THE COMPANIES

American Realty Capital Properties, Inc. and Tiger Acquisition, LLC

American Realty Capital Properties, Inc., or ARCP, is a Maryland corporation incorporated in December 2010 that qualifies as a real estate investment trust, or REIT, commencing with its initial taxable year ended December 31, 2011. ARCP was formed to acquire and own single-tenant, freestanding commercial real estate primarily subject to medium-term net leases with high credit quality tenants. In July 2011, ARCP commenced an initial public offering on a “reasonable best efforts” basis, which closed on September 6, 2011. ARCP common stock began trading on the NASDAQ Capital Market under the symbol “ARCP” on September 7, 2011.

Substantially all of ARCP’s business is conducted through ARC Properties Operating Partnership, L.P., or the ARCP OP, of which ARCP is the sole general partner.

As of September 30, 2012, excluding one vacant property classified as held for sale, ARCP owned 124 properties consisting of 2.2 million square feet, 100% leased with a weighted average remaining lease term of 6.8 years. In constructing its portfolio, ARCP is committed to diversification (industry, tenant and geography). As of September 30, 2012, rental revenues derived from investment grade tenants and tenants affiliated with investment grade entities as determined by a major rating agency approximated 99% (the rating of each parent company has been attributed to its wholly owned subsidiary for purposes of this disclosure). ARCP’s strategy encompasses receiving the majority of its revenue from investment grade tenants as ARCP further acquires properties and enters into (or assumes) medium-term lease arrangements.

In connection with the merger, ARCP will internalize certain property level management and leasing services and accounting activities, and in connection with such internalization, American Realty Capital Advisors III, LLC, or the ARCT III Advisor, will sell to the ARCP OP certain furniture, fixtures, equipment and other assets used by the ARCT III Advisor in connection with managing the property-level business and operations and accounting functions of American Realty Capital Trust III, Inc., or ARCT III, and American Realty Capital Operating Partnership III, L.P., or the ARCT III OP.

ARCP’s principal executive offices are located at 405 Park Avenue, 15^th Floor, New York, New York 10022, and its telephone number is (212) 415-6500.

The entity into which ARCT III will merge, or the Merger Sub, is a Delaware limited liability company and a direct wholly owned subsidiary of ARCP that was formed for the purpose of entering into the merger agreement.

American Realty Capital Trust III, Inc.

ARCT III is a Maryland corporation incorporated in October 2010 that qualifies as a REIT commencing with its initial taxable year ended December 31, 2011. ARCT III is a non-traded REIT. ARCT III was formed to acquire a diversified portfolio of commercial real estate, which consists primarily of freestanding single tenant properties net leased to credit worthy tenants. In March 2011, ARCT III commenced an initial public offering on a “reasonable best efforts” basis to sell up to 150.0 million shares of common stock, excluding 25.0 million shares issuable pursuant to a distribution reinvestment plan, offered at a price of $10.00 per share, subject to certain volume and other discounts, which we refer to as the ARCT III IPO. In September 2011, ARCT III commenced real estate operations. The ARCT III IPO closed in September 2012. As of September 30, 2012, ARCT III had 175.4 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to ARCT III’s distribution reinvestment plan.

Substantially all of ARCT III’s business is conducted through the ARCT III OP, of which ARCT III is the sole general partner.

As of September 30, 2012, ARCT III owned 382 properties comprised of 7.9 million square feet, which were 100% leased with a weighted average remaining lease term of 12.7 years. In constructing the portfolio, ARCT III has been committed to diversification by industry, tenant and geography.

ARCT III’s principal executive offices are located at 405 Park Avenue, 15^th Floor, New York, New York 10022, and its telephone number is (212) 415-6500.

ARCT III and ARCP each were sponsored, directly or indirectly, by AR Capital, LLC, or ARC. The ARCT III Advisor is a Delaware limited liability company wholly owned by ARC. ARC Properties Advisors, LLC, or the ARCP Manager, is a Delaware limited liability company wholly owned by ARC and is ARCP’s external manager. ARC and its affiliates, including the ARCT III Advisor and ARCP Manager, provide investment, management and advisory services, as well as certain acquisition and debt capital services to ARCT III and ARCP, as applicable. ARCT III and ARCP pay management fees and certain other fees to, and reimburse certain expenses of, the ARCT III Advisor and ARCP Manager, respectively. Affiliates of ARC also provide similar services for American Realty Capital New York Recovery REIT, Inc., Phillips Edison — ARC Shopping Center REIT, Inc., American Realty Capital — Retail Centers of America, Inc., American Realty Capital Healthcare Trust, Inc., American Realty Capital Daily Net Asset Value Trust, Inc., American Realty Capital Global Trust, Inc., American Realty Capital Healthcare Trust II, Inc., a development stage REIT, and American Realty Capital Trust IV, Inc. Certain of these ARC-sponsored REITs have investment strategies substantially similar to those of ARCT III, ARCP and the combined company.

The Combined Company

ARCT III’s and ARCP’s properties consist primarily of freestanding single-tenant commercial properties leased to investment grade (as determined by major credit rating agencies) and other creditworthy tenants that are diversified by tenant, industry and geography. Both ARCP’s and ARCT III’s portfolios of real estate investment properties (excluding one vacant property held by ARCP) were 100% leased as of September 30, 2012. ARCT III’s portfolio focuses on entering into (or assuming) long-term lease arrangements and targets assets at or below replacement cost, while ARCP focuses on entering into (or assuming) medium-term leases and purchasing properties with vintage in-place rents at valuations significantly below replacement cost. As of September 30, 2012, ARCT III owned 382 properties consisting of 7.9 million square feet, which were 100% leased with a weighted average remaining lease term of 12.7 years. As of September 30, 2012, rental revenues derived by ARCT III from investment grade tenants and tenants affiliated with investment grade entities as determined by a major rating agency approximated 80% (the rating of each parent company has been attributed to its wholly owned subsidiary for purposes of this disclosure). As of September 30, 2012, excluding one vacant property classified as held for sale, ARCP owned 124 properties consisting of 2.2 million square feet, which were 100% leased with a weighted average remaining lease term of 6.8 years. As of September 30, 2012, rental revenues derived by ARCP from investment grade tenants and tenants affiliated with investment grade entities as determined by a major rating agency approximated 99% (the rating of each parent company has been attributed to its wholly owned subsidiary for purposes of this disclosure). The surviving entity in the merger will own a portfolio that that uniquely combines ARCT III’s portfolio of properties with stable income from high credit quality tenants, with ARCP’s portfolio, which has substantial growth opportunities. The long-term business plan for the combined company contemplates the combined portfolio consisting of approximately 70% long-term leases and 30% medium-term leases, with an average remaining lease term of 10 to 12 years. The combined portfolio is additionally expected to develop growth potential from below market leases.

After the consummation of the merger, the combined company will have access to up to $1.2 billion of financing, consisting of a $1.0 billion credit facility (under which ARCT III has obtained commitments for $650.0 million, and which contains an “accordion” feature to allow ARCT III, under certain circumstances, to increase the commitments thereunder by $350.0 million), borrowings under which will be subject to borrowing base availability, and a $200.0 million bridge facility (of which $200.0 million is committed but subject to reduction to the extent the committing lender provides a commitment under the credit facility described above).

Property Portfolio Information

At September 30, 2012, ARCP owned a diversified portfolio:

At September 30, 2012, ARCT III owned a diversified portfolio:

Combined Property Portfolio

As of September 30, 2012, ARCP and ARCT III, on a pro forma basis, owned a portfolio with the following characteristics:

The following table lists tenants whose annualized rental income on a straight-line basis represent greater than 10% of the total annualized rental income on a straight-line basis for the pro forma portfolio properties of ARCP and ARCT III as of September 30, 2012.

Tenant		September 30, 2012
Dollar General			17.2	%
FedEx			14.3	%
Citizens Bank			13.7	%

Set forth below are summary financial statements of the parent of the lessee of the FedEx properties included in ARCP’s and ARCT III’s portfolio on a pro forma basis as described above. FedEx Corporation currently files its financial statements in reports filed with the U.S. Securities and Exchange Commission, or the Commission, and the following summary financial data regarding FedEx Corporation are taken from such filings:

		Six Months Ended November 30, 2012 (Unaudited)				Year Ended
(Amounts in Millions)						May 31, 2012 (Audited)				May 31, 2011 (Audited)				May 31, 2010 (Audited)
Statements of Operations Data
Revenues		$	21,899			$	42,680			$	39,304			$	34,734
Operating income			1,460				3,186				2,378				1,998
Net income			897				2,032				1,452				1,894

(Amounts in Millions)		November 30, 2012 (Unaudited)				May 31, 2012 (Audited)				May 31, 2011 (Audited)				May 31, 2010 (Audited)
Consolidated Condensed Balance Sheets
Total assets		$	31,312			$	29,903			$	27,385			$	24,902
Long-term debt			2,241				1,250				1,667				1,668
Total common stockholders’ investment			15,543				14,727				15,220				13,811

Set forth below are summary financial statements of the parent guarantor of the Dollar General properties included in ARCP's and ARCT III's portfolio on a pro forma basis as described above. Dollar General Corporation currently files its financial statements in reports filed with the Commission, and the following summary financial data regarding Dollar General Corporation are taken from such filings:

		For the 39 Weeks Ended November 2, 2012 (Unaudited)				Fiscal Year Ended
(Amounts in Thousands)						February 3, 2012 (Audited)				January 28, 2011 (Audited)				January 29, 2010 (Audited)
Consolidated Condensed Statements of Income
Net sales		$	11,814,507			$	14,807,188			$	13,035,000			$	11,796,380
Operating profit			1,132,927				1,490,804				1,274,065				953,258
Net income			635,240				766,685				627,857				339,442

(Amounts in Thousands)		November 2, 2012 (Unaudited)				February 3, 2012 (Audited)				January 28, 2011 (Audited)				January 29, 2010 (Audited)
Consolidated Condensed Balance Sheets
Total assets		$	10,273,677			$	9,688,520			$	9,546,222			$	8,863,519
Long-term obligations			3,023,367				2,617,891				3,287,070				3,399,715
Total liabilities			5,538,815				5,020,025				5,491,743				5,473,221
Total shareholders’ equity			4,734,862				4,668,495				4,054,479				3,390,298

Set forth below are summary financial statements of the parent of the lessee of the Citizens Bank properties included in ARCP's and ARCT III's portfolio on a pro forma basis as described above. RBS Citizens, N.A. currently makes its financial statements available on the Federal Deposit Insurance Corporation website, and the following summary financial data regarding RBS Citizens, N.A. are taken from such filings:

		Nine Months Ended September 30, 2012 (Unaudited)				Fiscal Year Ended
(Amounts in millions)						December 31, 2011 (Audited)				December 31, 2010 (Audited)				December 31, 2009 (Audited)
Consolidated Condensed Statements of Income
Total interest income		$	4,873			$	3,484			$	4,008			$	4,868
Net interest income after provision for credit losses			3,523				1,230				1,289				494
Net income (loss)			843				345				(39	)			(600	)

(Amounts in millions)		September 30, 2012 (Unaudited)				December 31, 2011 (Audited)				December 31, 2010 (Audited)				December 31, 2009 (Audited)
Consolidated Condensed Balance Sheets
Total assets		$	107,214			$	106,941			$	107,836			$	116,921
Total liabilities			88,455				88,830				90,920				100,321
Total shareholders’ equity			18,759				18,111				16,916				16,600

All of the following property portfolio information is provided to illustrate the combined property portfolio of ARCP and ARCT III post-merger. This information includes an illustration of the combined portfolio by industry, property type and geography, as well as a combined lease expiration schedule. The ARCP information represents quarterly information for the 124 properties owned at September 30, 2012. The ARCT III information represents quarterly information for the 382 properties owned at September 30, 2012.

Industry Diversification

The following table sets forth certain information regarding the property portfolios classified according to the business of the respective tenants, expressed as a percentage of total rental revenue:

Percentage of Rental Revenue

Industries		ARCP(1)				ARCT III(2)				Combined Total
Auto Retail			2.3	%			2.6	%			2.5	%
Auto Services			—				0.6	%			0.5	%
Consumer Goods			7.9	%			—				1.7	%
Consumer Products			—				19.7	%			15.6	%
Discount Retail			8.0	%			23.2	%			20.0	%
Freight			5.5	%			16.7	%			14.3	%
Gas/Convenience			—				1.2	%			0.9	%
Government Services			11.4	%			3.1	%			4.8	%
Healthcare			—				4.5	%			3.5	%
Home Maintenance			11.2	%			—				2.4	%
Medical Office			—				1.9	%			1.5	%
Pharmacy			5.3	%			9.6	%			8.7	%
Restaurant			—				5.0	%			4.0	%
Retail Banking			33.6	%			8.4	%			13.8	%
Specialty Retail			12.6	%			2.3	%			4.4	%
Storage Facility			2.2	%			—				0.5	%
Supermarket			—				1.2	%			0.9	%
Totals			100.0	%			100.0	%			100.0	%

Property Type Diversification

The following table sets forth certain property type information regarding the property portfolios (dollars in thousands):

ARCP

Property Type		Number of Properties				Approximate Leasable Square Feet				Quarterly Rental Revenue(1)				Percentage of Rental Revenue
Retail			108				749,800			$	2,520				50.1	%
Distribution			10				1,218,500				1,826				36.3
Office			5				103,900				573				11.4
Storage			1				126,700				111				2.2
Totals			124				2,198,900			$	5,030				100.0	%

ARCT III

Property Type		Number of Properties(2)				Approximate Leasable Square Feet				Quarterly Rental Revenue(2)				Percentage of Rental Revenue
Retail			343				2,732,800			$	9,929				53.4	%
Distribution			24				4,886,500				7,657				41.1
Office			15				239,800				1,024				5.5
Totals			382				7,859,100			$	18,610				100.0	%

Combined

Property Type		Number of Properties(2)				Approximate Leasable Square Feet				Total Quarterly Rental Revenue				Percentage of Total Quarterly Rental Revenue
Retail			451				3,482,600			$	12,449				52.7	%
Distribution			34				6,105,000				9,483				40.1
Office			20				343,700				1,597				6.7
Storage			1				126,700				111				0.5
Totals			506				10,058,000			$	23,640				100.0	%

Geographic Diversification

The following table sets forth certain state-by-state information regarding the property portfolios (dollars in thousands):

ARCP

State		Number of Properties				Percent Leased				Approximate Leasable Square Feet				Quarterly Rental Revenue (1)				Percentage of Rental Revenue
Alabama			1				100	%			39,500			$	151				3.0	%
Alaska			—				—				—				—				—
Arizona			—				—				—				—				—
Arkansas			5				100				43,800				45				0.9
California			—				—				—				—				—
Colorado			—				—				—				—				—
Connecticut			2				100				5,600				31				0.6
Delaware			1				100				4,600				23				0.4
Florida			1				100				8,900				14				0.3
Georgia			2				100				20,900				83				1.7
Hawaii			—				—				—				—				—
Idaho			—				—				—				—				—
Illinois			10				100				77,900				302				6.0
Indiana			1				100				20,200				85				1.7
Iowa			1				100				553,000				588				11.7
Kansas			1				100				7,500				7				0.1
Kentucky			1				100				12,100				30				0.6
Louisiana			—				—				—				—				—
Maine			—				—				—				—				—
Maryland			—				—				—				—				—
Massachusetts			—				—				—				—				—
Michigan			22				100				125,000				712				14.2
Minnesota			—				—				—				—				—
Mississippi			—				—				—				—				—
Missouri			26				100				224,500				304				6.0
Montana			—				—				—				—				—
Nebraska			—				—				—				—				—
Nevada			—				—				—				—				—
New Hampshire			2				100				6,900				28				0.5
New Jersey			1				100				32,000				241				4.8
New Mexico			—				—				—				—				—
New York			13				100				87,000				526				10.5
North Carolina			—				—				—				—				—
North Dakota			—				—				—				—				—
Ohio			18				100				220,800				595				11.8
Oklahoma			2				100				18,000				19				0.4
Oregon			—				—				—				—				—
Pennsylvania			5				100				62,600				266				5.3
Rhode Island			—				—				—				—				—
South Carolina			2				100				480,000				626				12.4
South Dakota			—				—				—				—				—
Tennessee			1				100				10,700				37				0.7
Texas			2				100				113,600				204				4.1
Utah			—				—				—				—				—
Vermont			3				100				12,500				59				1.2
Virginia			1				100				11,300				54				1.1
Washington			—				—				—				—				—
West Virginia			—				—				—				—				—
Wisconsin			—				—				—				—				—
Wyoming			—				—				—				—				—
Totals/Average			124				100	%			2,198,900			$	5,030				100.0	%

ARCT III

State		Number of Properties				Percent Leased				Approximate Leasable Square Feet				Quarterly Rental Revenue(2)				Percentage of Rental Revenue
Alabama			12				100	%			91,500			$	378				2.0	%
Alaska			—				—				—				—				—
Arizona			2				100				23,700				102				0.6
Arkansas			3				100				19,100				137				0.7
California			2				100				1,050,700				1,261				6.8
Colorado			3				100				189,800				736				4.0
Connecticut			7				100				28,700				238				1.3
Delaware			2				100				4,300				28				0.2
Florida			9				100				58,600				317				1.7
Georgia			11				100				35,200				324				1.7
Hawaii			—				—				—				—				—
Idaho			2				100				43,300				165				0.9
Illinois			13				100				471,700				1,042				5.6
Indiana			6				100				110,600				320				1.7
Iowa			4				100				39,300				88				0.5
Kansas			13				100				769,200				679				3.7
Kentucky			4				100				71,600				231				1.2
Louisiana			18				100				181,600				521				2.8
Maine			—				—				—				—				—
Maryland			—				—				—				—				—
Massachusetts			13				100				107,700				472				2.5
Michigan			18				100				234,900				844				4.5
Minnesota			1				100				9,000				21				0.1
Mississippi			26				100				1,305,300				1,649				8.9
Missouri			38				100				579,700				1,693				9.1
Montana			1				100				45,800				174				0.9
Nebraska			1				100				8,100				20				0.1
Nevada			6				100				59,900				342				1.8
New Hampshire			4				100				16,100				108				0.6
New Jersey			5				100				47,700				378				2.0
New Mexico			3				100				22,500				81				0.4
New York			3				100				195,600				1,089				5.9
North Carolina			15				100				175,000				577				3.1
North Dakota			3				100				26,400				72				0.4
Ohio			21				100				704,500				944				5.1
Oklahoma			10				100				215,600				397				2.1
Oregon			—				—				—				—				—
Pennsylvania			30				100				111,900				697				3.8
Rhode Island			4				100				14,700				112				0.6
South Carolina			9				100				86,000				488				2.6
South Dakota			1				100				9,200				22				0.1
Tennessee			8				100				148,500				345				1.9
Texas			39				100				418,200				1,092				5.9
Utah			—				—				—				—				—
Vermont			—				—				—				—				—
Virginia			6				100				61,800				192				1.0
Washington			2				100				25,100				96				0.5
West Virginia			1				100				13,300				82				0.4
Wisconsin			3				100				27,700				56				0.3
Wyoming			—				—				—				—				—
Totals/Average			382				100	%			7,859,100			$	18,610				100.0	%

Combined

State		Number of Properties				Percent Leased				Approximate Leasable Square Feet				Total Quarterly Rental Revenue(1)(2)				Percentage of Total Rental Revenue
Alabama			13				100	%			131,000			$	529				2.2	%
Alaska			—				—				—				—				—
Arizona			2				100				23,700				102				0.4
Arkansas			8				100				62,900				182				0.8
California			2				100				1,050,700				1,261				5.3
Colorado			3				100				189,800				736				3.1
Connecticut			9				100				34,300				269				1.1
Delaware			3				100				8,900				51				0.2
Florida			10				100				67,500				331				1.4
Georgia			13				100				56,100				407				1.7
Hawaii			—				—				—				—				—
Idaho			2				100				43,300				165				0.7
Illinois			23				100				549,600				1,344				5.7
Indiana			7				100				130,800				405				1.7
Iowa			5				100				592,300				676				2.9
Kansas			14				100				776,700				686				2.9
Kentucky			5				100				83,700				261				1.1
Louisiana			18				100				181,600				521				2.2
Maine			—				—				—				—				—
Maryland			—				—				—				—				—
Massachusetts			13				100				107,700				472				2.0
Michigan			40				100				359,900				1,556				6.6
Minnesota			1				100				9,000				21				0.1
Mississippi			26				100				1,305,300				1,649				7.0
Missouri			64				100				804,200				1,997				8.4
Montana			1				100				45,800				174				0.7
Nebraska			1				100				8,100				20				0.1
Nevada			6				100				59,900				342				1.5
New Hampshire			6				100				23,000				136				0.6
New Jersey			6				100				79,700				619				2.6
New Mexico			3				100				22,500				81				0.4
New York			16				100				282,600				1,615				6.8
North Carolina			15				100				175,000				577				2.4
North Dakota			3				100				26,400				72				0.3
Ohio			39				100				925,300				1,539				6.5
Oklahoma			12				100				233,600				416				1.8
Oregon			—				—				—				—				—
Pennsylvania			35				100				174,500				963				4.1
Rhode Island			4				100				14,700				112				0.5
South Carolina			11				100				566,000				1,114				4.7
South Dakota			1				100				9,200				22				0.1
Tennessee			9				100				159,200				382				1.6
Texas			41				100				531,800				1,296				5.5
Utah			—				—				—				—				—
Vermont			3				100				12,500				59				0.3
Virginia			7				100				73,100				246				1.0
Washington			2				100				25,100				96				0.4
West Virginia			1				100				13,300				82				0.4
Wisconsin			3				100				27,700				56				0.2
Wyoming			—				—				—				—				—
Totals/Average			506				100	%			10,058,000			$	23,640				100.0	%

Lease Expirations

The following table sets forth certain information regarding the property portfolios and the timing of the lease term expirations (excluding rights to extend a lease at the option of the tenant) on net leased, single-tenant properties (dollars in thousands):

		ARCP(1)
Year		Number of Leases Expiring				Approx. Leasable Sq. Feet				Quarterly Rental Revenue				Percentage of Quarterly Rental Revenue				Annualized Rental Revenue(3)				Percentage of Annualized Rental Revenue
2012			—				—			$	—				—	%		$	—				—	%
2013			—				—				—				—				—				—
2014			3				23,800				23				0.5				91				0.5
2015			14				130,700				206				4.1				823				4.1
2016			8				74,900				170				3.4				680				3.4
2017			38				470,400				1,218				24.2				4,873				24.2
2018			28				794,500				1,697				33.7				6,789				33.7
2019			20				132,100				858				17.1				3,432				17.1
2020			2				19,100				62				1.2				248				1.2
2021			5				42,400				141				2.8				566				2.8
2022			—				—				—				—				—				—
2023			—				—				—				—				—				—
2024			2				18,100				36				0.7				144				0.7
2025			3				27,300				54				1.1				216				1.1
2026			—				—				—				—				—				—
2027 – 2038			1				465,000				565				11.2				2,258				11.2
Totals			124				2,198,900			$	5,030				100.0	%		$	20,120				100.0	%

		ARCT III(2)
Year		Number of Leases Expiring				Approx. Leasable Sq. Feet				Quarterly Rental Revenue				Percentage of Quarterly Rental Revenue				Annualized Rental Revenue(3)				Percentage of Annualized Rental Revenue
2012			—				—			$	—				—	%		$	—				—	%
2013			—				—				—				—				—				—
2014			—				—				—				—				—				—
2015			—				—				—				—				—				—
2016			—				—				—				—				—				—
2017			—				—				—				—				—				—
2018			2				11,400				50				0.3				200				0.3
2019			3				23,300				70				0.4				280				0.4
2020			12				76,500				479				2.6				1,916				2.6
2021			22				726,500				2,060				11.1				8,240				11.1
2022			64				1,739,200				2,547				13.7				10,187				13.7
2023			15				1,748,700				2,763				14.8				11,051				14.8
2024			17				1,178,500				1,881				10.1				7,525				10.1
2025			65				473,400				1,714				9.2				6,856				9.2
2026			50				511,000				1,511				8.1				6,046				8.1
2027 – 2038			132				1,370,600				5,535				29.7				22,139				29.7
Totals			382				7,859,100			$	18,610				100.0	%		$	74,440				100.0	%