UPDATE: American Realty Capital Properties Settles Litigation Against RCS Capital

American Realty Capital Properties, Inc. ("ARCP") ARCP today announced that it has entered into a settlement agreement with RCS Capital Corporation ("RCS Capital") RCAP that resolves their dispute over the sale of Cole Capital Partners, LLC and Cole Capital Advisors, Inc. (collectively, "Cole Capital") to RCS Capital. The settlement, in which ARCP will receive $60 million, resolves litigation brought by ARCP in the Delaware Court of Chancery to enforce its rights under the September 30, 2014 Equity Purchase Agreement between ARCP and RCS Capital (the "Purchase Agreement") in which RCS Capital agreed to acquire all of ARCP's outstanding equity interests in both Cole Capital Partners, LLC and Cole Capital Advisors, Inc. American Reality Capital Properties ("ARCP") is a leading, self-managed commercial real estate investment trust focused on acquiring and owning single tenant freestanding commercial properties subject to net leases with high credit quality tenants. "Today's agreement is a positive outcome that serves the best interests of ARCP shareholders and our broader business, including our investment in Cole Capital. Our immediate plan is to stabilize Cole Capital, which we continue to believe is a valuable business, as we focus on creating long-term value and strengthening ARCP's position as the leading company in the net lease REIT industry," said David Kay, Chief Executive Officer of ARCP. The independent members of ARCP's board of directors and ARCP have engaged Morgan Stanley & Co. LLC and Citigroup Global Markets Inc., respectively, to assist in the negotiation of the settlement with RCS Capital and other strategic matters, including evaluating long-term alternatives for Cole Capital, in order to maximize the value of that business to ARCP. Under the terms of the settlement agreement described above, ARCP will receive $60 million from RCS Capital to agree to termination of the Purchase Agreement and all related agreements and documents. The settlement includes: $42.7 million in cash; a $15.3 million unsecured note from RCS Capital to ARCP; and a release from ARCP's obligation to pay to RCS Capital or its affiliates $2 million. The $42.7 million in cash includes the $10 million payment already delivered to ARCP by RCS Capital in connection with the Purchase Agreement. The two-year unsecured note will have an 8% interest rate and scheduled amortization payments. The release relates to ARCP's obligation to pay $2 million to RCS Capital or its affiliates for certain structuring services already provided by Realty Capital Securities, LLC, a subsidiary of RCS Capital, in connection with ARCP's May 28, 2014 equity offering. In addition, ARCP and RCS Capital have agreed to terminate, unwind or otherwise discontinue all agreements, arrangements and understandings between the two companies and any of their respective subsidiaries.