(xxi) (A) modify or amend the engagement letters entered into with the Company Financial Advisors to increase the compensation payable by the Company thereunder or (B) enter into any new Contract with the Company Financial Advisors; or
(xxii) authorize any of, or commit, resolve, propose or agree to take any of, the foregoing actions.
(c) Notwithstanding anything to the contrary set forth in this Agreement, nothing in this Agreement shall prohibit the Company from taking any action, or refraining to take any action, at any time or from time to time if, in the reasonable judgment of the Company Board, such action or inaction is reasonably necessary (i) for the Company to avoid or to continue to avoid incurring entity level income or excise Taxes under the Code (or applicable state Law) or to maintain its qualification as a REIT under the Code for any period or portion thereof ending on or prior to the Effective Time or (ii) to establish or maintain any exemption from or otherwise avoid the imposition of any requirement that the Company or any Company Subsidiary be registered as an investment company under the Investment Company Act, including in the case of clause (ii), making dividend or any other actual, constructive or deemed distribution payments to stockholders of the Company in accordance with this Agreement or otherwise as permitted pursuant to Section 5.1(b)(ii).
(d) Notwithstanding anything to the contrary set forth in this Agreement (including this Section 5.1), nothing shall prevent the Company or any of its Subsidiaries from taking or failing to take any commercially reasonable action in response to a COVID-19 Measure that would otherwise violate or breach this Agreement, which response shall not be deemed a breach of this Agreement; provided, however, that, to the extent reasonably practicable, the Company must provide reasonable advance written notice to Parent with reasonable detail of such response prior to such response.
Section 5.2 Conduct of Business by Parent.
(a) From the date of this Agreement until the earlier of the Effective Time and the date, if any, on which this Agreement is earlier terminated pursuant to Section 8.1, except (x) as prohibited or required by applicable Law or by any Governmental Entity, (y) as set forth in Section 5.2(a) of the Parent Disclosure Schedule or (z) as otherwise contemplated, required or permitted by this Agreement, unless the Company shall otherwise consent (which consent shall not be unreasonably withheld), Parent shall maintain the status of Parent as a REIT and shall, and shall cause each of the Parent Subsidiaries to, use commercially reasonable efforts (i) to conduct its business in the ordinary course consistent with past practice in all material respects, (ii) to preserve intact in all material respects its business organization and goodwill and relationship with customers, third party payors, including Governmental Entities, and others with which it has material business dealings and (iii) to maintain its material assets and properties in adequate working condition and good repair, ordinary wear and tear excepted.
(b) In addition to and without limiting the generality of the foregoing, from the date of this Agreement until the earlier of the Effective Time and the date, if any, on which this Agreement is earlier terminated pursuant to Section 8.1, except (x) as prohibited or required by applicable Law or by any Governmental Entity, (y) as set forth in Section 5.2(b) of the Parent Disclosure Schedule or (z) as otherwise contemplated, required or permitted by this Agreement, unless the Company shall otherwise consent (which consent shall not be unreasonably withheld), Parent shall not, and shall not permit any Parent Subsidiaries to, directly or indirectly:
(i) amend or propose or agree to amend any of its Constituent Documents in such a manner that would cause holders of Company Common Stock that receive Parent Common Stock pursuant to the Merger to be treated differently than other holders of Parent Common Stock;
(ii) subject to Section 6.15, declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property) in respect of any of its shares of beneficial interest, except for (A) the declaration and payment by Parent of quarterly cash dividends on its outstanding Parent Preferred Stock in an amount equal to $0.40625 per share and (B) dividends or distributions by any wholly owned Parent Subsidiary to Parent or to any other wholly owned Parent Subsidiary; provided that notwithstanding the restriction on dividends and other distributions in this Section 5.2(b)(ii), Parent and any Parent Subsidiary shall be permitted to make distributions, including under Sections 858 or 860 of the Code, reasonably necessary for Parent to maintain its status as a REIT under the Code (or applicable state Law) and avoid or reduce the imposition of any entity level income or excise Tax under the Code (or applicable state Law);
(iii) adjust, split, combine or reclassify any of its shares of beneficial interest or issue or propose or authorize the issuance of any other securities (including options, warrants or any similar security exercisable for, or convertible into, such other security) in lieu of, or in substitution for, its shares of beneficial interest; provided that, for the avoidance of doubt, the foregoing shall not prohibit any conversion of the Parent Preferred Stock in accordance with its terms;
(iv) repurchase, redeem or otherwise acquire any shares of beneficial interest of Parent or any of the Parent Subsidiaries, or any other equity interests or any rights, warrants or options to acquire any such shares or interests, except for the withholding of shares to satisfy withholding Tax obligations in respect of Restricted Stock Awards outstanding as of the date of this Agreement in accordance with their terms and the Incentive Plans in effect on the date of this;
(v) except as required by applicable Law or changes in GAAP, materially change any of its accounting policies for financial accounting purposes;
(vi) enter into any Parent Tax Protection Agreement; make, change or rescind any material election relating to Taxes; change a material method of Tax accounting; file or amend any material Tax Return, settle or compromise any material federal, state, local or foreign Tax liability, audit, claim or assessment; enter into any closing agreement related to a material amount of Taxes; knowingly surrender any right to claim any material Tax refund; give or request any waiver of a statute of limitations with respect to any material Tax Return except, in each case, (A) to the extent required by Law or (B) to the extent necessary (x) to preserve Parent’s qualification as a REIT under the Code or (y) to qualify or preserve the status of any Parent Subsidiary as a disregarded entity or partnership for United States federal income tax purposes or as a Qualified REIT Subsidiary or a Taxable REIT Subsidiary under the applicable provisions of Section 856 of the Code, as the case may be;
(vii) enter into any new line of business;
(viii) take any action that would, or fail to take any action, the failure of which to be taken would, reasonably be expected to cause Parent to fail to qualify as a REIT or any Parent Subsidiary to cease to be treated as any of (A) a partnership or disregarded entity for United States federal income tax purposes or (B) a Qualified REIT Subsidiary or a Taxable REIT Subsidiary under the applicable provisions of Section 856 of the Code, as the case may be;
(ix) adopt a plan of complete or partial liquidation or dissolution with respect to Parent or resolutions providing for or authorizing such a liquidation or dissolution;
(x) take any action that would reasonably be expected to (A) result in any condition to the Merger set forth in Article VII not being satisfied in all material respects or (B) prevent, materially delay or materially impede the consummation of the Merger or any other transactions contemplated by this Agreement; or
(xi) authorize any of, or commit, resolve, propose or agree to take any of, the foregoing actions.
(c) Notwithstanding anything to the contrary set forth in this Agreement, nothing in this Agreement shall prohibit Parent from taking any action, or refraining to take any action, at any time or from time to time, if, in the reasonable judgment of the Parent Board, such action or inaction is reasonably necessary (i) for Parent to avoid or to continue to avoid incurring entity level income or excise Taxes under the Code (or applicable state Law) or to maintain its qualification as a REIT under the Code for any period or portion thereof ending on or prior to the Effective Time, or (ii) to establish or maintain any exemption from or otherwise avoid the imposition of any requirement that Parent or any Parent Subsidiary be registered as an investment company under the Investment Company Act, including in the case of clause (i), making dividend or any other actual, constructive or deemed distribution payments to shareholders of Parent in accordance with this Agreement or otherwise as permitted pursuant to Section 5.2(b)(ii).
(d) Notwithstanding anything to the contrary set forth in this Agreement (including this Section 5.2), nothing shall prevent Parent or any of its Subsidiaries from taking or failing to take any commercially reasonable action in response to a COVID-19 Measure that would otherwise violate or breach this Agreement, which response shall not be deemed a breach of this Agreement; provided, however, that to the extent reasonably practicable, Parent must provide reasonable advance written notice to the Company with reasonable detail of such response prior to such response.
Section 5.3 No Control of Other Parties’ Business. Nothing contained in this Agreement shall give (i) Parent, directly or indirectly, the right to control or direct the Company or any Company Subsidiary’s operations prior to the Effective Time, or (ii) the Company, directly or indirectly, the right to control or direct Parent or any of Parent Subsidiary’s operations prior to the Effective Time. Prior to the Effective Time, (i) the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and the Company Subsidiaries’ respective operations and (ii) Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and the Parent Subsidiaries’ respective operations.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Preparation of the Joint Proxy Statement/Prospectus and Form S-4.
(a) As promptly as reasonably practicable after the execution and delivery of this Agreement, (i) the Company and Parent shall jointly prepare and cause to be filed with the SEC a joint proxy statement (as amended or supplemented from time to time, the “Joint Proxy Statement/Prospectus”) (x) to be mailed to the stockholders of the Company relating to the Company Stockholders Meeting and (y) to be mailed to the shareholders of Parent relating to the Parent Stockholders Meeting, and (ii) Parent shall prepare, together with the Company, and file with the SEC a registration statement on Form S-4 under the Securities Act (of which the Joint Proxy Statement/Prospectus shall be a part) with respect to the issuance of Parent Common Stock in the Merger (such Form S-4, and any amendments or supplements thereto, the “Form S-4”). Each of Parent and the Company shall use its reasonable best efforts to have the Joint Proxy Statement/Prospectus cleared by the SEC and the Form S-4 declared effective by the SEC, and to keep the Form S-4 effective as long as is necessary to consummate the Merger and the other transactions contemplated hereby. Parent shall furnish to the Company all information relating to Parent as may be reasonably requested by the Company in connection with any such action and the preparation, filing and mailing of the Joint Proxy Statement/Prospectus and the Company shall furnish to Parent all information relating to the Company as may be reasonably requested by Parent in connection with any such action and the preparation and filing of the Joint Proxy Statement/Prospectus and the Form S-4. Subject to applicable Law, as promptly as reasonably practicable after the SEC or its staff advises that it has no further comments on the Joint Proxy Statement/Prospectus and the Form S-4 or that the Company and Parent may commence mailing the Joint Proxy Statement/Prospectus, each of the Company and Parent shall use its reasonable best efforts to cause the Joint Proxy Statement/Prospectus to be distributed to the stockholders of the Company and the shareholders of Parent (as applicable). No filing of, or amendment or supplement to the Joint Proxy Statement/Prospectus or the Form S-4, as applicable, shall be made by the Company or Parent, as applicable, and no response to any comments of the SEC or its staff with respect thereto shall be submitted by the Company or Parent, as applicable, without providing the other party a reasonable opportunity to review and comment thereon and giving due consideration to inclusion in the Joint Proxy Statement/Prospectus or Form S-4, as applicable, or any such response, comments reasonably proposed by either party. Both parties shall notify the other party promptly of the receipt of any comments from the staff of the SEC with respect to the Joint Proxy Statement/Prospectus or the Form S-4, as applicable, and of any request by the staff of the SEC for amendments or supplements to the Joint Proxy Statement/Prospectus or Form S-4, as applicable, or for additional information. The Company or Parent, as applicable, shall respond promptly to any comments or requests from the staff of the SEC and shall supply the other party with copies of all correspondence between such party or any of its Representatives, on the one hand, and the staff of the SEC, on the other hand, with respect to the Joint Proxy Statement/Prospectus or the Form S-4.
(b) None of the information supplied or to be supplied by the Company or Parent for inclusion or incorporation by reference into (i) the Form S-4 will, at the time the Form S-4 is filed with the SEC or at the time it becomes effective under the Securities Act, contain any untrue statement of material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (ii) the Joint Proxy Statement/Prospectus will, at the date of distribution to stockholders of the Company, at the time of the Company Stockholders Meeting to be held in connection with the Merger, at the date of distribution to shareholders of Parent and at the time of the Parent Stockholders Meeting to be held in connection with the Issuance, contain any untrue statement of material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; providing, that, in each case of (i) and (ii), neither party shall be responsible or liable for any statements made or incorporated by reference therein based on information supplied by the other party for inclusion or incorporation by reference therein. If at any time prior to obtaining the Requisite Company Stockholder Vote or the Requisite Parent Stockholder Vote any information relating to the Company or Parent, or any of their respective Affiliates, directors or officers, should be discovered by the Company or Parent which should be set forth in an amendment or supplement to the Joint Proxy Statement/Prospectus or Form S-4, as applicable, so that such document would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, the party that discovers such information shall promptly notify the other party and an appropriate amendment or supplement describing such information shall be promptly filed with the SEC and, to the extent required by Law, distributed to the stockholders of the Company and to the shareholders of Parent.
(c) Each of the Company and Parent shall cause the Joint Proxy Statement/Prospectus and the Form S-4 to comply as to form in all material respects with the requirements of the Exchange Act and Securities Act, as the case may be, and the rules and regulations of the SEC thereunder, except that no representation or warranty shall be made by either party with respect to statements made or incorporated by reference therein based on information supplied by the other party for inclusion or incorporation by reference in the Joint Proxy Statement/Prospectus or Form S-4. Parent and the Company shall make any other necessary filings with respect to the Merger under the Securities Act and Exchange Act and the rules and regulations thereunder.
(d) Each party will advise the other party promptly after it receives notice thereof, of the time when the Form S-4 becomes effective, the issuance of any stop order, the suspension of the qualification of the Parent Common Stock issuable in connection with the Merger for offering or sale in any jurisdiction, or any request by the SEC for amendment of the Joint Proxy Statement/Prospectus or the Form S-4.
Section 6.2 Company Stockholders Meeting; Parent Stockholders Meeting.
(a) As promptly as reasonably practicable after the staff of the SEC advises that it has no further comments on the Joint Proxy Statement/Prospectus or that the Company may commence distribution of the Joint Proxy Statement/Prospectus, the Company, acting through the Company Board, and in accordance with applicable Law and the rules and regulations of NYSE, shall (i) unless this Agreement has been validly terminated pursuant to Article VIII, duly call, give notice of, convene and hold a meeting of the holders of Company Common Stock in accordance with the Constituent Documents of the Company for the purpose of obtaining the Requisite Company Stockholder Vote and such other matters as the Company Board may decide (the “Company Stockholders Meeting”); provided, however, that the Company shall be permitted to delay or postpone convening the Company Stockholders Meeting if in the good faith judgment of the Company Board (after consultation with its outside legal counsel) such delay or postponement of the Company Stockholders Meeting is consistent with its statutory duties under applicable Law; and (ii) subject to Section 6.3(d), include in the Joint Proxy Statement/Prospectus the Company Board Recommendation.
(b) As promptly as reasonably practicable after the staff of the SEC advises that it has no further comments on the Joint Proxy Statement/Prospectus or that Parent may commence distribution of the Joint Proxy Statement/Prospectus, Parent, acting through the Parent Board, and in accordance with applicable Law and the rules and regulations of NYSE, shall (i) unless this Agreement has been validly terminated pursuant to Article VIII, duly call, give notice of, convene and hold a meeting of the shareholders of Parent in accordance with the Constituent Documents of Parent for the purpose of obtaining the Requisite Parent Stockholder Vote and such other matters as the Parent Board may decide (the “Parent Stockholders Meeting”); provided, however, that Parent shall be permitted to delay or postpone convening the Parent Stockholders Meeting if in the good faith judgment of the Parent Board (after consultation with its outside legal counsel) such delay or postponement of the Parent Stockholders Meeting is consistent with its statutory duties under applicable Law; and (ii) include in the Joint Proxy Statement/Prospectus the Parent Board Recommendation.
Section 6.3 No Solicitation.
(a) The Company agrees that it shall, and shall cause the Company Subsidiaries and the directors, officers and employees of the Company and the Company Subsidiaries to, and shall direct and use its reasonable best efforts to cause its other Representatives to, immediately cease and cause to be terminated all existing discussions or negotiations with any Person conducted heretofore with respect to any Takeover Proposal. Promptly after the execution of this Agreement, but not later than within three (3) Business Days, the Company shall, and shall direct its Representatives to, request that each Person (if any) that has executed a confidentiality agreement (other than the Confidentiality Agreement) relating to a potential Takeover Proposal promptly return to the Company or destroy all non-public documents and materials furnished by the Company or any of its Representatives to such Person pursuant to the terms of such confidentiality agreement. Except as permitted by Section 6.3(b), the Company shall not, and shall cause each of the Company Subsidiaries and the directors, officers and employees of the Company and the Company Subsidiaries not to, and shall direct and use its reasonable best efforts to cause its other Representatives not to, directly or indirectly (i) initiate or solicit, or knowingly facilitate or encourage the making of any proposal or offer that constitutes or would reasonably be expected to lead to a Takeover Proposal, (ii) engage in or otherwise participate in any discussions or negotiations that would reasonably be expected to lead to a Takeover Proposal, or provide any access to its properties, books or records or any non‑public information to any Person relating to the Company or any of its Subsidiaries in connection with the foregoing, (iii) enter into any other acquisition agreement, option agreement, joint venture agreement, partnership agreement, letter of intent, term sheet, merger agreement or similar contract with respect to a Takeover Proposal, (iv) agree to, approve, endorse, declare advisable, recommend or consummate any Takeover Proposal or (v) authorize, commit to, agree or publicly propose to do any of the foregoing (except to notify such Person of the existence of the provisions of this Section 6.3). Notwithstanding anything to the contrary contained herein, the Company shall be permitted to terminate, amend, modify, waive or fail to enforce any provision of any “standstill” or similar obligation of any Person if (i) the Company Board determines in good faith, after consultation with its outside legal counsel, that the failure to take such action would reasonably be likely to be inconsistent with its statutory duties under applicable Law and (ii) absent such action by the Company, the applicable provisions would prevent any Person or group from making a Takeover Proposal privately to the Company Board; provided that the Company promptly (and in any event within forty-eight (48) hours thereafter) provides written notice to Parent thereof (including the identity of such counterparty) after granting any such limited termination, waiver, amendment, modification or failure to enforce. The Company agrees that any material violations of the restrictions set forth in this Section 6.3(a) by any Representative of the Company shall be deemed to be a breach by the Company.
(b) Notwithstanding the provisions of the second sentence of Section 6.3(a), at any time prior to obtaining the Requisite Company Stockholder Vote, in response to an unsolicited written Takeover Proposal received after the execution and delivery of this Agreement which did not arise as a result of a breach, in any material respect, of the Company’s obligations under Section 6.3(a), (i) the Company and its Representatives may contact the Person or group of Persons making such Takeover Proposal (and its Representatives) to clarify the terms and conditions thereof and (ii) if the Company Board determines in good faith (after consultation with its outside legal counsel) that the failure to take such actions would, or would be reasonably likely to, be inconsistent with its statutory duties under applicable Law, the Company and its Representatives may (A) furnish information with respect to the Company and the Company Subsidiaries to the Person or group of Persons making such Takeover Proposal (and its Representatives), provided that (1) prior to so furnishing such information the Company has entered into a confidentiality agreement with such Person or group of Persons on terms not less restrictive in the aggregate to such Person or group of Persons than the provisions of the Confidentiality Agreement are to Parent, its Affiliates and their respective Representatives and (2) all such information has previously been provided or made available to Parent or its Representatives or is provided or made available to Parent or its Representatives prior to or substantially concurrently with the time it is provided to such Person or group of Persons; and (B) participate in discussions or negotiations with the Person or group of Persons making such Takeover Proposal (and its Representatives) regarding such Takeover Proposal.
(c) Except as permitted by Section 6.3(d), neither the Company Board nor any committee thereof shall (i) withdraw (or modify or qualify in a manner adverse to Parent) the Company Board Recommendation, (ii) fail to include the Company Board Recommendation in the Joint Proxy Statement/Prospectus, (iii) approve, adopt or recommend, or publicly propose to approve, adopt or recommend, any Takeover Proposal (any action described in these clauses (i), (ii) or (iii) being referred to as a “Recommendation Withdrawal”), or (iv) allow the Company or any of the Company Subsidiaries to execute or enter into any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement, or other similar Contract (other than a confidentiality agreement in accordance with Section 6.3(b)) providing for, with respect to, or in connection with, any Takeover Proposal; provided, however, that (A) the delivery by the Company, the Company Board or any committee thereof of any notice specified in Section 6.3(e) shall not be deemed to be or constitute a Recommendation Withdrawal and (B) the provision of factual information by the Company to its stockholders shall not be deemed to be or constitute a Recommendation Withdrawal so long as the disclosure through which such factual information is conveyed, taken as a whole, is not contrary to or inconsistent with the Company Board Recommendation in any material respect.
(d) Notwithstanding the provisions of Section 6.3(c), at any time prior to obtaining the Requisite Company Stockholder Vote, and subject in each case to the prior compliance with Section 6.3(e), (i) the Company Board may make a Recommendation Withdrawal following the occurrence of an Intervening Event if the Company Board determines in good faith, after consultation with outside legal counsel, that the failure to take such action would, or would be reasonably likely to, be inconsistent with its statutory duties under applicable Law; or (ii) without limiting the effect of the Section 6.3(c) proviso and Section 6.3(d)(i) and the rights provided for thereunder, in response to a written Takeover Proposal that the Company Board determines in good faith (after consultation with its financial advisors and outside legal counsel) constitutes a Superior Proposal, the Company may make a Recommendation Withdrawal and/or terminate this Agreement pursuant to Section 8.1(d)(ii) and this Section 6.3(d)(ii) and, concurrently with such termination, may enter into a definitive agreement with respect to such Superior Proposal; provided, however, that the Company shall not terminate this Agreement pursuant to Section 8.1(d)(ii) and this Section 6.3(d)(ii), and any such purported termination shall be void and of no force or effect, unless the Company pays to Parent the fee payable pursuant to Section 8.3(b) prior to or concurrently with such termination.
(e) Notwithstanding anything to the contrary contained in this Agreement, the Company Board may not make a Recommendation Withdrawal or terminate this Agreement pursuant to Section 8.1(d)(ii) and Section 6.3(d)(ii), unless (i) if such Recommendation Withdrawal is not being made as a result of a Superior Proposal, the Company shall have provided to Parent three (3) Business Days prior written notice advising Parent that the Company Board intends to take such action and specifying the reasons therefor in reasonable detail or (ii) if such Recommendation Withdrawal or termination is being made as a result of a Superior Proposal, (A) the Company shall have provided to Parent three (3) Business Days prior written notice advising Parent that the Company Board intends to take such action and specifying the reasons therefor in reasonable detail as well as the material terms and conditions of any Superior Proposal (including the identity of the Person making such Superior Proposal and copies of all documents or correspondence evidencing such Superior Proposal), (B) during such three (3) Business Day period, if requested by Parent, the Company shall have engaged in good faith negotiations with Parent regarding any amendment to this Agreement proposed in writing by Parent and (C) at the end of such three (3) Business Day period such Takeover Proposal continues to constitute (in the good faith judgment of the Company Board after consultation with its financial advisors and outside legal counsel) a Superior Proposal. Any amendment to the financial terms or any other material change to the terms of a Superior Proposal shall require the Company to deliver a new written notice and the Company shall be required to comply again with the requirements of clauses (A) – (C) above; provided, however, that references to the three (3) Business Day period above shall then be deemed to be references to a two (2) Business Day period following receipt by Parent of any such new written notice.
(f) In addition to the obligations of the Company set forth in the other provisions of this Section 6.3, the Company shall as promptly as practicable (and in any event within 24 hours after receipt) advise Parent orally and in writing of any Takeover Proposal, the material terms and conditions of any such Takeover Proposal (including any material changes thereto) and the identity of the Person making the Takeover Proposal. The Company shall thereafter keep Parent reasonably informed on a current basis of the status of any such Takeover Proposal (including any material change to the terms thereof).
(g) Nothing contained in this Section 6.3 shall prohibit the Company or the Company Board from (i) taking and disclosing to the stockholders of the Company a position contemplated by Rule 14e-2(a) under the Exchange Act or making a statement contemplated by Item 1012(a) of Regulation M-A or Rule 14d-9 under the Exchange Act, (ii) making any disclosure to the stockholders of the Company if the Company Board determines in good faith, after consultation with its outside legal counsel, that the failure to make such disclosure would be reasonably likely to be inconsistent with its statutory duties under applicable Law or (iii) informing any Person of the existence of the provisions contained in this Section 6.3; provided that any Recommendation Withdrawal may only be made in accordance with Section 6.3(d); it being understood that a “stop, look and listen” communication to the stockholders of the Company pursuant to Rule 14d-9(f) under the Exchange Act (or any similar communication to the stockholders of the Company) shall not be deemed to be or constitute a Recommendation Withdrawal.
(h) For purposes of this Agreement:
“Intervening Event” means a material event, occurrence, development or change in circumstances with respect to the Company and its Subsidiaries, taken as a whole, that occurred or arose after the date of this Agreement, which was unknown to, nor reasonably foreseeable by, the Company Board (or if known or reasonably foreseeable, the material consequences of which were not known or reasonably foreseeable by the Company Board) as of the date of this Agreement and becomes known to or by the Company Board prior to the time the Requisite Company Stockholder Vote is obtained; provided, however that none of the following will constitute, or be considered in determining whether there has been, an Intervening Event: (i) the receipt, existence of or terms of a Takeover Proposal or any matter relating thereto or consequence thereof and (ii) changes in the market price or trading volume of the Company Shares or the fact that the Company meets or exceeds internal or published projections, budgets, forecasts or estimates of revenues, earnings or other financial results for any period (provided, however, that the underlying causes of such change or fact shall not be excluded by this clause (ii)).
“Takeover Proposal” means any inquiry, proposal or offer from any Person or “group” (as defined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) (other than Parent or any of its Subsidiaries) relating to, in a single transaction or series of transactions, (i) any direct or indirect purchase or other acquisition by any Person or “group” (as defined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) (other than Parent or any of its Subsidiaries) of shares of Company Common Stock representing more than twenty percent (20%) of the Company Common Stock outstanding after giving effect to the consummation of such purchase or other acquisition, including pursuant to a tender offer or exchange offer by any Person or “group” (as defined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) that, if consummated in accordance with its terms, would result in such Person or “group” (as defined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) beneficially owning more than twenty percent (20%) of the Company Common Stock outstanding after giving effect to the consummation of such tender or exchange offer; (ii) any direct or indirect purchase or other acquisition by any Person or “group” (as defined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) of more than twenty percent (20%) of the consolidated assets of the Company and the Company Subsidiaries taken as a whole (measured by the fair market value thereof as of the date of such purchase or acquisition); or (iii) any merger, consolidation, business combination, recapitalization, reorganization, liquidation, dissolution or other similar transaction involving the Company as a result of which the holders of the Company Common Stock immediately prior to the consummation of such transaction would cease to hold at least eighty percent (80%) of the total voting power of the Company or any surviving entity (or any direct or indirect parent company thereof) immediately following such transaction.
“Superior Proposal” means any unsolicited bona fide written Takeover Proposal that did not result from a breach, in any material respect, of this Section 6.3 that the Company Board has determined in its good faith judgment, after consultation with its financial advisors and outside legal counsel, and taking into consideration, among other things, all legal, financial, regulatory, timing and other aspects and risks of the proposal (including required conditions) and the Person making the proposal and all of the other terms, conditions and other aspects of such Takeover Proposal and this Agreement that the Company Board (or any committee thereof) deems relevant, to be (i) more favorable to the Company’s stockholders from a financial point of view than the transactions contemplated by this Agreement (including, if applicable, any revisions to this Agreement made or proposed in writing by Parent in accordance with Section 6.3(e)) and (ii) reasonably likely of being consummated on the terms so proposed; provided, that for purposes of the definition of “Superior Proposal,” the references to “20%” and “80%” in the definition of Takeover Proposal shall be deemed to be references to “50%”.
Section 6.4 Access to Information. From and after the date of this Agreement until the earlier of the Effective Time or termination of this Agreement pursuant to Section 8.1, each party shall, and shall cause each of its Subsidiaries to, afford the Representatives of the other party reasonable access (which may be limited to remote access due to COVID-19 Measures) during normal business hours to their and their Subsidiaries’ properties, books, records, Contracts and personnel, and shall furnish, and shall cause to be furnished, as promptly as reasonably practicable to the other party (a) a copy of each report, schedule and other document filed, furnished, published or announced by it during such period pursuant to the requirements of federal or state securities Laws or any Governmental Entity and (b) all other information concerning such party’s and its Subsidiaries’ business, properties and personnel as the other party may reasonably request; provided that the non-requesting party may restrict the foregoing access to those Persons who have entered into or are bound by a confidentiality agreement with such non-requesting party or to the extent required by applicable Law. All such access shall be subject to (i) reasonable restrictions imposed from time to time with respect to the provision of privileged communications or any applicable confidentiality agreement with any Person (provided that the parties will use commercially reasonable efforts to provide access to any such materials in such a way that does not jeopardize the application of the attorney-client privilege, attorney work product doctrine, or any other privilege, or violate any applicable confidentiality agreement) and (ii) restrictions in accordance with guidelines reasonably necessary in response to or related to COVID-19. In conducting any inspection of any properties of any party and its Subsidiaries, the inspecting parties and their Representatives shall not (A) interfere with the business of the other party or any of its Subsidiaries conducted at such property or (B) damage any property or any portion thereof. Prior to the Effective Time, no party or its Representatives shall have the right to conduct environmental testing or sampling at any of the facilities or properties of any other party or any of its Subsidiaries. All information obtained pursuant to this Section 6.4 shall continue to be governed by the Confidentiality Agreement and the Company Confidentiality Agreement, as applicable, each of which shall remain in full force and effect in accordance with its terms. No investigation pursuant to this Section 6.4 shall affect the representations and warranties or conditions to the obligations of the parties contained herein.
Section 6.5 Reasonable Best Efforts.
(a) Subject to the terms and conditions of this Agreement, each of the Company, Parent and Merger Sub shall use its reasonable best efforts to take, or cause to be taken, the actions and to do, or cause to be done, the things necessary, proper or advisable under this Agreement and applicable Laws and regulations to consummate the transactions contemplated hereby as soon as reasonably practicable after the date of this Agreement (and in any event no later than the Outside Date), including (i) using reasonable best efforts to take, or cause to be taken, the actions necessary to cause the conditions to Closing set forth in Article VII to be satisfied, (ii) preparing and filing as promptly as practicable all documents to effect all necessary applications, notices, petitions, filings and other documents and to obtain as promptly as practicable all consents, clearances, waivers, licenses, orders, registrations, authorizations, approvals and permits contemplated by this Agreement, and (iii) taking the reasonable steps as may be necessary or advisable to make all necessary filings and obtain all such consents, clearances, waivers, licenses, orders, registrations, authorizations, approvals and permits (including providing all necessary information and documentary material and providing personnel as necessary to attend any regulatory meetings, hearings or other proceedings).
(b) To the extent permissible under applicable Law or any rule, regulation or restriction of any Governmental Entity, each of the Company, Parent and Merger Sub shall, in connection with the efforts referenced above to obtain all requisite approvals, clearances and authorizations for the transactions contemplated hereby, use its reasonable best efforts to (i) cooperate in all respects with each other party in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by any private party, (ii) keep the other parties apprised of the status of matters relating to completion of the transactions contemplated hereby and promptly inform the other parties of any communication (including the initiation of any proceeding) received by such party from any Governmental Entity and any material communication received from any private party, in each case, in connection with any pending or threatened litigation regarding any of the transactions contemplated hereby, (iii) permit the other parties, or the other parties’ legal counsel, to review any filing, submission or other communication given by it to any Governmental Entity or, in connection with any pending or threatened litigation by any private party, with any other Person and to receive final versions of the same (it being understood that each party shall, without limitation, have the right to review in advance, subject to applicable Laws relating to the exchange of information, all of the information relating to such party, and any of its respective Subsidiaries, which appears in any filing made with, or materials submitted to, any third party or any Governmental Entity, with respect to this Agreement or the Merger), (iv) consult with the other parties in advance of any meeting, conference, conference call, discussion or communication with, any such Governmental Entity or, in connection with any proceeding by any private party, with any other Person and (v) to the extent permitted by such Governmental Entity or other Person, give the other parties the opportunity to attend and participate in such meetings, conferences, conference calls, discussions and communications. Notwithstanding the foregoing, the obligations set forth in this Section 6.5(b) shall not apply to any Transaction Litigation, which is the subject of Section 6.18.
(c) If any objections are asserted with respect to the transactions contemplated hereby under any applicable Law or if any suit is instituted by any Governmental Entity or any private party challenging any of the transactions contemplated hereby as violative of any applicable Law, each of the Company, Parent and Merger Sub shall, subject to Section 6.18 in the event of any Transaction Litigation, use its reasonable best efforts to resolve any such objections or challenges as such Governmental Entity or private party may have to such transactions under such applicable Law so as to permit consummation of the transactions contemplated hereby on the terms set forth in this Agreement as soon as reasonably practicable after the date of this Agreement (and in any event no later than the Outside Date).
Section 6.6 Employee Matters.
(a) Until the first anniversary of the Effective Time, the Surviving Entity shall provide, or cause to be provided, continued employment for those individuals who were employees of the Company and the Company Subsidiaries immediately prior to the Effective Time except as set forth on Section 6.6(a) of the Company Disclosure Schedule (the “Continuing Employees”) and shall provide, or cause to be provided, each Continuing Employee with (i) a base salary or base wages at an annual rate that is no less than the annual rate of the base salary or base wages provided to such Continuing Employee immediately prior to the date of this Agreement, (ii) an annual bonus and other cash-based incentive compensation target that is no less than the annual bonus and other cash-based incentive compensation target compensation provided to such Continuing Employee immediately prior to the date of this Agreement, (iii) a long-term equity incentive compensation opportunity with a value that is not less than any long term equity incentive compensation provided to such Continuing Employee immediately prior to the date of this Agreement, and (iv) employee benefits that are, in the good faith judgment of Parent, either (x) in the aggregate no less favorable than the employee benefits provided by the Company or the applicable Company Subsidiary to the Continuing Employees immediately prior to the date of this Agreement or (y) substantially comparable to the employee benefits provided by Parent or the applicable Subsidiary to similarly situated employees of Parent or the applicable Subsidiary. Notwithstanding anything to the contrary, nothing herein shall be deemed to restrict the right of Parent or the Surviving Entity to terminate the employment of any such Continuing Employee for Cause (as defined in such Continuing Employee’s Company Employment Agreement, or, to the extent such Continuing Employee is not party to a Company Employment Agreement, as defined in the Company’s Change in Control Severance Plan, effective January 1, 2021 (the “CIC Severance Plan”)).
(b) The Surviving Entity shall (i) waive any applicable pre-existing condition exclusions and waiting periods with respect to participation and coverage requirements in any replacement or successor welfare benefit plan of the Surviving Entity that a Continuing Employee is eligible to participate in following the Effective Time to the extent such exclusions or waiting periods were inapplicable to, or had been satisfied by, such Continuing Employee immediately prior to the Effective Time under the analogous Company Benefit Plan in which such Continuing Employee participated, (ii) provide each Continuing Employee with credit for any co-payments and deductibles paid prior to the Effective Time (to the same extent such credit was given under the analogous Company Benefit Plan prior to the Effective Time) in satisfying any applicable deductible or out-of-pocket requirements, and (iii) recognize service prior to the Effective Time with the Company and any of the Company Subsidiaries for purposes of eligibility to participate and vesting and level of benefits (but not for purposes of benefits accrual under any defined benefit pension plan) to the same extent such service was recognized by the Company or any of the Company Subsidiaries under the analogous Company Benefit Plan in which such Continuing Employee participated immediately prior to the Effective Time; provided that the foregoing shall not apply to the extent it would result in any duplication of benefits for the same period of service.
(c) From and after the Effective Time, except as otherwise agreed in writing between Parent and a Company employee, Parent will cause the Surviving Entity and its Subsidiaries to honor, in accordance with its terms (including any rights of amendment, modification or termination provided therein) the existing Company Employment Agreements, and all obligations thereunder in effect as of the Effective Time. Effective immediately upon the Effective Time, the Surviving Entity will terminate the employment of the two individuals set forth on Section 6.6(a) of the Company Disclosure Schedule in a manner that the parties acknowledge and agree will entitle such individuals to termination and severance compensation and benefits, as applicable, under the Company Employment Agreements (or, as applicable, the Company Benefit Plans).
(d) Notwithstanding anything herein to the contrary, any Continuing Employee who is not a party to a Company Employment Agreement and whose employment is terminated by the Company without Cause (as defined in the CIC Severance Plan) between the twelfth (12th) month anniversary of the Effective Time and the thirteenth (13th) month anniversary of the Effective Time shall be entitled to severance pay and benefits no less favorable than the severance pay and benefits such Continuing Employee would have been entitled to pursuant to the CIC Severance Plan and otherwise on the same terms and conditions as set forth in the CIC Severance Plan. For the avoidance of doubt, a Continuing Employee who is not a party to a Company Employment Agreement and voluntary leaves employment at any time after the Effective Date (other than as a result of a failure of the Surviving Company to comply with the first sentence of this Section 6.6(d)), or is terminated by the Company for Cause (as defined in the CIC Severance Plan) will not be entitled to any severance payments or benefits.
(e) To the extent requested in writing by Parent at least 20 days prior to the Effective Time, the Company shall take all actions that may be necessary to terminate participation in the Company 401(k) Plan at least one day prior to the Effective Time. If the Company terminates participation in the Company 401(k) Plan in accordance with the preceding sentence, (1) prior to the Effective Time and thereafter (as applicable), the Company and Parent shall take any and all actions as may be required, including amendments to the tax-qualified defined contribution retirement plan designated by Parent (the “Parent 401(k) Plan”) to permit each Continuing Employee to make rollover contributions of “eligible rollover distributions” (within the meaning of Section 401(a)(31) of the Code, inclusive of loans) in the form of cash, or notes (in the case of loans) or a combination thereof, in an amount equal to the full account balance distributed or distributable to such Continuing Employee from the Company 401(k) Plan to the Parent 401(k) Plan and (2) each Continuing Employee shall become a participant in the Parent 401(k) Plan on the Closing Date (giving effect to the service crediting provisions of Section 6.6(b)); it being agreed that there shall be no gap in the ability for Continuing Employees to participate in a tax-qualified defined contribution plan.
(f) Nothing contained herein, whether express or implied, (i) shall be treated as an amendment or other modification of any Company Benefit Plan or any employee benefit plan of Parent or any of its Subsidiaries, or (ii) subject to the requirements of this Section 6.6, shall limit the right of Parent or the Surviving Entity or any of its Subsidiaries to amend, terminate or otherwise modify any Company Benefit Plan following the Closing Date. The parties hereto acknowledge and agree that all provisions contained in this Section 6.6 are included for the sole benefit of the parties hereto, and that nothing in this Agreement, whether express or implied, creates any third party beneficiary or other rights in any other Person, including, without limitation, any current or former employees or directors of the Company or its Subsidiaries, any participant in any Company Benefit Plan or in any employee benefit plan of the Surviving Entity or Parent, or any dependent or beneficiary thereof.
Section 6.7 Expenses. Except as set forth in Section 8.3(f) and Section 8.3(g), whether or not the Merger is consummated, all Expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such Expenses. As used in this Agreement, “Expenses” includes all out-of-pocket fees and expenses (including all fees and expenses of counsel, accountants, investment bankers, experts and consultants to a party and its Affiliates) incurred by a party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement and the transactions contemplated hereby, including the preparation, filing, printing and mailing of the Joint Proxy Statement/Prospectus and the solicitation of the Requisite Company Stockholder Vote and the Requisite Parent Stockholder Vote.
Section 6.8 Directors’ and Officers’ Indemnification and Insurance.
(a) From and after the Effective Time, Parent shall, and shall cause the Surviving Entity to, to the fullest extent permitted by Law (including to the fullest extent authorized or permitted by any amendments to or replacements of the MGCL or the LLC Act adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors), indemnify, defend and hold harmless (and advance expenses, provided the Person to whom expenses are advanced provides a reasonable and customary undertaking (which shall not include posting of any collateral) to repay such advances if it is ultimately determined that such Person is not entitled to indemnification) the present and former directors and officers of the Company and the Company Subsidiaries, and any fiduciaries under any Company Benefit Plan (each an “Indemnified Party”), against any and all costs or expenses (including reasonable attorneys’ fees and expenses), judgments, fines, losses, claims, damages, penalties, liabilities and amounts paid in settlement in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative, regulatory or investigative, arising out of (in whole or in part), relating to or in connection with any circumstances, developments or matters in existence, or acts or omissions occurring or alleged to occur prior to or at the Effective Time, including the approval of this Agreement or the transactions contemplated hereby or arising out of or pertaining to the transactions contemplated hereby, whether asserted or claimed prior to, at or after the Effective Time.
(b) From and after the Effective Time, Parent, the Surviving Entity and the Indemnified Parties shall cooperate in the defense of any actual or threatened claim, action, suit, proceeding or investigation relating to any circumstances, developments or matters in existence at or prior to the Effective Time, or acts or omissions occurring at or prior to the Effective Time for which indemnification could be sought by an Indemnified Party hereunder and shall provide access to properties and individuals as reasonably requested and furnish or cause to be furnished records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection therewith. From and after the Effective Time, Parent and the Surviving Entity shall not settle, compromise or consent to the entry of any judgment with respect to any actual or threatened claim, action, suit, proceeding or investigation described in the preceding sentence unless: (i) such settlement, compromise or consent includes an unconditional release of each Indemnified Party from all liability arising out of such Claim; (ii)(A) such settlement, compromise or consent does not provide for any acknowledgement of fault or wrongdoing by any Indemnified Party and (B) the Surviving Entity reaffirms in writing its obligations to each Indemnified Party under this Section 6.8; or (iii) each Indemnified Party otherwise consents in writing to such settlement, compromise or consent (such consent not to be unreasonably withheld).
(c) The Constituent Documents of the Surviving Entity shall include provisions for indemnification, advancement of expenses and exculpation of the Indemnified Parties on the same basis as set forth in the Constituent Documents of the Company in effect on the date of this Agreement. Following the Effective Time, the Surviving Entity shall, and Parent shall cause the Surviving Entity to, maintain in effect the provisions in its Constituent Documents providing for indemnification, advancement of expenses and exculpation of Indemnified Parties, as applicable, with respect to the facts or circumstances occurring at or prior to the Effective Time, to the fullest extent permitted from time to time under applicable Law, which provisions shall not be amended except as required by applicable Law or except to make changes permitted by applicable Law that would enlarge the scope of the Indemnified Parties’ indemnification rights thereunder.
(d) If Parent or the Surviving Entity or any of their respective successors or assigns (i) consolidates with or merges into any other Person and is not the continuing or Surviving Entity or entity of such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person, then, and in each such case, Parent shall cause proper provisions to be made prior to the consummation of any transaction of the type described in clause (i) or clause (ii) of this sentence so that the successors and assigns of Parent or the Surviving Entity, as the case may be, shall assume all of the obligations set forth in this Section 6.8.
(e) From and after the Effective Time, Parent and the Surviving Entity shall comply with, and shall not, directly or indirectly, amend, modify, limit or terminate the advancement of expenses, exculpation and indemnification provisions of the agreements listed on Section 6.8(e) of the Company Disclosure Schedule between the Company and any of the Indemnified Parties, or any such provisions contained in the Surviving Entity’s Constituent Documents.
(f) This Section 6.8 is intended for the irrevocable benefit of, and to grant third party rights to, the Indemnified Parties and shall be binding on all successors and assigns of Parent and the Surviving Entity. Each Indemnified Party shall be a third-party beneficiary of this Section 6.8, and entitled to enforce the covenants contained in this Section 6.8. If any Indemnified Party makes any claim for indemnification or advancement of expenses under this Section 6.8 that is denied by Parent and/or the Surviving Entity, and a court of competent jurisdiction determines that the Indemnified Party is entitled to such indemnification, then Parent or the Surviving Entity shall pay such Indemnified Party’s costs and expenses, including reasonable legal fees and expenses, incurred in connection with pursuing such claim against Parent and/or the Surviving Entity. The rights of the Indemnified Parties under this Section 6.8 shall be in addition to any rights such Indemnified Parties may have under the Constituent Documents of the Company, the Constituent Documents of any of the Company Subsidiaries or the Surviving Entity or under any applicable Contracts, insurance policies or Laws.
(g) Following the Effective Time, the Surviving Entity shall, and Parent shall cause the Surviving Entity to, maintain with reputable and financially sound carriers the extension of the Company’s existing D&O Insurance, for a claims reporting or discovery period (whichever is greater) of six (6) years from and after the Effective Time with respect to any claim arising from facts or events that existed or occurred at or prior to the Effective Time with terms, conditions, retentions, coverage limits and limits of liability that are at least as favorable as the coverage provided under the Company’s existing D&O Insurance.
Section 6.9 Public Announcements. The parties agree that the Company and Parent shall issue a joint initial press release concerning this Agreement and the transactions contemplated hereby, which initial press release shall be approved in advance by the Company and Parent. Following such initial press release, Parent and the Company shall consult with each other before issuing, and give each other a reasonable opportunity to review and comment upon, any press release or other public statements (with respect to public statements, only to the extent practicable) with respect to the transactions contemplated hereby and shall not issue any such press release or make any such public statement prior to such consultation (with respect to public statements, only to the extent practicable), except as such party may reasonably conclude may be required by applicable Law, court process or by obligations pursuant to any listing agreement with any national securities exchange or national securities quotation system; provided, however, that the restrictions set forth in this Section 6.9 shall not apply to any release or public statement (a) made or proposed to be made by the Company in accordance with Section 6.3 or (b) in connection with any dispute between the parties regarding this Agreement or the transactions contemplated hereby.
Section 6.10 Notification. The Company shall promptly notify Parent, and Parent shall promptly notify the Company, of (a) any notice or other communication received by such party from any Governmental Entity in connection with the transactions contemplated hereby or from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated hereby, if the subject matter of such communication or the failure of such party to obtain such consent would reasonably be expected to have a Company Material Adverse Effect or a Parent Material Adverse Effect (as applicable), (b) any matter (including a breach of any representation, warranty, covenant or agreement contained in this Agreement) that would reasonably be expected to lead to the failure to satisfy any of the conditions to Closing in Article VII and (c) any action, suits, claims, investigations or proceedings commenced or, to such party’s knowledge, threatened in writing against, relating to or involving or otherwise affecting such party or any of its Subsidiaries which relate to the transactions contemplated hereby. Failure to comply with this Section 6.10 shall not result in the failure of any condition under Article VII to be satisfied, unless such condition would have otherwise been satisfied but for such failure to comply with this Section 6.10.
Section 6.11 Section 16(b). The Company and Parent shall take all steps reasonably necessary to cause the transactions contemplated hereby and any other dispositions of equity securities of the Company or acquisitions of equity securities of Parent (and, in each case, derivative securities) in connection with the transactions contemplated hereby by each individual who is a director or executive officer of the Company or Parent to be exempt under Rule 16b-3 promulgated under the Exchange Act.
Section 6.12 Listing of Parent Common Stock. Parent shall use its reasonable best efforts to cause prior to the Effective Time the shares of Parent Common Stock to be issued pursuant to this Agreement to be approved for listing, upon official notice of issuance, on the NYSE.
Section 6.13 Delisting of Company Shares. Each of the parties agrees to cooperate with each other in taking, or causing to be taken, all actions necessary to delist the Company Shares from NYSE and terminate its registration under the Exchange Act; provided that such delisting and termination shall not be effective until after the Effective Time.
Section 6.14 Affiliate Letter. On or prior to the date of the Company Stockholders Meeting, the Company will deliver to Parent a letter (the “Company Affiliate Letter”) identifying all persons who are “affiliates” of the Company for purposes of Rule 145 under the Securities Act (“Rule 145”). On or prior to the Closing Date, the Company will use all reasonable efforts to cause each person identified as an “affiliate” in the Company Affiliate Letter to deliver a written agreement, in form and substance reasonably acceptable to Parent, in connection with restrictions on affiliates under Rule 145.
Section 6.15 Dividends.
(a) In the event that a distribution with respect to shares of Company Common Stock permitted under the terms of this Agreement has a record date prior to the Effective Time and has not been paid prior to the Closing Date, such distribution shall be paid to the holders of such shares of Company Common Stock on the Closing Date immediately prior to the Effective Time. The Company shall coordinate with Parent the declaration, setting of record dates and payment dates of dividends on Company Common Stock so that holders of Company Common Stock do not receive both a dividend permitted by Section 5.1(b)(ii) and a dividend permitted by Section 5.2(b)(ii).
(b) In the event that a distribution with respect to shares of Parent Common Stock permitted under the terms of this Agreement has a record date prior to the Effective Time and has not been paid prior to the Closing Date, such distribution shall be paid to the holders of such shares of Parent Common Stock on the Closing Date immediately prior to the Effective Time.
(c) In the event that either the Company or Parent shall declare or pay any dividend or other distribution that is expressly permitted pursuant to the proviso at the end of Section 5.1(b)(ii) or Section 5.2(b)(ii), respectively, it shall provide the other party with at least fifteen (15) days advance written notice prior to taking such action, and such other party shall be entitled to declare and pay a dividend per share (i) in the case of the Company, to the holders of Company Common Stock in an amount per share of Company Common Stock equal to the product obtained by multiplying (A) the dividend declared by Parent with respect to each share of Parent Common Stock by (B) the Common Exchange Ratio and (ii) in the case of Parent, to holders of Parent Common Stock in an amount per share of Parent Common Stock equal to the quotient obtained by dividing (x) the dividend declared by the Company with respect to each share of Company Common Stock by (y) the Common Exchange Ratio. The record date and time and payment date and time for any dividend payable pursuant to this Section 6.15(c) shall be prior to the Closing Date.
(d) In the event that the Company shall declare or pay any dividend or other distribution that is expressly permitted pursuant to Section 5.1(b)(ii)(A) (other than (i) any such dividend or distribution declared prior to the date of this Agreement and (ii) the first such dividend or distribution declared after the date of this Agreement), the Company shall provide Parent with at least fifteen (15) days advance written notice prior to taking such action, and Parent shall be entitled to declare and pay a dividend per share to holders of Parent Common Stock in an amount per share of Parent Common Stock equal to the quotient obtained by dividing (x) the dividend declared by the Company with respect to each share of Company Common Stock by (y) the Common Exchange Ratio. The record date and time and payment date and time for any dividend payable pursuant to this Section 6.15(d) shall be prior to the Closing Date.
Section 6.16 Takeover Statutes. The parties shall use their respective reasonable best efforts (a) to take all action necessary so that no Takeover Statute becomes applicable to the Merger or any of the other transactions contemplated by this Agreement and (b) if any such Takeover Statute becomes applicable to any of the foregoing, to take all action necessary so that the Merger and the other transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to eliminate or minimize the effect of such Takeover Statute or the restrictions in the Constituent Documents of the Company and Parent on the Merger and the other transactions contemplated by this Agreement.
Section 6.17 Tax Matters.
(a) Each of Parent and the Company shall use its reasonable best efforts to cause the Merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, including by executing and delivering the tax representation letters referred to herein. Provided that the Company shall have received the opinion of counsel referred to in Section 7.3(f) and Parent shall have received the opinion of counsel referred to in Section 7.2(f), the parties shall treat the Merger as a “reorganization” within the meaning of Section 368(a) of the Code and no party shall take any position for Tax purposes inconsistent therewith, unless otherwise required by a final determination within the meaning of Section 1313(a) of the Code (or a similar determination under applicable state or local Law), reporting consistently for all federal, state, and local income Tax or other purposes; provided that, for the avoidance of doubt, nothing in this Section 6.17 shall prevent any party or any of their respective Affiliates from settling, or require any of them to litigate, any challenge or other similar proceeding by any Governmental Entity with respect to the foregoing. Neither Parent nor the Company shall take any action that would, or fail to take any action the failure of which would, reasonably be expected to cause the Merger to fail to qualify as a “reorganization” within the meaning of Section 368(a) of the Code.
(b) Parent shall use its reasonable best efforts to (i) obtain or cause to be provided the opinions referred to in Section 7.2(f) and Section 7.3(e), (ii) obtain an opinion of counsel consistent with the opinion of counsel referred to in Section 7.2(f), but dated as of the effective date of the Form S-4, to the extent required for the Form S-4 to be declared effective by the SEC, (iii) deliver to Parent Tax Counsel (or other tax counsel to Parent delivering the opinion described in Section 7.2(f)) and Company Tax Counsel (or other tax counsel to the Company delivering the opinion described in Section 7.3(f)), a tax representation letter, dated as of the effective date of the Form S-4 and the Closing Date, as applicable, and signed by an officer of Parent, in form and substance as set forth in Section 6.17(b)(i) of the Parent Disclosure Schedule, containing representations of Parent reasonably necessary or appropriate to enable such counsel to render the applicable tax opinions described in Section 7.2(f) and Section 7.3(f), and (iv) deliver to Parent Tax Counsel (or other tax counsel to Parent delivering the opinion described in Section 7.3(e)), a tax representation letter, dated as of the Closing Date (and, if applicable, the effective date of the Form S-4) and signed by an officer of Parent, in form and substance as set forth in Section 6.17(b)(ii) of the Parent Disclosure Schedule, containing representations of Parent reasonably necessary or appropriate to enable such counsel to render the tax opinion described in Section 7.3(e). The tax representations letters described in clause (iii) and (iv) above shall also be provided to the Company, and for purposes of the opinion required by Section 7.3(f), the Company may rely on the representation letter provided pursuant to clause (iii) above in connection with making the representations in the tax representation letter provided to Company Tax Counsel for purposes of the opinion to be issued pursuant to Section 7.3(f).
(c) The Company shall use its reasonable best efforts to (i) obtain or cause to be provided the opinions referred to in Section 7.2(e) and Section 7.3(f), (ii) obtain an opinion of counsel consistent with the opinion of counsel referred to in Section 7.3(f), but dated as of the effective date of the Form S-4, to the extent required for the Form S-4 to be declared effective by the SEC, (iii) deliver to Company Tax Counsel (or other tax counsel to the Company delivering the opinion described in Section 7.3(f)) and Parent Tax Counsel (or other tax counsel to Parent delivering the opinion described in Section 7.2(f)), a tax representation letter, dated as of the effective date of the Form S-4 and the Closing Date, as applicable, and signed by an officer of the Company, in form and substance as set forth in Section 6.17(c)(i) of the Company Disclosure Schedule, containing representations of the Company reasonably necessary or appropriate to enable such counsel to render the applicable tax opinions described in Section 7.2(f) and Section 7.3(f), and (iv) deliver to Venable LLP (or other tax counsel to the Company delivering the opinion described in Section 7.2(e)), a tax representation letter, dated as of the Closing Date (and, if applicable, the effective date of the Form S-4) and signed by an officer of Parent, in form and substance as set forth in Section 6.17(c)(ii) of the Company Disclosure Schedule, containing representations of the Company reasonably necessary or appropriate to enable such counsel to render the tax opinion described in Section 7.2(e). The tax representations letters described in clause (iii) and (iv) above shall also be provided to Parent, and for purposes of the opinion required by Section 7.2(f), Parent may rely on the representation letter provided pursuant to clause (iii) above in connection with making the representations in the tax representation letter provided to Parent Tax Counsel for purposes of the opinion to be issued pursuant to Section 7.2(f).
(d) Parent and the Company shall cooperate in the preparation, execution and filing of all returns, questionnaires, applications or other documents regarding any real property transfer or gains, sales, use, transfer, value added, stock transfer or stamp taxes, any transfer, recording, registration and other fees and any similar taxes that become payable in connection with the transactions contemplated by this Agreement (together with any related interest, penalties or additions to Tax, “Transfer Taxes”), and shall cooperate in attempting to minimize the amount of Transfer Taxes. From and after the Effective Time, Parent shall pay or cause to be paid, without deduction or withholding from any consideration, including the Common Stock Consideration and the Preferred Stock Consideration, or amounts payable to holders of Company Common Shares or Company Preferred Shares, all Transfer Taxes, except as otherwise provided in Section 2.1(d).
(e) The Company shall cooperate and consult in good faith with Parent with respect to maintenance of the REIT status of the Company. The Company shall distribute cash to its stockholders in its taxable year ending with the Merger in an amount equal to or in excess of the amount required to be distributed pursuant to Section 857(a) of the Code in respect of its taxable year ending with the Merger (taking into account all distributions made by the Company prior to the Effective Time) such that the Company will not be subject to Tax under Sections 857(b) or 4981 of the Code in respect of its taxable year ending with the Merger.
(f) On the Closing Date, prior to the Merger, the Company shall deliver to Merger Sub a duly executed certificate of non-foreign status, dated as of the Closing Date, substantially in the form of the sample certification set forth in Treasury Regulations Section 1.1445-2(b)(2)(iv)(B).
(g) Parent and the Company shall, upon written request, use commercially reasonable efforts to obtain any certificate or other document from any Governmental Entity or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed with respect to the transactions contemplated in this Agreement.
(h) Notwithstanding anything to the contrary herein, upon Parent’s written request, the Company shall use its reasonable best efforts to (A) cause any Company Subsidiary set forth in Section 3.6 of the Company Disclosure Schedule (each such Company Subsidiary identified in such written request, a “Converted Entity”) to (i) convert into a limited liability company (or other entity that is disregarded as an entity separate from the Company for U.S. federal income tax purposes) (a “Disregarded Entity”), (ii) merge with and into a Disregarded Entity, and/or (iii) make an election under Treasury Regulations Section 301.7701-3(c) to be disregarded as an entity separate from its owner for U.S. federal income tax purposes, as applicable, in each case, such that, prior to and at the Effective Time, for U.S. federal income tax purposes, such Converted Entity is a Disregarded Entity (and would be a Disregarded Entity without regard to its status as a Qualified REIT Subsidiary), (B) provide such cooperation and assistance as Parent may reasonable request to cause the Company and the Company Subsidiaries to engage in restructuring transactions prior to the Effective Time, including the formation of a new Company Subsidiary, the contribution of the equity interests of a Company Subsidiary to another Company Subsidiary, or causing any Company Subsidiary to merge with and into the Company; provided that neither the Company nor any of the Company Subsidiaries shall be required to take any such action that could adversely affect (i) the Company, the Company Subsidiaries, or the holders of holders of Company Common Shares, Company Preferred Shares, Options and Restricted Stock Awards, (ii) the classification of the Company as a REIT or could subject the Company to any “prohibited transactions” Taxes or other material Taxes under Code Sections 857(b), 860(c) or 4981 (or other material entity-level Taxes) or (iii) the Company’s ability to obtain the opinion of counsel described in Section 7.3(f). With respect to clause (A) in the preceding sentence, within ten (10) days of receiving any such written request, the Company shall notify Parent in writing of any Subsidiary identified in such request with respect to which a conversion, merger, and/or election, as applicable, cannot occur prior to the Effective Time.
Section 6.18 Transaction Litigation.
(a) In the event that any stockholder litigation related to this Agreement, the Merger or the other transactions contemplated by this Agreement is brought, or, to the knowledge of the Company, threatened, against the Company or any members of the Company Board after the date hereof and prior to the Effective Time (“Company Transaction Litigation”), the Company shall promptly notify Parent of any such Company Transaction Litigation and shall keep Parent reasonably informed with respect to the status thereof. The Company shall give Parent the opportunity to reasonably participate in (but not control) the defense of any Company Transaction Litigation, shall consider in good faith Parent’s advice with respect to such Company Transaction Litigation, and shall not settle or agree to settle any Company Transaction Litigation without Parent’s prior written consent (which consent shall not be unreasonably withheld); provided that the disclosure of information in connection therewith shall be subject to the provisions of Section 6.4, including attorney-client privilege or other privilege or the work product doctrine; provided further that the Company and Parent agree to provide access to any such materials in such a way that does not jeopardize the application of the attorney-client privilege, attorney work product doctrine, or any other privilege.
(b) In the event that any stockholder litigation related to this Agreement, the Merger or the other transactions contemplated by this Agreement is brought, or, to the knowledge of Parent, threatened, against Parent or any members of the Parent Board after the date hereof and prior to the Effective Time (“Parent Transaction Litigation” and together with Company Transaction Litigation, “Transaction Litigation”), Parent shall promptly notify the Company of any such Parent Transaction Litigation and shall keep the Company reasonably informed with respect to the status thereof. Parent shall give the Company the opportunity to reasonably participate in the defense of any Parent Transaction Litigation, shall consider in good faith the Company’s advice with respect to such Parent Transaction Litigation, and shall not settle or agree to settle any Parent Transaction Litigation without the Company’s prior written consent (which consent shall not be unreasonably withheld); provided that the disclosure of information in connection therewith shall be subject to the provisions of Section 6.4, including attorney-client privilege or other privilege or the work product doctrine; provided further that the Company and Parent agree to provide access to any such materials in such a way that does not jeopardize the application of the attorney-client privilege, attorney work product doctrine, or any other privilege.
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Party’s Obligation to Effect the Merger. The respective obligations of the Company, Parent and Merger Sub to effect the Merger are subject to the satisfaction or, to the extent permitted by Law, waiver on or prior to the Closing Date of the following conditions:
(a) Stockholder Approvals.
(i) The Requisite Company Stockholder Vote shall have been obtained.
(ii) The Requisite Parent Stockholder Vote shall have been obtained.
(b) Certain Regulatory Approvals.
(i) Parent shall have caused the shares of Parent Common Stock to be issued in the Merger and Parent Common Stock to be reserved for issuance upon exercise of Options to have been authorized for listing on the NYSE, subject to official notice of issuance.
(ii) The Form S-4 shall have become effective under the Securities Act and shall not be the subject of any stop order or proceeding seeking a stop order.
(c) No Injunctions or Restraints, Illegality. No Law shall be in effect and no temporary restraining order, preliminary or permanent injunction or other Order issued by any court in the United States of America or other United States Governmental Entity of competent jurisdiction shall be in effect, having the effect of making consummation of the Merger illegal or otherwise prohibiting consummation of the Merger.
(d) No Investigation. There shall be no pending, threatened or outstanding investigation or challenge by any Governmental Entity with respect to the transactions contemplated hereby.
Section 7.2 Conditions to Obligations of Parent and Merger Sub. The obligations of Parent and Merger Sub to effect the Merger are further subject to the satisfaction or, to the extent permitted by Law, waiver by Parent on or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties of the Company set forth in Section 3.1, Section 3.2, Section 3.5, Section 3.10 and Section 3.23 shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent expressly made as of an earlier date, in which case as of such earlier date); except, in the case of Section 3.5, for inaccuracies that are de minimis. Except for the representations and warranties of the Company set forth in Section 3.1, Section 3.2, Section 3.5, Section 3.10 and Section 3.23, each of the representations and warranties of the Company set forth in Article III of this Agreement shall be true and correct (without giving effect to any qualification or limitation as to “materiality” or “Company Material Adverse Effect” set forth therein) as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct (without giving effect to any qualification or limitation as to “materiality” or “Company Material Adverse Effect” set forth therein) would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
(b) Performance of Obligations of the Company. The Company shall have performed or complied in all material respects with all agreements and covenants required to be performed by it under this Agreement at or prior to the Closing.
(c) No Company Material Adverse Effect. Since the date hereof, no Company Material Adverse Effect shall have occurred.
(d) Officer’s Certificate. Parent shall have received a certificate from an executive officer of the Company confirming the satisfaction of the conditions set forth in Section 7.2(a), Section 7.2(b) and Section 7.2(c).
(e) REIT Opinion. Parent shall have received a written opinion of Venable LLP or other nationally recognized tax counsel to the Company, dated as of the Closing Date and substantially in the form set forth in Section 7.2(e) of the Company Disclosure Schedule, to the effect that, for the Company’s taxable year ended September 30, 2008 and through its taxable year ended September 30, 2020, the Company has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code, and its actual method of operation through the date of such opinion has enabled, and its proposed method of operation will continue to enable, the Company to meet the requirements for qualification and taxation as a REIT through the Effective Time, which opinion will be subject to customary exceptions, assumptions and qualifications and based on customary representations contained in an officer’s certificate executed by the Company.
(f) Section 368 Opinion. Parent shall have received a written opinion of Parent Tax Counsel, or other nationally recognized tax counsel to Parent, dated as of the Closing Date and substantially in the form set forth in Section 7.2(f) of the Parent Disclosure Schedule, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code, which opinion will be subject to customary exceptions, assumptions and qualifications. In rendering such opinion, such counsel may rely upon the tax representation letters described in Section 6.17.
Section 7.3 Conditions to Obligations of the Company. The obligations of the Company to effect the Merger are further subject to the satisfaction or, to the extent permitted by Law, waiver by the Company, on or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties of Parent and Merger Sub set forth in Section 4.1, Section 4.2, Section 4.5, Section 4.9 and Section 4.21 shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent expressly made as of an earlier date, in which case as of such earlier date); except, in the case of Section 4.5, for inaccuracies that are de minimis. Except for the representations and warranties of Parent and Merger Sub set forth in Section 4.1, Section 4.2, Section 4.5, Section 4.9 and Section 4.21, each of the representations and warranties of Parent and Merger Sub set forth in Article IV of this Agreement shall be true and correct (without giving effect to any qualification or limitation as to “materiality” or “Parent Material Adverse Effect” set forth therein) as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct (without giving effect to any qualification or limitation as to “materiality” or “Parent Material Adverse Effect” set forth therein) would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.
(b) Performance of Obligations of Parent and Merger Sub. Each of Parent and Merger Sub shall have performed or complied in all material respects with all agreements and covenants required to be performed by it under this Agreement at or prior to the Closing.
(c) No Parent Material Adverse Effect. Since the date hereof, no Parent Material Adverse Effect shall have occurred.
(d) Officer’s Certificate. The Company shall have received a certificate from an executive officer of Parent confirming the satisfaction of the conditions set forth in Section 7.3(a), Section 7.3(b) and Section 7.3(c).
(e) REIT Opinion. The Company shall have received a written opinion of Parent Tax Counsel, or other nationally recognized tax counsel to Parent, dated as of the Closing Date and substantially in the form set forth in Section 7.3(e) of the Parent Disclosure Schedule, to the effect that, commencing with Parent’s taxable year that ended on December 31, 2016, Parent has been organized and has operated in conformity with the requirements for qualification and taxation as a REIT under the Code and its current organization and its current and proposed method of operation will enable Parent to continue to meet the requirements for qualification and taxation as a REIT under the Code, which opinion will be subject to customary exceptions, assumptions and qualifications and based on customary representations contained in an officer’s certificate executed by Parent.
(f) Section 368 Opinion. The Company shall have received a written opinion of Company Tax Counsel, or other nationally recognized tax counsel to the Company, dated as of the Closing Date and substantially in the form set forth in Section 7.3(f) of the Company Disclosure Schedule, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code, which opinion will be subject to customary exceptions, assumptions and qualifications. In rendering such opinion, such counsel may rely upon the tax representation letters described in Section 6.17.
Section 7.4 Frustration of Closing Conditions. None of the Company, Parent or Merger Sub may rely on the failure of any condition set forth in this Article VII to be satisfied if such party’s failure to act in good faith or to use its reasonable best efforts to consummate the transactions contemplated hereby in accordance with Section 6.5 has been a principal cause of the failure of such condition to be satisfied.
ARTICLE VIII
TERMINATION AND AMENDMENT
Section 8.1 Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Effective Time, whether before or after receipt of the Requisite Company Stockholder Vote or the Requisite Parent Stockholder Vote (with any termination by Parent also being an effective termination by Merger Sub):
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company, if:
(i) the Merger shall not have been consummated on or before November 24, 2021 (the “Outside Date”); provided, however that the right to terminate this Agreement pursuant to this Section 8.1(b)(i) shall not be available to (A) the Company if its breach of any of its obligations under Section 6.2 or Section 6.3 has been a principal cause of the failure of the Merger to be consummated by the Outside Date or (B) any party whose failure to act in good faith or to use its reasonable best efforts to consummate the transactions contemplated hereby in accordance with Section 6.5 has been a principal cause of the failure of the Merger to be consummated by the Outside Date;
(ii) any Governmental Entity in the United States of competent jurisdiction issues an Order or takes any other action permanently restraining, enjoining or otherwise prohibiting the Merger and such Order or other action shall have become final and non-appealable; provided, however, that the right to terminate this Agreement pursuant to this Section 8.1(b)(ii) shall not be available to any party whose failure to act in good faith or to use its reasonable best efforts to consummate the transactions contemplated hereby in accordance with Section 6.5 has been a principal cause of the application or imposition of such Order or action;
(iii) the Requisite Company Stockholder Vote shall not have been obtained upon a vote taken thereon at the Company Stockholders Meeting or at any adjournment or postponement thereof; or
(iv) the Requisite Parent Stockholder Vote shall not have been obtained upon a vote taken thereon at the Parent Stockholders Meeting or at any adjournment or postponement thereof.
(c) by Parent:
(i) if the Company shall have breached or failed to perform any of its representations, warranties, covenants or agreements contained in this Agreement, which breach or failure to perform (A) is reasonably incapable of being cured by the Company by the Outside Date or (B) if reasonably capable of being cured, has not been cured by the Company within forty-five (45) days following written notice to the Company from Parent or Merger Sub of such breach, which notice states Parent’s intention to terminate this Agreement pursuant to this Section 8.1(c)(i), and, in each case, would result in a failure of any condition set forth in Section 7.2(a) or Section 7.2(b); provided that Parent shall not have the right to terminate this Agreement pursuant to this Section 8.1(c)(i) if it is then in material breach of any representation, warranty, covenant or agreement hereunder; or
(ii) prior to the stockholders of the Company having voted upon approval of this Agreement at the Company Stockholders Meeting, if (A) the Company Board shall have resolved to or effected a Recommendation Withdrawal, (B) a tender or exchange offer subject to Regulation 14D under the Exchange Act that constitutes a Takeover Proposal shall have been commenced by a Person who is not Parent or an Affiliate of Parent and the Company Board shall not have publicly announced, within ten (10) Business Days after the commencement of such tender or exchange offer, that the Company recommends rejection of such tender or exchange offer or (C) the Company shall have materially breached its obligations or agreements contained in Section 6.2(a) or Section 6.3.
(d) by the Company:
(i) if Parent or Merger Sub shall have breached or failed to perform any of its representations, warranties, covenants or agreements contained in this Agreement, which breach or failure to perform (A) is reasonably incapable of being cured by Parent or Merger Sub, as the case may be, by the Outside Date or (B) if reasonably capable of being cured, has not been cured by Parent or Merger Sub, as the case may be, within forty-five (45) days following written notice to Parent or Merger Sub, as the case may be, from the Company of such breach, which notice states the Company’s intention to terminate this Agreement pursuant to this Section 8.1(d)(i), and, in each case, would result in a failure of any condition set forth in Section 7.3(a) or Section 7.3(b); provided that the Company shall not have the right to terminate this Agreement pursuant to this Section 8.1(d)(i) if it is then in material breach of any representation, warranty, covenant or agreement hereunder; or
(ii) prior to obtaining the Requisite Company Stockholder Vote, in accordance with, and subject to the terms and conditions of, Section 6.3(d).
Section 8.2 Effect of Termination. In the event of any termination of this Agreement as provided in Section 8.1, the obligations of the parties shall terminate and there shall be no liability on the part of any party with respect thereto, except for the confidentiality provisions of Section 6.4 (Access to Information) and the provisions of Section 6.7 (Expenses), Section 6.9 (Public Announcements), this Section 8.2 (Effect of Termination), Section 8.3 (Termination Fee and Expense Reimbursement) and Article IX (General Provisions), each of which shall survive the termination of this Agreement and remain in full force and effect; provided, however, that subject to Section 8.3(d), neither Parent nor the Company shall be released from any liabilities or damages (including, in the case of claims by the Company, as contemplated by Section 9.5) arising out of any Willful and Material Breach of this Agreement.
Section 8.3 Termination Fee and Expense Reimbursement.
(a) In the event that this Agreement is validly terminated by either the Company or Parent pursuant to Section 8.1(b)(i) or Section 8.1(b)(iii) or by Parent pursuant to Section 8.1(c)(i) (provided that with respect to Section 8.1(b)(i) and Section 8.1(c)(i), the Requisite Company Stockholder Vote has not been obtained) and (i) a Takeover Proposal was publicly proposed or announced by any Person or “group” (as defined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) after the date of this Agreement and not withdrawn or abandoned as of such termination (in the case of a termination pursuant to Section 8.1(b)(i) or Section 8.1(c)(i)) or the time of the Company Stockholders Meeting (in the case of a termination pursuant to Section 8.1(b)(iii)), and (ii) within twelve (12) months of such termination the Company shall consummate a Takeover Proposal or enter into a definitive agreement for a Takeover Proposal that is subsequently consummated (within such twelve (12)-month period or within six (6) months thereafter) with the Person or “group” (as defined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) that publicly proposed or announced the Takeover Proposal in sub-clause (i), then, on the date of consummation of such transaction, the Company shall pay or cause to be paid to Parent (or its designees) the Termination Fee by wire transfer of immediately available funds to an account designated in writing by Parent. For purposes of this Section 8.3(a), each reference to “20%” or “80%” in the definition of “Takeover Proposal” shall be deemed to be a reference to “50%”.
(b) In the event that this Agreement is terminated by the Company pursuant to Section 8.1(d)(ii), then, prior to or concurrently with such termination, the Company shall pay or cause to be paid to Parent the Termination Fee by wire transfer of immediately available funds to an account designated in writing by Parent.
(c) In the event that this Agreement is terminated by Parent pursuant to Section 8.1(c)(ii), then the Company shall promptly, but in no event later than five (5) Business Days after the date of such termination, pay or cause to be paid to Parent the Termination Fee by wire transfer of immediately available funds to an account designated in writing by Parent.
(d) The parties agree and understand that in no event shall the Company be required to pay the Termination Fee on more than one occasion. Notwithstanding anything to the contrary in this Agreement but subject to Section 8.3(f), (i) if Parent receives the Termination Fee from the Company pursuant to this Section 8.3, such payment shall be the sole and exclusive remedy of Parent and Merger Sub against the Company and the Company Subsidiaries and any of their respective former, current or future officers, directors, partners, stockholders, managers, members or Affiliates and none of the Company, any of the Company Subsidiaries or any of their respective former, current or future officers, directors, partners, stockholders, managers, members or Affiliates shall have any further liability or obligation relating to or arising out of this Agreement or the transactions contemplated hereby; provided that the foregoing shall not limit the obligations of the Company set forth in the last sentence of this Section 8.3(d); and (ii) if Parent or Merger Sub receives any payments from the Company in respect of any breach of this Agreement, and thereafter Parent is entitled to receive the Termination Fee under this Section 8.3, the amount of such Termination Fee shall be reduced by the aggregate amount of any payments made by the Company to Parent or Merger Sub in respect of any such breaches of this Agreement. The parties acknowledge that the agreements contained in this Section 8.3 are an integral part of the transactions contemplated hereby, and that, without these agreements, the parties would not enter into this Agreement, and that any amounts payable pursuant to this Section 8.3 do not constitute a penalty. If the Company fails to pay as directed in writing by Parent the Termination Fee due to Parent or Merger Sub pursuant to this Section 8.3 within the time periods specified in this Section 8.3, the Company shall pay the out-of-pocket costs and expenses (including reasonable legal fees and expenses of outside counsel) incurred by Parent in connection with any action, including the filing of any lawsuit, taken to collect payment of such amounts, together with interest on such unpaid amounts at the prime lending rate prevailing during such period as published in The Wall Street Journal, calculated on a daily basis from the date such amounts were required to be paid until the date of actual payment. Notwithstanding the foregoing, nothing herein shall relieve any party from any liability or damages resulting from any fraud or Willful and Material Breach of this Agreement.
(e) If the Company becomes obligated to pay the Termination Fee under this Section 8.3, then, if requested by Parent, the Company shall deposit into escrow an amount in cash equal to the Termination Fee with an escrow agent selected by the Company that is reasonably acceptable to Parent pursuant to a written escrow agreement (the “Escrow Agreement”) reflecting the terms set forth in this Section 8.3(e) and otherwise reasonably acceptable to the escrow agent. The Escrow Agreement shall provide that the Termination Fee in escrow or the applicable portion thereof shall be released to Parent on an annual basis based upon the delivery by Parent to the escrow agent of any one (or a combination) of the following: (i) a letter from Parent’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to Parent without causing Parent to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code for the applicable taxable year of Parent determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A)-(I) or 856(c)(3)(A)-(I) of the Code (such income, “Qualifying REIT Income”), in which case the escrow agent shall release to Parent such maximum amount stated in the accountant’s letter; (ii) a letter from Parent’s counsel indicating that Parent received a private letter ruling from the IRS holding that the receipt by Parent of the Termination Fee would either constitute Qualifying REIT Income or would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code, in which case the escrow agent shall release to Parent the remainder of the Termination Fee; or (iii) a letter from Parent’s counsel indicating that Parent has received a tax opinion from its outside counsel or accountant, respectively, to the effect that the receipt by Parent of the Termination Fee should either constitute Qualifying REIT Income or should be excluded from gross income within the meaning of Section 856(c)(2) and (3) of the Code, in which case the escrow agent shall release to Parent the remainder of the Termination Fee. The Escrow Agreement shall further provide that, at the end of the third calendar year beginning after the date on which the Company’s obligation to pay the Termination Fee arose (or earlier if directed by Parent), any remaining amount then being held in escrow by the escrow agent shall be disbursed to the Company and, in the event the Termination Fee has not by then been paid in full, such unpaid portion shall never be due. The parties agree to cooperate in good faith to amend this Section 8.3(e) at the reasonable request of Parent in order to (A) maximize the portion of the applicable Termination Fee that may be distributed to Parent hereunder without causing Parent to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (B) improve Parent’s chances of securing the favorable private letter ruling from the IRS described in this Section 8.3(e) or (C) assist Parent in obtaining the favorable tax opinion from its outside counsel or accountant described in this Section 8.3(e). The Escrow Agreement shall provide that Parent shall bear all costs and expenses under the Escrow Agreement. The Company shall not be a party to the Escrow Agreement and shall not bear any liability, cost or expense resulting directly or indirectly from the Escrow Agreement (other than any Taxes imposed on the Company in connection therewith).
(f) In the event that this Agreement is terminated by the Company or Parent pursuant to Section 8.1(b)(iii) under circumstances in which the Requisite Stockholder Vote is not obtained, the Company shall reimburse Parent and its Affiliates, no later than two (2) Business Days after submission of reasonable documentation therefor, for all of their out-of-pocket fees and expenses (including all fees and expenses of counsel, accountants, investment banking firms and other financial advisors, experts and consultants) actually incurred or accrued in connection with this Agreement, the Merger and the other transactions contemplated by this Agreement, in an amount not to exceed $10,000,000 (the “Company Expense Reimbursement”). Any payment of the Company Expense Reimbursement shall be made by wire transfer of same-day funds to Parent (or its designee(s)).
(g) In the event that this Agreement is terminated by the Company or Parent pursuant to Section 8.1(b)(iv) under circumstances in which the Requisite Parent Stockholder Vote is not obtained, Parent shall reimburse the Company and its Affiliates, no later than two (2) Business Days after submission of reasonable documentation therefor, for all of their out-of-pocket fees and expenses (including all fees and expenses of counsel, accountants, investment banking firms and other financial advisors, experts and consultants) actually incurred or accrued in connection with this Agreement, the Merger and the other transactions contemplated by this Agreement, in an amount not to exceed $10,000,000 (the “Parent Expense Reimbursement”). Any payment of the Parent Expense Reimbursement shall be made by wire transfer of same-day funds to the Company (or its designee(s)).
Section 8.4 Procedure for Termination. A termination of this Agreement pursuant to Section 8.1 shall, in order to be effective, require in the case of each of Parent and Merger Sub, action by Parent’s board of trustees or, to the extent permitted by Law, the duly authorized designee of its board of trustees, and in the case of the Company, action by the Company Board or, to the extent permitted by Law, the duly authorized designee of the Company Board. Termination of this Agreement prior to the Effective Time shall not require the approval of the stockholders of the Company. A terminating party shall provide written notice of termination to the other parties specifying with reasonable particularity the basis for this termination. If more than one provision in Section 8.1 is available to a terminating party in connection with a termination, a terminating party may rely on any or all available provisions in Section 8.1 for any termination.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations, Warranties, Covenants and Agreements. None of the representations, warranties, covenants and other agreements in this Agreement or in any instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such representations, warranties, covenants and other agreements, shall survive the Effective Time, except for those covenants and agreements contained herein and therein that by their terms apply or are to be performed in whole or in part after the Effective Time and this Article IX.
Section 9.2 Disclosures. For purposes of the representations and warranties of Company, Parent and Merger Sub contained herein, disclosure in any section of the Company Disclosure Schedule or Parent Disclosure Schedule, as applicable, in connection with the Merger of any facts or circumstances shall be deemed to be disclosure of such facts or circumstances with respect to all representations or warranties by the Company, Parent or Merger Sub, as applicable, calling for disclosure of such information, whether or not such disclosure is specifically associated with or purports to respond to one or more or all of such representations or warranties, so long as the applicability of such disclosure to any such representations or warranties is reasonably clear on the face of such disclosure. The inclusion of any information in the Company Disclosure Schedule, Parent Disclosure Schedule or other document delivered by the Company, Parent or Merger Sub, as applicable, pursuant to this Agreement shall not be deemed to be an admission or evidence of the materiality of such item, nor shall it establish a standard of materiality for any purpose whatsoever.
Section 9.3 Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, by facsimile, upon confirmation of receipt, or by email in the form of a .pdf attachment (provided that any such email notice must expressly state that it is an official notice under this Agreement), (b) on the first (1st) Business Day following the date of dispatch if delivered by a recognized next-day courier service or (c) on the third (3rd) Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:
If to Parent or Merger Sub, to:
Equity Commonwealth
Two North Riverside Plaza
Suite 2100
Chicago, IL 60606
| | Attention: | David A. Helfand |
Orrin S. Shifrin
oshifrin@eqcre.com
with a copy to (which shall not constitute notice)
Fried, Frank, Harris, Shriver & Jacobson LLP
801 17th Street NW
Washington, DC 20006
| | Email: | stuart.barr@friedfrank.com |
| | Facsimile No: | 202-639-7003 |
If to the Company, to:
Monmouth Real Estate Investment Corporation
101 Crawfords Corner Road, Suite 1405
Holmdel, NJ 07733
| | Attention: | Michael P. Landy, Chief Executive Officer |
| | Facsimile No: | 732-577-9981 |
with a copy to (which shall not constitute notice):
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038
| | Attention: | Jeffrey S. Lowenthal |
James Z. Fang
| | Email: | jlowenthal@stroock.com |
jfang@stroock.com
| | Facsimile No: | 212-806-6006 |
Section 9.4 Interpretation.
(a) When a reference is made in this Agreement to a Section, clause or Schedule, such reference shall be to a Section or clause of or Schedule to this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The phrases “the date of this Agreement”, “the date hereof” and terms of similar import, will be deemed to refer to May 4, 2021. Whenever the content of this Agreement permits, the masculine gender will include the feminine and neuter genders, and a reference to singular or plural will be interchangeable with the other. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”. Whenever the word “or” is used in this Agreement, it shall be construed in the inclusive sense of “and/or”.
(b) References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. References to any statute are to that statute, as amended from time to time, and to the rules and regulations promulgated thereunder. References to “$” and “dollars” are to the currency of the United States of America. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. The words “hereby,” “herein,” “hereof,” “hereunder” and words of similar import refer to this Agreement as a whole (including any Schedules delivered herewith) and not merely to the specific section, paragraph or clause in which such word appears.
(c) The phrase “ordinary course of business” shall be deemed to be followed by the words “consistent with past practice in all material respects” and shall refer to business similar in nature and magnitude to actions customarily taken without any authorization by the board of directors in the course of normal day-to-day operations.
(d) The parties have participated jointly in negotiating and drafting this Agreement. In the event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.
(e) No summary of this Agreement or Schedule delivered herewith prepared by or on behalf of any party will affect the meaning or interpretation of this Agreement or any such Schedule.
(f) The phrases “delivered,” “made available” and words of similar import, when used in this Agreement, shall mean that the information referred to has been (i) physically or electronically delivered to Parent, Merger Sub, the Company or any of their respective Representatives, as applicable, prior to the date hereof, (ii) posted to the data site maintained by (x) the Company or its Representatives or (y) Parent or its Representatives, as applicable, in connection with the transactions contemplated by this Agreement prior to May 4, 2021 or (iii) filed with or furnished to the SEC and publicly available on the SEC’s EDGAR reporting system prior to the date hereof.
Section 9.5 Counterparts; Effectiveness. This Agreement may be executed and delivered in two (2) or more counterparts, including by facsimile or other form of electronic transmission, each of which shall be deemed to be an original but all of which shall constitute one and the same instrument. This Agreement shall become effective when each party has received counterparts thereof signed and delivered (by electronic communication, facsimile or otherwise) by all of the other parties.
Section 9.6 Entire Agreement; No Third Party Beneficiaries.
(a) This Agreement (including any Exhibits), the Company Disclosure Schedule, the Parent Disclosure Schedule, the Company Confidentiality Agreement and the Confidentiality Agreement constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and thereof.
(b) This Agreement is not intended to, and shall not, confer upon any other Person any rights or remedies hereunder, except (a) as set forth in or contemplated by the terms and provisions of Section 6.8, and (b) from and after the Effective Time, the rights of holders of Company Common Shares, Company Preferred Shares, Options and Restricted Stock Awards to receive the Common Stock Consideration, the Preferred Stock Consideration or other payments set forth in Article II.
(c) The representations and warranties in this Agreement are the product of negotiations among the parties and are for the sole benefit of the parties. Any inaccuracies in such representations and warranties are subject to waiver by the parties in accordance with Section 9.10(b) without notice or liability to any other Person. In some instances, the representations and warranties in this Agreement may represent an allocation among the parties of risks associated with particular matters regardless of the knowledge of any of the parties. Consequently, Persons other than the parties may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.
Section 9.7 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy in any jurisdiction, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Notwithstanding the foregoing, upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
Section 9.8 Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties, in whole or in part (whether by operation of law or otherwise), without the prior written consent of the other parties, and any attempt to make any such assignment without such consent shall be null and void. This Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns.
Section 9.9 Amendment. This Agreement may be amended by the parties, by action taken or authorized by their respective boards of directors, at any time before or after the Requisite Company Stockholder Vote or the Requisite Parent Stockholder Vote is obtained, but after such approval no amendment shall be made which by Law or in accordance with the rules of any relevant stock exchange requires further approval by the stockholders of the Company or by the shareholders of Parent, as applicable, without such further approval. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties.
Section 9.10 Extension; Waiver. At any time prior to the Effective Time, the parties, by action taken or authorized by their respective boards of directors or board of trustees, as applicable,, may, to the extent legally allowed, (a) extend the time for the performance of any of the obligations or other acts of the other parties, (b) to the extent permitted by applicable Law, waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto and (c) to the extent permitted by applicable Law, waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights, nor shall any single or partial exercise by any party to this Agreement of any of its rights under this Agreement preclude any other or further exercise of such rights or any other rights under this Agreement.
Section 9.11 Governing Law and Venue; Waiver of Jury Trial.
(a) This Agreement and any disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby (whether in contract, tort or otherwise) shall be governed by and construed in accordance with the laws of the State of Maryland, without regard to principles of conflicts of law thereof.
(b) EACH OF THE PARTIES HERETO IRREVOCABLY (I) AGREES THAT ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT (INCLUDING ANY EXHIBITS), THE COMPANY DISCLOSURE SCHEDULE, THE PARENT DISCLOSURE SCHEDULE, THE COMPANY CONFIDENTIALITY AGREEMENT OR THE CONFIDENTIALITY AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (INCLUDING ANY EXHIBITS), SHALL BE BROUGHT AND EXCLUSIVELY VENUED IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND, NORTHERN DIVISION, OR, ONLY IF THAT COURT LACKS SUBJECT MATTER JURISDICTION, IN THE CIRCUIT COURT FOR BALTIMORE CITY, MARYLAND; (II) SUBMITS TO THE PERSONAL JURISDICTION OF THE COURTS REFERRED TO IN THE PRECEDING CLAUSE (I) (AND TO THE JURISDICTION OF ANY COURT TO WHICH AN APPEAL MAY BE TAKEN FROM SUCH COURTS); AND (III) WAIVES, AND AGREES NOT TO ASSERT AS A DEFENSE IN ANY SUCH ACTION OR PROCEEDING, LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON-CONVENIENS, AND AGREES NOT TO SEEK TRANSFER TO ANY OTHER VENUE. EACH OF THE PARTIES FURTHER CONSENTS TO THE ASSIGNMENT OF ANY PROCEEDING IN THE CIRCUIT COURT FOR BALTIMORE CITY, MARYLAND TO THE BUSINESS AND TECHNOLOGY CASE MANAGEMENT PROGRAM PURSUANT TO MARYLAND RULE 16-308 (OR ANY SUCCESSOR THERETO). THE PARTIES AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH SUCH ACTION, SUIT OR PROCEEDING IN THE MANNER PROVIDED IN SECTION 9.3 OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW SHALL BE VALID AND SUFFICIENT SERVICE THEREOF.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE IN CONNECTION WITH THIS AGREEMENT (INCLUDING ANY EXHIBITS) IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT (INCLUDING ANY EXHIBITS), THE COMPANY DISCLOSURE SCHEDULE, THE PARENT DISCLOSURE SCHEDULE, THE COMPANY CONFIDENTIALITY AGREEMENT OR THE CONFIDENTIALITY AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (INCLUDING ANY EXHIBITS). EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT (INCLUDING ANY EXHIBITS) BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11(c).
Section 9.12 Remedies; Specific Performance. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by Law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. The parties agree that irreparable harm would occur and the parties would not have any adequate remedy at Law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that prior to the valid and effective termination of this Agreement in accordance with Article VIII, the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at Law or in equity. Each party hereby waives any requirement for the securing or posting of any bond or other security in connection with such remedy.
Section 9.13 Definitions. As used in this Agreement:
An “Affiliate” of any Person means another Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person, where “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, as trustee or executor or otherwise.
“Aggregate Merger Consideration” has the meaning set forth in Section 2.1(a).
“Agreement” has the meaning set forth in the preamble hereto.
“Articles of Merger” has the meaning set forth in Section 1.2(b).
“Bankruptcy and Equity Exception” has the meaning set forth in Section 3.2(c).
“beneficially own” (and the related term “beneficial ownership”) has the meaning under Section 13(d) of the Exchange Act.
“Book-Entry Shares” has the meaning set forth in Section 1.6(c).
“Business Day” means any day other than a Saturday, a Sunday or any day on which the SEC or banking institutions in the City of New York are authorized or required by Law or executive order to be closed.
“Bylaws” means the Bylaws of the Company, as in effect as of the date of this Agreement.
“Certificate” has the meaning set forth in Section 1.6(c).
“CIC Severance Plan” has the meaning set forth in Section 6.6(a).
“Closing” has the meaning set forth in Section 1.2(a).
“Closing Date” has the meaning set forth in Section 1.2(a).
“Closing Date Market Price” means the volume weighted average price per share of Company Common Stock on the NYSE (as reported by Bloomberg L.P., or, if not reported thereby, by another authoritative source mutual agreed by the parties) for the five (5) consecutive trading days immediately preceding the fifth trading day prior to the Closing Date. The Closing Date Market Price shall be calculated to the nearest one-hundredth of one cent.
“Code” means the Internal Revenue Code of 1986, as amended.
“Common Stock Consideration” has the meaning set forth in Section 1.6(b).
“Common Exchange Ratio” means 0.67, appropriately adjusted in accordance with Section 1.8.
“Company” has the meaning set forth in the preamble hereto.
“Company 401(k) Plan” meant the tax-qualified defined contribution retirement plan sponsored by the Company or in which the Company participates.
“Company Affiliate Letter” has the meaning set forth in Section 6.14.
“Company Benefit Plans” means each written employee benefit plan, scheme, program, policy, arrangement and contract (including any “employee benefit plan,” as defined in Section 3(3) of ERISA, whether or not subject to ERISA, and any bonus, deferred compensation, stock bonus, stock purchase, restricted stock, stock option or other equity-based arrangement, and any collective bargaining, employment, termination, retention, bonus, change in control or severance agreement, plan, program, policy, arrangement or contract) under which any current or former director, officer or employee of the Company or any of the Company Subsidiaries has any present or future right to benefits, that is maintained, sponsored or contributed to by the Company or any of the Company Subsidiaries or which the Company or any of the Company Subsidiaries has any obligation to maintain, sponsor or contribute, or with respect to which the Company or any of its Subsidiaries would incur any direct or indirect liability under the Code or ERISA or any similar non-U.S. law, whether contingent or otherwise.
“Company Board” the Board of Directors of the Company.
“Company Board Recommendation” has the meaning set forth in Section 3.2(b).
“Company Capitalization Date” has the meaning set forth in Section 3.5(a).
“Company Common Share” has the meaning set forth in Section 1.6(b).
“Company Common Stock” has the meaning set forth in Section 1.6(b).
“Company Confidentiality Agreement” means the confidentiality letter agreement, dated as of April 9, 2021, between the Company and Parent.
“Company Disclosure Schedule” has the meaning set forth in the preamble to Article III.
“Company Employment Agreements” means that certain: (a) Employment Agreement by and between Eugene w. Landy and the Company, dated December 9, 1994, as amended on June 26, 1997, November 5, 2003, April 1, 2008, July 1, 2010, April 9, 2013, January 1, 2014, and July 1, 2015; (b) Amended and Restated Employment Agreement by and between Michael P. Landy and the Company, dated August 24, 2020; and (c) Amended and Restated Employment Agreement by and between Kevin Miller and the Company, dated August 19, 2019 and effective as of January 1, 2019.
“Company Expense Reimbursement” has the meaning set forth in Section 8.3(f).
“Company Financial Advisors” has the meaning set forth in Section 3.16.
“Company Material Adverse Effect” means any fact, circumstance, change, event, occurrence or effect that (x) has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the assets, liabilities, financial condition, business or results of operations of the Company and the Company Subsidiaries, taken as a whole; provided, however, that none of the following shall constitute or be considered in determining whether a Company Material Adverse Effect has occurred: (a) changes or fluctuations in the economy or the securities, capital, credit or financial markets generally in the United States; (b) national or international political conditions or changes therein (including the commencement, continuation or escalation of acts of war, armed hostilities, sabotage or other acts of terrorism); (c) changes that are the result of factors generally affecting the real estate industry or the geographic areas in which the Company and the Company Subsidiaries operate; (d) any loss of, or adverse change in, the relationship of the Company or any of the Company Subsidiaries with its lessees, employees, suppliers, financing sources, business partners, regulators or other third parties solely caused by the identity of Parent, the execution of this Agreement or the announcement, negotiation, existence or performance of the transactions contemplated by this Agreement; (e) changes in GAAP, the rules or policies of the Public Company Accounting Oversight Board or any applicable Law or interpretation or application of any of the foregoing after the date of this Agreement; (f) any failure by the Company to meet any internal or external projections, forecasts or estimates of revenues, earnings, cash flow, funds from operations or other metrics for any period; provided that the exception in this clause (f) shall not preclude a determination that any event, change, circumstance or effect underlying such failure has resulted in, or contributed to, a Company Material Adverse Effect; (g) the suspension of trading in securities on the NYSE or a decline in the price, or a change in the trading volume, of the Company Common Stock on the NYSE; provided that the exception in this clause (g) shall not preclude a determination that any event, change, circumstance or effect underlying such suspension or decline has resulted in, or contributed to, a Company Material Adverse Effect; (h) effects resulting from COVID-19, earthquakes, hurricanes, tornados or other weather conditions, natural disasters or force majeure events; (i) any change or announcement of a potential change in the credit rating of the Company or any of the Company Subsidiaries or any of their securities; provided that the exception in this clause (i) shall not preclude a determination that any event, change, circumstance or effect underlying such change or announcement of a potential change has resulted in, or contributed to, a Company Material Adverse Effect; (j) compliance by the Company with the terms of this Agreement, including the failure of the Company to take any action as a result of restrictions in Article V of this Agreement, or any actions taken, or failure to take any action, which Parent has requested in writing or (k) any stockholder litigation or threatened stockholder litigation, in each case, arising from allegations of a breach of duty or similar obligations in connection with this Agreement or the transactions contemplated hereby; provided that the exceptions in clauses (a), (b), (c) and (h) shall apply only to the extent such event, change, circumstance or effect does not (i) relate only to (or have the effect of relating only to) the Company and the Company Subsidiaries or (ii) disproportionately adversely affect the Company and the Company Subsidiaries, taken as a whole, compared to other companies of similar size operating in the same industry and in similar geographic areas in which the Company and the Company Subsidiaries operate or (y) materially impairs, materially delays or prevents, or would reasonably be expected to materially impair, materially delay or prevent, the Company from consummating the Merger before the Outside Date.
“Company Permits” has the meaning set forth in Section 3.1.
“Company Preferred Share” has the meaning set forth in Section 1.6(e).
“Company Preferred Stock” has the meaning set forth in Section 1.6(e).
“Company Property” means each real property, or interest therein, owned, or leased (including ground leased) as lessee or sublessee, by the Company or any Company Subsidiary as of the date of this Agreement (including all of the Company’s or any Company Subsidiary’s right, title and interest in and to buildings, structures and other improvements and fixtures located on or under such real property and all easements, rights and other appurtenances to such real property).
“Company SEC Documents” has the meaning set forth in Section 3.7(a).
“Company Securities” has the meaning set forth in Section 3.5(b).
“Company Shares” has the meaning set forth in Section 1.6(e).
“Company Stockholders Meeting” has the meaning set forth in Section 6.2.
“Company Subsidiaries” and “Company Subsidiary” shall have the meanings set forth in Section 3.6.
“Company Subsidiary Partnership” has the meaning set forth in Section 3.17(h).
“Company Subsidiary Securities” has the meaning set forth in Section 3.6.
“Company Tax Counsel” means Stroock & Stroock & Lavan LLP.
“Company Tax Protection Agreements” has the meaning set forth in Section 3.17(h).
“Company Transaction Litigation” has the meaning set forth in Section 6.18.
“Confidentiality Agreement” means the confidentiality letter agreement, dated as of February 17, 2021, between the Company and Parent.
“Constituent Documents” means, with respect to any entity, the articles or certificate of incorporation, the bylaws of such entity, or any similar charter or other governing documents of such entity.
“Continuing Employees” has the meaning set forth in Section 6.6(a).
“Contract” means, with respect to any Person, all contracts, agreements, commitments, arrangements, leases and other instruments to which such Person is a party.
“Converted Entity” has the meaning set forth in Section 6.17(h).
“COVID-19” means SARS-CoV-2 or any disease or infections resulting therefrom, including COVID-19 and any mutations thereof.
“COVID-19 Measures” means any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester or any other similar Laws, directives, guidelines or recommendations by any Governmental Entity, in connection with or in response to COVID-19, including the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
“D&O Insurance” has the meaning set forth in Section 3.14.
“Disregarded Entity” has the meaning set forth in Section 6.17(h).
“Effective Time” has the meaning set forth in Section 1.2(b).
“Environmental Law” means any foreign, federal, state or local law, treaty, statute, rule, regulation, order, ordinance, decree, injunction, judgment, governmental restriction or any other requirement of law (including common law) regulating or relating to the protection of human health from exposure to any hazardous substance, natural resource damages or the protection of the environment, including laws relating to the protection of wetlands, pollution, contamination or the use, generation, management, handling, transport, treatment, disposal, storage, release or threatened release of hazardous substances.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” of any entity means any other entity that, together with such entity, would be treated as a single employer under Section 414 of the Code.
“Escrow Agreement” has the meaning set forth in Section 8.3(e).
“Excess Stock” has the meaning set forth in Section 3.5(a).
“Exchange Act” means the Securities Exchange Act of 1934.
“Exchange Agent” has the meaning set forth in Section 2.1(a).
“Exchange Fund” has the meaning set forth in Section 2.1(a).
“Expenses” has the meaning set forth in Section 6.7.
“Form S-4” has the meaning set forth in Section 6.1(a).
“GAAP” means the United States generally accepted accounting principles.
“Governmental Entity” means any nation or government, any state, agency, commission, or other political subdivision thereof, any regulatory authority or any entity (including a court or arbitrator (public or private)) of competent jurisdiction properly exercising executive, legislative, judicial, taxing or administration functions of the government.
“Incentive Plans” means the Amended and Restated 2007 Incentive Award Plan of the Company, as amended and restated on May 18, 2017 and any other Company employee or director stock option, stock purchase or equity compensation plans, arrangements or agreements.
“Indemnified Party” has the meaning set forth in Section 6.8(a).
“Intellectual Property” means: (a) trademarks, service marks, logos, trade names and trade dress, and all goodwill associated with the foregoing, (b) domain names, (c) copyrights, software and computer programs, (d) patents, (e) trade secrets, (f) know-how, (g) proprietary information and (h) all registrations and applications for registration of any of the foregoing.
“Intervening Event” has the meaning set forth in Section 6.3(h).
“Investment Company Act” means the Investment Company Act of 1940.
“IRS” means the Internal Revenue Service.
“Issuance” has the meaning set forth in the recitals hereto.
“Joint Proxy Statement/Prospectus” has the meaning set forth in Section 6.1(a).
“knowledge” means (a) with respect to Parent, the actual knowledge of the individuals named in Section 9.1 of the Parent Disclosure Schedule after reasonable inquiry and (b) with respect to the Company, the actual knowledge of the individuals named in Section 9.1 of the Company Disclosure Schedule after reasonable inquiry, in each case, as of the date of this Agreement.
“Latest Balance Sheet Date” has the meaning set forth in Section 3.10.
“Law” means any statute, law, ordinance, rule or regulation (domestic or foreign) issued, promulgated or entered into by or with any Governmental Entity.
“Liens” means any mortgage, pledge, hypothecation, assignment, encumbrance, lien (statutory or other), other charge or security interest.
“LLC Act” has the meaning set forth in the recitals hereto.
“Material Contract” has the meaning set forth in Section 3.22(a).
“Merger” has the meaning set forth in the recitals hereto.
“Merger Consideration” has the meaning set forth in Section 1.6(b), subject to adjustment pursuant to Section 1.8, if applicable.
“Merger Sub” has the meaning set forth in the preamble hereto.
“MGCL” has the meaning set forth in the recitals hereto.
“Net Option Share” means, with respect to each Option, the quotient obtained by dividing (a) the difference of (i) the Option Intrinsic Value, less (ii) the aggregate dollar amount of the withholding Tax obligation of the holder of such Option in respect of the Option Intrinsic Value (as contemplated by Section 2.2), by (b) the Closing Date Market Price.
“Net RS Share” means, with respect to each Restricted Stock Award, the quotient obtained by dividing (a) the difference of (i) the Restricted Stock Award Value less (ii) the aggregate dollar amount of the withholding Tax obligation of the holder of such Restricted Stock Award in respect of the Restricted Stock Award Value (as contemplated by Section 2.2), by (b) the Closing Date Market Price.
“NYSE” means The New York Stock Exchange.
“Option” has the meaning set forth in Section 1.7(a)(i).
“Option Intrinsic Value” means with respect to each Option, the product of (i) the excess, if any, of the Closing Date Market Price over the per share exercise price of such Option, multiplied by (ii) the number of Company Common Shares subject to such Option immediately prior to the Effective Time.
“Order” means any order, writ, award, injunction, decree, judgment or stipulation issued, promulgated or entered into by or with any Governmental Entity.
“other party” means, with respect to the Company, Parent and Merger Sub, and means, with respect to Parent or Merger Sub, the Company, unless the context otherwise requires.
“Outside Date” has the meaning set forth in Section 8.1(b)(i).
“Parent” has the meaning set forth in the preamble hereto.
“Parent 401(k) Plan” has the meaning set forth in Section 6.6(e).
“Parent Benefit Plans” means each written employee benefit plan, scheme, program, policy, arrangement and contract (including any “employee benefit plan,” as defined in Section 3(3) of ERISA, whether or not subject to ERISA, and any bonus, deferred compensation, stock bonus, stock purchase, restricted stock, stock option or other equity-based arrangement, and any collective bargaining, employment, termination, retention, bonus, change in control or severance agreement, plan, program, policy, arrangement or contract) under which any current or former director, officer or employee of Parent or any of the Parent Subsidiaries has any present or future right to benefits, that is maintained, sponsored or contributed to by Parent or any of the Parent Subsidiaries or which Parent or any of the Parent Subsidiaries has any obligation to maintain, sponsor or contribute, or with respect to which Parent or any of its Subsidiaries would incur any direct or indirect liability under the Code or ERISA or any similar non-U.S. law, whether contingent or otherwise.
“Parent Board” has the meaning set forth in the recitals hereto.
“Parent Board Recommendation” has the meaning set forth in Section 4.2(b).
“Parent Common Stock” has the meaning set forth in Section 4.5(b).
“Parent Preferred Stock” has the meaning set forth in Section 4.5(b).
“Parent Disclosure Schedule” has the meaning set forth in the Preamble to Article IV.
“Parent Expense Reimbursement” has the meaning set forth in Section 8.3(g).
“Parent Financial Advisors” means Goldman Sachs & Co. LLC and BofA Securities, Inc.
“Parent Incentive Plans” has the meaning set forth in Section 4.5(b).
“Parent Material Adverse Effect” means any fact, circumstance, change, event, occurrence or effect that (x) has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the assets, liabilities, financial condition, business or results of operations of Parent and the Parent Subsidiaries, taken as a whole; provided, however, that none of the following shall constitute or be considered in determining whether a Parent Material Adverse Effect has occurred: (a) changes or fluctuations in the economy or the securities, capital, credit or financial markets generally in the United States; (b) national or international political conditions or changes therein (including the commencement, continuation or escalation of acts of war, armed hostilities, sabotage or other acts of terrorism); (c) changes that are the result of factors generally affecting the real estate industry or the geographic areas in which Parent and the Parent Subsidiaries operate; (d) any loss of, or adverse change in, the relationship of the Parent or any of the Parent Subsidiaries with its lessees, employees, suppliers, financing sources, business partners, regulators or other third parties solely caused by the identity of the Company, the execution of this Agreement or the announcement, negotiation, existence or performance of the transactions contemplated by this Agreement; (e) changes in GAAP, the rules or policies of the Public Company Accounting Oversight Board or any applicable Law or interpretation or application of any of the foregoing after the date of this Agreement; (f) any failure by Parent to meet any internal or external projections, forecasts or estimates of revenues, earnings, cash flow, funds from operations or other metrics for any period; provided that the exception in this clause (f) shall not preclude a determination that any event, change, circumstance or effect underlying such failure has resulted in, or contributed to, a Parent Material Adverse Effect; (g) the suspension of trading in securities on the NYSE or a decline in the price, or a change in the trading volume, of the Parent Common Stock on the NYSE; provided that the exception in this clause (g) shall not preclude a determination that any event, change, circumstance or effect underlying such suspension or decline has resulted in, or contributed to, a Parent Material Adverse Effect; (h) effects resulting from COVID-19, earthquakes, hurricanes, tornados or other weather conditions, natural disasters or force majeure events; (i) any change or announcement of a potential change in the credit rating of Parent or any of the Parent Subsidiaries or any of their securities; provided that the exception in this clause (i) shall not preclude a determination that any event, change, circumstance or effect underlying such change or announcement of a potential change has resulted in, or contributed to, a Parent Material Adverse Effect; (j) compliance by Parent with the terms of this Agreement, including the failure of Parent to take any action as a result of restrictions in Article V of this Agreement, or any actions taken, or failure to take any action, which Parent has requested in writing; or (k) any stockholder litigation or threatened stockholder litigation, in each case, arising from allegations of a breach of duty or similar obligations in connection with this Agreement or the transactions contemplated hereby; provided that the exceptions in clauses (a), (b), (c) and (h) shall apply only to the extent such event, change, circumstance or effect does not (i) relate only to (or have the effect of relating only to) Parent and the Parent Subsidiaries or (ii) disproportionately adversely affect Parent and the Parent Subsidiaries, taken as a whole, compared to other companies of similar size operating in the same industry and in similar geographic areas in which Parent and the Parent Subsidiaries operate or (y) materially impairs, materially delays or prevents, or would reasonably be expected to materially impair, materially delay or prevent, Parent from consummating the Merger before the Outside Date.
“Parent Material Contract” has the meaning set forth in Section 4.20(a).
“Parent Permits” has the meaning set forth in Section 4.1.
“Parent Property” means each real property, or interest therein, owned, or leased (including ground leased) as lessee or sublessee, by Parent or any Parent Subsidiary as of the date of this Agreement (including all of Parent’s or any Parent Subsidiary’s right, title and interest in and to buildings, structures and other improvements and fixtures located on or under such real property and all easements, rights and other appurtenances to such real property).
“Parent SEC Documents” has the meaning set forth in Section 4.6(a).
“Parent Securities” has the meaning set forth in Section 4.5(c).
“Parent Stockholders Meeting” has the meaning set forth in Section 6.2(b).
“Parent Subsidiaries” and “Parent Subsidiary” shall have the meanings set forth in Section 4.11(b).
“Parent Subsidiary Partnership” has the meaning set forth in Section 4.16(h).
“Parent Tax Counsel” means Fried, Frank, Harris, Shriver and Jacobson, LLP.
“Parent Tax Protection Agreements” has the meaning set forth in Section 4.16(h).
“Parent Transaction Litigation” has the meaning set forth in Section 6.18.
“parties” has the meaning set forth in the preamble hereto.
“Permitted Liens” means (a) any Liens for Taxes or other governmental charges not yet delinquent or the amount or validity of which is being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP, (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, workmen’s, landlords’ or other similar Liens, (c) pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation, (d) Liens that do not, individually or in the aggregate, materially impair the continued use or operation of the property to which they relate or the conduct of the business of the Company and the Company Subsidiaries as conducted on the date of this Agreement, (e) statutory Liens arising by operation of Law with respect to a liability incurred in the ordinary course of business and which is not yet due and payable or which is being contested in good faith and by appropriate proceedings and (f) immaterial easements, rights of way or other similar matters or restrictions or exclusions that would be shown by a current title report or other similar report.
“Person” means an individual, corporation, limited liability company, partnership, association, trust, unincorporated organization, or other entity or group (as such term is defined in the Exchange Act).
“Preferred Stock Consideration” means the amount of $25.00 plus all accumulated and unpaid accrued dividends to, but not including, the Closing Date, per share of Company Preferred Stock.
“Qualified REIT Subsidiary” has the meaning set forth in Section 3.6.
“Qualifying REIT Income” has the meaning set forth in Section 8.3(e).
“Recommendation Withdrawal” has the meaning set forth in Section 6.3(c).
“Reference Price” means the volume weighted average price per share of Parent Common Stock on the NYSE (as reported by Bloomberg L.P., or, if not reported thereby, by another authoritative source mutual agreed by the parties) for the five (5) consecutive trading days immediately preceding the fifth trading day prior to the Closing Date. The Reference Price shall be calculated to the nearest one-hundredth of one cent.
“REIT” means a real estate investment trust within the meaning of Sections 856 through 860 of the Code.
“Representatives” means, with respect to any party, collectively, each of such party’s Subsidiaries, each of such party’s and its Subsidiaries’ respective officers, directors and employees and any advisors, attorneys, consultants or other representatives (acting in such capacity) retained by such party or any of its controlled Affiliates.
“Requisite Company Stockholder Vote” means the approval of this Agreement and the transactions contemplated hereby, including the Merger, by the affirmative vote of at least two-thirds of the outstanding Company Shares entitled to vote thereon in accordance with applicable Law and the charter and bylaws of the Company.
“Requisite Parent Stockholder Vote” means the approval of the Issuance as required by the rules of the NYSE by the affirmative vote of a majority of the votes cast on a proposal to approve the Issuance by the holders of the Parent Common Stock voting thereon in accordance with applicable Law and the declaration of trust and bylaws of Parent.
“Restricted Stock Award” has the meaning set forth in Section 1.7(a)(ii).
“Restricted Stock Award Value” means with respect to each Restricted Stock Award, the product obtained by multiplying (i) the Closing Date Market Price, by (ii) the number of Company Common Shares in respect of the Restricted Stock Award outstanding immediately prior to the Effective Time.
“Rule 145” has the meaning set forth in Section 6.14.
“SDAT” has the meaning set forth in Section 1.2(b).
“SEC” means the Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933.
“Significant Subsidiary” means any Company Subsidiary that qualifies as a “Significant Subsidiary” under Item 1.02(a)(w) of Regulation S-X of the SEC.
“Subsidiary” of any Person means any corporation, partnership, joint venture, limited liability company, trust, estate or other Person of which (or in which), directly or indirectly, more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such partnership, joint venture or limited liability company or other Person or (c) the beneficial interest in such trust or estate, is at the time owned by such first Person, or by such first Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries.
“Superior Proposal” has the meaning set forth in Section 6.3(h).
“Surviving Entity” has the meaning set forth in Section 1.1.
“Takeover Proposal” has the meaning set forth in Section 6.3(h).
“Takeover Statutes” has the meaning set forth in Section 3.24.
“Tax” means income, gross receipts, franchise, sales, use, ad valorem, property, payroll, withholding, excise, severance, transfer, employment, estimated, alternative or add-on minimum, value added, stamp, occupation, premium, environmental or windfall profits taxes, and other taxes, charges, fees, levies, imposts, customs, duties, licenses or other assessments, together with any interest, penalties, and additions to tax or additional amounts imposed by any and all federal, state, local, foreign or other Taxing Authority.
“Taxable REIT Subsidiary” has the meaning set forth in Section 3.6.
“Tax Return” means any statement, report, return, information return or claim for refund relating to Taxes (including any declarations, schedules or attachments thereto), including, if applicable, any combined or consolidated return for any group of entities that includes the Company or Parent, as applicable, or any of their respective Subsidiaries.
“Taxing Authority” means, with respect to any Tax, the Governmental Entity that imposes such Tax, and the agency (if any) charged with the collection of such Tax for such Governmental Entity.
“Termination Fee” means $62,161,697.
“Transaction Litigation” has the meaning set forth in Section 6.18.
“Transfer Taxes” has the meaning set forth in Section 6.17(d).
“Willful and Material Breach” means a material breach that is a consequence of an act undertaken by the breaching party or the failure by the breaching party to take an act it is required to take under this Agreement, with actual knowledge that the taking of or failure to take such act would, or would reasonably be expected to, cause a breach of this Agreement.
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IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement to be signed by their respective officers thereunto duly authorized, all as of the date first written above.
| | EQUITY COMMONWEALTH |
| | | | |
| | By: | | /s/ David Helfand | |
| | | Name: David Helfand | |
| | | Title: President and Chief Executive Officer | |
| | RS18 LLC |
| | By Equity Commonwealth, its sole and managing member |
| | | | |
| | By: | | /s/ David Helfand | |
| | | Name: David Helfand | |
| | | Title: President and Chief Executive Officer | |
| | MONMOUTH REAL ESTATE INVESTMENT CORPORATION |
| | | | |
| | By: | | /s/ Michael P. Landy | |
| | | Name: Michael P. Landy | |
| | | Title: President and Chief Executive Officer | |
[Signature Page to Agreement and Plan of Merger]
