenses | 19,357 | 2,519 | |||||
Deferred rent | 12,252 | 1,862 | |||||
Distributions payable | 10,709 | 840 | |||||
Total liabilities | 1,012,128 | 92,207 | |||||
Commitments and contingencies (Note 9) | — | — | |||||
Stockholders' equity: | |||||||
Preferred stock, $0.01 par value, 50,000,000 authorized, none issued and outstanding at December 31, 2014 and December 31, 2013 | — | — | |||||
Common stock, $0.01 par value, 300,000,000 shares authorized, 177,933,175 and 15,665,827 shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively | 1,782 | 157 | |||||
Additional paid-in capital | 1,575,592 | 133,592 | |||||
Accumulated other comprehensive income (loss) | (5,589 | ) | 319 | ||||
Accumulated deficit | (155,116 | ) | (11,348 | ) | |||
Total stockholders' equity | 1,416,669 | 122,720 | |||||
Total liabilities and stockholders' equity | $ | 2,428,797 | $ | 214,927 |
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Revenue: | ||||||||||||
Rental income | $ | 88,158 | $ | 3,900 | $ | 30 | ||||||
Operating expense reimbursements | 5,225 | 51 | — | |||||||||
Total revenues | 93,383 | 3,951 | 30 | |||||||||
Expenses: | ||||||||||||
Property operating | 7,947 | 42 | — | |||||||||
Operating fees to affiliate | 797 | 50 | 1 | |||||||||
Acquisition and transaction related | 83,498 | 7,745 | 228 | |||||||||
General and administrative | 4,314 | 58 | 183 | |||||||||
Depreciation and amortization | 40,387 | 2,112 | 21 | |||||||||
Income tax benefit | (1,431 | ) | — | — | ||||||||
Total expenses | 135,512 | 10,007 | 433 | |||||||||
Operating loss | (42,129 | ) | (6,056 | ) | (403 | ) | ||||||
Other income (expense): | ||||||||||||
Interest expense | (14,852 | ) | (969 | ) | (10 | ) | ||||||
Income from investments | 14 | — | — | |||||||||
Gain (loss) on foreign currency | (186 | ) | 35 | — | ||||||||
Gain on derivative instruments | 1,881 | — | — | |||||||||
Gain (loss) on hedging instruments deemed ineffective | 1,387 | — | — | |||||||||
Other income | 291 | 1 | — | |||||||||
Total other expense | (11,465 | ) | (933 | ) | (10 | ) | ||||||
Net loss | $ | (53,594 | ) | $ | (6,989 | ) | $ | (413 | ) | |||
Other comprehensive income (loss): | ||||||||||||
Change in cumulative translation adjustment | (11,990 | ) | 2,140 | 10 | ||||||||
Designated derivatives, fair value adjustments | 6,082 | (1,778 | ) | (53 | ) | |||||||
Comprehensive loss | $ | (59,502 | ) | $ | (6,627 | ) | $ | (456 | ) | |||
Basic and diluted weighted average shares outstanding | 126,079,369 | 5,453,404 | 64,252 | |||||||||
Basic and diluted net loss per share | $ | (0.43 | ) | $ | (1.28 | ) | $ | (6.43 | ) |
Common Stock | ||||||||||||||||||||||
Number of Shares | Par Value | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total | |||||||||||||||||
Balance, December 31, 2011 | 22,222 | — | 200 | — | (16 | ) | 184 | |||||||||||||||
Issuance of common stock | 225,278 | 3 | 2,028 | — | — | 2,031 | ||||||||||||||||
Common stock offering costs, commissions and dealer manager fees | — | — | (2,550 | ) | — | — | (2,550 | ) | ||||||||||||||
Share-based compensation | 9,000 | — | 11 | — | — | 11 | ||||||||||||||||
Distributions declared | — | — | — | — | (16 | ) | (16 | ) | ||||||||||||||
Net loss | — | — | — | — | (413 | ) | (413 | ) | ||||||||||||||
Other comprehensive loss | — | — | — | (43 | ) | — | (43 | ) | ||||||||||||||
Balance, December 31, 2012 | 256,500 | 3 | (311 | ) | (43 | ) | (445 | ) | (796 | ) | ||||||||||||
Issuance of common stock | 15,261,350 | 153 | 150,484 | — | — | 150,637 | ||||||||||||||||
Common stock offering costs, commissions and dealer manager fees | — | — | (17,924 | ) | — | — | (17,924 | ) | ||||||||||||||
Common stock issued through distribution reinvestment plan | 138,977 | 1 | 1,319 | — | — | 1,320 | ||||||||||||||||
Share-based compensation | 9,000 | — | 24 | — | — | 24 | ||||||||||||||||
Distributions declared | — | — | — | — | (3,914 | ) | (3,914 | ) | ||||||||||||||
Net loss | — | — | — | — | (6,989 | ) | (6,989 | ) | ||||||||||||||
Other comprehensive income | — | — | — | 362 | — | 362 | ||||||||||||||||
Balance, December 31, 2013 | 15,665,827 | $ | 157 | $ | 133,592 | $ | 319 | $ | (11,348 | ) | $ | 122,720 | ||||||||||
Issuance of common stock | 157,635,481 | 1,579 | 1,565,738 | — | — | 1,567,317 | ||||||||||||||||
Common stock offering costs, commissions and dealer manager fees | — | — | (167,693 | ) | — | — | (167,693 | ) | ||||||||||||||
Common stock issued through distribution reinvestment plan | 4,721,780 | 47 | 44,839 | — | — | 44,886 | ||||||||||||||||
Common stock repurchases | (99,969 | ) | (1 | ) | (990 | ) | — | — | (991 | ) | ||||||||||||
Share-based compensation | 10,056 | — | 10 | — | — | 10 | ||||||||||||||||
Amortization of restricted shares | — | — | 96 | — | — | 96 | ||||||||||||||||
Distributions declared | — | — | — | — | (90,174 | ) | (90,174 | ) | ||||||||||||||
Net loss | — | — | — | — | (53,594 | ) | (53,594 | ) | ||||||||||||||
Cumulative translation adjustment | — | — | — | (11,990 | ) | — | (11,990 | ) | ||||||||||||||
Other comprehensive income | — | — | — | 6,082 | — | 6,082 | ||||||||||||||||
Balance, December 31, 2014 | 177,933,175 | $ | 1,782 | $ | 1,575,592 | $ | (5,589 | ) | $ | (155,116 | ) | $ | 1,416,669 |
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | (53,594 | ) | $ | (6,989 | ) | $ | (413 | ) | ||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||||||||
Depreciation | 20,856 | 837 | 12 | ||||||||
Amortization of intangibles | 19,531 | 1,275 | 9 | ||||||||
Amortization of deferred financing costs | 3,753 | 250 | 1 | ||||||||
Amortization of mortgage premium | (498 | ) | (1 | ) | — | ||||||
Accretion of below-market lease liability | (1,085 | ) | (29 | ) | — | ||||||
Amortization of above-market lease assets | 1,085 | — | 9 | ||||||||
Amortization of above-market ground lease assets | 32 | — | — | ||||||||
Share-based compensation | 106 | 24 | 11 | ||||||||
Net realized and unrealized mark-to-market transactions | (3,272 | ) | — | — | |||||||
Changes in assets and liabilities: | |||||||||||
Prepaid expenses and other assets | (20,644 | ) | (1,819 | ) | (76 | ) | |||||
Deferred tax asset | (2,102 | ) | — | — | |||||||
Due from affiliates | — | — | — | ||||||||
Accounts payable and accrued expenses | 15,749 | 1,888 | 29 | ||||||||
Deferred rent | 10,390 | 917 | — | ||||||||
Net cash used in operating activities | (9,693 | ) | (3,647 | ) | (418 | ) | |||||
Cash flows from investing activities: | |||||||||||
Investment in real estate and other assets | (1,507,072 | ) | (110,026 | ) | (1,357 | ) | |||||
Deposits for real estate acquisitions | (775 | ) | (1,474 | ) | — | ||||||
Capital expenditures | (8,838 | ) | — | — | |||||||
Purchase of investment securities | (490 | ) | — | — | |||||||
Net cash used in investing activities | (1,517,175 | ) | (111,500 | ) | (1,357 | ) | |||||
Cash flows from financing activities: | |||||||||||
Borrowings under credit facility | 258,500 | — | — | ||||||||
Repayments on credit facility | (18,500 | ) | — | — | |||||||
Proceeds from notes payable | 12,505 | — | — | ||||||||
Payments on notes payable | (12,505 | ) | — | — | |||||||
Payments on mortgage notes payable | (135 | ) | — | — | |||||||
Proceeds from issuance of common stock | 1,569,082 | 148,871 | 2,031 | ||||||||
Payments of offering costs | (168,270 | ) | (18,770 | ) | (748 | ) | |||||
Payments of deferred financing costs | (16,888 | ) | (2,345 | ) | (41 | ) | |||||
Distributions paid | (35,415 | ) | (1,769 | ) | (1 | ) | |||||
Advances from affiliates, net | (100 | ) | (1,041 | ) | 786 | ||||||
Restricted cash | (5,367 | ) | (737 | ) | — | ||||||
Net cash provided by financing activities | 1,582,907 | 124,209 | 2,027 | ||||||||
Net change in cash and cash equivalents | 56,039 | 9,062 | 252 | ||||||||
Effect of exchange rate changes on cash | (2,855 | ) | 2,176 | 10 | |||||||
Cash and cash equivalents, beginning of period | 11,500 | 262 | — | ||||||||
Cash and cash equivalents, end of period | $ | 64,684 | $ | 11,500 | $ | 262 |
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Supplemental Disclosures | |||||||||||
Cash paid for interest | $ | 6,540 | $ | 218 | $ | — | |||||
Non-Cash Investing and Financing Activities: | |||||||||||
Mortgage notes payable assumed or used to acquire investments in real estate | $ | 217,791 | $ | 75,651 | $ | 1,228 | |||||
Premium on mortgage note payable | — | 1,664 | — | ||||||||
Borrowings under line of credit to acquire real estate | 446,558 | — | — | ||||||||
Common stock issued through distribution reimbursement plan | 44,886 | 1,320 | — | ||||||||
Reclassification of deferred offering costs | — | — | 559 |
December 31, | ||||||||
(In thousands) | 2014 | 2013 | ||||||
Intangible assets: | ||||||||
In-place lease, net of accumulated amortization of $20,131 and $1,325 at December 31, 2014 and 2013, respectively | $ | 435,684 | $ | 44,202 | ||||
Above-market lease, net of accumulated amortization of $1,086 and $113 at December 31, 2014 and 2013, respectively | 26,329 | 2,259 | ||||||
Below-market ground lease, net of accumulated amortization of $32 at December 31, 2014 | 817 | — | ||||||
Total intangible lease assets, net | $ | 462,830 | $ | 46,461 | ||||
Intangible liabilities: | ||||||||
Below-market leases, net of accumulated accretion of $1,211 and $129 at December 31, 2014 and 2013, respectively | $ | 21,676 | $ | 5,854 | ||||
Total intangible lease liabilities, net | $ | 21,676 | $ | 5,854 |
(In thousands) | Amortization Years | 2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||
In-place leases (amortization expense) | 11.6 | $ | 41,646 | $ | 41,646 | $ | 41,646 | $ | 41,646 | $ | 41,646 | |||||||||||
Above-market lease assets (rental revenue) | 11.6 | (2,539 | ) | (2,539 | ) | (2,539 | ) | (2,539 | ) | (2,539 | ) | |||||||||||
Below-market ground lease assets (amortization expense) | 90.3 | 30 | 28 | 26 | 25 | 23 | ||||||||||||||||
Below-market lease liabilities (rental revenue) | 14.2 | 1,884 | 1,884 | 1,884 | 1,884 | 1,884 | ||||||||||||||||
Total to be included in rental income | $ | (655 | ) | $ | (655 | ) | $ | (655 | ) | $ | (655 | ) | $ | (655 | ) |
Year ended December 31, 2013 | As originally reported | Revisions | As revised | |||||||||||||
Item 1 | Item 2 | |||||||||||||||
Net Cash provided by (used in) Operating Activities | $ | (2,702 | ) | $ | (945 | ) | $ | — | $ | (3,647 | ) | |||||
Net Cash provided by (used in) Investing Activities | $ | (112,445 | ) | $ | 945 | $ | — | $ | (111,500 | ) | ||||||
Net Cash provided by (used in) Financing Activities | $ | 124,209 | $ | — | $ | — | $ | 124,209 | ||||||||
Additional non-cash financing activities: | ||||||||||||||||
Line of credit draws used directly to acquire investments in real estate | $ | — | $ | — | $ | — | $ | — |
Three months ended March 31, 2014 | As originally reported | Revisions | As revised | |||||||||||||
Item 1 | Item 2 | |||||||||||||||
Net Cash provided by (used in) Operating Activities | $ | (16,893 | ) | $ | (1,649 | ) | $ | — | $ | (18,542 | ) | |||||
Net Cash provided by (used in) Investing Activities | $ | (219,996 | ) | $ | 1,649 | $ | 36,265 | $ | (182,082 | ) | ||||||
Net Cash provided by (used in) Financing Activities | $ | 504,818 | $ | — | $ | (36,265 | ) | $ | 468,553 | |||||||
Additional non-cash financing activities: | ||||||||||||||||
Line of credit draws used directly to acquire investments in real estate | $ | — | $ | — | $ | 36,265 | $ | 36,265 |
Six months ended June 30, 2014 | As originally reported | Revisions | As revised | |||||||||||||
Item 1 | Item 2 | |||||||||||||||
Net Cash provided by (used in) Operating Activities | $ | (769 | ) | $ | (2,463 | ) | $ | — | $ | (3,232 | ) | |||||
Net Cash provided by (used in) Investing Activities | $ | (519,568 | ) | $ | 2,463 | $ | 71,528 | $ | (445,577 | ) | ||||||
Net Cash provided by (used in) Financing Activities | $ | 1,441,661 | $ | — | $ | (71,528 | ) | $ | 1,370,133 | |||||||
Additional non-cash financing activities: | ||||||||||||||||
Line of credit draws used directly to acquire investments in real estate | $ | — | $ | — | $ | 71,528 | $ | 71,528 |
Nine months ended September 30, 2014 | As originally reported | Revisions | As revised | |||||||||||||
Item 1 | Item 2 | |||||||||||||||
Net Cash provided by (used in) Operating Activities | $ | 352 | $ | (10,000 | ) | $ | — | $ | (9,648 | ) | ||||||
Net Cash provided by (used in) Investing Activities | $ | (1,408,617 | ) | $ | 10,000 | $ | 309,096 | $ | (1,089,521 | ) | ||||||
Net Cash provided by (used in) Financing Activities | $ | 1,672,715 | $ | — | $ | (309,096 | ) | $ | 1,363,619 | |||||||
Additional non-cash financing activities: | ||||||||||||||||
Line of credit draws used directly to acquire investments in real estate | $ | — | $ | — | $ | 309,096 | $ | 309,096 |
Number of Properties | Base Purchase Price(1) | |||||
(In thousands) | ||||||
As of December 31, 2013 | 37 | $ | 184,960 | |||
Twelve Months ended December 31, 2014 | 270 | 2,193,594 | ||||
Portfolio as of December 31, 2014 | 307 | $ | 2,378,554 |
(1) | Contract purchase price, excluding acquisition related costs, based on the exchange rate at the time of purchase, where applicable. |
Year Ended December 31, | ||||||||||||
(Dollar amounts in thousands) | 2014 | 2013 | 2012 | |||||||||
Real estate investments, at cost: | ||||||||||||
Land | $ | 288,376 | $ | 44,118 | $ | 519 | ||||||
Buildings, fixtures and improvements | 1,450,862 | 103,127 | 1,210 | |||||||||
Total tangible assets | 1,739,238 | 147,245 | 1,729 | |||||||||
Intangibles acquired: | ||||||||||||
In-place leases | 418,419 | 44,865 | 647 | |||||||||
Above market lease asset | 26,711 | 2,159 | 209 | |||||||||
Below market lease liability | (17,513 | ) | (5,983 | ) | — | |||||||
Below market ground lease liability | 901 | — | — | |||||||||
Goodwill | 3,665 | — | — | |||||||||
Total assets acquired, net | 2,171,421 | 188,286 | 2,585 | |||||||||
Mortgage notes payable used to acquire real estate investments | (217,791 | ) | (75,651 | ) | (1,228 | ) | ||||||
Credit facility borrowings used to acquire real estate investments | (446,558 | ) | — | — | ||||||||
Other liabilities assumed | — | (1,664 | ) | — | ||||||||
Cash paid for acquired real estate investments | $ | 1,507,072 | $ | 110,971 | $ | 1,357 | ||||||
Number of properties purchased | 270 | 36 | 1 |
Year Ended December 31, | ||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||
Pro forma revenues | $ | 203,769 | $ | 202,419 | $ | 16,685 | ||||||
Pro forma net income | $ | 54,887 | $ | (55,524 | ) | $ | (6,817 | ) | ||||
Pro forma earnings per share | 0.44 | (10.18 | ) | (106.10 | ) |
(In thousands) | Future Minimum Base Rent Payments | |||
2015 | $ | 175,154 | ||
2016 | 179,154 | |||
2017 | 182,643 | |||
2018 | 185,137 | |||
2019 | 187,586 | |||
Thereafter | 1,220,434 | |||
$ | 2,130,108 |
December 31, | ||||||
Tenant | 2014 | 2013 | 2012 | |||
Encanto Restaurants, Inc. | * | 19.4% | —% | |||
Western Digital Corporation | * | 14.6% | —% | |||
Thames Water Utilities Limited | * | 11.7% | —% | |||
McDonald's Property Company Limited | * | * | 100% |
December 31, | ||||||
Country | 2014 | 2013 | 2012 | |||
United Kingdom | 22.0% | 38.4% | 100% | |||
Puerto Rico | * | 19.4% | * | |||
Germany | 10.9% | * | * | |||
United States: | ||||||
California | * | 14.6% | * | |||
Texas | 10.4% | * | * |
Encumbered Properties | Outstanding Loan Amount | Effective Interest Rate | Interest Rate | ||||||||||||||
Country | Portfolio | December 31, 2014 | December 31, 2013 | Maturity | |||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||
Germany: | |||||||||||||||||
Rheinmetall | 1 | $ | 12,884 | $ | — | 2.5% | Fixed | Jan. 2019 | |||||||||
OBI DIY | 1 | 5,470 | — | 2.4% | Fixed | Jan. 2019 | |||||||||||
RWE AG | 3 | 75,969 | — | 1.6% | Fixed | Oct. 2019 | |||||||||||
Rexam | 1 | 6,394 | — | 1.9% | Fixed | Oct. 2019 | |||||||||||
Metro Tonic | 1 | 32,211 | — | 1.7% | Fixed | Dec. 2019 | |||||||||||
United Kingdom: | |||||||||||||||||
McDonald's | 1 | 1,180 | (1) | 1,253 | 4.1% | (2) | Fixed | Oct. 2017 | |||||||||
Wickes Building Supplies I | 1 | 3,024 | (1) | 3,209 | 3.7% | (2) | Fixed | May 2018 | |||||||||
Everything Everywhere | 1 | 6,213 | (1) | 6,596 | 4.0% | (2) | Fixed | Jun. 2018 | |||||||||
Thames Water | 1 | 9,319 | (1) | 9,894 | 4.1% | (2) | Fixed | Jul. 2018 | |||||||||
Wickes Building Supplies II | 1 | 2,563 | (1) | 2,721 | 4.2% | (2) | Fixed | Jul. 2018 | |||||||||
Northern Rock | 2 | 8,155 | (1) | 8,657 | 4.4% | (2) | Fixed | Sep. 2018 | |||||||||
Wickes Building Supplies III | 1 | 2,951 | (1) | 3,133 | 4.3% | (2) | Fixed | Nov. 2018 | |||||||||
Provident Financial | 1 | 19,804 | — | 4.1% | (2) | Fixed | Feb. 2019 | ||||||||||
Crown Crest | 1 | 29,901 | — | 4.2% | (2) | Fixed | Feb. 2019 | ||||||||||
Aviva | 1 | 24,387 | — | 3.8% | (2) | Fixed | Mar. 2019 | ||||||||||
United States: | Western Digital | 1 | 18,269 | 18,541 | 3.7% | Fixed | Jul. 2021 | ||||||||||
Puerto Rico: | Encanto Restaurants | 18 | 22,492 | 22,900 | 3.0% | Fixed | Jun. 2017 | ||||||||||
Total | 37 | $ | 281,186 | $ | 76,904 | 3.7% |
(In thousands) | Future Principal Payments | |||
2015 | $ | 721 | ||
2016 | 758 | |||
2017 | 23,099 | |||
2018 | 32,562 | |||
2019 | 207,374 | |||
Thereafter | 16,672 | |||
$ | 281,186 |
(In thousands) | Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
December 31, 2014 | $ | 514 | $ | — | $ | (24 | ) | $ | 490 | ||||||||
December 31, 2013 | $ | — | $ | — | $ | — | — | $ | — |
(In thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
December 31, 2014 | ||||||||||||||||
Foreign currency swaps, net | $ | — | $ | 11,289 | $ | — | $ | 11,289 | ||||||||
Foreign currency forwards, net | $ | — | $ | 1,884 | $ | — | $ | 1,884 | ||||||||
Investment securities | $ | 490 | $ | — | $ | — | $ | 490 | ||||||||
Interest rate swaps, net | $ | — | $ | (5,650 | ) | $ | — | $ | (5,650 | ) | ||||||
December 31, 2013 | ||||||||||||||||
Foreign currency swap | $ | — | $ | (2,565 | ) | $ | — | $ | (2,565 | ) | ||||||
Interest rate swap | $ | — | $ | 734 | $ | — | $ | 734 |
Carrying Amount(1) | Fair Value | Carrying Amount(2) | Fair Value | |||||||||||||||
(In thousands) | Level | December 31, 2014 | December 31, 2014 | December 31, 2013 | December 31, 2013 | |||||||||||||
Mortgage notes payable | 3 | $ | 282,351 | $ | 280,967 | $ | 78,567 | $ | 77,698 | |||||||||
Credit facility | 3 | $ | 659,268 | $ | 669,824 | $ | — | $ | — |
December 31, 2014 | December 31, 2013 | |||||||||||
Derivatives | Number of Instruments | Notional Amount | Number of Instruments | Notional Amount | ||||||||
(In thousands) | (In thousands) | |||||||||||
Interest Rate Swap (GBP) | 20 | $ | 371,225 | 7 | $ | 35,465 | ||||||
Interest Rate Swap (EUR) | 10 | $ | 282,999 | — | $ | — | ||||||
Total | 30 | $ | 654,224 | 7 | $ | 35,465 |
December 31, 2014 | December 31, 2013 | ||||||||||||
Derivatives | Number of Instrument (2) | Notional Amount (2) | Number of Instruments (1) | Notional Amount (1) | |||||||||
(In thousands) | (In thousands) | ||||||||||||
Foreign currency swaps (GBP-USD) | 5 | $ | 107,623 | 7 | $ | 35,597 | |||||||
Foreign currency swaps (EUR-USD) | 10 | 134,285 | — | — | — | ||||||||
Total | 15 | $ | 241,908 | 7 | $ | 35,597 |
December 31, 2014 | December 31, 2013 | |||||||||||
Derivatives | Number of Instruments | Notional Amount | Number of Instruments | Notional Amount | ||||||||
(In thousands) | (In thousands) | |||||||||||
EUR-USD forwards | 31 | $ | 12,699 | — | $ | — | ||||||
GBP-USD forwards | 80 | $ | 13,664 | — | $ | — |
(In thousands) | Balance Sheet Location | December 31, 2014 | December 31, 2013 | |||||||
Derivatives designated as hedging instruments: | ||||||||||
Interest rate swaps | Derivative assets, at fair value | $ | 18 | $ | 734 | |||||
Foreign currency swaps | Derivative assets, at fair value | $ | 11,736 | $ | — | |||||
Interest rate swaps | Derivative liabilities, at fair value | $ | (5,668 | ) | $ | — | ||||
Foreign currency swaps | Derivative liabilities, at fair value | $ | (447 | ) | $ | (2,565 | ) | |||
Derivatives not designated as hedging instruments: | ||||||||||
GBP-USD Forwards | Derivative assets, at fair value | $ | 1,148 | $ | — | |||||
EUR-USD Forwards | Derivative assets, at fair value | $ | 736 | $ | — |
Year Ended December 31, | |||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||
Amount of gain (loss) recognized in accumulated other comprehensive income from derivatives (effective portion) | $ | 5,670 | (1,901 | ) | $ | (55 | ) | ||||
Amount of loss reclassified from accumulated other comprehensive income into income as interest expense (effective portion) | $ | (2,087 | ) | (123 | ) | $ | (2 | ) | |||
Amount of gain (loss) recognized in income on derivative instruments (ineffective portion and amount excluded from effectiveness testing) | $ | — | — | $ | — |
Gross Amounts Not Offset on the Balance Sheet | ||||||||||||||||||||||||||||
Derivatives (In thousands) | Gross Amounts of Recognized Assets | Gross Amounts of Recognized (Liabilities) | Gross Amounts Offset on the Balance Sheet | Net Amounts of Assets (Liabilities) presented on the Balance Sheet | Financial Instruments | Cash Collateral Received (Posted) | Net Amount | |||||||||||||||||||||
December 31, 2014 | $ | 13,638 | $ | (6,115 | ) | $ | — | $ | 7,523 | $ | — | $ | — | $ | 7,523 | |||||||||||||
December 31, 2013 | $ | 734 | $ | (2,565 | ) | $ | — | $ | (1,831 | ) | $ | — | $ | — | $ | (1,831 | ) |
Year Ended December 31, | Payable as of December 31, | |||||||||||||||
(In thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Total commissions and fees to Dealer Manager | $ | 148,372 | $ | 14,024 | $ | 13 | $ | 176 |
Year Ended December 31, | Payable as of December 31, | |||||||||||||||
(In thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Fees and expense reimbursements to the Advisor and Dealer Manager | $ | 16,920 | $ | 2,615 | $ | 61 | $ | 293 |
Year Ended December 31, | ||||||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | Payable as of December 31, | |||||||||||||||||||||||||||||||||
(In thousands) | Incurred | Forgiven | Incurred | Forgiven | Incurred | Forgiven | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||
One-time fees and reimbursements: | ||||||||||||||||||||||||||||||||||||
Acquisition fees and related cost reimbursements | $ | 32,915 | $ | — | $ | 2,447 | $ | — | $ | 41 | $ | — | $ | 2 | $ | — | $ | — | ||||||||||||||||||
Transaction fee | — | — | 165 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Financing coordination fees | 6,546 | — | 926 | — | 9 | — | — | — | — | |||||||||||||||||||||||||||
Ongoing fees: | ||||||||||||||||||||||||||||||||||||
Asset management fees (1) | — | — | — | — | — | 3 | — | — | — | |||||||||||||||||||||||||||
Property management and leasing fees | 1,316 | 690 | 50 | 25 | 1 | — | 52 | 1 | 1 | |||||||||||||||||||||||||||
Strategic advisory fees | 561 | — | 359 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Distributions on Class B Units | 178 | — | 4 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Total related party operational fees and reimbursements | $ | 41,516 | $ | 690 | $ | 3,951 | $ | 25 | $ | 51 | $ | 3 | $ | 54 | $ | 1 | $ | 1 |
Year Ended December 31, | ||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||
Property operating expenses absorbed | $ | 178 | $ | 4 | $ | — | ||||||
General and administrative expenses absorbed | — | 1,292 | 85 | |||||||||
Total expenses absorbed (1) | $ | 178 | $ | 1,296 | $ | 85 |
Number of Restricted Shares | Weighted-Average Issue Price | |||||
Unvested, December 31, 2011 | — | $ | — | |||
Granted | 9,000 | 9.00 | ||||
Vested | — | — | ||||
Unvested, December 31, 2012 | 9,000 | 9.00 | ||||
Granted | 9,000 | 9.00 | ||||
Vested | (1,800 | ) | 9.00 | |||
Unvested, December 31, 2013 | 16,200 | 9.00 | ||||
Granted | 9,000 | 9.00 | ||||
Vested | (10,800 | ) | 9.00 | |||
Forfeitures | — | — | ||||
Unvested, December 31, 2014 | 14,400 | $ | 9.00 |
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Net loss (in thousands) | $ | (53,594 | ) | $ | (6,989 | ) | $ | (413 | ) | |||
Basic and diluted weighted average shares outstanding | 126,079,369 | 5,453,404 | 64,252 | |||||||||
Basic and diluted net loss per share | $ | (0.43 | ) | $ | (1.28 | ) | $ | (6.43 | ) |
December 31, | |||||||||
2014 | 2013 | 2012 | |||||||
Unvested restricted stock | 14,400 | 16,200 | 9,000 | ||||||
OP Units | 22 | 22 | 22 | ||||||
Class B units | 705,743 | 23,392 | — | ||||||
Total common share equivalents | 720,165 | 39,614 | 9,022 |
For the quarter ended | ||||||||||||||||
2014 | March 31, | June 30, | September 30, | December 31, | ||||||||||||
Rental revenue | $ | 7,315 | $ | 13,223 | $ | 25,400 | $ | 42,220 | ||||||||
Net loss | $ | (16,349 | ) | $ | (7,479 | ) | $ | (24,558 | ) | $ | (5,208 | ) | ||||
Weighted average shares outstanding | 37,602,790 | 111,819,848 | 175,401,867 | 177,414,574 | ||||||||||||
Basic and diluted net loss per share | $ | (0.43 | ) | $ | (0.07 | ) | $ | (0.14 | ) | $ | (0.03 | ) | ||||
For the quarter ended | ||||||||||||||||
2013 | March 31, | June 30, | September 30, | December 31, | ||||||||||||
Rental revenue | $ | 45 | $ | 200 | $ | 1,232 | $ | 2,474 | ||||||||
Net loss | $ | (2 | ) | $ | (1,294 | ) | $ | (3,090 | ) | $ | (2,603 | ) | ||||
Weighted average shares outstanding | 439,097 | 2,755,487 | 7,023,704 | 11,456,997 | ||||||||||||
Basic and diluted net loss per share | $ | — | $ | (0.47 | ) | $ | (0.44 | ) | $ | (0.23 | ) |
Number of Properties | Rentable Square Feet | Base Purchase Price(1) | |||||||||
(in thousands) | |||||||||||
Total portfolio, December 31, 2014 | 307 | — | 16,305,844 | $ | 2,378,554 | ||||||
Acquisitions | 2 | 136,874 | 38,655 | ||||||||
Total portfolio, April 2, 2015 | 309 | 16,442,718 | $ | 2,417,209 |
Initial Costs | Costs Capitalized Subsequent to Acquisition | |||||||||||||||||||||||||||||||||
Property | City | U.S. State or Country | Acquisition Date | Encumbrances at December 31, 2014 | Land | Building and Improvements | Land | Building and Improvements | Gross Amount at December 31, 2014(1)(2) | Accumulated Depreciation (3)(4) | ||||||||||||||||||||||||
McDonalds Corporation | Carlisle | UK | Oct. 2012 | $ | 1,181 | $ | 499 | $ | 1,163 | $ | — | $ | — | $ | 1,662 | $ | 145 | |||||||||||||||||
Wickes | Blackpool | UK | May. 2013 | 3,023 | 2,097 | 2,252 | — | — | 4,349 | 180 | ||||||||||||||||||||||||
Everything Everywhere | Merthyr Tydfil | UK | Jun. 2013 | 6,213 | 4,272 | 2,718 | — | — | 6,990 | 208 | ||||||||||||||||||||||||
Thames Water | Swindon | UK | Jul. 2013 | 9,320 | 4,272 | 5,048 | — | — | 9,320 | 345 | ||||||||||||||||||||||||
Wickes | Tunstall | UK | Jul. 2013 | 2,563 | 1,087 | 2,485 | — | — | 3,572 | 169 | ||||||||||||||||||||||||
PPD Global Labs | Highland Heights | KY | Aug. 2013 | — | 2,001 | 6,002 | — | — | 8,003 | 433 | ||||||||||||||||||||||||
Northern Rock | Sunderland | UK | Sep. 2013 | 8,155 | 1,553 | 5,437 | — | — | 6,990 | 350 | ||||||||||||||||||||||||
Kulicke & Soffa | Fort Washington | PA | Sep. 2013 | — | 2,272 | 12,874 | — | — | 15,146 | 828 | ||||||||||||||||||||||||
Wickes | Clifton | UK | Nov. 2013 | 2,951 | 1,553 | 2,175 | — | — | 3,728 | 122 | ||||||||||||||||||||||||
Con-Way Freight, Inc. | Aurora | NE | Nov. 2013 | — | 295 | 1,670 | — | — | 1,965 | 110 | ||||||||||||||||||||||||
Con-Way Freight, Inc. | Grand Rapids | MI | Nov. 2013 | — | 945 | 1,417 | — | — | 2,362 | 94 | ||||||||||||||||||||||||
Con-Way Freight, Inc. | Riverton | IL | Nov. 2013 | — | 344 | 804 | — | — | 1,148 | 53 | ||||||||||||||||||||||||
Con-Way Freight, Inc. | Salina | KS | Nov. 2013 | — | 461 | 1,843 | — | — | 2,304 | 122 | ||||||||||||||||||||||||
Con-Way Freight, Inc. | Uhrichsville | OH | Nov. 2013 | — | 380 | 886 | — | — | 1,266 | 59 | ||||||||||||||||||||||||
Con-Way Freight, Inc. | Vincennes | IN | Nov. 2013 | — | 220 | 712 | — | — | 932 | 44 | ||||||||||||||||||||||||
Con-Way Freight, Inc. | Waite Park | MN | Nov. 2013 | — | 366 | 681 | — | — | 1,047 | 45 | ||||||||||||||||||||||||
Wolverine | Howard City | MI | Dec. 2013 | — | 719 | 13,667 | — | — | 14,386 | 834 | ||||||||||||||||||||||||
Western Digital | San Jose | CA | Dec. 2013 | 18,269 | 9,021 | 16,729 | — | — | 25,750 | 808 | ||||||||||||||||||||||||
Encanto Restaurants | Baymon | PR | Dec. 2013 | 1,829 | 1,150 | 1,724 | — | — | 2,874 | 96 | ||||||||||||||||||||||||
Encanto Restaurants | Caguas | PR | Dec. 2013 | 1,591 | — | 2,481 | — | — | 2,481 | 138 | ||||||||||||||||||||||||
Encanto Restaurants | Carolina | PR | Dec. 2013 | 875 | 615 | 751 | — | — | 1,366 | 42 | ||||||||||||||||||||||||
Encanto Restaurants | Carolina | PR | Dec. 2013 | 2,943 | 1,840 | 2,761 | — | — | 4,601 | 153 | ||||||||||||||||||||||||
Encanto Restaurants | Guayama | PR | Dec. 2013 | 954 | 673 | 822 | — | — | 1,495 | 46 | ||||||||||||||||||||||||
Encanto Restaurants | Mayaguez | PR | Dec. 2013 | 875 | 410 | 957 | — | — | 1,367 | 53 | ||||||||||||||||||||||||
Encanto Restaurants | Ponce | PR | Dec. 2013 | 1,392 | 655 | 1,528 | — | — | 2,183 | 85 | ||||||||||||||||||||||||
Encanto Restaurants | Ponce | PR | Dec. 2013 | 1,273 | 600 | 1,399 | — | — | 1,999 | 80 | ||||||||||||||||||||||||
Encanto Restaurants | Puerto Neuvo | PR | Dec. 2013 | 517 | — | 782 | — | — | 782 | 43 | ||||||||||||||||||||||||
Encanto Restaurants | Quebrada Arena | PR | Dec. 2013 | 1,535 | 843 | 1,566 | — | — | 2,409 | 87 | ||||||||||||||||||||||||
Encanto Restaurants | Rio Piedras | PR | Dec. 2013 | 1,750 | 963 | 1,788 | — | — | 2,751 | 99 | ||||||||||||||||||||||||
Encanto Restaurants | Rio Piedras | PR | Dec. 2013 | 1,074 | 505 | 1,179 | — | — | 1,684 | 65 | ||||||||||||||||||||||||
Encanto Restaurants | San German | PR | Dec. 2013 | 716 | 391 | 726 | — | — | 1,117 | 42 | ||||||||||||||||||||||||
Encanto Restaurants | San Juan | PR | Dec. 2013 | 994 | 389 | 1,168 | — | — | 1,557 | 65 | ||||||||||||||||||||||||
Encanto Restaurants | San Juan | PR | Dec. 2013 | 1,750 | 1,235 | 1,509 | — | — | 2,744 | 84 | ||||||||||||||||||||||||
Encanto Restaurants | San Juan | PR | Dec. 2013 | 493 | 153 | 612 | — | — | 765 | 34 |
Initial Costs | Costs Capitalized Subsequent to Acquisition | |||||||||||||||||||||||||||||||||
Property | City | U.S. State or Country | Acquisition Date | Encumbrances at December 31, 2014 | Land | Building and Improvements | Land | Building and Improvements | Gross Amount at December 31, 2014(1)(2) | Accumulated Depreciation (3)(4) | ||||||||||||||||||||||||
Encanto Restaurants | Toa Baja | PR | Dec. 2013 | 437 | 68 | 616 | — | — | 684 | 35 | ||||||||||||||||||||||||
Encanto Restaurants | Vega Baja | PR | Dec. 2013 | 1,495 | 822 | 1,527 | — | — | 2,349 | 85 | ||||||||||||||||||||||||
Rheinmetall | Neuss | Germany | Jan. 2014 | 12,884 | 6,250 | 17,547 | — | — | 23,797 | 476 | ||||||||||||||||||||||||
GE Aviation | Grand Rapids | MI | Jan. 2014 | — | 3,174 | 27,076 | — | — | 30,250 | 721 | ||||||||||||||||||||||||
Provident Financial | Bradford | UK | Feb. 2014 | 19,805 | 1,567 | 29,067 | — | — | 30,634 | 679 | ||||||||||||||||||||||||
Crown Crest | Leicester | UK | Feb. 2014 | 29,901 | 8,927 | 36,863 | — | — | 45,790 | 981 | ||||||||||||||||||||||||
Trane | Davenport | IA | Feb. 2014 | — | 291 | 1,968 | — | — | 2,259 | 54 | ||||||||||||||||||||||||
Aviva | Sheffield | UK | Mar. 2014 | 24,387 | 3,375 | 38,242 | — | — | 41,617 | 839 | ||||||||||||||||||||||||
DFS Trading | Brigg | UK | Mar. 2014 | — | 1,577 | 4,471 | — | — | 6,048 | 101 | ||||||||||||||||||||||||
DFS Trading | Carcroft | UK | Mar. 2014 | — | 360 | 2,583 | — | — | 2,943 | 61 | ||||||||||||||||||||||||
DFS Trading | Carcroft | UK | Mar. 2014 | — | 1,325 | 5,249 | — | — | 6,574 | 109 | ||||||||||||||||||||||||
DFS Trading | Darley Dale | UK | Mar. 2014 | — | 1,551 | 3,981 | — | — | 5,532 | 91 | ||||||||||||||||||||||||
DFS Trading | Somercotes | UK | Mar. 2014 | — | 911 | 3,254 | — | — | 4,165 | 88 | ||||||||||||||||||||||||
Government Services Administration | Fanklin | TN | Mar. 2014 | — | 4,160 | 30,083 | — | — | 34,243 | 600 | ||||||||||||||||||||||||
National Oilwell Varco | Williston | ND | Mar. 2014 | — | 211 | 3,513 | — | — | 3,724 | 95 | ||||||||||||||||||||||||
Talk Talk | Manchester | UK | Apr. 2014 | — | 911 | 10,831 | — | — | 11,742 | 225 | ||||||||||||||||||||||||
Government Services Administration | Dover | DE | Apr. 2014 | — | 1,097 | 1,715 | — | — | 2,812 | 34 | ||||||||||||||||||||||||
Government Services Administration | Germantown | PA | Apr. 2014 | — | 1,097 | 3,573 | — | — | 4,670 | 64 | ||||||||||||||||||||||||
OBI DIY | Mayen | Germany | Apr. 2014 | 5,470 | 1,362 | 8,129 | — | — | 9,491 | 165 | ||||||||||||||||||||||||
DFS Trading | South Yorkshire | UK | Apr. 2014 | — | — | 1,624 | — | — | 1,624 | 44 | ||||||||||||||||||||||||
DFS Trading | Yorkshire | UK | Apr. 2014 | — | — | 2,116 | — | — | 2,116 | 38 | ||||||||||||||||||||||||
Government Services Administration | Dallas | TX | Apr. 2014 | — | 484 | 2,934 | — | — | 3,418 | 52 | ||||||||||||||||||||||||
Government Services Administration | Mission | TX | Apr. 2014 | — | 618 | 3,145 | — | — | 3,763 | 59 | ||||||||||||||||||||||||
Government Services Administration | International Falls | MN | May. 2014 | — | 350 | 11,182 | — | — | 11,532 | 204 | ||||||||||||||||||||||||
Indiana Department of Revenue | Indianapolis | IN | May. 2014 | — | 891 | 7,677 | — | — | 8,568 | 145 | ||||||||||||||||||||||||
National Oilwell Varco | Pleasanton | TX | May. 2014 | — | 202 | 1,643 | — | — | 1,845 | 37 | ||||||||||||||||||||||||
Nissan | Murfreesboro | TN | May. 2014 | — | 966 | 19,573 | — | — | 20,539 | 299 | ||||||||||||||||||||||||
Government Services Administration | Lakewood | CO | Jun. 2014 | — | 1,220 | 7,928 | — | — | 9,148 | 122 | ||||||||||||||||||||||||
Lippert Components | South Bend | IN | Jun. 2014 | — | 3,195 | 6,883 | — | — | 10,078 | 108 | ||||||||||||||||||||||||
Axon Energy Products | Conroe | TX | Jun. 2014 | — | 826 | 6,132 | — | — | 6,958 | 91 | ||||||||||||||||||||||||
Axon Energy Products | Houston | TX | Jun. 2014 | — | 416 | 5,186 | — | — | 5,602 | 83 |
Initial Costs | Costs Capitalized Subsequent to Acquisition | |||||||||||||||||||||||||||||||||
Property | City | U.S. State or Country | Acquisition Date | Encumbrances at December 31, 2014 | Land | Building and Improvements | Land | Building and Improvements | Gross Amount at December 31, 2014(1)(2) | Accumulated Depreciation (3)(4) | ||||||||||||||||||||||||
Axon Energy Products | Houston | TX | Jun. 2014 | — | 294 | 2,310 | — | — | 2,604 | 38 | ||||||||||||||||||||||||
Bell Supply Co | Carrizo Springs | TX | Jun. 2014 | — | 260 | 1,445 | — | — | 1,705 | 28 | ||||||||||||||||||||||||
Bell Supply Co | Cleburne | TX | Jun. 2014 | — | 301 | 323 | — | — | 624 | 7 | ||||||||||||||||||||||||
Bell Supply Co | Frierson | LA | Jun. 2014 | — | 260 | 1,054 | — | — | 1,314 | 28 | ||||||||||||||||||||||||
Bell Supply Co | Gainesville | TX | Jun. 2014 | — | 131 | 1,420 | — | — | 1,551 | 23 | ||||||||||||||||||||||||
Bell Supply Co | Killdeer | ND | Jun. 2014 | — | 307 | 1,250 | — | — | 1,557 | 23 | ||||||||||||||||||||||||
Bell Supply Co | Williston | ND | Jun. 2014 | — | 162 | 2,323 | — | — | 2,485 | 39 | ||||||||||||||||||||||||
GE Oil & Gas | Canton | OH | Jun. 2014 | — | 437 | 3,039 | — | — | 3,476 | 50 | ||||||||||||||||||||||||
GE Oil & Gas | Odessa | TX | Jun. 2014 | — | 1,611 | 3,322 | — | — | 4,933 | 99 | ||||||||||||||||||||||||
Lhoist | Irving | TX | Jun. 2014 | — | 173 | 2,154 | — | — | 2,327 | 42 | ||||||||||||||||||||||||
Select Energy Services | DeBerry | TX | Jun. 2014 | — | 533 | 7,551 | — | — | 8,084 | 192 | ||||||||||||||||||||||||
Select Energy Services | Gainesville | TX | Jun. 2014 | — | 519 | 7,482 | — | — | 8,001 | 113 | ||||||||||||||||||||||||
Select Energy Services | Victoria | TX | Jun. 2014 | — | 354 | 1,698 | — | — | 2,052 | 34 | ||||||||||||||||||||||||
Bell Supply Co | Jacksboro | TX | Jun. 2014 | — | 51 | 657 | — | — | 708 | 15 | ||||||||||||||||||||||||
Bell Supply Co | Kenedy | TX | Jun. 2014 | — | 190 | 1,669 | — | — | 1,859 | 30 | ||||||||||||||||||||||||
Select Energy Services | Alice | TX | Jun. 2014 | — | 518 | 1,331 | — | — | 1,849 | 21 | ||||||||||||||||||||||||
Select Energy Services | Dilley | TX | Jun. 2014 | — | 429 | 1,777 | — | — | 2,206 | 32 | ||||||||||||||||||||||||
Select Energy Services | Kenedy | TX | Jun. 2014 | — | 815 | 8,355 | — | — | 9,170 | 131 | ||||||||||||||||||||||||
Select Energy Services | Laredo | TX | Jun. 2014 | — | 2,472 | 944 | — | — | 3,416 | 22 | ||||||||||||||||||||||||
Superior Energy Services | Gainesville | TX | Jun. 2014 | — | 322 | 480 | — | — | 802 | 7 | ||||||||||||||||||||||||
Superior Energy Services | Jacksboro | TX | Jun. 2014 | — | 408 | 312 | — | — | 720 | 6 | ||||||||||||||||||||||||
Amcor Packaging | Workington | UK | Jun. 2014 | — | 1,352 | 7,971 | — | — | 9,323 | 129 | ||||||||||||||||||||||||
Government Services Administration | Raton | NM | Jun. 2014 | — | 93 | 875 | — | — | 968 | 13 | ||||||||||||||||||||||||
Nimble Storage | San Jose | CA | Jun. 2014 | — | 30,227 | 10,708 | — | 28 | 40,963 | 142 | ||||||||||||||||||||||||
FedEx | Amarillo | TX | Jul. 2014 | — | 889 | 6,421 | — | — | 7,310 | 104 | ||||||||||||||||||||||||
FedEx | Chicopee | MA | Jul. 2014 | — | 1,030 | 7,022 | — | — | 8,052 | 119 | ||||||||||||||||||||||||
FedEx | San Antonio | TX | Jul. 2014 | — | 3,283 | 17,729 | — | — | 21,012 | 239 | ||||||||||||||||||||||||
Sandoz | Princeton | NJ | Jul. 2014 | — | 7,766 | 29,991 | — | 9,561 | 47,318 | 383 | ||||||||||||||||||||||||
Wyndham | Branson | MO | Jul. 2014 | — | 881 | 3,307 | — | — | 4,188 | 47 | ||||||||||||||||||||||||
Valassis | Livonia | MI | Jul. 2014 | — | 1,735 | 8,119 | — | — | 9,854 | 106 | ||||||||||||||||||||||||
Government Services Administration | Fort Fairfield | ME | Jul. 2014 | — | 26 | 9,315 | — | — | 9,341 | 99 | ||||||||||||||||||||||||
AT&T Services, Inc. | San Antonio | TX | Jul. 2014 | — | 5,312 | 41,201 | — | — | 46,513 | 434 | ||||||||||||||||||||||||
PNC Bank | Erie | PA | Jul. 2014 | — | 242 | 6,195 | — | — | 6,437 | 67 | ||||||||||||||||||||||||
PNC Bank | Scranton | PA | Jul. 2014 | — | 1,324 | 3,004 | — | — | 4,328 | 33 | ||||||||||||||||||||||||
Achmea | Leusden | Netherlands | Jul. 2014 | — | 3,094 | 24,115 | — | — | 27,209 | 255 |
Initial Costs | Costs Capitalized Subsequent to Acquisition | ||||||||||||||||||||||||||
Property | City | U.S. State or Country | Acquisition Date | Encumbrances at December 31, 2014 | Land | Building and Improvements | Land | Building and Improvements | Gross Amount at December 31, 2014(1)(2) | Accumulated Depreciation (3)(4) | |||||||||||||||||
Continental Tire | Fort Mill | SC | Jul. 2014 | — | 780 | 14,259 | — | — | 15,039 | 153 | |||||||||||||||||
Fujitsu Office Properties | Manchester | UK | Jul. 2014 | — | 4,386 | 47,482 | — | — | 51,868 | 517 | |||||||||||||||||
BP Oil | Wootton Bassett | UK | Aug. 2014 | — | 712 | 3,075 | — | — | 3,787 | 36 | |||||||||||||||||
HBOS | Derby | UK | Aug. 2014 | — | 714 | 7,192 | — | — | 7,906 | 86 | |||||||||||||||||
HBOS | St. Helens | UK | Aug. 2014 | — | 270 | 4,075 | — | — | 4,345 | 49 | |||||||||||||||||
HBOS | Warrington | UK | Aug. 2014 | — | 516 | 2,435 | — | — | 2,951 | 32 | |||||||||||||||||
Malthurst | Shiptonthorpe | UK | Aug. 2014 | — | 328 | 2,327 | — | — | 2,655 | 30 | |||||||||||||||||
Malthurst | Yorkshire | UK | Aug. 2014 | — | 581 | 1,523 | — | — | 2,104 | 25 | |||||||||||||||||
Stanley Black & Decker | Westerville | OH | Aug. 2014 | — | 958 | 6,933 | — | — | 7,891 | 77 | |||||||||||||||||
Thermo Fisher | Kalamazoo | MI | Aug. 2014 | — | 1,176 | 10,179 | — | — | 11,355 | 107 | |||||||||||||||||
Capgemini | Birmingham | UK | Aug. 2014 | — | 1,933 | 18,331 | — | — | 20,264 | 170 | |||||||||||||||||
Merck | Madison | NJ | Aug. 2014 | — | 10,290 | 32,530 | — | — | 42,820 | 277 | |||||||||||||||||
Family Dollar | Abbeville | AL | Aug. 2014 | — | 115 | 635 | — | — | 750 | 7 | |||||||||||||||||
Family Dollar | Aiken | SC | Aug. 2014 | — | 439 | 505 | — | — | 944 | 6 | |||||||||||||||||
Family Dollar | Alapaha | GA | Aug. 2014 | — | 200 | 492 | — | — | 692 | 6 | |||||||||||||||||
Family Dollar | Anniston | AL | Aug. 2014 | — | 176 | 618 | — | — | 794 | 7 | |||||||||||||||||
Family Dollar | Atlanta | GA | Aug. 2014 | — | 234 | 1,181 | — | — | 1,415 | 11 | |||||||||||||||||
Family Dollar | Bossier City | LA | Aug. 2014 | — | 291 | 520 | — | — | 811 | 5 | |||||||||||||||||
Family Dollar | Brandenburg | KY | Aug. 2014 | — | 178 | 748 | — | — | 926 | 8 | |||||||||||||||||
Family Dollar | Brownfield | TX | Aug. 2014 | — | 31 | 664 | — | — | 695 | 6 | |||||||||||||||||
Family Dollar | Brownsville | TX | Aug. 2014 | — | 83 | 803 | — | — | 886 | 8 | |||||||||||||||||
Family Dollar | Caledonia | MS | Aug. 2014 | — | 415 | 162 | — | — | 577 | 3 | |||||||||||||||||
Family Dollar | Camden | SC | Aug. 2014 | — | 187 | 608 | — | — | 795 | 7 | |||||||||||||||||
Family Dollar | Camp Wood | TX | Aug. 2014 | — | 96 | 593 | — | — | 689 | 6 | |||||||||||||||||
Family Dollar | Church Point | LA | Aug. 2014 | — | 247 | 563 | — | — | 810 | 6 | |||||||||||||||||
Family Dollar | Columbia | SC | Aug. 2014 | — | 363 | 487 | — | — | 850 | 6 | |||||||||||||||||
Family Dollar | Columbus | MS | Aug. 2014 | — | 305 | 85 | — | — | 390 | 1 | |||||||||||||||||
Family Dollar | Danville | VA | Aug. 2014 | — | 124 | 660 | — | — | 784 | 7 | |||||||||||||||||
Family Dollar | Detroit | MI | Aug. 2014 | — | 107 | 711 | — | — | 818 | 6 | |||||||||||||||||
Family Dollar | Diamond Head | MS | Aug. 2014 | — | 104 | 834 | — | — | 938 | 8 | |||||||||||||||||
Family Dollar | Eatonville | FL | Aug. 2014 | — | 332 | 584 | — | — | 916 | 8 | |||||||||||||||||
Family Dollar | Falfurrias | TX | Aug. 2014 | — | 52 | 745 | — | — | 797 | 6 | |||||||||||||||||
Family Dollar | Fayetteville | NC | Aug. 2014 | — | 99 | 438 | — | — | 537 | 4 | |||||||||||||||||
Family Dollar | Fort Davis | TX | Aug. 2014 | — | 114 | 698 | — | — | 812 | 8 | |||||||||||||||||
Family Dollar | Fort Madison | IA | Aug. 2014 | — | 188 | 226 | — | — | 414 | 3 |
Initial Costs | Costs Capitalized Subsequent to Acquisition | ||||||||||||||||||||||||||
Property | City | U.S. State or Country | Acquisition Date | Encumbrances at December 31, 2014 | Land | Building and Improvements | Land | Building and Improvements | Gross Amount at December 31, 2014(1)(2) | Accumulated Depreciation (3)(4) | |||||||||||||||||
Family Dollar | Greenwood | SC | Aug. 2014 | — | 629 | 546 | — | — | 1,175 | 5 | |||||||||||||||||
Family Dollar | Grenada | MS | Aug. 2014 | — | 346 | 335 | — | — | 681 | 4 | |||||||||||||||||
Family Dollar | Griffin | GA | Aug. 2014 | — | 369 | 715 | — | — | 1,084 | 8 | |||||||||||||||||
Family Dollar | Hallsville | TX | Aug. 2014 | — | 96 | 225 | — | — | 321 | 2 | |||||||||||||||||
Family Dollar | Hardeeville | SC | Aug. 2014 | — | 83 | 663 | — | — | 746 | 7 | |||||||||||||||||
Family Dollar | Hastings | NE | Aug. 2014 | — | 260 | 515 | — | — | 775 | 5 | |||||||||||||||||
Family Dollar | Haw River | NC | Aug. 2014 | — | 310 | 554 | — | — | 864 | 7 | |||||||||||||||||
Family Dollar | Jacksonville | FL | Aug. 2014 | — | 369 | 544 | — | — | 913 | 6 | |||||||||||||||||
Family Dollar | Kansas City | MO | Aug. 2014 | — | 52 | 986 | — | — | 1,038 | 8 | |||||||||||||||||
Family Dollar | Knoxville | TN | Aug. 2014 | — | 82 | 714 | — | — | 796 | 7 | |||||||||||||||||
Family Dollar | La Feria | TX | Aug. 2014 | — | 124 | 956 | — | — | 1,080 | 9 | |||||||||||||||||
Family Dollar | Lancaster | SC | Aug. 2014 | — | 229 | 721 | — | — | 950 | 8 | |||||||||||||||||
Family Dollar | Lillian | AL | Aug. 2014 | — | 410 | 508 | — | — | 918 | 6 | |||||||||||||||||
Family Dollar | Louisville | KY | Aug. 2014 | — | 511 | 503 | — | — | 1,014 | 6 | |||||||||||||||||
Family Dollar | Louisville | MS | Aug. 2014 | — | 235 | 410 | — | — | 645 | 5 | |||||||||||||||||
Family Dollar | Madisonville | KY | Aug. 2014 | — | 389 | 576 | — | — | 965 | 6 | |||||||||||||||||
Family Dollar | Memphis | TN | Aug. 2014 | — | 356 | 507 | — | — | 863 | 6 | |||||||||||||||||
Family Dollar | Memphis | TN | Aug. 2014 | — | 79 | 342 | — | — | 421 | 4 | |||||||||||||||||
Family Dollar | Memphis | TN | Aug. 2014 | — | 158 | 301 | — | — | 459 | 4 | |||||||||||||||||
Family Dollar | Mendenhall | MS | Aug. 2014 | — | 61 | 720 | — | — | 781 | 7 | |||||||||||||||||
Family Dollar | Mobile | AL | Aug. 2014 | — | 258 | 682 | — | — | 940 | 7 | |||||||||||||||||
Family Dollar | Mohave Valley | AZ | Aug. 2014 | — | 284 | 575 | — | — | 859 | 7 | |||||||||||||||||
Family Dollar | N Platte | NE | Aug. 2014 | — | 117 | 255 | — | — | 372 | 2 | |||||||||||||||||
Family Dollar | Nampa | ID | Aug. 2014 | — | 133 | 1,126 | — | — | 1,259 | 11 | |||||||||||||||||
Family Dollar | Newberry | MI | Aug. 2014 | — | 172 | 1,562 | — | — | 1,734 | 15 | |||||||||||||||||
Family Dollar | North Charleston | SC | Aug. 2014 | — | 376 | 588 | — | — | 964 | 7 | |||||||||||||||||
Family Dollar | North Charleston | SC | Aug. 2014 | — | 458 | 593 | — | — | 1,051 | 7 | |||||||||||||||||
Family Dollar | Oklahoma City | OK | Aug. 2014 | — | 144 | 1,211 | — | — | 1,355 | 10 | |||||||||||||||||
Family Dollar | Orlando | FL | Aug. 2014 | — | 668 | 567 | — | — | 1,235 | 7 | |||||||||||||||||
Family Dollar | Orlando | FL | Aug. 2014 | — | 501 | 769 | — | — | 1,270 | 10 | |||||||||||||||||
Family Dollar | Paulden | AZ | Aug. 2014 | — | 468 | 306 | — | — | 774 | 5 | |||||||||||||||||
Family Dollar | Pensacola | FL | Aug. 2014 | — | 123 | 541 | — | — | 664 | 6 | |||||||||||||||||
Family Dollar | Poteet | TX | Aug. 2014 | — | 141 | 169 | — | — | 310 | 3 | |||||||||||||||||
Family Dollar | Rockford | IL | Aug. 2014 | — | 183 | 1,179 | — | — | 1,362 | 11 | |||||||||||||||||
Family Dollar | Roebuck | SC | Aug. 2014 | — | 306 | 508 | — | — | 814 | 7 |
Initial Costs | Costs Capitalized Subsequent to Acquisition | ||||||||||||||||||||||||||
Property | City | U.S. State or Country | Acquisition Date | Encumbrances at December 31, 2014 | Land | Building and Improvements | Land | Building and Improvements | Gross Amount at December 31, 2014(1)(2) | Accumulated Depreciation (3)(4) | |||||||||||||||||
Family Dollar | San Angelo | TX | Aug. 2014 | — | 96 | 342 | — | — | 438 | 4 | |||||||||||||||||
Family Dollar | St Louis | MO | Aug. 2014 | — | 226 | 1,325 | — | — | 1,551 | 12 | |||||||||||||||||
Family Dollar | Tyler | TX | Aug. 2014 | — | 217 | 682 | — | — | 899 | 6 | |||||||||||||||||
Family Dollar | Union | MS | Aug. 2014 | — | 52 | 622 | — | — | 674 | 6 | |||||||||||||||||
Family Dollar | Williamston | SC | Aug. 2014 | — | 211 | 558 | — | — | 769 | 6 | |||||||||||||||||
Family Dollar | Winter Haven | FL | Aug. 2014 | — | 486 | 437 | — | — | 923 | 6 | |||||||||||||||||
Family Dollar | Winter Haven | FL | Aug. 2014 | — | 210 | 527 | — | — | 737 | 7 | |||||||||||||||||
Government Services Administration | Rangeley | ME | Aug. 2014 | — | 1,377 | 4,746 | — | 117 | 6,240 | 40 | |||||||||||||||||
Garden Ridge | Louisville | KY | Sep. 2014 | — | 3,994 | 4,865 | — | — | 8,859 | 43 | |||||||||||||||||
Garden Ridge | Lubbock | TX | Sep. 2014 | — | 1,574 | 5,950 | — | — | 7,524 | 59 | |||||||||||||||||
Garden Ridge | Mesa | AZ | Sep. 2014 | — | 2,727 | 4,867 | — | — | 7,594 | 47 | |||||||||||||||||
Garden Ridge | Raleigh | NC | Sep. 2014 | — | 2,362 | 4,267 | — | — | 6,629 | 42 | |||||||||||||||||
Hewlett-Packard | Newcastle | UK | Sep. 2014 | — | 1,335 | 22,237 | — | — | 23,572 | 147 | |||||||||||||||||
Intier Automotive | Redditch | UK | Sep. 2014 | — | 1,379 | 10,920 | — | — | 12,299 | 81 | |||||||||||||||||
Waste Management | Winston-Salem | NC | Sep. 2014 | — | 494 | 3,235 | — | — | 3,729 | 22 | |||||||||||||||||
FedEx | Winona | MN | Sep. 2014 | — | 83 | 1,785 | — | — | 1,868 | 14 | |||||||||||||||||
Winston Hotel | Amsterdam | Netherlands | Sep. 2014 | — | 8,534 | 4,512 | — | — | 13,046 | 28 | |||||||||||||||||
Dollar General | Allen | OK | Sep. 2014 | — | 99 | 793 | — | — | 892 | 6 | |||||||||||||||||
Dollar General | Allentown | PA | Sep. 2014 | — | 346 | 888 | — | — | 1,234 | 8 | |||||||||||||||||
Dollar General | Caledonia | OH | Sep. 2014 | — | 110 | 861 | — | — | 971 | 6 | |||||||||||||||||
Dollar General | Cherokee | KS | Sep. 2014 | — | 27 | 769 | — | — | 796 | 6 | |||||||||||||||||
Dollar General | Choctaw | OK | Sep. 2014 | — | 247 | 859 | — | — | 1,106 | 6 | |||||||||||||||||
Dollar General | Clearwater | KS | Sep. 2014 | — | 90 | 785 | — | — | 875 | 6 | |||||||||||||||||
Dollar General | Dexter | NM | Sep. 2014 | — | 329 | 585 | — | — | 914 | 4 | |||||||||||||||||
Dollar General | Elmore City | OK | Sep. 2014 | — | 21 | 742 | — | — | 763 | 5 | |||||||||||||||||
Dollar General | Erie | PA | Sep. 2014 | — | 410 | 682 | — | — | 1,092 | 5 | |||||||||||||||||
Dollar General | Eunice | NM | Sep. 2014 | — | 269 | 569 | — | — | 838 | 4 | |||||||||||||||||
Dollar General | Gore | OK | Sep. 2014 | — | 143 | 813 | — | — | 956 | 6 | |||||||||||||||||
Dollar General | Gratiot | OH | Sep. 2014 | — | 239 | 809 | — | — | 1,048 | 6 | |||||||||||||||||
Dollar General | Greensburg | PA | Sep. 2014 | — | 97 | 970 | — | — | 1,067 | 7 | |||||||||||||||||
Dollar General | Heavener | OK | Sep. 2014 | — | 99 | 998 | — | — | 1,097 | 7 | |||||||||||||||||
Dollar General | Kingston | OK | Sep. 2014 | — | 81 | 778 | — | — | 859 | 6 | |||||||||||||||||
Dollar General | Lordsburg | NM | Sep. 2014 | — | 212 | 719 | — | — | 931 | 5 | |||||||||||||||||
Dollar General | Lyons | KS | Sep. 2014 | — | 120 | 970 | — | — | 1,090 | 7 | |||||||||||||||||
Dollar General | Mansfield | LA | Sep. 2014 | — | 169 | 812 | — | — | 981 | 6 |
Initial Costs | Costs Capitalized Subsequent to Acquisition | |||||||||||||||||||||||||||||||||
Property | Citiy | U.S. State or Country | Acquisition Date | Encumbrances at December 31, 2014 | Land | Building and Improvements | Land | Building and Improvements | Gross Amount at December 31, 2014(1)(2) | Accumulated Depreciation (3)(4) | ||||||||||||||||||||||||
Dollar General | McKean | PA | Sep. 2014 | — | 107 | 1,014 | — | — | 1,121 | 7 | ||||||||||||||||||||||||
Dollar General | Muskogee | OK | Sep. 2014 | — | 154 | 771 | — | — | 925 | 6 | ||||||||||||||||||||||||
Dollar General | Neligh | NE | Sep. 2014 | — | 83 | 1,045 | — | — | 1,128 | 7 | ||||||||||||||||||||||||
Dollar General | New Florence | PA | Sep. 2014 | — | 70 | 940 | — | — | 1,010 | 7 | ||||||||||||||||||||||||
Dollar General | New Paris | OH | Sep. 2014 | — | 411 | 488 | — | — | 899 | 5 | ||||||||||||||||||||||||
Dollar General | Norman | OK | Sep. 2014 | — | 40 | 913 | — | — | 953 | 7 | ||||||||||||||||||||||||
Dollar General | Painesville | OH | Sep. 2014 | — | 340 | 797 | — | — | 1,137 | 6 | ||||||||||||||||||||||||
Dollar General | Painesville | OH | Sep. 2014 | — | 300 | 715 | — | — | 1,015 | 5 | ||||||||||||||||||||||||
Dollar General | Peggs | OK | Sep. 2014 | — | 72 | 879 | — | — | 951 | 6 | ||||||||||||||||||||||||
Dollar General | Santa Rosa | NM | Sep. 2014 | — | 324 | 575 | — | — | 899 | 4 | ||||||||||||||||||||||||
Dollar General | Sapulpa | OK | Sep. 2014 | — | 143 | 745 | — | — | 888 | 5 | ||||||||||||||||||||||||
Dollar General | Schuyler | NE | Sep. 2014 | — | 144 | 905 | — | — | 1,049 | 6 | ||||||||||||||||||||||||
Dollar General | Spencerville | OH | Sep. 2014 | — | 213 | 928 | — | — | 1,141 | 6 | ||||||||||||||||||||||||
Dollar General | Tahlequah | OK | Sep. 2014 | — | 132 | 925 | — | — | 1,057 | 7 | ||||||||||||||||||||||||
Dollar General | Talihina | OK | Sep. 2014 | — | 163 | 1,023 | — | — | 1,186 | 7 | ||||||||||||||||||||||||
Dollar General | Townville | PA | Sep. 2014 | — | 78 | 882 | — | — | 960 | 7 | ||||||||||||||||||||||||
Dollar General | Uniontown | PA | Sep. 2014 | — | 165 | 1,107 | — | — | 1,272 | 8 | ||||||||||||||||||||||||
Dollar General | Valley Falls | KS | Sep. 2014 | — | 51 | 922 | — | — | 973 | 6 | ||||||||||||||||||||||||
Dollar General | Valliant | OK | Sep. 2014 | — | 183 | 1,004 | — | — | 1,187 | 7 | ||||||||||||||||||||||||
Dollar General | Wymore | NE | Sep. 2014 | — | 21 | 872 | — | — | 893 | 6 | ||||||||||||||||||||||||
Dollar General | Wynnewood | OK | Sep. 2014 | — | 188 | 1,057 | — | — | 1,245 | 8 | ||||||||||||||||||||||||
FedEx | Bohemia | NY | Sep. 2014 | — | 4,838 | 19,596 | — | — | 24,434 | 141 | ||||||||||||||||||||||||
FedEx | Watertown | NY | Sep. 2014 | — | 561 | 4,757 | — | — | 5,318 | 36 | ||||||||||||||||||||||||
Shaw Aero | Naples | FL | Sep. 2014 | — | 998 | 22,332 | — | — | 23,330 | 145 | ||||||||||||||||||||||||
Mallinckrodt | St. Louis | MO | Sep. 2014 | — | 1,499 | 16,828 | — | — | 18,327 | 111 | ||||||||||||||||||||||||
Kuka Warehouse | Sterling Heights | MI | Sep. 2014 | — | 1,227 | 10,790 | — | — | 12,017 | 71 | ||||||||||||||||||||||||
Trinity Health | Livonia | MI | Sep. 2014 | — | 8,953 | 28,141 | — | — | 37,094 | 212 | ||||||||||||||||||||||||
FedEx | Hebron | KY | Sep. 2014 | — | 1,106 | 7,750 | — | — | 8,856 | 54 | ||||||||||||||||||||||||
FedEx | Lexington | KY | Sep. 2014 | — | 1,118 | 7,961 | — | — | 9,079 | 55 | ||||||||||||||||||||||||
GE Aviation | Cincinnati | OH | Sep. 2014 | — | 1,393 | 10,490 | — | — | 11,883 | 69 | ||||||||||||||||||||||||
Bradford & Bingley | Bingley | UK | Oct. 2014 | — | 5,180 | 13,006 | — | — | 18,186 | 93 | ||||||||||||||||||||||||
DNV GL | Dublin | OH | Oct. 2014 | — | 2,509 | 3,140 | — | — | 5,649 | 22 | ||||||||||||||||||||||||
Rexam | Reckinghausen | Germany | Oct. 2014 | 6,394 | 857 | 12,064 | — | — | 12,921 | 53 | ||||||||||||||||||||||||
CJ Energy | Houston | TX | Oct. 2014 | — | 3,865 | 9,457 | — | — | 13,322 | 44 | ||||||||||||||||||||||||
FedEx | Lake Charles | LA | Oct. 2014 | — | 255 | 7,485 | — | — | 7,740 | 39 |
Initial Costs | Costs Capitalized Subsequent to Acquisition | |||||||||||||||||||||||||||||||||
Property | Citiy | U.S. State or Country | Acquisition Date | Encumbrances at December 31, 2014 | Land | Building and Improvements | Land | Building and Improvements | Gross Amount at December 31, 2014(1)(2) | Accumulated Depreciation (3)(4) | ||||||||||||||||||||||||
Family Dollar | Big Sandy | TN | Oct. 2014 | — | 62 | 739 | — | — | 801 | 4 | ||||||||||||||||||||||||
Family Dollar | Boling | TX | Oct. 2014 | — | 80 | 781 | — | — | 861 | 4 | ||||||||||||||||||||||||
Family Dollar | Bonifay | FL | Oct. 2014 | — | 103 | 673 | — | — | 776 | 4 | ||||||||||||||||||||||||
Family Dollar | Brindidge | AL | Oct. 2014 | — | 89 | 749 | — | — | 838 | 5 | ||||||||||||||||||||||||
Family Dollar | Brownsville | TN | Oct. 2014 | — | 155 | 776 | — | — | 931 | 4 | ||||||||||||||||||||||||
Family Dollar | Buena Vista | GA | Oct. 2014 | — | 246 | 757 | — | — | 1,003 | 6 | ||||||||||||||||||||||||
Family Dollar | Calvert | TX | Oct. 2014 | — | 91 | 777 | — | — | 868 | 4 | ||||||||||||||||||||||||
Family Dollar | Chocowinty | NC | Oct. 2014 | — | 237 | 554 | — | — | 791 | 3 | ||||||||||||||||||||||||
Family Dollar | Clarksville | TN | Oct. 2014 | — | 370 | 1,025 | — | — | 1,395 | 6 | ||||||||||||||||||||||||
Family Dollar | Fort Mill | SC | Oct. 2014 | — | 556 | 757 | — | — | 1,313 | 4 | ||||||||||||||||||||||||
Family Dollar | Hillsboro | TX | Oct. 2014 | — | 287 | 634 | — | — | 921 | 3 | ||||||||||||||||||||||||
Family Dollar | Lake Charles | LA | Oct. 2014 | — | 295 | 737 | — | — | 1,032 | 4 | ||||||||||||||||||||||||
Family Dollar | Lakeland | FL | Oct. 2014 | — | 300 | 812 | — | — | 1,112 | 4 | ||||||||||||||||||||||||
Family Dollar | Lansing | MI | Oct. 2014 | — | 132 | 1,040 | — | — | 1,172 | 6 | ||||||||||||||||||||||||
Family Dollar | Laurens | SC | Oct. 2014 | — | 303 | 584 | — | — | 887 | 4 | ||||||||||||||||||||||||
Family Dollar | Marion | MS | Oct. 2014 | — | 183 | 747 | — | — | 930 | 4 | ||||||||||||||||||||||||
Family Dollar | Marsing | ID | Oct. 2014 | — | 188 | 786 | — | — | 974 | 5 | ||||||||||||||||||||||||
Family Dollar | Montgomery | AL | Oct. 2014 | — | 122 | 821 | — | — | 943 | 5 | ||||||||||||||||||||||||
Family Dollar | Montgomery | AL | Oct. 2014 | — | 411 | 646 | — | — | 1,057 | 5 | ||||||||||||||||||||||||
Family Dollar | Monticello | FL | Oct. 2014 | — | 230 | 695 | — | — | 925 | 4 | ||||||||||||||||||||||||
Family Dollar | Monticello | UT | Oct. 2014 | — | 96 | 894 | — | — | 990 | 6 | ||||||||||||||||||||||||
Family Dollar | North Little Rock | AR | Oct. 2014 | — | 424 | 649 | — | — | 1,073 | 4 | ||||||||||||||||||||||||
Family Dollar | Oakdale | LA | Oct. 2014 | — | 243 | 696 | — | — | 939 | 3 | ||||||||||||||||||||||||
Family Dollar | Orlando | FL | Oct. 2014 | — | 684 | 619 | — | — | 1,303 | 4 | ||||||||||||||||||||||||
Family Dollar | Port St. Lucie | FL | Oct. 2014 | — | 403 | 907 | — | — | 1,310 | 5 | ||||||||||||||||||||||||
Family Dollar | Prattville | AL | Oct. 2014 | — | 463 | 749 | — | — | 1,212 | 5 | ||||||||||||||||||||||||
Family Dollar | Prichard | AL | Oct. 2014 | — | 241 | 803 | — | — | 1,044 | 4 | ||||||||||||||||||||||||
Family Dollar | Quinlan | TX | Oct. 2014 | — | 74 | 774 | — | — | 848 | 4 | ||||||||||||||||||||||||
Family Dollar | Rigeland | MS | Oct. 2014 | — | 447 | 891 | — | — | 1,338 | 4 | ||||||||||||||||||||||||
Family Dollar | Rising Star | TX | Oct. 2014 | — | 63 | 674 | — | — | 737 | 3 | ||||||||||||||||||||||||
Family Dollar | Southaven | MS | Oct. 2014 | — | 409 | 1,080 | — | — | 1,489 | 6 | ||||||||||||||||||||||||
Family Dollar | Spout Springs | NC | Oct. 2014 | — | 474 | 676 | — | — | 1,150 | 4 | ||||||||||||||||||||||||
Family Dollar | St. Petersburg | FL | Oct. 2014 | — | 482 | 851 | — | — | 1,333 | 4 | ||||||||||||||||||||||||
Family Dollar | Swansboro | NC | Oct. 2014 | — | 337 | 826 | — | — | 1,163 | 6 | ||||||||||||||||||||||||
Panasonic | Hudson | NJ | Oct. 2014 | — | 1,312 | 7,075 | — | — | 8,387 | 31 |
Initial Costs | Costs Capitalized Subsequent to Acquisition | |||||||||||||||||||||||||||||||||
Property | Citiy | U.S. State or Country | Acquisition Date | Encumbrances at December 31, 2014 | Land | Building and Improvements | Land | Building and Improvements | Gross Amount at December 31, 2014(1)(2) | Accumulated Depreciation (3)(4) | ||||||||||||||||||||||||
Onguard | Havre De Grace | MD | Oct. 2014 | — | 2,216 | 6,585 | — | — | 8,801 | 41 | ||||||||||||||||||||||||
Axon Energy Products | Houston | TX | Oct. 2014 | — | 297 | 2,432 | — | — | 2,729 | 11 | ||||||||||||||||||||||||
Metro Tonic | Halle Peissen | Germany | Oct. 2014 | 32,211 | 7,387 | 51,749 | — | — | 59,136 | 254 | ||||||||||||||||||||||||
Tokmanni | Matsala | Finland | Nov. 2014 | — | 1,914 | 57,932 | — | — | 59,846 | 268 | ||||||||||||||||||||||||
Fife Council | Dunfermline | UK | Nov. 2014 | — | 409 | 5,277 | — | — | 5,686 | 24 | ||||||||||||||||||||||||
Family Dollar | Doerun | GA | Nov. 2014 | — | 236 | 717 | — | — | 953 | 4 | ||||||||||||||||||||||||
Family Dollar | Old Hickory | TN | Nov. 2014 | — | 548 | 781 | — | — | 1,329 | 4 | ||||||||||||||||||||||||
Government Services Administration | Rapid City | SD | Nov. 2014 | — | 504 | 7,837 | — | — | 8,341 | 35 | ||||||||||||||||||||||||
KPN BV | Houten | Netherlands | Nov. 2014 | — | 1,714 | 20,965 | — | — | 22,679 | 89 | ||||||||||||||||||||||||
RWE AG | Essen | Germany | Nov. 2014 | 17,968 | 2,064 | 26,365 | — | — | 28,429 | 56 | ||||||||||||||||||||||||
RWE AG | Essen | Germany | Nov. 2014 | 31,769 | 13,054 | 45,890 | — | — | 58,944 | 96 | ||||||||||||||||||||||||
RWE AG | Essen | Germany | Nov. 2014 | 26,229 | 5,332 | 37,908 | — | — | 43,240 | 79 | ||||||||||||||||||||||||
Follett School | McHenry | IL | Dec. 2014 | — | 3,423 | 15,600 | — | — | 19,023 | 42 | ||||||||||||||||||||||||
Quest Diagnostics, Inc. | Santa Clarita | CA | Dec. 2014 | — | 10,714 | 69,018 | — | — | 79,732 | 146 | ||||||||||||||||||||||||
Family Dollar | Tampa | FL | Dec. 2014 | — | 466 | 820 | — | — | 1,286 | 2 | ||||||||||||||||||||||||
Diebold | North Canton | OH | Dec. 2014 | — | 575 | 8,906 | — | — | 9,481 | — | ||||||||||||||||||||||||
Dollar General | Chickasha | OK | Dec. 2014 | — | 248 | 1,293 | — | — | 1,541 | — | ||||||||||||||||||||||||
Weatherford International | Odessa | TX | Dec. 2014 | — | 665 | 1,795 | — | — | 2,460 | — | ||||||||||||||||||||||||
AM Castle | Wichita | KS | Dec. 2014 | — | 426 | 6,027 | — | — | 6,453 | — | ||||||||||||||||||||||||
FedEx | Billerica | MA | Dec. 2014 | — | 1,138 | 6,674 | — | — | 7,812 | — | ||||||||||||||||||||||||
Constellium Auto | Wayne | MI | Dec. 2014 | — | 1,180 | 13,781 | — | — | 14,961 | — | ||||||||||||||||||||||||
Total | $ | 281,186 | $ | 326,696 | $ | 1,519,558 | $ | — | $ | 9,706 | $ | 1,855,960 | $ | 21,319 |
(1) | Acquired intangible lease assets allocated to individual properties in the amount of $484.1 million are not reflected in the table above. |
(2) | The tax basis of aggregate land, buildings and improvements as of December 31, 2014 is $2.4 billion. |
(3) | The accumulated depreciation column excludes approximately $21.3 million of amortization associated with acquired intangible lease assets. |
(4) | Each of the properties has a depreciable life of: 40 years for buildings, 15 years for improvements and five years for fixtures. |
December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Real estate investments, at cost: | ||||||||||||
Balance at beginning of year | $ | 149,009 | $ | 1,729 | $ | — | ||||||
Additions-Acquisitions | 1,748,944 | 147,245 | 1,729 | |||||||||
Asset remeasurement | (675 | ) | — | — | ||||||||
Currency translation adjustment | (41,318 | ) | 35 | — | ||||||||
Balance at end of the year | $ | 1,855,960 | $ | 149,009 | $ | 1,729 | ||||||
Accumulated depreciation and amortization: | ||||||||||||
Balance at beginning of year | $ | 869 | $ | 12 | $ | — | ||||||
Depreciation expense | 20,856 | 837 | 12 | |||||||||
Currency translation adjustment | (406 | ) | 20 | — | ||||||||
Balance at end of the year | $ | 21,319 | $ | 869 | $ | 12 |
Exhibit 3.1
ARTICLES
OF
AMENDMENT AND RESTATEMENT
FOR
AMERICAN REALTY CAPITAL GLOBAL TRUST, INC.
a Maryland Corporation
TABLE OF CONTENTS
Page | ||
ARTICLE I. NAME | 1 | |
ARTICLE II. PURPOSES AND POWERS | 1 | |
ARTICLE III. RESIDENT AGENT AND PRINCIPAL OFFICE | 1 | |
ARTICLE IV. DEFINITIONS | 2 | |
ARTICLE V. STOCK | 10 | |
SECTION 5.1 | AUTHORIZED SHARES | 10 |
SECTION 5.2 | COMMON SHARES. | 11 |
SECTION 5.3 | PREFERRED SHARES | 12 |
SECTION 5.4 | CLASSIFIED OR RECLASSIFIED SHARES | 12 |
SECTION 5.5 | STOCKHOLDERS’ CONSENT IN LIEU OF MEETING | 12 |
SECTION 5.6 | CHARTER AND BYLAWS | 12 |
SECTION 5.7 | NO ISSUANCE OF SHARE CERTIFICATES | 12 |
SECTION 5.8 | SUITABILITY OF STOCKHOLDERS. | 13 |
SECTION 5.9 | RESTRICTIONS ON OWNERSHIP AND TRANSFER. | 14 |
SECTION 5.10 | SETTLEMENTS | 22 |
SECTION 5.11 | SEVERABILITY | 22 |
SECTION 5.12 | ENFORCEMENT | 22 |
SECTION 5.13 | NON-WAIVER | 22 |
SECTION 5.14 | REPURCHASE OF SHARES | 23 |
SECTION 5.15 | DISTRIBUTION REINVESTMENT PLANS | 23 |
SECTION 5.16 | PREEMPTIVE AND APPRAISAL RIGHTS | 23 |
ARTICLE VI. BOARD OF DIRECTORS | 23 | |
SECTION 6.1 | NUMBER OF DIRECTORS | 23 |
SECTION 6.2 | EXPERIENCE | 24 |
SECTION 6.3 | COMMITTEES | 24 |
SECTION 6.4 | TERM | 24 |
SECTION 6.5 | FIDUCIARY OBLIGATIONS | 24 |
SECTION 6.6 | RESIGNATION, REMOVAL OR DEATH | 24 |
ARTICLE VII. POWERS OF THE BOARD OF DIRECTORS | 25 | |
SECTION 7.1 | GENERAL | 25 |
SECTION 7.2 | AUTHORIZATION BY BOARD OF STOCK ISSUANCE | 25 |
SECTION 7.3 | FINANCINGS | 25 |
SECTION 7.4 | REIT QUALIFICATION | 25 |
SECTION 7.5 | DETERMINATIONS BY BOARD | 26 |
i |
SECTION 7.6 | STOCKHOLDER CONCURRENCE REQUIRED | 26 |
SECTION 7.7 | VOTE OF MAJORITY OF INDEPENDENT DIRECTORS REQUIRED | 27 |
ARTICLE VIII. ADVISOR | 27 | |
SECTION 8.1 | APPOINTMENT AND INITIAL INVESTMENT OF ADVISOR | 27 |
SECTION 8.2 | SUPERVISION OF ADVISOR | 28 |
SECTION 8.3 | FIDUCIARY OBLIGATIONS | 28 |
SECTION 8.4 | AFFILIATION AND FUNCTIONS | 28 |
SECTION 8.5 | TERMINATION | 28 |
SECTION 8.6 | DISPOSITION FEE ON SALE OF PROPERTIES | 29 |
SECTION 8.7 | INCENTIVE FEES | 29 |
SECTION 8.8 | ORGANIZATION AND OFFERING EXPENSES LIMITATION | 29 |
SECTION 8.9 | ACQUISITION FEES | 29 |
SECTION 8.10 | ANNUAL SUBORDINATED PERFORMANCE FEE | 29 |
SECTION 8.11 | REIMBURSEMENT FOR TOTAL OPERATING EXPENSES | 30 |
SECTION 8.12 | REIMBURSEMENT LIMITATION | 30 |
SECTION 8.13 | NO FEES UPON INTERNALIZATION | 30 |
ARTICLE IX. INVESTMENT OBJECTIVES AND LIMITATIONS | 30 | |
SECTION 9.1 | REVIEW OF OBJECTIVES | 30 |
SECTION 9.2 | CERTAIN PERMITTED INVESTMENTS | 30 |
SECTION 9.3 | INVESTMENT LIMITATIONS | 31 |
ARTICLE X. CONFLICTS OF INTEREST | 33 | |
SECTION 10.1 | SALES AND LEASES TO THE COMPANY | 33 |
SECTION 10.2 | SALES AND LEASES TO THE SPONSOR, ADVISOR, DIRECTORS OR AFFILIATES | 34 |
SECTION 10.3 | OTHER TRANSACTIONS. | 34 |
ARTICLE XI. STOCKHOLDERS | 35 | |
SECTION 11.1 | MEETINGS OF STOCKHOLDERS | 35 |
SECTION 11.2 | VOTING RIGHTS OF STOCKHOLDERS | 35 |
SECTION 11.3 | EXTRAORDINARY ACTIONS | 36 |
SECTION 11.4 | VOTING LIMITATIONS ON SHARES HELD BY THE ADVISOR, DIRECTORS AND AFFILIATES | 36 |
SECTION 11.5 | RIGHT OF INSPECTION | 36 |
SECTION 11.6 | ACCESS TO STOCKHOLDER LIST | 36 |
SECTION 11.7 | REPORTS | 37 |
SECTION 11.8 | TENDER OFFERS | 37 |
ii |
ARTICLE XII. LIABILITY OF STOCKHOLDERS, DIRECTORS, ADVISORS AND AFFILIATES; TRANSACTIONS BETWEEN AFFILIATES AND THE COMPANY | 37 | |
SECTION 12.1 | LIMITATION OF STOCKHOLDER LIABILITY | 37 |
SECTION 12.2 | LIMITATION OF DIRECTOR AND OFFICER LIABILITY; INDEMNIFICATION. | 38 |
SECTION 12.3 | PAYMENT OF EXPENSES | 39 |
SECTION 12.4 | EXPRESS EXCULPATORY CLAUSES IN INSTRUMENTS | 39 |
ARTICLE XIII. AMENDMENTS | 40 | |
ARTICLE XIV. ROLL-UP TRANSACTIONS | 40 | |
ARTICLE XV. DURATION | 41 |
iii |
AMERICAN REALTY CAPITAL GLOBAL TRUST, INC.
ARTICLES OF AMENDMENT AND RESTATEMENT
FIRST: The charter of American Realty Capital Global Trust, Inc., a Maryland corporation (the “Company”), is hereby amended to provide that, immediately upon the acceptance of these Articles of Amendment and Restatement for record (the “Effective Time”) by the State Department of Assessments and Taxation of Maryland, each Retail Share, $0.01 par value per share, of the Company, which was issued and outstanding immediately prior to the Effective Time shall be changed into one issued and outstanding share of common stock, $0.01 par value per share.
SECOND: The Company desires to further amend and restate its charter as currently in effect and as hereinafter amended.
THIRD: The following provisions are all the provisions of the charter currently in effect and as hereinafter amended:
ARTICLE I.
NAME
The name of the Company is American Realty Capital Global Trust, Inc. So far as may be practicable, the business of the Company shall be conducted and transacted under that name. Under circumstances in which the Board determines that the use of the name “American Realty Capital Global Trust, Inc.” is not practicable, it may use any other designation or name for the Company.
ARTICLE II.
PURPOSES AND POWERS
The purposes for which the Company is formed are to engage in any lawful act or activity (including, without limitation or obligation, qualifying and engaging in business as a real estate investment trust under Sections 856 through 860, or any successor sections, of the Internal Revenue Code of 1986, as amended (the “Code”)), for which corporations may be organized under the MGCL and the general laws of the State of Maryland as now or hereafter in force.
ARTICLE III.
RESIDENT AGENT AND PRINCIPAL OFFICE
The name and address of the resident agent for service of process of the Company in the State of Maryland is CSC-Lawyers Incorporating Service Company, 7 St. Paul Street, Suite 1660, Baltimore, Maryland 21202. The address of the Company’s principal office in the State of Maryland is c/o CSC-Lawyers Incorporating Service Company, 7 St. Paul Street, Suite 1660, Baltimore, Maryland 21202. The Company may have such other offices and places of business within or outside the State of Maryland as the Board may from time to time determine.
ARTICLE IV.
DEFINITIONS
As used in the Charter, the following terms shall have the following meanings unless the context otherwise requires:
“ACQUISITION EXPENSES” means any and all expenses incurred by the Company, the Advisor, or any Affiliate of either in connection with the selection, acquisition or development of any Asset, whether or not acquired, including, without limitation, legal fees and expenses, travel and communications expenses, costs of appraisals, nonrefundable option payments on property not acquired, accounting fees and expenses, foreign stamp duties or real estate transfer taxes or duty taxes incurred in connection with a foreign investment and title insurance premiums.
“ACQUISITION FEE” means any and all fees and commissions, exclusive of Acquisition Expenses, paid by any Person to any other Person (including any fees or commissions paid by or to any Affiliate of the Company or the Advisor) in connection with making or investing in Mortgages or the purchase, development or construction of a Property, including real estate commissions, selection fees, Development Fees, Construction Fees, nonrecurring management fees, loan fees, points or any other fees of a similar nature. Excluded shall be Development Fees and Construction Fees paid to any Person not affiliated with the Sponsor in connection with the actual development and construction of a project.
“ADVISOR” or “ADVISORS” means the Person or Persons, if any, appointed, employed or contracted with by the Company pursuant to Section 8.1 hereof and responsible for directing or performing the day-to-day business affairs of the Company, including any Person to whom the Advisor subcontracts all or substantially all of such functions.
“ADVISORY AGREEMENT” means the agreement between the Company and the Advisor pursuant to which the Advisor will direct or perform the day-to-day business affairs of the Company.
“AFFILIATE” or “AFFILIATED” means, with respect to any Person, (i) any Person directly or indirectly owning, controlling or holding, with the power to vote, ten percent (10%) or more of the outstanding voting securities of such other Person; (ii) any Person, ten percent (10%) or more of whose outstanding voting securities are directly or indirectly owned, controlled or held, with the power to vote, by such other Person; (iii) any Person directly or indirectly controlling, controlled by or under common control with such other Person; (iv) any executive officer, director, trustee or general partner of such other Person; and (v) any legal entity for which such Person acts as an executive officer, director, trustee or general partner.
“ANNUAL SUBORDINATED PERFORMANCE FEE” shall have the meaning given in Section 8.10.
“ASSET” means any Property, Mortgage or other investments owned by the Company, directly or indirectly through one (1) or more of its Affiliates, and any other investment made by the Company, directly or indirectly through one (1) or more of its Affiliates.
2 |
“AVERAGE INVESTED ASSETS” means, for a specified period, the average of the aggregate book value of the Assets invested, directly or indirectly in equity interests in and loans secured by real estate, before deducting depreciation, bad debts or other non-cash reserves, computed by taking the average of such values at the end of each month during such period.
“BOARD” means the Board of Directors of the Company.
“BYLAWS” means the Bylaws of the Company, as amended from time to time.
“CHARTER” means the charter of the Company, as amended from time to time.
“CODE” shall have the meaning as provided in Article II herein.
“COMMENCEMENT OF THE INITIAL PUBLIC OFFERING” shall mean the date that the Securities and Exchange Commission declares effective the registration statement filed under the Securities Act for the Initial Public Offering.
“COMMON SHARES” shall have the meaning as provided in Section 5.1 herein.
“COMPANY” shall have the meaning as provided in Article I herein.
“COMPETITIVE REAL ESTATE COMMISSION” means a real estate or brokerage commission paid for the purchase or sale of a Property that is reasonable, customary and competitive in light of the size, type and location of the Property.
“CONSTRUCTION FEE” means a fee or other remuneration for acting as general contractor and/or construction manager to construct improvements, supervise and coordinate projects or provide major repairs or rehabilitations on a Property.
“CONTRACT PURCHASE PRICE” means the amount actually paid or allocated in respect of the purchase, development, construction or improvement of a Property or the amount of funds advanced with respect to a Mortgage, or the amount actually paid or allocated in respect of the purchase of other Assets, in each case exclusive of Acquisition Fees and Acquisition Expenses, but in each case including any indebtedness assumed or incurred in respect of such Property.
“DEALER MANAGER” means Realty Capital Securities, LLC, an Affiliate of the Company, or such other Person selected by the Board to act as the dealer manager for an Offering.
“DEVELOPMENT FEE” means a fee for the packaging of a Property or Mortgage, including the negotiation and approval of plans and any assistance in obtaining zoning and necessary variances and financing for a specific Property, either initially or at a later date.
“DIRECTOR” means a member of the Board of Directors of the Company that manages the Company.
3 |
“DISTRIBUTIONS” means any distributions of money or other property, pursuant to Section 5.2(iii) hereof, by the Company to owners of Shares, including distributions that may constitute a return of capital for federal income tax purposes.
“EXCESS AMOUNT” has the meaning provided in Section 8.10 herein.
“EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended from time to time, or any successor statute thereto.
“EXTENSION AMENDMENT” has the meaning provided in Article XV.
“FINANCING COORDINATION FEE” means a fee paid in connection with the financing of an Asset, assumption of any loan in connection with the acquisition of an Asset or refinancing of any loan on an Asset.
“GROSS PROCEEDS” means the aggregate purchase price of all Shares sold for the account of the Company through an Offering, without deduction for Selling Commissions, volume discounts, any marketing support and due diligence expense reimbursement or Organization and Offering Expenses. For the purpose of computing Gross Proceeds, the purchase price of any Share for which reduced Selling Commissions are paid to the Dealer Manager or a Soliciting Dealer (where net proceeds to the Company are not reduced) shall be deemed to be the full amount of the offering price per Share pursuant to the Prospectus for such Offering without reduction.
“INDEMNITEE” has the meaning provided in Section 12.2 herein.
“INDEPENDENT APPRAISER” means a Person with no material current or prior business or personal relationship with the Advisor or the Directors and who is engaged to a substantial extent in the business of rendering opinions regarding the value of Real Property or of other Assets of the type held by the Company. Membership in a nationally recognized appraisal society such as the American Institute of Real Estate Appraisers or the Society of Real Estate Appraisers shall be conclusive evidence of being engaged to a substantial extent in the business of rendering opinions as to the value of Real Property.
“INDEPENDENT DIRECTOR” means a Director who is not and who has not been within the last two years, directly or indirectly associated with the Sponsor or the Advisor by virtue of (i) ownership of an interest in the Sponsor, the Advisor or any of their Affiliates, (ii) employment by the Sponsor, the Advisor or any of their Affiliates, (iii) service as an officer or director of the Sponsor, the Advisor or any of their Affiliates, (iv) performance of services, other than as a Director, for the Company, (v) service as a director or trustee of more than three REITs organized by the Sponsor or advised by the Advisor or (vi) maintenance of a material business or professional relationship with the Sponsor, the Advisor or any of their Affiliates. A business or professional relationship is considered “material” per se if the aggregate gross revenue derived by the Director from the Sponsor, the Advisor and their Affiliates exceeds five percent (5%) of either the Director’s annual gross revenue, derived from all sources, during either of the last two years or the Director’s net worth on a fair market value basis. An indirect association with the Sponsor or the Advisor shall include circumstances in which a Director’s spouse, parent, child, sibling, mother- or father-in-law, son- or daughter-in-law or brother- or sister-in-law is or has been associated with the Sponsor, the Advisor, any of their Affiliates or the Company.
4 |
“INITIAL INVESTMENT” means that portion of the initial capitalization of the Company contributed by the Sponsor or its Affiliates pursuant to Section II.A. of the NASAA REIT Guidelines.
“INITIAL PUBLIC OFFERING” means the first Offering.
“INVESTED CAPITAL” means the amount calculated by multiplying the total number of Shares purchased by Stockholders by the issue price at the time of such purchase, reduced by the portion of any Distribution that is attributable to Net Sales Proceeds and by any amounts paid by the Company to repurchase Shares pursuant to the Company’s plan for the repurchase of Shares.
“IRA” means an “individual retirement account” (as defined in Section 408 of the Code).
“JOINT VENTURES” means those joint venture or partnership arrangements in which the Company or the Operating Partnership is a co-venturer, limited liability company member, limited partner or general partner established to acquire or hold Assets.
“LEVERAGE” means the aggregate amount of indebtedness of the Company for money borrowed (including purchase money mortgage loans) outstanding at any time, both secured and unsecured.
“LIQUIDITY DEADLINE” has the meaning in Article XV.
“LIQUIDITY EVENT” includes a sale of all or substantially all the Assets, a sale or merger of the Company, a Listing, or other similar transaction.
“LISTING” means the listing of the Common Shares on a national securities exchange or the trading of the Common Shares in the over-the-counter market. Upon such Listing, the Common Shares shall be deemed Listed.
“MGCL” means the Maryland General Corporation Law, as in effect from time to time.
“MORTGAGES” means, in connection with mortgage financing provided by the Company, all of the notes, deeds of trust, security interests or other evidences of indebtedness or obligations, which are secured or collateralized by Real Property owned by the borrowers under such notes, deeds of trust, security interests or other evidences of indebtedness or obligations.
“NASAA REIT GUIDELINES” means the Statement of Policy Regarding Real Estate Investment Trusts as revised and adopted by the North American Securities Administrators Association on May 7, 2007.
“NET ASSETS” means the total Assets (other than intangibles) at cost, before deducting depreciation, reserves for bad debts or other non-cash reserves, less total liabilities, calculated at least quarterly by the Company on a basis consistently applied.
5 |
“NET INCOME” means, for any period, the Company’s total revenues applicable to such period, less the total expenses applicable to such period other than additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of the Assets.
“NET SALES PROCEEDS” means, in the case of a transaction described in clause (i)(A) of the definition of Sale, the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Company, including all real estate commissions, closing costs and legal fees and expenses. In the case of a transaction described in clause (i)(B) of the definition of Sale, Net Sales Proceeds means the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Company, including any legal fees and expenses and other selling expenses incurred in connection with such transaction. In the case of a transaction described in clause (i)(C) of the definition of Sale, Net Sales Proceeds means the proceeds of any such transaction actually distributed to the Company or the Operating Partnership from the Joint Venture less the amount of any selling expenses, including legal fees and expenses incurred by or on behalf of the Company (other than those paid by the Joint Venture). In the case of a transaction or series of transactions described in clause (i)(D) of the definition of Sale, Net Sales Proceeds means the proceeds of any such transaction (including the aggregate of all payments under a Mortgage on or in satisfaction thereof other than regularly scheduled interest payments) less the amount of selling expenses incurred by or on behalf of the Company, including all commissions, closing costs and legal fees and expenses. In the case of a transaction described in clause (i)(E) of the definition of Sale, Net Sales Proceeds means the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Company, including any legal fees and expenses and other selling expenses incurred in connection with such transaction. In the case of a transaction described in clause (ii) of the definition of Sale, Net Sales Proceeds means the proceeds of such transaction or series of transactions less all amounts generated thereby which are reinvested in one (1) or more Assets within one hundred eighty (180) days thereafter and less the amount of any real estate commissions, closing costs, and legal fees and expenses and other selling expenses incurred by or allocated to the Company or the Operating Partnership in connection with such transaction or series of transactions. Net Sales Proceeds shall also include Refinancing Proceeds and any other amounts that the Company determines, in its discretion, to be economically equivalent to proceeds of a Sale. Net Sales Proceeds shall not include any reserves established by the Company, which shall be determined by the Board in its sole discretion.
“NON-COMPLIANT TENDER OFFER” has the meaning provided in Section 11.8 herein.
“OFFERING” means any public offering and sale of shares of stock pursuant to an effective registration statement filed under the Securities Act.
“OPERATING PARTNERSHIP” means American Realty Capital Global Operating Partnership, L.P., an Affiliate of the Company through which the Company may own Assets.
6 |
“ORGANIZATION AND OFFERING EXPENSES” means any and all costs and expenses incurred by and to be paid from the assets of the Company in connection with the formation of the Company and the qualification and registration of an offering, and the marketing and distribution of Shares, including, without limitation, total underwriting and brokerage discounts and commissions (including fees of the underwriters’ attorneys), expenses for printing, engraving and amending registration statements or supplementing prospectuses, mailing and distributing costs, salaries of employees while engaged in sales activity, telephone and other telecommunications costs, all advertising and marketing expenses (including the costs related to investor and broker-dealer sales meetings), charges of transfer agents, registrars, trustees, escrow holders, depositories and experts, and fees, expenses and taxes related to the filing, registration and qualification of the sale of the Shares under federal and state laws, including taxes and fees and accountants’ and attorneys’ fees.
“PERSON” means an individual, corporation, partnership, estate, trust (including a trust qualified under Sections 401(a) or 501(c)(17) of the Code), portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other legal entity and also includes a group as that term is used for purposes of Section 13(d)(3) of the Exchange Act and a group to which an Excepted Holder Limit (as defined in Section 5.9(i) hereof) applies.
“PLAN OF LIQUIDATION” has the meaning provided in Article XV herein.
“PREFERRED SHARES” has the meaning provided in Section 5.1 herein.
“PROPERTY” or “PROPERTIES” means, as the context requires, any, or all, respectively, of the Real Property acquired by the Company, directly or indirectly through joint venture arrangements or other partnership or investment interests.
“PROSPECTUS” means the same as that term is defined in Section 2(10) of the Securities Act, including a preliminary prospectus and an offering circular as described in Rule 256 of the General Rules and Regulations under the Securities Act.
“REAL PROPERTY” or “REAL ESTATE” means land, rights in land (including leasehold interests), and any buildings, structures, improvements, furnishings, fixtures and equipment located on or used in connection with land and rights or interests in land.
“REFINANCING PROCEEDS” means the proceeds of the refinancing of any indebtedness of the Company, less the amount of expenses incurred by or on behalf of the Company in connection with such refinancing.
“REINVESTMENT PLAN” has the meaning provided in Section 5.15 herein.
“REIT” means a corporation, trust, association or other legal entity (other than a real estate syndication) that is engaged primarily in investing in equity interests in real estate (including fee ownership and leasehold interests) or in loans secured by real estate or both, as defined pursuant to the REIT Provisions of the Code.
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“REIT PROVISIONS OF THE CODE” means Sections 856 through 860 of the Code and any successor or other provisions of the Code relating to real estate investment trusts (including provisions as to the attribution of ownership of beneficial interests therein) and the regulations promulgated thereunder.
“ROLL-UP ENTITY” means a partnership, real estate investment trust, corporation, trust or similar entity that would be created or would survive after the successful completion of a proposed Roll-Up Transaction.
“ROLL-UP TRANSACTION” means a transaction involving the acquisition, merger, conversion or consolidation either directly or indirectly of the Company and the issuance of securities of a Roll-Up Entity to the holders of Common Shares. Such term does not include:
(a) a transaction involving securities of a company that have been for at least twelve (12) months listed on a national securities exchange; or
(b) a transaction involving the conversion to corporate, trust or association form of only the Company, if, as a consequence of the transaction, there will be no significant adverse change in any of the following:
(i) the voting rights of the holders of the Shares;
(ii) the term of existence of the Company;
(iii) Sponsor or Advisor compensation; or
(iv) the Company’s investment objectives.
“SALE” or “SALES” means (i) any transaction or series of transactions whereby: (A) the Company or the Operating Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any Property or portion thereof, including the lease of any Property consisting of a building only, and including any event with respect to any Property which gives rise to a significant amount of insurance proceeds or condemnation awards; (B) the Company or the Operating Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of all or substantially all of the interest of the Company or the Operating Partnership in any Joint Venture in which it is a co-venturer or partner; (C) any Joint Venture in which the Company or the Operating Partnership is a co-venturer or partner directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any Property or portion thereof, including any event with respect to any Property which gives rise to a significant amount of insurance proceeds or condemnation awards; (D) the Company or the Operating Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, conveys or relinquishes its interest in any Mortgage or portion thereof, including any payments thereunder or in satisfaction thereof (other than regularly scheduled interest payments) or any amounts owed pursuant to such Mortgage, and including any event with respect to any Mortgage which gives rise to a significant amount of insurance proceeds or similar awards; or (E) the Company or the Operating Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any other Asset not previously described in this definition or any portion thereof, but (ii) not including any transaction or series of transactions specified in clause (i) (A) through (E) above in which the proceeds of such transaction or series of transactions are reinvested by the Company in one (1) or more Assets within one hundred eighty (180) days thereafter.
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“SECURITIES” means any of the following issued by the Company, as the text requires: Shares, any other stock, shares or other evidences of equity or beneficial or other interests, voting trust certificates, bonds, debentures, notes or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in, temporary or interim certificates for, receipts for, guarantees of, or warrants, options or rights to subscribe to, purchase or acquire, any of the foregoing.
“SECURITIES ACT” means the Securities Act of 1933, as amended from time to time, or any successor statute thereto. Reference to any provision of the Securities Act shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted by any applicable regulations as in effect from time to time.
“SELLING COMMISSIONS” means any and all commissions payable to underwriters, dealer managers or other broker-dealers in connection with the sale of Shares, including, without limitation, commissions payable to the Dealer Manager.
“SHARES” means shares of stock of the Company of any class or series, including Common Shares or Preferred Shares, that have the right to elect the Directors of the Company.
“SOLICITING DEALERS” means those broker-dealers that are members of the Financial Industry Regulatory Authority, or that are exempt from broker-dealer registration, and that, in either case, enter into participating broker or other agreements with the Dealer Manager to sell Shares.
“SPONSOR” means any Person which (i) is directly or indirectly instrumental in organizing, wholly or in part, the Company, (ii) will control, manage or participate in the management of the Company, and any Affiliate of any such Person, (iii) takes the initiative, directly or indirectly, in founding or organizing the Company, either alone or in conjunction with one (1) or more other Persons, (iv) receives a material participation in the Company in connection with the founding or organizing of the business of the Company, in consideration of services or property, or both services and property, (v) has a substantial number of relationships and contacts with the Company, (vi) possesses significant rights to control Properties, (vii) receives fees for providing services to the Company which are paid on a basis that is not customary in the industry or (viii) provides goods or services to the Company on a basis which was not negotiated at arm’s-length with the Company. The term “Sponsor” shall not include a Person whose only relationship with the Company is that of an independent property manager and whose only compensation is as such or wholly independent third parties such as attorneys, accountants and underwriters whose only compensation is for professional services.
“STOCKHOLDER LIST” has the meaning provided in Section 11.6 herein.
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“STOCKHOLDERS” means the holders of record of the shares of stock as maintained in the books and records of the Company or its transfer agent.
“TERMINATION DATE” means the date of termination of the Advisory Agreement.
“TERMINATION OF THE INITIAL PUBLIC OFFERING” shall mean the earlier of (i) the date on which the Initial Public Offering expires or is terminated by the Company or (ii) the date on which all shares of stock offered in the Initial Public Offering are sold, excluding warrants, if any, offered thereunder and shares that may be acquired upon exercise of such warrants and shares offered thereunder that may be acquired pursuant to the Reinvestment Plan.
“TOTAL OPERATING EXPENSES” means all costs and expenses paid or incurred by the Company, as determined under generally accepted accounting principles, that are in any way related to the operation of the Company or to Company business, including advisory fees, but excluding (i) the expenses of raising capital such as Organization and Offering Expenses, legal, audit, accounting, underwriting, brokerage, listing, registration, and other fees, printing and other such expenses and tax incurred in connection with the issuance, distribution, transfer, registration and Listing of the Shares, (ii) interest payments, (iii) taxes, (iv) non-cash expenditures such as depreciation, amortization and bad debt reserves, (v) incentive fees paid in compliance with the NASAA REIT Guidelines, (vi) Acquisition Fees and Acquisition Expenses, (vii) real estate commissions on the Sale of Properties, (viii) Financing Coordination Fees and (ix) other fees and expenses connected with the acquisition, disposition, management and ownership of real estate interests, mortgage loans or other property (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property).
“UNIMPROVED REAL PROPERTY” means Property in which the Company has an equity interest that was not acquired for the purpose of producing rental or other operating income, that has no development or construction in process and for which no development or construction is planned, in good faith, to commence within one (1) year.
“2%/25% GUIDELINES” has the meaning provided in Section 8.10 herein.
ARTICLE V.
STOCK
SECTION 5.1 AUTHORIZED SHARES. The total number of shares of stock that the Company shall have authority to issue is 350,000,000 shares, of which (i) 300,000,000 shall be designated as common stock, $0.01 par value per share (the “Common Shares”);and (ii) 50,000,000 shall be designated as preferred stock, $0.01 par value per share (the “Preferred Shares”). All shares shall be fully paid and nonassessable when issued. The aggregate par value of all authorized shares of stock having par value is $3,500,000. If shares of one (1) class of stock are classified or reclassified into shares of another class of stock pursuant to Section 5.2(ii) or Section 5.3 of this Article V, the number of authorized shares of the former class shall be automatically decreased and the number of Shares of the latter class shall be automatically increased, in each case by the number of shares so classified or reclassified, as the case may be, so that the aggregate number of shares of all classes that the Company has authority to issue shall not be more than the total number of shares set forth in the first sentence of this Section 5.1. The Board, with the approval of a majority of the entire Board and without any action by the Stockholders, may amend the Charter from time to time to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that the Company has authority to issue.
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SECTION 5.2 COMMON SHARES.
(i) COMMON SHARES SUBJECT TO TERMS OF PREFERRED SHARES. The Common Shares shall be subject to the express terms of any series of Preferred Shares.
(ii) DESCRIPTION. Subject to Section 5.9 of this Article V and except as may otherwise be specified in the charter, each Common Share shall entitle the holder thereof to one (1) vote per share on all matters upon which Stockholders are entitled to vote pursuant to Section 11.2 hereof. The Board may classify or reclassify any unissued Common Shares from time to time in one (1) or more classes or series of stock; provided, however, that the voting rights per Share (other than any publicly held Share) sold in a private offering shall not exceed the voting rights which bear the same relationship to the voting rights of a publicly held Share as the consideration paid to the Company for each privately offered Share bears to the book value of each outstanding publicly held Share.
(iii) DISTRIBUTION RIGHTS. The Board from time to time may authorize the Company to declare and pay to Stockholders such dividends or other Distributions in cash or other assets of the Company or from any other source as the Board in its discretion shall determine. The Board shall endeavor to authorize the Company to declare and pay such dividends and other Distributions as shall be necessary for the Company to qualify as a REIT under the Code unless the Board has determined, in its sole discretion, that qualification as a REIT is not in the best interests of the Company; provided, however, Stockholders shall have no right to any dividend or other Distribution unless and until authorized by the Board and declared by the Company. The exercise of the powers and rights of the Board pursuant to this section shall be subject to the provisions of any class or series of Shares at the time outstanding. The receipt by any Person in whose name any Shares are registered on the records of the Company or by his or her duly authorized agent shall be a sufficient discharge for all dividends or other Distributions payable or deliverable in respect of such Shares and from all liability to see to the application thereof. Distributions in kind shall not be permitted, except for distributions of readily marketable securities or securities of the Company, distributions of beneficial interests in a liquidating trust established for the dissolution of the Company and the liquidation of its assets in accordance with the terms of the Charter or distributions in which (i) the Board advises each Stockholder of the risks associated with direct ownership of the property, (ii) the Board offers each Stockholder the election of receiving such in-kind distributions and (iii) in-kind distributions are made only to those Stockholders that accept such offer.
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(iv) RIGHTS UPON LIQUIDATION. In the event of any voluntary or involuntary liquidation, dissolution or winding up, or any distribution of the assets of the Company, the aggregate assets available for distribution to holders of the Common Shares shall be determined in accordance with applicable law. Each holder of Common Shares of a particular class shall be entitled to receive, ratably with each other holder of Common Shares of such class, that portion of such aggregate assets available for distribution as the number of outstanding Common Shares of such class held by such holder bears to the total number of outstanding Common Shares of such class then outstanding.
(v) VOTING RIGHTS. Except as may be provided otherwise in the Charter, and subject to the express terms of any series of Preferred Shares, the holders of the Common Shares shall have the exclusive right to vote on all matters (as to which a common stockholder shall be entitled to vote pursuant to applicable law) at all meetings of the Stockholders.
SECTION 5.3 PREFERRED SHARES. The Board may classify any unissued Preferred Shares and reclassify any previously classified but unissued Preferred Shares of any series from time to time, in one (1) or more classes or series of shares of stock; provided, however, that the voting rights per Share (other than a publicly held Share) sold in a private offering shall not exceed the voting rights that bear the same relationship to the voting rights of a publicly held Share as the consideration paid to the Company for each privately offered Share bears to the book value of each outstanding publicly held Share.
SECTION 5.4 CLASSIFIED OR RECLASSIFIED SHARES. Prior to issuance of classified or reclassified shares of stock of any class or series, the Board by resolution shall: (a) designate that class or series to distinguish it from all other classes and series of shares; (b) specify the number of shares to be included in the class or series; (c) set or change, subject to the provisions of Section 5.9 and the express terms of any class or series of shares outstanding at the time, the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other Distributions, qualifications and terms and conditions of redemption for each class or series of shares; and (d) cause the Company to file articles supplementary with the State Department of Assessments and Taxation of Maryland. Any of the terms of any class or series of shares set or changed pursuant to clause (c) of this Section 5.4 may be made dependent upon facts or events ascertainable outside the Charter (including determinations by the Board or other facts or events within the control of the Company) and may vary among holders thereof, provided that the manner in which such facts, events or variations shall operate upon the terms of such class or series of shares is clearly and expressly set forth in the articles supplementary or other charter document.
SECTION 5.5 STOCKHOLDERS’ CONSENT IN LIEU OF MEETING. Any action required or permitted to be taken at any meeting of the Stockholders may be taken without a meeting by consent, in writing or by electronic transmission, in any manner permitted by the MGCL and set forth in the Bylaws.
SECTION 5.6 CHARTER AND BYLAWS. The rights of all Stockholders and the terms of all shares of stock are subject to the provisions of the Charter and the Bylaws.
SECTION 5.7 NO ISSUANCE OF SHARE CERTIFICATES. Unless otherwise provided by the Board, the Company shall not issue stock certificates. A Stockholder’s investment shall be recorded on the books of the Company. To transfer his or her shares of stock, a Stockholder shall submit an executed form to the Company, which form shall be provided by the Company upon request. Such transfer will also be recorded on the books of the Company. Upon issuance or transfer of shares, the Company will provide the Stockholder with information concerning his or her rights with regard to such shares, as required by the Bylaws and the MGCL or other applicable law.
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SECTION 5.8 SUITABILITY OF STOCKHOLDERS.
Until Listing, the following provisions shall apply:
(i) INVESTOR SUITABILITY STANDARDS. Subject to suitability standards established by individual states, to become a Stockholder in the Company, if such prospective Stockholder is an individual (including an individual beneficiary of a purchasing IRA), or if the prospective Stockholder is a fiduciary (such as a trustee of a trust or corporate pension or profit sharing plan, or other tax-exempt organization, or a custodian under the Uniform Gifts to Minors Act), such individual or fiduciary, as the case may be, must represent to the Company, among other requirements as the Company may require from time to time:
(a) that such individual (or, in the case of a fiduciary, that the fiduciary account or the donor who directly or indirectly supplies the funds to purchase the Shares) has a minimum annual gross income of $70,000 and a net worth (excluding home, home furnishings and automobiles) of not less than $70,000; or
(b) that such individual (or, in the case of a fiduciary, that the fiduciary account or the donor who directly or indirectly supplies the funds to purchase the Shares) has a net worth (excluding home, home furnishings, and automobiles) of not less than $250,000.
(ii) DETERMINATION OF SUITABILITY OF SALE. The Sponsor and each Person selling Common Shares on behalf of the Sponsor or the Company shall make every reasonable effort to determine that the purchase of Common Shares is a suitable and appropriate investment for each Stockholder. In making this determination, each Person selling Common Shares on behalf of the Company shall ascertain that the prospective Stockholder: (a) meets the minimum income and net worth standards established for the Company; (b) can reasonably benefit from the Company based on the prospective Stockholder’s overall investment objectives and portfolio structure; (c) is able to bear the economic risk of the investment based on the prospective Stockholder’s overall financial situation; and (d) has apparent understanding of (1) the fundamental risks of the investment; (2) the risk that the Stockholder may lose the entire investment; (3) the lack of liquidity of the Common Shares; (4) the restrictions on transferability of the Common Shares; and (5) the tax consequences of the investment.
The Sponsor or each Person selling Common Shares on behalf of the Sponsor or the Company shall make this determination on the basis of information it has obtained from a prospective Stockholder. Relevant information for this purpose will include at least the age, investment objectives, investment experiences, income, net worth, financial situation, and other investments of the prospective Stockholder, as well as any other pertinent factors.
The Sponsor or each Person selling Common Shares on behalf of the Sponsor or the Company shall maintain records of the information used to determine that an investment in Common Shares is suitable and appropriate for a Stockholder. The Sponsor or each Person selling Common Shares on behalf of the Sponsor or the Company shall maintain these records for at least six years.
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(iii) MINIMUM INVESTMENT AND TRANSFER. Subject to certain individual state requirements and except for Shares issued pursuant to the Reinvestment Plan, the Company will sell its Common Shares only to investors who initially purchase a minimum of 250 Common Shares for an aggregate price of $2,500. In order to satisfy the purchase requirements for retirement plans, a husband and wife may jointly contribute funds from their separate IRAs, provided that each such contribution is made in increments of $100.00 or ten (10) whole shares. An investment in Shares shall not, in itself, create a retirement plan, and in order to create a retirement plan a Stockholder must comply with all applicable provisions of the Code. Following the initial minimum investment, no subsequent sale or transfer of Common Shares other than pursuant to the Reinvestment Plan will be permitted of less than 250 Common Shares, and a Stockholder shall not transfer, fractionalize or subdivide such shares so as to retain less than the minimum number thereof.
SECTION 5.9 RESTRICTIONS ON OWNERSHIP AND TRANSFER.
(i) DEFINITIONS. For purposes of this Section 5.9, the following terms shall have the following meanings:
“AGGREGATE SHARE OWNERSHIP LIMIT” means not more than 9.8% in value of the aggregate of the outstanding shares of capital stock and not more than 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of shares of capital stock.
“BENEFICIAL OWNERSHIP” means ownership of Shares by a Person, whether the interest in the Capital Stock is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The terms “Beneficial Owner,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative meanings.
“BUSINESS DAY” means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York City are authorized or required by law, regulation or executive order to close.
“CAPITAL STOCK” means all classes or series of stock of the Company, including, without limitation, Common Shares and Preferred Shares.
“CHARITABLE BENEFICIARY” means one (1) or more beneficiaries of the Trust as determined pursuant to Section 5.9(iii)(f), provided that each such organization must be described in Section 501(c)(3) of the Code and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.
“CONSTRUCTIVE OWNERSHIP” means ownership of Capital Stock by a Person, whether the interest in the Capital Stock is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code. The terms “Constructive Owner,” “Constructively Owns” and “Constructively Owned” shall have the correlative meanings.
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“EXCEPTED HOLDER” means a Stockholder for whom an Excepted Holder Limit is created by the Charter or by the Board pursuant to Section 5.9(ii)(g).
“EXCEPTED HOLDER LIMIT” means, provided that the affected Excepted Holder agrees to comply with the requirements established by the Board pursuant to Section 5.9(ii)(g), and subject to adjustment pursuant to Section 5.9(ii)(h), the percentage limit established by the Board pursuant to Section 5.9(ii)(g).
“MARKET PRICE” on any date means, with respect to any class or series of outstanding shares of Capital Stock, the Closing Price for such Capital Stock on such date. The “Closing Price” on any date shall mean the last sale price for such Capital Stock, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, for such Capital Stock, in either case as reported on the principal national securities exchange on which such Capital Stock is Listed or admitted to trading or, if such Capital Stock is not Listed or admitted to trading on any national securities exchange, the last quoted price, or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the principal automated quotation system that may then be in use or, if such Capital Stock is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in such Capital Stock selected by the Board or, in the event that no trading price is available for such Capital Stock, the fair market value of the Capital Stock, as determined in good faith by the Board.
“NYSE” means the New York Stock Exchange.
“PROHIBITED OWNER” means, with respect to any purported Transfer, any Person who, but for the provisions of Section 5.9(ii)(a), would Beneficially Own or Constructively Own shares of Capital Stock, and if appropriate in the context, shall also mean any Person who would have been the record owner of the shares that the Prohibited Owner would have so owned.
“RESTRICTION TERMINATION DATE” means the first day after the Commencement of the Initial Public Offering on which the Company determines pursuant to Section 7.4 that it is no longer in the best interests of the Company to attempt to, or continue to, qualify as a REIT or that compliance with the restrictions and limitations on Beneficial Ownership, Constructive Ownership and Transfers of Shares set forth herein is no longer required in order for the Company to qualify as a REIT.
“TRANSFER” means any issuance, sale, transfer, gift, assignment, devise or other disposition, as well as any other event that causes any Person to acquire Beneficial Ownership or Constructive Ownership of Capital Stock or the right to vote or receive dividends on Capital Stock, or any agreement to take any such actions or cause any such events, including (a) the granting or exercise of any option (or any disposition of any option), (b) any disposition of any securities or rights convertible into or exchangeable for Capital Stock or any interest in Capital Stock or any exercise of any such conversion or exchange right and (c) Transfers of interests in other entities that result in changes in Beneficial Ownership or Constructive Ownership of Capital Stock; in each case, whether voluntary or involuntary, whether owned of record, Constructively Owned or Beneficially Owned and whether by operation of law or otherwise. The terms “Transferring” and “Transferred” shall have the correlative meanings.
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“TRUST” means any trust provided for in Section 5.9(iii)(a).
“TRUSTEE” means the Person unaffiliated with the Company and a Prohibited Owner, that is appointed by the Company to serve as trustee of the Trust.
(ii) SHARES.
(a) OWNERSHIP LIMITATIONS. During the period commencing on the date that the Company elects to qualify for federal income tax treatment as a REIT and prior to the Restriction Termination Date, but subject to Section 5.10:
(I) BASIC RESTRICTIONS.
(A) (1) Except as set forth in any articles supplementary creating any class or series of shares of Capital Stock, no Person, other than an Excepted Holder, shall Beneficially Own or Constructively Own shares of Capital Stock in excess of the Aggregate Share Ownership Limit and (2) no Excepted Holder shall Beneficially Own or Constructively Own shares of Capital Stock in excess of the Excepted Holder Limit for such Excepted Holder.
(B) No Person shall Beneficially Own or Constructively Own shares of Capital Stock to the extent that such Beneficial or Constructive Ownership of Shares would result in the Company being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year), or otherwise failing to qualify as a REIT (including, but not limited to, Beneficial Ownership or Constructive Ownership that would result in the Company actually owning or Constructively Owning an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by the Company from such tenant would cause the Company to fail to satisfy any of the gross income requirements of Section 856(c) of the Code).
(C) Any Transfer of shares of Capital Stock that, if effective, would result in the Capital Stock being Beneficially Owned by fewer than 100 Persons (determined under the principles of Section 856(a)(5) of the Code) shall be void ab initio, and the intended transferee shall acquire no rights in such shares of Capital Stock.
(II) TRANSFER IN TRUST. If any Transfer of shares of Capital Stock occurs which, if effective, would result in any Person Beneficially Owning or Constructively Owning shares of Capital Stock in violation of Section 5.9(ii)(a)(I)(A) or (B),
(A) then that number of shares of Capital Stock the Beneficial Ownership or Constructive Ownership of which otherwise would cause such Person to violate Section 5.9(ii)(a)(I)(A) or (B) (rounded to the nearest whole share) shall be automatically Transferred to a Trust for the benefit of a Charitable Beneficiary, as described in Section 5.9(iii), effective as of the close of business on the Business Day prior to the date of such Transfer, and such Person shall acquire no rights in such shares; or
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(B) if the Transfer to the Trust described in clause (A) of this Section 5.9(ii)(a)(II) would not be effective for any reason to prevent the violation of Section 5.9(ii)(a)(I)(A) or (B) then the Transfer of that number of shares of Capital Stock that otherwise would cause any Person to violate Section 5.9(ii)(a)(I)(A) or (B) shall be void ab initio, and the intended transferee shall acquire no rights in such shares.
(b) REMEDIES FOR BREACH. If the Board or any duly authorized committee thereof shall at any time determine in good faith that a Transfer or other event has taken place that results in a violation of Section 5.9(ii)(a) or that a Person intends to acquire or has attempted to acquire Beneficial Ownership or Constructive Ownership of any shares of Capital Stock in violation of Section .9(ii)(a) (whether or not such violation is intended), the Board or a committee thereof shall take such action as it deems advisable to refuse to give effect to or to prevent such Transfer or other event, including, without limitation, causing the Company to redeem shares, refusing to give effect to such Transfer on the books of the Company or instituting proceedings to enjoin such Transfer or other event; provided, however, that any Transfer or attempted Transfer or other event in violation of Section 5.9(ii)(a) shall automatically result in the Transfer to the Trust described above, and, where applicable, such Transfer (or other event) shall be void ab initio as provided above irrespective of any action (or non-action) by the Board or a committee thereof.
(c) NOTICE OF RESTRICTED TRANSFER. Any Person who acquires or attempts or intends to acquire Beneficial Ownership or Constructive Ownership of shares of Capital Stock that will or may violate Section 5.9(ii)(a)(I)(A) or (B) or any Person who would have owned shares of Capital Stock that resulted in a Transfer to the Trust pursuant to the provisions of Section 5.9(ii)(a)(II) shall immediately give written notice to the Company of such event, or in the case of such a proposed or attempted transaction, give at least 15 days prior written notice, and shall provide to the Company such other information as the Company may request in order to determine the effect, if any, of such Transfer on the Company’s status as a REIT.
(d) OWNERS REQUIRED TO PROVIDE INFORMATION. From the Commencement of the Initial Public Offering and prior to the Restriction Termination Date:
(I) every owner of more than five percent (5%) (or such lower percentage as required by the Code or the Treasury Regulations promulgated thereunder) of the outstanding shares of Capital Stock, within 30 days after the end of each taxable year, shall give written notice to the Company stating the name and address of such owner, the number of shares of Capital Stock Beneficially Owned and a description of the manner in which such shares are held. Each such owner shall provide to the Company such additional information as the Company may request in order to determine the effect, if any, of such Beneficial Ownership on the Company’s status as a REIT and to ensure compliance with the Aggregate Share Ownership Limit; and
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(II) each Person who is a Beneficial Owner or a Constructive Owner of Capital Stock and each Person (including the stockholder of record) who is holding Capital Stock for a Beneficial Owner or a Constructive Owner shall provide to the Company such information as the Company may request, in good faith, in order to determine the Company’s status as a REIT and to comply with requirements of any taxing authority or governmental authority or to determine such compliance.
(e) REMEDIES NOT LIMITED. Subject to Section 7.4 of the Charter, nothing contained in this Section 5.9(ii)(e) shall limit the authority of the Board to take such other action as it deems necessary or advisable to protect the Company and the interests of its stockholders in preserving the Company’s status as a REIT.
(f) AMBIGUITY. In the case of an ambiguity in the application of any of the provisions of this Section 5.9(ii), Section 5.9(iii), or any definition contained in Section 5.9(i), the Board shall have the power to determine the application of the provisions of this Section 5.9(ii) or Section 5.9(iii) or any such definition with respect to any situation based on the facts known to it. In the event Section 5.9(ii) or (iii) requires an action by the Board and the Charter fails to provide specific guidance with respect to such action, the Board shall have the power to determine the action to be taken so long as such action is not contrary to the provisions of Section 5.9. Absent a decision to the contrary by the Board (which the Board may make in its sole and absolute discretion), if a Person would have (but for the remedies set forth in Section 5.9(ii)(b)) acquired Beneficial Ownership or Constructive Ownership of shares of Capital Stock in violation of Section 5.9(ii)(a), such remedies (as applicable) shall apply first to the shares of Capital Stock which, but for such remedies, would have been Beneficially Owned or Constructively Owned (but not actually owned) by such Person, pro rata among the Persons who actually own such shares of Capital Stock based upon the relative number of the shares held by each such Person.
(g) EXCEPTIONS.
(I) Subject to Section 5.9(ii)(a)(I)(B), the Board, in its sole discretion, may (prospectively or retroactively) exempt a Person from the Aggregate Share Ownership Limit and may establish or increase an Excepted Holder Limit for such Person if:
(A) the Board obtains such representations and undertakings from such Person as are reasonably necessary to ascertain that no individual’s Beneficial Ownership or Constructive Ownership of such shares of Capital Stock will violate Section 5.9(ii)(a)(I)(B);
(B) such Person represents that it does not, and undertakes that it will not, actually own or Constructively Own an interest in a tenant of the Company (or a tenant of any entity owned or controlled by the Company) that would cause the Company to actually own or Constructively Own more than a 9.8% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant and the Board obtains such representations and undertakings from such Person as are reasonably necessary to ascertain this fact (for this purpose, a tenant from whom the Company (or an entity owned or controlled by the Company) derives (and is expected to continue to derive) a sufficiently small amount of revenue such that, in the opinion of the Board, rent from such tenant would not adversely affect the Company’s ability to qualify as a REIT, shall not be treated as a tenant of the Company); and
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(C) such Person agrees that any violation or attempted violation of such representations or undertakings (or other action which is contrary to the restrictions contained in Section 5.9(ii)(a) through Section 5.9(ii)(f)) will result in such shares of Capital Stock being automatically Transferred to a Trust in accordance with Section 5.9(ii)(A)(II) and Section 5.9(iii).
(II) Prior to granting any exception pursuant to Section 5.9(ii)(g)(I), the Board may require a ruling from the Internal Revenue Service, or an opinion of counsel, in either case in form and substance satisfactory to the Board in its sole discretion, as it may deem necessary or advisable in order to determine or ensure the Company’s status as a REIT. Notwithstanding the receipt of any ruling or opinion, the Board may impose such conditions or restrictions as it deems appropriate in connection with granting such exception.
(III) Subject to Section 5.9(ii)(a)(I)(B), an underwriter which participates in an Offering or a private placement of shares of Capital Stock (or Securities convertible into or exchangeable for shares of Capital Stock) may Beneficially Own or Constructively Own shares of Capital Stock (or Securities convertible into or exchangeable for shares of Capital Stock) in excess of the Aggregate Share Ownership Limit but only to the extent necessary to facilitate such Offering or private placement.
(IV) The Board may only reduce the Excepted Holder Limit for an Excepted Holder: (1) with the written consent of such Excepted Holder at any time, or (2) pursuant to the terms and conditions of the agreements and undertakings entered into with such Excepted Holder in connection with the establishment of the Excepted Holder Limit for that Excepted Holder. No Excepted Holder Limit shall be reduced to a percentage that is less than the Aggregate Share Ownership Limit.
(h) INCREASE OR DECREASE IN AGGREGATE SHARE OWNERSHIP LIMIT. Subject to Section 5.9(ii)(a)(I)(B), the Board may from time to time increase the Aggregate Share Ownership Limit for one (1) or more Persons and decrease the Aggregate Share Ownership Limit for all other Persons; provided, however, that the decreased Aggregate Share Ownership Limit will not be effective for any Person whose percentage ownership of Capital Stock is in excess of such decreased Aggregate Share Ownership Limit until such time as such Person’s percentage of Capital Stock equals or falls below the decreased Aggregate Share Ownership Limit, but any further acquisition of Capital Stock in excess of such percentage ownership of Capital Stock will be in violation of the Aggregate Share Ownership Limit and, provided further, that the new Aggregate Share Ownership Limit would not allow five or fewer Persons to Beneficially Own or Constructively Own more than 49.9% in value of the outstanding shares of Capital Stock.
(i) NOTICE TO STOCKHOLDERS UPON ISSUANCE OR TRANSFER. Upon issuance or Transfer of shares of Capital Stock prior to the Restriction Termination Date, the Company shall provide the recipient with a notice containing information about the shares of Capital Stock purchased or otherwise Transferred, in lieu of issuance of a share certificate, in a form substantially similar to the following:
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The securities of American Realty Capital Global Trust, Inc. (the “Company”) are subject to restrictions on Beneficial and Constructive Ownership and Transfer for the purpose, among others, of the Company’s maintenance of its status as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the “Code”). Subject to certain further restrictions and except as expressly provided in the Company’s charter, (i) no Person may Beneficially or Constructively Own shares of Capital Stock in excess of 9.8% of the value of the total outstanding shares of Capital Stock or 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of shares of Capital Stock unless such Person is an Excepted Holder (in which case the Excepted Holder Limit shall be applicable); (ii) no Person may Beneficially or Constructively Own shares of Capital Stock that would result in the Company being “closely held” under Section 856(h) of the Code or otherwise cause the Company to fail to qualify as a REIT; and (iii) any Transfer of shares of Capital Stock that, if effective, would result in the Capital Stock being beneficially owned by fewer than 100 Persons (determined under the principles of Section 856(a)(5) of the Code) shall be void ab initio and the intended transferee shall acquire no rights in such shares. Any Person who Beneficially or Constructively Owns or attempts to Beneficially or Constructively Own shares of Capital Stock which causes or will cause a Person to Beneficially or Constructively Own shares of Capital Stock in excess or in violation of the above limitations must immediately give written notice (or, in the case of an attempted transaction, give at least 15 days prior written notice) to the Company. If any of the restrictions on transfer or ownership as set forth in (i) and (ii) above are violated, the shares of Capital Stock in excess or in violation of such limitations will be automatically transferred to a Trustee of a Trust for the benefit of one (1) or more Charitable Beneficiaries. In addition, the Company may redeem shares upon the terms and conditions specified by the Board in its sole discretion if the Board determines that ownership or a Transfer or other event may violate the restrictions described above. Furthermore, upon the occurrence of certain events, attempted Transfers in violation of the restrictions described above may be void ab initio. All capitalized terms in this notice have the meanings defined in the Company’s charter, as the same may be amended from time to time, a copy of which, including the restrictions on transfer and ownership, will be furnished to each holder of Capital Stock on request and without charge. Requests for such a copy may be directed to the Secretary of the Company at its principal office.
(j) NON-COMPLIANT TENDER OFFERS. No Stockholder may Transfer any shares of stock held by such Stockholder to a Person making a Non-Compliant Tender Offer unless such Stockholder shall have first offered such shares of stock to the Company at the tender offer price offered in such Non-Compliant Tender Offer.
(iii) TRANSFER OF SHARES IN TRUST.
(a) OWNERSHIP IN TRUST. Upon any purported Transfer or other event described in Section 5.9(ii)(a)(II) that would result in a Transfer of shares of Capital Stock to a Trust, such shares shall be Transferred to the Trustee as trustee of a Trust for the exclusive benefit of one (1) or more Charitable Beneficiaries. Such Transfer to the Trustee shall be effective as of the close of business on the Business Day prior to the purported Transfer or other event that results in the Transfer to the Trust pursuant to Section 5.9(ii)(a)(II). The Trustee shall be appointed by the Company and shall be a Person unaffiliated with the Company and any Prohibited Owner. Each Charitable Beneficiary shall be designated by the Company as provided in Section 5.9(iii)(f).
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(b) STATUS OF SHARES HELD BY THE TRUSTEE. Shares of Capital Stock held by the Trustee shall be issued and outstanding shares of Capital Stock. The Prohibited Owner shall have no rights in the shares held in trust by the Trustee. The Prohibited Owner shall not benefit economically from ownership of any shares held in trust by the Trustee, shall have no rights to dividends or other Distributions and shall not possess any rights to vote or other rights attributable to the shares held in the Trust.
(c) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all voting rights and rights to dividends or other Distributions with respect to shares of Capital Stock held in the Trust, which rights shall be exercised for the exclusive benefit of the Charitable Beneficiary. Any dividend or other Distribution paid prior to the discovery by the Company that the shares have been Transferred to the Trustee shall be paid by the recipient of such dividend or other Distribution to the Trustee upon demand and any dividend or other Distribution authorized but unpaid shall be paid when due to the Trustee. Any dividend or other Distribution so paid to the Trustee shall be held in trust for the Charitable Beneficiary. The Prohibited Owner shall have no voting rights with respect to shares held in the Trust and, subject to Maryland law, effective as of the date that the shares have been Transferred to the Trustee, the Trustee shall have the authority (at the Trustee’s sole discretion) (i) to rescind as void any vote cast by a Prohibited Owner prior to the discovery by the Company that the shares have been Transferred to the Trustee and (ii) to recast such vote in accordance with the desires of the Trustee acting for the benefit of the Charitable Beneficiary; provided, however, that if the Company has already taken irreversible corporate action, then the Trustee shall not have the authority to rescind and recast such vote. Notwithstanding the provisions of this Section 5.9, until the Company has received notification that shares have been Transferred into a Trust, the Company shall be entitled to rely on its stock Transfer and other stockholder records for purposes of preparing lists of Stockholders entitled to vote at meetings, determining the validity and authority of proxies and otherwise conducting votes of Stockholders.
(d) SALE OF SHARES BY TRUSTEE. Within 20 days of receiving notice from the Company that shares of Capital Stock have been Transferred to the Trust, the Trustee shall sell the shares held in the Trust to a Person, designated by the Trustee, whose ownership of the shares will not violate the ownership limitations set forth in Section 5.9(ii)(a)(I) or (II). Upon such sale, the interest of the Charitable Beneficiary in the shares sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Prohibited Owner and to the Charitable Beneficiary as provided in this Section 5.9(iii)(d). The Prohibited Owner shall receive the lesser of (1) the price paid by the Prohibited Owner for the shares or, if the Prohibited Owner did not give value for the shares in connection with the event causing the shares to be held in the Trust (e.g., in the case of a gift, devise or other such transaction), the Market Price of the shares on the day of the event causing the shares to be held in the Trust and (2) the price per share received by the Trustee from the sale or other disposition of the shares held in the Trust. The Trustee may reduce the amount payable to the Prohibited Owner by the amount of dividends and other Distributions which have been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Trustee pursuant to Section 5.9(iii)(c). Any net sales proceeds in excess of the amount payable to the Prohibited Owner shall be immediately paid to the Charitable Beneficiary. If, prior to the discovery by the Company that shares of Capital Stock have been Transferred to the Trustee, such shares are sold by a Prohibited Owner, then (i) such shares shall be deemed to have been sold on behalf of the Trust and (ii) to the extent that the Prohibited Owner received an amount for such shares that exceeds the amount that such Prohibited Owner was entitled to receive pursuant to this Section 5.9, such excess shall be paid to the Trustee upon demand.
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(e) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE. Shares of Capital Stock Transferred to the Trustee shall be deemed to have been offered for sale to the Company, or its designee, at a price per share equal to the lesser of (i) the price per share in the transaction that resulted in such Transfer to the Trust (or, in the case of a devise or gift, the Market Price at the time of such devise or gift) and (ii) the Market Price on the date the Company, or its designee, accepts such offer. The Company may reduce the amount payable to the Prohibited Owner by the amount of dividends and other Distributions which have been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Trustee pursuant to Section 5.9(iii)(c). The Company may pay the amount of such reduction to the Trustee for the benefit of the Charitable Beneficiary. The Company shall have the right to accept such offer until the Trustee has sold the shares held in the Trust pursuant to Section 5.9(iii)(d). Upon such a sale to the Company, the interest of the Charitable Beneficiary in the shares sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Prohibited Owner.
(f) DESIGNATION OF CHARITABLE BENEFICIARIES. By written notice to the Trustee, the Company shall designate one (1) or more nonprofit organizations to be the Charitable Beneficiary of the interest in the Trust such that (i) the shares of Capital Stock held in the Trust would not violate the restrictions set forth in Section 5.9(ii)(a)(I) or (II) in the hands of such Charitable Beneficiary and (ii) each such organization must be described in Section 501(c)(3) of the Code and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.
SECTION 5.10 SETTLEMENTS. Nothing in Section 5.9 shall preclude the settlement of any transaction entered into through the facilities of the NYSE or any other national securities exchange or automated inter-dealer quotation system. The fact that the settlement of any transaction occurs shall not negate the effect of any provision of Sections 5.9, and any transfer in such a transaction shall be subject to all of the provisions and limitations set forth in Section 5.9.
SECTION 5.11 SEVERABILITY. If any provision of Section 5.9 or any application of any such provision is determined to be void, invalid or unenforceable by any court having jurisdiction over the issue, the validity and enforceability of the remaining provisions of Section 5.9 shall not be affected and other applications of such provision shall be affected only to the extent necessary to comply with the determination of such court.
SECTION 5.12 ENFORCEMENT. The Company is authorized specifically to seek equitable relief, including injunctive relief, to enforce the provisions of Section 5.9.
SECTION 5.13 NON-WAIVER. No delay or failure on the part of the Company or the Board in exercising any right hereunder shall operate as a waiver of any right of the Company or the Board, as the case may be, except to the extent specifically waived in writing.
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SECTION 5.14 REPURCHASE OF SHARES. The Board may establish, from time to time, a program or programs by which the Company voluntarily repurchases shares of Capital Stock from its Stockholders; provided, however, that such repurchase does not impair the capital or operations of the Company. The Sponsor, the Advisor, the Directors or any Affiliates thereof may not receive any fees arising out of the repurchase of stock by the Company.
SECTION 5.15 DISTRIBUTION REINVESTMENT PLANS. The Board may establish, from time to time, a Distribution reinvestment plan or plans (each, a “Reinvestment Plan”). Under any such Reinvestment Plan, (i) all material information regarding Distributions to the Stockholders and the effect of reinvesting such Distributions, including the tax consequences thereof, shall be provided to the Stockholders not less often than annually and (ii) each Stockholder participating in such Reinvestment Plan shall have a reasonable opportunity to withdraw from the Reinvestment Plan not less often than annually after receipt of the information required in clause (i) above.
SECTION 5.16 PREEMPTIVE AND APPRAISAL RIGHTS. Except as may be provided by the Board in setting the terms of classified or reclassified shares of Capital Stock pursuant to Section 5.4 or as may otherwise be provided by contract approved by the Board, no holder of stock shall, as such holder, have any preemptive right to purchase or subscribe for any additional shares of Capital Stock or any other security of the Company which it may issue or sell. Holders of shares of stock shall not be entitled to exercise any rights of an objecting stockholder provided for under Title 3, Subtitle 2 of the MGCL or any successor statute unless the Board, upon the affirmative vote of a majority of the Board, shall determine that such rights apply, with respect to all or any classes or series of stock, to one (1) or more transactions occurring after the date of such determination in connection with which holders of such shares would otherwise be entitled to exercise such rights.
ARTICLE VI.
BOARD OF DIRECTORS
SECTION 6.1 NUMBER OF DIRECTORS. The number of Directors of the Company shall be five, which number may be increased or decreased from time to time pursuant to the Bylaws; provided, however, that the number of Directors shall not be fewer than three nor greater than ten. From and after the Commencement of the Initial Public Offering, a majority of the Board will be Independent Directors except for a period of up to 60 days after the death, removal or resignation of an Independent Director pending the election of such Independent Director’s successor. The Company elects, at such time as it becomes eligible to make the election provided for under Section 3-804(c) of the MGCL, except as may be provided by the Board in setting the terms of any class or series of Preferred Shares, that any and all vacancies on the Board, other than those resulting from the unexpired term of another Director, may be filled only by the affirmative vote of a majority of the Stockholders, and any Director elected to fill a vacancy shall serve for the remainder of the full term of the directorship in which such vacancy occurred. Notwithstanding the foregoing sentence, Independent Directors shall nominate replacements for vacancies among the Independent Directors’ positions. No reduction in the number of Directors shall cause the removal of any Director from office prior to the expiration of his term. For the purposes of voting for Directors, each Share may be voted for as many individuals as there are Directors to be elected and for whose election the Share is entitled to be voted. Cumulative voting for Directors is prohibited.
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The names of the Directors who shall serve on the Board until the first annual meeting of the Stockholders and until their successors are duly elected and qualify, subject to an increase in the number of Directors prior to the first annual meeting of the Stockholders, are:
Nicholas S. Schorsch
Edward M. Weil, Jr.
Scott J. Bowman
Edward G. Rendell
Abby Wenzel
or such other Directors as appointed in accordance with this Charter.
SECTION 6.2 EXPERIENCE. Each Director shall have at least three years of relevant experience demonstrating the knowledge and experience required to successfully acquire and manage the type of assets being acquired by the Company. At least one (1) of the Independent Directors shall have three years of relevant real estate experience, and at least one (1) of the Independent Directors shall be a financial expert with at least three years of relevant finance experience.
SECTION 6.3 COMMITTEES. Subject to the MGCL, the Board may establish such committees as it deems appropriate, in its discretion, provided that the majority of the members of each committee are Independent Directors. Any Audit Committee established by the Board shall be composed solely of Independent Directors.
SECTION 6.4 TERM. Each Director shall hold office for one (1) year, until the next annual meeting of Stockholders and until his successor is duly elected and qualifies. Directors may be elected to an unlimited number of successive terms.
SECTION 6.5 FIDUCIARY OBLIGATIONS. The Directors serve in a fiduciary capacity to the Company and have a fiduciary duty to the Stockholders of the Company, including a specific fiduciary duty to supervise the relationship of the Company with the Advisor.
SECTION 6.6 RESIGNATION, REMOVAL OR DEATH. Any Director may resign by delivering his resignation to the Board, the Chairman of the Board, the chief executive officer or the Secretary. Any resignation shall take effect immediately upon its receipt or at such later time specified in the resignation. Any Director or the entire Board may be removed from office with or without cause, by the affirmative vote of the holders of not less than a majority of the Shares then outstanding and entitled to vote generally in the election of directors, subject to the rights of any Preferred Shares to elector remove such Directors.
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ARTICLE VII.
POWERS OF THE BOARD OF DIRECTORS
SECTION 7.1 GENERAL. The business and affairs of the Company shall be managed under the direction of the Board. In accordance with the policies on investments and borrowing set forth in this Article VII and Article IX hereof, the Board shall monitor the administrative procedures, investment operations and performance of the Company and the Advisor to assure that such policies are carried out. The Board may take any action that, in its sole judgment and discretion, is necessary or desirable to conduct the business of the Company. The Charter shall be construed with a presumption in favor of the grant of power and authority to the Board. Any construction of the Charter or determination made in good faith by the Board concerning its powers and authority hereunder shall be conclusive. The enumeration and definition of particular powers of the Board included in this Article VII shall in no way be limited or restricted by reference to or inference from the terms of this or any other provision of the Charter or construed or deemed by inference or otherwise in any manner to exclude or limit the powers conferred upon the Board under the general laws of the State of Maryland as now or hereafter in force.
SECTION 7.2 AUTHORIZATION BY BOARD OF STOCK ISSUANCE. The Board may authorize the issuance from time to time of shares of stock of any class or series, whether now or hereafter authorized, or securities or rights convertible into shares of stock of any class or series, whether now or hereafter authorized, for such consideration as the Board may deem advisable (including as compensation for the Independent Directors or without consideration in the case of a stock split or stock dividend), subject to such restrictions or limitations, if any, as may be set forth in the Charter or the Bylaws; provided that the issuance of Preferred Shares shall be approved by a majority of the Independent Directors not otherwise interested in the transaction, who shall have access, at the Company’s expense, to the Company’s legal counsel or to independent legal counsel.
SECTION 7.3 FINANCINGS. The Board shall have the power and authority to borrow or, in any other manner, raise money for the purposes and on the terms it determines, which terms may (i) include evidencing the same by issuance of Securities of the Company and (ii) have such provisions as the Board may determine (a) to reacquire such Securities; (b) to enter into other contracts or obligations on behalf of the Company; (c) to guarantee, indemnify or act as surety with respect to payment or performance of obligations of any Person; and (d) to mortgage, pledge, assign, grant security interests in or otherwise encumber the Company’s assets to secure any such Securities of the Company, contracts or obligations (including guarantees, indemnifications and suretyships); and to renew, modify, release, compromise, extend, consolidate or cancel, in whole or in part, any obligation to or of the Company or participate in any reorganization of obligors to the Company.
SECTION 7.4 REIT QUALIFICATION. If the Company elects to qualify for federal income tax treatment as a REIT, the Board shall use its reasonable best efforts to take such actions as are necessary or appropriate to preserve the status of the Company as a REIT; however, if the Board determines that it is no longer in the best interests of the Company to continue to be qualified as a REIT, the Board may revoke or otherwise terminate the Company’s REIT election pursuant to Section 856(g) of the Code. The Board also may determine that compliance with any restriction or limitation on stock ownership and transfers set forth in Section 5.9 of Article V is no longer required for REIT qualification.
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SECTION 7.5 DETERMINATIONS BY BOARD. The determination as to any of the following matters, made in good faith by or pursuant to the direction of the Board consistent with the Charter, shall be final and conclusive and shall be binding upon the Company and every holder of shares of stock: the amount of the net income of the Company for any period and the amount of assets at any time legally available for the payment of dividends, redemption of shares or the payment of other Distributions on shares; the amount of paid-in surplus, net assets, other surplus, annual or other cash flow, funds from operations, net profit, net assets in excess of capital, undivided profits or excess of profits over losses on sales of assets; the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges shall have been created shall have been paid or discharged); any interpretation of the terms, preferences, conversion or other rights, voting powers or rights, restrictions, limitations as to dividends or other Distributions, qualifications or terms or conditions of redemption of any class or series of stock; the fair value, or any sale, bid or asked price to be applied in determining the fair value, of any asset owned or held by the Company or any shares of stock; the number of shares of stock of any class of the Company; any matter relating to the acquisition, holding and disposition of any assets by the Company; the application of any provision of the Charter in the case of any ambiguity, including, without limitation: (i) any provision of the definitions of any of the following: Affiliate, Independent Director and Sponsor, (ii) which amounts paid to the Advisor or its Affiliates are property-level expenses connected with the ownership of real estate interests, loans or other property, (iii) which expenses are excluded from the definition of Total Operating Expenses and (iv) whether expenses qualify as Organization and Offering Expenses; any conflict between the MGCL and the provisions set forth in the NASAA REIT Guidelines; or any other matter relating to the business and affairs of the Company or required or permitted by applicable law, the Charter or Bylaws or otherwise to be determined by the Board; provided, however, that any determination by the Board as to any of the preceding matters shall not render invalid or improper any action taken or omitted prior to such determination and no Director shall be liable for making or failing to make such a determination; and provided, further, that to the extent the Board determines that the MGCL conflicts with the provisions set forth in the NASAA REIT Guidelines, the NASAA REIT Guidelines control to the extent any provisions of the MGCL are not mandatory.
SECTION 7.6 STOCKHOLDER CONCURRENCE REQUIRED. Notwithstanding the foregoing, without concurrence of a majority of the outstanding shares of stock entitled to vote thereon, the Board may not (i) amend the Charter, except for amendments that do not adversely affect the rights, preferences and privileges of Stockholders (including amendments to provisions relating to Director qualifications, fiduciary duty, liability and indemnification, conflicts of interest, investment policies or investment restrictions), (ii) sell all or substantially all of the Assets other than in the ordinary course of the Company’s business or in connection with liquidation and dissolution or as otherwise permitted by law, (iii) cause the merger or similar reorganization of the Company except as permitted by law or (iv) dissolve or liquidate the Company, other than before the Company’s initial investment in Assets.
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SECTION 7.7 VOTE OF MAJORITY OF INDEPENDENT DIRECTORS REQUIRED. Notwithstanding the foregoing, a majority of the Independent Directors must approve matters relating to: (i) the requirement that a majority of Directors and of Independent Directors review and ratify the Charter at or before the first meeting of the Board; (ii) the duty of the Board to establish written policies on investments and borrowing and to monitor the administrative procedures, investment operations and performance of the Company and the Advisor to assure that such policies are carried out; (iii) the Company’s minimum capitalization; (iv) the Advisory Agreement; (v) liability and indemnification; (vi) reasonableness of the Company’s fees and expenses; (vii) limitations on Organization and Offering Expenses; (viii) limitations on Acquisition Fees and Acquisition Expenses; (viii) limitations on Total Operating Expenses; (ix) limitations on Real Estate commissions on resale of property; (x) limitations on incentive fees; (xi) Advisor compensation; (xii) the Independent Directors’ periodic duty to review the Company’s investment policies; (xiii) the authority of a majority of the Independent Directors to select an Independent Appraiser to determine the fair market value that the Company pays for Real Estate that it acquires both (a) when a majority of the Independent Directors determine to appoint an Independent Appraiser to determine fair market value in connection with any acquisition by the Company and (b) whenever the Company acquires property from the Advisor, the Directors, the Sponsor or their Affiliates; (xiv) the restrictions and procedures contained herein relating to meetings of Stockholders; (xv) the authority of a majority of Stockholders present in person or by proxy at an annual meeting at which a quorum is present, without the necessity for concurrence by the Board, to vote to elect the Directors; (xvi) those requirements of any Reinvestment Plan that the Board establishes, relating to periodic distribution of certain material information to Stockholders and opportunity for participating Stockholders to withdraw; (xvii) the adoption of a Plan of Liquidation or a postponement thereof; and (xviii) the requirement that a majority of Independent Directors must approve matters relating to the duties and restrictions enumerated in this Section 7.7.
ARTICLE VIII.
ADVISOR
SECTION 8.1 APPOINTMENT AND INITIAL INVESTMENT OF ADVISOR. The Board is responsible for setting the general policies of the Company and for the general supervision of its business conducted by officers, agents, employees, advisors or independent contractors of the Company. However, the Board is not required personally to conduct the business of the Company, and it may (but need not) appoint, employ or contract with any Person (including a Person Affiliated with any Director) as an Advisor and may grant or delegate such authority to the Advisor as the Board may, in its sole discretion, deem necessary or desirable. The term of retention of any Advisor shall not exceed one (1) year, although there is no limit to the number of times that a particular Advisor may be retained. The Sponsor or its Affiliates have made an initial investment of $200,000 in the Company. The Sponsor or any such Affiliate may not sell the Initial Investment while AR Capital Global Holdings, LLC remains a Sponsor but may transfer the Initial Investment to AR Capital Global Holdings, LLC or the Affiliates of AR Capital Global Holdings, LLC or the Advisor.
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SECTION 8.2 SUPERVISION OF ADVISOR. The Board shall evaluate the performance of the Advisor before entering into or renewing an Advisory Agreement, and the criteria used in such evaluation shall be reflected in the minutes of the meetings of the Board. The Board may exercise broad discretion in allowing the Advisor to administer and regulate the operations of the Company, to act as agent for the Company, to execute documents on behalf of the Company and to make executive decisions that conform to general policies and principles established by the Board. The Board shall monitor the Advisor to assure that the administrative procedures, operations and programs of the Company are in the best interests of the Stockholders and are fulfilled. The Independent Directors are responsible for reviewing the total fees and expenses of the Company at least annually or with sufficient frequency to determine that the expenses incurred are reasonable in light of the investment performance of the Company, its Net Assets, its Net Income and the fees and expenses of other comparable unaffiliated REITs. Each such determination shall be reflected in the minutes of the meetings of the Board. The Independent Directors also will be responsible for reviewing, from time to time and at least annually, the performance of the Advisor and determining that compensation to be paid to the Advisor is reasonable in relation to the nature and quality of services performed and that such compensation is within the limits prescribed by the Charter. The Independent Directors shall also supervise the performance of the Advisor and the compensation paid to the Advisor by the Company in order to determine that the provisions of the Advisory Agreement are being carried out. Specifically, the Independent Directors will consider factors such as (i) the amount of the fee paid to the Advisor in relation to the size, composition and performance of the Assets, (ii) the success of the Advisor in generating opportunities that meet the investment objectives of the Company, (iii) rates charged to other REITs and to investors other than REITs by advisors performing the same or similar services, (iv) additional revenues realized by the Advisor and its Affiliates through their relationship with the Company, including loan administration, underwriting or broker commissions, servicing, engineering, inspection and other fees, whether paid by the Company or by others with whom the Company does business, (v) the quality and extent of service and advice furnished by the Advisor, (vi) the performance of the Assets, including income, conservation or appreciation of capital, frequency of problem investments and competence in dealing with distress situations, and (vii) the quality of the Assets relative to the investments generated by the Advisor for its own account. The Independent Directors may also consider all other factors that they deem relevant, and the findings of the Independent Directors on each of the factors considered shall be recorded in the minutes of the Board. The Board shall determine whether any successor Advisor possesses sufficient qualifications to perform the advisory function for the Company and whether the compensation provided for in its contract with the Company is justified.
SECTION 8.3 FIDUCIARY OBLIGATIONS. The Advisor shall have a fiduciary responsibility and duty to the Company and to the Stockholders.
SECTION 8.4 AFFILIATION AND FUNCTIONS. The Board, by resolution or in the Bylaws, may provide guidelines, provisions or requirements concerning the affiliation and functions of the Advisor.
SECTION 8.5 TERMINATION. Either a majority of the Independent Directors or the Advisor may terminate the Advisory Agreement on sixty (60) days’ written notice without cause or penalty, and, in such event, the Advisor will cooperate with the Company and the Board in making an orderly transition of the advisory function.
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SECTION 8.6 DISPOSITION FEE ON SALE OF PROPERTIES. The Company may pay the Advisor a real estate commission upon Sale of one (1) or more Properties, in an amount equal to the lesser of (i) one-half (1/2) of the Competitive Real Estate Commission if a third party broker is also involved, or (ii) two percent (2%) of the sales price of such Property or Properties. Payment of such fee may be made only if the Advisor provides a substantial amount of services in connection with the Sale of a Properties or Properties, as determined by a majority of the Independent Directors. In addition, the amount paid when added to all other real estate commissions paid to unaffiliated parties in connection with such Sale shall not exceed the lesser of the Competitive Real Estate Commission or an amount equal to six percent (6%) of the sales price of such Property or Properties.
SECTION 8.7 INCENTIVE FEES. The Company may pay (including through the issuance of an interest by the Operating Partnership) the Advisor or its Affiliates an interest in the gain from the Sale of Assets, for which full consideration is not paid in cash or property of equivalent value, provided the amount or percentage of such interest is reasonable. Such an interest in gain from the Sale of Assets shall be considered presumptively reasonable if it does not exceed fifteen percent (15%) of the balance of such net proceeds remaining after payment to Stockholders, in the aggregate, of an amount equal to one hundred percent (100%) of the Invested Capital, plus an amount equal to six percent (6%) of the Invested Capital per annum cumulative. In the case of multiple Advisors, such Advisor and any of their Affiliates shall be allowed such fees provided such fees are distributed by a proportional method reasonably designed to reflect the value added to the Company assets by each respective Advisor or any Affiliate.
SECTION 8.8 ORGANIZATION AND OFFERING EXPENSES LIMITATION. The Company shall reimburse the Advisor and its Affiliates for Organization and Offering Expenses incurred by the Advisor or its Affiliates; provided, however, that the total amount of all Organization and Offering Expenses shall be reasonable and shall in no event exceed fifteen percent (15%) of the Gross Proceeds of each Offering.
SECTION 8.9 ACQUISITION FEES. The Company may pay the Advisor and its Affiliates fees for the review and evaluation of potential investments in Assets; provided, however, (i) that the total of all Acquisition Fees and Acquisition Expenses shall be reasonable, and shall not exceed an amount equal to four and one-half percent (4.5%) of the Contract Purchase Price, or, in the case of a Mortgage, four and one-half percent (4.5%) of the funds advanced and (ii) that once all the proceeds from the Initial Public Offering have been fully invested, the total of all Acquisition Fees shall not exceed an amount equal to one and one-half percent (1.5%) of the Contract Purchase Price for all the Assets acquired; provided, however, that a majority of the Directors (including a majority of the Independent Directors) not otherwise interested in the transaction may approve fees and expenses in excess of these limits if they determine the transaction to be commercially competitive, fair and reasonable to the Company.
SECTION 8.10 ANNUAL SUBORDINATED PERFORMANCE FEE. The Company may pay the Advisor an Annual Subordinated Performance Fee (“Annual Subordinated Performance Fee”) calculated on the basis of the Company’s total return to Stockholders; provided, that in any year in which the Company’s total return to Stockholders exceeds six percent (6%) per annum, the Advisor shall receive fifteen percent (15%) of the excess total return but shall not receive more than ten percent (10%) of the aggregate total return for such year.
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SECTION 8.11 REIMBURSEMENT FOR TOTAL OPERATING EXPENSES. The Company may reimburse the Advisor, at the end of each fiscal quarter, for Total Operating Expenses incurred by the Advisor; provided, however, that the Company shall not reimburse the Advisor at the end of any fiscal quarter for Total Operating Expenses that, in the four consecutive fiscal quarters then ended, exceed the greater of two percent (2%) of Average Invested Assets or twenty five percent (25%) of Net Income (the “2%/25% Guidelines”) for such year. The Independent Directors shall have the fiduciary responsibility of limiting Total Operating Expenses to amounts that do not exceed the 2%/25% Guidelines unless they have made a finding that, based on such unusual and non-recurring factors that they deem sufficient, a higher level of expenses (an “Excess Amount”) is justified. Any such finding and the reasons in support thereof shall be reflected in the minutes of the meetings of the Board. Within 60 days after the end of any fiscal quarter of the Company for which there is an Excess Amount which the Independent Directors conclude was justifiable and reimbursable to the Advisor, there shall be sent to the Stockholders a written disclosure of such fact, together with an explanation of the factors the Independent Directors considered in determining that such Excess Amount was justified. If the Independent Directors do not determine that excess expenses are justified, the Advisor shall reimburse the Company at the end of the twelve month period the amount by which the annual expenses paid or incurred by the Company exceeded the 2%/25% Guidelines.
SECTION 8.12 REIMBURSEMENT LIMITATION. The Company shall not reimburse the Advisor or its Affiliates for services for which the Advisor or its Affiliates are entitled to compensation in the form of a separate fee.
SECTION 8.13 NO FEES UPON INTERNALIZATION. If the Board elects to internalize any management services provided by the Advisor, neither the Company nor the Operating Partnership shall pay any compensation or other remuneration to the Advisor or its Affiliates in connection with such internalization of management services.
ARTICLE IX.
INVESTMENT OBJECTIVES AND LIMITATIONS
SECTION 9.1 REVIEW OF OBJECTIVES. The Independent Directors shall review the investment policies of the Company with sufficient frequency (not less often than annually) to determine that the policies being followed by the Company are in the best interests of its Stockholders. Each such determination and the basis therefor shall be set forth in the minutes of the meetings of the Board.
SECTION 9.2 CERTAIN PERMITTED INVESTMENTS. Until such time as the Common Shares are Listed, the following shall apply:
(i) The Company may invest in Assets.
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(ii) The Company may invest in Joint Ventures with the Sponsor, the Advisor, one (1) or more Directors or any of their Affiliates only if a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction, approve such investment as being fair and reasonable to the Company and on substantially the same terms and conditions as those received by the other joint venturers.
(iii) Subject to any limitations in Section 9.3, the Company may invest in equity securities, provided that if such equity securities are not traded on a national securities exchange or included for quotation on an inter-dealer quotation system, such investment shall be permitted only if a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction approve such investment as being fair, competitive and commercially reasonable.
SECTION 9.3 INVESTMENT LIMITATIONS. Until such time as the Common Shares are Listed, the following investment limitations shall apply. In addition to other investment restrictions imposed by the Board from time to time, consistent with the Company’s objective of qualifying as a REIT, the following shall apply to the Company’s investments:
(i) Not more than ten percent (10%) of the Company’s total assets shall be invested in Unimproved Real Property or mortgage loans on Unimproved Real Property.
(ii) The Company shall not invest in commodities or commodity future contracts. This limitation is not intended to apply to futures contracts, when used solely for hedging purposes in connection with the Company’s ordinary business of investing in Real Estate assets and Mortgages.
(iii) Except for those Mortgages insured or guaranteed by a government or government agency, the Company shall not invest in or make any Mortgage, unless an appraisal is obtained concerning the underlying property. In a transaction in which a majority of the Independent Directors so determine, and in any transaction with the Advisor, the Sponsor, any Director or any Affiliate thereof, such appraisal will be obtained from an Independent Appraiser concerning the underlying property. Such appraisals shall be maintained in the Company’s records for at least five (5) years and shall be available for inspection and duplication by any holder of Common Shares for a reasonable charge. In addition to the appraisal, a mortgagee’s or owner’s title insurance policy or commitment as to the priority of the mortgage or condition of the title must be obtained.
(iv) The Company shall not make or invest in any Mortgage, including a construction loan, on any one (1) property if the aggregate amount of all mortgage loans outstanding on the property, including the loans of the Company, would exceed an amount equal to eighty-five percent (85%) of the appraised value of the property as determined by appraisal, unless substantial justification exists because of the presence of other underwriting criteria. For purposes of this subsection, the “aggregate amount of all mortgage loans outstanding on the property, including the loans of the Company” shall include all interest (excluding contingent participation in income and/or appreciation in value of the mortgaged property), the current payment of which may be deferred pursuant to the terms of such loans, to the extent that deferred interest on each loan exceeds five percent (5%) per annum of the principal balance of the loan.
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(v) The Company shall not invest in indebtedness secured by a mortgage on real property which is subordinate to liens or other indebtedness or equity interests of the Advisor, the Sponsor, any Director or any Affiliate of the Company.
(vi) The Company shall not issue (A) equity Securities redeemable solely at the option of the holder (except that Stockholders may offer their Common Shares to the Company pursuant to any repurchase plan adopted by the Board on terms outlined in the Prospectus relating to any Offering, as such plan is thereafter amended in accordance with its terms); (B) debt Securities unless the historical debt service coverage (in the most recently completed fiscal year) as adjusted for known changes is sufficient to properly service that higher level of debt; (C) equity Securities on a deferred payment basis or under similar arrangements; (D) options or warrants to purchase shares of Capital Stock to the Advisor, the Directors, the Sponsor or any Affiliate thereof except on the same terms as such options or warrants, if any, are sold to the general public; or (E) equity securities that are assessable after the receipt of the consideration for which the Board authorized their issuance. The foregoing restrictions shall not prevent the Company from issuing options or warrants to the Advisor, the Directors, the Sponsor or any Affiliate thereof at exercise prices not less than the fair market value of the underlying Securities on the date of grant and for consideration (which may include services) that in the judgment of the Independent Directors has a market value not less than the value of such option or warrant on the date of grant. Options or warrants issuable to the Advisor, the Directors, the Sponsor or any Affiliate thereof shall not exceed ten percent (10%) of the outstanding Shares on the date of grant. The voting rights per Share (other than any publicly held Share) sold in a private offering shall not exceed the voting rights which bear the same relationship to the voting rights of a publicly held Share as the consideration paid to the Company for each privately offered share bears to the book value of each outstanding publicly held share.
(vii) A majority of the Directors or a majority of a duly authorized committee of the Board shall authorize the consideration to be paid for each Asset, ordinarily based on the fair market value of the Asset. If a majority of the Independent Directors on the Board or such duly authorized committee determine, or if the Asset is acquired from the Advisor, a Director, the Sponsor or their Affiliates, such fair market value shall be determined by a qualified Independent Appraiser selected by such Independent Directors.
(viii) The Company will continually review its investment activity to attempt to ensure that it is not classified as an “investment company” under the Investment Company Act of 1940, as amended.
(ix) The Company will not make any investment that the Company believes will be inconsistent with its objectives of qualifying and remaining qualified as a REIT unless and until the Board determines, in its sole discretion, that REIT qualification is not in the best interests of the Company.
(x) The Company shall not invest in real estate contracts of sale unless such contracts are in recordable form and appropriately recorded in the chain of title.
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(xi) The Company will not, directly or indirectly, including through any subsidiary, extend or maintain credit, arrange for the extension of credit, or renew an extension of credit, in the form of a personal loan to or for any of the Directors or any of the Company’s executive officers.
(xii) The Company will not invest in any equity securities a majority of disinterested Directors, including a majority of disinterested Independent Directors, approves the transaction as being fair, competitive and commercially reasonable, other than equity securities of a REIT or other real estate operating company. Investments in entities affiliated with the Advisor, the Sponsor, any Director, or any of their Affiliates shall be subject to the restrictions on joint venture investments set forth in Section 9.2(ii).
(xiii) The Company shall not engage in any short sale.
(xiv) The Company shall not engage in trading, as opposed to investment activities.
(xv) The Company shall not engage in underwriting activities or distribute, as agent, securities issued by others.
(xvi) The Company shall not invest in foreign currency or bullion.
(xvii) The aggregate amount of borrowing shall not exceed three hundred percent (300%) of the Company’s Net Assets as of the date of the borrowing, which is generally expected to be approximately 75% of the cost of the Company’s investments, unless the excess is approved by a majority of the Independent Directors and disclosed to the Stockholders in the Company’s next quarterly report to Stockholders following such borrowing along with justification for such excess. This limitation, however, shall not apply to individual real estate assets or investments.
(xviii) The Company shall not acquire securities in any entity holding investments or engaging in activities prohibited by the restrictions on investments set forth in the foregoing clauses (i) through (xvii) of this Section 9.3.
ARTICLE X.
CONFLICTS OF INTEREST
SECTION 10.1 SALES AND LEASES TO THE COMPANY. The Company may purchase or lease an Asset or Assets from the Sponsor, the Advisor, a Director, an officer or any Affiliate thereof upon a finding by a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction (i) that such transaction is fair and reasonable to the Company and (ii) that such transaction is at a price to the Company no greater than the cost of the Asset to such Sponsor, Advisor, Director, officer, Affiliate or, if the price to the Company is in excess of such cost, substantial justification exists for the excess and the excess is reasonable. In no event shall the purchase price paid by the Company for any such Asset exceed the Asset’s current appraised value.
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SECTION 10.2 SALES AND LEASES TO THE SPONSOR, ADVISOR, DIRECTORS OR AFFILIATES. An Advisor, the Sponsor, a Director, an officer or any Affiliate thereof may only purchase or lease Assets from the Company if a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction determine that the transaction is fair and reasonable to the Company.
SECTION 10.3 OTHER TRANSACTIONS.
(i) The Company shall not engage in any other transaction with the Sponsor, a Director, the Advisor or any Affiliates thereof unless a majority of the Directors (including a majority of the Independent Directors) not otherwise interested in such transaction approve such transaction as fair and reasonable to the Company and on terms and conditions not less favorable to the Company than those available from unaffiliated third parties.
(ii) The Company shall not make loans to the Sponsor, the Advisor, a Director, an officer or any Affiliates thereof except Mortgages pursuant to Section 9.3(iii) hereof or loans to wholly owned subsidiaries of the Company. The Sponsor, the Advisor, the Directors, the officers and any Affiliates thereof shall not make loans to the Company, or to joint ventures in which the Company is a co-venturer, unless approved by a majority of the Directors (including a majority of the Independent Directors) not otherwise interested in such transaction as fair, competitive, and commercially reasonable, and no less favorable to the Company than comparable loans between unaffiliated parties.
(iii) The Company may enter into joint ventures with the Sponsor, the Advisor, a Director and any Affiliates thereof, provided that (a) a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction approves the transaction as being fair and reasonable to the Company and (b) the investment by the Company is on substantially the same terms as those received by other joint venturers.
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ARTICLE XI.
STOCKHOLDERS
SECTION 11.1 MEETINGS OF STOCKHOLDERS. There shall be an annual meeting of the Stockholders, to be held on such date and at such time and place as shall be determined by or in the manner prescribed in the Bylaws, at which the Directors shall be elected and any other proper business may be conducted. The annual meeting will be held upon reasonable notice on a date that is within a reasonable period of time following the distribution of the Company’s annual report to Stockholders, but not less than thirty (30) days after delivery of such report. The Directors, including the Independent Directors, shall take reasonable steps to ensure that such notice is provided. The holders of a majority of Shares entitled to vote, present in person or by proxy, at an annual meeting at which a quorum is present may, without the necessity for concurrence by the Board, vote to elect the Directors. A quorum shall be the presence in person or by proxy of Stockholders entitled to cast at least 50% of all the votes entitled to be cast at such meeting on any matter. Special meetings of Stockholders may be called in the manner provided in the Bylaws, including by the Chairman of the Board, the President, the Chief Executive Officer, a majority of the Directors or a majority of the Independent Directors, and shall be called by the Secretary of the Company to act on any matter that may properly be considered at a meeting of Stockholders upon written request of Stockholders entitled to cash not less than ten percent (10%) of all votes entitled to be cast on such matter at such meeting. Notice of any special meeting of Stockholders shall be given as provided in the Bylaws, and the special meeting shall be held not less than 15 days nor more than 60 days after the delivery of such notice. If the meeting is called by written request of Stockholders as described in this Section 11.1, the special meeting shall be held at the time and place specified in the Stockholder request; provided, however, that if none is so specified, at such time and place convenient to the Stockholders. If there are no Directors, the Secretary of the Company shall promptly call a special meeting of the Stockholders entitled to vote for the election of successor Directors. Any meeting may be adjourned and reconvened as the Board may determine or as otherwise provided in the Bylaws. Without the approval of a majority of the shares of stock entitled to vote on the matter, the Board may not (i) amend the Charter to materially and adversely affect the rights, preferences and privileges of the Stockholders; (ii) amend provisions of the Charter relating to director qualifications, fiduciary duties, liability and indemnification, conflicts of interest, investment policies or investment restrictions; (iii) liquidate or dissolve the Company other than before the initial investment in Property; (iv) sell all or substantially all of the Company’s assets other than in the ordinary course of business or as otherwise permitted by law; or (v) cause the merger or similar reorganization of the Company except as permitted by law.
SECTION 11.2 VOTING RIGHTS OF STOCKHOLDERS. Subject to the provisions of any class or series of shares of stock then outstanding and the mandatory provisions of any applicable laws or regulations, the Stockholders shall be entitled to vote only on the following matters: (a) election or removal of Directors, without the necessity for concurrence by the Board, as provided in Sections 6.1, 6.4, 6.6 and 11.1 hereof; (b) amendment of the Charter, without the necessity for concurrence by the Board, as provided in Article XIII hereof; (c) dissolution of the Company, without the necessity for concurrence by the Board; (d) to the extent required under Maryland law, merger or consolidation of the Company or the sale or other disposition of all or substantially all of the Company’s assets; and (e) such other matters with respect to which the Board has adopted a resolution declaring that a proposed action is advisable and directing that the matter be submitted to the Stockholders for approval or ratification. Except with respect to the foregoing matters, no action taken by the Stockholders at any meeting shall in any way bind the Board. Without the approval of a majority of the shares of stock entitled to vote on the matter, the Board may not (i) amend the Charter to materially and adversely affect the rights, preferences and privileges of the Stockholders; (ii) amend provisions of the Charter relating to director qualifications, fiduciary duties, liability and indemnification, conflicts of interest, investment policies or investment restrictions; (iii) liquidate or dissolve the Company other than before the initial investment in property; (iv) sell all or substantially all of the Company’s assets other than in the ordinary course of business or as otherwise permitted by law; or (v) cause the merger or similar reorganization of the Company except as permitted by law.
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SECTION 11.3 EXTRAORDINARY ACTIONS. Notwithstanding any provision of law permitting or requiring any action to be taken or approved by the affirmative vote of the holders of shares of stock entitled to cast a greater number of votes, any such action shall be effective and valid if declared advisable by the Board and taken or approved by the affirmative vote of holders of shares entitled to cast a majority of all the votes entitled to be cast on the matter.
SECTION 11.4 VOTING LIMITATIONS ON SHARES HELD BY THE ADVISOR, DIRECTORS AND AFFILIATES. With respect to shares of stock owned by the Advisor, any Director or any of their Affiliates, neither the Advisor, nor such Director(s), nor any of their Affiliates may vote or consent on matters submitted to the Stockholders regarding the removal of the Advisor, such Director(s) or any of their Affiliates or any transaction between the Company and any of them. In determining the requisite percentage in interest of shares necessary to approve a matter on which the Advisor, such Director(s) and any of their Affiliates may not vote or consent, any shares owned by any of them shall not be included.
SECTION 11.5 RIGHT OF INSPECTION. Any Stockholder and any designated representative thereof shall be permitted access to the records of the Company at all reasonable times, and may inspect and copy any of them for a reasonable charge. Inspection of the Company books and records by the office or agency administering the securities laws of a jurisdiction shall be provided upon reasonable notice and during normal business hours.
SECTION 11.6 ACCESS TO STOCKHOLDER LIST. An alphabetical list of the names, addresses and telephone numbers of the Stockholders of the Company, along with the number of shares of stock held by each of them (the “Stockholder List”), shall be maintained as part of the books and records of the Company and shall be available for inspection by any Stockholder or the Stockholder’s designated agent at the home office of the Company upon the request of the Stockholder. The Stockholder List shall be updated at least quarterly to reflect changes in the information contained therein. A copy of the Stockholder List shall be mailed to any Stockholder so requesting within ten days of receipt by the Company of the request. The copy of the Stockholder List shall be printed in alphabetical order, on white paper, and in a readily readable type size (in no event smaller than 10-point type). The Company may impose a reasonable charge for expenses incurred in reproduction pursuant to the Stockholder request. A Stockholder may request a copy of the Stockholder List in connection with matters relating to Stockholders’ voting rights, and the exercise of Stockholder rights under federal proxy laws.
If the Advisor or the Board neglects or refuses to exhibit, produce or mail a copy of the Stockholder List as requested, the Advisor and/or the Board, as the case may be, shall be liable to any Stockholder requesting the Stockholder List for the costs, including reasonable attorneys’ fees, incurred by that Stockholder for compelling the production of the Stockholder List, and for actual damages suffered by any Stockholder by reason of such refusal or neglect. It shall be a defense that the actual purpose and reason for the requests for inspection or for a copy of the Stockholder List is to secure the Stockholder List or other information for the purpose of selling the Stockholder List or copies thereof, or of using the same for a commercial purpose, other than in the interest of the applicant as a Stockholder relative to the affairs of the Company. The Company may require the Stockholder requesting the Stockholder List to represent that the Stockholder List is not requested for a commercial purpose unrelated to the Stockholder’s interest in the Company. The remedies provided hereunder to Stockholders requesting copies of the Stockholder List are in addition to, and shall not in any way limit, other remedies available to Stockholders under federal law, or the laws of any state.
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SECTION 11.7 REPORTS. The Directors, including the Independent Directors, shall take reasonable steps to insure that the Company shall cause to be prepared and mailed or delivered to each Stockholder as of a record date after the end of the fiscal year and each holder of other publicly held Securities within one hundred twenty (120) days after the end of the fiscal year to which it relates an annual report for each fiscal year ending after the Commencement of the Initial Public Offering that shall include: (i) financial statements prepared in accordance with generally accepted accounting principles which are audited and reported on by independent certified public accountants; (ii) the ratio of the costs of raising capital during the period to the capital raised; (iii) the aggregate amount of advisory fees and the aggregate amount of other fees paid to the Advisor and any Affiliate of the Advisor by the Company and including fees or charges paid to the Advisor and any Affiliate of the Advisor by third parties doing business with the Company; (iv) the Total Operating Expenses of the Company, stated as a percentage of Average Invested Assets and as a percentage of Net Income; (v) a report from the Independent Directors that the policies being followed by the Company are in the best interests of its Stockholders and the basis for such determination; and (vi) separately stated, full disclosure of all material terms, factors and circumstances surrounding any and all transactions involving the Company, the Directors, the Advisors, the Sponsors and any Affiliate thereof occurring in the year for which the annual report is made, and the Independent Directors shall be specifically charged with a duty to examine and comment in the report on the fairness of such transactions.
SECTION 11.8 TENDER OFFERS. If any Person makes a tender offer, including, without limitation, a “mini-tender” offer, such Person must comply with all of the provisions of Regulation 14D of the Exchange Act, including, without limitation, disclosure and notice requirements, that would be applicable if the tender offer was for more than five percent (5%) of the outstanding shares of the stock of the Company; provided, however, that unless otherwise required by the Exchange Act, such documents are not required to be filed with the Securities and Exchange Commission. Any Person who initiates a tender offer without complying with the provisions of Regulation 14D (such tender offer, a “Non-Compliant Tender Offer”) shall be responsible for all expenses incurred by the Company in connection with the enforcement of the provisions of this Section 11.8, including, without limitation, expenses incurred in connection with the review of all documents related to such tender offer. In addition, the Company may seek injunctive relief, including, without limitation, a temporary or permanent restraining order, in connection with any Non-Compliant Tender Offer. This Section 11.8 shall be of no force or effect with respect to any Shares that are then Listed.
ARTICLE XII.
LIABILITY OF STOCKHOLDERS, DIRECTORS, ADVISORS AND AFFILIATES; TRANSACTIONS BETWEEN AFFILIATES AND THE COMPANY
SECTION 12.1 LIMITATION OF STOCKHOLDER LIABILITY. No Stockholder shall be liable for any debt, claim, demand, judgment or obligation of any kind of, against or with respect to the Company by reason of being a Stockholder, nor shall any Stockholder be subject to any personal liability whatsoever, in tort, contract or otherwise, to any Person in connection with the Company’s assets or the affairs of the Company by reason of being a Stockholder. All Shares issued to Stockholders shall be non-assessable.
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SECTION 12.2 LIMITATION OF DIRECTOR AND OFFICER LIABILITY; INDEMNIFICATION.
(a) Subject to the limitations set forth under Maryland law or in paragraph (c) or (d) below, no Director or officer of the Company shall be liable to the Company or its Stockholders for money damages. Neither the amendment nor repeal of this Section 12.2(a), nor the adoption or amendment of any other provision of the Charter or Bylaws inconsistent with this Section 12.2(a), shall apply to or affect in any respect the applicability of the preceding sentence with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.
(b) Subject to the limitations set forth under Maryland law or in paragraph (c) or (d) below, the Company shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (i) any individual who is a present or former Director or officer of the Company and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity, (ii) any individual who, while a Director or officer of the Company and at the request of the Company, serves or has served as a director, officer, partner, member, manager or trustee of another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity or (iii) the Advisor of any of its Affiliates acting as an agent of the Company. The rights of a Director or officer to indemnification and advance of expenses provided hereby shall vest immediately upon election of such Director or officer. The Company may, with the approval of the Board or any duly authorized committee thereof, provide such indemnification and advance for expenses to a person who served a predecessor of the Company in any of the capacities described in (i) or (ii) above and to any employee or agent of the Company or a predecessor of the Company. The Board may take such action as is necessary to carry out this Section 12.2(b). No amendment of the Charter or repeal of any of its provisions shall limit or eliminate the right of indemnification provided hereunder with respect to acts or omissions occurring prior to such amendment or repeal.
(c) Notwithstanding anything to the contrary contained in paragraph (a) or (b) above, the Company shall not provide for indemnification of a Director, the Advisor or any Affiliate of the Advisor (the “Indemnitee”) for any liability or loss suffered by any of them and the Company shall not provide that an Indemnitee be held harmless for any loss or liability suffered by the Company, unless all of the following conditions are met:
(i) The Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Company.
(ii) The Indemnitee was acting on behalf of or performing services for the Company.
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(iii) Such liability or loss was not the result of (A) negligence or misconduct, in the case that the Indemnitee is a Director (other than an Independent Director), the Advisor or an Affiliate of the Advisor or (B) gross negligence or willful misconduct, in the case that the Indemnitee is an Independent Director.
(iv) Such indemnification or agreement to hold harmless is recoverable only out of Net Assets and not from the Stockholders.
(d) Notwithstanding anything to the contrary contained in paragraph (a) or (b) above, the Company shall not provide indemnification for any loss, liability or expense arising from or out of an alleged violation of federal or state securities laws by an Indemnitee unless one (1) or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged securities law violations as to the Indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the Indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against the Indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which Securities were offered or sold as to indemnification for violations of securities laws.
SECTION 12.3 PAYMENT OF EXPENSES. The Company may pay or reimburse reasonable legal expenses and other costs incurred by an Indemnitee in advance of final disposition of a proceeding only if: (i) the proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Company, (ii) the Indemnitee provides the Company with a written affirmation of the Indemnitee’s good faith belief that the Indemnitee has met the standard of conduct necessary for indemnification by the Company as authorized by Section 12.2, (iii) the proceeding was initiated by a third party who is not a Stockholder or, if by a Stockholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement and (iv) the Indemnitee provides the Company with a written undertaking to repay the amount paid or reimbursed by the Company, together with the applicable legal rate of interest, if it is ultimately determined that the Indemnitee did not comply with the requisite standard of conduct.
SECTION 12.4 EXPRESS EXCULPATORY CLAUSES IN INSTRUMENTS. Neither the Stockholders nor the Directors, officers, employees or agents of the Company shall be liable under any written instrument creating an obligation of the Company by reason of their being Stockholders, Directors, officers, employees or agents of the Company, and all Persons shall look solely to the Company’s assets for the payment of any claim under or for the performance of that instrument. The omission of the foregoing exculpatory language from any instrument shall not affect the validity or enforceability of such instrument and shall not render any Stockholder, Director, officer, employee or agent liable thereunder to any third party, nor shall the Directors or any officer, employee or agent of the Company be liable to anyone as a result of such omission.
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ARTICLE XIII.
AMENDMENTS
(i) The Company reserves the right from time to time to make any amendment to its Charter, now or hereafter authorized by law, including any amendment altering the terms or contract rights, as expressly set forth in the Charter, of any outstanding shares of stock. All rights and powers conferred by the Charter on Stockholders, Directors and officers are granted subject to this reservation. Except for amendments permitted to be made without Stockholder approval under Maryland law or by specific provision in this Charter, any amendment to the Charter shall be valid only if approved by the affirmative vote of a majority of all votes entitled to be cast on the matter, including, without limitation, (i) any amendment which would adversely affect the rights, preferences and privileges of the Stockholders and (ii) any amendment to Sections 6.2, 6.5 and 6.6 of Article VI, Article IX, Article X, Article XII, Article XIV, Article XV and this Article XIII (or any other amendment of the Charter that would have the effect of amending such sections).
(ii) Notwithstanding anything to the contrary contained herein, at such time as the Common Shares are approved for Listing, the Charter shall be as set forth in Exhibit A hereto.
ARTICLE XIV.
ROLL-UP TRANSACTIONS
(i) In connection with any proposed Roll-Up Transaction, an appraisal of all of the Company’s assets shall be obtained from a competent Independent Appraiser. The Company’s assets shall be appraised on a consistent basis, and the appraisal shall be based on the evaluation of all relevant information and shall indicate the value of the assets as of a date immediately prior to the announcement of the proposed Roll-Up Transaction. The appraisal shall assume an orderly liquidation of the assets over a 12-month period. If the appraisal will be included in a prospectus used to offer the securities of a Roll-Up Entity, the appraisal shall be filed with the Securities and Exchange Commission and the states as an exhibit to the registration statement for the offering. Accordingly, an issuer using the appraisal shall be subject to liability for violation of Section 11 of the Securities Act, and comparable provisions under state laws for any material misrepresentations or omissions in the appraisal. The terms of the engagement of the Independent Appraiser shall clearly state that the engagement is for the benefit of the Company and the Stockholders. A summary of the appraisal, indicating all material assumptions underlying the appraisal, shall be included in a report to Stockholders in connection with a proposed Roll-Up Transaction. In connection with a proposed Roll-Up Transaction, the person sponsoring the Roll-Up Transaction shall offer to holders of Common Shares who vote against the proposed Roll-Up Transaction the choice of:
(a) accepting the securities of a Roll-Up Entity offered in the proposed Roll-Up Transaction; or
(b) one (1) of the following:
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(I) remaining as Stockholders of the Company and preserving their interests therein on the same terms and conditions as existed previously; or
(II) receiving cash in an amount equal to the Stockholder’s pro rata share of the appraised value of the net assets of the Company.
(ii) The Company is prohibited from participating in any proposed Roll-Up Transaction:
(a) that would result in the holders of Common Shares having voting rights in a Roll-Up Entity that are less than the rights provided for in Article XI hereof;
(b) that includes provisions that would operate as a material impediment to, or frustration of, the accumulation of shares of stock by any purchaser of the securities of the Roll-Up Entity (except to the minimum extent necessary to preserve the tax status of the Roll-Up Entity), or which would limit the ability of an investor to exercise the voting rights of its securities of the Roll-Up Entity on the basis of the number of shares held by that investor;
(c) in which investor’s rights to access of records of the Roll-Up Entity will be less than those described in Sections 11.5 and 11.6 hereof; or
(d) in which any of the costs of the Roll-Up Transaction would be borne by the Company if the Roll-Up Transaction is rejected by the holders of Common Shares.
ARTICLE XV.
DURATION
If the Board has not determined to pursue a Liquidity Event by the sixth anniversary of the Termination of the Initial Public Offering , the Board shall adopt a resolution declaring that a proposed liquidation of the Company is advisable on substantially the terms and conditions set forth in, or referred to, in the resolution (the “Plan of Liquidation”) and directing that the proposed Plan of Liquidation be submitted for consideration at either an annual or special meeting of the Stockholders provided, however, that the adoption of a Plan of Liquidation by the Board and the submission thereof to the Stockholders may be postponed if a majority of Directors, including a majority of Independent Directors, determines that a liquidation is not then in the best interest of the Stockholders. If the adoption of a Plan of Liquidation and the submission thereof to the Stockholders is so postponed, the Board shall reconsider whether the liquidation is in the best interest of the Stockholders at least annually and further postponement of the adoption of a Plan of Liquidation and the submission thereof to the Stockholders shall only be permitted if a majority of Directors, including a majority of Independent Directors, again determines that a liquidation would not then be in the best interest of the Stockholders. If the Board adopts a Plan of Liquidation and the Stockholders do not approve the Plan of Liquidation, (i) the Company shall continue operating and (ii) upon the written request of Stockholders owning in the aggregate not less than ten percent (10%) of the then outstanding Common Shares, the Board shall resubmit the Plan of Liquidation for consideration by proxy statement to the Stockholders up to once every two (2) years. If the Board adopts a Plan of Liquidation and the Stockholders approve the Plan of Liquidation, the Board shall commence an orderly liquidation of the Assets pursuant to such Plan of Liquidation. If listing occurs on or before the sixth anniversary of the Termination of the Initial Public Offering, the Company shall continue perpetually unless dissolved pursuant to any applicable provision of the MGCL.
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FOURTH: The amendment and restatement of the charter as hereinabove set forth have been duly advised by the Board of Directors of the Company and approved by the stockholders of the Company as required by law.
FIFTH: The current address of the principal office of the Company is as set forth in Article III of the foregoing amendment and restatement of the charter.
SIXTH: The name and address of the Company’s current resident agent are as set forth in Article III of the foregoing amendment and restatement of the charter.
SEVENTH: The number of directors of the Company and the names of the directors currently in office are as set forth in Section 6.1 of Article VI of the foregoing amendment and restatement of the charter.
EIGHTH: The total number of shares of stock which the Company had authority to issue immediately prior to the foregoing amendment and restatement of the charter was 350,000,000, consisting of 300,000,000 shares of common stock, $0.01 par value per share, of which 200,000,000 were classified as Retail Shares and 100,000,000 were classified as Institutional Shares, and 50,000,000 shares of preferred stock, $0.01 par value per share. The aggregate par value of all shares of stock having par value was $1,000. The total number of shares of stock which the Company has authority to issue pursuant to the foregoing amendment and restatement of the charter is 350,000,000, consisting of 300,000,000 shares of common stock, $0.01 par value per share, and 50,000,000 shares of preferred stock, $0.01 par value per share. The aggregate par value of all authorized shares of stock having par value is $3,500,000.
NINTH: The undersigned Chief Executive Officer acknowledges these Articles of Amendment and Restatement to be the corporate act of the Company and, as to all matters or facts required to be verified under oath, the undersigned Chief Executive Officer acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, American Realty Capital Global Trust, Inc. has caused these Articles of Amendment and Restatement to be signed in its name and on its behalf by its Chief Executive Officer, and attested by its Secretary, on this 13th day of August, 2013.
ATTEST:
By: | /s/ Edward M. Weil, Jr. | By: | /s/ Nicholas S. Schorsch | |
Name: Edward M. Weil, Jr. | Name: Nicholas S. Schorsch | |||
Title: President, Chief Operating Officer, Treasurer and Secretary | Title: Chief Executive Officer |
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Exhibit A
to the Articles of Amendment and Restatement
Form of Amended and Restated Charter
of
American Realty Capital Global Trust, Inc.
Upon Approval for Listing
AMENDED AND RESTATED CHARTER
FOR
AMERICAN REALTY CAPITAL GLOBAL TRUST, INC.
a Maryland Corporation
TABLE OF CONTENTS
Page | ||
ARTICLE I NAME | 1 | |
ARTICLE II PURPOSES AND POWERS | 1 | |
ARTICLE III RESIDENT AGENT AND PRINCIPAL OFFICE | 1 | |
ARTICLE IV DEFINITIONS | 1 | |
ARTICLE V STOCK | 3 | |
SECTION 5.1 | AUTHORIZED SHARES | 3 |
SECTION 5.2 | COMMON SHARES | 3 |
SECTION 5.3 | PREFERRED SHARES | 4 |
SECTION 5.4 | CLASSIFIED OR RECLASSIFIED SHARES | 4 |
SECTION 5.5 | STOCKHOLDERS’ CONSENT IN LIEU OF MEETING | 4 |
SECTION 5.6 | CHARTER AND BYLAWS | 4 |
SECTION 5.7 | RESTRICTIONS ON OWNERSHIP AND TRANSFER | 4 |
SECTION 5.8 | SETTLEMENTS | 12 |
SECTION 5.9 | SEVERABILITY | 13 |
SECTION 5.10 | ENFORCEMENT | 13 |
SECTION 5.11 | NON-WAIVER | 13 |
SECTION 5.12 | PREEMPTIVE AND APPRAISAL RIGHTS | 13 |
ARTICLE VI BOARD OF DIRECTORS | 13 | |
SECTION 6.1 | NUMBER OF DIRECTORS | 13 |
SECTION 6.2 | RESIGNATION OR REMOVAL | 14 |
ARTICLE VII POWERS OF THE BOARD OF DIRECTORS | 14 | |
SECTION 7.1 | GENERAL | 14 |
SECTION 7.2 | AUTHORIZATION BY BOARD OF STOCK ISSUANCE | 14 |
SECTION 7.3 | FINANCINGS | 15 |
SECTION 7.4 | REIT QUALIFICATION | 15 |
SECTION 7.5 | DETERMINATIONS BY BOARD | 15 |
ARTICLE VIII EXTRAORDINARY ACTIONS | 16 | |
ARTICLE IX LIABILITY OF STOCKHOLDERS, DIRECTORS AND OFFICERS | 16 | |
SECTION 9.1 | LIMITATION OF STOCKHOLDER LIABILITY | 16 |
SECTION 9.2 | LIMITATION OF DIRECTOR AND OFFICER LIABILITY; INDEMNIFICATION | 16 |
SECTION 9.3 | EXPRESS EXCULPATORY CLAUSES IN INSTRUMENTS | 16 |
ARTICLE X AMENDMENTS | 17 |
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AMERICAN REALTY CAPITAL GLOBAL TRUST,
INC.
AMENDED AND RESTATED CHARTER
ARTICLE I
NAME
The name of the corporation is American Realty Capital Global Trust, Inc. (the “Company”). So far as may be practicable, the business of the Company shall be conducted and transacted under that name. Under circumstances in which the Company’s Board of Directors determines that the use of the name “American Realty Capital Global Trust, Inc.” is not practicable, it may use any other designation or name for the Company.
ARTICLE II
PURPOSES AND POWERS
The purposes for which the Company is formed are to engage in any lawful act or activity (including, without limitation or obligation, qualifying and engaging in business as a real estate investment trust under Sections 856 through 860, or any successor sections, of the Internal Revenue Code of 1986, as amended (the “Code”)), for which corporations may be organized under the MGCL and the general laws of the State of Maryland as now or hereafter in force.
ARTICLE III
RESIDENT AGENT AND PRINCIPAL OFFICE
The name and address of the resident agent for service of process of the Company in the State of Maryland is CSC-Lawyers Incorporating Service Company, 7 St. Paul Street, Suite 1660, Baltimore, Maryland 21202. The address of the Company’s principal office in the State of Maryland is c/o CSC-Lawyers Incorporating Service Company, 7 St. Paul Street, Suite 1660, Baltimore, Maryland 21202. The Company may have such other offices and places of business within or outside the State of Maryland as the Board may from time to time determine.
ARTICLE IV
DEFINITIONS
As used in the Charter, the following terms shall have the following meanings unless the context otherwise requires:
“BOARD” means the Board of Directors and the Company.
“BYLAWS” means the Bylaws of the Company, as amended from time to time.
“CHARTER” means the charter of the Company.
“COD” shall have the meaning as provided in Article II herein.
“COMMON SHARES” shall have the meaning as provided in Section 5.1 herein.
“COMPANY” shall have the meaning as provided in Article I herein.
“DIRECTOR” means a director of the Company.
“DISTRIBUTIONS” means any distributions of money or other property, pursuant to Section 5.2(iii) hereof, by the Company to owners of Shares, including distributions that may constitute a return of capital for federal income tax purposes.
“MGCL” means the Maryland General Corporation Law, as in effect from time to time.
“PERSON” means an individual, corporation, partnership, estate, trust (including a trust qualified under Sections 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other legal entity and also includes a group as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, and a group to which an Excepted Holder Limit (as defined in Article V, Section 5.7(i) hereof) applies.
“PREFERRED SHARES” shall have the meaning as provided in Section 5.1 herein.
“REIT” means a corporation, trust, association or other legal entity (other than a real estate syndication) that is engaged primarily in investing in equity interests in real estate (including fee ownership and leasehold interests) or in loans secured by real estate or both, as defined pursuant to the REIT Provisions of the Code.
“REIT PROVISIONS OF THE CODE” means Sections 856 through 860 of the Code and any successor or other provisions of the Code relating to real estate investment trusts (including provisions as to the attribution of ownership of beneficial interests therein) and the regulations promulgated thereunder.
“SECURITIES” means any of the following issued by the Company, as the text requires: Shares, any other stock, shares or other evidences of equity or beneficial or other interests, voting trust certificates, bonds, debentures, notes or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in, temporary or interim certificates for, receipts for, guarantees of, or warrants, options or rights to subscribe to, purchase or acquire, any of the foregoing.
“SHARES” means shares of capital stock of the Company of any class or series, including Common Shares or Preferred Shares.
“STOCKHOLDERS” means the holders of record of the Company’s Shares as maintained in the books and records of the Company or its transfer agent.
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ARTICLE V
STOCK
SECTION 5.1 AUTHORIZED SHARES. The total number of Shares that the Company shall have authority to issue is 350,000,000 shares, of which (i) 300,000,000 shall be designated as common stock, $0.01 par value per share (the “Common Shares”); and (ii) 50,000,000 shall be designated as preferred stock, $0.01 par value per share (the “Preferred Shares”). All shares shall be fully paid and nonassessable when issued. The aggregate par value of all authorized shares of stock having par value is $3,500,000. If shares of one class of stock are classified or reclassified into shares of another class of stock pursuant to Section 5.2(ii) or Section 5.3 of this Article V, the number of authorized shares of the former class shall be automatically decreased and the number of shares of the latter class shall be automatically increased, in each case by the number of shares so classified or reclassified, as the case may be, so that the aggregate number of Shares of all classes that the Company has authority to issue shall not be more than the total number of Shares set forth in the first sentence of this paragraph. The Board, with the approval of a majority of the entire Board and without any action by the Stockholders, may amend the Charter from time to time to increase or decrease the aggregate number of Shares or the number of Shares of any class or series that the Company has authority to issue.
SECTION 5.2 COMMON SHARES.
(i) COMMON SHARES SUBJECT TO TERMS OF PREFERRED SHARES. The Common Shares shall be subject to the express terms of any series of Preferred Shares.
(ii) DESCRIPTION. Subject to Section 5.7 of this Article V and except as may otherwise be specified in the Charter, each Common Share shall entitle the holder thereof to one vote. The Board may classify or reclassify any unissued Common Shares from time to time into one or more classes or series of stock.
(iii) DISTRIBUTION RIGHTS. The Board from time to time may authorize the Company to declare and pay to Stockholders such dividends or other Distributions in cash or other assets of the Company or in securities of the Company or from any other source as the Board in its discretion shall determine. The Board shall endeavor to authorize the Company to declare and pay such dividends and Distributions as shall be necessary for the Company to qualify as a REIT under the REIT Provisions of the Code unless the Board has determined, in its sole discretion, that qualification as a REIT is not in the best interests of the Company; provided, however, Stockholders shall have no right to any dividend or Distribution unless and until authorized by the Board and declared by the Company. The exercise of the powers and rights of the Board pursuant to this section shall be subject to the provisions of any class or series of Shares at the time outstanding. The receipt by any Person in whose name any Shares are registered on the records of the Company or by his or her duly authorized agent shall be a sufficient discharge for all dividends or Distributions payable or deliverable in respect of such Shares and from all liability to see to the application thereof.
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(iv) RIGHTS UPON LIQUIDATION. In the event of any voluntary or involuntary liquidation, dissolution or winding up, or any distribution of the assets of the Company, the aggregate assets available for distribution to holders of the Common Shares shall be determined in accordance with applicable law. Each holder of Common Shares of a particular class shall be entitled to receive, ratably with each other holder of Common Shares of such class, that portion of such aggregate assets available for distribution as the number of outstanding Common Shares of such class held by such holder bears to the total number of outstanding Common Shares of such class then outstanding.
(v) VOTING RIGHTS. Except as may be provided otherwise in the Charter, and subject to the express terms of any class or series of Preferred Shares, the holders of the Common Shares shall have the exclusive right to vote on all matters (as to which a common stockholder shall be entitled to vote pursuant to applicable law) at all meetings of the Stockholders.
SECTION 5.3 PREFERRED SHARES. The Board may classify any unissued Preferred Shares and reclassify any previously classified but unissued Preferred Shares of any series from time to time, into one or more classes or series of Shares.
SECTION 5.4 CLASSIFIED OR RECLASSIFIED SHARES. Prior to issuance of classified or reclassified Shares of any class or series, the Board by resolution shall: (a) designate that class or series to distinguish it from all other classes and series Shares; (b) specify the number of Shares to be included in the class or series; (c) set or change, subject to the provisions of Section 5.9 and subject to the express terms of any class or series of Shares outstanding at the time, the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other Distributions, qualifications and terms and conditions of redemption for each class or series; and (d) cause the Company to file articles supplementary with the State Department of Assessments and Taxation of Maryland. Any of the terms of any class or series of Shares set or changed pursuant to clause (c) of this Section 5.4 may be made dependent upon facts or events ascertainable outside the Charter (including determinations by the Board or other facts or events within the control of the Company) and may vary among holders thereof, provided that the manner in which such facts, events or variations shall operate upon the terms of such class or series of Shares is clearly and expressly set forth in the articles supplementary or other charter document.
SECTION 5.5 STOCKHOLDERS’ CONSENT IN LIEU OF MEETING. Any action required or permitted to be taken at any meeting of the Stockholders may be taken without a meeting by consent, in writing or by electronic transmission, in any manner permitted by the MGCL and set forth in the Bylaws.
SECTION 5.6 CHARTER AND BYLAWS. The rights of all Stockholders and the terms of all Shares are subject to the provisions of the Charter and the Bylaws.
SECTION 5.7 RESTRICTIONS ON OWNERSHIP AND TRANSFER.
(i) DEFINITIONS. For purposes of Section 5.7, the following terms shall have the following meanings:
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“AGGREGATE SHARE OWNERSHIP LIMIT” means 9.8% in value of the aggregate of the outstanding Shares and 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of Shares, or such other percentage determined by the Board in accordance with Section 5.7(ii)(h) of the Charter.
“BENEFICIAL OWNERSHIP” means ownership of Shares by a Person, whether the interest in the Shares is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The terms “Beneficial Owner,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative meanings.
“BUSINESS DAY” means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York City are authorized or required by law, regulation or executive order to close.
“CHARITABLE BENEFICIARY” means one or more beneficiaries of the Trust as determined pursuant to Section 5.7(iii)(f), provided that each such organization must be described in Section 501(c)(3) of the Code and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.
“CONSTRUCTIVE OWNERSHIP” means ownership of Shares by a Person, whether the interest in the Shares is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code. The terms “Constructive Owner,” “Constructively Owns” and “Constructively Owned” shall have the correlative meanings.
“EXCEPTED HOLDER” means a Stockholder for whom an Excepted Holder Limit is created by the Board pursuant to Section 5.7(ii)(g).
“EXCEPTED HOLDER LIMIT” means, provided that the affected Excepted Holder agrees to comply with the requirements established by the Board pursuant to Section 5.7(ii)(g), and subject to adjustment pursuant to Section 5.7(ii)(h), the percentage limit established by the Board pursuant to Section 5.7(ii)(g).
“MARKET PRICE” on any date means, with respect to any class or series of outstanding Shares, the Closing Price for such Shares on such date. The “Closing Price” on any date shall mean the last sale price for such Shares, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, for such Shares, in either case as reported on the principal national securities exchange on which such Shares are Listed or admitted to trading or, if such Shares are not Listed or admitted to trading on any national securities exchange, the last quoted price, or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the principal automated quotation system that may then be in use or, if such Shares are not quoted by any such system, the average of the closing bid and asked prices as furnished by a professional market maker making a market in such Shares selected by the Board or, in the event that no trading price is available for such Shares, the fair market value of the Shares, as determined in good faith by the Board.
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“NYSE” means the New York Stock Exchange.
“PROHIBITED OWNER” means, with respect to any purported Transfer, any Person who, but for the provisions of Section 5.7(ii)(a), would Beneficially Own or Constructively Own Shares, and if appropriate in the context, shall also mean any Person who would have been the record owner of the Shares that the Prohibited Owner would have so owned.
“RESTRICTION TERMINATION DATE” means the first day on which the Board determines pursuant to Section 7.3 of the Charter that it is no longer in the best interests of the Company to attempt to, or continue to, qualify as a REIT or that compliance with the restrictions and limitations on Beneficial Ownership, Constructive Ownership and Transfers of Shares set forth herein is no longer required in order for the Company to qualify as a REIT.
“TRANSFER” means any issuance, sale, transfer, gift, assignment, devise or other disposition, as well as any other event that causes any Person to acquire Beneficial Ownership or Constructive Ownership of Shares or the right to vote or receive dividends on Shares, or any agreement to take any such actions or cause any such events, including (a) the granting or exercise of any option (or any disposition of any option), (b) any disposition of any securities or rights convertible into or exchangeable for Shares or any interest in Shares or any exercise of any such conversion or exchange right and (c) Transfers of interests in other entities that result in changes in Beneficial or Constructive Ownership of Shares; in each case, whether voluntary or involuntary, whether owned of record, Constructively Owned or Beneficially Owned and whether by operation of law or otherwise. The terms “Transferring” and “Transferred” shall have the correlative meanings.
“TRUST” means any trust provided for in Section 5.7(iii)(a).
“TRUSTEE” means the Person unaffiliated with the Company and a Prohibited Owner, that is appointed by the Company to serve as trustee of the Trust.
(ii) SHARES.
(a) OWNERSHIP LIMITATIONS. Prior to the Restriction Termination Date, but subject to Section 5.8:
(I) BASIC RESTRICTIONS.
(A) (1) No Person, other than an Excepted Holder, shall Beneficially Own or Constructively Own Shares in excess of the Aggregate Share Ownership Limit and (2) no Excepted Holder shall Beneficially Own or Constructively Own Shares in excess of the Excepted Holder Limit for such Excepted Holder.
(B) No Person shall Beneficially or Constructively Own Shares to the extent that such Beneficial or Constructive Ownership of Shares would result in the Company being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year), or otherwise failing to qualify as a REIT (including, but not limited to, Beneficial or Constructive Ownership that would result in the Company owning (actually or Constructively) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by the Company from such tenant would cause the Company to fail to satisfy any of the gross income requirements of Section 856(c) of the Code).
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(C) Any Transfer of Shares that, if effective, would result in Shares being beneficially owned by less than 100 Persons (determined under the principles of Section 856(a)(5) of the Code) shall be void ab initio , and the intended transferee shall acquire no rights in such Shares.
(II) TRANSFER IN TRUST. If any Transfer of Shares occurs which, if effective, would result in any Person Beneficially Owning or Constructively Owning Shares in violation of Section 5.7(ii)(a)(l)(A) or (B),
(A) then that number of Shares the Beneficial or Constructive Ownership of which otherwise would cause such Person to violate Section 5.7(ii)(a)(I)(A) or (B) (rounded up to the nearest whole share) shall be automatically transferred to a Trust for the benefit of a Charitable Beneficiary, as described in Section 5.7(iii), effective as of the close of business on the Business Day prior to the date of such Transfer, and such Person shall acquire no rights in such shares; or
(B) if the transfer to the Trust described in clause (A) of this sentence would not be effective for any reason to prevent the violation of Section 5.7(ii)(a)(I)(A) or (B) then the Transfer of that number of Shares that otherwise would cause any Person to violate Section 5.7(ii)(a)(I)(A) or (B) shall be void ab initio, and the intended transferee shall acquire no rights in such Shares.
(III) To the extent that, upon a transfer of Shares pursuant to Section 5.7(ii)(a)(II), a violation of any provision of this Section 5.7 would nonetheless be continuing (for example where the ownership of Shares by a single Trust would violate the 100 stockholder requirement applicable to REITs), then Shares shall be transferred to that number of Trusts, each having a distinct Trustee and a Charitable Beneficiary or Beneficiaries that are distinct from those of each other Trust, such that there is no violation of any provision of this Section 5.7.
(b) REMEDIES FOR BREACH. If the Board or any duly authorized committee thereof shall at any time determine in good faith that a Transfer or other event has taken place that results in a violation of Section 5.7(ii)(a) or that a Person intends to acquire or has attempted to acquire Beneficial or Constructive Ownership of any Shares in violation of Section 5.7(ii)(a) (whether or not such violation is intended), the Board or a committee thereof shall take such action as it deems advisable to refuse to give effect to or to prevent such Transfer or other event, including, without limitation, causing the Company to redeem Shares, refusing to give effect to such Transfer on the books of the Company or instituting proceedings to enjoin such Transfer or other event; provided, however, that any Transfer or attempted Transfer or other event in violation of Section 5.7(ii)(a) shall automatically result in the transfer to the Trust described above, and, where applicable, such Transfer (or other event) shall be void ab initio as provided above irrespective of any action (or non-action) by the Board or a committee thereof.
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(c) NOTICE OF RESTRICTED TRANSFER. Any Person who acquires or attempts or intends to acquire Beneficial Ownership or Constructive Ownership of Shares that will or may violate Section 5.7(ii)(a)(I)(A) or (B) or any Person who would have owned Shares that resulted in a transfer to the Trust pursuant to the provisions of Section 5.7(ii)(a)(II) shall immediately give written notice to the Company of such event, or in the case of such a proposed or attempted transaction, give at least 15 days prior written notice, and shall provide to the Company such other information as the Company may request in order to determine the effect, if any, of such Transfer on the Company’s status as a REIT.
(d) OWNERS REQUIRED TO PROVIDE INFORMATION. Prior to the Restriction Termination Date:
(I) every owner of more than five percent (or such lower percentage as required by the Code or the Treasury Regulations promulgated thereunder) of the outstanding Shares, within 30 days after the end of each taxable year, shall give written notice to the Company stating the name and address of such owner, the number of Shares Beneficially Owned and a description of the manner in which such Shares are held. Each such owner shall provide to the Company such additional information as the Company may request in order to determine the effect, if any, of such Beneficial Ownership on the Company’s status as a REIT and to ensure compliance with the Aggregate Share Ownership Limit; and
(II) each Person who is a Beneficial or Constructive Owner of Shares and each Person (including the stockholder of record) who is holding Shares for a Beneficial or Constructive Owner shall provide to the Company such information as the Company may request, in good faith, in order to determine the Company’s status as a REIT and to comply with requirements of any taxing authority or governmental authority or to determine such compliance.
(e) REMEDIES NOT LIMITED. Subject to Section 7.3 of the Charter, nothing contained in this Section 5.7(ii)(e) shall limit the authority of the Board to take such other action as it deems necessary or advisable to protect the Company and the interests of its stockholders in preserving the Company’s status as a REIT.
(f) AMBIGUITY. In the case of an ambiguity in the application of any of the provisions of this Section 5.7(ii), Section 5.7(iii), or any definition contained in Section 5.7(i), the Board shall have the power to determine the application of the provisions of this Section 5.7(ii) or Section 5.7(iii) or any such definition with respect to any situation based on the facts known to it. In the event Section 5.7(ii) or (iii) requires an action by the Board and the Charter fails to provide specific guidance with respect to such action, the Board shall have the power to determine the action to be taken so long as such action is not contrary to the provisions of Section 5.7. Absent a decision to the contrary by the Board (which the Board may make in its sole and absolute discretion), if a Person would have (but for the remedies set forth in Section 5.7(ii)(b)) acquired Beneficial or Constructive Ownership of Shares in violation of Section 5.7(ii)(a), such remedies (as applicable) shall apply first to the Shares which, but for such remedies, would have been Beneficially Owned or Constructively Owned (but not actually owned) by such Person, pro rata among the Persons who actually own such Shares based upon the relative number of the Shares held by each such Person.
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(g) EXCEPTIONS.
(I) Subject to Section 5.7(ii)(a)(I)(B), the Board, in its sole discretion, may (prospectively or retroactively) exempt a Person from the Aggregate Share Ownership Limit and may establish or increase an Excepted Holder Limit for such Person if:
(A) the Board obtains such representations and undertakings from such Person as are reasonably necessary to ascertain that no individual’s Beneficial or Constructive Ownership of such Shares will violate Section 5.7(ii)(a)(I)(B);
(B) such Person does not and represents that it will not own, actually or Constructively, an interest in a tenant of the Company (or a tenant of any entity owned or controlled by the Company) that would cause the Company to own, actually or Constructively, more than a 9.9% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant and the Board obtains such representations and undertakings from such Person as are reasonably necessary to ascertain this fact (for this purpose, a tenant from whom the Company (or an entity owned or controlled by the Company) derives (and is expected to continue to derive) a sufficiently small amount of revenue such that, in the opinion of the Board, rent from such tenant would not adversely affect the Company’s ability to qualify as a REIT, shall not be treated as a tenant of the Company); and
(C) such Person agrees that any violation or attempted violation of such representations or undertakings (or other action which is contrary to the restrictions contained in Section 5.7(ii)(a) through Section 5.7(ii)(f)) will result in such Shares being automatically transferred to a Trust in accordance with Section 5.7(ii)(A)(II) and Section 5.7(iii).
(II) Prior to granting any exception pursuant to Section 5.7(ii)(g)(I), the Board may require a ruling from the Internal Revenue Service, or an opinion of counsel, in either case in form and substance satisfactory to the Board in its sole discretion, as it may deem necessary or advisable in order to determine or ensure the Company’s status as a REIT. Notwithstanding the receipt of any ruling or opinion, the Board may impose such conditions or restrictions as it deems appropriate in connection with granting such exception.
(III) Subject to Section 5.7(ii)(a)(I)(B), an underwriter which participates in an Offering or a private placement of Shares (or Securities convertible into or exchangeable for Shares) may Beneficially Own or Constructively Own Shares (or Securities convertible into or exchangeable for Shares) in excess of the Aggregate Share Ownership Limit but only to the extent necessary to facilitate such Offering or private placement.
(IV) The Board may only reduce the Excepted Holder Limit for an Excepted Holder: (1) with the written consent of such Excepted Holder at any time, or (2) pursuant to the terms and conditions of the agreements and undertakings entered into with such Excepted Holder in connection with the establishment of the Excepted Holder Limit for that Excepted Holder. No Excepted Holder Limit shall be reduced to a percentage that is less than the Aggregate Share Ownership Limit.
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(h) INCREASE OR DECREASE IN AGGREGATE SHARE OWNERSHIP LIMIT. Subject to Section 5.7(ii)(a)(I)(B), the Board may from time to time increase the Aggregate Share Ownership Limit for one or more Persons and decrease the Aggregate Share Ownership Limit for all other Persons; provided, however, that the decreased Aggregate Share Ownership Limit will not be effective for any Person whose percentage ownership of Shares is in excess of such decreased Aggregate Share Ownership Limit until such time as such Person’s percentage of Shares equals or falls below the decreased Aggregate Share Ownership Limit, but any further acquisition of Shares in excess of such percentage ownership of Shares will be in violation of the Aggregate Share Ownership Limit and, provided further, that the new Aggregate Share Ownership Limit would not allow five or fewer Persons to Beneficially Own or Constructively Own more than 49.9% in value of the outstanding Shares.
(i) NOTICE TO STOCKHOLDERS UPON ISSUANCE OR TRANSFER. Upon issuance or transfer of Shares prior to the Restriction Termination Date, the Company shall provide the recipient with a notice containing information about the Shares purchased or otherwise transferred, in lieu of issuance of a share certificate, in a form substantially similar to the following:
The securities of American Realty Capital Global Trust, Inc. (the “Company”) are subject to restrictions on Beneficial and Constructive Ownership and Transfer for the purpose, among others, of the Company’s maintenance of its status as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the “Code”). Subject to certain further restrictions and except as expressly provided in the Company’s charter, (i) no Person may Beneficially or Constructively Own Shares in excess of 9.8% of the value of the total outstanding Shares or 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of Shares unless such Person is an Excepted Holder (in which case the Excepted Holder Limit shall be applicable); (ii) no Person may Beneficially or Constructively Own Shares that would result in the Company being “closely held” under Section 856(h) of the Code or otherwise cause the Company to fail to qualify as a REIT; and (iii) any Transfer of Shares that, if effective, would result in the Shares being beneficially owned by fewer than 100 Persons (as determined under the principles of Section 856(a)(5) of the Code) shall be void ab initio and the intended transferee shall acquire no rights in such Shares. Any Person who Beneficially or Constructively Owns or attempts to Beneficially or Constructively Own Shares which causes or will cause a Person to Beneficially or Constructively Own Shares in excess or in violation of the above limitations must immediately notify the Company in writing (or, in the case of an attempted transaction, give at least 15 days prior written notice). If any of the restrictions on transfer or ownership as set forth in (i) and (ii) above are violated, the Shares in excess or in violation of the above limitations will be automatically transferred to a Trustee of a Trust for the benefit of one or more Charitable Beneficiaries. In addition, the Company may redeem shares upon the terms and conditions specified by the Board in its sole discretion if the Board determines that ownership or a Transfer or other event may violate the restrictions described above. Furthermore, upon the occurrence of certain events, attempted Transfers in violation of the restrictions described in (i) and (ii) above may be void ab initio. All capitalized terms in this notice have the meanings defined in the Company’s charter, as the same may be amended from time to time, a copy of which, including the restrictions on transfer and ownership, will be furnished to each holder of Shares of the Company on request and without charge. Requests for such a copy may be directed to the Secretary of the Company at its principal office.
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(iii) TRANSFER OF SHARES IN TRUST.
(a) OWNERSHIP IN TRUST. Upon any purported Transfer or other event described in Section 5.7(ii)(a)(III) that would result in a transfer of Shares to a Trust, such Shares shall be transferred to the Trustee as trustee of a Trust for the exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee shall be effective as of the close of business on the Business Day prior to the purported Transfer or other event that results in the transfer to the Trust pursuant to Section 5.7(ii)(a)(III). The Trustee shall be appointed by the Company and shall be a Person unaffiliated with the Company and any Prohibited Owner. Each Charitable Beneficiary shall be designated by the Company as provided in Section 5.7(iii)(f).
(b) STATUS OF SHARES HELD BY THE TRUSTEE. Shares held by the Trustee shall be issued and outstanding Shares of the Company. The Prohibited Owner shall have no rights in the shares held by the Trustee. The Prohibited Owner shall not benefit economically from ownership of any Shares held in trust by the Trustee, shall have no rights to dividends or other Distributions and shall not possess any rights to vote or other rights attributable to the Shares held in the Trust.
(c) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all voting rights and rights to dividends or other Distributions with respect to Shares held in the Trust, which rights shall be exercised for the exclusive benefit of the Charitable Beneficiary. Any dividend or other Distribution paid prior to the discovery by the Company that the Shares have been transferred to the Trustee shall be paid by the recipient of such dividend or Distribution to the Trustee upon demand and any dividend or other Distribution authorized but unpaid shall be paid when due to the Trustee. Any dividend or other Distribution so paid to the Trustee shall be held in trust for the Charitable Beneficiary. The Prohibited Owner shall have no voting rights with respect to shares held in the Trust and, subject to Maryland law, effective as of the date that the Shares have been transferred to the Trustee, the Trustee shall have the authority (at the Trustee’s sole discretion) (i) to rescind as void any vote cast by a Prohibited Owner prior to the discovery by the Company that the Shares have been transferred to the Trustee and (ii) to recast such vote in accordance with the desires of the Trustee acting for the benefit of the Charitable Beneficiary; provided, however, that if the Company has already taken irreversible corporate action, then the Trustee shall not have the authority to rescind and recast such vote. Notwithstanding the provisions of this Section 5.7, until the Company has received notification that Shares have been transferred into a Trust, the Company shall be entitled to rely on its stock transfer and other stockholder records for purposes of preparing lists of Stockholders entitled to vote at meetings, determining the validity and authority of proxies and otherwise conducting votes of Stockholders.
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(d) SALE OF SHARES BY TRUSTEE. Within 20 days of receiving notice from the Company that Shares have been transferred to the Trust, the Trustee shall sell the Shares held in the Trust to a person, designated by the Trustee, whose ownership of the Shares will not violate the ownership limitations set forth in Section 5.7(ii)(a)(I) or (II). Upon such sale, the interest of the Charitable Beneficiary in the Shares sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Prohibited Owner and to the Charitable Beneficiary as provided in this Section 5.7(iii)(d). The Prohibited Owner shall receive the lesser of (1) the price paid by the Prohibited Owner for the Shares or, if the Prohibited Owner did not give value for the Shares in connection with the event causing the Shares to be held in the Trust (e.g., in the case of a gift, devise or other such transaction), the Market Price of the Shares on the day of the event causing the Shares to be held in the Trust and (2) the price per Share received by the Trustee from the sale or other disposition of the Shares held in the Trust. The Trustee may reduce the amount payable to the Prohibited Owner by the amount of dividends and other Distributions which have been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Trustee pursuant to Section 5.7(c). Any net sales proceeds in excess of the amount payable to the Prohibited Owner shall be immediately paid to the Charitable Beneficiary. If, prior to the discovery by the Company that Shares have been transferred to the Trustee, such Shares are sold by a Prohibited Owner, then (i) such Shares shall be deemed to have been sold on behalf of the Trust and (ii) to the extent that the Prohibited Owner received an amount for such Shares that exceeds the amount that such Prohibited Owner was entitled to receive pursuant to this Section 5.7, such excess shall be paid to the Trustee upon demand.
(e) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE. Shares transferred to the Trustee shall be deemed to have been offered for sale to the Company, or its designee, at a price per Share equal to the lesser of (i) the price per Share in the transaction that resulted in such transfer to the Trust (or, in the case of a devise or gift, the Market Price at the time of such devise or gift) and (ii) the Market Price on the date the Company, or its designee, accepts such offer. The Company may reduce the amount payable to the Prohibited Owner by the amount of dividends and other Distributions which has been paid to the Prohibited Owner and is owed by the Prohibited Owner to the Trustee pursuant to Section 5.7(c). The Company may pay the amount of such reduction to the Trustee for the benefit of the Charitable Beneficiary. The Company shall have the right to accept such offer until the Trustee has sold the shares held in the Trust pursuant to Section 5.7(iii)(d). Upon such a sale to the Company, the interest of the Charitable Beneficiary in the Shares sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Prohibited Owner.
(f) DESIGNATION OF CHARITABLE BENEFICIARIES. By written notice to the Trustee, the Company shall designate one or more nonprofit organizations to be the Charitable Beneficiary of the interest in the Trust such that (i) the Shares held in the Trust would not violate the restrictions set forth in Section 5.7(ii)(a)(I) or (II) in the hands of such Charitable Beneficiary and (ii) each such organization must be described in Section 501(c)(3) of the Code and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.
SECTION 5.8 SETTLEMENTS. Nothing in Section 5.7 shall preclude the settlement of any transaction entered into through the facilities of the NYSE or any other national securities exchange or automated inter-dealer quotation system. The fact that the settlement of any transaction occurs shall not negate the effect of any provision of Sections 5.7, and any transfer in such a transaction shall be subject to all of the provisions and limitations set forth in Section 5.7.
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SECTION 5.9 SEVERABILITY. If any provision of Section 5.7 or any application of any such provision is determined to be void, invalid or unenforceable by any court having jurisdiction over the issue, the validity and enforceability of the remaining provisions of Section 5.7 shall not be affected and other applications of such provision shall be affected only to the extent necessary to comply with the determination of such court.
SECTION 5.10 ENFORCEMENT. The Company is authorized specifically to seek equitable relief, including injunctive relief, to enforce the provisions of Section 5.7.
SECTION 5.11 NON-WAIVER. No delay or failure on the part of the Company or the Board in exercising any right hereunder shall operate as a waiver of any right of the Company or the Board, as the case may be, except to the extent specifically waived in writing.
SECTION 5.12 PREEMPTIVE AND APPRAISAL RIGHTS. Except as may be provided by the Board in setting the terms of classified or reclassified Shares pursuant to Section 5.4 or as may otherwise be provided by contract approved by the Board, no holder of Shares shall, as such holder, have any preemptive right to purchase or subscribe for any additional Shares or any other security of the Company which it may issue or sell. Holders of Shares shall not be entitled to exercise any rights of an objecting stockholder provided for under Title 3, Subtitle 2 of the MGCL or any successor statute unless the Board, upon the affirmative vote of a majority of the Board, shall determine that such rights apply, with respect to all or any classes or series of Shares, to one or more transactions occurring after the date of such determination in connection with which holders of such Shares would otherwise be entitled to exercise such rights.
ARTICLE VI
BOARD OF DIRECTORS
SECTION 6.1 NUMBER OF DIRECTORS. The number of Directors of the Company shall be five, which number may be increased or decreased from time to time pursuant to the Bylaws but shall never be less than the minimum number required by the MGCL. The Company elects, at such time as it becomes eligible to make the election provided for under Section 3-804(c) of the MGCL, that, except as may be provided by the Board in setting the terms of any class or series of Shares, any and all vacancies on the Board may be filled only by the affirmative vote of a majority of the remaining Directors in office, even if the remaining Directors do not constitute a quorum, and any Director elected to fill a vacancy shall serve for the remainder of the full term of the directorship in which such vacancy occurred. No reduction in the number of Directors shall cause the removal of any Director from office prior to the expiration of his term, except as may otherwise be provided in the terms of any Preferred Shares. For the purposes of voting for Directors, each Share may be voted for as many individuals as there are Directors to be elected and for whose election the Share is entitled to be voted. Cumulative voting for Directors is prohibited.
The names of the Directors who shall serve on the Board until the next annual meeting of the Stockholders and until their successors are duly elected and qualify, are:
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Nicholas S. Schorsch
Edward M. Weil, Jr.
Scott J. Bowman
Edward G. Rendell
Abby Wenzel
or such other Directors as appointed in accordance with this Charter.
SECTION 6.2 RESIGNATION OR REMOVAL. Any Director may resign by delivering notice to the Board, effective upon receipt by the Board of such notice or upon any future date specified in the notice. Subject to the rights of holders of one or more classes or series of Preferred Shares, any Director or the entire Board may be removed from office at any time, but only for cause and then only by the affirmative vote of at least two-thirds of the votes entitled to be cast generally in the election of Directors. For the purpose of this paragraph, “cause” shall mean, with respect to any particular Director, conviction of a felony or a final judgment of a court of competent jurisdiction holding that such director caused demonstrable, material harm to the Company through bad faith or active and deliberate dishonesty.
ARTICLE VII
POWERS OF THE BOARD OF DIRECTORS
SECTION 7.1 GENERAL. The business and affairs of the Company shall be managed under the direction of the Board. The Board may take any action that, in its sole judgment and discretion, is necessary or desirable to conduct the business of the Company. The Charter shall be construed with a presumption in favor of the grant of power and authority to the Board. Any construction of the Charter or determination made in good faith by the Board concerning its powers and authority hereunder shall be conclusive. The enumeration and definition of particular powers of the Board included in this Article VII shall in no way be limited or restricted by reference to or inference from the terms of this or any other provision of the Charter or construed or deemed by inference or otherwise in any manner to exclude or limit the powers conferred upon the Board under the general laws of the State of Maryland as now or hereafter in force.
SECTION 7.2 AUTHORIZATION BY BOARD OF STOCK ISSUANCE. The Board may authorize the issuance from time to time of Shares of any class or series, whether now or hereafter authorized, or securities or rights convertible into Shares of any class or series, whether now or hereafter authorized, for such consideration as the Board may deem advisable (or without consideration in the case of a stock split or stock dividend), subject to such restrictions or limitations, if any, as may be set forth in the Charter or the Bylaws.
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SECTION 7.3 FINANCINGS. The Board shall have the power and authority to borrow or, in any other manner, raise money for the purposes and on the terms it determines, which terms may (i) include evidencing the same by issuance of Securities of the Company and (ii) have such provisions as the Board may determine (a) to reacquire such Securities; (b) to enter into other contracts or obligations on behalf of the Company; (c) to guarantee, indemnify or act as surety with respect to payment or performance of obligations of any Person and (d) to mortgage, pledge, assign, grant security interests in or otherwise encumber the Company’s assets to secure any such Securities of the Company, contracts or obligations (including guarantees, indemnifications and suretyships); and to renew, modify, release, compromise, extend, consolidate or cancel, in whole or in part, any obligation to or of the Company or participate in any reorganization of obligors to the Company.
SECTION 7.4 REIT QUALIFICATION. If the Company elects to qualify for federal income tax treatment as a REIT, the Board shall use its reasonable best efforts to take such actions as are necessary or appropriate to preserve the status of the Company as a REIT; however, if the Board determines that it is no longer in the best interests of the Company to continue to be qualified as a REIT, the Board may revoke or otherwise terminate the Company’s REIT election pursuant to Section 856(g) of the Code. The Board also may determine that compliance with any restriction or limitation on stock ownership and transfers set forth in Section 5.7 of Article V is no longer required for REIT qualification.
SECTION 7.5 DETERMINATIONS BY BOARD. The determination as to any of the following matters, made in good faith by or pursuant to the direction of the Board consistent with the Charter, shall be final and conclusive and shall be binding upon the Company and every holder of Shares: the amount of the net income of the Company for any period and the amount of assets at any time legally available for the payment of dividends, redemption of Shares or the payment of other Distributions on Shares; the amount of paid-in surplus, net assets, other surplus, annual or other cash flow, funds from operations, net profit, net assets in excess of capital, undivided profits or excess of profits over losses on sales of assets; the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges shall have been created shall have been paid or discharged); any interpretation of the terms, preferences, conversion or other rights, voting powers or rights, restrictions, limitations as to dividends or other Distributions, qualifications or terms or conditions of redemption of any class or series of Shares; the fair value, or any sale, bid or asked price to be applied in determining the fair value, of any asset owned or held by the Company or any Shares; the number of Shares of any class of the Company; any matter relating to the acquisition, holding and disposition of any assets by the Company; or any other matter relating to the business and affairs of the Company or required or permitted by applicable law, the Charter or Bylaws or otherwise to be determined by the Board; provided , however , that any determination by the Board as to any of the preceding matters shall not render invalid or improper any action taken or omitted prior to such determination and no Director shall be liable for making or failing to make such a determination.
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ARTICLE VIII
EXTRAORDINARY ACTIONS
Except as specifically provided in Section 6.2 of Article VI (relating to removal of Directors) and in the last sentence of Article X, notwithstanding any provision of law permitting or requiring any action to be taken or approved by the affirmative vote of the holders of Shares entitled to cast a greater number of votes, any such action shall be effective and valid if declared advisable by the Board and taken or approved by the affirmative vote of holders of Shares entitled to cast a majority of all the votes entitled to be cast on the matter.
ARTICLE IX
LIABILITY OF STOCKHOLDERS, DIRECTORS AND OFFICERS
SECTION 9.1 LIMITATION OF STOCKHOLDER LIABILITY. No Stockholder shall be liable for any debt, claim, demand, judgment or obligation of any kind of, against or with respect to the Company by reason of his being a Stockholder, nor shall any Stockholder be subject to any personal liability whatsoever, in tort, contract or otherwise, to any Person in connection with the Company’s assets or the affairs of the Company by reason of his being a Stockholder.
SECTION 9.2 LIMITATION OF DIRECTOR AND OFFICER LIABILITY; INDEMNIFICATION.
(a) To the maximum extent that Maryland law in effect from time to time permits limitation of the liability of directors and officers of a corporation, no present or former Director or officer of the Company shall be liable to the Company or its Stockholders for money damages. Neither the amendment nor repeal of this Section 9.2(a), nor the adoption or amendment of any other provision of the Charter or Bylaws inconsistent with this Section 9.2(a), shall apply to or affect in any respect the applicability of the preceding sentence with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.
(b) The Company shall have the power, to the maximum extent permitted by Maryland law in effect from time to time, to obligate itself to indemnify, and to pay or reimburse reasonable expenses in advance of final disposition of a proceeding to, (i) any individual who is a present or former Director or officer of the Company or (ii) any individual who, while a Director or officer of the Company and at the request of the Company, serves or has served as a director, officer, partner, member, manager or trustee of another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or any other enterprise from and against any claim or liability to which such person may become subject or which such person may incur by reason of his or her service in such capacity. The Company shall have the power, with the approval of the Board, to provide such indemnification and advancement of expenses to a person who served a predecessor of the Company in any of the capacities described in (i) or (ii) above and to any employee or agent of the Company or a predecessor of the Company.
SECTION 9.3 EXPRESS EXCULPATORY CLAUSES IN INSTRUMENTS. Neither the Stockholders nor the Directors, officers, employees or agents of the Company shall be liable under any written instrument creating an obligation of the Company by reason of their being Stockholders, Directors, officers, employees or agents of the Company, and all Persons shall look solely to the Company’s assets for the payment of any claim under or for the performance of that instrument. The omission of the foregoing exculpatory language from any instrument shall not affect the validity or enforceability of such instrument and shall not render any Stockholder, Director, officer, employee or agent liable thereunder to any third party, nor shall the Directors or any officer, employee or agent of the Company be liable to anyone as a result of such omission.
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ARTICLE X
AMENDMENTS
The Company reserves the right from time to time to make any amendment to its Charter, now or hereafter authorized by law, including any amendment altering the terms or contract rights, as expressly set forth in the Charter, of any outstanding Shares. All rights and powers conferred by the Charter on Stockholders, Directors and officers are granted subject to this reservation. Except as otherwise provided in the next sentence and except for those amendments permitted to be made without Stockholder approval under Maryland law or by specific provision in the Charter, any amendment to the Charter shall be valid only if declared advisable by the Board and approved by the affirmative vote of a majority of all the votes entitled to be cast on the matter. However, any amendment to the second sentence of Section 6.2 of Article VI or to this sentence of the Charter shall be valid only if declared advisable by the Board and approved by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter.
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Exhibit 10.36
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into as of the 31st day of December, 2014, by and between American Realty Capital Global Trust, Inc., a Maryland corporation (the “Company”), and Scott J. Bowman, Peter M. Budko, Patrick J. Goulding, William M. Kahane, Nicholas Radesca, Edward G. Rendell, Nicholas S. Schorsch, Abby M. Wenzel, Andrew Winer, Edward M. Weil, Jr., American Realty Capital Global Advisors, LLC, AR Capital, LLC and RCS Capital Corporation (each, an “Indemnitee”).
WHEREAS, at the request of the Company, Indemnitee currently serves as a director, officer or service provider of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his or her service; and
WHEREAS, as an inducement to Indemnitee to continue to serve as such director, officer or service provider, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings; and
WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Definitions. For purposes of this Agreement:
(a) “Applicable Legal Rate” means a fixed rate of interest equal to the applicable federal rate for mid-term debt instruments as of the day that it is determined that Indemnitee must repay any advanced expenses.
(b) “Change in Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if, after the Effective Date (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of all of the Company’s then-outstanding securities entitled to vote generally in the election of directors without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person’s attaining such percentage interest; (ii) the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) at any time, a majority of the members of the Board of Directors are not individuals (A) who were directors as of the Effective Date or (B) whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by the affirmative vote of at least two-thirds of the directors then in office who were directors as of the Effective Date or whose election for nomination for election was previously so approved.
(c) “Corporate Status” means the status of a person as a present or former director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company. As a clarification and without limiting the circumstances in which Indemnitee may be serving at the request of the Company, service by Indemnitee shall be deemed to be at the request of the Company if Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise (i) of which a majority of the voting power or equity interest is owned directly or indirectly by the Company or (ii) the management of which is controlled directly or indirectly by the Company.
(d) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification and/or advance of Expenses is sought by Indemnitee.
(e) “Effective Date” means the date set forth in the first paragraph of this Agreement.
(f) “Expenses” means any and all reasonable and out-of-pocket attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties and any other disbursements or expenses incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise participating in a Proceeding. Expenses shall also include Expenses incurred in connection with any appeal resulting from any Proceeding including, without limitation, the premium for, security for and other costs relating to any cost bond supersedeas bond or other appeal bond or its equivalent.
(g) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification agreements), or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification or advance of Expenses hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.
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(h) “Proceeding” means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative or investigative (formal or informal) nature, including any appeal therefrom, except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or culminate in the institution of a Proceeding, such situation shall also be considered a Proceeding.
Section 2. Services by Indemnitee. Indemnitee will serve as a director, officer or service provider of the Company. However, this Agreement shall not impose any independent obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company. This Agreement shall not be deemed an employment contract between the Company (or any other entity) and Indemnitee.
Section 3. General. Subject to the limitations in Section 5, the Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) as otherwise permitted by Maryland law in effect on the Effective Date and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date. Subject to the limitations in Section 5, the rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law (the “MGCL”).
Section 4. Standard for Indemnification. Subject to the limitations in Section 5, if, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall indemnify Indemnitee against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any such Proceeding unless it is established by clear and convincing evidence that (a) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) Indemnitee actually received an improper personal benefit in money, property or services or (c) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his or her conduct was unlawful.
Section 5. Certain Limits on Indemnification. Notwithstanding any other provision of this Agreement (other than Section 6), Indemnitee shall not be entitled to:
(a) indemnification for any loss or liability unless all of the following conditions are met: (i) Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Company; (ii) Indemnitee was acting on behalf of or performing services for the Company; (iii) such loss or liability was not the result of (A) gross negligence or willful misconduct, in the case that the Indemnitee is an independent director of the Company or (B) negligence or misconduct, in the case that the Indemnitee is not an independent director of the Company; and (iv) such indemnification is recoverable only out of the Company’s net assets and not from the Company’s stockholders;
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(b) indemnification for any loss or liability arising from an alleged violation of federal or state securities laws unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to Indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to Indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against Indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which securities of the Company were offered or sold as to indemnification for violations of securities laws;
(c) indemnification hereunder if the Proceeding was one by or in the right of the Company and Indemnitee is adjudged to be liable to the Company;
(d) indemnification hereunder if Indemnitee is adjudged to be liable on the basis that personal benefit was improperly received in any Proceeding charging improper personal benefit to Indemnitee, whether or not involving action in the Indemnitee’s Corporate Status; or
(e) indemnification or advance of Expenses hereunder if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this Agreement, or (ii) the Company’s charter or Bylaws, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.
Section 6. Court-Ordered Indemnification. Subject to the limitations in Section 5(a) and (b), a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances:
(a) if such determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or
(b) if such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses.
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Section 7. Indemnification for Expenses of an Indemnitee Who is Wholly or Partly Successful. Subject to the limitations in Section 5, to the extent that Indemnitee was or is, by reason of his or her Corporate Status, made a party to (or otherwise becomes a participant in) any Proceeding and is successful, on the merits or otherwise, in the defense of such Proceeding, Indemnitee shall be indemnified for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each such claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section 7, and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 8. Advance of Expenses for an Indemnitee. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall, without requiring a preliminary determination of Indemnitee’s ultimate entitlement to indemnification hereunder, advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with (a) such Proceeding which is initiated by a third party who is not a stockholder of the Company, or (b) such Proceeding which is initiated by a stockholder of the Company acting in his or her capacity as such and for which a court of competent jurisdiction specifically approves such advancement, and which relates to acts or omissions with respect to the performance of duties or services on behalf of the Company, within ten days after the receipt by the Company of a statement or statements requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee, together with the Applicable Legal Rate of interest thereon, relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established, by clear and convincing evidence, that the standard of conduct has not been met by Indemnitee and which have not been successfully resolved as described in Section 7 of this Agreement. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor.
Section 9. Indemnification and Advance of Expenses as a Witness or Other Participant. Subject to the limitations in Section 5, to the extent that Indemnitee is or may be, by reason of Indemnitee’s Corporate Status, made a witness or otherwise asked to participate in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party, Indemnitee shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith within ten days after the receipt by the Company of a statement or statements requesting any such advance or indemnification from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee.
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Section 10. Procedure for Determination of Entitlement to Indemnification.
(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. Indemnitee may submit one or more such requests from time to time and at such time(s) as Indemnitee deems appropriate in Indemnitee’s sole discretion. The officer of the Company receiving any such request from Indemnitee shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to Section 10(a) above, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, which Independent Counsel shall be selected by Indemnitee and approved by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control shall not have occurred, (A) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors or, if such a quorum cannot be obtained, then by a majority vote of a duly authorized committee of the Board of Directors consisting solely of one or more Disinterested Directors, (B) if Independent Counsel has been selected by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL and approved by Indemnitee, which approval shall not be unreasonably withheld, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 10(b). Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.
(c) The Company shall pay the reasonable fees and expenses of Independent Counsel, if one is appointed.
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Section 11. Presumptions and Effect of Certain Proceedings.
(a) In making any determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 10(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.
(b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea of nolo contendere or its equivalent, or entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.
(c) The knowledge and/or actions, or failure to act, of any other director, officer, employee or agent of the Company or any other director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to Indemnitee for purposes of determining any other right to indemnification under this Agreement.
Section 12. Remedies of Indemnitee.
(a) If (i) a determination is made pursuant to Section 10(b) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Sections 8 or 9 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Sections 7 or 9 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification pursuant to any other section of this Agreement or the charter or Bylaws of the Company is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence a proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his or her rights under Section 7 of this Agreement. Except as set forth herein, the provisions of Maryland law (without regard to its conflicts of laws rules) shall apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.
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(b) In any judicial proceeding or arbitration commenced pursuant to this Section 12, Indemnitee shall be presumed to be entitled to indemnification or advance of Expenses, as the case may be, under this Agreement and the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 12, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 8 of this Agreement until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed). The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all of the provisions of this Agreement.
(c) If a determination shall have been made pursuant to Section 10(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification.
(d) In the event that Indemnitee is successful in seeking, pursuant to this Section 12, a judicial adjudication of or an award in arbitration to enforce Indemnitee’s rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him or her in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.
(e) Interest shall be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period (i) commencing with either the tenth day after the date on which the Company was requested to advance Expenses in accordance with Sections 8 or 9 of this Agreement or the 60th day after the date on which the Company was requested to make the determination of entitlement to indemnification under Section 10(b) of this Agreement, as applicable, and (ii) and ending on the date such payment is made to Indemnitee by the Company.
Section 13. Defense of the Underlying Proceeding.
(a) Indemnitee shall notify the Company promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder and shall include with such notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding. The failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.
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(b) Subject to the provisions of the last sentence of this Section 13(b) and of Section 13(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 13(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee, or (iii) would impose any Expense, judgment, fine, penalty or limitation on Indemnitee. This Section 13(b) shall not apply to a Proceeding brought by Indemnitee under Section 12 of this Agreement.
(c) Notwithstanding the provisions of Section 13(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that Indemnitee may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of the Company (subject to Section 12(d) of this Agreement), to represent Indemnitee in connection with any such matter.
Section 14. Non-Exclusivity; Survival of Rights; Subrogation.
(a) The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. Unless consented to in writing by Indemnitee, no amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal, regardless of whether a claim with respect to such action or inaction is raised prior or subsequent to such amendment, alteration or repeal. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right or remedy shall be cumulative and in addition to every other right or remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion of any right or remedy hereunder, or otherwise, shall not prohibit the concurrent assertion or employment of any other right or remedy.
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(b) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
Section 15. Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee by reason of his or her Corporate Status and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee by reason of his or her Corporate Status. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and Expenses incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence. The purchase, establishment and maintenance of any such insurance shall not in any way limit or affect the rights or obligations of the Company or Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights or obligations of the Company under any such insurance policies. If, at the time the Company receives notice from any source of a Proceeding to which Indemnitee is a party or a participant (as a witness or otherwise), the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies.
Section 16. Coordination of Payments. The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
Section 17. Reports to Stockholders. To the extent required by the MGCL, the Company shall report in writing to its stockholders the payment of any amounts for indemnification of, or advance of Expenses to, Indemnitee under this Agreement arising out of a Proceeding by or in the right of the Company with the notice of the meeting of stockholders of the Company next following the date of the payment of any such indemnification or advance of Expenses or prior to such meeting.
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Section 18. Duration of Agreement; Binding Effect.
(a) This Agreement shall continue until and terminate on the later of (i) the date that Indemnitee shall have ceased to serve as a director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company and (ii) the date that Indemnitee is no longer subject to any actual or possible Proceeding (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement).
(b) The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.
(c) The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
(d) The Company and Indemnitee agree that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall further be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges that, in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby waives any such requirement of such a bond or undertaking.
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Section 19. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 20. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.
Section 21. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
Section 22. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
Section 23. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, on the day of such delivery, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:
(a) If to Indemnitee, to the address set forth on the signature page hereto.
(b) If to the Company, to:
American Realty Capital Global Trust, Inc.
405 Park Avenue, 14th Floor
New York, NY 10022
Attn: General Counsel
or to such other address as may have been furnished in writing to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.
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Section 24. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
American Realty Capital Global trust, Inc.
By: /s/ Scott J. Bowman
Name: Scott J. Bowman
Title: Chief Executive Officer
INDEMNITEE
/s/ Nicholas S. Schorsch
Name: Nicholas S. Schorsch
INDEMNITEE
/s/ William M. Kahane
Name: William M. Kahane
INDEMNITEE
/s/ Peter M. Budko
Name: Peter M. Budko
INDEMNITEE
/s/ Edward M. Weil, Jr.
Name: Edward M. Weil, Jr.
INDEMNITEE
/s/ Nicholas Radesca
Name: Nicholas Radesca
INDEMNITEE
/s/ Patrick J. Goulding
Name: Patrick J. Goulding
INDEMNITEE
/s/ Scott J. Bowman
Name: Scott J. Bowman
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INDEMNITEE
/s/ Andrew Winer
Name: Andrew Winer
INDEMNITEE
/s/ Abby M. Wenzel
Name: Abby M. Wenzel
INDEMNITEE
/s/ Edward G. Rendell
Name: Edward G. Rendell
INDEMNITEE
American Realty Capital GLOBAL
ADVISORS, LLC
By: AMERICAN REALTY CAPITAL GLOBAL
SPECIAL LIMITED PARTNERSHIP, LLC,
its sole member
By: AR Capital Global Holdings, LLC,
its sole member
By: AR Capital, LLC, its sole member
By: /s/ William M. Kahane
Name: William M. Kahane
Title: Manager
INDEMNITEE
AR CAPITAL, LLC
By: /s/ William M. Kahane
Name: William M. Kahane
Title: Manager
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INDEMNITEE
RCS CApital CORPORATION
By: /s/ James A. Tanaka
Name: James A. Tanaka
Title: Authorized Signatory
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EXHIBIT A
AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED
To: The Board of Directors of American Realty Capital Global Trust, Inc.
Re: Affirmation and Undertaking
Ladies and Gentlemen:
This Affirmation and Undertaking is being provided pursuant to that certain Indemnification Agreement, dated the 31st day of December, 2014, by and between American Realty Capital Global Trust, Inc., a Maryland corporation (the “Company”), and the undersigned Indemnitee (the “Indemnification Agreement”), pursuant to which I am entitled to advance of Expenses in connection with [Description of Proceeding] (the “Proceeding”).
Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.
I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm my good faith belief that at all times, insofar as I was involved as a director of the Company, in any of the facts or events giving rise to the Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.
In consideration of the advance of Expenses by the Company for reasonable attorneys’ fees and related Expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses, together with the Applicable Legal Rate of interest thereon, relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established.
IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this _____ day of _______________, 20____.
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Name:
Exhibit 10.37
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into as of the 20th day of March, 2015, by and between American Realty Capital Global Trust, Inc., a Maryland corporation (the “Company”), and P. Sue Perrotty (“Indemnitee”).
WHEREAS, at the request of the Company, Indemnitee currently serves as a director, officer or service provider of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his or her service; and
WHEREAS, as an inducement to Indemnitee to continue to serve as such director, officer or service provider, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings; and
WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Definitions. For purposes of this Agreement:
(a) “Applicable Legal Rate” means a fixed rate of interest equal to the applicable federal rate for mid-term debt instruments as of the day that it is determined that Indemnitee must repay any advanced expenses.
(b) “Change in Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if, after the Effective Date (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of all of the Company’s then-outstanding securities entitled to vote generally in the election of directors without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person’s attaining such percentage interest; (ii) the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) at any time, a majority of the members of the Board of Directors are not individuals (A) who were directors as of the Effective Date or (B) whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by the affirmative vote of at least two-thirds of the directors then in office who were directors as of the Effective Date or whose election for nomination for election was previously so approved.
(c) “Corporate Status” means the status of a person as a present or former director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company. As a clarification and without limiting the circumstances in which Indemnitee may be serving at the request of the Company, service by Indemnitee shall be deemed to be at the request of the Company if Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise (i) of which a majority of the voting power or equity interest is owned directly or indirectly by the Company or (ii) the management of which is controlled directly or indirectly by the Company.
(d) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification and/or advance of Expenses is sought by Indemnitee.
(e) “Effective Date” means the date set forth in the first paragraph of this Agreement.
(f) “Expenses” means any and all reasonable and out-of-pocket attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties and any other disbursements or expenses incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise participating in a Proceeding. Expenses shall also include Expenses incurred in connection with any appeal resulting from any Proceeding including, without limitation, the premium for, security for and other costs relating to any cost bond supersedeas bond or other appeal bond or its equivalent.
(g) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification agreements), or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification or advance of Expenses hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.
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(h) “Proceeding” means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative or investigative (formal or informal) nature, including any appeal therefrom, except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or culminate in the institution of a Proceeding, such situation shall also be considered a Proceeding.
Section 2. Services by Indemnitee. Indemnitee will serve as a director, officer or service provider of the Company. However, this Agreement shall not impose any independent obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company. This Agreement shall not be deemed an employment contract between the Company (or any other entity) and Indemnitee.
Section 3. General. Subject to the limitations in Section 5, the Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) as otherwise permitted by Maryland law in effect on the Effective Date and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date. Subject to the limitations in Section 5, the rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law (the “MGCL”).
Section 4. Standard for Indemnification. Subject to the limitations in Section 5, if, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall indemnify Indemnitee against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any such Proceeding unless it is established by clear and convincing evidence that (a) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) Indemnitee actually received an improper personal benefit in money, property or services or (c) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his or her conduct was unlawful.
Section 5. Certain Limits on Indemnification. Notwithstanding any other provision of this Agreement (other than Section 6), Indemnitee shall not be entitled to:
(a) indemnification for any loss or liability unless all of the following conditions are met: (i) Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Company; (ii) Indemnitee was acting on behalf of or performing services for the Company; (iii) such loss or liability was not the result of (A) gross negligence or willful misconduct, in the case that the Indemnitee is an independent director of the Company or (B) negligence or misconduct, in the case that the Indemnitee is not an independent director of the Company; and (iv) such indemnification is recoverable only out of the Company’s net assets and not from the Company’s stockholders;
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(b) indemnification for any loss or liability arising from an alleged violation of federal or state securities laws unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to Indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to Indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against Indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which securities of the Company were offered or sold as to indemnification for violations of securities laws;
(c) indemnification hereunder if the Proceeding was one by or in the right of the Company and Indemnitee is adjudged to be liable to the Company;
(d) indemnification hereunder if Indemnitee is adjudged to be liable on the basis that personal benefit was improperly received in any Proceeding charging improper personal benefit to Indemnitee, whether or not involving action in the Indemnitee’s Corporate Status; or
(e) indemnification or advance of Expenses hereunder if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this Agreement, or (ii) the Company’s charter or Bylaws, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.
Section 6. Court-Ordered Indemnification. Subject to the limitations in Section 5(a) and (b), a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances:
(a) if such determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or
(b) if such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses.
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Section 7. Indemnification for Expenses of an Indemnitee Who is Wholly or Partly Successful. Subject to the limitations in Section 5, to the extent that Indemnitee was or is, by reason of his or her Corporate Status, made a party to (or otherwise becomes a participant in) any Proceeding and is successful, on the merits or otherwise, in the defense of such Proceeding, Indemnitee shall be indemnified for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each such claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section 7, and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 8. Advance of Expenses for an Indemnitee. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall, without requiring a preliminary determination of Indemnitee’s ultimate entitlement to indemnification hereunder, advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with (a) such Proceeding which is initiated by a third party who is not a stockholder of the Company, or (b) such Proceeding which is initiated by a stockholder of the Company acting in his or her capacity as such and for which a court of competent jurisdiction specifically approves such advancement, and which relates to acts or omissions with respect to the performance of duties or services on behalf of the Company, within ten days after the receipt by the Company of a statement or statements requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee, together with the Applicable Legal Rate of interest thereon, relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established, by clear and convincing evidence, that the standard of conduct has not been met by Indemnitee and which have not been successfully resolved as described in Section 7 of this Agreement. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor.
Section 9. Indemnification and Advance of Expenses as a Witness or Other Participant. Subject to the limitations in Section 5, to the extent that Indemnitee is or may be, by reason of Indemnitee’s Corporate Status, made a witness or otherwise asked to participate in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party, Indemnitee shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith within ten days after the receipt by the Company of a statement or statements requesting any such advance or indemnification from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee.
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Section 10. Procedure for Determination of Entitlement to Indemnification.
(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. Indemnitee may submit one or more such requests from time to time and at such time(s) as Indemnitee deems appropriate in Indemnitee’s sole discretion. The officer of the Company receiving any such request from Indemnitee shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to Section 10(a) above, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, which Independent Counsel shall be selected by Indemnitee and approved by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control shall not have occurred, (A) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors or, if such a quorum cannot be obtained, then by a majority vote of a duly authorized committee of the Board of Directors consisting solely of one or more Disinterested Directors, (B) if Independent Counsel has been selected by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL and approved by Indemnitee, which approval shall not be unreasonably withheld, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 10(b). Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.
(c) The Company shall pay the reasonable fees and expenses of Independent Counsel, if one is appointed.
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Section 11. Presumptions and Effect of Certain Proceedings.
(a) In making any determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 10(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.
(b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea of nolo contendere or its equivalent, or entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.
(c) The knowledge and/or actions, or failure to act, of any other director, officer, employee or agent of the Company or any other director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to Indemnitee for purposes of determining any other right to indemnification under this Agreement.
Section 12. Remedies of Indemnitee.
(a) If (i) a determination is made pursuant to Section 10(b) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Sections 8 or 9 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Sections 7 or 9 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification pursuant to any other section of this Agreement or the charter or Bylaws of the Company is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence a proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his or her rights under Section 7 of this Agreement. Except as set forth herein, the provisions of Maryland law (without regard to its conflicts of laws rules) shall apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.
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(b) In any judicial proceeding or arbitration commenced pursuant to this Section 12, Indemnitee shall be presumed to be entitled to indemnification or advance of Expenses, as the case may be, under this Agreement and the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 12, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 8 of this Agreement until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed). The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all of the provisions of this Agreement.
(c) If a determination shall have been made pursuant to Section 10(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification.
(d) In the event that Indemnitee is successful in seeking, pursuant to this Section 12, a judicial adjudication of or an award in arbitration to enforce Indemnitee’s rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him or her in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.
(e) Interest shall be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period (i) commencing with either the tenth day after the date on which the Company was requested to advance Expenses in accordance with Sections 8 or 9 of this Agreement or the 60th day after the date on which the Company was requested to make the determination of entitlement to indemnification under Section 10(b) of this Agreement, as applicable, and (ii) and ending on the date such payment is made to Indemnitee by the Company.
Section 13. Defense of the Underlying Proceeding.
(a) Indemnitee shall notify the Company promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder and shall include with such notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding. The failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.
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(b) Subject to the provisions of the last sentence of this Section 13(b) and of Section 13(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 13(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee, or (iii) would impose any Expense, judgment, fine, penalty or limitation on Indemnitee. This Section 13(b) shall not apply to a Proceeding brought by Indemnitee under Section 12 of this Agreement.
(c) Notwithstanding the provisions of Section 13(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that Indemnitee may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of the Company (subject to Section 12(d) of this Agreement), to represent Indemnitee in connection with any such matter.
Section 14. Non-Exclusivity; Survival of Rights; Subrogation.
(a) The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. Unless consented to in writing by Indemnitee, no amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal, regardless of whether a claim with respect to such action or inaction is raised prior or subsequent to such amendment, alteration or repeal. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right or remedy shall be cumulative and in addition to every other right or remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion of any right or remedy hereunder, or otherwise, shall not prohibit the concurrent assertion or employment of any other right or remedy.
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(b) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
Section 15. Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee by reason of his or her Corporate Status and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee by reason of his or her Corporate Status. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and Expenses incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence. The purchase, establishment and maintenance of any such insurance shall not in any way limit or affect the rights or obligations of the Company or Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights or obligations of the Company under any such insurance policies. If, at the time the Company receives notice from any source of a Proceeding to which Indemnitee is a party or a participant (as a witness or otherwise), the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies.
Section 16. Coordination of Payments. The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
Section 17. Reports to Stockholders. To the extent required by the MGCL, the Company shall report in writing to its stockholders the payment of any amounts for indemnification of, or advance of Expenses to, Indemnitee under this Agreement arising out of a Proceeding by or in the right of the Company with the notice of the meeting of stockholders of the Company next following the date of the payment of any such indemnification or advance of Expenses or prior to such meeting.
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Section 18. Duration of Agreement; Binding Effect.
(a) This Agreement shall continue until and terminate on the later of (i) the date that Indemnitee shall have ceased to serve as a director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company and (ii) the date that Indemnitee is no longer subject to any actual or possible Proceeding (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement).
(b) The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.
(c) The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
(d) The Company and Indemnitee agree that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall further be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges that, in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby waives any such requirement of such a bond or undertaking.
-11- |
Section 19. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 20. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.
Section 21. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
Section 22. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
Section 23. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, on the day of such delivery, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:
(a) If to Indemnitee, to the address set forth on the signature page hereto.
(b) If to the Company, to:
American Realty Capital Global Trust, Inc.
405 Park Avenue, 14th Floor
New York, NY 10022
Attn: General Counsel
or to such other address as may have been furnished in writing to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.
-12- |
Section 24. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules.
[SIGNATURE PAGE FOLLOWS]
-13- |
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
American Realty Capital Global trust, Inc.
By: /s/ Scott J. Bowman
Name: Scott J. Bowman
Title: Chief Executive Officer
INDEMNITEE
/s/ P. Sue Perrotty
Name: P. Sue Perrotty
-14- |
EXHIBIT A
AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED
To: The Board of Directors of American Realty Capital Global Trust, Inc.
Re: Affirmation and Undertaking
Ladies and Gentlemen:
This Affirmation and Undertaking is being provided pursuant to that certain Indemnification Agreement, dated the 13th day of March, 2015, by and between American Realty Capital Global Trust, Inc., a Maryland corporation (the “Company”), and the undersigned Indemnitee (the “Indemnification Agreement”), pursuant to which I am entitled to advance of Expenses in connection with [Description of Proceeding] (the “Proceeding”).
Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.
I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm my good faith belief that at all times, insofar as I was involved as a director of the Company, in any of the facts or events giving rise to the Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.
In consideration of the advance of Expenses by the Company for reasonable attorneys’ fees and related Expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses, together with the Applicable Legal Rate of interest thereon, relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established.
IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this _____ day of _______________, 20____.
_____________________________
Name:
Name | Jurisdiction of Formation/Incorporation |
American Realty Capital Global Operating Partnership, L.P. | Delaware |
ARC Global Holdco, LLC | Delaware |
ARC MCCARUK001, LLC | Delaware |
ARC WKBPLUK001, LLC | Delaware |
ARC EEMTRUK001, LLC | Delaware |
ARC TWSWDUK001, LLC | Delaware |
ARC WKSOTUK001, LLC | Delaware |
ARC PPHHTKY001, LLC | Delaware |
ARC NRSLDUK001, LLC | Delaware |
ARC KSFTWPA001, LLC | Delaware |
ARC WKMCRUK001, LLC | Delaware |
ARC CWRVTILI001, LLC | Delaware |
ARC CWVININ001, LLC | Delaware |
ARC CWSALKS001, LLC | Delaware |
ARC CWGRDMI001, LLC | Delaware |
ARC CWWPKMN001, LLC | Delaware |
ARC CWARANE001, LLC | Delaware |
ARC CWUVLOH001, LLC | Delaware |
ARC WWHWCMI001, LLC | Delaware |
ARC DBGWSDG001, LLC | Delaware |
ARC DBGESRG001, LLC | Delaware |
ARC GEGRDMI001, LLC | Delaware |
ARC RMNUSGER01, LLC | Delaware |
ARC PFBFDUK001, LLC | Delaware |
ARC CCLTRUK001, LLC | Delaware |
ARC TFDTPIA001, LLC | Delaware |
ARC ALSFDUK001, LLC | Delaware |
ARC DFSMCUK001, LLC | Delaware |
ARC GSFRNTN001, LLC | Delaware |
ARC NOWILND001, LLC | Delaware |
ARC TKMANUK001, LLC | Delaware |
ARC DFSMCUK001, LLC | Delaware |
ARC OBMYNGER01, LLC | Delaware |
ARC GSDVRDE001, LLC | Delaware |
ARC GSGTNPA001, LLC | Delaware |
ARC GSDALTX001, LLC | Delaware |
ARC GSMSSTX001, LLC | Delaware |
ARC GSIFLMN001, LLC | Delaware |
ARC DRINDIN001, LLC | Delaware |
ARC NOPLNTX001, LLC | Delaware |
ARC NNMFBTN001, LLC | Delaware |
ARC VALWDCO001, LLC | Delaware |
ARC LPSBDIN001, LLC | Delaware |
ARC GBLMESA001, LLC | Delaware |
ARC GBLMESA001, LLC | Delaware |
ARC GBLMESA01, LLC | Delaware |
ARC AMWORUK001, LLC | Delaware |
ARC GSRTNNM001, LLC | Delaware |
ARC NSSNJCA001, LLC | Delaware |
ARC FECPEMA001, LLC | Delaware |
ARC FEAMOTX001, LLC | Delaware |
ARC FESANTX001, LLC | Delaware |
ARC SZPTNNJ001, LLC | Delaware |
ARC WNBRNMO001, LLC | Delaware |
ARC VCLIVMI001, LLC | Delaware |
ARC GSFFDME001, LLC | Delaware |
ARC ATSNTTX001 | Delaware |
ARC PNEREPA001, LLC | Delaware |
ARC PNSCRPA001, LLC | Delaware |
ARC FUMANUK001, LLC | Delaware |
ARC ACHNETH001, LLC | Delaware |
ARC CTFTMSC001, LLC | Delaware |
ARC BKSCOUK001, LLC | Delaware |
ARC MEROXUK01, LLC | Delaware |
ARC TFKMZMI001, LLC | Delaware |
ARC SWWSVOH001, LLC | Delaware |
ARC CABIRUK001, LLC | Delaware |
ARC MKMDNNJ001, LLC | Delaware |
ARC FD73SLB001, LLC | Delaware |
ARC GSRNGME001 | Delaware |
ARC GRLOUKY001, LLC | Delaware |
ARC GRLBKTX001, LLC | Delaware |
ARC GRMSAAZ001, LLC | Delaware |
ARC GRRALNC001, LLC | Delaware |
ARC WMWSLNC001, LLC | Delaware |
ARC IAREDUK001, LLC | Delaware |
ARC HPNEWUK001, LLC | Delaware |
ARC SANPLFL001, LLC | Delaware |
ARC WHAMSNE001, LLC | Delaware |
ARC FEWNAMN001, LLC | Delaware |
ARC DG40PCK001, LLC | Delaware |
ARC FEBHMNY001, LLC | Delaware |
ARC FEWTRNY001, LLC | Delaware |
ARC MPSTLMO001, LLC | Delaware |
ARC TRLIVMI001, LLC | Delaware |
ARC KUSTHMI001, LLC | Delaware |
ARC FEHBRKY001, LLC | Delaware |
ARC FELEXKY001, LLC | Delaware |
ARC GECINOH001, LLC | Delaware |
ARC BBWYKUK001, LLC | Delaware |
ARC REXREGER01, LLC | Delaware |
ARC DNDUBOH001, LLC | Delaware |
ARC FELKCLA001, LLC | Delaware |
ARC FD34PCK001, LLC | Delaware |
ARC TOMANFI001, LLC | Delaware |
ARC METHAGER01, LLC | Delaware |
ARC PSHRSNJ001, LLC | Delaware |
ARC CJHSNTX001, LLC | Delaware |
ARC OGHDGMD001, LLC | Delaware |
ARC SLKRCP001 LLC | Delaware |
ARC GSRPCSD001, LLC | Delaware |
ARC KPHTNNE001, LLC | Delaware |
ROCHESSGER01, LLC | Delaware |
ROCHESSGER02, LLC | Delaware |
ROCHESSGER03, LLC | Delaware |
ARC FSMCHIL001, LLC | Delaware |
ARC SLSTCCA001, LLC | Delaware |
ARC DINCNOH001, LLC | Delaware |
ARC WIODSTX001, LLC | Delaware |
ARC AMWCHKS001, LLC | Delaware |
ARC FEBILMA001, LLC | Delaware |
ARC CSVBTMI001, LLC | Delaware |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-196829) of American Realty Capital Global Trust, Inc. of our report dated April 2, 2015 relating to the financial statements and financial statement schedules, which appears in this Form 10-K.
PricewaterhouseCoopers LLP
New York, New York
April 2, 2015
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our report dated March 7, 2014, with respect to the consolidated financial statements included in the Annual Report of American Realty Capital Global Trust, Inc. on Form 10-K for the years ended December 31, 2013 and 2012. We hereby consent to the incorporation by reference of said report in the Registration Statement of American Realty Capital Global Trust, Inc. on Form S-3D (File No. 333-196829, effective June 17, 2014).
/S/ GRANT THORNTON LLP
Philadelphia, Pennsylvania
April 1, 2015
1. | I have reviewed this Annual Report on Form 10-K of American Realty Capital Global Trust, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated this 2nd day of April, 2015 | /s/ Scott J. Bowman | |
Scott J. Bowman | ||
Chief Executive Officer | ||
(Principal Executive Officer) |
1. | I have reviewed this Annual Report on Form 10-K of American Realty Capital Global Trust, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated this 2nd day of April, 2015 | /s/ Patrick J. Goulding | |
Patrick J. Goulding | ||
Chief Financial Officer | ||
(Principal Financial Officer and Principal Accounting Officer) |
/s/ Scott J. Bowman | |
Scott J. Bowman | |
Chief Executive Officer | |
(Principal Executive Officer) | |
/s/ Patrick J. Goulding | |
Patrick J. Goulding | |
Chief Financial Officer | |
(Principal Financial Officer and Principal Accounting Officer) |
Real Estate Investments - Schedule of Properties (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |
---|---|---|
Dec. 31, 2014
property
|
Dec. 31, 2013
|
|
Other Real Estate [Roll Forward] | ||
Number of real estate properties, ending balance | 307 | |
Cost of real estate investment property, beginning balance | $ 196,908 | |
Cost of real estate investment property, ending balance | 2,340,039 | 196,908 |
Acquisitions, 2014 [Member] | ||
Other Real Estate [Roll Forward] | ||
Number of real estate properties, beginning balance | 37 | |
Number of properties | 270 | |
Number of real estate properties, ending balance | 307 | |
Cost of real estate investment property, beginning balance | 184,960 | |
Base purchase price | 2,193,594 | |
Cost of real estate investment property, ending balance | $ 2,378,554 |
Fair Value of Financial Instruments - Narrative (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2014
|
Dec. 31, 2013
|
---|---|---|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investment securities, at fair value | $ 490 | $ 0 |
Quoted Prices in Active Markets Level 1 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investment securities, at fair value | $ 0 |
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