x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR | |
o | 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) | ||
Large accelerated filer o | Accelerated filer o | |
Non-accelerated filer o | (Do not check if a smaller reporting company) | Smaller reporting company x |
Page | |
March 31, 2015 | December 31, 2014 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Real estate investments, at cost: | |||||||
Land | $ | 8,090 | $ | 5,271 | |||
Buildings, fixtures and improvements | 84,625 | 23,669 | |||||
Acquired intangible lease assets | 15,848 | 4,520 | |||||
Total real estate investments, at cost | 108,563 | 33,460 | |||||
Less accumulated depreciation and amortization | (528 | ) | — | ||||
Total real estate investments, net | 108,035 | 33,460 | |||||
Cash and cash equivalents | 33,806 | 1,286 | |||||
Derivatives, at fair value | 3,178 | 250 | |||||
Deposits for real estate acquisitions | 11,493 | 5,464 | |||||
Prepaid expenses and other assets | 1,283 | 7,265 | |||||
Receivable for sale of common stock | 3,000 | 891 | |||||
Deferred financing costs, net | 3,526 | 749 | |||||
Deferred offering costs, net | 47 | — | |||||
Total assets | $ | 164,368 | $ | 49,365 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Short term notes payable | $ | — | $ | 6,746 | |||
Mortgage notes payable | 75,957 | 17,139 | |||||
Below-market lease liabilities, net | 79 | — | |||||
Derivatives, at fair value | 334 | 86 | |||||
Due to affiliates | 1,026 | 1,268 | |||||
Accounts payable and accrued expenses | 3,890 | 300 | |||||
Deferred rent | — | 366 | |||||
Distributions payable | 541 | 155 | |||||
Total liabilities | 81,827 | 26,060 | |||||
Commitments and contingencies (Note 9) | |||||||
Stockholders' equity: | |||||||
Preferred stock, $0.01 par value, 50,000,000 authorized, none issued and outstanding | — | — | |||||
Common stock, $0.01 par value, 300,000,000 shares authorized, 4,327,875 and 1,297,355 shares issued, respectively; and 4,325,209 and 1,297,355 shares outstanding, respectively | 40 | 13 | |||||
Additional paid-in capital | 91,975 | 26,004 | |||||
Accumulated other comprehensive income (loss) | 2,482 | (41 | ) | ||||
Accumulated deficit | (11,956 | ) | (2,671 | ) | |||
Total stockholders' equity | 82,541 | 23,305 | |||||
Total liabilities and stockholders' equity | $ | 164,368 | $ | 49,365 | |||
Three Months Ended March 31, 2015 | |||
Revenues: | |||
Rental income | $ | 1,046 | |
Operating expense reimbursement | 174 | ||
Total revenues | 1,220 | ||
Expenses: | |||
Property operating | 157 | ||
Operating fees to affiliate | 25 | ||
Acquisition and transaction related | 7,165 | ||
General and administrative | 316 | ||
Depreciation and amortization | 482 | ||
Total expenses | 8,145 | ||
Operating loss | (6,925 | ) | |
Other income (expense): | |||
Interest expense | (826 | ) | |
Loss on foreign currency | (468 | ) | |
Total other expenses | (1,294 | ) | |
Net loss | $ | (8,219 | ) |
Other comprehensive loss: | |||
Change in cumulative translation adjustment | (157 | ) | |
Designated derivatives, fair value adjustment | 2,680 | ||
Comprehensive loss | $ | (5,696 | ) |
Basic and diluted weighted average shares outstanding | 2,430,444 | ||
Basic and diluted net loss per share | $ | (3.38 | ) |
Common Stock | |||||||||||||||||||||||
Number of Shares | Par Value | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total | ||||||||||||||||||
Balance, December 31, 2014 | 1,297,355 | $ | 13 | $ | 26,004 | $ | (41 | ) | $ | (2,671 | ) | 23,305 | |||||||||||
Issuance of common stock | 3,017,182 | 27 | 74,599 | — | — | 74,626 | |||||||||||||||||
Common stock offering costs, commissions and dealer manager fees | — | — | (8,885 | ) | — | — | (8,885 | ) | |||||||||||||||
Common stock issued through distribution reinvestment plan | 10,672 | — | 254 | — | — | 254 | |||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||
Amortization of restricted shares | — | — | 3 | — | — | 3 | |||||||||||||||||
Distributions declared | — | — | — | — | (1,066 | ) | (1,066 | ) | |||||||||||||||
Net loss | — | — | — | — | (8,219 | ) | (8,219 | ) | |||||||||||||||
Cumulative translation adjustment | — | — | — | (157 | ) | — | (157 | ) | |||||||||||||||
Other comprehensive income | — | — | — | 2,680 | — | 2,680 | |||||||||||||||||
Balance, March 31, 2015 | 4,325,209 | $ | 40 | $ | 91,975 | $ | 2,482 | $ | (11,956 | ) | $ | 82,541 | |||||||||||
Three Months Ended | ||||
March 31, 2015 | ||||
Cash flow from operating activities: | ||||
Net loss | $ | (8,219 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation | 305 | |||
Amortization of intangibles | 168 | |||
Amortization of deferred financing costs | 527 | |||
Accretion of below-market lease liability | (1 | ) | ||
Amortization of above-market lease assets | 56 | |||
Share-based compensation | 3 | |||
Changes in assets and liabilities: | ||||
Due to affiliates | (242 | ) | ||
Prepaid expenses and other assets | (764 | ) | ||
Accounts payable and accrued expenses | 2,681 | |||
Deferred rent | (366 | ) | ||
Net cash used in operating activities | (5,852 | ) | ||
Cash flows from investing activities: | ||||
Investment in real estate and other assets | (18,397 | ) | ||
Deposits for real estate acquisitions | (6,029 | ) | ||
Net cash used in investing activities | (24,426 | ) | ||
Cash flows from financing activities: | ||||
Payments of deferred financing costs | (3,304 | ) | ||
Proceeds from issuance of common stock | 72,517 | |||
Payments of offering costs | (8,023 | ) | ||
Distributions paid | (426 | ) | ||
Net cash provided by financing activities | 60,764 | |||
Net change in cash and cash equivalents | 30,486 | |||
Effect of exchange rate on cash | 2,034 | |||
Cash and cash equivalents, beginning of period | 1,286 | |||
Cash and cash equivalents, end of period | $ | 33,806 | ||
Three Months Ended | ||||
March 31, 2015 | ||||
Supplemental Disclosures: | ||||
Cash paid for interest | $ | 25 | ||
Non-Cash Investing and Financing Activities: | ||||
VAT refund receivable used to repay notes payable | $ | 6,746 | ||
Mortgage notes payable assumed or used to acquire investments in real estate | 63,100 | |||
Repayment of note payable | (6,746 | ) | ||
Common stock issued through distribution reimbursement plan | 254 | |||
Number of Properties | Base Purchase Price(1) | |||||
(In thousands) | ||||||
As of December 31, 2014 | 2 | $ | 33,820 | |||
Three Months ended March 31, 2015 | 2 | 81,497 | ||||
Portfolio as of March 31, 2015 | 4 | $ | 115,317 | |||
(1) | Contract purchase price, excluding acquisition related costs, based on the exchange rate at the time of purchase, where applicable. |
Three Months Ended March 31, 2015 | ||||
(Dollar amounts in thousands) | ||||
Real estate investments, at cost: | ||||
Land | $ | 3,503 | ||
Buildings, fixtures and improvements | 65,804 | |||
Total tangible assets | 69,307 | |||
Acquired intangibles: | ||||
In-place leases | 12,217 | |||
Above market lease assets | 56 | |||
Below market lease liabilities | (83 | ) | ||
Total assets acquired, net | 81,497 | |||
Mortgage notes payable used to acquire real estate investments | (63,100 | ) | ||
Cash paid for acquired real estate investments | $ | 18,397 | ||
Number of properties purchased | 2 | |||
Three Months Ended March 31, 2015 | ||||
(In thousands) | ||||
Pro forma revenues | $ | 2,243 | ||
Pro forma net loss | $ | (1,133 | ) | |
Basic and diluted net loss per share | $ | (0.47 | ) | |
(In thousands) | Future Minimum Base Rental Payments | |||
April 1, 2015 — December 31, 2015 | $ | 6,055 | ||
2016 | 8,081 | |||
2017 | 8,089 | |||
2018 | 8,097 | |||
2019 | 8,105 | |||
Thereafter | 33,202 | |||
$ | 71,629 | |||
March 31, 2015 | ||
Tenant | ||
Auchan | 16.1% | |
Pole Emploi | 11.0% | |
Sagemcom | 66.0% | |
March 31, 2015 | ||
Country | ||
France | 93.1% | |
Portfolio | Encumbered Properties | Outstanding Loan Amount | Effective Interest Rate | Interest Rate | Maturity | |||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||
Pole Emploi | 1 | 6,294 | (1) | $ | 7,050 | (1) | 1.7% | (2) | Fixed | Dec. 2019 | ||||||
Auchan | 1 | $ | 9,006 | (1) | 10,089 | (1) | 1.7% | (2) | Fixed | Dec. 2019 | ||||||
Sagemcom (4) | 1 | 38,955 | (1) | — | 1.6% | (2) | Fixed | Dec. 2019 | ||||||||
Sagemcom (mezzanine) (4) | 21,702 | (1) | — | 7.6% | (3) | Variable | Aug. 2016 | |||||||||
Total | 3 | $ | 75,957 | $ | 17,139 | 2.7% | ||||||||||
(1) | Based on exchange rates as of March 31, 2015 and December 31, 2014, as applicable. |
(2) | Fixed as a result of entering into a swap agreement. |
(3) | The effective interest rates relates to mezzanine loan with interest rate of 7.5% plus 3-month Euribor using rate as of March 31, 2015. |
(4) | The Sagemcom property is encumbered by a mortgage and a mezzanine loan, each pursuant to the same loan agreement. |
(In thousands) | Future Principal Payments | |||
April 1, 2015 — December 31, 2015 | $ | — | ||
2016 | 21,702 | |||
2017 | — | |||
2018 | — | |||
2019 | 54,255 | |||
Thereafter | — | |||
$ | 75,957 | |||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
March 31, 2015 | ||||||||||||||||
Foreign currency swap, net | $ | — | $ | 2,629 | $ | — | $ | 2,629 | ||||||||
Interest rate swap, net | $ | — | $ | (334 | ) | $ | — | $ | (334 | ) | ||||||
EUR-USD Forwards | $ | — | $ | 549 | $ | — | $ | 549 | ||||||||
December 31, 2014 | ||||||||||||||||
Foreign currency swap, net | $ | — | $ | 250 | $ | — | $ | 250 | ||||||||
Interest rate swap, net | $ | — | $ | (86 | ) | $ | — | $ | (86 | ) | ||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||
(In thousands) | Level | March 31, 2015 | March 31, 2015 | December 31, 2014 | December 31, 2014 | ||||||||||||
Mortgage notes payable | 3 | $ | 75,957 | $ | 75,161 | $ | 17,139 | $ | 16,983 | ||||||||
March 31, 2015 | December 31, 2014 | |||||||||||
Derivatives | Number of Instruments | Notional Amount | Number of Instruments | Notional Amount | ||||||||
(In thousands) | (In thousands) | |||||||||||
Interest rate swaps (EUR) | 3 | $ | 54,255 | 2 | $ | 17,139 | ||||||
March 31, 2015 | December 31, 2014 | |||||||||||
Derivatives | Number of Instruments | Notional Amount | Number of Instruments | Notional Amount | ||||||||
(In thousands) | (In thousands) | |||||||||||
EUR-USD Cross Currency Swaps | 1 | $ | 14,570 | 1 | $ | 16,321 | ||||||
EUR-USD Forwards | 1 | 10,100 | — | — | ||||||||
Total | 2 | $ | 24,670 | 1 | $ | 16,321 | ||||||
March 31, 2015 | December 31, 2014 | |||||||||
(In thousands) | Balance Sheet Location | |||||||||
Derivatives designated as hedging instruments: | ||||||||||
Foreign currency swaps | Derivative assets, at fair value | $ | 2,629 | $ | 250 | |||||
Interest rate swap | Derivative liabilities, at fair value | (334 | ) | (86 | ) | |||||
EUR-USD Forwards | Derivative assets, at fair value | 549 | — | |||||||
Total | $ | 2,844 | $ | 164 | ||||||
March 31, 2015 | ||||
(In thousands) | ||||
Amount of gain recognized in accumulated other comprehensive income from derivatives (effective portion) | $ | 2,893 | ||
Amount of gain (loss) reclassified from accumulated other comprehensive income into income as interest expense (effective portion) | $ | (17 | ) | |
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 | |||||||||||||||||||||
March 31, 2015 | $ | 3,178 | $ | (334 | ) | $ | — | $ | 2,844 | $ | — | $ | — | $ | 2,844 | |||||||||||||
December 31, 2014 | $ | 250 | $ | (86 | ) | $ | — | $ | 164 | $ | — | $ | — | $ | 164 | |||||||||||||
Three Months Ended March 31, 2015 | Payable as of March 31, 2015 | |||||||
(In thousands) | ||||||||
Total commissions and fees from Dealer Manager | $ | 6,742 | $ | 275 | ||||
Three Months Ended March 31, 2015 | Payable as of March 31, 2015 | |||||||
(In thousands) | ||||||||
Fees and expense reimbursements from the Advisor and Dealer Manager | $ | 2,214 | $ | 1,026 | ||||
Three Months Ended March 31, 2015 | Payable as of March 31, 2015 | |||||||||||
(In thousands) | Incurred | Forgiven | ||||||||||
One-time fees and reimbursements: | ||||||||||||
Acquisition fees and related cost reimbursements | $ | 1,628 | $ | — | $ | — | ||||||
Transaction fee | — | — | — | |||||||||
Financing coordination fees | 1,223 | — | — | |||||||||
Other expense reimbursements | — | — | — | |||||||||
Ongoing fees: | ||||||||||||
Asset management fees | — | — | — | |||||||||
Property management and leasing fees | 34 | 4 | — | |||||||||
Strategic advisory fees | — | — | — | |||||||||
Distributions on Class B units | — | — | — | |||||||||
Total related party operational fees and reimbursements | $ | 2,885 | $ | 4 | $ | — | ||||||
Number of Restricted Shares | Weighted-Average Issue Price | |||||
Unvested, December 31, 2014 | 2,666 | $ | 22.50 | |||
Granted | — | — | ||||
Vested | — | — | ||||
Forfeitures | — | — | ||||
Unvested, March 31, 2015 | 2,666 | $ | 22.50 | |||
Three Months Ended March 31, 2015 | ||||
Net loss (in thousands) | $ | (8,219 | ) | |
Weighted average shares outstanding | 2,430,444 | |||
Basic and diluted net loss per share | $ | (3.38 | ) | |
March 31, | |||
2015 | |||
Unvested restricted stock | 2,666 | ||
OP Units | 90 | ||
Class B units | 13,247 | ||
Total common share equivalents | 16,003 | ||
Source of Capital (in thousands) | Inception to March 31, 2015 | April 1, 2015 to April 30, 2015 | Total | |||||||||
Common stock | $ | 107,055 | $ | 39,388 | $ | 146,443 | ||||||
Country | Number of Properties | Rentable Square Feet | Base Purchase Price (1) | ||||||||
(In thousands) | |||||||||||
Total portfolio, March 31, 2015 | U.S. and France | 4 | 528,996 | $ | 115,317 | ||||||
Acquisitions | UK | 1 | 126,078 | 16,539 | |||||||
Total portfolio, May 15, 2015 | 5 | 655,074 | $ | 131,856 | |||||||
• | We have a limited operating history. This inexperience makes our future performance difficult to predict. |
• | All of our executive officers are also officers, managers and/or holders of a direct or indirect controlling interest in American Realty Capital Global II 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. |
• | Commencing with the NAV pricing date, as described herein, the purchase price and repurchase price for our shares will be based on our net asset value ("NAV") rather than a public trading market. Our published NAV may not accurately reflect the value of our assets. No public market currently exists, or may ever exist, for shares of our common stock and our shares are, and may continue to be, illiquid. |
• | If we and our Advisor are unable to find suitable investments, then we may not be able to achieve our investment objectives or pay distributions. |
• | Our initial public offering of common stock (the "IPO"), which commenced on August 26, 2014, is a blind pool offering and you may not have the opportunity to evaluate our investments before you make your purchase of our common stock, thus making your investment more speculative. |
• | If we raise substantially less than the maximum offering in our IPO, we may not be able to invest in a diversified portfolio of real estate assets, which may cause the value of an investment in us to vary more widely with the performance of specific assets. |
• | We may be unable to pay or maintain cash distributions or increase distributions over time. |
• | We are obligated to pay fees that may be substantial to our Advisor and its affiliates. |
• | We will depend on tenants for our revenue and, accordingly, our 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. |
• | Our organizational documents permit us to pay distributions from unlimited amounts of any source. Until substantially all the proceeds from our IPO 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. Any distributions may reduce the amount of capital we ultimately invest in properties and other permitted investments and negatively impact the value of your investment. |
• | We have not generated cash flows sufficient to pay our distributions to stockholders, as such, we may be forced to borrow at unfavorable 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 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 our 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. |
Portfolio | Acquisition Date | Country | Number of Properties | Rentable Square Feet | Rented Square Feet | Remaining Lease Term (1) | Base Purchase Price (2) | |||||||||||
(In thousands) | ||||||||||||||||||
Auchan | Dec. 2014 | France | 1 | 152,235 | 152,235 | 8.4 | $ | 20,640 | ||||||||||
Pole Emploi | Dec. 2014 | France | 1 | 41,452 | 37,437 | 8.3 | 13,180 | |||||||||||
Veolia Water | Feb. 2015 | US | 1 | 70,000 | 70,000 | 10.8 | 6,996 | |||||||||||
Sagemcom | Feb. 2015 | France | 1 | 265,309 | 265,309 | 8.8 | 74,501 | |||||||||||
Total | 4 | 528,996 | 524,981 | 8.9 | $ | 115,317 | ||||||||||||
(1) | Remaining lease term in years as of March 31, 2015. If the portfolio has multiple properties with varying lease expirations, remaining lease term is calculated on a weighted-average basis. |
(2) | Contract purchase price, excluding acquisition related costs, based on the exchange rate at the time of purchase, where applicable. |
Three Months Ended | ||||
(In thousands) | March 31, 2015 | |||
Net loss (in accordance with GAAP) | $ | (8,219 | ) | |
Depreciation and amortization | 482 | |||
FFO | (7,737 | ) | ||
Acquisition fees and expenses (1) | 7,165 | |||
Amortization of above or below market leases and liabilities (2) | 55 | |||
Straight-line rent (3) | (4 | ) | ||
Amortization of mortgage premiums | — | |||
Loss on foreign currency (4) | 468 | |||
MFFO | $ | (53 | ) | |
(1) | 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. |
(2) | Under GAAP, certain intangibles are accounted for at cost and reviewed at least annually for impairment, and certain intangibles are assumed to diminish predictably in value over time and amortized, similar to depreciation and amortization of other real estate related assets that are excluded from FFO. However, because real estate values and market lease rates historically rise or fall with market conditions, management believes that by excluding charges relating to amortization of these intangibles, MFFO provides useful supplemental information on the performance of the real estate. |
Three Months Ended | |||||||
March 31, 2015 | |||||||
(In thousands) | Percentage of Distributions | ||||||
Distributions: (1) | |||||||
Distributions paid in cash | $ | 426 | |||||
Distributions reinvested | 254 | ||||||
Total distributions | $ | 680 | |||||
Source of distribution coverage: | |||||||
Cash flows provided by operations (1) | $ | — | — | % | |||
Proceeds from issuance of common stock | 426 | 62.6 | % | ||||
Common stock issued under the DRIP / offering proceeds | 254 | 37.4 | % | ||||
Total sources of distribution coverage | $ | 680 | 100.0 | % | |||
Cash flows used in operations (GAAP basis) (2) | $ | (5,852 | ) | ||||
Net loss (in accordance with GAAP) | $ | (8,219 | ) | ||||
(2) | Cash flows used in operations for the three months ended March 31, 2015 reflects acquisition and transaction related expenses of $7.2 million. |
For the Period from April 23, 2014 (date of inception) to March 31, 2015 | ||||
(In thousands) | ||||
Distributions paid: (1) | ||||
Common stockholders in cash | $ | 485 | ||
Common stockholders pursuant to DRIP / offering proceeds | 282 | |||
Total distributions paid | $ | 767 | ||
Reconciliation of net loss: | ||||
Revenues | $ | 1,240 | ||
Acquisition and transaction-related expenses | (9,083 | ) | ||
Depreciation and amortization | (482 | ) | ||
Other operating expenses | (994 | ) | ||
Other non-operating expenses | (1,354 | ) | ||
Net loss (in accordance with GAAP) (2) | $ | (10,673 | ) | |
April 1, 2015 — December 31, 2015 | Years Ended December 31, | |||||||||||||||||||
(In thousands) | Total | 2016 — 2017 | 2018 — 2019 | Thereafter | ||||||||||||||||
Principal on mortgage notes payable (1) | $ | 75,957 | $ | — | $ | 21,702 | $ | 54,255 | $ | — | ||||||||||
Interest on mortgage notes payable (1) | 6,715 | 1,805 | 3,076 | 1,834 | — | |||||||||||||||
Total (2) | $ | 82,672 | $ | 237 | $ | 24,778 | $ | 56,089 | $ | — | ||||||||||
For the Period from April 23, 2014 (date of inception) to March 31, 2015 | ||||
(In thousands) | ||||
Selling commissions and dealer manager fees | $ | 9,720 | ||
Other offering costs | 5,324 | |||
Total offering costs | $ | 15,044 | ||
For the Period from April 23, 2014 (date of inception) to March 31, 2015 | ||||
(In thousands) | ||||
Total commissions paid to the Dealer Manager | $ | 9,720 | ||
Less: | ||||
Commissions to participating brokers | (6,493 | ) | ||
Reallowance to participating broker dealers | (1,192 | ) | ||
Net to the Dealer Manager | $ | 2,035 | ||
AMERICAN REALTY CAPITAL GLOBAL TRUST II, INC. | ||
By: | /s/ Scott J. Bowman | |
Scott J. Bowman | ||
Chief Executive Officer (Principal Executive Officer) | ||
By: | /s/ Patrick J. Goulding | |
Patrick J. Goulding | ||
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | ||
Exhibit No. | Description | |
10.17* | Indemnification Agreement between the Company and Lee M. Elman, dated as of May14, 2015. | |
10.18* | Purchase Agreement, dated March 19, 2015, between Quarry Town Limited and ARC NCKWYDE001, LLC. | |
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. | |
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 * | XBRL (eXtensible Business Reporting Language). The following materials from American Realty Capital Global Trust II, Inc.'s Quarterly Report on Form 10-Q for the three ended September 30, 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. As provided in Rule 406T of Regulation S-T, this information in furnished and not filed for purpose of Sections 11 and 12 of the Securities Act of 1933, as amended, and Section 18 of the Exchange Act. | |
Exhibit 10.17
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into as of the 14th day of May, 2015, by and between American Realty Capital Global Trust II, Inc., a Maryland corporation (the “Company”), and Lee M. Elman (“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.
(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;
(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.
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.
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.
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.
(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.
(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.
(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.
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.
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 II, 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.
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]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
American Realty Capital Global trust II, Inc.
| By: | /s/ Scott J. Bowman | |
| Name: Scott J. Bowman | ||
| Title: Chief Executive Officer |
| INDEMNITEE | |
| /s/ Lee M. Elman | |
| Name: Lee M. Elman |
EXHIBIT A
AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED
To: The Board of Directors of American Realty Capital Global Trust II, Inc.
Re: Affirmation and Undertaking
Ladies and Gentlemen:
This Affirmation and Undertaking is being provided pursuant to that certain Indemnification Agreement, dated the 14th day of May, 2015, by and between American Realty Capital Global Trust II, 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: | ||
Exhibit 10.18
| OUR REF | DAJ/QUA32.2 |
| YOUR REF | MJR/ARC001X001 |
Morton Fraser LLP
Quartermile Two
2 Lister Square
Edinburgh
EH3 9GL
19 March 2015
Dear Sirs
QUARRY TOWN LIMITED
ARC NCKWYDE001, LLC
DISCOVERY CENTRE, DUNDEE
On behalf of and as instructed by the Seller, we offer to sell the Property to the Purchaser on the following conditions:
| 1 | Definitions and Interpretation |
| 1.1 | In the Missives: |
"2012 Act" means the Land Registration etc. (Scotland) Act 2012;
"Advance Notice" means an Advance Notice as defined in Section 56 of the 2012 Act;
"Assignation of Guarantee" means the assignation of guarantee in favour of the Purchaser in terms of the draft forming Part 11 of the Schedule;
"Completion" means the Date of Entry or, if later, the date when the Completion Payment is paid and the purchase of the Property is completed in terms of the Missives;
"Completion Payment" means the net amount of (a) the Price subject to all adjustments provided for in the Missives (including all rent and other apportionments) under deduction of (b) the Deposit;
"Conclusion Date" means the date of conclusion of the Missives;
"Date of Entry" means the earlier of (i) 30 April 2015; and (ii) the date occurring 6 Working Days following the Purchaser giving written notice to the Seller that it wishes to complete the purchase of the Property;
| Brodies LLP is a limited liability partnership, registered in Scotland. Registered no. SO300334. Registered office: 15 Atholl Crescent, Edinburgh, EH3 8HA. A list of all members is available for inspection at 15 Atholl Crescent Edinburgh EH3 8HA. 'Brodies' is a registered trade mark. |
Edinburgh Office: Brodies LLP Solicitors 15 Atholl Crescent Edinburgh EH3 8HA, Scotland UK |
Tel: [+44] (0)131 228 3777 Fax: [+44] (0)131 228 3878 DX ED10, EDINBURGH-1 |
"Deposit" means the sum of FIVE HUNDRED AND FIFTY FIVE THOUSAND POUNDS (£555,000) STERLING exclusive of VAT;
"Disclosed Documents" means the documents listed in Part 1 of the Schedule;
"Disposition" means the disposition of the Property in favour of the Purchaser in terms of the draft set out in Part 6 of the Schedule;
"Encumbrances" are encumbrances as set out in section 9 of the 2012 Act;
"Fixed Plant" means such plant and machinery (within the meaning of the Capital Allowances Act 2001) as constitutes a fixture or fixtures in respect of which the Seller has a basis to claim and which is included in the sale of the Property;
"Guarantee" means the guarantee granted by the Guarantor under and in terms of the Lease;
"Guarantor" means NCR Corporation, a corporation incorporated under the laws of the State of Maryland and having its head office at 3097 Satellite Blvd., Duluth, GA 30096, USA;
"HMRC" means HM Revenue & Customs;
"Interest" means interest on the sum in question at 4% per annum above the base rate from time to time of The Royal Bank of Scotland plc from the date that such sum is due for payment or, if there is no such date specified, the date of demand for such sum until such sum is paid;
"Landlords" means the landlord under the Lease;
"Lease" means the lease and other documentation listed in Part 3 of the Schedule;
"Missives" means the contract constituted by this offer and all duly executed letters following on it;
"Opinion Letter" means the signed opinion letter in terms of the draft forming Part 9 of the Schedule;
"Price" means EIGHT MILLION NINE HUNDRED AND FORTY ONE THOUSAND FOUR HUNDRED AND FORTY EIGHT POUNDS (£8,941,448) Sterling (exclusive of any VAT) as may be reduced in accordance with Condition 4.2.2 and/or increased in accordance with Condition 4.2.3;
"Property" means ALL and WHOLE the subjects known generally as Discovery Centre, 3 Fulton Road, Dundee, Angus DD2 4SW and registered in the Land Register of Scotland under Title Number ANG3945;
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"Purchaser" means ARC NCKWYDE001, LLC, a Limited Liability Company registered under the Laws of the State of Delaware, United States of America (File Number 5671188) and having its Registered Office at 2711 Centerville Road, Suite 400, Wilmington, 19808 USA;
"Purchaser's Bank" means (a) the client account of the Purchaser's Solicitors and/or (b) the client account of the solicitors acting for the Purchaser's heritable creditor and/or (c) if it is a bank which is a shareholder in CHAPS Clearing Co. Limited, and the funds in question are loan funds from that bank for the purpose of acquiring the Property, the Purchaser's heritable creditor;
"Purchaser's Solicitors" means Morton Fraser LLP (Ref: Michael Ramsay) or such other solicitors as the Purchaser may appoint in their place from time to time and who have been notified in writing to the Seller's Solicitors;
"Schedule" means the schedule annexed to this offer;
"Seller" means, Quarry Town Limited, incorporated under the Companies Ordinance in Gibraltar with Registered Number 87249 and having its Registered Office at Suites 7b and 8b, 50 Town Range, Gibraltar;
"Seller's Bank Account" means Bank: The Royal Bank of Scotland plc, 36 St Andrew Square Edinburgh, Sort Code: 83-06-08, Account Number: 00112030, Account Name: Brodies LLP Client Account or such other UK clearing bank account as the Seller’s Solicitors nominate by written notice to that effect at least 3 Working Days prior to the Date of Entry;
"Seller's Solicitors" means Brodies LLP (Ref: JIR.QUA32.2) or such other solicitors as the Seller may appoint in their place from time to time and who have been notified in writing to the Purchaser's Solicitors;
"Tenant" means the current tenant under the Lease;
"Title Deeds" means the title deeds of the Property listed in Part 2 of the Schedule;
"TOGC" means a transfer of a business as a going concern for the purposes of section 49(1) of the VAT Act and Article 5 of the Value Added Tax (Special Provisions) Order 1995;
"VAT" means value added tax as provided for in the VAT Act and any tax similar or equivalent to value added tax or performing a similar fiscal function;
"VAT Act" means the Value Added Tax Act 1994;
"VAT Group" means two or more bodies corporate registered as a group for VAT purposes under Section 43 of the VAT Act; and
"Working Day" means any day on which clearing banks in Edinburgh, Glasgow and London are open for normal business.
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| 1.2 | In the Missives, unless otherwise specified or the context otherwise requires: |
| 1.2.1 | any reference to one gender includes all other genders; |
| 1.2.2 | words in the singular only include the plural and vice versa; |
| 1.2.3 | any reference to the whole is to be treated as including reference to any part of the whole; |
| 1.2.4 | any reference to a person includes a natural person, corporate or unincorporated body (whether or not having separate legal personality) and words importing individuals include corporations and vice versa; |
| 1.2.5 | any reference to a Condition, Schedule or Part of the Schedule is to the relevant Condition, Schedule or Part of the Schedule of or to this offer; |
| 1.2.6 | any reference to a statute or statutory provision includes any subordinate legislation which is in force from time to time under that statute or statutory provision; |
| 1.2.7 | any reference to any statute, statutory provision or subordinate legislation is a reference to it as it is in force from time to time taking account of any amendment or re-enactment; |
| 1.2.8 | any phrase introduced by the words "including", "include", "in particular" or any similar expression is to be construed as illustrative only and is not to be construed as limiting the generality of any preceding words; |
| 1.2.9 | a document will be duly executed only if it is executed in such manner as meets the requirements of Section 3 or Section 9B of the Requirements of Writing (Scotland) Act 1995; |
| 1.2.10 | where at any one time there are two or more persons included in the expression "Purchaser" or "Seller" obligations contained in the Missives which are expressed to be made by the Purchaser and/or the Seller are binding jointly and severally on them and their respective executors and representatives whomsoever without the necessity of discussing them in their order; |
| 1.2.11 | any reference to funds being cleared means that the funds are immediately available for withdrawal from the holder's bank account; |
| 1.2.12 | any reference to "reasonable consent" means the prior written consent of the party in question, such consent not to be unreasonably withheld or delayed; and |
| 1.2.13 | where a Condition provides that Interest is payable and that the sum must be paid within a specified period, no Interest will accrue on the sum provided it is paid within that period. |
| 4 |
| 1.3 | The headings in the Missives are included for convenience only and are to be ignored in construing the Missives. |
| 1.4 | The Schedule forms part of the Missives. |
| 2 | Price |
| 2.1 | payment |
| 2.1.1 | On the Date of Entry the Purchaser will:- |
| 2.1.1.1 | pay the Completion Payment by instantaneous bank transfer of cleared funds from the Purchaser's Bank to the Seller's Bank Account; and |
| 2.1.1.2 | take, and procure that the Purchaser’s Solicitors take, all such steps as may be necessary to procure the release of the Deposit in cleared funds to the Seller’s Bank Account (including signing all necessary bank forms and other documentation) |
in each case in exchange for the Disposition and other items to be delivered by the Seller referred to in Condition 9.
| 2.1.2 | A payment not made in accordance with Condition 2.1.1 may be refused. |
| 2.2 | deposit |
| 2.2.1 | The Deposit will be paid by the Purchaser by instantaneous bank transfer of cleared funds from the Purchaser's Bank to the Seller’s Bank Account on the Conclusion Date. |
| 2.2.2 | The Deposit will be: |
| 2.2.2.1 | placed on joint deposit by the Seller’s Solicitors in an interest bearing account in the joint names of the Purchaser’s Solicitors and the Seller’s Solicitors (“Joint Account”) at the earliest practicable opportunity following receipt of same by the Seller’s Solicitors as cleared funds in accordance with Condition 2.2.1, to be held by them pending the occurrence of any of the events described in Conditions 2.2.2.2 to 2.2.2.4 inclusive and to be dealt with as set out therein, as applicable; |
| 2.2.2.2 | treated as a payment to account of the Price if the purchase of the Property proceeds, and accordingly released to the Seller, and paid to the Seller's Bank Account, at Completion; |
| 2.2.2.3 | paid to the Seller, forthwith, and paid to the Seller's Bank Account, if the Purchaser fails to pay the Completion Payment timeously on the Required Completion Date defined in Condition 2.6 (time being of the essence); and |
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| 2.2.2.4 | repaid to the Purchaser, forthwith to the Purchaser's Bank Account, if the Seller fails to deliver the settlement items to the Purchaser in terms of Condition 9 and the Purchaser properly rescinds the Missives as a result. |
| 2.2.3 | The interest accrued on the Deposit in the Joint Account will be paid either:- |
| 2.2.3.1 | along with the Deposit to the party to whom the Deposit is payable in accordance with Condition 2.2.2.3 or Condition 2.2.2.4; or |
| 2.2.3.2 | to the Purchaser within 2 Working Days of Completion if the Deposit is released to the Seller in accordance with Condition 2.2.2.2. |
| 2.2.4 | The Seller and the Purchaser undertake that they will, and that they will procure that their respective solicitors will, take any and all such steps as may be necessary as expeditiously as possible to give effect to the foregoing provisions, including signing all necessary bank forms and other documentation. |
| 2.2.5 | The Seller and the Purchaser agree that Interest will be payable on all sums payable under this Condition 2.2 in case of any late payment. The due date for payment of such Interest when Interest begins to be payable will be:- |
| 2.2.5.1 | the Conclusion Date for the purposes of payment of the Deposit to the Seller's Bank Account by the Purchaser in terms of Condition 2.2.1; and/or |
| 2.2.5.2 | for the purposes of Conditions 2.2.2.2, 2.2.2.3 or 2.2.2.4 the first date which is at least 3 Working Days after the occurrence of the relevant event (whether positive or negative) giving rise to the obligation to make payment of the Deposit in terms of the relevant such Condition. |
| 2.2.6 | The Seller’s Solicitors and the Purchaser’s Solicitors respectively confirm, by the issue and acceptance of this offer, that they are authorised to give effect to this Condition 2.2 insofar as obligations are imposed on them. |
| 2.2.7 | The Deposit will be held in the Joint Account for the sole and express purpose of making timeous payment of the Deposit in terms of the Missives and may not be otherwise withdrawn from the Joint Account otherwise than (i) to the extent provided for, and in accordance with, this Condition 2.2; and/or (ii) with the express written authority of both the Seller and the Purchaser. |
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| 2.2.8 | Without prejudice to the generality of this Condition 2.2, the Purchaser and the Seller acknowledge that the holding of the Deposit by the Purchaser’s Solicitors and the Seller’s Solicitors on joint deposit aforesaid is a matter entirely separate from the respective remaining rights and obligations of the Purchaser and the Seller under the Missives and that as such:- |
| 2.2.8.1 | such holding of the Deposit will not be a defence whether by way of set off or otherwise to any action for payment by the Seller or the Purchaser under the Missives except as expressly permitted in this Condition 2.2; and |
| 2.2.8.2 | no such remaining rights and obligations (and/or any dispute, claim and/or actual or alleged breach thereof) will be a defence whether by way of set off or otherwise to (and/or otherwise affect or be relevant to) any entitlement of the Purchaser or the Seller (as the case may be) to the release of the Deposit or relevant part thereof to them in accordance with this Condition 2.2. |
| 2.3 | interest |
If the Completion Payment or (subject to compliance by the Seller and the Seller’s Solicitors with Condition 2.2.4) the Deposit or any part of them or any part of it is not paid to the Seller on the Date of Entry in accordance with the Missives then, notwithstanding consignation or that the Purchaser has not taken entry, the Purchaser will pay to the Seller Interest on the outstanding money.
| 2.4 | cancellation of sale |
If the Purchaser fails to (a) pay the Deposit to the Seller’s Bank Account in cleared funds in accordance with Condition 2.2.1 within 5 Working Days of the Conclusion Date; or (b) pay the Completion Payment in accordance with Condition 2.1.1.1 with Interest as set out in Condition 2.3 within 10 Working Days after the Date of Entry; and/or (c) provide all required authorisations (other than any from the Seller’s Solicitors and/or the Seller) for the immediate release of the Deposit in cleared funds to the Seller in accordance with Conditions 2.1.1.2 and 2.2.2.2 within 10 Working Days after the Date of Entry the Seller is entitled (in its absolute discretion exercisable by immediate written notice to the Purchaser served at any time following expiry of such 10 Working Day period but prior to such payment and release) to rescind the Missives, to re-sell the Property to any third party and to claim damages from the Purchaser which may include:
| 2.4.1 | all costs and expenses incurred in relation to the re-marketing of the Property and the re-sale of it; |
| 2.4.2 | any shortfall between: |
| 2.4.2.1 | the sale price received by the Seller on any such re-sale; and |
| 2.4.2.2 | the Price; and |
| 7 |
| 2.4.3 | financial losses including increased funding costs which the Seller would not have incurred had the Price been paid on the Date of Entry and interest which the Seller could have earned on the Price had it been paid on the Date of Entry. |
If the Seller rescinds the Missives, no Interest will be due by the Purchaser in terms of Condition 2.33.
| 2.5 | receipt of money |
For the purposes of this Condition 2, money will not be deemed paid to the Seller until such time as same day credit on it is available to the holder of the Seller's Bank Account in accordance with normal banking procedure.
| 2.6 | suspension |
The provisions of Conditions 2.2.2.3, 2.3 and 2.4 will not apply (and any Relevant Delay Period as defined in Condition 4.2.3 shall exclude) during any period(s) of time during which the delay in payment by the Purchaser is due to any failure or breach by or on behalf of the Seller to implement its obligations or duties under the Missives on time and the “Required Completion Date” for the purposes of Condition 2.2.2.3 shall be the date which is the Date of Entry as deferred by any such period(s) of time.
| 3 | VAT |
| 3.1.1 | The Seller and the Purchaser agree: |
| 3.1.1.1 | that the sale of the Property to the Purchaser in terms of the Missives constitutes a TOGC and accordingly no VAT will be charged on the Price at Completion and no VAT will form part of the Completion Payment; |
| 3.1.1.2 | that the business of letting the Property for a consideration is capable of being operated separately as a business; and |
| 3.1.1.3 | to use all reasonable endeavours both before and after Completion to procure that the sale of the Property to the Purchaser in terms of the Missives is treated by HMRC as a TOGC. |
| 3.1.2 | The Seller confirms to the Purchaser that: |
| 3.1.2.1 | it (or the representative member of its VAT Group) is registered for the purposes of VAT; |
| 3.1.2.2 | either it or a person of which it is, and will at Completion be, a relevant associate (for the purposes of the VAT Act, Schedule 10, paragraph 2) has exercised pursuant to the VAT Act, Schedule 10, paragraph 2 (or been treated pursuant to the VAT Act, Schedule 10, paragraph 21 as having exercised) an option to tax in respect of the Property and has duly notified that option to HMRC to the extent required in order to make it effective; |
| 8 |
| 3.1.2.3 | it (or such other person referred to in Condition 3.1.2.2) has not revoked, and will not revoke before Completion, its option and, where such option is treated as having been exercised as a result of a real estate election having been made, will not prior to Completion take any action, or omit to take any action, by virtue of which HMRC could revoke such real estate election; |
| 3.1.2.4 | the assets to be transferred to the Purchaser in terms of the Missives have been and will, in the period up to Completion, be used continuously for the Seller's business comprising the letting of and the collection of rents from property and such assets are the only assets in the business to be transferred; and |
| 3.1.2.5 | at Completion the Seller and the Tenant will not be members of the same VAT Group. |
The Seller has exhibited evidence of the matters stated in Conditions 3.1.2.1 and 3.1.2.2.
| 3.1.3 | The Purchaser confirms to the Seller that: |
| 3.1.3.1 | it (or the representative member of its VAT Group) will be registered or liable to be registered for the purposes of VAT at Completion; |
| 3.1.3.2 | before Completion it (or another person) will: |
| 3.1.3.2.1 | exercise an option to tax in respect of the Property under the VAT Act, Schedule 10, paragraph 2 or make a real estate election under the VAT Act, Schedule 10, paragraph 21; and |
| 3.1.3.2.2 | duly notify such option to tax or real estate election (as the case may be) to HMRC, |
in either case, so as to ensure that the conditions in Article 5(2A) of the Value Added Tax (Special Provisions) Order 1995 will be satisfied in respect of the Purchaser's acquisition of the Property from the Seller;
| 3.1.3.3 | it (or such other person referred to in Condition 3.1.3.2) will not revoke its option either before or after Completion and, where such option is treated as having been exercised as a result of a real estate election having been made, will not take any action, or omit to take any action, by virtue of which HMRC could revoke such real estate election; |
| 9 |
| 3.1.3.4 | it will use such assets in carrying on the same kind of business as the Seller, namely that detailed in Condition 3.1.2.4; |
| 3.1.3.5 | Article 5 (2B) of the Value Added Tax (Special Provisions) Order 1995 does not apply to the Purchaser in relation to the purchase of the Property; and |
| 3.1.3.6 | it is not acting as a nominee. |
The Purchaser will exhibit to the Seller, as soon as possible and in any event before Completion, evidence of the matters stated in Conditions 3.1.3.1 and 3.1.3.2 (including an acknowledgement by HMRC of the notification of such option to tax or, as the case may be, such real estate election if such acknowledgement is received by the Purchaser (or such other person referred to in Condition 3.1.3.2) prior to Completion).
| 3.1.4 | If, notwithstanding the provisions above, HMRC direct in writing that VAT is chargeable on the sale of the Property, the Seller will notify the Purchaser in writing within 5 Working Days of the Seller being so advised by HMRC. |
| 3.1.5 | The Purchaser will pay to the Seller within 10 Working Days of written demand a sum equal to the amount of VAT determined by HMRC, in exchange for a valid VAT invoice. |
| 3.1.6 | Subject to Condition 3.1.7, the Purchaser will pay, in addition, to the Seller within 10 Working Days of written demand an amount equal to the total of any interest, penalties, claims, losses, damages, costs and expenses arising as a consequence of, or in relation to the failure to charge and collect VAT on the Price at Completion and to account for such VAT to HMRC except to the extent that VAT is chargeable on the Price as a consequence of the Seller's failure to comply with its obligations and undertakings in terms of this Condition 3. |
| 3.1.7 | The Seller will use all reasonable endeavours to minimise the amount due under Condition 3.1.6. |
| 3.1.8 | If the Purchaser fails to pay any amount due under Conditions 3.1.5 and 3.1.6 within the relevant time limit, the Purchaser will pay Interest on the outstanding amount. No Interest will be payable under this Condition in respect of any amount and time period to the extent that the Seller has already been compensated under Condition 3.1.6 for interest in respect of the same amount and the same time period. |
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| 3.1.9 | The Purchaser and the Seller do not intend to make a joint application under regulation 6(1) of the VAT Regulations 1995 (SI 1995/2518) for the Purchaser to be registered for VAT under the Seller's VAT registration number and the Seller confirms that it will allow the Purchaser such access to VAT records relating to the Property as required by Section 49 of the VAT Act as amended by the Finance Act 2007. |
| 3.2 | capital goods scheme |
The Seller confirms to the Purchaser that none of the assets to be transferred to the Purchaser in terms of the Missives is a capital item to which the Capital Goods Scheme (per Regulation 112 to 116 of the Value Added Tax Regulations 1995 as amended) applies or will apply in the period up to Completion other than any assets specified in Part 8 of the Schedule.
| 4 | Entry and Apportionments |
| 4.1 | entry |
Entry to the Property subject only to and with the benefit of the Lease will be given on the Date of Entry.
| 4.2 | rent apportionment etc |
| 4.2.1 | The Purchaser acknowledges by your acceptance hereof that the Lease is subject to a reduced rent of £1 per annum if asked in the period from 28 February 2015 to 27 August 2017 (both dates inclusive). There will accordingly be no apportionment of rents payable under the Lease as at Completion and the Seller and Purchaser will respectively be entitled to all such rents referable to the periods respectively preceding and following such reduced rent period. |
| 4.2.2 | If the Date of Entry is earlier than 30 April 2015 then the Price (and thus (subject to and without prejudice to Condition 4.2.3) the Completion Payment due to be paid by the Purchaser to the Seller at Completion) will be decreased by a sum calculated in accordance with the following formula: |
S = D x £2,535
where:
| S | is the sum to be thus deducted from the Price due by the Purchaser to the Seller; and |
| D | is the number of days (if any) comprised in the period commencing on the Date of Entry and ending on 29 April 2015 (both dates inclusive). |
| 4.2.3 | If Completion occurs later than the Date of Entry then the Purchaser shall pay to the Seller (by way of an increase in the Price) a sum calculated in accordance with the following formula: |
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S = D x £2,535
where:
| S | is the sum to be thus added to the Price due by the Purchaser to the Seller. |
| D | is the number of days (if any) comprised in the period (the “Relevant Delay Period”) commencing on the Date of Entry and ending on the date of Completion but excluding therefrom any period(s) of time during which the delay in Completion is due to any failure or breach by or on behalf of the Seller to implement its obligations or duties under the Missives on time. |
| 4.3 | other apportionments |
| 4.3.1 | All (if any) payments under the Lease and/or outgoings for the Property (other than rent, rates and insurance) will be apportioned as at Completion on an equitable basis. |
| 4.3.2 | Within 5 Working Days after Completion, the Seller or the Seller's Solicitors will advise the local authority of the change of ownership of the Property so that any apportionment of rates can be carried out by the local authority. |
| 5 | Other payments |
| 5.1 | arrears |
| 5.1.1 | If any payments under the Lease are in arrears at Completion the Purchaser will use all reasonable endeavours to procure payment from the Tenant as soon as practicable after Completion provided that the Seller keeps the Purchaser free of expense. |
| 5.1.2 | The Purchaser will pay to the Seller all sums relating to such arrears (together with any interest paid by the Tenant in terms of the Lease) within 5 Working Days of cleared funds being received from the Tenant. |
| 5.1.3 | If the Seller or its agents receive any payments from the Tenant after Completion which do not relate to arrears due to the Seller it will pay them to the Purchaser within 5 Working Days of the relevant cleared funds being received from the Tenant. |
| 5.1.4 | If requested by the other, the Seller and the Purchaser will each assign to the other such rights as are reasonably necessary to enable them to recover from the Tenant any sums due under the Lease to which they are entitled in terms of the Missives. The Seller may not take any steps to sequestrate the Tenant or appoint a receiver or liquidator to the Tenant. |
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| 5.2 | rent deposits |
There are no rent deposits paid by the Tenant and held by or to the order of the Seller (or their agents) as Landlords.
| 6 | Disclosed documents |
| 6.1 | Subject only to Condition 9 the Purchaser is deemed to have examined the Disclosed Documents and accepts that it is purchasing the Property on the basis that it has satisfied itself on all matters disclosed in them and on the validity and marketability of the Seller's title to the Property. |
| 6.2 | Condition 6.1 will override any other provision of the Missives apparently to the contrary and any confirmation given by the Seller in the Missives is given subject to the Disclosed Documents whether or not that is expressly stated. |
| 7 | Title |
| 7.1 | Encumbrances |
| 7.1.1 | So far as the Seller is aware there are no Encumbrances affecting the Property other than those specified or referred to in the Disclosed Documents. |
| 7.1.2 | The Property is sold with and under the Encumbrances affecting the Property whether specified or referred to in the Title Deeds or not. |
| 7.2 | minerals |
The minerals are included in the sale to the extent to which the Seller has any right to them.
| 7.3 | outstanding disputes |
During the period of the Seller's ownership of the Property, there have been no disputes which remain outstanding with neighbouring proprietors or third parties about items common to the Property and adjacent premises, access to or from the Property, the title to the Property or similar matters.
| 7.4 | possession |
The Seller confirms that it is currently in legal possession of the Property as landlord under the Lease and has been in such possession of the Property openly, peaceably and without judicial interruption for a continuous period of at least one year.
| 7.5 | community interests |
The Seller has not as far as it is aware received any notices in terms of Section 37 of the Land Reform (Scotland) Act 2003 in respect of the Property.
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| 7.6 | occupancy rights |
The Seller warrants that no part of the Property is (or has within the prescriptive period been) used as a private residence and consequently that the provisions of none of the Matrimonial Homes (Family Protection) (Scotland) Act 1981 as amended, or the Family Law (Scotland) Act 1985, or the Civil Partnership Act 2004 apply to the Property or any part of it, or to the Seller's interest in the Property.
| 7.7 | Advance Notices |
| 7.7.1 | The Seller will apply to the Keeper for an Advance Notice for the Disposition, in the form adjusted with the Purchaser, to be entered on the application record for the Property no earlier than 5 Working Days prior to the Date of Entry. The cost of such Advance Notice will be met by the Seller. |
| 7.7.2 | The Seller consents to the Purchaser applying to the Keeper for Advance Notices for any deeds which the Purchaser intends to grant in relation to the Property. The cost of any Advance Notices which the Purchaser applies for will be met by the Purchaser. |
| 7.7.3 | If the Seller rescinds the Missives in the circumstances set out in Condition 2.4 (Cancellation of Sale) the Purchaser will immediately discharge at its own cost any Advance Notice submitted by it if requested to do so by the Seller and consents to the discharge of all Advance Notices for the Disposition. |
| 7.7.4 | If Completion is likely to occur after the Date of Entry, the Seller, if requested to do so by the Purchaser, will apply for a further Advance Notice for the Disposition, in the form adjusted with the Purchaser, and the cost of any such additional Advance Notices will be met: |
| 7.7.4.1 | by the Seller if the delay in settlement is due to any failure or breach by or on behalf of the Seller to implement its obligations under the Missives on time; or |
| 7.7.4.2 | by the Purchaser if the delay in settlement is due to any failure or breach by or on behalf of the Purchaser to implement its obligations under the Missives on time. |
| 7.7.5 | The Seller’s Solicitors will not provide any letter of obligation. |
| 7.8 | Land Register Requirements |
| 7.8.1 | Subject to Conditions 6 and 7.8.2, the Seller will deliver to the Purchaser, on demand from time to time and at the Seller’s expense such documents and evidence as the Keeper may require to enable the Keeper to update or create (as the case may be) the Title Sheet of the Property to disclose the Purchaser as the registered proprietor of the whole of the Property. Such documents will include (unless the Property comprises part only of a building): |
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| 7.8.1.1 | a plan or bounding description sufficient to enable the Property to be identified on the cadastral map; and |
| 7.8.1.2 | evidence (such as a Plans Report) that the description of the Property in the Title Deeds is habile to include the whole of the occupied extent and there is no conflict between the extent of the Property and any registered cadastral units. |
| 7.8.2 | After Completion, the Seller will deliver such documents and evidence as are specified in Condition 7.8.1 only if the Disposition is presented for registration not later than 14 days after Completion. |
| 8 | Lease |
| 8.1 | confirmations |
The Seller confirms that, except as disclosed in Part 4 of the Schedule:
| 8.1.1 | The Lease accurately sets out the whole terms of the letting of the Property. |
| 8.1.2 | The Lease has not been amended or varied in a manner which is binding on the Purchaser and will not be so amended or varied prior to Completion except with the prior written consent of the Purchaser. |
| 8.1.3 | The information disclosed in the rent payment history (forming part of the Disclosed Documents) is complete and accurate in all material respects. |
| 8.1.4 | The Seller is not aware of any material breach by the Tenant of any of its obligations under the Lease which would not be reasonably ascertainable from an inspection of the Property. |
| 8.1.5 | The Seller has not received written notification from the Tenant of claims or disputes under the Lease against the Landlord which are outstanding. |
| 8.1.6 | There are no notices issued by the Seller to the Tenant, or by the Tenant to the Seller, under the Lease which remain to be implemented. |
| 8.1.7 | No notices by or on behalf of the Tenant exercising any option to break or terminate the Lease have been served on the Seller or vice versa. |
| 8.1.8 | The Seller has not received written notification of the insolvency, liquidation, administration or receivership of the Tenant. |
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| 8.1.9 | The Seller has not received written notification of the creation of any fixed or floating charges over the interest of the Tenant under the Lease. |
| 8.2 | period to completion |
The Seller will take all necessary steps which a prudent landlord (acting reasonably) would take in the interests of good estate management to ensure that the confirmations given in Condition 8.1 apply at Completion.
| 8.3 | interim management |
| 8.3.1 | In the period from the Conclusion Date until Completion, the Seller will: |
| 8.3.1.1 | implement its obligations as Landlord under the Lease; |
| 8.3.1.2 | continue to manage the Property and the Lease as a responsible landlord and in accordance with the principles of good estate management; and |
| 8.3.1.3 | disclose in writing any changes to the confirmations given in Condition 8.1. |
| 8.3.2 | The Seller will not: |
| 8.3.2.1 | terminate or accept a renunciation of the Lease; or |
| 8.3.2.2 | grant any new lease; or |
| 8.3.2.3 | vary the Lease; or |
| 8.3.2.4 | settle any rent review under the Lease, propose or agree any reference to a third party for determination of any rent review or make or agree any proposal for a reviewed rent; or |
| 8.3.2.5 | serve any notice under the Lease; or |
| 8.3.2.6 | carry out any alterations to the Property |
except with the prior written consent of the Purchaser.
| 8.3.3 | If any application to the Seller for its consent under the Lease is still outstanding, or if any such application is made prior to Completion, the Seller will not grant consent without the prior written approval of the Purchaser. In relation to each such application, the Purchaser will timeously comply with the obligations of the Seller, as Landlord, failing which the Purchaser will indemnify the Seller fully in respect of all liability incurred by the Seller to the Tenant in relation to the relevant applications. |
| 16 |
| 8.4 | rent reviews |
There are no outstanding rent reviews under the Lease.
| 9 | Completion |
| 9.1 | At Completion, the Purchaser will pay the Completion Payment (and any VAT on the Price) to the Seller in terms of Condition 2.1 and procure the release of the Deposit in cleared funds to the Seller in terms of Condition 2.1.1.2. |
| 9.2 | In exchange for the payment and release of the Deposit referred to in Condition 9.1, at Completion the Seller will deliver to the Purchaser: |
| 9.2.1 | disposition |
the Disposition duly executed by the Seller.
| 9.2.2 | title deeds |
the Title Deeds.
| 9.2.3 | leases |
the Lease.
| 9.2.4 | disclosed documents |
the Disclosed Documents.
| 9.2.5 | Legal Reports |
| 9.2.5.1 | a Legal Report brought down to a date as near as practicable to Completion which report will show: |
| 9.2.5.1.1 | no entries adverse to the Seller’s interest in the Property |
| 9.2.5.1.2 | the Advance Notice for the Disposition; and |
| 9.2.5.1.3 | no other Advance Notices other than those submitted by the Purchaser. |
the cost of the Reports and Search being the responsibility of the Seller.
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| 9.2.6 | discharge/deed of restriction |
a discharge/deed of restriction duly executed by the heritable creditor in any standard security affecting the Property together with completed and signed application forms for registration and payment for the correct amount of registration dues.
| 9.2.7 | letter of consent and non-crystallisation |
a letter of consent and non-crystallisation in the holder's usual form (releasing the Property from charge or otherwise in terms that confer a valid title on the subject to compliance with any time limit for registration of the Purchaser's title) in respect of the transaction envisaged by the Missives from each holder of a floating charge granted by the Seller.
| 9.2.8 | retrocession of assignation of rents |
a retrocession of assignation of rents duly executed by the creditor in terms of the draft forming Part 10 of the Schedule (subject to such if any amendments as are required by such creditor and approved by both Parties acting reasonably).
| 9.2.9 | change of landlord |
notices of change of landlord in terms of the draft notices forming Part 5 of the Schedule addressed to the Tenant and the Guarantor respectively and signed by the Seller's Solicitors.
| 9.2.10 | assignation of guarantee |
the Assignation of Guarantee duly executed by the Seller.
| 9.2.11 | opinion letter |
the Opinion Letter (in pdf format) sent by email and dated no earlier than 2 Working Days prior to Completion.
| 9.2.12 | other documents |
any other deeds and documents to be delivered to the Purchaser on or before Completion in terms of the Missives.
| 10 | Post Completion |
Provided that the Disposition is presented for registration prior to the earlier of 14 days after Completion and the date of expiry of the last Advance Notice registered in relation to the Disposition in terms of Condition 7.7, the updated or newly created Title Sheet of the Property will contain no exclusion or limitation of warranty in terms of Section 75 of the 2012 Act and disclose no entry, deed or diligence (including any charging order under the Buildings (Recovery of Expenses) (Scotland) Act 2014 or any notice of potential liability for costs registered under the Tenements (Scotland) Act 2004 or the Title Conditions (Scotland) Act 2003) prejudicial to the interest of the Purchasers other than such as are created by or against the Purchaser or have been disclosed to, and accepted in writing by, the Purchaser prior to Completion.
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| 11 | Insurance |
| 11.1 | From the Conclusion Date until Completion, the Seller will keep the Property insured in accordance with the Landlords' obligations under the Lease. As soon as reasonably practicable after the Conclusion Date, the Seller will make available to the Purchaser written details of such insurances, if it has not already provided this information. |
| 11.2 | Immediately following the Conclusion Date, the Seller will use its reasonable endeavours to have the Purchaser's interest in the Property (as purchaser, price unpaid) endorsed or noted on or otherwise (either specifically or generically) covered by its policies of insurance in respect of or relating to the Property and will exhibit evidence to the Purchaser that it has done so. |
| 11.3 | The Seller will: |
| 11.3.1 | within 5 Working Days after Completion cancel such insurances (under reservation of all prior claims), and |
| 11.3.2 | provided that the insurance premiums have been paid in full by the Tenant, within 5 Working Days of receipt, refund to the relevant Tenants all repayments of premium due to them and exhibit evidence to the Purchaser of having done so. |
| 12 | Damage or Destruction |
| 12.1 | Risk of damage to or destruction of the Property will not pass to the Purchaser until Completion. |
| 12.2 | If prior to Completion the Property sustains damage (whether insured or otherwise) which at common law would entitle a hypothetical tenant under a hypothetical lease of the Property to an abatement of rent of an amount exceeding 20% of the rent, either party will be entitled to resile from the Missives without penalty on delivery of written notice to that effect to the other's solicitors no later than midday on the date on which Completion is due to take place, time being of the essence. |
| 12.3 | If there is any dispute as to whether the Property has suffered such damage, the matter will be referred to the decision of an independent surveyor, who will act as an expert, appointed, failing agreement, by the Chairman of the RICS in Scotland on application by either party. The independent surveyor's decision will be binding on the parties. If the independent surveyor dies, delays or becomes unwilling or incapable of acting then either the Seller or the Purchaser may apply to the Chairman to discharge that independent surveyor and appoint a replacement. The fees and expenses of the independent surveyor and the cost of appointment are payable by the Seller and the Purchaser in the proportions which the independent surveyor directs and if no direction is made, equally. |
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| 12.4 | Subject to Condition 12.2 if the Property is damaged or destroyed by an insured risk prior to Completion, the Seller's responsibility to the Purchaser at Completion will be: |
| 12.4.1 | to pay to the Purchaser the insurance proceeds received by the Seller to the extent that they have not been spent on reinstatement; and |
| 12.4.2 | to assign its rights in respect of the insurance proceeds specified in Condition 12.4.1 to the Purchaser. |
| 13 | Statutory matters |
| 13.1 | statute |
The Purchaser is deemed to have satisfied itself on the application of all statute and statutory regulations and rules in so far as affecting or relating to the Property and, except as expressly provided for in the Missives, the Seller gives no warranties or assurances on such matters.
| 13.2 | statutory repairs notices |
Any local authority statutory repairs notices (other than any notice or requirement of any Environmental Authority made pursuant to any Environmental Law (as such terms are defined in Condition 14)) affecting the Property which are issued prior to the Date of Entry will as between the Purchaser and the Seller be the responsibility of the Seller except to the extent that (i) they are instigated by or with the authority of the Purchaser or (ii) they are the responsibility of the Tenant in accordance with the Lease. Liability under this Condition will subsist until met and will not be avoided by the issue of a fresh notice.
| 13.3 | energy performance certificate |
The Seller confirms that a valid current energy performance certificate (in terms of the Energy Performance of Buildings (Scotland) Regulations 2008) has been obtained for, and affixed to, the Property.
| 13.4 | green deal |
As far as the Seller is aware the Property is not subject to a green deal plan as defined in Section 1 of the Energy Act 2011.
| 14 | No employees |
| 14.1 | As at the Conclusion Date and Completion, the Seller confirms that there are no persons to whom the provisions of the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("Employment Regulations") will apply in relation to: |
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| 14.1.1 | the sale of the Property; and |
| 14.1.2 | the creation or cessation of any contractual relationship consequent to such sale; |
with the effect of such person’s employment (or liability for it and its termination) being deemed to transfer to the Purchaser at Completion.
| 14.2 | If it is asserted or found by a court or tribunal that the Employment Regulations apply in relation to any person ("Employee"), the Purchaser may terminate the employment of the Employee within 10 Working Days, where it has not already terminated, and if the Purchaser complies with its obligations under this Condition 14 (where applicable), the Seller undertakes to keep the Purchaser indemnified, on demand, against all costs, claims, liabilities and expenses (including reasonable legal expenses) of any nature arising out of the employment of the Employee prior to Completion or the termination of it (whether it is terminated by the Purchaser or any other person and whether before, on or after Completion). |
| 15 | Guarantee |
| 15.1 | The Guarantee will be assigned to the Purchaser in terms of the Assignation of Guarantee. |
| 15.2 | The Purchaser will: |
| 15.2.1 | within 15 Working Days after Completion duly execute the Assignation of Guarantee delivered to the Purchaser at Completion; and |
| 15.2.2 | within 20 Working Days after Completion, intimate the Assignation of Guarantee to the Guarantor and deliver a copy of the intimation to the Seller. |
| 16 | Capital allowances |
| 16.1 | Purchaser and the Seller agree that the portion of the Price attributable to items of Fixed Plant is £260,136.66 (subject to Condition 16.3). |
| 16.2 | The Seller and the Purchaser recognise that because the Seller's expenditure on the acquisition of the Property was incurred before 1 April 2008, and the Seller has not subsequently incurred capital expenditure in relation to the refurbishment or development of the Property, the Seller is not required to bring any disposal values into account in respect of those integral features within the Property which prior to 1 April 2008 did not qualify for plant and machinery allowances. |
| 16.3 | If the Date of Entry is a date earlier than 30 April 2015 the portion of the Price attributable to items of Fixed Plant will be recalculated on the basis that the Seller shall only claim writing down allowances to the Date of Entry. |
| 16.4 | The Purchaser will make an election with the Seller under Section 198 of the Capital Allowances Act 2001 in terms of the draft contained in Part 7 of the Schedule, in which case: |
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| 16.4.1 | on Completion, the Seller and the Purchaser will sign in duplicate the election agreeing the value of Fixed Plant in accordance with clauses 16.1 and 16.3 above, being the disposal value for the Fixed Plant required to be brought into account by the Seller and falling to be treated as expenditure incurred by the Purchaser on the provision of the Fixed Plant and the Seller confirms that the amount attributed to the Fixed Plant in the election will not be in excess of the aggregate amount treated for the purposes of the Capital Allowances Act 2001 as having been paid by the Seller for the Fixed Plant; |
| 16.4.2 | both the Seller and the Purchaser will submit the election to HMRC within the time limit prescribed by law and take all reasonable steps to procure that the value is accepted by HMRC; |
| 16.4.3 | the Seller and the Purchaser agree to reflect such value in their relevant tax computations and returns. |
| 16.5 | The Seller will use reasonable endeavours to provide, or procure that its agents provide: |
| 16.5.1 | copies of all relevant information in its possession or that of its agents, and |
| 16.5.2 | such cooperation and assistance as the Purchaser may reasonably require |
to enable the Purchaser to make and substantiate claims under the Capital Allowances Act 2001 in respect of the Property.
| 16.6 | The Purchaser agrees that it will: |
| 16.6.1 | use the information provided pursuant to Condition 16.5 only for the stated purpose; and |
| 16.6.2 | not disclose, without the reasonable consent of the Seller, any such information which the Seller expressly provides on a confidential basis. |
| 17 | Access |
Subject to the terms of the Lease access to the Property prior to the Date of Entry will be given to the Purchaser, its surveyors and other professional advisers for all reasonable purposes (including examining the Property), provided that the Purchaser will ensure that in doing so they:
| 17.1 | comply with the Seller's reasonable requirements, |
| 17.2 | comply with the access restrictions imposed on the Landlord under the Lease; and |
| 17.3 | exercise reasonable restraint and make good all loss, injury and damage caused to the Property and any claim from the Tenant. |
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| 18 | Confidentiality |
| 18.1 | generally |
Save as after provided in Condition 18.2 the Purchaser and the Seller will not disclose details of the Missives or the acquisition of the Property by the Purchaser to the press or otherwise except:
| 18.1.1 | with the prior written consent of the other party; |
| 18.1.2 | to the Purchaser and the Seller's respective affiliates on the basis that such affiliates are bound in the same terms mutatis mutandis as this Condition 18.1; |
| 18.1.3 | to the Purchaser and the Seller's respective agents and professional advisers in connection with the acquisition/sale of the Property; |
| 18.1.4 | to the Purchaser's bankers or other providers of finance (and their professional advisers) in connection with the acquisition of the Property; |
| 18.1.5 | where required by law; and |
| 18.1.6 | where required to comply with the requirements of the Stock Exchange or any other regulatory or government authority. |
| 18.2 | press releases |
The Purchaser may after Completion publish a press release and/or make such announcement as it sees fit in relation to its purchase of the Property, provided that it will not disclose the identity of the Seller in doing so.
| 19 | Formal documentation |
| 19.1 | formal documentation required |
Neither the Seller nor the Purchaser will be bound by any acceptance of this offer or any other letter purporting to form part of the Missives or any amendment or variation of the Missives unless it is duly executed.
| 19.2 | complete agreement |
The Missives (including the annexations) will represent and express the full and complete agreement between the Seller and the Purchaser at the Conclusion Date relating to the sale of the Property and will supersede any previous agreements between the Seller and the Purchaser relating to such sale. Neither the Seller nor the Purchaser has been induced to enter into the Missives on account of any prior warranties or representations.
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| 20 | Supersession |
The provisions of the Missives (other than Conditions 2.4, 7.8 and 10 which will remain in full force and effect until implemented) in so far as not implemented by the granting and delivery of the Disposition and others, will remain in full force and effect until:
| 20.1 | in the case of the Lease confirmations given in Condition 8.1, 6 years after the Date of Entry; |
| 20.2 | in the case of the provisions in Condition 5.1, 6 months after the Date of Entry; and |
| 20.3 | in the case of all other provisions the earlier of: |
| 20.3.1 | the date when such provisions have been implemented; and |
| 20.3.2 | 2 years after the Date of Entry except in so far as they are founded on in any court proceedings which have commenced within such 2 year period. |
| 21 | Exclusion of Personal Liability |
| 21.1 | No personal liability will attach to the Purchaser's Solicitors by virtue of their entering into the Missives in their capacity as agents for the Purchaser. |
| 21.2 | No personal liability will attach to the Seller's Solicitors by virtue of their entering into the Missives in their capacity as agents for the Seller. |
| 21.3 | The Seller and the Purchaser will be solely liable to each other for compliance with, and fulfilment of, their respective obligations under the Missives. |
| 22 | Assignation |
The Purchaser may not (whether at common law or otherwise):
| 22.1.1 | assign, transfer, grant any security interest over, hold on trust or deal in any other manner with the benefit of the whole or any part of its interest in the Missives; |
| 22.1.2 | sub-contract any or all of its obligations under the Missives; nor |
| 22.1.3 | purport to do any of the foregoing. |
| 23 | Proper Law and Prorogation |
The Missives and the rights and obligations of the Seller and the Purchaser will be governed by and construed in accordance with the law of Scotland and the Seller and the Purchaser will be deemed to have agreed to submit to the non-exclusive jurisdiction of the Scottish courts.
| 24 |
| 24 | Time limit |
This offer, if not previously withdrawn, will fall unless a binding written acceptance has been received by us by 5 pm on 20 March 2015.
Yours faithfully
| Signed on behalf of Brodies LLP | Witness | ||
| by James Ian Roscoe, Member | |||
| 15 Atholl Crescent, | |||
| Edinburgh | |||
| EH3 8HA | |||
| 25 |
This is the Schedule referred to in the foregoing offer by Brodies LLP (on behalf of Quarry Town Limited) to Morton Fraser LLP (on behalf of ARC NCKWYDE001, LLC) in respect of Discovery Centre, Dundee DD2 4SW
Part 1
Disclosed Documents
| 1 | Title Deeds |
| 2 | Lease |
| 3 | Property enquiry certificate for Discovery Centre, Dundee dated 13 January 2015 |
| 4 | Copy of Title Sheet ANG10480 dated 20 October 2014 (re neighbouring property) |
| 5 | Legal Report Property over ANG3945 certified to 12 January 2015 |
| 6 | Copy of Title Sheet ANG29855 dated 20 Oct 2014 (tenant’s interest under lease) |
| 7 | Copy of Standard Security dated 10 December 2004 by Quarry Town Limited in favour of Capita IRG Trustees Limited as Security Trustee therein mentioned |
| 8 | Copy of Debenture dated 16 December 2004 by Quarry Town Limited in favour of Capita IRG Trustees Limited as Security Trustee therein mentioned |
| 9 | Copy of Rental Assignation dated 10 December 2004 by Quarry Town Limited in favour of Capita IRG Trustees Limited as Security Trustee therein mentioned |
| 10 | Copies of Planning Permissions: |
| 10.1 | Planning Approval D23770 dated 27 April 1999 (including application form, drawings and correspondence with the Planning Dept dated 16 and 23 Dec 1999 and 8 March 2001) |
| 10.2 | Planning Approval D24350 dated 16 December 1999 |
| 10.3 | Planning Approval 01/30012/ADV dated 16 July 2001 (including application form and drawings) |
| 10.4 | Planning Approval 01/25117/D dated 27 May 2003 (including drawings) |
| 11 | Copies of Building Warrants: |
| 11.1 | Building Warrant Approval 99/0151/BW (Stage 1) |
| 11.2 | Building Warrant Approval 00/0309/ALT (Amendment 1 to Stage 1) |
| 26 |
| 11.3 | Building Warrant Approval 00/0540/BW (Stage 2) |
| 11.4 | Relaxation Direction 2 (Regulation 9 – Technical Standard E9.4b) dated 13/12/2000 |
| 11.5 | Building Warrant Approval 00/0854/BW (Stage 3) |
| 11.6 | Building Warrant Approval 01/00742/ALT (Amendment 1 to Stage 3) |
| 11.7 | Building Warrant Approval 01/00473/BW (Stage 4) |
| 11.8 | Building Warrant Approval 01/00741/ALT (Stage 1) |
| 11.9 | Building Warrant Approval 01/00876/NBUILD (Amendment 2 to Stage 3) |
| 11.10 | Relaxation Direction 1 (Regulation 9 – Technical Standard E5.4) dated 3/10/2001 |
| 11.11 | Building Warrant Approval 01/00968/NBUILD (Amendment 1 to Stage 4) |
| 11.12 | Building Warrant Approval 03/00137/NBUILD |
| 12 | Copies of Completion Certificates: |
| 12.1 | Certificate of Completion 00/00540/BW. |
| 12.2 | Certificate of Completion 00/0854/BW (incl. – 01/00742/ALT & 01/00876/NBUILD). |
| 12.3 | Certificate of Completion 99/00151/BW (inc. – 01/0309/ALT & 01/00741/ALT). |
| 12.4 | Certificate of Completion 01/00473/BW (incl. – Relation Regulation 9 – Technical Standard E5.4 & Regulation 9 – Technical Standard E9.4b). |
| 12.5 | Certificate of Completion 01/00968/NBUILD. |
| 12.6 | Certificate of Completion 03/00137/NBUILD. |
| 13 | NCR Accounts: |
| 13.1 | 31 December 2013 |
| 13.2 | 31 December 2012 |
| 13.3 | 31 December 2011 |
| 14 | NCR Financial Solutions Group Limited charges search (to 19 December 2014) |
| 15 | Certificates of Insurance: |
| 15.1 | 1 January 2014 – 31 December 2014 |
| 27 |
| 15.2 | 1 January 2015 – 31 December 2015 |
| 16 | Invoices for 2015 insurance costs |
| 17 | Rateable Value |
| 18 | Reinstatement Cost Assessments – October 2011 |
| 19 | Floor Plans: |
| 19.1 | 1st Floor East Office Aug 2011 |
| 19.2 | 1st Floor West Labs Aug 2011 |
| 19.3 | 2nd Floor East Offices Aug 2011 |
| 19.4 | 2nd Floor West Offices Aug 2011 |
| 19.5 | 3rd Floor East Offices Aug 2011 |
| 19.6 | 3rd Floor West Offices Aug 2011 |
| 19.7 | Ground Floor East Aug 2011 |
| 19.8 | Ground Floor West Aug 2011 |
| 20 | Energy Performance Certificate dated 14 February 2014 |
| 21 | Rent Payment History |
| 22 | Debtor history report dated 1 December 2014 |
| 23 | Latest rental invoice (28 November 2014 – 27 February 2015) |
| 24 | Roads adoption plan |
| 25 | Fire risk assessment July 2012 |
| 26 | Fire risk assessment August 2014 |
| 27 | Centre Risk Assessment April 2014 |
| 28 | DDA Accessibility Appraisal dated 22 February 2013 |
| 29 | Election to waive VAT exemption |
| 30 | Election to waive VAT exemption dated 13 October 2004 |
| 31 | Election to waive VAT exemption dated 13 December 2004 |
| 28 |
| 32 | Notification of VAT Registration dated 13 October 2004 |
| 33 | Non-resident landlord scheme approval |
| 34 | S. 198 Capital Allowances Election and 2004 CA election |
| 29 |
Part 2
Title Deeds
Title Sheet in respect of Title Number ANG3945 updated to 20 October 2014.
| 30 |
Part 3
Lease
Lease among Balgarthno Estates Limited, NCR Financial Solutions Group Limited and NCR Corporation dated 12, 17 and 25 November 2003 and registered in the Books of Council and Session on 2 March 2004 (and registered in the Land Register of Scotland under Title Number ANG29855) as varied by:
| 1. | Minute of Agreement among Balgarthno Estates Limited, NCR Financial Solutions Group Limited and NCR Corporation dated 12, 17 and 25 November 2003 and registered in the Books of Council and Session on 2 March 2004; |
| 2. | Licence for Works Agreement among Balgarthno Estates Limited, NCR Financial Solutions Group Limited and NCR Corporation dated 9 and 15 November and 1 December 2004 and registered in the Books of Council and Session on 9 December 2004; |
| 3. | Licence for Works Agreement between Quarry Town Limited and NCR Financial Solutions Group Limited with the consent of NCR Corporation dated 19 July, 8 August and 15 September 2011 and registered in the Books of Council and Session on 10 January 2012; and |
| 4. | Minute of Agreement among Quarry Town Limited, NCR Financial Solutions Group Limited and NCR Corporation dated 3, 12 and 17 November 2014 and registered in the Books of Council and Session on 3 December 2014. |
| 31 |
Part 4
Disclosures against Lease Confirmations
None
| 32 |
Part 5
Notices of Change of Landlord
NCR Financial Solutions Group Limited
206/216 Marylebone Road
London
NW1 6LY
Dear Sirs
DISCOVERY CENTRE, 3 FULTON ROAD, DUNDEE, ANGUS DD2 4SW (the "Property")
On behalf of our client, Quarry Town Limited, incorporated under the Companies Ordinance in Gibraltar with Registered Number 87249 and having its Registered Office at Suites 7b and 8b, 50 Town Range, Gibraltar (the “Seller”) we intimate to you (the "Tenants") that, as from [insert Date of Entry] 2015, the Seller has sold its interest as your landlord in the Property to ARC NCKWYDE001, LLC, a Limited Liability Company registered under the Laws of the State of Delaware, United States of America (File Number 5671188) and having its Registered Office at 2711 Centerville Road, Suite 400, Wilmington, 19808 USA (the "Purchaser").
Future rent demands will be issued by or on behalf of the Purchaser and future communications concerning any matter arising from the letting should be addressed to the Purchaser c/o their property manager, namely Moor Park Capital Partners LLP (in their capacity as property manager for the Landlord), 2nd Floor, 37-38 Margaret Street, London W1G 0JF.
We also intimate that the Seller has received a retrocession from Capita IRG Trustees Limited, as agent and security trustee, of their right, title and interest to the rent and other sums receivable in terms of the assignation of rents granted by the Seller in their favour dated 10 December 2004 (a certified copy of which retrocession accompanies this letter).
This letter is enclosed in duplicate. Kindly post the duplicate, with the docquet on it duly signed, to the solicitors acting for the Purchaser: Morton Fraser LLP (ref. Michael Ramsay), Quartermile Two, 2 Lister Square, Edinburgh EH3 9GL.
Yours faithfully
Agents for Quarry Town Limited
................................. 2015
We acknowledge receipt of the notice of which the above is a duplicate.
....................................................
For and on behalf of the Tenants
| 33 |
NCR Corporation
3097 Satellite Blvd.
Duluth
GA 30096
USA
Dear Sirs
DISCOVERY CENTRE, 3 FULTON ROAD, DUNDEE, ANGUS DD2 4SW (the "Property")
On behalf of our client, Quarry Town Limited, incorporated under the Companies Ordinance in Gibraltar with Registered Number 87249 and having its Registered Office at Suites 7b and 8b, 50 Town Range, Gibraltar (the “Seller”) we intimate to you (the "Guarantor") as guarantor of the tenant of the Property that, as from [insert Date of Entry] 2015, the Seller has sold its interest as landlord of the Property to ARC NCKWYDE001, LLC, a Limited Liability Company registered under the Laws of the State of Delaware, United States of America (File Number 5671188) and having its Registered Office at 2711 Centerville Road, Suite 400, Wilmington, 19808 USA (the "Purchaser").
Future rent demands will be issued to the tenant by or on behalf of the Purchaser and future communications concerning any matter arising from the letting should be addressed to the Purchaser c/o their property manager, namely Moor Park Capital Partners LLP (in their capacity as property manager for the Landlord), 2nd Floor, 37-38 Margaret Street, London W1G 0JF.
We also intimate that the Seller has received a retrocession from Capita IRG Trustees Limited, as agent and security trustee, of their right, title and interest to the rent and other sums receivable in terms of the assignation of rents granted by the Seller in their favour dated 10 December 2004 (a certified copy of which retrocession accompanies this letter).
This letter is enclosed in duplicate. Kindly post the duplicate, with the docquet on it duly signed, to the solicitors acting for the Purchaser: Morton Fraser LLP (ref. Michael Ramsay), Quartermile Two, 2 Lister Square, Edinburgh EH3 9GL.
Yours faithfully
Agents for Quarry Town Limited
................................. 2015
We acknowledge receipt of the notice of which the above is a duplicate.
....................................................
For and on behalf of NCR Corporation
| 34 |
Part 6
Disposition
DISPOSITION
by
Quarry Town limited
in favour of
ARC NCKWYDE001, LLC
Subjects: The Discovery Centre, 3 Fulton Road, Dundee (Title Number ANG3945)
Brodies LLP
15 Atholl Crescent
Edinburgh EH3 8HA
T: 0131 228 3777
F: 0131 228 3878
DX ED 10
Ref: KCLA/DAJ/JIR/QUA32.2
FAS 1468
2015
| 35 |
DISPOSITION
by
QUARRY TOWN LIMITED
in favour of
ARC NCKWYDE001, LLC
| 1 | Definitions |
In this deed unless the context otherwise requires:
| 1.1 | "Sellers" means Quarry Town Limited, incorporated under the Companies Ordinance in Gibraltar with Registered Number 87249 and having its Registered Office at Suites 7b and 8b, 50 Town Range, Gibraltar; |
| 1.2 | "Purchasers" means ARC NCKWYDE001, LLC, a Limited Liability Company registered under the Laws of the State of Delaware, United States of America (File Number 5671188) and having its Registered Office at 2711 Centerville Road, Suite 400, Wilmington, 19808 USA; |
| 1.3 | "Price" means the sum of […………….] POUNDS (£[…………..]) Sterling exclusive of any VAT;1 |
| 1.4 | "Lease" means the lease of the Subjects entered into among Balgarthno Estates Limited, the NCR Financial Solutions Group Limited and NCR Corporation dated 12, 17 and 25 November 2003 and registered in the Books of Council and Session on 2 March 2004 as varied and amended by (1) the Minute of Agreement entered into among Balgarthno Estates Limited, the NCR Financial Solutions Group Limited and NCR Corporation dated 12, 17 and 25 November 2003 and registered in the Books of Council and Session on 2 March 2004; and (2) the Minute of Variation entered into among Quarry Town Limited, NCR Financial Solutions Group Limited and NCR Corporation dated 3, 12 and 17 November 2014 and registered in the Books of Council and Session on 3 December 2014, the tenant’s interest in which lease is registered in the Land Register of Scotland under Title Number ANG29855; and |
| 1.5 | "Subjects" means the subjects described in Clause 3. |
| 2 | Narrative |
| 2.1 | The Sellers are the heritable proprietors of the Subjects. |
| 2.2 | The Sellers have sold the Subjects to the Purchasers in consideration of the Price. |
| 2.3 | The Sellers acknowledge receipt of the Price. |
1 The Price as finalised in terms of the Missives (but excluding any adjustment thereto in terms of Condition 4.2.3) to be inserted
| 36 |
| 3 | Disposition |
The Sellers dispone to the Purchasers and to their successors and assignees whomsoever heritably and irredeemably ALL and WHOLE the subjects known generally as Discovery Centre, 3 Fulton Road, Dundee, Angus DD2 4SW being the subjects and others registered in the Land Register of Scotland under Title Number ANG3945.
| 4 | Entry |
The Sellers grant entry and vacant possession to the Subjects (subject to the Lease) on […….] 2015.2
| 5 | Warrandice |
The Sellers grant warrandice but excepting therefrom the Lease.
| 6 | Trust clause |
The Sellers declare that they hold the Subjects in trust for the Purchasers absolutely until the earlier of 14 days from the date of entry and the date of registration in the Land Register of Scotland of the Purchasers’ interest in the Subjects, but solely for the purpose of holding title to the Subjects; from the date of entry the Sellers qua trustee under that trust shall be under no duty to maintain or preserve the Subjects nor to insure the Subjects against fire or other insurable risks.
| 7 | Testing clause |
This document is executed as follows:
For Quarry Town Limited
| signature of witness |
signature of director/secretary/authorised signatory | ||
| full name of above (print) | full name of above (print) | ||
| date of signing | |||
| address of witness | place of signing | ||
2 The Date of Entry as finalised in terms of the Missive to be inserted
| 37 |
Part 7
Capital Allowances Election
| 1 | The parties to the Joint Election |
The Seller
Quarry Town Limited, incorporated under the Companies Ordinance in Gibraltar with Registered Number
Tax Reference [………………]
The Purchaser
ARC NCKWYDE001, LLC, a Limited Liability Company registered under the Laws of the State of Delaware, United States of America (File Number 5671188) and having its Registered Office at 2711 Centerville Road, Suite 400, Wilmington, 19808 USA
Tax Reference [………….….]
| 2 | The Property |
The Property is the Discovery Centre, 3 Fulton Road, Dundee, Angus DD2 4SW the title to which is registered in the Land Register of Scotland under Title Number ANG3945
| 3 | The interest acquired |
The interest in land to which this election relates and which has been acquired by the Purchaser is the heritable interest in the Property.
| 4 | The joint election |
The Seller and the Purchaser jointly elect, pursuant to the provisions of Section 198 of the Capital Allowances Act 2001, that the amount which, for all purposes of Part 2 of the Capital Allowances Act 2001, is to be taken as the portion of the sale price of the interest specified above which falls to be treated as capital expenditure incurred by the Purchaser on the provision of plant and machinery fixtures is £[……] (Note : insert same figure are finalised below) which amount shall be further apportioned as below.
As the Seller's expenditure incurred on the Property was pre 1 April 2008 this section 198 election does not apply to any integral features that only became qualifying from 1 April 2008. The Purchaser is the first new owner of the Property since 1 April 2008 and should be entitled to submit a claim in relation to these previously non qualifying assets based on an apportionment of the Purchase Price. No disposal values are required to be brought in by the Seller in relation to these assets.
| 38 |
| plant and machinery fixtures which are integral features (within the meaning of section 33A(5) of the Capital Allowances Act 2001) | 0 |
| plant and machinery fixtures which are not integral features |
[£…] Note : insert £260,136.66 as adjusted, if applicable, in accordance with Condition 16.3 of the Missives |
The operative date for capital allowances purposes in accordance with the Capital Allowances Act 2001 s.572(4) is [Insert date of Completion or, if earlier, time when possession of Property is given] 2015.
| Signed | Signed |
| Name | Name | |||
| For and on behalf of the Seller | For and on behalf of the Purchaser | |||
| 39 |
Part 8
Capital Goods Scheme
None
| 40 |
Part 9
Opinion Letter
[to be issued on Hassans headed notepaper]
ARC NCKWYDE001, LLC
2711 Centerville Road
Suite 400
Wilmington 19808
USA
Dear Sirs
Quarry Town Limited (“the Company”)
| 1. | We refer to the terms of the documents more specifically referred to at paragraph 3 below, which are to be executed by the Company in connection with the sale of the property known as Discovery Centre, 3 Fulton Road, Dundee, Angus DD2 4SW, registered in the Land Register of Scotland under Title Number ANG3945 (“the Property”). |
| 2. | We are lawyers qualified to practise in Gibraltar. We have not made any investigation of, and do not express any opinion, as to the laws of any jurisdiction outside Gibraltar. This Opinion is given only in respect of the present laws of Gibraltar and having effect in Gibraltar and is limited to the facts and circumstances disclosed to us and subsisting at the date hereof as set out herein. |
| 3. | For the purposes of this Opinion, we have examined the following documents:- |
| (a) | a copy of an offer to sell the Property to ARC NCKWYDE001, LLC (“the Purchaser”) made by Brodies LLP on behalf of the Company, executed by Brodies LLP on behalf of the Company on [..] 2015 ("the Offer"); |
| (b) | a copy of the documents to be signed and delivered by the Company in terms of the Offer, namely the Disposition, Capital Allowances Election and the Assignation of Guarantee (all as defined therein) |
The documents referred to at paragraph 3 shall be collectively referred to as “the Agreements”.
| 4. | We have in addition examined the following documents: |
| (a) | a certified true copy of the Certificate of Incorporation of the Company; |
| (b) | a certified true copy of the Memorandum & Articles of Association of the Company; |
| (c) | a certified true copy of the Minutes of a meeting of the Board of Directors of the Company approving inter alia the terms of the Agreements and authorising due acceptance of the same by the Company (“the Minutes”); and |
| 41 |
| (d) | a Certificate of Good Standing, dated as at the date thereof, obtained from Companies House, Gibraltar in respect of the Company (“the Certificate”) (copy enclosed). |
(together, “the Documents”)
Save as stated above, we have not examined or considered any other documentation whatsoever, nor have we made any other investigations or enquiries.
| 5. | In giving this Opinion, we have assumed without making any independent enquiry: |
| (a) | the capacity, power and authority of all parties other than the Company, to enter into and perform their respective obligations under the Agreements in accordance with the laws by which they are expressed to be governed; |
| (b) | that all necessary corporate action has been taken to authorise the issue and execution of the Agreements by all parties other than the Company; |
| (c) | that the Agreements will constitute legal, valid and binding agreements enforceable in accordance with their respective terms, under their respective governing laws; |
| (d) | that the Agreements will be delivered to you unconditionally; |
| (e) | that the information which has been made available to us by Companies House, Gibraltar and the secretary of the Company was complete, accurate and up-to-date as of the date on which it was issued and did not fail to disclose any material filings at the Companies Registry in Gibraltar and that the information contained in the Certificate is accurate as at the date hereof; |
| (f) | the genuineness of all and any signatures and seals; |
| (g) | the completeness and conformity to the originals of all documents submitted to us purporting to be copies or drafts of the originals; |
| (h) | to the extent that the obligations of any of the parties may be dependent upon such matters: |
| (i) | that each party to the Agreements, other than the Company, is duly incorporated and organised validly existing under the laws of its principal place of business; |
| (ii) | that all acts, conditions and things required to be done, fulfilled or undertaken under any law (including any and all authorisations and consents of any public authority of any jurisdiction), other than that of Gibraltar, in respect of the lawful execution or performance of the Agreements and in order to ensure that the Agreements are binding upon and enforceable against the parties thereto, other than the Company, have been, or will be done, fulfilled, undertaken or obtained; and |
| 42 |
| (iii) | that insofar as any obligations under the Agreements are to be performed in any jurisdiction outside Gibraltar their performance will be legal and effective in accordance with the laws of that jurisdiction and that in executing the Agreements the Company is not in breach of any other agreement, obligation or trust; |
| (i) | that no circumstances exist which would justify the setting aside of the Agreements by reason of fraud, misrepresentation, mistake or undue influence; |
| (j) | that the Company is solvent at the time of issue of this Opinion; |
| (k) | that the Company is not in administration; |
| (l) | that the resolutions contained in the Minutes have been duly passed at properly convened, constituted and conducted meetings of the duly appointed Directors of the Company, at which all constitutional and other formalities have been observed and that the Minutes are a true, complete and accurate record of the proceedings at such meeting, and that none of the resolutions contained in the Minutes have been revoked, rescinded or otherwise amended or modified; |
| (m) | the choice of law to govern the Agreements is bona fide and is objectively concerned with the Agreements and was not made with the intention of evading the laws of Gibraltar or the jurisdiction of the Supreme Court of Gibraltar; |
| (n) | the copy of the Company's Memorandum & Articles of Association is a complete and true copy of the original Memorandum & Articles of Association of the Company, as currently in force, and that no change had been made to it prior to the execution of the Agreements; |
| (o) | that the Company will derive commercial benefit from entering into the Agreements; |
| (p) | that it is not intended to obtain security over any real property in Gibraltar in connection with the Agreements; and |
| (q) | that, in connection with the Agreements, no profits of the Company will accrue in, or be derived from, Gibraltar. |
| 6. | Based on the above and subject to the qualifications, reservations and assumptions detailed in Paragraph 7 and Paragraph 9 below, we are of the opinion that: |
| (a) | The Company is a corporate body incorporated on the 22nd January 2003 and is duly established and existing with limited liability under the laws of Gibraltar. |
| 43 |
| (b) | The Certificate shows, at the date hereof, that the Registered Office of the Company is Suites 7B & 8B, 50 Town Range, Gibraltar, the incorporation number of the Company is 87249, the Directors of the Company are Finsbury Corporate Services Limited and the authorised share capital of the Company is £9,000 divided into 9,000 Ordinary Shares of £1 each. |
| (c) | The Company has corporate power and legal capacity to carry on business as set out in its Memorandum and Articles of Association, to hold, dispose of, charge and otherwise deal with property, and to enter into and perform its obligations under the Agreements and to sue and be sued in its own name. |
| (d) | The Company has taken all actions required on its part to authorise the execution, delivery, performance and observance of the Agreements. |
| (e) | The execution delivery and performance by the Company of the Agreements will not:- |
| i) | contravene any existing law, regulation, Act, decree or authorisation to which it is subject; |
| ii) | contravene any provisions of the Company's Certificate of Incorporation or Memorandum and Articles of Association. |
| (f) | The Agreements, executed by and on behalf of the Company in accordance with the authority conferred by the Minutes will, when delivered, constitute valid and legally binding obligations of the Company enforceable in accordance with their respective terms. |
| (g) | Save as otherwise stated in this Opinion, no consent permit licence approval or authorisation or exemption under Gibraltar law from any government judicial or other authority is required in connection with the execution, delivery, performance, service, validity or enforceability of the Agreements. |
| (h) | Save as otherwise stated in this Opinion, the Company has obtained all authorisations, approvals and consents (including without limitation any exchange control consents) from all governmental or other authorities in Gibraltar necessary or appropriate for the execution and delivery by it of the Agreements and the exercise of its rights and the performance of its obligations under them (including without limitation, for making all payments due, or to become due, from it thereunder free from any deduction or withholding) and, save as otherwise stated in this Opinion, to render the same legal, valid, enforceable and admissible in evidence. |
| (i) | The Company will be bound by the express choice of law in the Agreements provided that the choice was bona fide legal and is not invalidated by reasons of public policy. We are not aware of any public policy and/or illegality in Gibraltar which would invalidate the choice of law or any other term in the Agreements. |
| (j) | The Company has legal capacity to submit irrevocably to the jurisdiction of the courts it has chosen in the Agreements and is not entitled to claim any immunity from suit or execution of any judgment on the ground of sovereignty or otherwise. |
| 44 |
| (k) | The submission by the Company to the jurisdiction of the courts contained in the Agreements is a valid submission and any final judgment for a sum of money obtained against the Company in said courts will be enforceable against it in Gibraltar save and except where: |
| (a) | it was obtained by fraud; |
| (b) | its recognition or enforcement is contrary to public policy; |
| (c) | the proceedings in which it was obtained are contrary to natural justice; and |
| (d) | it is in respect of penalties. |
Any such judgment will require to be registered in accordance with the prescribed procedure, in the Supreme Court of Gibraltar prior to enforcement.
| (l) | Tax debts covered by the Mutual Legal Assistance (European Union) Act 2005 will be enforceable in Gibraltar unless specific conditions for non-assistance contained therein can be met. The recovery of tax debts other than under the said Act are not enforceable in Gibraltar. |
| (m) | There will be no withholding or other tax, duty, levy or impost to be deducted under Gibraltar law from any payment to be made under or in connection with the Agreements. |
| (n) | Any monies payable under, in connection with, or secured by the Agreements and the proceeds of any judgment obtained in respect of the Agreements in the courts of Gibraltar, may be remitted out of Gibraltar without limit or restriction and without the need to obtain any consent, permit, licence, approval, authorisation or exemption of any person. |
| (o) | There will be no stamp duty, ad valorem or otherwise, or other tax or impost of any nature payable in respect of the execution, delivery, performance, observance or enforcement of the Agreements. |
| (p) | It is not necessary in order to enable you to claim and enforce in Gibraltar any right afforded to you by, or in connection with the Agreements, or by reason of the execution, delivery and performance of them by you, that you be licensed, qualified or otherwise entitled to carry on business in, or otherwise registered with, any authority of, or in Gibraltar. |
| (q) | You will not be deemed to be resident, domiciled or carrying on business in or subject to the laws of Gibraltar by reason of the execution, delivery, performance or enforcement of the Agreements. |
| 7. | We qualify this Opinion in the following respect:- |
| (a) | We have not advised nor do we purport to advise in respect of the commerciality of the transaction referred to in all or any of the documentation referred to in this letter. |
| 45 |
| (b) | We express no opinion as to the accuracy of any warranties or representations given or made (expressly or impliedly) under or by virtue of any of the documents herein mentioned. |
| (c) | We express no opinion on the liability of the Company to pay taxes in Gibraltar other than as expressly set out and qualified herein. |
| 8. | The Certificate does not reveal, as at the date hereof, that any steps have been taken to appoint a receiver, an administrative receiver, a receiver and manager or liquidator over or to wind up the Company. The Certificate does reveal, however, that there are 3 charges registered against the Company at Companies House, Gibraltar namely :- a Standard Security dated 10th December 2004, in favour of Capita IRG Trustees Limited, with serial number 13286; a Rental Assignation dated 10th December 2004, in favour of Capita IRG Trustees Limited, with serial number 13287; and a Debenture dated 16th December 2004, in favour of Capita IRG Trustees Limited, with serial number 13288. |
| 9. | The Agreements are expressed to be governed by the law of Scotland, but if litigated in Gibraltar we would wish to put you on notice of the following reservations and qualifications:- |
| (a) | We express no opinion as to whether specific performance or injunctive relief, being equitable remedies, would necessarily be available in proceedings in the Gibraltar courts in respect of any of the obligations of the Company under or arising out of the Agreements. |
| (b) | Under Gibraltar law the enforcement of the Company’s obligations under the Agreements may be limited by:- |
| (i) | general principles of equity and public policy; and |
| (ii) | applicable bankruptcy, insolvency, liquidation, reorganisation, moratoriums and other laws relating to the enforcement of creditors’ rights generally. |
| (c) | If proceedings are held in Gibraltar a Gibraltar court may refuse to give effect to any obligation of the parties to pay the legal costs and other costs charges and expenses incurred by any party in respect of the costs of successful or unsuccessful litigation brought before that court or where the court has itself made an order for costs. |
| (d) | If proceedings are held in Gibraltar, the Gibraltar courts may not give effect to any obligations with respect to interest payments on overdue amounts if it could be established that the amount expressed as being payable was in the nature of a penalty. |
| (e) | Where any party to the Agreements is vested with a discretion or may determine a matter in its opinion and the proceedings are held in Gibraltar the Gibraltar courts may require that such discretion be exercised reasonably or that such opinion is based upon reasonable grounds. |
| 46 |
| (f) | The question of severability and of unenforceable or void provisions would, if proceedings were held in Gibraltar, be determined by the courts of Gibraltar at their sole discretion. |
| (g) | Claims may be or become barred under the Limitation Act in accordance with the applicable limitation period or may be or become subject to a defence of set-off or counter-claim. |
| (h) | A Gibraltar court may not treat as evidence of any sum due from the Company under the Agreements certificates, decisions or calculations of the other contracting parties to the Agreements, which the Agreements state are to be so treated. |
| (i) | Any requirement to pay compound interest may not be enforceable in a Gibraltar court. |
| (j) | If any of the contracting parties in the Agreements are, or may be entitled under the Agreements, to do or omit to do any act, deed, matter or thing without prior notice to the Company, a Gibraltar court may not give effect to such provisions. |
| (k) | A Gibraltar court may examine the merits of any claims against the Company under any indemnity provision contained in the Agreements and may reserve its discretion in enforcing that claim. |
| (l) | A Gibraltar court will not necessarily award costs and disbursements in litigation in accordance with contractual provisions and we have reservations as to the ability of a party to obtain judgment for payment of interest at default rates (as against prescribed Court rates) after judgment in the courts of Gibraltar. |
| (m) | A Gibraltar court may, in certain circumstances, hold a charge to be a floating charge, even if it is described as a fixed charge. |
| (n) | The term “enforceable” as used in this Opinion means that the obligations assumed by the Company under the Agreements are of a type which the courts of Gibraltar enforce. It does not mean that these obligations will necessarily be enforced in all circumstances in accordance with their terms. |
| 10. | The Certificate will not necessarily reveal whether or not a resolution has been passed, an appointment made, or proceedings commenced, or a charge or registrable document created, since particulars of such matters are not required to be recorded or delivered for registration at all (if the document constitutes a “security financial collateral arrangement” or a “title transfer financial collateral arrangement” as defined in the Financial Collateral Arrangements Act 2004) or only within a specified period. Furthermore, the Certificate will not disclose the existence of any actions taken or proposals made for winding-up the Company otherwise than by petition to the Supreme Court of Gibraltar. |
| 47 |
| 11. | This Opinion letter is given solely in relation to the matters referred to herein only for your benefit (and any assignee or transferee) and is limited to matters of law of Gibraltar as at the date hereof. It may not be quoted or relied upon by any other person, or for any other purpose, without our prior written consent (which will not be unreasonably withheld). |
| 12. | This Opinion is to be governed by, and construed in accordance with, Gibraltar law and shall not give rise to any action of any nature in any jurisdiction other than Gibraltar. |
Yours faithfully
| 48 |
Part 10
Rent Retrocession
RETROCESSION OF ASSIGNATION OF RENTS
by
capita irg trustees limited
AS SECURITY TRUSTEE
in favour of
Quarry Town limited
Subjects: The Discovery Centre, 3 Fulton Road, Dundee (Title Number ANG3945)
Brodies LLP
15 Atholl Crescent
Edinburgh EH3 8HA
T: 0131 228 3777
F: 0131 228 3878
DX ED 10
Ref: KCLA/DAJ/JIR/QUA32.2
FAS 1468
2015
| 49 |
WE, CAPITA IRG TRUSTEES LIMITED, a company incorporated under the Companies Acts with registered number 02729260 and having our registered office at The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, as trustee for the Finance Parties referred to in the aftermentioned Assignation of Rents CONSIDERING that we have agreed to grant these presents DO HEREBY RETROCESS, REPONE, RESTORE AND REASSIGN to and in favour of Quarry Town Limited, a company incorporated under the Companies Ordinance in Gibraltar with registered number 87249 and having their registered office at Suites 7B and 8B, 50 Town Range, Gibraltar the whole Rental Income (as the term "Rental Income" is defined in the aftermentioned assignation of rents) and all rights and remedies assigned to us by an assignation of rents granted by the said Quarry Town Limited in our favour dated 10 December 2004 together with our whole right, title and interest, present and future in and to the Rental Income and we hereby irrevocably discharge the said Quarry Town Limited of and from all obligations in terms of or pursuant to the said assignation of rents: IN WITNESS WHEREOF these presents are executed as follows:-
| signature of witness |
signature of director/secretary/authorised signatory of Capita Asset Services (UK) Limited as attorney for Capita IRG Trustees Limited
| ||
| full name of above (print) | full name of above (print) | ||
| date of signing | |||
| address of witness | place of signing | ||
| 50 |
Part 11
Assignation of Guarantee
ASSIGNATION
between
Quarry Town Limited, incorporated under the Companies Ordinance in Gibraltar with Registered Number 87249 and having its Registered Office at Suites 7b and 8b, 50 Town Range, Gibraltar ("Assignors")
and
ARC NCKWYDE001, LLC, a Limited Liability Company registered under the Laws of the State of Delaware, United States of America (File Number 5671188) and having its Registered Office at 2711 Centerville Road, Suite 400, Wilmington, 19808 USA ("Assignees")
WHEREAS:
| (A) | The Assignors is entitled to the benefit of the Guarantee; |
| (B) | The Assignors have sold or are about to sell their interest in the Property; |
| (C) | The Parties have agreed that the Assignors will assign, and the Assignees will accept an assignation of, the Assignors’ interest under the Guarantee with effect from the Date of Entry. |
IT IS AGREED by the Parties as follows:
| 1 | Definitions |
In this Assignation:
"Date of Entry" means [……………………] 20153;
"Guarantee" means the guarantee detailed in the Schedule;
"Parties" means the Assignors and the Assignees;
"Property" means ALL and WHOLE the subjects known generally as Discovery Centre, 3 Fulton Road, Dundee, Angus DD2 4SW and registered in the Land Register of Scotland under Title Number ANG3945;
"Schedule" means the schedule annexed to this Assignation.
3 The Date of Entry as finalised in terms of the Missive to be inserted (in manuscript if Date of Entry is not 30 April 2015)
| 51 |
| 2 | Assignation |
The Assignors in implementation of their obligations relating to the transfer of the Property assign to the Assignees the Assignors’ whole right, title and interest under the Guarantee with effect from the Date of Entry.
| 3 | Costs |
| 3.1 | Each of the Parties will bear their own costs and expenses in connection with this Assignation. |
| 3.2 | The Assignee will be responsible for any Stamp Duty Land Tax / Land and Buildings Transaction Tax chargeable on the assignation of the Assignor’s interest under the Guarantee. |
| 3.3 | The Assignee will pay the costs of registering this Assignation in the Books of Council and Session and obtaining one extract (for the Assignee). |
| 4 | Warrandice |
The Assignor grants warrandice from its own facts and deeds.
| 5 | Consent to Registration |
The Parties consent to the registration of this Assignation for preservation and execution: IN WITNESS WHEREOF this document, including the Schedule, is executed as follows:
For Quarry Town Limited
| signature of witness |
signature of director/secretary/authorised signatory | ||
| full name of above (print) | full name of above (print) | ||
| date of signing | |||
| address of witness | place of signing | ||
| 52 |
For ARC NCKWYDE001, LLC
| signature of witness |
signature of director/secretary/authorised signatory | ||
| full name of above (print) | full name of above (print) | ||
| date of signing | |||
| address of witness | place of signing | ||
| 53 |
This is the Schedule referred to in the foregoing Assignation between Quarry Town Limited and ARC NCKWYDE001, LLC
Guarantee
The Guarantee contained in gremio the Lease among Balgarthno Estates Limited, NCR Financial Solutions Group Limited and NCR Corporation dated 12, 17 and 25 November 2003 and registered in the Books of Council and Session on 2 March 2004.
For Quarry Town Limited
|
signature of director/secretary/authorised signatory |
For ARC NCKWYDE001, LLC
|
signature of director/secretary/authorised signatory |
| member, for and on behalf of Brodies LLP |
| 54 |
1. | I have reviewed this Quarterly Report on Form 10-Q of American Realty Capital Global Trust II, 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 Act 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 15th day of May, 2015 | /s/ Scott J. Bowman | |
Scott J. Bowman | ||
Chief Executive Officer | ||
(Principal Executive Officer) | ||
1. | I have reviewed this Quarterly Report on Form 10-Q of American Realty Capital Global Trust II, 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 Act 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 15th day of May, 2015 | /s/ Patrick J. Goulding | |
Patrick J. Goulding | ||
Chief Financial Officer, Treasurer and Secretary | ||
(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, Treasurer and Secretary | |
(Principal Financial Officer and Principal Accounting Officer) | |
|
Share Based Compensation - Narrative (Details) (Restricted Share Plan [Member], Unvested Restricted Stock [Member], USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended |
|---|---|
|
Mar. 31, 2015
|
|
|
Restricted Share Plan [Member] | Unvested Restricted Stock [Member]
|
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
| Shares granted automatically upon election to board of directors (in shares) | 1,333 |
| Vesting period | 5 years |
| Periodic vesting percentage | 20.00% |
| Maximum authorized amount as a percentage of shares authorized | 5.00% |
| Number of shares authorized (in shares) | 6,300,000 |
| Share-based compensation | $ 3 |
| Compensation cost not yet recognized | $ 53 |
| Period for recognition of costs not yet recognized | 5 years |