LXP Industrial Trust DEFM14A, filed Sep 18, 2026
LXP Industrial Trust (LXP)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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| x | Definitive Proxy Statement |
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| ¨ | Soliciting Material under § 240.14a-12 |
LXP INDUSTRIAL TRUST
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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515 N. Flagler Drive, Suite 408
West Palm Beach, FL 33401
September 18, 2026
Dear Fellow Shareholder,
You are cordially invited to attend a special meeting of shareholders (the “Special Meeting”) of LXP Industrial Trust, a Maryland real estate investment trust (the “Company”), to be held on October 26, 2026, at 9:00 a.m., Eastern Time. The Special Meeting will be held virtually via live webcast at www.meetnow.global/MRZXCWJ. You will not be able to attend the Special Meeting in person.
The board of trustees of the Company (the “Board”) has approved an Agreement and Plan of Merger, dated as of July 19, 2026 (as may be amended from time to time, the “Merger Agreement”), by and among the Company, Leopard REIT LLC, a Delaware limited liability company (“Parent”), and Leopard Merger Sub LLC, a Maryland limited liability company and wholly owned indirect subsidiary of Parent (“Merger Sub”). The Merger Agreement provides that, upon the terms and conditions set forth therein and in accordance with the Maryland REIT Law (the “MRL”) and the Maryland Limited Liability Company Act (the “MLLCA”), the Company will be merged with and into Merger Sub with Merger Sub surviving the merger (the “Surviving Entity” and such merger transaction, the “Merger”). Upon completion of the Merger, the common shares of the Surviving Entity will be owned and controlled by Parent.
At the Special Meeting, you will be asked to consider and vote on (i) a proposal to approve the Merger and the other transactions contemplated by the Merger Agreement (the “Merger Proposal”), (ii) a proposal to approve, on a non-binding, advisory basis, the compensation that may be paid or become payable to the Company’s named executive officers in connection with the Merger (the “Advisory Merger-Related Compensation Proposal”) and (iii) a proposal to approve any adjournment of the Special Meeting for the purpose of soliciting additional proxies if there are not sufficient votes at the Special Meeting to approve the Merger Proposal (the “Adjournment Proposal”).
If the Merger is completed, you, as a holder of common shares of beneficial interest, par value $0.0001 per share, of the Company (each, a “Company Common Share”), will be entitled to receive $61.20 in cash, without interest, subject to certain adjustments as further described in the enclosed proxy statement, in exchange for each Company Common Share you own as of immediately prior to the effective time of the Merger, as more fully described in the enclosed proxy statement.
Only holders of record of Company Common Shares at the close of business on September 18, 2026, are entitled to notice of, and to vote at, the Special Meeting, or any adjournment or postponement thereof. Holders of our 6.50% Series C Cumulative Convertible Preferred Stock, par value $0.0001 per share, are entitled to notice of the Special Meeting, but their vote is not required to approve any of the proposals at the Special Meeting and is not being solicited.
Our Board has unanimously (i) determined and declared that the Merger and the other transactions contemplated by the Merger Agreement are advisable and in the best interests of the Company and its shareholders, (ii) duly authorized and approved the execution, delivery and performance of the Merger Agreement, including, subject to obtaining the requisite approval by the shareholders of the Company, the consummation of the Merger and the other transactions contemplated thereby, (iii) directed that the approval of the Merger and the other transactions contemplated by the Merger Agreement be submitted for consideration by the holders of Company Common Shares at the Special Meeting and (iv) recommended that the Company’s shareholders vote in favor of the Merger Proposal. The Board recommends that you vote “FOR” the approval of the Merger Proposal (Proposal 1 below), which approval is necessary to complete the Merger, “FOR” the Advisory Merger-Related Compensation Proposal (Proposal 2 below) and “FOR” the Adjournment Proposal (Proposal 3 below).
The Merger Proposal must be approved by the affirmative vote of the holders of Company Common Shares entitled to cast a majority of all the votes entitled to be cast at the Special Meeting on the Merger Proposal. The Notice of Special Meeting and proxy statement accompanying this letter provide you with more specific information concerning the Special Meeting, the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. The Company encourages you to read carefully the enclosed proxy statement, including the annexes. You may also obtain more information about the Company from it or from documents filed with the U.S. Securities and Exchange Commission.
Your vote is very important regardless of the number of Company Common Shares that you own. Whether or not you plan to attend the virtual Special Meeting, the Company requests that you authorize a proxy to vote your shares by either completing and returning the enclosed proxy card as promptly as possible or authorizing your proxy or voting instructions by telephone or through the Internet. The enclosed proxy card contains instructions regarding voting. If you attend the Special Meeting, you will be able to personally vote even if you have previously submitted your proxy, as your proxy is revocable at your option, but you may also continue to have your shares voted as instructed in your proxy, as your attendance alone will not revoke any proxy that you have previously given. If you fail to authorize a proxy to vote your shares, fail to personally vote at the Special Meeting, or fail to instruct your broker on how to vote, it will have the same effect as a vote “AGAINST” approval of the Merger Proposal.
On behalf of the Board, thank you for your continued support.
Sincerely,
| /s/ T. Wilson Eglin | /s/ Jamie Handwerker | |
| T. Wilson Eglin | Jamie Handwerker | |
| Chairman and CEO | Lead Independent Trustee |
This proxy statement is dated September 18, 2026 and, together with the enclosed proxy card, is first being mailed to our shareholders on or about September 21, 2026.
515 N. Flagler Drive, Suite 408
West Palm Beach, FL 33401
September 18, 2026
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 26, 2026
September 18, 2026
To the Shareholders of LXP Industrial Trust:
NOTICE IS HEREBY GIVEN that the special meeting of shareholders (including any adjournment or postponement thereof, the “Special Meeting”) of LXP Industrial Trust, a Maryland real estate investment trust (the “Company”), will be held on October 26, 2026, at 9:00 a.m., Eastern Time, virtually via live webcast, at www.meetnow.global/MRZXCWJ, for the following purposes:
| (1) | To consider and vote on a proposal to approve the merger of the Company with and into Leopard Merger Sub LLC, a Maryland limited liability company (“Merger Sub”) and wholly owned indirect subsidiary of Leopard REIT LLC, a Delaware limited liability company (“Parent”), with Merger Sub continuing as the surviving entity (such merger transaction, the “Merger”), pursuant to the Agreement and Plan of Merger, dated as of July 19, 2026 (as may be amended from time to time, the “Merger Agreement”), by and among the Company, Parent, and Merger Sub, and the other transactions contemplated by the Merger Agreement (the “Merger Proposal”); |
| (2) | To consider and vote on a proposal to approve, on a non-binding, advisory basis, the compensation that may be paid or become payable to our named executive officers in connection with the Merger (the “Advisory Merger-Related Compensation Proposal”); and |
| (3) | To consider and vote on a proposal to approve any adjournment of the Special Meeting for the purpose of soliciting additional proxies if there are not sufficient votes at the Special Meeting to approve the Merger Proposal (the “Adjournment Proposal”). |
Only shareholders of record of common shares of beneficial interest, par value $0.0001 per share, of the Company (each, a “Company Common Share”), at the close of business on September 18, 2026, are entitled to notice of and to vote at the Special Meeting or at any postponements or adjournments thereof.
Holders of our 6.50% Series C Cumulative Convertible Preferred Stock, par value $0.0001 per share (the “Company Series C Preferred Shares”), are entitled to notice of the Special Meeting but their vote is not required to approve any of the proposals at the Special Meeting and is not being solicited.
The foregoing items of business are more fully described in the proxy statement attached to the notices delivered to holders of Company Common Shares, and forms a part of, and is incorporated by reference into, such notices. Pursuant to the Company’s Third Amended and Restated By-laws, as amended, only the matters set forth in this Notice of Special Meeting may be brought before the Special Meeting. The board of trustees of the Company (the “Board”) has fixed the close of business on September 18, 2026 as the record date for the determination of shareholders entitled to notice of and to vote at the Special Meeting or any postponement or adjournment thereof. On or around September 21, 2026, the Company intends to commence mailing of this Notice to all shareholders entitled to notice of, or vote at, the Special Meeting.
The Board unanimously approved the Merger Agreement and determined and declared the Merger and the other transactions contemplated by the Merger Agreement to be advisable and in the best interests of the Company and its shareholders. The Board recommends that holders of Company Common Shares vote “FOR” the Merger Proposal, “FOR” the Advisory Merger-Related Compensation Proposal, and “FOR” the Adjournment Proposal.
The Merger Proposal must be approved by the affirmative vote of the holders of Company Common Shares entitled to cast a majority of all the votes entitled to be cast at the Special Meeting on the Merger Proposal. Accordingly, the vote of every holder of Company Common Shares is very important regardless of the number of Company Common Shares owned. If you are a holder of Company Common Shares, whether or not you plan to virtually attend the Special Meeting, the Company requests that you authorize a proxy to vote your Company Common Shares by either marking, signing, dating and promptly returning the enclosed proxy card in the postage-paid envelope or authorizing your proxy or voting instructions by telephone or through the Internet. If you virtually attend the Special Meeting and are a holder of Company Common Shares, you will be able to personally vote at the Special Meeting even if you have previously submitted your proxy, as your proxy is revocable at your option, but you may also continue to have your Company Common Shares voted as instructed in your proxy, as your attendance alone will not revoke any proxy that you have previously given. If you are a holder of record of Company Common Shares and you fail to either authorize a proxy to vote your shares or attend the meeting, the effect will be that the Company Common Shares that you own will not be counted for purposes of determining whether a quorum is present at the Special Meeting. A failure to authorize a proxy to vote your Company Common Shares, failure to personally vote at the Special Meeting, or failure to instruct your broker, bank or other nominee on how to vote your Company Common Shares will have the same effect as a vote “AGAINST” the Merger Proposal. Abstentions will have the same effect as voting “AGAINST” the Merger Proposal. The approval of the Advisory Merger-Related Compensation Proposal and the approval of the Adjournment Proposal require the affirmative vote of a majority of the votes cast by holders of Company Common Shares on each such proposal. If you are a holder of Company Common Shares and fail to authorize a proxy to vote your Company Common Shares, fail to personally vote at the Special Meeting, or fail to instruct your broker on how to vote your Company Common Shares, it will have no effect on the outcome of the Advisory Merger-Related Compensation Proposal or the Adjournment Proposal. Abstentions, while present for purposes of determining the presence of a quorum, are not considered votes cast and therefore will have no effect on the outcome of the Advisory Merger-Related Compensation Proposal and the Adjournment Proposal.
Any proxy may be revoked at any time prior to its exercise by authorizing a proxy to vote again over the Internet or by telephone prior to 11:59 p.m., Eastern Time, on October 25, 2026, signing and returning another proxy card with a later date, provided the Company receives the updated proxy card before the date of the Special Meeting, or personally voting at the Special Meeting. Attendance at the Special Meeting alone will not be sufficient to revoke a previously authorized proxy.
The Company encourages holders of Company Common Shares to read the accompanying proxy statement in its entirety and to submit a proxy or voting instructions so that your Company Common Shares will be represented and voted even if you do not attend the Special Meeting. If you have any questions or need assistance in submitting a proxy or your voting instructions, please call the Company’s proxy solicitor, Georgeson LLC, toll-free at (866) 920-7133, or email at LXPIndustrial@Georgeson.com.
Holders of Company Series C Preferred Shares are also encouraged to read the definitive proxy statement for more information about the Merger and the Merger Agreement, including the proposed treatment of the Company Series C Preferred Shares in connection therewith. The definitive proxy statement may be obtained free of charge at the SEC’s website at www.sec.gov or by accessing the Investor Relations section of the Company’s website at https://ir.lxp.com.
Regardless of the number of Company Common Shares you hold, as a shareholder your role is very important, and the Board strongly encourages you to exercise your right to vote.
By order of the Board of Trustees,
| /s/ Joseph S. Bonventre | |
| Joseph S. Bonventre, Secretary |
TABLE OF CONTENTS
| i |
| ii |
| NO DISSENTERS’ RIGHTS OF APPRAISAL | 109 |
| WHERE YOU CAN FIND ADDITIONAL INFORMATION | 110 |
| Available Information | 110 |
| Annex A | A-1 |
| Annex B | B-1 |
| iii |
This summary highlights only selected information from this proxy statement relating to the merger of LXP Industrial Trust, a Maryland real estate investment trust (the “Company” or “LXP”), with Leopard REIT LLC, a Delaware limited liability company (“Parent”), and Leopard Merger Sub LLC, a Maryland limited liability company and a wholly owned indirect subsidiary of Parent (“Merger Sub”), pursuant to which the Company will merge into Merger Sub with Merger Sub surviving the merger (the “Merger”), and the other transactions contemplated by the Merger Agreement (as defined herein). This summary does not contain all of the information about the Merger and the related transactions contemplated by the Merger Agreement that may be important to you. As a result, to understand the Merger and the related transactions fully, and for a more complete description of the terms of the Merger and the related transactions, you should read carefully this proxy statement in its entirety, including the annexes and the other documents to which the Company has referred you, including the Agreement and Plan of Merger, dated as of July 19, 2026, by and among the Company, Parent, and Merger Sub (as may be amended from time to time, the “Merger Agreement”), which is attached as Annex A. Capitalized terms used and not otherwise defined in this proxy statement have the meanings set forth in the Merger Agreement.
The Parties to the Merger (See Page 28)
LXP Industrial Trust
Corporate Headquarters:
515 N. Flagler Drive, Suite 408
West Palm Beach, FL 33401
(212) 692-7200
LXP Industrial Trust (the “Company,” “LXP,” “we,” “us” or “our”) is a Maryland real estate investment trust focused on Class A warehouse and distribution investments in 12 target markets across the Sunbelt and Midwest. LXP seeks to expand its warehouse and distribution portfolio through acquisitions, build-to-suit transactions, sale-leaseback transactions, development projects and other transactions.
As of June 30, 2026, the Company had equity ownership interests in approximately 109 consolidated real estate properties, located in 14 states. The properties in which the Company has an interest are primarily net leased to tenants in various industries.
The Company’s corporate headquarters is located in West Palm Beach, Florida. The Company’s website is www.lxp.com. The information found on, or otherwise accessible through, the Company’s website is not incorporated into, and does not form a part of, this proxy statement or any other report or document the Company files with or furnishes to the U.S. Securities and Exchange Commission (“SEC”). The common shares of beneficial interest, par value $0.0001 per share, of the Company (each, a “Company Common Share”), are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “LXP.” The shares of 6.50% Series C Cumulative Convertible Preferred Stock, par value $0.0001 per share, of the Company (the “Company Series C Preferred Shares”), are listed on the NYSE under the ticker symbol “LXPPRC.” For additional information about the Company and the Company’s business, please refer to the section of this proxy statement captioned “Where You Can Find Additional Information.”
Leopard REIT LLC
Leopard Merger Sub LLC
c/o Brookfield Property Group LLC
Brookfield Place, 225 Liberty Street, 8th Floor
New York, NY 10281-1048
(212) 417-7000
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Leopard REIT LLC, a Delaware limited liability company, is jointly owned by affiliates of Brookfield Asset Management Ltd. (“Brookfield”) and Canada Pension Plan Investment Board (“CPPIB” and together with Brookfield, the “Sponsors”) and was formed solely for the purpose of acquiring the Company. Leopard Merger Sub LLC, a Maryland limited liability company (“Merger Sub”), is a wholly owned indirect subsidiary of Parent and was formed solely for the purpose of facilitating Parent’s acquisition of the Company. Neither Parent nor Merger Sub has carried on any activities to date, except for activities incidental to formation and activities undertaken in connection with the transactions contemplated by the Merger Agreement.
Parent and Merger Sub are at times referred to in this proxy statement together, as the “Parent Parties.”
The Special Meeting (See Page 29)
The Proposals
The special meeting of the Company’s shareholders (the “Special Meeting”) will be held on October 26, 2026, at 9:00 a.m., Eastern Time. The Special Meeting will be held virtually via live webcast, at www.meetnow.global/MRZXCWJ. At the Special Meeting, holders of Company Common Shares as of the record date, which was the close of business on September 18, 2026 (the “Record Date”), will be asked to consider and vote on (i) a proposal to approve the Merger and the other transactions contemplated by the Merger Agreement (the “Merger Proposal”), (ii) a proposal to approve, on a non-binding, advisory basis, the compensation that may be paid or become payable to the Company’s named executive officers in connection with the Merger (the “Advisory Merger-Related Compensation Proposal”), and (iii) a proposal to approve any adjournment of the Special Meeting for the purpose of soliciting additional proxies if there are not sufficient votes at the Special Meeting to approve the Merger Proposal (the “Adjournment Proposal”).
Pursuant to the Company’s Third Amended and Restated By-laws, as amended (the “Bylaws”), only the matters set forth in the Notice of Special Meeting may be brought before the Special Meeting.
Record Date, Notice and Quorum (See Page 29)
All holders of record of Company Common Shares as of the Record Date, which was the close of business on September 18, 2026, are entitled to receive notice of and attend and vote at the Special Meeting or any postponement or adjournment of the Special Meeting. Holders of Company Series C Preferred Shares as of the Record Date are only entitled to receive notice of the Special Meeting, but are not entitled to vote at the Special Meeting. Each such shareholder of record will be entitled to cast one vote on each matter presented at the Special Meeting for each Company Common Share that such holder owned as of the Record Date. As of the Record Date, there were 58,957,264 Company Common Shares outstanding and entitled to vote at the Special Meeting.
A quorum will be established for purposes of the Special Meeting if shareholders entitled to cast a majority of all the votes entitled to be cast at the Special Meeting on any matter are present, either virtually or by proxy. A quorum is necessary to transact business at the Special Meeting. Abstentions and broker non-votes, if any, will be counted as shares present for the purposes of determining the presence of a quorum. If a quorum is not present at the Special Meeting, the Company expects that the Special Meeting will be adjourned to a later date.
Pursuant to the Merger Agreement and in accordance with the Maryland REIT Law (the “MRL”) and the Maryland Limited Liability Company Act (the “MLLCA”), at the effective time of the Merger (the “Effective Time”), the Company will merge with and into Merger Sub, and the separate existence of the Company will cease, with Merger Sub being the surviving entity (the “Surviving Entity”) in the Merger, such that following and as a result of the Merger, the Surviving Entity will be indirectly controlled by Parent.
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On the date on which the closing of the Merger (the “Closing”) occurs (the “Closing Date”), the Company, Parent and Merger Sub will (i) cause articles of merger with respect to the Merger (the “Articles of Merger”) to be duly executed and filed with the State Department of Assessments and Taxation of Maryland (the “SDAT”) as provided under the MRL and MLLCA and (ii) make any other filings, recordings or publications required to be made by the Company, Parent or Merger Sub under the MRL and MLLCA in connection with the Merger. The Merger will become effective upon the later of such time as the Articles of Merger have been accepted for record by the SDAT, and such time (not to exceed thirty (30) days after the Articles of Merger are accepted for record by the SDAT) which the parties have agreed upon and designated in the Articles of Merger in accordance with the MRL and MLLCA as the Effective Time.
Reasons for the Merger (See Page 43)
The Merger was determined and declared to be advisable and in the best interests of the Company and its shareholders and approved by all members of the board of trustees of the Company (the “Board”), as more fully described in the section of this proxy statement captioned “The Merger—Background of the Merger.” In considering the Merger, the Board consulted with members of Company management, as well as the Company’s financial and legal advisors, and considered a number of factors, including the following material factors, which the Board viewed as supporting its decision:
| · | the Board’s knowledge of the business, operations, financial condition, earnings and prospects of the Company, including: | |
| · | the challenges the Company has faced given its lack of scale, including the impact of lack of scale on its cost of capital, G&A efficiency and the ability to achieve desired concentration levels in target markets; | |
| · | the challenges the Company has faced in growing earnings given its access to capital at attractive rates and challenges in recycling capital through property sales given tax considerations associated with the Company’s built-in gains; and | |
| · | the potential challenges the Company faces from prolonged macroeconomic and commercial real estate uncertainty resulting from inflation, the interest rate environment, international military conflicts, financial market volatility and valuations, and the U.S. political environment, including shifting government policies, among other concerns; | |
| · | the Board’s knowledge of the current and prospective environment in which the Company operates, including the macroeconomic risks noted above and the Company’s relative exposure to a deterioration in this environment given its scale relative to its peers (including relative disadvantages in cost of capital, G&A efficiency and other matters) and the importance of development to its growth strategy; | |
| · | the fact that the proposed Merger Consideration in the cash amount of $61.20 per Company Common Share provides the Company’s common shareholders with certainty of value and liquidity immediately upon the Closing, in comparison to the risks and uncertainty that would be inherent in remaining an independent public company, including the risks and uncertainties noted above; | |
| · | the current and historical trading prices of Company Common Shares, including the fact that the proposed Merger Consideration in the cash amount of $61.20 per Company Common Share provides approximately a 12.3% premium to the 30-day volume-weighted average price per Company Common Share ending July 17, 2026, approximately a 19.8% premium to the 90-day volume-weighted average price per Company Common Share ending July 17, 2026, and approximately a 58% premium to the 52-week low price per Company Common Share; | |
| · | the fact that the proposed Merger Consideration in the cash amount of $61.20 per Company Common Share exceeds most financial analyst estimates of Company net asset value per common share and that the Company’s share price has historically been below such third-party estimates of net asset value per common share; |
| 6 |
| · | the fact that the Company was able to negotiate to improve the initial price proposed by Parent and to improve other terms in the Merger Agreement that the Board believes were important over the course of negotiations; | |
| · | the fact that the Merger Agreement provides for customary go-shop and fiduciary out provisions, which, subject to the terms thereof, authorize the Company to undergo a post-signing market-check, during which time other potential interested parties can propose a competing proposal, and which, subject to the terms of the Merger Agreement, if the Board concludes any such competing proposal constitutes a Superior Proposal, allows the Board to terminate the Merger Agreement and enter into an alternative agreement with such other party prior to the Cut-Off Time, and, in such case, the Company Termination Payment would be limited to approximately $54 million (i.e., approximately 1.5% of the equity value of the Company); | |
| · | advice from the Company’s independent financial advisor and outside legal counsel that the Company’s right to terminate the Merger Agreement, under certain circumstances, in order to enter into a definitive agreement providing for the implementation of a Superior Proposal and the Company Termination Payment after the Go-Shop Period are reasonable and not likely to preclude any other interested party from making a competing proposal; | |
| · | that the Merger Agreement contains terms that, taken as a whole, the Board believes provide a significant degree of certainty that the Merger will be completed as quickly as possible; | |
| · | the probability that the Merger will be completed based on, among other things, Parent’s available capital and Parent’s experience in the real estate industry, the absence of a financing contingency or condition, the Parent Termination Payment equal to approximately $289 million (i.e., approximately 8% of the Company’s equity value), payable to the Company if the Merger Agreement is terminated in certain circumstances, including a material breach or failure to close, the limited number of conditions to the Merger, and the absence of any significant regulatory approvals; | |
| · | the fact that Parent executed equity commitment letters and debt commitment letters representing the full merger consideration and other capitalization payable under the Merger Agreement; | |
| · | the fact that the limited guarantees are being executed by affiliates of Parent, which Parent has informed us have sufficient available capital to pay the full amount of the limited guarantees; | |
| · | the oral opinion of BofA Securities, Inc. (“BofA Securities”), which was confirmed by delivery of a written opinion dated July 19, 2026 to the Board to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations set forth in the written opinion, the Merger Consideration to be received in the Merger by holders of the Company Common Shares (other than the Parent Parties or any of their respective subsidiaries or any of the Acquired Companies) was fair, from a financial point of view, to such holders, as more fully described below in the section of this proxy statement captioned “The Merger—Opinion of the Company’s Financial Advisor;”; and | |
| · | the fact that the Merger is subject to the Company’s receipt of the approval of the Merger by a majority of all the votes entitled to be cast at the Special Meeting on the Merger Proposal, and that the Company’s shareholders are free to vote against the Merger for any reason, including if a higher offer were to be made prior to the Special Meeting (in certain cases subject to the Company Termination Payment if the Company subsequently were to enter into a definitive agreement relating to, or to consummate, any alternative acquisition). |
| 7 |
Recommendation of Our Board (See Page 45)
The Board has unanimously:
| · | determined and declared that the Merger and the other transactions contemplated by the Merger Agreement are advisable and in the best interests of the Company and its shareholders; | |
| · | duly authorized and approved the execution, delivery and performance of the Merger Agreement, including, subject to obtaining the requisite approval by the shareholders of the Company, the consummation of the Merger and the other transactions contemplated thereby; | |
| · | directed that the approval of the Merger and the other transactions contemplated by the Merger Agreement be submitted for consideration by the holders of Company Common Shares at the Special Meeting; and | |
| · | recommended that you vote “FOR” the Merger Proposal, “FOR” the Advisory Merger-Related Compensation Proposal and “FOR” the Adjournment Proposal. | |
Opinion of the Company’s Financial Advisor (See Page 49)
The Company has retained BofA Securities to act as the Company’s financial advisor in connection with the Merger. BofA Securities is an internationally recognized investment banking firm which is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. The Company selected BofA Securities to act as the Company’s financial advisor in connection with the Merger on the basis of BofA Securities’ experience in transactions similar to the Merger, its reputation in the investment community and its familiarity with the Company and its business.
On July 19, 2026, at a meeting of the Board held to evaluate the Merger, BofA Securities delivered to the Board an oral opinion, which was confirmed by delivery of a written opinion, dated July 19, 2026, to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations set forth in the written opinion, the Merger Consideration (as defined below) to be received in the Merger by holders of Company Common Shares (other than the Parent Parties or any of their respective subsidiaries or any of the Acquired Companies (as defined below)) was fair, from a financial point of view, to such holders.
The full text of BofA Securities’ written opinion to the Board, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex B to this proxy statement and is incorporated by reference herein in its entirety. BofA Securities delivered its opinion to the Board for the benefit and use of the Board (in its capacity as such) in connection with and for purposes of its evaluation of the Merger. BofA Securities expressed no opinion or view as to any terms or other aspects or implications of the Merger, including without limitation, the form or structure of the Merger, any related transactions or any other agreement, arrangement or understanding entered into in connection with or related to the Merger or otherwise (other than the Merger Consideration to the extent expressly specified in such opinion), and no opinion or view was expressed as to the relative merits of the Merger in comparison to other strategies or transactions that might be available to the Company or in which the Company might engage or as to the underlying business decision of the Company to proceed with or effect the Merger. BofA Securities’ opinion does not constitute a recommendation as to how any shareholder should vote or act in connection with the Merger or any other matter.
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Litigation Related to the Merger (See Page 60)
After filing its Preliminary Proxy Statement on September 4, 2026, the Company received a demand letter from a purported shareholder. The demand alleges that the Company’s disclosures were incomplete and misleading, in violation of federal securities laws. The Company does not believe that the allegations have any merit and intends to defend against them.
Material U.S. Federal Income Tax Consequences of the Merger (See Page 60)
Your receipt of the Merger Consideration (as defined below) for your Company Common Shares pursuant to the Merger will be treated for U.S. federal income tax purposes as a taxable sale of your Company Common Shares (except in the case of certain non-U.S. holders (as defined in the section of this proxy statement captioned “The Merger-Material U.S. Federal Income Tax Consequences of the Merger”) noted below). Generally, for U.S. federal income tax purposes, you will recognize gain or loss as a result of the Merger measured by the difference, if any, between the Merger Consideration you receive and your adjusted tax basis in your shares. However, under certain circumstances, we may be required to withhold a portion of the Merger Consideration paid to certain non-U.S. holders (as defined in the section of this proxy statement captioned “The Merger-Material U.S. Federal Income Tax Consequences of the Merger”) who could be treated as having “effectively connected income” subject to U.S. federal income tax, to the extent required under the Foreign Investment in Real Property Tax Act, which we refer to as “FIRPTA.” Tax matters can be complicated, and the tax consequences of the Merger to you will depend on your particular tax situation. We encourage you to consult your tax advisor regarding the tax consequences of the Merger to you. For further discussion, see “The Merger-Material U.S. Federal Income Tax Consequences of the Merger.”
Delisting and Deregistration of Company Shares (See Page 65)
If the Merger is completed, the Company Common Shares and the Company Series C Preferred Shares will be delisted, will no longer be traded on the NYSE and the Company Common Shares will be deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Treatment of Company Common Shares (See Page 67)
At the Effective Time, each Company Common Share that is issued and outstanding as of immediately prior to the Effective Time will automatically be cancelled and converted into the right to receive an amount in cash equal to $61.20 per share, without interest and subject to certain adjustments described herein (the “Merger Consideration”).
Notwithstanding the foregoing, each issued and outstanding Company Common Share held by (i) the Parent Parties or any of their respective subsidiaries or (ii) the Company or any of its subsidiaries (the “Acquired Companies”) as of the Effective Time will automatically be cancelled and will cease to exist, and no consideration will be paid, nor will any right inure or be made with respect to such Company Common Shares in connection with or as a consequence of the Merger.
Treatment of Company Series C Preferred Shares (See Page 67)
At the Effective Time, each Company Series C Preferred Share that is issued and outstanding as of immediately prior to the Effective Time will automatically be cancelled and converted into the right to receive one Series C Cumulative Convertible Preferred Unit of the Surviving Entity (each a “Surviving Entity Series C Preferred Unit” and collectively, the “Series C Preferred Consideration”). We have been advised by the Parent Parties that immediately following the Effective Time, the Parent intends to effectuate a second step merger that will result in each Surviving Entity Series C Preferred Unit issued in the Merger being exchanged for a cash amount equal to the $50.00 liquidation preference per Surviving Entity Series C Preferred Unit plus an amount equal to any accrued and unpaid dividends to, but not including, the Closing Date.
Treatment of Company Restricted Share Awards (See Page 67)
The Merger Agreement provides that, at the Effective Time, awards of restricted shares granted under the Company’s 2022 Equity-Based Award Plan, as amended (each, a “Company Restricted Share Award”), that are outstanding as of immediately prior to the Effective Time will (a) to the extent not vested, become fully vested, and any applicable performance conditions will be deemed to have been satisfied at the maximum level of performance (which is consistent with actual performance as of the date of the Merger Agreement), and (b) automatically be cancelled and converted into the right to receive a lump sum cash payment (subject to applicable withholding taxes) equal to the sum of (i) the product of (x) the Merger Consideration; and (y) the number of Company Common Shares represented by such Company Restricted Share Award, plus (ii) all accrued but unpaid dividends with respect to Company Restricted Share Awards outstanding immediately prior to the Effective Time (the “Company Restricted Share Award Consideration”).
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Financing of the Merger (See Page 91)
The Merger is not conditioned on any financing arrangements. The Parent Parties have represented in the Merger Agreement that Parent or Merger Sub had fully paid any and all commitment fees or other fees due as of or prior to the date of the Merger Agreement in connection with the debt commitment letters, dated as of July 19, 2026, together with the related fee letters (subject to certain permitted redactions) and the term sheet and other annexes, exhibits, schedules and attachments thereto (collectively, the “Debt Commitment Letters”), and the equity commitment letters delivered by Parent to the Company (the “Equity Commitment Letters” and, together with the Debt Commitment Letters, the “Financing Commitment Letters”). The Parent Parties have also represented that the net proceeds contemplated by the Financing Commitment Letters (both before and after giving effect to any “flex” provisions contained in the Debt Commitment Letters) in the aggregate will be sufficient for the Parent Parties and the Surviving Entity to pay all amounts required to be paid by them on the Closing Date in connection with the Merger and Financing Commitment Letters (including payment of the Merger Consideration, payment of the Series C Preferred Consideration, repayment or refinancing of debt of any Acquired Company contemplated by the Merger Agreement or the Debt Commitment Letters, payment of all amounts discussed in the section of this proxy statement captioned “The Merger-Interests of the Company’s Trustees and Executive Officers in the Merger-Treatment of Company Restricted Share Awards,” in each case, on the Closing Date, and payment of all other fees and expenses and obligations required to be paid or satisfied by Parent or Merger Sub on the Closing Date in connection with the Merger and the Financing (as defined in the Merger Agreement)). Each of the Parent Parties has agreed to use their respective reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to arrange, obtain and consummate the Financing in an amount required to satisfy the Required Amount (as defined in the Merger Agreement) not later than the Closing Date on the terms and conditions described in or contemplated by the Financing Commitment Letters.
Financing Cooperation; Assumption (See Page 88)
The Company has agreed to use its commercially reasonable efforts to provide, and will use its commercially reasonable efforts to cause its representatives to provide, and to cause each subsidiary of the Company to use its commercially reasonable efforts to provide, to the Parent Parties, in each case at Parent’s sole expense, all cooperation reasonably necessary and customary in connection with the arrangement of the debt financing committed pursuant to the Debt Commitment Letters (collectively, the “Debt Financing”), which cooperation is reasonably requested in writing by Parent. Such requested cooperation may not unreasonably interfere with the ongoing operations of the Acquired Companies. Furthermore, each of the Parent Parties will cause their respective subsidiaries and affiliates to use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable to obtain or complete any assumption, consent or other approval required in connection with the Merger Agreement or the transactions contemplated thereby related to the existing indebtedness of the Acquired Companies (each, an “Assumption”). Parent has agreed that obtaining any Assumption is not a condition to Closing and that the consummation of the transactions contemplated by the Merger Agreement will not be conditioned on, or delayed or postponed as a result of the obtaining of (or the failure to obtain) any Assumption. For more information, please see the section of this proxy statement captioned “The Merger Agreement-Financing Cooperation; Assumption.”
Interests of the Company’s Trustees and Executive Officers in the Merger (See Page 55)
When considering the recommendation of our Board that you vote to approve the Merger Proposal, you should be aware that our trustees and executive officers may have interests in the Merger that are different from, or in addition to, your interests as a shareholder. The Board was aware of these interests and considered them, among other matters, in evaluating and approving the Merger Agreement and the Merger and in recommending that the Merger Proposal be approved by our shareholders. These interests include the following:
| · | all executive officers hold outstanding Company Restricted Share Awards that will be cancelled and terminated and converted into the right to receive the Company Restricted Share Award Consideration (subject to applicable withholding taxes); |
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| · | all of our executive officers are parties to arrangements with the Company or its affiliates that provide for severance benefits in the event of certain qualifying terminations of employment in connection with the Merger; |
| · | certain of our executive officers may receive transaction bonuses and/or “gross-up” or similar payments in connection with the Merger; and |
| · | the Merger Agreement provides for continued indemnification and directors’ and officers’ liability and fiduciary liability insurance to be provided by the Surviving Entity for six years from and after the Closing Date. |
These interests are discussed in more detail in the section of this proxy statement captioned “The Merger-Interests of the Company’s Trustees and Executive Officers in the Merger.” The members of our Board were aware of the different or additional interests described in such section and considered these interests, among other matters, in evaluating, negotiating and approving the Merger Agreement and the Merger, and in recommending to the shareholders that the Merger Proposal be approved.
Competing Proposals (See Page 77)
During the period beginning on July 19, 2026 and ending on August 28, 2026 at 11:59 p.m. (New York City time) (the “No-Shop Period Start Date”, and such period of time, the “Go-Shop Period”), the Company, its subsidiaries and its representatives have the right to, directly or indirectly:
| · | solicit, initiate, or facilitate any inquiry or the making of any proposal which constitutes, or may reasonably be expected to result in any competing proposal; |
| · | engage in, continue or otherwise participate in any discussions or negotiations regarding, or, subject to the following bullet point, furnish to any other person information in connection with or for the purpose of facilitating, a competing proposal subject to the terms of the Merger Agreement; |
| · | enter into an Acceptable Confidentiality Agreement (as defined in the section of this proxy statement captioned “The Merger Agreement—Competing Proposals and Obligations of the Board with Respect to its Recommendation-Go-Shop Period”) with, and only following such entry into an Acceptable Confidentiality Agreement, (i) furnish information (including non-public information) relating to any of the Acquired Companies to, or (ii) afford access to the business, properties, assets, books, records or other non-public written information and data, or to any personnel of any of the Acquired Companies pursuant to an Acceptable Confidentiality Agreement (as defined in the section of this proxy statement captioned “The Merger Agreement—Competing Proposals and Obligations of the Board with Respect to its Recommendation-Go-Shop Period”) to, any person or group of persons or to such person’s representatives (including potential financing sources of such person); provided that the Company directly or indirectly provides the Parent Parties with any written information or data provided to such person and grants the Parent Parties equivalent access that was not previously made available to the Parent Parties prior to or substantially concurrently with such person; and |
| · | otherwise cooperate with or assist any competing proposal or inquiry, including by granting a waiver, amendment or release under any “standstill provision” or similar obligation of any third party with respect to the Company or any of its subsidiaries solely to allow for a competing proposal or amendment to a competing proposal to be made to the Board on a non-public basis (except as required by law). |
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No Solicitation of Transactions (See Page 80)
Except as expressly permitted in the Merger Agreement, during the period commencing on (a) with respect to any third party who is an Excluded Party (as defined in the section of this proxy statement captioned “The Merger Agreement—Competing Proposals and Obligations of the Board with Respect to its Recommendation-Go-Shop Period”) as of the No-Shop Period Start Date, the date on which such third party is no longer an Excluded Party, or (b) with respect to any other person, the No-Shop Period Start Date, and continuing until the earlier of the Effective Time and the valid termination of the Merger Agreement in accordance with its terms, the Company and its subsidiaries, and their respective representatives, are subject to restrictions on its and their ability to solicit any competing proposals, including, among others, restrictions on its and their ability to furnish to any third parties any information in connection with any competing proposal, or engage in any discussions or negotiations regarding any competing proposal. Subject to the terms of the Merger Agreement, the Company or its subsidiaries may furnish information (including non-public information) to, and engage in discussions or negotiations with, a third party if the Company receives a bona fide competing proposal from such third party after the date of the Merger Agreement that did not result from a breach of the obligations as specified in the Merger Agreement, and the Board (or, if appropriate, any committee thereof), after consultation with the Company’s financial advisor and outside legal counsel, determines in good faith based upon the information then-available that such competing proposal constitutes or would reasonably be expected to result in a Superior Proposal, and after consultation with the Company’s outside legal counsel, determines in good faith that failure to do so would be inconsistent with the duties of the trustees of the Board under applicable law. Under certain circumstances and after following certain procedures and adhering to certain restrictions, the Company is permitted to terminate the Merger Agreement in order to enter into a definitive agreement relating to a Superior Proposal (subject to payment of the Company Termination Payment).
Conditions to the Merger (See Page 95)
Completion of the Merger depends upon the satisfaction or waiver of a number of conditions, including, among others, that:
| · | the affirmative vote of the holders of Company Common Shares entitled to cast a majority of all the votes entitled to be cast at the Special Meeting on the Merger Proposal (the “shareholder approval”) must have been obtained; |
| · | consents from certain governmental authorities must have been obtained or must have occurred, as applicable, and must be in full force and effect; |
| · | no judgment, injunction, order or decree issued by any governmental authority of competent jurisdiction prohibiting consummation of the Merger is in effect, and no law has been enacted, entered, promulgated or enforced by any governmental authority after the date of the Merger Agreement that, in any case, prohibits, restrains, enjoins or makes illegal the consummation of the Merger; |
| · | the Company’s and the Parent Parties’ respective representations and warranties in the Merger Agreement must be true and correct in the manner described in the section of this proxy statement captioned “The Merger Agreement-Representations and Warranties”; |
| · | Parent must have received a tax opinion of Hogan Lovells Cadwalader US LLP (“HLC”) (or such other nationally recognized REIT counsel as may be reasonably acceptable to both Parent and the Company), dated as of the Closing Date; |
| · | the Company and Parent must have received closing certificates from the other, each dated as of the Closing Date, each signed by an applicable executive officer, certifying that certain specified conditions have been satisfied; |
| · | from the date of the Merger Agreement through the Closing Date, there must not have occurred a Company material adverse effect (as defined in the section of this proxy statement captioned “The Merger Agreement-Representations and Warranties”) that is continuing; and |
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| · | the Company and the Parent Parties must have performed and complied in all material respects with its and their respective covenants required by the Merger Agreement to be performed or complied with on or prior to the Closing Date. |
Termination of the Merger Agreement (See Page 96)
The Company and Parent may mutually agree to terminate the Merger Agreement and abandon the Merger at any time prior to the Effective Time, even after the Company has obtained the shareholder approval.
Termination by Either the Company or Parent (See Page 96)
In addition, the Company, on the one hand, or Parent, on the other hand, may terminate the Merger Agreement upon prior written notice to the other party at any time prior to the Effective Time, even after the Company has obtained the shareholder approval, if:
| · | the Merger has not occurred on or before 11:59 p.m., New York City time, on January 19, 2027 (the “Outside Date”); provided, however, that the right to terminate the Merger Agreement under this bullet point will not be available to any party to the Merger Agreement if the primary cause of such failure of the Merger to be consummated by the Outside Date was the failure of such party (and, in the case of Parent, including the failure of the other Parent Parties) to perform in all material respects any of its obligations, covenants or agreements under the Merger Agreement; |
| · | any governmental authority of competent jurisdiction has issued a final and non-appealable order permanently restraining or otherwise prohibiting the transactions contemplated by the Merger Agreement; provided, however, that the right to terminate the Merger Agreement under this bullet point is not available to any party to the Merger Agreement if the issuance of such final, non-appealable order was primarily due to the failure of such party (and, in the case of Parent, including the failure of the other Parent Parties) to perform in all material respects any of its obligations, covenants or agreements under the Merger Agreement; or |
| · | the shareholder approval was not obtained at the Special Meeting, duly convened therefor or at any adjournment or postponement thereof at which a vote on the approval of the Merger was taken. |
Termination by Parent (See Page 97)
Parent may also terminate the Merger Agreement, upon prior written notice to the Company, at any time prior to the Closing, even after the Company has obtained the shareholder approval, if:
| · | the Company has breached any of its representations or warranties or failed to perform any obligation, covenant or agreement set forth in the Merger Agreement (other than the covenants discussed in the section of this proxy statement captioned “The Merger Agreement-Competing Proposals and Obligations of the Board with Respect to its Recommendation”), in each case, that would cause any of the mutual conditions to the parties’ obligations to effect the Merger or the additional conditions to the obligations of the Parent Parties to effect the Merger not to be satisfied, which breach or failure to perform cannot be cured, or if capable of cure, has not been cured by the earlier of thirty (30) days following the delivery of written notice thereof from Parent to the Company and two business days prior to the Outside Date; provided that Parent will not have the right to terminate the Merger Agreement under this bullet point if, at the time Parent delivers notice of its election to terminate the Merger Agreement, the Parent Parties have breached any of their representations or warranties or failed to perform any obligation, covenant or agreement set forth in the Merger Agreement, in each case, that would cause any of the closing conditions relating to their representations, warranties or obligations of the Parent Parties not to be satisfied, subject to a cure period, which such breach is continuing at the time of delivery of notice of Parent’s election to terminate; or |
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| · | prior to receipt of the shareholder approval, the Board (or any committee thereof), for any reason, has effected an Adverse Recommendation Change (as discussed in the section of this proxy statement captioned “The Merger Agreement-Competing Proposals and Obligations of the Board with Respect to its Recommendation-Obligations of the Board with Respect to its Recommendation”). |
Parent Termination Payment (See Page 97)
Parent has agreed to pay the Company approximately $289 million (the “Parent Termination Payment”) if:
| · | the Company terminates the Merger Agreement pursuant to the provision described in the first bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by the Company”; |
| · | the Company terminates the Merger Agreement pursuant to the provision described in the third bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by the Company” under circumstances where the Company Termination Payment is not then payable; or |
| · | the Company or Parent terminates the Merger Agreement pursuant to the provision described in the first bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by Either the Company or Parent” and the Company was then entitled to terminate the Merger Agreement pursuant to either the first or third bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by the Company”, under circumstances where the Company Termination Payment is not then payable. |
Termination by the Company (See Page 98)
The Company may also terminate the Merger Agreement, upon prior written notice to Parent, at any time prior to the Closing, even after the Company has obtained the shareholder approval, if:
| · | the Parent Parties have breached any of their representations or warranties or failed to perform any obligation, covenant or agreement set forth in the Merger Agreement, in each case, that would cause any of the mutual conditions to the parties’ obligations to effect the Merger or the additional conditions to the Company’s obligation to effect the Merger not to be satisfied, which breach or failure to perform cannot be cured, or if capable of cure, has not been cured by the earlier of thirty (30) days following the delivery of written notice thereof from the Company to Parent and two business days prior to the Outside Date; provided, however, that the Company will not have the right to terminate the Merger Agreement under this bullet point if, at the time the Company delivers notice of its election to terminate the Merger Agreement, the Company has breached any of its representations or warranties or failed to perform any obligation, covenant or agreement set forth in the Merger Agreement, in each case, that would cause any of the closing conditions relating to the representations, warranties or obligations of the Company not to be satisfied, subject to a cure period, which such breach is continuing at the time of delivery of notice of the Company’s election to terminate; | |
| · | prior to receipt of the shareholder approval, the Board (or any committee thereof) has determined to terminate the Merger Agreement in order to enter into an alternative acquisition agreement with respect to a Superior Proposal in accordance with the terms of the Merger Agreement; provided that such termination will not be effective unless the Company has paid in full the Company Termination Payment and the Company concurrently enters into an alternative acquisition agreement with respect to such Superior Proposal; or |
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| · | all of the following requirements are satisfied: |
| · | the mutual conditions to the parties’ obligations to effect the Merger and the additional conditions to the obligations of the Parent Parties to effect the Merger (other than those conditions that by their nature are to be satisfied at the Closing; provided that each such condition is, at the time of delivery of the notice referred to in the following bullet point, capable of being satisfied as if such time were the Closing) have been satisfied or waived by Parent; | |
| · | on or after the date the Closing should have occurred pursuant to the Merger Agreement, the Company has delivered an irrevocable written notice to Parent that all of the conditions to the parties’ obligations to effect the Merger and the additional conditions to the obligations of the Parent Parties to effect the Merger have been satisfied or waived by Parent (other than those conditions that by their nature are to be satisfied at the Closing; provided that each such condition is then capable of being satisfied as if such time were the Closing) have been satisfied or waived by Parent and the Company is ready, willing and able to consummate, and will consummate, the Closing at such time; and | |
| · | the Parent Parties fail to consummate the Closing within three business days after the Company’s delivery to Parent of such notice and the Company was ready, willing and able to consummate the Closing during such three business day period (it being understood that during such three business day period, neither Parent nor the Company may terminate the Merger Agreement). |
Company Termination Payment (See Page 99)
The Company has agreed to pay Parent a termination payment of approximately $108 million (the “Company Termination Payment”), if:
| · | the Company terminates the Merger Agreement pursuant to the provision described in the second bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by the Company”; |
| · | the Merger Agreement is validly terminated by (i) Parent pursuant to the provision described in the second bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by Parent”, or (ii) the Company pursuant to the provision described in the third bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by Either the Company or Parent” at a time when Parent was entitled to terminate pursuant to the second bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by Parent”; or |
| · | all of the following requirements are satisfied: |
| · | the Company or Parent terminates the Merger Agreement pursuant to the provisions described in the first bullet point (and at the time of such termination, the Company would not have been entitled to terminate the Merger Agreement pursuant to the third bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by the Company”) or the third bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by Either the Company or Parent” or Parent terminates the Merger Agreement pursuant to the provision described in the first bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by Parent”; and |
| · | (i) a competing proposal has been publicly announced or has become publicly disclosed or publicly known after the date of the Merger Agreement and prior to the Special Meeting and, in either case, has not been publicly withdrawn or otherwise publicly abandoned, and (ii) within twelve (12) months following such termination, the Company (x) enters into a definitive written agreement providing for such competing proposal that is later consummated or (y) consummates any competing proposal (provided that for purposes of this sub-bullet point, each percentage in the definition of “competing proposal” will be increased to “50%”). |
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Notwithstanding the foregoing, the definition of “Company Termination Payment” provides that the Company has agreed to pay Parent a termination payment of approximately $54 million if, prior to the Cut-Off Time (as defined in the Merger Agreement), the Company enters into a definitive agreement with an Excluded Party with respect to a Superior Proposal.
Specific Performance; Remedies (See Page 99)
Prior to valid termination of the Merger Agreement, each party will be entitled to an injunction, specific performance or other equitable relief as specified in the Merger Agreement to prevent breaches and to enforce specifically the terms and provisions of the Merger Agreement, without proof of damages. Each party has waived any defense in an action for specific performance that a remedy at law would be adequate and any requirement under any law to post a bond or other security to obtain equitable relief. The parties have agreed that the right of specific performance is an integral part of the transactions contemplated by the Merger Agreement. The parties may pursue both specific performance and damages; provided, however, that no party will be entitled or permitted to receive an award of damages or payment of the Company Termination Payment or the Parent Termination Payment, as applicable, if specific performance or other equitable remedies are awarded and the Merger is consummated, and no party will be entitled or permitted to receive an award of specific performance or other equitable remedies if damages are awarded or if the Company Termination Payment or the Parent Termination Payment, as applicable, is paid. Prior to the Closing, the Company is entitled to specific performance to cause the Parent Parties to draw down the full amount of the Equity Financing (as defined in the Merger Agreement) and consummate the Merger, including to effect the Closing in accordance with the Merger Agreement, on the terms and subject to the conditions in the Merger Agreement, only if and for so long as, (i) all applicable closing conditions have been satisfied or waived, (ii) the Debt Financing (or any Alternative Financing (as defined in the section of this proxy statement captioned “Financing of the Merger”)) has been funded in accordance with its terms or the Debt Financing Sources (as defined in the Merger Agreement) having irrevocably confirmed in writing that the Debt Financing (or any Alternative Financing) will be funded in accordance with the terms thereof at the Closing if the Equity Financing (as defined in the Merger Agreement) is funded, (iii) the Parent Parties are required to and have failed to complete the Closing when required by the terms of the Merger Agreement, and (iv) the Company has irrevocably confirmed in writing to the Parent Parties that the Company stands ready, willing and able to consummate the transactions contemplated by the Merger Agreement if specific performance is granted and, if the Equity Financing and Debt Financing are funded, then the closing will occur within five Business Days after receipt of such irrevocable confirmation on the terms and conditions set forth in the Merger Agreement. In no event may the Company or any of its successors or permitted assigns seek specific performance of the Debt Commitment Letter against any of the Debt Financing Sources (as defined in the Merger Agreement).
Efforts Obligations; Regulatory Approvals (See Page 84)
Each party to the Merger Agreement has agreed to, and will cause their respective subsidiaries to, use its reasonable best efforts to, as promptly as practicable and in any event prior to the Outside Date:
| · | take all actions necessary to cause the conditions to Closing set forth in the Merger Agreement to be satisfied; | |
| · | execute and deliver any additional instruments necessary to consummate the Merger and the other transactions contemplated by the Merger Agreement and to fully carry out the purposes of the Merger Agreement; | |
| · | prepare and file any applications, notices, registrations and requests as may be required or advisable to be filed with or submitted to any governmental authority in order to consummate the transactions contemplated by the Merger Agreement; | |
| · | obtain all necessary actions or nonactions, authorizations, permits, waivers, consents, clearances, approvals and expirations or terminations of waiting periods from governmental authorities necessary in connection with the consummation of the Merger and the other transactions contemplated by the Merger Agreement; and |
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| · | make all necessary or advisable registrations and filings (including filings with governmental authorities, if any) and take all reasonable steps as may be necessary or advisable to obtain an approval or waiver from, or to avoid an action or proceeding by, any governmental authority necessary in connection with the consummation of the Merger and the other transactions contemplated by the Merger Agreement. |
The Parent Parties have further agreed to avoid or eliminate each and every impediment under antitrust or similar laws asserted by any governmental authority with respect to the Merger Agreement so as to make effective the Merger as promptly as practicable and to avoid any action that would prevent or delay the Closing beyond the Outside Date, including, as described more fully in the section of this proxy statement captioned “The Merger Agreement—Efforts Obligations; Regulatory Approvals,” by proposing, negotiating, committing to and effecting conduct of business restrictions, divestitures and licenses, amending ventures and other arrangements, using reasonable best efforts to contest adverse orders, and otherwise taking actions that would limit Parent’s or its subsidiaries’ freedom of action after the Closing. None of the Parent Parties, the Company or any of its subsidiaries will be required to become subject to any such requirement, condition, agreement or order unless (i) it is binding on the Company or its subsidiaries only from and after the Closing, (ii) in the case of governmental consents, together with all other requirements, conditions, agreements or orders, it would not reasonably be expected to have a material adverse effect on the value of the transactions contemplated by the Merger Agreement to Parent, and (iii) in the case of non-governmental consents, Parent has consented to it. In no event will the Parent Parties, the Company or any of its subsidiaries be required to pay (and the Company will not, without Parent’s consent, commit to pay) directly or indirectly, prior to the Closing, any fee, penalty or other consideration, or incur any liability, to any third party for any consent required for or triggered by the transactions contemplated by the Merger Agreement.
Each party to the Merger Agreement will use, and cause its affiliates to use, its commercially reasonable efforts to obtain all necessary consents from persons other than governmental authorities required for or triggered by the Merger and the other transactions contemplated by the Merger Agreement (excluding any Assumption), subject to the protections described above. The Company will be deemed to have satisfied these obligations if it uses its commercially reasonable efforts, whether or not any such consents are obtained.
Market Price of Company Common Shares (See Page 103)
Company Common Shares are listed on the NYSE under the trading symbol “LXP.” On July 17, 2026, the last trading day before the Company publicly announced the execution of the Merger Agreement, the reported closing price per Company Common Share on the NYSE was $58.51. On September 17, 2026, the last trading day before the date of this proxy statement, the reported closing price per Company Common Share on the NYSE was $60.87. You are encouraged to obtain current market quotations for Company Common Shares.
No Dissenters’ Rights of Appraisal (See Page 109)
The Company’s shareholders will not have appraisal rights in connection with the Merger and the other transactions contemplated by the Merger Agreement. See the section of this proxy statement captioned “No Dissenters’ Rights of Appraisal” for more information.
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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER
The following questions and answers briefly address some questions you may have regarding the Special Meeting and the proposed Merger. These questions and answers may not address all questions that may be important to you as a shareholder. Please refer to the more detailed information contained elsewhere in this proxy statement, as well as the additional documents to which it refers or which it incorporates by reference, including the Merger Agreement, a copy of which is attached to this proxy statement as Annex A.
| Q. | What is the proposed transaction? |
| A. | The proposed transaction is the acquisition of the Company and its subsidiaries by Parent and its subsidiary pursuant to the Merger Agreement. If the Merger Proposal is approved by the requisite vote of the Company’s shareholders and the other closing conditions under the Merger Agreement have been satisfied or waived, the Company will merge with and into Merger Sub, with Merger Sub continuing as the Surviving Entity. Upon the consummation of the Merger, each of the Company’s common shareholders will be entitled to receive $61.20 in cash, without interest and subject to certain adjustments described herein, per Company Common Share held by such holder. For additional information about the Merger, please review with your advisors the Merger Agreement attached to this proxy statement as Annex A, and incorporated by reference into this proxy statement. The Company encourages you to read the Merger Agreement carefully and in its entirety, as it is the principal document governing the Merger. |
| Q. | As a common shareholder, what will I receive in the Merger? |
| A. | For each outstanding Company Common Share that you own immediately prior to the Effective Time, you will receive $61.20 in cash, without interest and subject to certain adjustments. The Merger Agreement only permits the Company to declare and pay dividends to its common shareholders in limited circumstances, including as may be reasonably required in order for the Company to maintain its qualification to be taxed as a real estate investment trust (“REIT”). The Merger Consideration is subject to decrease in the event the Company declares and pays any such common share dividends. As of the date of this proxy statement, no such dividend is currently anticipated. |
| Q. | Will I receive dividends with respect to the Company Common Shares that I own? |
| A. | Under the terms of the Merger Agreement, the Company is not permitted to issue its regular quarterly dividends during the pendency of the Merger. The Company may declare and pay dividends to its shareholders solely as may be reasonably required in order for the Company to maintain its qualification to be taxed as a REIT or to avoid or to continue to avoid incurring entity level income or excise taxes. The amount in cash payable to the shareholders as the Merger Consideration is subject to decrease in the event the Company declares and pays any such dividends in cash or property other than stock. As of the date of this proxy statement, no such dividend is currently anticipated. |
| Q. | When do you expect the Merger to be completed? |
| A. | If the Company’s shareholders vote to approve the Merger and the other transactions contemplated by the Merger Agreement, and assuming that the other conditions to the Merger are satisfied or waived, it is anticipated that the Merger will be completed five business days after the Special Meeting. However, there can be no assurances that the conditions will be satisfied or waived, or that the Merger will be completed on that anticipated timeline, or at all. Pursuant to the Merger Agreement, the Closing will take place on (i) the fifth business day after all closing conditions are satisfied (other than those conditions that, by their nature, are to be satisfied at the Closing) or (ii) at such other date as mutually agreed to by the parties to the Merger Agreement. Unless extended by mutual agreement, the Merger Agreement provides that either party may terminate the agreement if the Merger has not been consummated on or prior to the Outside Date. For further information regarding the timing of the Closing, see the sections of this proxy statement captioned “The Merger Agreement-Closing Date; Effective Time.” |
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| Q. | What happens if the Merger is not completed? |
| A. | If the Merger Proposal is not approved by the Company’s shareholders, or if the Merger is not completed for any other reason, the Company’s shareholders will not receive any payment for their Company Common Shares pursuant to the Merger Agreement. Instead, the Company will remain a public company, and the Company Common Shares and Company Series C Preferred Shares will continue to be registered under the Exchange Act and listed on the NYSE. Upon a termination of the Merger Agreement, under certain circumstances and pursuant to the terms of the Merger Agreement, the Company will be required to pay Parent the Company Termination Payment. For further information regarding the circumstances giving rise to payment of the Company Termination Payment, see the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Company Termination Payment.” |
| Q. | If the Merger is completed, how do I obtain the Merger Consideration for the Company Common Shares I hold? |
| A. | Following the completion of the Merger, your Company Common Shares will automatically be converted into the right to receive your portion of the per share Merger Consideration. Shortly after the Merger is completed, if you are a record holder of shares, you will receive a letter of transmittal describing how you may exchange your Company Common Shares for the Merger Consideration. If your Company Common Shares are held in “street name” by your broker, bank or other nominee, you may receive instructions from your broker, bank or other nominee as to what action, if any, you need to take to effect the surrender of your “street name” shares in exchange for the Merger Consideration. |
| Q. | When and where is the Special Meeting? |
| A. | The Special Meeting will be held on October 26, 2026 at 9:00 a.m., Eastern Time. The Special Meeting will be a completely virtual meeting of shareholders, which will be conducted exclusively by webcast. No physical meeting will be held. You will be able to attend the Special Meeting online by visiting www.meetnow.global/MRZXCWJ. You will also be able to vote your shares online by attending the Special Meeting by webcast. |
| Q. | Who can vote at and attend the Special Meeting? |
| A. | All holders of record of Company Common Shares as of the Record Date, which was the close of business on September 18, 2026, are entitled to receive notice of and attend and vote at the Special Meeting or any postponement or adjournment of the Special Meeting. Each such shareholder will be entitled to cast one vote on each matter presented at the Special Meeting for each Company Common Share that such holder owned as of the Record Date. Holders of Company Series C Preferred Shares as of the Record Date are only entitled to receive notice of the Special Meeting, but are not entitled to vote at the Special Meeting. To participate in the Special Meeting, you will need to review the information included on your proxy card or on the instructions that accompanied your proxy materials. You will need to enter your control number printed on your proxy card to participate in the Special Meeting. The Special Meeting will begin promptly at 9:00 a.m., Eastern Time. You are encouraged to access the meeting prior to the start time. If you encounter any difficulties accessing the meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual meeting platform at www.meetnow.global/MRZXCWJ. |
The vote of the holders of Company Series C Preferred Shares is not required to approve any of the proposals at the Special Meeting and is not being solicited.
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| Q. | What is the quorum requirement? |
| A. | The presence, virtually or represented by proxy, of shareholders entitled to cast a majority of all the votes entitled to be cast at the Special Meeting on any matter will constitute a quorum for purposes of the Special Meeting. Abstentions and broker non-votes, if any, will be included in determining whether a quorum is present. A broker non-vote is a vote that is not cast on a non-routine matter because the shares entitled to cast the vote are held in the name of a broker, bank or other nominee, the broker, bank or other nominee lacks discretionary authority to vote the shares and the broker, bank or other nominee has not received voting instructions from the beneficial owner of the shares. Because all of the proposals to be voted on at the Special Meeting are “non-routine” matters, brokers, banks and other nominees will not have authority to vote on any proposals unless instructed, so the Company does not expect there to be any broker non-votes at the Special Meeting. |
| Q. | What vote of shareholders is required to approve the Merger and the other transactions contemplated by the Merger Agreement? |
| A. | Approval of the Merger Proposal requires the affirmative vote of the holders of Company Common Shares entitled to cast a majority of all the votes entitled to be cast at the Special Meeting on the Merger Proposal. Because the required vote for the Merger Proposal is based on the number of votes the Company’s shareholders are entitled to cast rather than on the number of votes cast, failure to vote your shares (including failure to give voting instructions to your broker, bank or other nominee) and abstentions will have the same effect as voting “AGAINST” the Merger Proposal. The vote of the holders of Company Series C Preferred Shares is not required to approve any of the proposals at the Special Meeting and is not being solicited. |
| Q. | What vote of shareholders is required to approve, on a non-binding, advisory basis, the compensation that may be paid or become payable to the Company’s named executive officers in connection with the Merger? |
| A. | Approval, on a non-binding, advisory basis, of the compensation that may be paid or become payable to the Company’s named executive officers in connection with the Merger requires the affirmative vote of a majority of the votes cast on the Advisory Merger-Related Compensation Proposal. For the purpose of the Advisory Merger-Related Compensation Proposal, failure to vote your shares (including failure to give voting instructions to your broker, bank or other nominee) and abstentions will have no effect on the proposal. |
| Q. | What vote of shareholders is required to approve adjournments of the Special Meeting? |
| A. | Approval of any adjournment of the Special Meeting to solicit additional proxies if there are not sufficient votes at the Special Meeting to approve the Merger Proposal requires the affirmative vote of a majority of the votes cast on the Adjournment Proposal. For the purpose of the Adjournment Proposal, failure to vote your shares (including failure to give voting instructions to your broker, bank or other nominee) and abstentions will have no effect on the proposal. The Company does not intend to call a vote on this proposal if the Merger Proposal is approved at the Special Meeting. Pursuant to the Company’s Bylaws, the Board may also adjourn the Special Meeting from time to time without the approval of the shareholders, subject to the terms of the Merger Agreement. |
| Q. | Why is my vote important? |
| A. | If you are a record holder and do not authorize your proxy, submit voting instructions or personally attend at the Special Meeting, it will be more difficult for the Company to obtain the necessary quorum to hold the Special Meeting. In addition, because the Merger Proposal must be approved by the affirmative vote of the holders of Company Common Shares entitled to cast a majority of all the votes entitled to be cast at the Special Meeting on the Merger Proposal, your failure to authorize your proxy or voting instructions or to personally vote at the Special Meeting will have the same effect as a vote “AGAINST” the approval of the Merger Proposal. |
| Q. | How does the proposed Merger Consideration of $61.20 per Company Common Share compare to the market price of Company Common Shares? |
| A. | The proposed Merger Consideration of $61.20 per Company Common Share provides approximately a 4.6% premium over the closing price of Company Common Shares on July 17, 2026, the last trading day before the Company publicly announced the execution of the Merger Agreement, approximately a 12.3% premium to the 30-day volume-weighted average price per Company Common Share ending July 17, 2026, approximately a 19.8% premium to the 90-day volume-weighted average price per Company Common Share ending July 17, 2026 and approximately a 58% premium to the 52-week low price per Company Common Share. |
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| Q. | How does the Board recommend that I vote? |
| A. | The Board recommends that you vote “FOR” the Merger Proposal, “FOR” the Advisory Merger-Related Compensation Proposal, and “FOR” the Adjournment Proposal. |
| Q. | Do any of the Company’s trustees and executive officers have any interest in the Merger and the other transactions contemplated by the Merger Agreement that is different than mine? |
| A. | Certain of the Company’s trustees and executive officers have certain interests in the Merger and the other transactions contemplated by the Merger Agreement that are different from, or in addition to, the interests of the Company’s shareholders generally, including payment in respect of Company Restricted Share Awards (whether vested or unvested), potential severance benefits, potential transaction bonuses, potential “gross-up” or similar payments and rights to ongoing indemnification and insurance coverage. See the section of this proxy statement captioned “The Merger-Interests of the Company’s Trustees and Executive Officers in the Merger” for additional information about interests that the Company’s trustees and executive officers have in the Merger and the other transactions contemplated by the Merger Agreement that are different than yours. |
| Q. | What do I need to do now? |
| A. | After carefully reading and considering the information contained in this proxy statement and the annexes attached to this proxy statement, please vote your Company Common Shares or authorize a proxy to vote your Company Common Shares in one of the ways described below as soon as possible. You will be entitled to one vote for each Company Common Share that you owned as of the Record Date. |
| Q. | How do I cast my vote? |
| A. | If you are a shareholder of record on the Record Date, you may vote at the Special Meeting or authorize a proxy to vote your shares at the Special Meeting. You can authorize your proxy by completing, signing, dating and returning the enclosed proxy card, or, if you prefer, by following the instructions on your proxy card for telephonic or Internet proxy authorization. If the telephone or Internet option is available to you, the Company strongly encourages you to use it because it is faster and less costly. Registered shareholders can transmit their voting instructions by telephone by calling 1-800-652-8683 or on the Internet at www.envisionreports.com/lxp. Telephone and Internet proxy authorization are available 24 hours a day until 11:59 p.m., Eastern Time, on the day immediately prior to the Special Meeting. You will need the control number included on your proxy card or your paper voting instruction form (if you received a paper copy of the proxy materials) if you are going to authorize your proxy by telephone or through the Internet. To authorize your proxy by mail, please complete sign, date and mail your proxy card. You can also personally cast your vote at the Special Meeting. |
| Q. | How do I cast my vote if my Company Common Shares are held of record in “street name”? |
| A. | All of the proposals in this proxy statement are non-routine matters, so brokers, banks and other nominees will not have authority to vote on any proposals unless instructed. A broker non-vote occurs when shares held by a bank, broker, trust or other nominee are represented at a meeting, but the bank, broker, trust or other nominee has not received voting instructions from the beneficial owner and does not have the discretion to direct the voting of the shares on a particular proposal but has discretionary voting power on other proposals at such meeting. If you own Company Common Shares through a broker, bank or other nominee (i.e., in “street name”), you must provide voting instructions in accordance with the instructions on the voting instruction card that your broker, bank or other nominee provides to you, since brokers, banks and other nominees do not have discretionary voting authority with respect to any of the proposals described in this proxy statement. If you have not received such voting instructions or require further information regarding such voting instructions, contact your broker, bank or other nominee, who can give you directions on how to vote your Company Common Shares. If you hold your Company Common Shares through a broker, bank or other nominee and wish to personally vote at the Special Meeting, you must obtain a “legal proxy,” executed in your favor, from the broker, bank or other nominee (which may take several days). |
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| Q. | What will happen if I fail to provide voting instructions for shares I hold in “street name”? |
| A. | With respect to the Merger Proposal, if you hold shares in “street name” and fail to give voting instructions to your broker, bank or other nominee, it will have the same effect as a vote “AGAINST” the Merger Proposal. With respect to the Advisory Merger-Related Compensation Proposal and the Adjournment Proposal, if you hold your shares in “street name” and fail to give voting instructions to your broker, bank or other nominee, it will not have any effect on the outcome of such proposals, assuming a quorum is otherwise present at the Special Meeting. |
| Q. | What will happen if I abstain from voting or fail to vote? |
| A. | With respect to the Merger Proposal, if you abstain from voting or fail to personally cast your vote at the Special Meeting or by proxy, it will have the same effect as a vote “AGAINST” the Merger Proposal. With respect to the Advisory Merger-Related Compensation Proposal and the Adjournment Proposal, if you abstain from voting or fail to personally cast your vote at the Special Meeting or by proxy, it will not have any effect on the outcome of such proposals, assuming a quorum is otherwise present at the Special Meeting. |
| Q. | How will proxy holders vote my Company Common Shares? |
| A. | If you properly authorize a proxy prior to the Special Meeting, your Company Common Shares will be voted as you direct. If you properly authorize a proxy but no direction is otherwise made, your Company Common Shares will be voted “FOR” the Merger Proposal, “FOR” the Advisory Merger-Related Compensation Proposal, and “FOR” the Adjournment Proposal. |
| Q. | What happens if I sell my Company Common Shares before the Special Meeting? |
| A. | If you held Company Common Shares on the Record Date but transfer them after the Record Date and prior to the Effective Time, you will retain your right to vote at the Special Meeting, but not the right to receive the Merger Consideration for those shares. The right to receive such consideration when the Merger becomes effective will pass to the person who at that time owns the Company Common Shares you previously owned. |
| Q. | Can I change my vote or revoke my proxy after I have mailed my proxy card? |
| A. | Yes. If you own Company Common Shares as a record holder on the Record Date, you may revoke a previously authorized proxy at any time before it is exercised by authorizing a proxy to vote again over the Internet or by telephone prior to 11:59 p.m., Eastern Time on October 25, 2026, signing and returning another proxy card with a later date, provided the Company receives the updated proxy card before the date of the Special Meeting, or personally voting at the Special Meeting. Attendance at the virtual meeting will not, in itself, constitute revocation of a previously authorized proxy. If you have instructed a broker to vote your shares, the foregoing options for changing your vote do not apply and instead you must follow the applicable instructions received from such broker to change your vote. |
| Q. | Is the Merger expected to be taxable to me? |
| A. | Yes. The receipt of Merger Consideration in exchange for Company Common Shares pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. You should consult your own tax advisors regarding the particular tax consequences to you of the exchange of Company Common Shares for Merger Consideration pursuant to the Merger in light of your particular circumstances (including the application and effect of any state, local or foreign income and other tax laws). For further discussion, see “The Merger-Material U.S. Federal Income Tax Consequences of the Merger.” |
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| Q. | What rights do I have if I oppose the Merger and the other transactions contemplated by the Merger Agreement? |
| A. | If you are a shareholder of record on the Record Date, you can vote against the Merger Proposal. You are not, however, entitled to exercise any appraisal rights, dissenters’ rights or the rights of an objecting shareholder to receive the fair value of your shares in connection with the Merger. Pursuant to applicable Maryland law, shareholders are not entitled to exercise such rights and, accordingly, shareholders who object to the Merger do not have any appraisal rights, dissenters’ rights or the rights of an objecting shareholder in connection with the Merger. For more information, see the section of this proxy statement captioned “No Dissenters’ Rights of Appraisal.” |
| Q. | Where can I find the voting results of the Special Meeting? |
| A. | The Company intends to announce preliminary voting results at the Special Meeting and publish final results in a Current Report on Form 8-K that will be filed with the SEC following the Special Meeting. All reports that the Company files with the SEC are publicly available on the SEC’s website at www.sec.gov. |
| Q. | Can I participate if I am unable to attend the Special Meeting? |
| A. | If you are unable to attend the virtual meeting, the Company encourages you to complete, sign, date and return your proxy card, or authorize your proxy or voting instructions by telephone or through the Internet. |
| Q. | Have any shareholders already agreed to vote to approve the Merger Proposal? |
| A. | There are no contractual voting agreements in place with respect to the Merger Proposal. |
| Q. | Where can I find more information about the Company? |
| A. | The Company files certain information with the SEC. This information is available on the SEC’s website at www.sec.gov and on the Company’s website at www.lxp.com. The information found on, or otherwise accessible through, the Company’s website is not incorporated into, and does not form a part of, this proxy statement or any other report or document the Company files with or furnishes to the SEC. You can also request copies of these documents from the Company. See the section of this proxy statement captioned “Where You Can Find Additional Information.” |
| Q. | Who will solicit and pay the cost of soliciting proxies? |
| A. | The Company will bear the full cost of solicitation of proxies for the Special Meeting. The Board is soliciting your proxy on the Company’s behalf. In addition to the use of mail, proxies may be solicited by personal interview, telephone, facsimile, e-mail or otherwise, by the Company’s trustees, officers and other employees. The Company has engaged Georgeson LLC (“Georgeson”) to assist in the solicitation of proxies for a fee of $27,500, as well as certain additional per-service fees and reimbursement of reasonable fees and expenses. The Company also will request persons, firms and corporations holding Company Common Shares in their names, or in the names of their nominees, that are beneficially owned by others to send or cause to be sent proxy materials to, and obtain proxies from, such beneficial owners and will reimburse such holders for their reasonable expenses in so doing. |
| Q. | Who can help answer my other questions? |
| A. | If after reading this proxy statement you have more questions about the Special Meeting or the Merger or need assistance voting your proxy, you should contact Georgeson, the Company’s proxy solicitor, as follows: |
Call toll free (866) 920-7133
Or email at LXPIndustrial@Georgeson.com
If your broker holds your shares, you should also contact your broker for additional information.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement and the documents that the Company incorporates by reference herein contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act). Also, documents the Company subsequently files with the SEC and incorporates by reference may contain forward-looking statements. These forward-looking statements include, among others, statements about the expected benefits of the Merger, the expected timing and completion of the Merger and the future business, performance and opportunities of the Company. Forward-looking statements involve numerous risks and uncertainties, and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise, and the Company may not be able to realize them. The Company does not guarantee that the transactions and events described will happen as described (or that they will happen at all). Forward-looking statements generally can be identified by the use of words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “foresee,” “looking ahead,” “is confident,” “should,” “will,” “predicted,” “likely,” or similar words or phrases intended to identify information that is not historical in nature. Forward-looking statements are based on expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, without limitation:
| · | risks associated with the Company’s ability to obtain the shareholder approval required to consummate the Merger and the timing of the Closing, including the risks that a condition to Closing will not be satisfied within the expected timeframe or at all or that the Closing will not occur; |
| · | the outcome of any legal proceedings that may be instituted against the parties to, and others related to, the Merger and the Merger Agreement; |
| · | the risk that shareholder litigation in connection with the Merger may affect the timing or occurrence of the Merger or result in significant costs of defense, indemnification and liability; |
| · | unanticipated difficulties or expenditures relating to the Merger, the response of business partners and competitors to the announcement of the Merger, potential difficulties in the Company’s ability to retain and hire key personnel and maintain relationships with tenants and other third parties as a result of the Merger, and/or potential difficulties in employee retention as a result of the announcement and pendency of the Merger; and |
| · | other factors, including those risks disclosed in Part I, Item 1A. “Risk Factors” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2025, Part II, Item 1A. “Risk Factors” and Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, and the Company’s other filings with the SEC, including any subsequent reports on Form 10-Q and Current Reports on Form 8-K. |
While forward-looking statements reflect the Company’s good faith beliefs, they are not guarantees of future performance. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. For a further discussion of these and other factors that could impact the Company’s future results, performance or transactions, see the sections entitled “Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, and the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, and the Company’s other filings with the SEC, including any subsequent reports on Form 10-Q and Current Reports on Form 8-K.
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MERGER PROPOSAL
The Company is asking its shareholders to vote on the Merger Proposal to approve the Merger and the other transactions contemplated by the Merger Agreement.
For detailed information regarding the Merger Proposal, see the information about the Merger, the Merger Agreement and the other transactions contemplated thereby throughout this proxy statement, including the information set forth in the sections of this proxy statement captioned “The Merger” and “The Merger Agreement.” A copy of the Merger Agreement is attached as Annex A to this proxy statement.
Approval of the Merger Proposal requires the affirmative vote of the holders of Company Common Shares entitled to cast a majority of all the votes entitled to be cast at the Special Meeting on the Merger Proposal. If you properly authorize your proxy by mail, by telephone or through the Internet, but do not indicate instructions to vote your shares “FOR,” “AGAINST” or “ABSTAIN” on this Proposal 1, your shares will be voted in accordance with the recommendation of the Board, which is “FOR” this Proposal 1. Because the required vote for the Merger Proposal is based on the number of votes the Company’s shareholders are entitled to cast rather than on the number of votes cast, if you abstain from voting, fail to authorize a proxy to vote your shares, fail to personally vote at the Special Meeting, or fail to instruct your broker, bank or other nominee on how to vote, such abstention or failure to vote will have the same effect as voting “AGAINST” the Merger Proposal.
Shareholder approval of the Merger Proposal is a condition to the completion of the Merger and the other transactions contemplated by the Merger Agreement. In the event the Merger Proposal does not receive shareholder approval, the Merger and the other transactions contemplated by the Merger Agreement cannot be completed.
THE BOARD RECOMMENDS THAT THE COMPANY’S SHAREHOLDERS VOTE “FOR” THE MERGER PROPOSAL.
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ADVISORY MERGER-RELATED COMPENSATION PROPOSAL
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Rule 14a-21(c) under the Exchange Act, the Company is required to submit the Advisory Merger-Related Compensation Proposal to our shareholders to approve, on an advisory, non-binding basis, the “golden parachute” compensation payments that will or may be made by the Company and its subsidiaries to its named executive officers that are based on or otherwise relate to the Merger. This proposal, commonly known as a “say on golden parachute” proposal, gives shareholders the opportunity to vote on an advisory, non-binding basis on the “golden parachute” compensation payments that will or may be paid by the Company and its subsidiaries to its named executive officers that are based on or otherwise relate to the Merger. Information intended to comply with Item 402(t) of Regulation S-K concerning this compensation, subject to certain assumptions described therein, is presented in the section of this proxy statement captioned “The Merger-Interests of the Company’s Trustees and Executive Officers in the Merger.”
The Company is asking its shareholders to vote “FOR” the following resolution:
“RESOLVED, that LXP Industrial Trust shareholders approve, on a non-binding, advisory basis, the compensation that may be paid or become payable to the named executive officers of LXP Industrial Trust that is based on or otherwise relates to the Merger, as disclosed pursuant to Item 402(t) of Regulation S-K under the heading “The Merger-Interests of the Company’s Trustees and Executive Officers in the Merger”.”
Approval and adoption of the above resolution, on a non-binding, advisory basis, requires the affirmative vote of a majority of the votes cast on the Advisory Merger-Related Compensation Proposal. If you properly authorize your proxy by mail, by telephone or through the Internet, but do not indicate instructions to vote your shares “FOR,” “AGAINST” or “ABSTAIN” on this Proposal 2, your shares will be voted in accordance with the recommendation of the Board, which is “FOR” this Proposal 2. If you abstain from voting, fail to authorize a proxy to vote your shares, fail to personally vote at the Special Meeting, or fail to instruct your broker, bank or other nominee on how to vote, such abstention or failure to vote will have no effect on the outcome of the Advisory Merger-Related Compensation Proposal (assuming a quorum is present).
Shareholder approval of the Advisory Merger-Related Compensation Proposal is not a condition to the completion of the Merger and the other transactions contemplated by the Merger Agreement. The vote on the Advisory Merger-Related Compensation Proposal is a vote separate and apart from the vote on the Merger Proposal. Accordingly, you may vote to approve the Merger Proposal and vote against or abstain with respect to the Advisory Merger-Related Compensation Proposal and vice versa. Because the vote on the Advisory Merger-Related Compensation Proposal is advisory only, it will not be binding on either the Company or Parent or their respective affiliates. Accordingly, if the Merger Proposal is approved and the Merger is completed, the compensation that is contractually required to be paid will or may be paid, subject only to the conditions applicable thereto, regardless of the outcome of the non-binding, advisory vote of the Company’s shareholders on the Advisory Merger-Related Compensation Proposal.
THE BOARD RECOMMENDS THAT THE COMPANY’S SHAREHOLDERS VOTE “FOR” THE ADVISORY MERGER-RELATED COMPENSATION PROPOSAL.
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ADJOURNMENT PROPOSAL
The Company is asking its shareholders to vote on the Adjournment Proposal to approve any adjournments of the Special Meeting for the purpose of soliciting additional proxies if there are not sufficient votes at the Special Meeting to approve the Merger Proposal.
Approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast on the Adjournment Proposal. If you properly authorize your proxy by mail, by telephone or through the Internet, but do not indicate instructions to vote your shares “FOR,” “AGAINST” or “ABSTAIN” on this Proposal 3, your shares will be voted in accordance with the recommendation of the Board, which is “FOR” this Proposal 3. If you abstain from voting, fail to authorize a proxy to vote your shares, fail to personally vote at the Special Meeting, or fail to instruct your broker, bank or other nominee on how to vote, such abstention or failure to vote will have no effect on the outcome of the Adjournment Proposal (assuming a quorum is present).
Shareholder approval of the Adjournment Proposal is not a condition to the completion of the Merger and the other transactions contemplated by the Merger Agreement.
THE BOARD RECOMMENDS THAT THE COMPANY’S SHAREHOLDERS VOTE “FOR” THE ADJOURNMENT PROPOSAL.
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LXP Industrial Trust
515 N. Flagler Drive, Suite 408
West Palm Beach, FL 33401
(212) 692-7200
LXP Industrial Trust (the “Company,” “LXP,” “we,” “us” or “our”) is a Maryland real estate investment trust focused on Class A warehouse and distribution investments in 12 target markets across the Sunbelt and Midwest. LXP seeks to expand its warehouse and distribution portfolio through acquisitions, build-to-suit transactions, sale-leaseback transactions, development projects and other transactions.
As of June 30, 2026, the Company had ownership interests in approximately 109 consolidated real estate properties, located in 14 states. The properties in which the Company has an interest are primarily net leased to tenants in various industries.
The Company’s corporate headquarters is located in West Palm Beach, Florida. The Company’s website is www.lxp.com. The information found on, or otherwise accessible through, the Company’s website is not incorporated into, and does not form a part of, this proxy statement or any other report or document the Company files with or furnishes to the U.S. Securities and Exchange Commission (“SEC”). The common shares of beneficial interest, par value $0.0001 per share, of the Company (each, a “Company Common Share”), are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “LXP.” The Company Series C Preferred Shares are listed on the NYSE under the ticker symbol “LXPPRC.” For additional information about the Company and the Company’s business, please refer to the section of this proxy statement captioned “Where You Can Find Additional Information.”
Leopard REIT LLC
Leopard Merger Sub LLC
c/o Brookfield Property Group LLC
Brookfield Place, 225 Liberty Street, 8th Floor
New York, NY 10281-1048
(212) 417-7000
Leopard REIT LLC, a Delaware limited liability company, is jointly owned by affiliates of Brookfield Asset Management Ltd. (“Brookfield”) and Canada Pension Plan Investment Board (“CPPIB” and together with Brookfield, the “Sponsors”) and was formed solely for the purpose of acquiring the Company. Leopard Merger Sub LLC, a Maryland limited liability company (“Merger Sub”), is a wholly owned indirect subsidiary of Parent and was formed solely for the purpose of facilitating Parent’s acquisition of the Company. Neither Parent nor Merger Sub has carried on any activities to date, except for activities incidental to formation and activities undertaken in connection with the transactions contemplated by the Merger Agreement. Parent and Merger Sub are at times referred to in this proxy statement together, as the “Parent Parties.”
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Date, Time and Purpose of the Special Meeting
Your proxy is solicited on behalf of the Board for exercise at the Special Meeting to be held on October 26, 2026, at 9:00 a.m., Eastern Time, virtually at www.meetnow.global/MRZXCWJ, or at any postponement or adjournment thereof, for the purposes discussed in this proxy statement and in the accompanying Notice of Special Meeting. Proxies are solicited to give all record holders of Company Common Shares an opportunity to vote on matters properly presented at the Special Meeting.
The purpose of the Special Meeting is for you to consider and vote on the following matters:
| (1) | a proposal to approve the Merger and the other transactions contemplated by the Merger Agreement (the “Merger Proposal”); |
| (2) | a proposal to approve, on a non-binding, advisory basis, the compensation that may be paid or become payable to the Company’s named executive officers in connection with the Merger (the “Advisory Merger-Related Compensation Proposal”); and |
| (3) | a proposal to approve any adjournment of the Special Meeting for the purpose of soliciting additional proxies if there are not sufficient votes at the Special Meeting to approve the Merger Proposal (the “Adjournment Proposal”). |
Pursuant to the Bylaws, only the matters set forth in the Notice of Special Meeting may be brought before the Special Meeting. The affirmative vote of the holders of Company Common Shares entitled to cast a majority of all the votes entitled to be cast at the Special Meeting on the Merger Proposal is required to approve the Merger Proposal and for the Merger to occur. A copy of the Merger Agreement is attached as Annex A to this proxy statement, which the Company encourages you to read carefully in its entirety.
The Special Meeting will be a completely virtual meeting of shareholders, which will be conducted exclusively by webcast. No physical meeting will be held. You will be able to attend the Special Meeting online by visiting www.meetnow.global/MRZXCWJ. You will be able to vote your shares online by attending the Special Meeting by webcast if you are a shareholder of record or obtain a legal proxy from your bank, broker or other nominee.
To participate in the Special Meeting, you will need to review the information included on your proxy card or the instructions that accompanied your proxy materials. You will need to enter your control number printed on your proxy card to participate in the Special Meeting.
The Special Meeting will begin promptly at 9:00 a.m., Eastern Time. You are encouraged to access the meeting prior to the start time. If you encounter any difficulties accessing the meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual meeting platform at www.meetnow.global/MRZXCWJ.
Record Date, Notice and Quorum
Record holders of outstanding Company Common Shares as of the close of business on September 18, 2026, the Record Date for the Special Meeting, are entitled to vote at the Special Meeting on all matters to be voted upon. Holders of Company Series C Preferred Shares as of the Record Date are only entitled to receive notice of the Special Meeting, but are not entitled to vote at the Special Meeting. As of the Record Date, there were 58,957,264 Company Common Shares outstanding. On each matter presented to the Company’s shareholders for vote at the Special Meeting, the holders of Company Common Shares are entitled to one vote per share held as of the Record Date.
A quorum will be established for purposes of the Special Meeting if shareholders entitled to cast a majority of all the votes entitled to be cast at the Special Meeting on any matter are present, either virtually or by proxy.
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Completion of the Merger requires approval of the Merger Proposal by the affirmative vote of the holders of Company Common Shares entitled to cast a majority of all the votes entitled to be cast at the Special Meeting on the Merger Proposal. Each shareholder is entitled to cast one vote on each matter presented at the Special Meeting for each Company Common Share owned by such shareholder on the Record Date. Because the required vote for the Merger Proposal is based on the number of votes holders of Company Common Shares are entitled to cast rather than on the number of votes cast, if you fail to authorize a proxy to vote your shares or fail to vote online during the virtual Special Meeting, or fail to instruct your broker on how to vote, such failure will have the same effect as voting “AGAINST” the Merger Proposal. Abstentions will have the same effect as a vote “AGAINST” the Merger Proposal.
The approval of the Advisory Merger-Related Compensation Proposal and the approval of the Adjournment Proposal each requires the affirmative vote of a majority of the votes cast on such proposal. Approval of either or both of these proposals is not a condition to completion of the Merger. For the purpose of each of these proposals, if you fail to authorize a proxy to vote your shares, fail to personally vote at the Special Meeting, or fail to instruct your broker on how to vote, it will not have any effect on the outcome of such proposals, assuming a quorum is otherwise present at the meeting. Abstentions, while present for purposes of determining presence of a quorum, are not considered votes cast and therefore will have no other effect on the outcome of these two proposals.
In order for your Company Common Shares to be voted, if you are a shareholder of record, you must either return the enclosed proxy card, authorize your proxy or voting instructions by telephone or through the Internet or personally vote at the Special Meeting.
The vote of the holders of Company Series C Preferred Shares is not required to approve any of the proposals at the Special Meeting and is not being solicited.
As of the Record Date, the Company’s trustees and executive officers beneficially owned and are entitled to vote an aggregate of approximately 1,671,270 of the outstanding Company Common Shares, entitling them to exercise approximately 2.83% of the voting power of Company Common Shares entitled to vote at the Special Meeting.
Votes cast by proxy or virtually at the Special Meeting will be counted by the person appointed by the Board to act as inspector of election for the Special Meeting. The inspector of election will also determine the number of Company Common Shares represented at the Special Meeting, virtually or by proxy.
The Board is soliciting proxies for the Special Meeting from the Company’s shareholders. The Company will bear the entire cost of soliciting proxies from its shareholders. The Company has retained the services of Georgeson to assist with the solicitation of proxies in connection with the Special Meeting, and it will pay Georgeson $27,500, as well as certain additional per-service fees and reimbursement of reasonable fees and expenses for these services. In addition to the solicitation of proxies by delivery of the proxy statement by mail, the Company will request that brokers, banks and other nominees that hold Company Common Shares, which are beneficially owned by its shareholders, send proxies and proxy materials to those beneficial owners and secure those beneficial owners’ voting instructions. The Company may also use several of its regular employees, who will not be specially compensated, to solicit proxies from its shareholders, either personally or by telephone, Internet, facsimile or special delivery letter.
You may vote by attending the Special Meeting and voting in person via webcast, or you may vote by authorizing a proxy to vote on your behalf. The method of voting by proxy differs for shares held as a record holder and shares held in “street name.” If you hold your Company Common Shares as a record holder and you are reviewing a paper copy of this proxy statement, you may authorize a proxy to vote your shares by completing, dating and signing the proxy card that was included with the proxy statement and promptly returning it, or by submitting a proxy over the Internet or by telephone by following the instructions on the proxy card.
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If you hold your Company Common Shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you will receive a notice from your broker, bank or other nominee that includes instructions on how to vote your shares. Your broker, bank or other nominee will allow you to deliver your voting instructions over the Internet and may also permit you to authorize your vote by telephone. In addition, you may request paper copies of the proxy statement and proxy card from your broker, bank or other nominee by following the instructions on the notice provided by your broker, bank or other nominee.
All of the proposals in this proxy statement are non-routine matters, so brokers, banks and other nominees will not have authority to vote on any proposals unless instructed, and the Company does not expect there to be any broker non-votes at the Special Meeting. A broker non-vote occurs when shares held by a bank, broker, trust or other nominee are represented at a meeting, but the bank, broker, trust or other nominee has not received voting instructions from the beneficial owner and does not have the discretion to direct the voting of the shares on a particular proposal but has discretionary voting power on other proposals at such meeting. Accordingly, if you own Company Common Shares through a broker, bank or other nominee (i.e., in “street name”), you must provide voting instructions in accordance with the instructions on the voting instruction card that your broker, bank or other nominee provides to you, as brokers, banks and other nominees do not have discretionary voting authority with respect to any of the three proposals described in this proxy statement. You should instruct your broker, bank or other nominee as to how to vote your Company Common Shares following the directions contained in such voting instruction card. If you have not received such voting instructions or require further information regarding such voting instructions, contact your broker, bank or other nominee who can give you directions on how to vote your Company Common Shares. If you hold your Company Common Shares through a broker, bank or other nominee and wish to personally vote at the Special Meeting, you must obtain a “legal proxy,” executed in your favor, from the broker, bank or other nominee (which may take several days). Because the Merger Proposal requires the affirmative vote of the holders of Company Common Shares entitled to cast a majority of all the votes entitled to be cast at the Special Meeting on the Merger Proposal, the failure to provide your bank, broker, trust or other nominee with voting instructions will have the same effect as a vote “AGAINST” the Merger Proposal. Because the approval of each of (i) the Advisory Merger-Related Compensation Proposal and (ii) the Adjournment Proposal requires the affirmative vote of a majority of the votes cast on such proposal, and because your bank, broker or other nominee does not have discretionary authority to vote on either proposal, the failure to provide your bank, broker, trust or other nominee with voting instructions will have no effect on approval of either proposal, assuming a quorum is otherwise present.
If you authorize a proxy to vote your shares through the Internet, you should be aware that you may incur costs to access the Internet, such as usage charges from telephone companies or Internet service providers and that these costs must be borne by you. If you authorize a proxy to vote your shares by Internet or telephone, then you need not return a written proxy card by mail.
YOUR VOTE IS VERY IMPORTANT. Regardless of whether you plan to attend the Special Meeting, the Company requests that you authorize a proxy for your Company Common Shares as described above as promptly as possible. If you properly give your proxy and submit it to the Company in time to vote, one of the individuals named as your proxy will vote your shares as described below.
All shares entitled to vote and represented by properly submitted proxies (including those submitted electronically, telephonically and in writing) received before the polls are closed at the Special Meeting, and not revoked or superseded, will be voted at the Special Meeting in accordance with the instructions indicated on those proxies. If no direction is indicated on a proxy, your shares will be voted as follows: “FOR” the Merger Proposal, as described in this proxy statement, “FOR” the Advisory Merger-Related Compensation Proposal, and “FOR” the Adjournment Proposal. This proxy gives each of T. Wilson Eglin and Joseph S. Bonventre discretionary authority to vote your shares in accordance with his discretion with respect to all additional matters that might come before the Special Meeting.
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If you authorize a proxy, your Company Common Shares will be voted at the Special Meeting as you indicate on your proxy. If no instructions are indicated when you authorize your proxy, your Company Common Shares will be voted in accordance with the recommendations of the Board. The Board recommends that you vote “FOR” the Merger Proposal, “FOR” the Advisory Merger-Related Compensation Proposal and “FOR” the Adjournment Proposal.
If you are a shareholder of record, you may revoke your proxy at any time before your proxy is voted at the Special Meeting by taking any of the following actions:
| · | filing a written notice revoking the proxy with the Company’s Secretary at 515 N. Flagler Drive, Suite 408, West Palm Beach, Florida 33401; |
| · | properly submitting to the Company a proxy with a later date; or |
| · | attending the Special Meeting by webcast and personally voting, although attendance at the Special Meeting will not, by itself, revoke a proxy. |
Written notices of revocation and other communications with respect to the revocation of proxies should be addressed to:
LXP Industrial Trust
515 N. Flagler Drive, Suite 408
West Palm Beach, Florida 33401
If your shares are held in “street name,” you may change your vote by submitting new voting instructions to your broker, bank or other nominee. You must contact your broker, bank or other nominee to find out how to do so. See above regarding how to personally vote at the Special Meeting if your shares are held in “street name.”
Pursuant to the Bylaws, only the matters set forth in the Notice of Special Meeting may be brought before the Special Meeting.
Availability of Proxy Materials for the Special Meeting
The Company’s proxy materials, including this proxy statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, are available online at the Company’s website at www.lxp.com. You are encouraged to access and review all of the important information contained in the proxy materials before voting.
Adjournments and Postponements
Although it is not currently expected, the Special Meeting may be adjourned for the purpose of soliciting additional proxies if the holders of a sufficient number of Company Common Shares are not present at the Special Meeting, virtually or by proxy, to constitute a quorum or if the Company believes it is reasonably likely that the Merger Proposal will not be approved at the Special Meeting when convened on October 26, 2026, or when convened or reconvened following any postponement or adjournment. Pursuant to the Company’s Bylaws, the Board, without any action by our shareholders, may adjourn the Special Meeting (whether or not a quorum is present) to a later date and time and at a place announced at the Special Meeting. The adjourned meeting may take place without further notice other than by an announcement made at the Special Meeting unless the adjournment is for more than 120 days after the original record date or if, after the adjournment, a new record date is fixed for the adjourned meeting, in which case a notice of the adjourned meeting will be given to each shareholder of record entitled to vote at the Special Meeting (subject to certain restrictions in the Merger Agreement, including that the Company will consult with Parent in advance of such adjournment).
In addition, at any time prior to convening the Special Meeting, the Company may postpone the Special Meeting for any reason without the approval of its shareholders to a date not more than 120 days after the original record date without setting a new record date (subject to the restrictions in the Merger Agreement described above).
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If you plan to attend the virtual Special Meeting and wish to vote online, you will need the control number included on your proxy card or on the instructions that accompany your proxy materials. Please note that if your shares are held in “street name,” which means your shares are held of record by a broker, bank or other nominee, and you wish to vote at the virtual Special Meeting, you must have a legal proxy from the record holder of the shares, which is the broker, bank or other nominee, authorizing you to vote at the Special Meeting.
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General Description of the Merger
Pursuant to the Merger Agreement and in accordance with the MRL and the MLLCA, at the Effective Time, the Company will be merged with and into Merger Sub, with Merger Sub surviving the Merger.
The following chronology summarizes the key meetings and events that led to the signing of the Merger Agreement. The following chronology does not purport to catalogue every conversation and correspondence among representatives of the Company, potential buyers and their respective affiliates or advisors. All dates and times referred to in the following chronology are Eastern Time unless otherwise indicated.
In the ordinary course of business, the Board and Company management regularly evaluate a range of financial and strategic opportunities aimed at enhancing shareholder value. In connection with these evaluations, the Board and Company management have regularly considered options that could inform the Company’s long-term strategies, such as raising capital, potential acquisitions or other investments in industrial assets, disposing of certain Company assets, pursuing joint ventures, and exploring other transactions that could complement or expand the Company’s operations on a stand-alone basis or otherwise. The Company also routinely engages in ordinary course discussions with significant investors and market participants concerning publicly available information about the Company, including the Company’s business and future plans.
During April 2024, T. Wilson Eglin, Chairman, Chief Executive Officer and President of the Company, discussed with representatives of BofA Securities exploring a potential transaction in which an institutional investor would acquire an interest in a portfolio of Company properties and make a corresponding investment in the Company Common Shares to provide capital to fund external growth. BofA Securities subsequently discussed the potential transaction with Brookfield, which had expressed interest in the opportunity, and Brookfield was provided with publicly available information regarding a portfolio of properties identified by the Company. During the same period, Party A contacted the Company regarding a potential acquisition of a specific portfolio of Company properties and was provided with publicly available information relating to certain Company properties.
In May 2024, the Company continued discussions with Brookfield and Party A. On May 22, 2024, at the Company’s regularly scheduled quarterly Board meeting, Company management provided the Board with an update regarding those discussions.
On June 29, 2024, Brookfield informed BofA Securities that it was not interested in pursuing the transaction proposed by the Company, but indicated that it would continue to evaluate the Company’s publicly available information and consider the potential acquisition of a different portfolio of Company properties. Brookfield also indicated that it may be interested in making an investment in Company Common Shares in connection with any portfolio transaction.
On July 1, 2024, a financial advisory firm contacted Mr. Eglin regarding a potential introduction to Party B to discuss a potential programmatic joint venture and a corresponding investment in the Company Common Shares.
On July 10, 2024, Brookfield provided the Company with a list of 30 Company properties it was interested in acquiring. In response, the Company provided Brookfield with publicly available information regarding those properties.
On July 16, 2024, Company management provided the Board with an update regarding the Company’s ongoing discussions with Brookfield and Party A as well as the potential introduction to Party B.
Following further discussions, on July 17, 2024, BofA Securities, at the direction of Company management, advised a representative of Brookfield that the Company was not interested in selling all of the properties identified by Brookfield, and the discussions ceased.
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On October 9, 2024, a financial advisory firm, on behalf of the Company, met with representatives of Party B to discuss, on a preliminary basis, a potential programmatic joint venture involving the Company’s development projects and a corresponding investment in the Company Common Shares. Following those discussions, on October 16, 2024, at the direction of Company management, the financial advisory firm delivered to Party B a draft non-binding term sheet setting forth proposed terms for a potential transaction.
On November 7, 2024, Party B submitted questions regarding the draft term sheet. Company management and the financial advisory firm discussed those questions, and on November 14, 2024, the financial advisory firm, on behalf of the Company, provided responses to Party B.
On December 4, 2024, the financial advisory firm informed the Company that, following discussions with representatives of Party B, Party B was not prepared to move forward with the proposed transaction at that time.
On March 18, 2025, a representative of Brookfield contacted Mr. Eglin to request a discussion, and the parties subsequently spoke on March 22, 2025 regarding potential strategic alternatives, including the acquisition of the Company by Brookfield. Following that discussion, Mr. Eglin provided updates to certain members of the Board, including the lead independent trustee, regarding the conversation.
On March 25, 2025, at the quarterly meeting of the Board, the Board, together with a representative of HLC, its outside legal counsel, discussed the recent communications with Brookfield and the potential strategic alternatives that had been discussed, including the potential acquisition of the Company by Brookfield.
On March 27, 2025, Mr. Eglin and a representative of Brookfield continued discussions regarding a potential transaction involving the Company and entering into a non-disclosure agreement in connection therewith.
Later on March 27, 2025, a representative of the Company sent representatives of Brookfield a draft non-disclosure agreement, which did not restrict the Company from engaging in discussions with other parties regarding a strategic transaction. Following negotiations regarding, among other things, the length of the standstill period, on April 8, 2025, the Company and Brookfield executed the non-disclosure agreement (the “Brookfield NDA”). Following the execution of the Brookfield NDA, Company management began preparing information to be made available to Brookfield in a virtual data room in connection with its evaluation of a potential transaction.
On May 9, 2025, the Company began providing Brookfield with certain non-public information for its evaluation of a potential transaction. Thereafter, representatives of the Company and Brookfield engaged in periodic discussions regarding Brookfield’s review of such information and its ongoing evaluation of the Company.
On May 22, 2025, a representative of the financial advisory firm informed Mr. Eglin that Party B had renewed its interest in a potential programmatic joint venture.
On May 27, 2025, at the Company’s quarterly Board meeting, Mr. Eglin provided the Board with an update regarding the Company’s ongoing discussions with Brookfield and Party B.
On June 12, 2025, Mr. Eglin participated in a discussion with representatives of the financial advisory firm and Party B regarding several potential transaction structures, including a programmatic joint venture and a transaction involving certain leased-land assets owned by the Company. Following the discussion, the Company provided Party B with publicly available information regarding those leased-land assets for its evaluation. During the same period, Company management, representatives of the financial advisory firm and Party B also discussed a potential manufacturing real estate joint venture. Thereafter, discussions between the Company and Party B did not progress further.
On July 9, 2025, following Brookfield’s review of the information made available in the data room and discussions between representatives of Brookfield and the Company regarding such materials, a representative of Brookfield informed Mr. Eglin that Brookfield’s preliminary indication of value in connection with a potential acquisition of the Company by Brookfield was $50.00 per Company Common Share in cash (the “July 9 Proposal”). Following that discussion, on July 10, 2025, Mr. Eglin updated the lead independent trustee and another independent trustee regarding the July 9 Proposal. After considering the preliminary value relative to the Company’s then-current trading price, Mr. Eglin and the lead independent trustee determined that a special Board meeting was not necessary at that time and that a Board meeting would be convened on July 29, 2025, when the Audit Committee of the Board was already scheduled to meet. On July 9, 2025, the closing share price of the Company Common Shares was $41.70.
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On July 29, 2025, the Board, together with a representative of HLC, reviewed and discussed the July 9 Proposal. Following such discussion, the Board determined that the consideration proposed by the July 9 Proposal did not reflect adequate value for the Company and its shareholders and declined to make a counterproposal to Brookfield at that time. Following the meeting, Mr. Eglin communicated the Board’s position to a representative of Brookfield.
On October 16, 2025, the Brookfield representative informed Mr. Eglin that, in light of the announcement of the sale of the Company’s vacant development projects, Brookfield was willing to increase its preliminary indication of value in connection with a potential acquisition of the Company by Brookfield to $55.00 per Company Common Share in cash (the “October 16 Proposal”). On October 16, 2025, the closing share price of the Company Common Shares was $46.65.
Following the discussion, on October 20, 2025, Mr. Eglin spoke with the lead independent trustee regarding the October 16 Proposal, and on October 23, 2025, Mr. Eglin spoke with another independent trustee regarding the October 16 Proposal. Following those discussions, on October 29, 2025, Mr. Eglin informed a representative of Brookfield that the Company was not interested in pursuing a transaction at the proposed price.
On November 20, 2025, a representative of Brookfield provided Mr. Eglin with materials relating to a potential alternative joint venture investment and expressed an interest in further discussions regarding a potential transaction involving the Company. The materials were reviewed by members of Company management and subsequently discussed by Mr. Eglin with each member of the Board.
At the quarterly meeting of the Board on December 3, 2025, Mr. Eglin updated the Board on discussions with Brookfield, including a planned meeting between representatives of the Company and Brookfield that had been scheduled for December 5, 2025, to discuss Brookfield’s interest in a potential acquisition of the Company.
On December 5, 2025, representatives of the Company met with representatives of Brookfield to discuss Brookfield’s interest in a potential acquisition of the Company, including discussion of certain of the Company’s key assets and target markets. Following the meeting, representatives of Brookfield requested additional diligence information, including information regarding each of the Company’s target markets. Between December 2025 and February 2026, the Company furnished additional information requested by Brookfield and responded to Brookfield’s follow-up diligence inquiries.
On February 10, 2026, a representative of Brookfield requested a meeting with representatives of the Company to discuss the market information previously provided by the Company. On February 18, 2026, representatives of the Company and Brookfield met and discussed such market information. Following the meeting, Brookfield requested additional information, which the Company provided between February 18, 2026 and February 27, 2026.
On March 18, 2026, Mr. Eglin met with a representative of Brookfield, who advised Mr. Eglin that Brookfield was again proposing a potential acquisition of the Company by Brookfield and had increased its preliminary indication of value in connection with such acquisition of the Company to $56.00 per Company Common Share in cash (the “March 18 Proposal”). Following the meeting, on March 18, 2026, Mr. Eglin spoke with the lead independent trustee and another independent trustee regarding the March 18 Proposal. On March 20, 2026, the March 18 Proposal was further discussed at meetings of each of the Compensation Committee and the Nominating and Corporate Governance Committee. On March 18, 2026, the closing share price of the Company Common Shares was $48.71.
At the quarterly meeting of the Board on March 26, 2026, the Board discussed the March 18 Proposal. Following discussion, the Board requested that separate meetings be scheduled between the Board and each of BofA Securities and J.P. Morgan Securities LLC (“J.P. Morgan”) to discuss the March 18 Proposal and other strategic considerations, including the relative benefits and considerations of the Company continuing to execute its strategic plan. Later that day, Mr. Eglin contacted representatives of BofA Securities and representatives of J.P. Morgan to arrange the meetings with the Board. Mr. Eglin also informed a representative of Brookfield of the Board’s discussion and the Board’s desire to meet with financial advisors. On March 31, 2026, the Brookfield NDA was amended to extend its term, including with respect to the non-disclosure, non-solicitation and standstill provisions. Brookfield also requested, and on April 3, 2026, the Company provided its consent, to discuss the potential transaction and the Company’s information with certain potential co-investors, including CPPIB.
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Following the March 26, 2026 meeting of the Board, the March 18 Proposal and related information was provided to representatives of BofA Securities and J.P. Morgan. Thereafter, meetings between the Board and representatives of BofA Securities and J.P. Morgan were scheduled for April 14, 2026 to discuss the March 18 Proposal and other strategic considerations.
On April 14, 2026, the Board held separate meetings with representatives of BofA Securities and representatives of J.P. Morgan. Representatives of HLC attended each meeting and reviewed with the Board the duties of the trustees and certain applicable requirements under Maryland law. Prior to the meetings, presentation materials prepared by each of BofA Securities and J.P. Morgan were made available to the Board. In the presentations, representatives of BofA Securities and J.P. Morgan each discussed with the Board certain topics, including current market conditions, the considerations and potential benefits of the Company’s strategic plan, various valuation analyses, including based on financial metrics, performance of REITs generally in the market, recent REIT M&A activity, share trading prices and NAV estimates, and strategic alternatives available to the Company, including the continued execution of its strategic plan, one or more joint ventures or a sale of the Company. Representatives of each of BofA Securities and J.P. Morgan also reviewed the March 18 Parent Proposal, including various financial analyses of the proposal and precedent transaction analyses. The Board discussed with representatives of each of BofA Securities and J.P. Morgan the advantages and considerations associated with various transaction process alternatives, including exclusive engagement with Brookfield, a targeted market check involving a limited number of potential bidders and a broader market outreach process. Representatives of each of BofA Securities and J.P. Morgan reviewed other parties that might be interested in acquiring the Company. The Board then engaged in a discussion regarding the appropriate response to the March 18 Proposal. Following this discussion, the Board authorized Mr. Eglin to communicate to Brookfield that the consideration set forth in the March 18 Parent Proposal was not adequate, but that the Board would consider engaging in further discussions on an exclusive basis if the proposed indication of value was increased to at least $60.00 per Company Common Share.
On April 16, 2026, Mr. Eglin spoke with a representative of Brookfield and conveyed that the March 18 Proposal was not acceptable to the Board. Mr. Eglin encouraged Brookfield to consider submitting an indication of value of at least $60.00 per Company Common Share. The Brookfield representative indicated that Brookfield would discuss with CPPIB and expected to revert to Mr. Eglin during the following week with a revised indication of value.
On April 27, 2026, a representative of Brookfield contacted Mr. Eglin and communicated a revised indication of value in connection with a potential acquisition of the Company by Brookfield of $57.25 per Company Common Share.
On May 4, 2026, Brookfield and CPPIB submitted a written non-binding proposal for an acquisition of the Company by a joint venture between the Sponsors providing for consideration of $57.25 per Company Common Share in cash (the “May 4 Non-Binding Parent Proposal”). The May 4 Non-Binding Parent Proposal provided that no further dividends would be paid to the Company’s shareholders and that the transaction would not be subject to a financing contingency, and proposed a 45-day exclusivity period. On May 4, 2026, the closing share price of the Company Common Shares was $50.62.
At a regularly scheduled meeting of the Board on May 19, 2026, the Board met with representatives of BofA Securities to discuss the May 4 Non-Binding Parent Proposal and related matters, and the Board determined that the transaction consideration proposed in the May 4 Non-Binding Parent Proposal was not adequate.
On May 20, 2026, Mr. Eglin met with a representative of Brookfield and indicated that May 4 Non-Binding Parent Proposal was not sufficient. Mr. Eglin also advised the representative of Brookfield that the Company would provide the Sponsors with an updated presentation regarding the Company’s business and recent developments to assist the Sponsors in their evaluation of the Company, which was subsequently provided on May 29, 2026.
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On June 1, 2026, Mr. Eglin spoke by telephone with a representative of Brookfield and indicated that any proposal would need to provide for consideration of at least $60.00 per Company Common Share in order to be considered by the Board.
On June 6, 2026, Brookfield and CPPIB submitted a revised written non-binding proposal for an acquisition of the Company by a joint venture between the Sponsors providing for consideration of $60.00 per Company Common Share in cash (the “June 6 Revised Written Non-Binding Parent Proposal”). The June 6 Revised Written Non-Binding Parent Proposal provided that no further dividends would be paid to the Company’s shareholders, that the definitive agreement would contain a customary no-shop provision and market termination fees, and that the transaction would not be subject to a financing contingency, and proposed a 45-day exclusivity period. On June 5, 2026, the closing share price of the Company Common Shares was $52.21.
On June 8, 2026, the Board met with representatives of BofA Securities and HLC to discuss the June 6 Revised Written Non-Binding Parent Proposal. Mr. Eglin provided his assessment of the proposal. Representatives of BofA Securities then presented an updated financial and strategic review of the June 6 Revised Written Non-Binding Parent Proposal, including a preliminary valuation summary. Members of the Board discussed the proposal with representatives of BofA Securities, HLC and Company management and asked questions regarding, among other things, the treatment of dividends during the interim period, financing certainty, the identity of the proposed acquisition vehicle, the potential inclusion of a go-shop, window-shop or no-shop provision, and the structure of related termination fees. Following the departure of the representatives of BofA Securities, representatives of HLC reviewed with the Board the duties of the trustees and certain applicable requirements under Maryland law. The Board then further discussed the June 6 Revised Written Non-Binding Parent Proposal and the potential path forward, including the treatment of the dividend, the exclusivity arrangement and the need for a go-shop provision in any definitive agreement with a two-tier termination fee. Following this discussion, the Board directed Company management and its advisors to communicate to Parent that they would support entering into an exclusivity agreement based on the June 6 Revised Written Non-Binding Parent Proposal, but noted that the proposed immediate suspension of the dividend would not be acceptable.
Later on June 8, 2026, representatives of BofA Securities and representatives of Brookfield discussed the treatment of the dividends during the interim period. Following further discussion among representatives of the Company, representatives of BofA Securities and representatives of HLC, on June 8, 2026, a representative of BofA Securities proposed to representatives of Brookfield that the Company’s shareholders would receive a partial prorated dividend for the period between the Company’s most recent ex-dividend date prior to signing a merger agreement through the signing date.
On June 10, 2026, representatives of HLC delivered to outside counsel to the Sponsors, Gibson, Dunn & Crutcher LLP (“Gibson Dunn”), a draft of the exclusivity agreement and an access agreement.
Later on June 10, 2026, representatives of Brookfield communicated to representatives of BofA Securities that they would agree to permit the Company to pay a partial prorated dividend to the Company’s shareholders that would accrue from July 1, 2026 (the day after the record date of the preceding quarterly dividend) to the earlier of execution of a merger agreement and July 29, 2026. Following discussion among Company management, representatives of BofA Securities and representatives of HLC, BofA Securities communicated to representatives of Brookfield that the proposed treatment of the dividend was acceptable.
Between June 10, 2026 and June 14, 2026, representatives of HLC and Gibson Dunn negotiated the exclusivity agreement and access agreement to be entered into between the Company, on the one hand, and the Sponsors, on the other hand. Following those negotiations, on June 14, 2026, the Company and the Sponsors entered into (i) an exclusivity agreement providing for exclusivity through July 29, 2026 (the “Exclusivity Period”) and (ii) an access agreement pursuant to which the Sponsors were granted access to the Company’s properties to conduct certain inspections in connection with the proposed transaction. On June 12, 2026, the closing share price of the Company Common Shares was $53.04.
Between June 16, 2026 and July 2, 2026, representatives of Party C made multiple unsolicited approaches to the Company and its advisors regarding a potential acquisition of the Company. On each occasion, the Company (or its advisors, on the Company’s behalf) informed Party C that it was not in a position to engage at that time. At a Board meeting on July 2, 2026, the Board acknowledged that the Company could not engage with Party C during the Exclusivity Period.
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Between June 16, 2026 and July 20, 2026, the Company opened the virtual data room to the Sponsors, which was populated with customary due diligence information and documentation. From June 16, 2026 through the execution of the Merger Agreement, Company management and its advisors engaged in extensive confirmatory due diligence with the Sponsors regarding the Company and the potential transaction, including attending calls and diligence meetings on topics including tax, financial, human resources, risk, transaction costs, and environmental and legal due diligence, providing responses to due diligence requests across such topic areas, facilitating and attending property visits. In support of the due diligence workstreams, Company management also regularly updated the virtual data room in response to supplemental due diligence requests from the Sponsors and their advisors, including Gibson Dunn.
On June 24, 2026, representatives of HLC delivered to representatives of Gibson Dunn an initial draft of the merger agreement, which provided for, among other things: (i) customary go-shop provisions providing for a 45-day go-shop period, subject to a 15-day extension period for certain parties from whom the Company received a competing proposal during the go-shop period (referred to herein as “excluded parties”); (ii) a two-tiered Company termination fee, providing for a termination fee payable in connection with a Superior Proposal from an excluded party equal to 1% of the Company’s equity value with respect to excluded parties prior to the end of the extension period, and 2.5% otherwise, payable by the Company in certain customary instances, including upon termination for a change in recommendation or superior proposal; (iii) a Parent termination fee equal to 8% of the Company’s equity value, payable upon a material breach by Parent or Parent’s failure to close, or a termination at the outside date at a time when the Company was entitled to terminate for a material breach by Parent or Parent’s failure to close; (iv) the closing to occur three business days following shareholder approval, although Parent may elect to delay the closing for up to 14 days if it waives its right to assert claims arising from intervening events, including any Company material adverse effect, representation or covenant breaches, or failures of closing conditions; (v) customary specific performance rights, pursuant to which, subject to the satisfaction of specified conditions, the Company could seek equitable relief to enforce Parent’s obligations, including the funding of the equity financing and the consummation of the Merger; and (vi) the right of the Company to declare and pay a partial prorated dividend to the Company’s shareholders for the period between the Company’s most recent ex-dividend date prior to signing the Merger Agreement and the date of signing of the Merger Agreement.
On July 2, 2026, the Board held a meeting, with representatives of Company management, BofA Securities, J.P. Morgan and HLC attending. During the meeting, representatives of HLC reminded the trustees of their previously reviewed duties under Maryland law, as well as the terms of the exclusivity agreement. Mr. Eglin then provided the Board with an update on the status of negotiations during the Exclusivity Period with the Sponsors. Representatives of BofA Securities subsequently provided the Board with an update on: (i) the due diligence process to date, and other process-related matters; (ii) an illustrative overview of the go-shop process proposed in the draft merger agreement; (iii) a summary of the proposed termination fee package; (iv) key workstreams during the proposed go-shop period; (v) an illustrative post-announcement timeline; (vi) a preliminary list of potential go-shop outreach parties; and (vii) valuation materials regarding the Company’s share price performance since the commencement of the Exclusivity Period.
On July 2, 2026, representatives of Gibson Dunn sent representatives of HLC a revised draft of the merger agreement, which proposed, among other things: (i) a reduction in the duration of the go-shop period to 30 days with a 5-day extension period for excluded parties; (ii) an increase in the Company termination fee payable in connection with a Superior Proposal from an excluded party to 2% of the Company’s equity value with respect to excluded parties prior to the end of the extension period, and 4% under other circumstances; (iii) an increase in the Parent termination fee to 10% of the Company’s equity value, payable upon a material breach by Parent or Parent’s failure to close, or a termination at the outside date at a time when the Company was entitled to terminate for a material breach by Parent or Parent’s failure to close; (iv) providing for the Parent termination fee, plus applicable recovery costs, as the Company’s sole and exclusive monetary remedy for Parent’s failure to close (except to prevent breaches of the confidentiality and public-announcements covenants); (v) inclusion of an inside date, such that the closing may only occur after a specified date (unless waived by Parent), provided that all conditions to closing have been satisfied or validly waived; and (vi) expanded financing cooperation obligations for the Company.
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On July 8, 2026, representatives of HLC sent representatives of Gibson Dunn a revised draft of the merger agreement, which proposed, among other things: (i) the go-shop period should remain 45 days, subject to a 15-day extension period for excluded parties; (ii) the Company termination fee payable in connection with a Superior Proposal from an excluded party should remain at 1% of the Company’s equity value with respect to excluded parties prior to the end of the extension period, and 2.5% under other circumstances; (iii) the Parent termination fee should remain equal to 8% of the Company’s equity value, payable upon a material breach by Parent or Parent’s failure to close, or a termination at the outside date at a time when the Company was entitled to terminate for a material breach by Parent or Parent’s failure to close; (iv) allowing Parent to defer closing for up to 14 days beyond the date on which all closing conditions were satisfied, provided that Parent waived its right to terminate the merger agreement or refuse to close based on any intervening Company material adverse effect, representation or covenant breach, or closing condition failure; and (v) reinstating the Company’s specific performance rights, pursuant to which, subject to the satisfaction of specified conditions, the Company could seek equitable relief to enforce Parent’s obligations, including the funding of the equity financing and the consummation of the Merger.
On July 10, 2026, representatives of Gibson Dunn sent representatives of HLC a revised draft of the merger agreement, which proposed, among other things: (i) a five-day extension period to the go-shop period for excluded parties; (ii) the Company termination fee payable in connection with a Superior Proposal from an excluded party should be 2% of the Company’s equity value with respect to excluded parties prior to the end of the extension period, and 3.5% thereafter; (iii) a reduction of the Parent termination fee to 7% of the Company’s equity value, payable upon a material breach by Parent or Parent’s failure to close, or a termination at the outside date at a time when the Company was entitled to terminate for a material breach by Parent or Parent’s failure to close; (iv) an elimination of the proposed inside date construct and instead a fixed closing date five business days following the satisfaction or waiver of the closing conditions; and (v) revisions to the remedies provisions that contemplated conditional specific performance and provided that Parent’s aggregate monetary liability would not exceed the Parent termination fee plus recovery costs (except in the case of fraud).
Between July 10, 2026 and July 18, 2026, representatives of HLC and Gibson Dunn engaged in various negotiations regarding the merger agreement, and, with the input of their respective clients, revised and shared multiple drafts of the merger agreement, during which time the parties continued to negotiate the various key issues. On July 10, 2026, representatives of Gibson Dunn provided representatives of HLC with copies of the Sponsors’ proposed form of equity commitment letter and limited guarantee, and on July 17, 2026, representatives of Gibson Dunn provided representatives of HLC with a copy of Parent’s proposed debt commitment letter. Throughout the negotiation process, the Company and the Sponsors engaged in extensive discussions regarding the debt financing for the transaction. The Company sought to maximize certainty of funding and, accordingly, negotiated the conditions to funding under the draft debt commitment letter and related financing provisions to reduce execution risk and provide greater assurance that the debt financing would be available at closing.
On July 15, 2026, the Board held a meeting, with representatives of Company management, BofA Securities, J.P. Morgan and HLC attending, to discuss the progress made on the documentation and negotiations since the prior Board meeting, including summaries of the merger agreement, equity commitment letters and limited guarantees. Before representatives of BofA Securities and J.P. Morgan joined the meeting, the Board unanimously approved the engagement of BofA Securities and J.P. Morgan as the Company’s financial advisors. Shortly thereafter, representatives of HLC reviewed with the Board the duties of the trustees in connection with the proposed transaction. Thereafter, BofA Securities and J.P. Morgan joined the meeting and representatives of HLC summarized the remaining key open issues, including the size of the respective termination fees, the go-shop package (including the extension period and excluded party provisions), and the latest proposal with respect to financing and specific performance. The Board provided its feedback to Company management and its advisors and emphasized the importance of having a go-shop period and Company termination fees (particularly during the go-shop period) that would not be preclusive of potential bidders submitting competing proposals during the go-shop period. Representatives of BofA Securities and J.P. Morgan reviewed with the Board the recent increase in the Company’s share price and the impacts of such increase on certain valuation metrics relevant to the proposed transaction. Following a discussion, the Board directed Company management to propose an increase in the proposed transaction consideration to $61.20 per Company Common Share, which, at the time, represented an approximately 10% premium to the Company’s share price plus the amount of the expected Company Common Share dividend for the quarter ending September 30, 2026. The Board further directed Company management and the Company’s legal and financial advisors to continue negotiations with the Sponsors regarding the remaining open merger agreement issues consistent with the Board’s discussion. The Board also reviewed a relationship disclosure provided by BofA Securities, dated as of July 14, 2026, regarding the relationships between BofA Securities and its affiliates, on the one hand, and the Company, Brookfield and CPPIB, on the other hand, as fully described in the section entitled “—Opinion of Our Financial Advisor.” The Board then reviewed, discussed and considered various reasons to approve the proposed merger agreement and certain countervailing factors (see “—Reasons for the Merger” and “—Recommendation of Our Board” beginning on page 45). Following the meeting, Mr. Eglin contacted a representative of Brookfield and conveyed the Board’s view that the Sponsors should increase their proposal to provide for consideration of $61.20 per Company Common Share.
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On July 17, 2026, the Sponsors submitted a revised proposal increasing the consideration to $61.20 per Company Common Share in cash and providing that no additional dividends would be paid by the Company prior to the consummation of the Merger. On the same day, representatives of Gibson Dunn sent representatives of HLC a revised draft of the merger agreement, which, among other things, reflected that the parties continued to negotiate: (i) the duration of the go-shop period; (ii) the length of the extension period available to excluded parties following the expiration of the go-shop period; (iii) the Company termination fee payable in connection with a Superior Proposal submitted by an excluded party prior to the end of the extension period, as well as the Company termination fee payable under other circumstances; and (iv) the specific performance provisions, including a requirement that the debt financing either be funded or that the debt financing sources irrevocably confirm in writing that the debt financing would be funded at closing, subject to the equity commitments being funded at closing.
Further on July 17, 2026, Mr. Eglin spoke by telephone with a representative of Brookfield to discuss the remaining open issues relating to the go-shop period and the termination fees. Mr. Eglin and the representative of Brookfield discussed: (i) a Company termination fee equal to 1.5% of the Company’s equity value with respect to excluded parties prior to the end of the extension period, and 3.0% thereafter, and (ii) a 45-day go-shop period, subject to a 10-day extension for excluded parties. Representatives of the Company, Parent and their respective advisors continued negotiations regarding several key transaction terms, including the termination fee provisions, the duration and mechanics of the go-shop period, the transaction termination triggers, and the terms of the equity commitment letters, debt commitment letter and limited guarantees.
Based on these discussions and negotiations, in the early morning of July 19, 2026, representatives of HLC sent representatives of Gibson Dunn a revised draft of the merger agreement, which proposed, among other things: (i) that the go-shop period remain 45 days, and (ii) that the Company termination fee payable in connection with a Superior Proposal from an excluded party prior to the end of the extension period be equal to 1.5% of the Company’s equity value, and 3.0% under other circumstances. Later on July 19, 2026, representatives of Gibson Dunn sent representatives of HLC a revised draft of the merger agreement, which proposed, among other things: (i) the Company termination fee payable in connection with a Superior Proposal from an excluded party prior to the end of the extension period be equal to 1.5% of the Company’s equity value, and 3.0% thereafter, subject to agreement on the go-shop period, and (ii) a 30-day go-shop period. Throughout the day, representatives of HLC and representatives of Gibson Dunn continued to trade iterative drafts of the merger agreement and met telephonically on several occasions to resolve the remaining open issues, including finalizing the following terms: (i) a Company termination fee of 1.5% of the Company’s equity value with respect to Superior Proposals from excluded parties prior to the end of the extension period, and 3.0% under other circumstances; (ii) a 40-day go-shop period, subject to a five-day extension period for excluded parties; and (iii) a financing package accompanied by specific performance rights available to the Company if certain conditions are satisfied. For a further description of the final terms of the Merger Agreement, please see the section of this proxy statement entitled “—The Merger Agreement”.
On July 19, 2026, the Company executed an engagement letter with BofA Securities to act as the Company’s lead financial advisor in connection with the sale process and the Company executed an engagement letter with J.P. Morgan to act as the Company’s financial advisor.
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On July 19, 2026, the Board held a meeting, with representatives of Company management, BofA Securities, J.P. Morgan and HLC attending. During the meeting, representatives of HLC discussed with the trustees their duties under Maryland law, and then provided the Board with a summary of the Merger Agreement, including the outcome of the final negotiation of the material provisions of the Merger Agreement, particularly the proposed financing package, the termination fees, and the duration of the go-shop period. Representatives of BofA Securities then reviewed with the Board BofA Securities’ financial analyses of the Merger Consideration and delivered to the Board its oral opinion, which was confirmed by delivery of a written opinion dated July 19, 2026, to the effect that, as of that date and based on and subject to various assumptions and limitations set forth in the written opinion, the Merger Consideration to be received in the Merger by holders of the Company Common Shares (other than the Parent Parties or any of their respective subsidiaries or any of the Acquired Companies), was fair, from a financial point of view, to such holders. For more information regarding BofA Securities’ opinion, please see “—Opinion of the Company’s Financial Advisor.”
The Board then reviewed, discussed and considered various reasons to approve the Merger Agreement and certain countervailing factors (see “—Reasons for the Merger” and “—Recommendation of Our Board” beginning on page 45). After discussions with Company management and its financial and legal advisors, and in light of the reasons considered, the Board unanimously:
| · | determined and declared that the Merger and the other transactions contemplated by the Merger Agreement are advisable and in the best interests of the Company and its shareholders; |
| · | duly authorized and approved the execution, delivery and performance of the Merger Agreement, including the consummation of the Merger and the other transactions contemplated by the Merger Agreement; |
| · | directed that the approval of the Merger and the other transactions contemplated by the Merger Agreement be submitted for consideration by the holders of Company Common Shares at the Special Meeting; and |
| · | resolved to recommend that the Company’s shareholders vote in favor of the Merger Proposal. |
The Board then discussed with Company management and its advisors next steps, including the commencement of the go-shop process, the scope of parties to be contacted, and communications.
On July 19, 2026, the parties executed the Merger Agreement and related documentation.
Prior to the market opening on July 20, 2026, the Company and the Sponsors issued a joint press release announcing their entry into the Merger Agreement.
Go-Shop
On July 20, 2026, following the announcement of the Company’s entry into the Merger Agreement with Parent, and at the direction of the Board, representatives of BofA Securities and J.P. Morgan commenced outreach to 51 potential bidding parties as part of the Go-Shop Period, consisting of 29 financial sponsors, 14 sovereigns/investment managers and 8 strategic bidding parties. Among those contacted, 14 parties expressed interest in entering into confidentiality agreements with the Company to evaluate a potential sale transaction. Of those parties, 12 parties, including 9 financial sponsors, 1 sovereign/investment manager and 2 strategic bidding parties, executed confidentiality agreements and were provided access to a virtual data room for prospective go-shop bidders containing, among other materials, business and financial information previously made available to Parent.
The Go-Shop Period expired on August 28, 2026 at 11:59 p.m., New York City time. Prior to the expiration of the Go-Shop Period, no party submitted a competing proposal to the Company.
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The Merger and the other transactions contemplated by the Merger Agreement were determined and declared advisable and in the best interests of the Company and its shareholders and approved by all members of the Board, as more fully described above in the section of this proxy statement captioned “The Merger-Background of the Merger.” In reaching its decision to (i) determine and declare that the Merger and the other transactions contemplated by the Merger Agreement are advisable and in the best interests of the Company and its shareholders, (ii) duly authorize and approve the execution, delivery and performance of the Merger Agreement, including, subject to obtaining the requisite approval by the shareholders of the Company, the consummation of the Merger and the other transactions contemplated thereby, (iii) direct that the approval of the Merger and the other transactions contemplated by the Merger Agreement be submitted for consideration by the holders of Company Common Shares at the Special Meeting; and (iv) recommend that the Company’s shareholders vote in favor of the approval of the Merger, the Board consulted with members of Company management, as well as the Company’s financial and legal advisors, and considered a number of factors, including the following material factors, which the Board viewed as supporting its decision:
| · | the Board’s knowledge of the business, operations, financial condition, earnings and prospects of the Company, including: |
| · | the challenges the Company has faced given its lack of scale, including the impact of lack of scale on its cost of capital, G&A efficiency and the ability to achieve desired concentration levels in target markets; |
| · | the challenges the Company has faced in growing earnings given its access to capital at attractive rates and challenges in recycling capital through property sales given tax considerations associated with the Company’s built-in gains; and |
| · | the potential challenges the Company faces from prolonged macroeconomic and commercial real estate uncertainty resulting from inflation, the interest rate environment, international military conflicts, financial market volatility and valuations, and the U.S. political environment, including shifting government policies, among other concerns; |
| · | the Board’s knowledge of the current and prospective environment in which the Company operates, including the macroeconomic risks noted above and the Company’s relative exposure to a deterioration in this environment given its scale relative to its peers (including relative disadvantages in cost of capital, G&A efficiency and other matters) and the importance of development to its growth strategy; |
| · | the fact that the proposed Merger Consideration in the cash amount of $61.20 per Company Common Share provides the Company’s common shareholders with certainty of value and liquidity immediately upon the Closing, in comparison to the risks and uncertainty that would be inherent in remaining an independent public company, including the risks and uncertainties noted above; |
| · | the current and historical trading prices of Company Common Shares, including the fact that the proposed Merger Consideration in the cash amount of $61.20 per Company Common Share provides approximately a 12.3% premium to the 30-day volume-weighted average price per Company Common Share ending July 17, 2026, approximately a 19.8% premium to the 90-day volume-weighted average price per Company Common Share ending July 17, 2026, and approximately a 58% premium to the 52-week low price per Company Common Share; |
| · | the fact that the proposed Merger Consideration in the cash amount of $61.20 per Company Common Share exceeds most financial analyst estimates of Company net asset value per common share and that the Company’s share price has historically been below such third-party estimates of net asset value per common share; |
| · | the fact that the Company was able to negotiate to improve the initial price proposed by Parent and to improve other terms in the Merger Agreement that the Board believes were important over the course of negotiations; |
| · | the fact that the Merger Agreement provides for customary go-shop and fiduciary out provisions, which, subject to the terms thereof, authorize the Company to undergo a post-signing market-check, during which time other potential interested parties can propose a competing proposal, and which, subject to the terms of the Merger Agreement, if the Board concludes any such competing proposal constitutes a Superior Proposal, allows the Board to terminate the Merger Agreement and enter into an alternative agreement with such other party prior to the Cut-Off Time, and, in such case, the Company Termination Payment would be limited to approximately $54 million (i.e., approximately 1.5% of the equity value of the Company); |
| · | advice from the Company’s independent financial advisor and outside legal counsel that the Company’s right to terminate the Merger Agreement, under certain circumstances, in order to enter into a definitive agreement providing for the implementation of a Superior Proposal and the Company Termination Payment after the Go-Shop Period are reasonable and not likely to preclude any other interested party from making a competing proposal; |
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| · | that the Merger Agreement contains terms that, taken as a whole, the Board believes provide a significant degree of certainty that the Merger will be completed as quickly as possible; |
| · | the probability that the Merger will be completed based on, among other things, Parent’s available capital and Parent’s experience in the real estate industry, the absence of a financing contingency or condition, the Parent Termination Payment equal to approximately $289 million (i.e., approximately 8% of the Company’s equity value), payable to the Company if the Merger Agreement is terminated in certain circumstances, including a material breach or failure to close, the limited number of conditions to the Merger, and the absence of any significant regulatory approvals; |
| · | the fact that Parent executed equity commitment letters and debt commitment letters representing the full Merger Consideration and other capitalization payable under the Merger Agreement; |
| · | the fact that the limited guarantees are being executed by affiliates of Parent, which Parent has informed us have sufficient available capital to pay the full amount of the limited guarantees; |
| · | the oral opinion of BofA Securities, which was confirmed by delivery of a written opinion dated July 19, 2026 to the Board to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations set forth in the written opinion, the Merger Consideration to be received in the Merger by holders of the Company Common Shares (other than the Parent Parties or any of their respective subsidiaries or any of the Acquired Companies) was fair, from a financial point of view, to such holders, as more fully described below in the section of this proxy statement captioned “The Merger—Opinion of the Company’s Financial Advisor;”; and |
| · | the fact that the Merger is subject to the Company’s receipt of the approval of the Merger by a majority of all the votes entitled to be cast at the Special Meeting on the Merger Proposal, and that the Company’s shareholders are free to vote against the Merger for any reason, including if a higher offer were to be made prior to the Special Meeting (in certain cases subject to the Company Termination Payment if the Company subsequently were to enter into a definitive agreement relating to, or to consummate, any alternative acquisition). |
The Board also considered the following potentially negative factors in its consideration of the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement:
| · | the fact that the Company did not run an auction process prior to signing the Merger Agreement, the requirement to pay the Company Termination Payment if there is a Superior Proposal during the Go-Shop Period and the Company terminates the Merger Agreement, and the Company’s inability, after the No-Shop Period Start Date, to solicit competing proposals and the possibility that the Company Termination Payment payable by the Company upon the termination of the Merger Agreement under certain circumstances could discourage other potential bidders from making a competing proposal; |
| · | the fact that, following the Merger, the Company will no longer exist as a stand-alone public company and that its existing shareholders will not participate in any future earnings or growth; |
| · | the risk that an alternative transaction or different strategic alternative or liquidation potentially could be more beneficial to the Company’s shareholders than the Merger; |
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| · | the fact that Parent is a newly formed entity with no assets and that the limited guarantees, provided by the Guarantors (as defined in the Merger Agreement) on a several basis, guarantee Parent’s obligations under the Merger Agreement only with respect to (i) payment of the Parent Termination Payment of approximately $289 million, if and to the extent payable pursuant to the Merger Agreement, or, solely if the Merger Agreement is validly terminated pursuant to the applicable breach termination provision and the Parent Termination Payment is not payable, monetary damages awarded in a final, binding and non-appealable judgment of a court of competent jurisdiction resulting from Parent’s or Merger Sub’s fraud or willful breach of the Merger Agreement, and (ii) certain recovery costs associated with enforcing payment of the Parent Termination Payment, if applicable, which recovery costs are capped at $10,000,000 in the aggregate, in each case subject to the terms and limitations set forth in the Merger Agreement and the Guarantees; |
| · | the risks that Parent fails to close or breaches the Merger Agreement, that Parent’s financing will be unavailable, and that the Company’s remedies for such a failure or breach may be limited to specific performance or other equitable relief in specified circumstances, or otherwise to a payment capped at the Parent Termination Payment of approximately $289 million (plus any recovery costs) in the instances in which it is payable, which may be inadequate to compensate the Company in the event of a termination and which termination may harm the Company’s prospects if the Merger does not close; |
| · | the risk of merger-related shareholder litigation; |
| · | the fact that this transaction will be taxable to the Company’s shareholders; |
| · | the fact that the Company shareholders are not entitled to appraisal or dissenter’s rights; |
| · | the fact that, under the terms of the Merger Agreement, the Company is not permitted to make, declare or pay any regular cash dividends or distributions on Company Common Shares, except in limited circumstances, such as if reasonably required to preserve its tax status as a REIT; |
| · | the restrictions on the conduct of the Company’s business prior to the completion of the Merger, which could delay or prevent the Company from undertaking business opportunities that may arise pending completion of the Merger; |
| · | the potential adverse impact of the announcement and pendency of the transactions contemplated by the Merger Agreement on our business, including on our existing and prospective business relationships with tenants and other third parties and on our employees, including the risk that certain key members of our management and other key employees might choose not to remain employed with us prior to the completion of the Merger, regardless of whether or not the Merger is completed; |
| · | the significant transaction costs, business disruption and management distraction caused by the proposed Merger, which will likely harm the Company’s prospects if the Merger does not close; and |
| · | the fact that certain of the Company’s trustees and executive officers may have conflicts of interest in connection with the Merger, as they may receive certain benefits that are different from, and in addition to, those of the Company’s other shareholders, including with respect to change of control compensation. |
The foregoing discussion of the factors considered by the Board is not intended to be exhaustive, but rather includes the material factors considered by the Board. In reaching its decision to approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Board did not quantify or assign any relative weights to, and did not make specific assessments of, the factors considered, and individual trustees may have given different weights to different factors. The Board did not reach any specific conclusion with respect to any of the factors or reasons considered. The above factors are not presented in any order of priority. The explanation of the factors and reasoning set forth above contains forward-looking statements and should be read in conjunction with the section of this proxy statement captioned “Cautionary Statement Regarding Forward-Looking Statements.”
The Board has unanimously:
| · | determined and declared that the Merger and the other transactions contemplated by the Merger Agreement are advisable and in the best interests of the Company and its shareholders; |
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| · | duly authorized and approved the execution, delivery and performance of the Merger Agreement, including, subject to obtaining the requisite approval by the shareholders of the Company, the consummation of the Merger and the other transactions contemplated thereby; |
| · | directed that the approval of the Merger and the other transactions contemplated by the Merger Agreement be submitted for consideration by the holders of Company Common Shares at the Special Meeting; and |
| · | recommended that you vote “FOR” the Merger Proposal, “FOR” the Advisory Merger-Related Compensation Proposal and “FOR” the Adjournment Proposal. |
Unaudited Prospective Financial Information
While the Company has from time to time provided limited financial guidance to investors, the Company has not, as a matter of course, otherwise publicly disclosed internal projections as to future performance, earnings or other results beyond the then-current annual period due to, among other reasons, the uncertainty, unpredictability and subjectivity of the underlying assumptions and estimates inherent in preparing financial projections.
However, in connection with the evaluation and negotiation of the Merger and the other transactions contemplated by the Merger Agreement, Company management prepared certain non-public, internal, unaudited financial projections regarding the Company’s future operations for fiscal years ending December 31, 2026 through December 31, 2030 (the “financial projections”). Company management provided the financial projections to the Board in connection with its evaluation of the Merger, and to the Company’s financial advisor, BofA Securities, for its use and reliance in connection with its financial analyses and opinions.
The following tables summarize the financial projections:
| Fiscal Year Ending December 31, | ||||||||||||||||||||
| 2026E | 2027E | 2028E | 2029E | 2030E | ||||||||||||||||
| (dollar amounts in millions) | ||||||||||||||||||||
| Cash NOI(1) | $ | 280 | $ | 299 | $ | 322 | $ | 341 | $ | 376 | ||||||||||
| Cash EBITDA(2) | $ | 266 | $ | 280 | $ | 299 | $ | 317 | $ | 354 | ||||||||||
| Adjusted Company FFO(3) | $ | 200 | $ | 213 | $ | 222 | $ | 231 | $ | 252 | ||||||||||
| Unlevered Free Cash Flow(4) | $ | 163 | $ | 193 | $ | 165 | $ | 120 | $ | 151 | ||||||||||
| (1) | Cash net operating income (“Cash NOI”) is calculated on a consolidated basis as the Company’s projected net operating income before other income (expense), adjusted for property operating expenses and straight-line revenue, and assumes the completion of acquisitions, development investment and dispositions in each year presented, as described in “-Important Information About the Financial Projections” below. | |
| (2) | Cash EBITDA represents EBITDA (earnings before interest expense, taxes, depreciation and amortization) modified to include other adjustments to GAAP net income for gains on sales of real estate or changes in control, impairment charges, gain (loss) on debt satisfaction, net, non-cash charges, net, straight-line adjustments, non-recurring charges, the non-cash purchase option impact of sales-type leases and adjustments for pro rata share of non-wholly owned entities. | |
| (3) | The Company defines Adjusted Company Funds from Operations available to all equityholders - diluted (“Adjusted Company FFO”) as net income (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, impairment charges related to real estate, amortization of leasing commissions, an adjustment for joint ventures and noncontrolling interests, gains and losses from the sales of certain real estate assets, preferred dividends, amounts allocated to participating securities, transaction costs, including costs associated with terminated investments, such as non-refundable deposits and legal fees, and gains and losses on debt satisfaction. | |
| (4) | “Unlevered Free Cash Flow” was calculated by BofA Securities, in connection with its financial analyses as described in the section of this proxy statement captioned “The Merger-Opinion of the Company’s Financial Advisor,” using the financial information provided by the Company in the financial projections, as Cash EBITDA further adjusted for capital expenditures, net acquisitions/dispositions, tenant improvements and leasing commissions and other adjustments, including payroll taxes and joint venture adjustments. |
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Important Information About the Financial Projections
The financial projections are included in this proxy statement solely to give the Company’s shareholders access to certain information that was made available to the Board and BofA Securities. The financial projections have not been updated following the date such projections were approved by the Board to reflect the Company’s then current views of its future financial performance, and should not be treated as guidance with respect to projected results for the fiscal year ending December 31, 2026 or any other period. The financial projections are subjective in many respects and were prepared solely for the Company’s internal use, for use by Parent in connection with its consideration of the Merger (as more fully described in the section of this proxy statement captioned “The Merger-Background of the Merger”) and for BofA Securities in connection with its financial analysis and fairness opinion. The financial projections were not prepared with a view toward public disclosure and, accordingly, do not necessarily comply with published guidelines of the SEC, the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information or GAAP. In addition, the financial projections require significant estimates and assumptions that make them inherently less comparable to the similarly titled GAAP measures in the Company’s historical GAAP financial statements. Neither the Company’s independent registered public accounting firm nor any other independent accountants have compiled, examined, audited or performed any procedures with respect to the financial projections, and have not expressed any opinion or any other form of assurance regarding the financial projections or their achievability. Likewise, neither the Company’s independent registered public accounting firm nor any other independent accountants assume responsibility for, and disclaim any association with, such financial projections. The report of the Company’s independent registered public accounting firm contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 relates to the Company’s historical financial information and does not extend to the financial projections and should not be read to do so. Furthermore, the financial projections do not take into account any circumstances or events occurring after the date they were prepared. Additionally, the inclusion of the financial projections in this proxy statement does not constitute an admission or representation by the Company that the information is material.
The above financial data were not prepared in accordance with GAAP. The Company uses these non-GAAP financial measures in analyzing its financial results and believes that they enhance investors’ understanding of the Company’s financial performance and the comparability of its results to prior periods. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The Company’s calculation of non-GAAP financial measures may differ from others in the industry and the Company’s Cash NOI, Cash EBITDA, Adjusted Company FFO and Unlevered Free Cash Flow are not necessarily comparable with similar titles used by other companies. Reconciliations of non-GAAP financial measures were not relied upon by BofA Securities for purposes of its opinion to the Board as described below in the section of this proxy statement captioned “The Merger-Opinion of the Company’s Financial Advisor” or by the Board in connection with its consideration of the Merger. In addition, financial measures provided to a board of directors or a financial advisor are excluded from the definition of non-GAAP financial measures under SEC rules and, therefore, are not subject to SEC rules regarding disclosures of non-GAAP financial measures, which would otherwise require, among other information, a reconciliation of a non-GAAP financial measure to a GAAP financial measure. Accordingly, the Company has not provided a reconciliation of the financial measures included in the financial projections above.
In the view of Company management, the financial projections were prepared on a reasonable basis reflecting management’s best available estimates and judgments regarding the Company’s future financial performance at the time they were prepared.
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The financial projections, while presented with numerical specificity, are subjective in many respects and were based on numerous variables, estimates and assumptions that are inherently uncertain and necessarily involve judgments with respect to, among other things, the Company’s performance, industry performance, general business, future economic, competitive, regulatory and financial market conditions, all of which are difficult or impossible to predict and many of which are beyond the Company’s or Company management’s control. The financial projections are not a guarantee of future financial performance. The financial projections were developed under the assumption of continued standalone operation, including the completion of certain sales, acquisitions and equity financing activities and development and redevelopment currently in process, and the financial projections do not take into account any circumstances, transactions or events occurring (other than those for which the Company is contractually obligated) after the date on which the financial projections were prepared and do not give effect to any changes or expenses as a result of the Merger or any effects of the Merger. Further, the financial projections do not take into account the effect of any failure of the Merger to be consummated and should not be viewed as accurate or continuing in that context or any other context. The financial projections also reflect assumptions as to certain business decisions that are subject to change. Given that the financial projections cover multiple years, by their nature, they become subject to greater uncertainty with each successive year. Important factors that may affect actual results and cause the financial projections to not be achieved include, but are not limited to, risks and uncertainties relating to the Company’s business (including its ability to achieve strategic goals, objectives and targets over applicable periods and achieve stabilization of its development projects or certain leasing results and occupancy levels in its portfolio), industry performance and dynamics, local market conditions, general business, economic, competitive, regulatory and financial market conditions, disruptions in the financial, debt, capital, credit or securities markets, the Company’s ability to obtain financing, development and redevelopment costs, changes in business strategy and other factors described in the section of this proxy statement captioned “Cautionary Statement Regarding Forward-Looking Statements” and the risks described in the Company’s periodic reports filed with the SEC, which reports can be found as described under the section of this proxy statement captioned “Where You Can Find More Information.” As a result, actual results may differ materially from those contained in the financial projections. Accordingly, there can be no assurance that the projected results summarized above will be realized. Shareholders are urged to review the Company’s most recent SEC filings for a description of the reported and anticipated results of operations and financial condition and capital resources, including in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, and subsequent Quarterly Reports on Form 10-Q, which are incorporated by reference into this proxy statement.
The financial projections also reflect assumptions that are subject to change and are susceptible to multiple interpretations and periodic revisions based on actual results, revised prospects for the Company’s business, changes in general business or economic conditions, certain accounting assumptions, timing of business investments, changes in actual or projected cash flows, competitive pressures and changes in tax or other laws or regulations or any other transaction or event that has occurred or that may occur and that was not anticipated when the financial projections were prepared, including material assumptions regarding (i) the Company’s estimates regarding annual growth in net operating income and general and administrative expenses, (ii) annual investments in the Class A warehouse and distribution space of as yet unidentified properties, including related income and expenses related to such investments, and corresponding transaction expenses, (iii) debt financing transactions to fund such acquisitions, (iv) dispositions of existing properties, (v) development costs for speculative and build-to-suit development projects and redevelopment projects and (vi) the Company’s estimates regarding Cash NOI, which rely on leasing assumptions.
In addition, the financial projections may be affected by the Company’s ability to achieve strategic goals, objectives and targets over the applicable period. Accordingly, actual results will differ, and may differ materially, from those contained in the financial projections. The financial projections should be evaluated, if at all, in conjunction with the historical financial statements and other information contained in the Company’s public filings with the SEC. There can be no assurance that the financial results in the financial projections will be realized, or that future actual financial results will not materially vary from those estimated in the financial projections. The inclusion of the financial projections and accompanying narrative in the table above should not be regarded as an indication that the Company, Parent, or their respective affiliates, advisors, officers, employees, members, trustees or their respective representatives consider the financial projections to be necessarily predictive of actual future events, and this information should not be relied upon as such. Furthermore, the Company, Parent, and their respective affiliates, advisors, officers, employees, members, trustees and their respective representatives can provide no assurance that actual results will not differ materially from the financial projections, and undertake no obligation to update or otherwise revise or reconcile the financial projections to reflect circumstances existing after the dates on which the financial projections were prepared or to reflect the occurrence of future events, even in the event that any or all of the assumptions and estimates underlying the financial projections are shown to be in error or are no longer appropriate. Some or all of the assumptions that have been made in connection with the preparation of the financial projections may have changed since the date the financial projections were prepared. These considerations should be taken into account in reviewing the financial projections, which were prepared as of an earlier date. The Company, Parent, and their respective affiliates, advisors, officers, employees, directors, trustees and their respective representatives make no representation regarding the Company’s ultimate performance compared to the information contained in the financial projections or that the financial projections will be achieved. In addition, the Company has not made and makes no representation to any shareholder or to Parent or the Parent Parties in the Merger Agreement or otherwise concerning the financial projections or regarding its ultimate performance compared to the information contained in the financial projections or that the projected results will be achieved. None of the Company, Parent, and their respective affiliates, advisors, officers, employees, members, trustees and their respective representatives assumes any responsibility for the validity, reasonableness, accuracy, or completeness of the financial projections.
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In light of the foregoing factors and the uncertainties inherent in the financial projections, shareholders are cautioned not to place undue, if any, reliance on the financial projections.
Opinion of the Company’s Financial Advisor
The Company has retained BofA Securities to act as the Company’s financial advisor in connection with the Merger. BofA Securities is an internationally recognized investment banking firm which is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. The Company selected BofA Securities to act as the Company’s financial advisor in connection with the Merger on the basis of BofA Securities’ experience in transactions similar to the Merger, its reputation in the investment community and its familiarity with the Company and its business.
On July 19, 2026, at a meeting of the Board held to evaluate the Merger, BofA Securities delivered to the Board an oral opinion, which was confirmed by delivery of a written opinion dated July 19, 2026, to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations set forth in the written opinion, the Merger Consideration to be received in the Merger by holders of the Company Common Shares (other than the Parent Parties or any of their respective subsidiaries or any of the Acquired Companies) was fair, from a financial point of view, to such holders.
The full text of BofA Securities’ written opinion to the Board, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex B to this proxy statement and is incorporated by reference herein in its entirety. The following summary of BofA Securities’ opinion is qualified in its entirety by reference to the full text of the written opinion. BofA Securities delivered its opinion to the Board for the benefit and use of the Board (in its capacity as such) in connection with and for purposes of its evaluation of the Merger. BofA Securities expressed no opinion or view as to any terms or other aspects or implications of the Merger, including without limitation, the form or structure of the Merger, any related transactions or any other agreement, arrangement or understanding entered into in connection with or related to the Merger or otherwise (other than the Merger Consideration to the extent expressly specified in such opinion), and no opinion or view was expressed as to the relative merits of the Merger in comparison to other strategies or transactions that might be available to the Company or in which the Company might engage or as to the underlying business decision of the Company to proceed with or effect the Merger. BofA Securities’ opinion does not constitute a recommendation as to how any shareholder should vote or act in connection with the Merger or any other matter.
In connection with rendering its opinion, BofA Securities, among other things:
| (1) | reviewed certain publicly available business and financial information relating to the Company; |
| (2) | reviewed certain internal financial and operating information with respect to the business, operations and prospects of the Company furnished to or discussed with BofA Securities by the management of the Company, including the financial projections; |
| (3) | discussed the past and current business, operations, financial condition and prospects of the Company with members of senior management of the Company; |
| (4) | reviewed the trading history for the Company Common Shares and a comparison of that trading history with the trading histories of other companies BofA Securities deemed relevant; |
| (5) | compared certain financial and stock market information of the Company with similar information of other companies BofA Securities deemed relevant; |
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| (6) | compared certain financial terms of the Merger to financial terms, to the extent publicly available, of other transactions BofA Securities deemed relevant; |
| (7) | reviewed a draft, dated July 19, 2026, of the Merger Agreement (the “Draft Agreement”); and |
| (8) | performed such other analyses and studies and considered such other information and factors as BofA Securities deemed appropriate. |
In arriving at its opinion, BofA Securities assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with it and relied upon the assurances of the management of the Company that they were not aware of any facts or circumstances that would make such information or data inaccurate or misleading in any material respect. With respect to the financial projections, BofA Securities was advised by the Company, and assumed, that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of the Company as to the future financial performance of the Company. BofA Securities relied, at the direction of the Company, upon the assessments of the management of the Company as to the potential impact of market, governmental and regulatory trends and developments relating to or affecting the Company and its business. BofA Securities did not make and was not provided with any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of the Company, nor did it make any physical inspection of the properties or assets of the Company. BofA Securities did not evaluate the solvency or fair value of the Company or Parent under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. BofA Securities assumed, at the direction of the Company, that the Merger would be consummated in accordance with its terms, without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the Merger, no delay, limitation, restriction or condition, including any divestiture requirements or amendments or modifications, would be imposed that would have an adverse effect on the Company or the contemplated benefits of the Merger. BofA Securities also assumed, at the direction of the Company, that the final executed Merger Agreement would not differ in any material respect from the Draft Agreement reviewed by BofA Securities.
BofA Securities expressed no view or opinion as to any terms or other aspects or implications of the Merger (other than the Merger Consideration to the extent expressly specified in its opinion), including, without limitation, the form or structure of the Merger, any related transaction or any other agreement, arrangement or understanding entered into in connection with or related to the Merger or otherwise. BofA Securities was not requested to, and did not, solicit indications of interest or proposals from third parties regarding a possible acquisition of all or any part of the Company or any alternative transaction. BofA Securities’ opinion was limited to the fairness, from a financial point of view, of the Merger Consideration to be received by the holders of the Company Common Shares (other than the Parent Parties or any of their respective subsidiaries or any of the Acquired Companies) and no opinion or view was expressed with respect to any consideration received in connection with the Merger by the holders of any other class of securities, creditors or other constituencies of any party. In addition, no opinion or view was expressed with respect to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to any of the officers, directors, trustees or employees of any party to the Merger, or class of such persons, relative to the Merger Consideration or otherwise. Furthermore, no opinion or view was expressed as to the relative merits of the Merger in comparison to other strategies or transactions that might be available to the Company or in which the Company might engage or as to the underlying business decision of the Company to proceed with or effect the Merger. BofA Securities did not express any view or opinion with respect to, and BofA Securities relied, at the direction of the Company, upon the assessments of representatives of the Company regarding, legal, regulatory, accounting, tax and similar matters relating to the Company, Parent and the Merger (including the contemplated benefits of the Merger), as to which matters BofA Securities understood that the Company obtained such advice as it deemed necessary from qualified professionals. In addition, BofA Securities expressed no opinion or recommendation as to how any shareholder should vote or act in connection with the Merger or any other matter. Except as described in this summary, the Company imposed no other limitations on the investigations made or procedures followed by BofA Securities in rendering its opinion.
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BofA Securities’ opinion was necessarily based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and the information made available to BofA Securities as of, the date of its opinion. As the Company was aware, the credit, financial and stock markets have been experiencing unusual volatility and BofA Securities expressed no opinion or view as to any potential effects of such volatility on the Company or the Merger. It should be understood that subsequent developments may affect BofA Securities’ opinion, and BofA Securities does not have any obligation to update, revise, or reaffirm its opinion. The issuance of BofA Securities’ opinion was approved by a fairness opinion review committee of BofA Securities.
The discussion set forth below in the section of this proxy statement captioned “The Merger—Opinion of the Company’s Financial Advisor—Summary of Material Company Financial Analyses” represents a brief summary of the material financial analyses presented by BofA Securities to the Board in connection with its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by BofA Securities, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by BofA Securities. Considering the data set forth in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by BofA Securities.
Summary of Material Company Financial Analyses.
Selected Publicly Traded Companies Analysis.
BofA Securities reviewed publicly available financial and stock market information for the Company and the following two publicly traded real-estate investment trusts and property management companies:
| · | First Industrial Realty Trust, Inc. | |
| · | STAG Industrial, Inc. |
BofA Securities reviewed, among other things, enterprise values of the selected publicly traded companies, calculated as equity values based on their closing stock prices on July 17, 2026, plus debt, preferred stock and minority interests, less cash and cash equivalents, as a multiple of calendar year 2027 estimated earnings before interest, taxes, depreciation and amortization (“EBITDA”). BofA Securities also reviewed, among other things, per share equity values of the selected publicly traded companies, based on their respective closing stock prices on July 17, 2026, as a multiple of calendar year 2027 estimated funds from operation (“FFO”).
BofA Securities then applied calendar year 2027 estimated EBITDA multiples of 15.9x to 20.8x, derived from the selected publicly traded companies, to the Company’s calendar year 2027 estimated EBITDA to determine implied per share equity values for the Company. Similarly, BofA Securities applied calendar year 2027 estimated FFO multiples of 15.0x to 20.1x, derived from the selected publicly traded companies, to the Company’s calendar year 2027 estimated FFO, to determine implied per share equity values for the Company. Estimated financial data of the selected publicly traded companies were based on publicly available research analysts’ estimates, and estimated financial data of the Company were based on the financial projections. This analysis indicated the following approximate implied per share equity value reference ranges for the Company, as compared to the Merger Consideration:
| Implied Per Share Equity Value Reference Ranges for the Company | ||||||||||
| 2027E EBITDA | 2027E FFO | Merger Consideration | ||||||||
| $49.42 - $72.47 | $54.28 - $72.71 | $ | 61.20 | |||||||
No company used in this analysis is identical or directly comparable to the Company. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the public trading or other values of the companies to which the Company was compared.
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Selected Precedent M&A Transactions Analysis.
BofA Securities reviewed, to the extent publicly available, financial information relating to the following nine selected transactions involving real estate investment trusts and property management companies:
| Date Announced | Acquiror | Target | ||
| February 2, 2026 | Brookfield Asset Management | Peakstone Realty Trust | ||
| October 24, 2025 | Makarora Management LP, Ares Management Corporation | Plymouth Industrial REIT, Inc. | ||
| February 22, 2023 | GIC Private Limited, Centerbridge Partners, L.P. | INDUS Realty Trust, Inc. | ||
| June 13, 2022 | Prologis, Inc. | Duke Realty Corporation | ||
| April 25, 2022 | Blackstone Real Estate Partners IX L.P. | PS Business Parks, Inc. | ||
| November 5, 2021 | Industrial Logistics Properties Trust | Monmouth Real Estate Investment Corporation | ||
| October 27, 2019 | Prologis, Inc. | Liberty Property Trust | ||
| May 7, 2018 | Blackstone Real Estate Partners VIII | Gramercy Property Trust | ||
| April 29, 2018 | Prologis, Inc. | DCT Industrial Trust, Inc. |
BofA Securities reviewed transaction values, calculated as the enterprise value implied for each target company based on the consideration payable in the selected transaction, as a multiple of the target company’s one-year forward estimated EBITDA (“NTM EBITDA”). BofA Securities then applied one-year forward EBITDA multiples of 15.8x to 21.5x, derived from the selected transactions, to the Company’s estimated NTM EBITDA. Estimated financial data of the selected transactions were based on publicly available information and research analyst estimates at the time of announcement of the relevant transaction. Estimated financial data of the Company were based on the financial projections. This analysis indicated the following approximate implied per share equity value reference ranges for the Company, as compared to the Merger Consideration:
| Implied Per Share Equity Value Reference Range for the Company | ||||||
| NTM EBITDA | Merger Consideration | |||||
| $46.68 - $73.04 | $ | 61.20 | ||||
No company, business or transaction used in this analysis is identical or directly comparable to Company or the Merger. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the acquisition or other values of the companies, business segments or transactions to which the Company and the Merger were compared.
Discounted Cash Flow Analysis.
BofA Securities performed a discounted cash flow analysis of the Company to calculate the estimated present value of the standalone unlevered, after-tax free cash flows that the Company was forecasted to generate during the period from the third quarter of 2026 through the Company’s fiscal year 2030 based on the financial projections. BofA Securities calculated terminal values for the Company by applying a forward EBITDA exit multiple range of 15.0x to 18.0x, based on BofA Securities’ professional judgment and experience, to the estimated EBITDA for the terminal year, which was calculated by applying the 2030 to 2034 estimated compound annual growth rate per the financial projections to the Company’s estimated fiscal year 2030 EBITDA. The cash flows and terminal values were then discounted to present value as of June 30, 2026, assuming a mid-year convention for cash flows, using discount rates ranging from 8.1% to 9.2%, which were based on an estimate of the Company’s weighted average cost of capital. This analysis indicated the following approximate implied per share equity value reference ranges for the Company, as compared to the Merger Consideration:
| Implied Per Share Equity Value Reference Range for the Company | Merger Consideration | |||||
| $49.25 - $65.73 | $ | 61.20 | ||||
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Other Factors.
In rendering its opinion, BofA Securities also noted certain additional factors that were not considered as part of BofA Securities’ material financial analyses with respect to its opinion but were referenced for informational purposes, including, among other things, the following:
| · | historical trading prices and trading volumes of the Company Common Shares during the one-year period ended July 17, 2026, which ranged from $38.75 to $58.51 per share; | |
| · | certain publicly available equity research analyst price targets for the Company Common Shares as of July 17, 2026, which indicated a stock price target range for the Company of $51.03 to $61.97 per share when discounted one year at the Company’s mid-point estimated cost of equity of 9.7%, including discounted next four quarterly dividends; | |
| · | certain publicly available research analysts’ net asset value per share estimates for the Company Common Shares, which indicated a range of net asset value per share estimates of $49.79 to $66.90; | |
| · | the range of the Company’s management’s estimates of the net asset value of the Company as of March 31, 2026, of $59.62 to $67.33 per share and $55.72 to $63.43 on a change of control basis; and | |
| · | an illustrative sale for cash analysis based on the financial projections, assuming target levered internal rates of return of 12.0% to 14.0%, exit capitalization rates of 6.25% to 6.75%, synergies equal to 85% of total general and administrative expenses and an illustrative transaction date of June 30, 2026, which indicated an implied per share equity value reference range of $52.54 to $59.73. |
Miscellaneous
As noted above, the discussion set forth in the section of this proxy statement captioned “The Merger—Opinion of the Company’s Financial Advisor—Summary of Material Company Financial Analyses” is a brief summary of the material financial analyses presented by BofA Securities to the Board in connection with its opinion and is not a comprehensive description of all analyses undertaken by BofA Securities in connection with its opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description. BofA Securities believes that its analyses summarized above must be considered as a whole. BofA Securities further believes that selecting portions of its analyses and the factors considered or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying BofA Securities’ analyses and opinion. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that such analysis was given greater weight than any other analysis referred to in the summary.
In performing its analyses, BofA Securities considered industry performance, general business and economic conditions and other matters, many of which are beyond the control of the Company and Parent. The estimates of the future performance of the Company in or underlying BofA Securities’ analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by BofA Securities’ analyses. These analyses were prepared solely as part of BofA Securities’ analysis of the fairness, from a financial point of view, to holders of the Company Common Shares of the Merger Consideration to be received by such holders, and were provided to the Board in connection with the delivery of BofA Securities’ opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the estimates used in, and the ranges of valuations resulting from, any particular analysis described above are inherently subject to substantial uncertainty and should not be taken to be BofA Securities’ view of the actual values of the Company.
The type and amount of consideration payable in the Merger was determined through negotiations between the Company and Parent, rather than by any financial advisor, and was approved by the Board. The decision to enter into the Merger Agreement was solely that of the Board. As described above, BofA Securities’ opinion and analyses were only one of many factors considered by the Board in its evaluation of the proposed Merger and should not be viewed as determinative of the views of the Board or management with respect to the Merger or the Merger Consideration.
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The Company has agreed to pay BofA Securities for its services in connection with the Merger an aggregate fee currently estimated to be approximately $13,000,000, $2,500,000 of which fee was payable upon delivery of its opinion and the remainder of which is contingent upon the completion of the Merger. The Company also has agreed to reimburse BofA Securities for its expenses incurred in connection with BofA Securities’ engagement and to indemnify BofA Securities, any of its affiliates, its and their respective directors, officers, employees and agents, and each other person controlling BofA Securities or any of its affiliates against specified liabilities, including liabilities under the federal securities laws.
BofA Securities and its affiliates comprise a full service securities firm and commercial bank engaged in securities, commodities and derivatives trading, foreign exchange and other brokerage activities, and principal investing as well as providing investment, corporate and private banking, asset and investment management, financing and financial advisory services and other commercial services and products to a wide range of companies, governments and individuals. In the ordinary course of their businesses, BofA Securities and its affiliates may invest on a principal basis or on behalf of customers or manage funds that invest, make or hold long or short positions, finance positions or trade or otherwise effect transactions in equity, debt or other securities or financial instruments (including derivatives, bank loans or other obligations) of (i) the Company and certain of its affiliates, (ii) Brookfield Corporation, an affiliate of Parent, and certain of Brookfield Corporation’s affiliates and/or portfolio companies and (iii) CPPIB, an affiliate of Parent, and certain of CPPIB’s affiliates and/or portfolio companies.
We and our affiliates in the past have provided, currently are providing, and/or in the future may provide, investment banking, commercial banking and other financial services to the Company and have received or in the future may receive compensation for the rendering of these services, including (i) providing syndicated loans, commercial loans and other commercial credit services, (ii) providing checking, deposit and other liquidity and treasury services, and (iii) providing short-term fixed income and other markets services. From July 1, 2024 through June 30, 2026 BofA Securities and its affiliates derived aggregate revenues from the Company and certain of its affiliates of approximately $5.0 million for investment and corporate banking services.
In addition, we and our affiliates in the past have provided, currently are providing, and/or in the future may provide, investment banking, commercial banking and other financial services to Brookfield Corporation and certain of its affiliates and/or portfolio companies and have received or in the future may receive compensation for the rendering of these services, including (i) providing mergers and acquisition advisory services to Brookfield Corporation and certain of its portfolio companies with respect to the purchase, sale and spin-off of certain portfolio companies and portfolio assets, (ii) acting as underwriter in connection with certain equity, debt and equity linked securities of Brookfield Corporation and certain of its portfolio companies, (iii) providing acquisition financing with respect to the purchase and sale of certain Brookfield Corporation portfolio companies and portfolio assets, (iv) providing commercial leases, commercial lending and trade finance to Brookfield Corporation and certain of its portfolio companies, (v) providing foreign exchange, swaps, derivatives and other markets products to Brookfield Corporation and certain of its portfolio companies, (vi) providing commercial credit card, checking and other liquidity and treasury services to Brookfield Corporation and certain of its portfolio companies, and (vii) providing certain workplace benefit financial products to Brookfield Corporation and certain of its portfolio companies. From July 1, 2024 through June 30, 2026 BofA Securities and its affiliates derived aggregate revenues from Brookfield Corporation and certain of its affiliates and/or portfolio companies of approximately $500 million for investment and corporate banking services.
In addition, we and our affiliates in the past have provided, currently are providing, and/or in the future may provide, investment banking, commercial banking and other financial services to CPPIB and its affiliates including (i) providing credit card and other liquidity and treasury services, (ii) providing debt, equity, swap, option, futures, interest rate and derivative trading, execution and financing services, foreign exchange trading, forward and swap services, and other markets services, and (iii) mergers and acquisitions advisory services, debt capital markets underwriting, equity capital markets block trade underwriting and other investment banking services. From July 1, 2024 through June 30, 2026 BofA Securities and its affiliates derived aggregate revenues from CPPIB and its affiliates of approximately $200 million for investment and corporate banking services.
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As of the date of its opinion, BofA Securities and its affiliates were working with Brookfield Corporation and its affiliates and/or portfolio companies on one or more investment and corporate banking matters unrelated to the Merger and BofA Securities believes, based on the information available to it as of the date of its opinion, that the aggregate revenues BofA Securities and its affiliates will derive from Brookfield Corporation and its affiliates and/or portfolio companies for those concurrent investment and corporate banking services will be materially more than the fee payable to BofA Securities for its services in connection with the Merger. In addition, BofA Securities and its affiliates were working with CPPIB and its affiliates on one or more investment and corporate banking matters unrelated to the Merger and BofA Securities believes, based on the information available to it as of the date of its opinion, that the aggregate revenues BofA Securities and its affiliates will derive from CPPIB and its affiliates for those concurrent investment and corporate banking services will be materially more than the fee payable to BofA Securities for its services in connection with the Merger. In addition, in the ordinary course of their respective businesses, BofA Securities and its affiliates (including members of BofA Securities’ deal team working with the Company on the Merger) have pitched, are currently pitching, and/or will continue to pitch, additional investment and corporate banking services unrelated to the Merger to Brookfield Corporation and CPPIB and their respective affiliates but how much, if any, additional investment and corporate banking business and revenues will result from those efforts is subject to numerous factors beyond the control of BofA Securities and its affiliates.
As of the close of trading on July 16, 2026, BofA Securities and its affiliates held on a non-fiduciary basis (i) outstanding Company Common Shares having a market value of approximately $15 million as of such date, representing less than 0.5% of the outstanding Company Common Shares as of such date and (ii) outstanding common stock of Brookfield Corporation having a market value of approximately $130 million as of such date, representing less than 0.5% of the outstanding common stock of Brookfield Corporation as of such date.
The Parent Parties have secured committed financing, consisting of a combination of (i) Equity Financing (as defined in the Merger Agreement) to be provided by affiliates of the Sponsors on the terms and subject to the conditions set forth in an equity commitment letter provided by such entities, and (ii) debt financing to be provided by certain lenders on the terms and subject to the conditions set forth in a debt commitment letter, the aggregate proceeds of which will be sufficient for the Parent Parties to pay all amounts the Parent Parties may be obligated to pay pursuant to the Merger Agreement or the Merger (including, without limitation, payment of the Merger Consideration, repayment or assumption of debt of any Acquired Company contemplated by the Merger Agreement, payment of all amounts discussed in the section of this proxy statement captioned “The Merger-Interests of the Company’s Trustees and Executive Officers in the Merger-Treatment of Company Restricted Share Awards,” and payment of all other fees and expenses and obligations required to be paid or satisfied by the Parent Parties in connection with the Merger).
Interests of the Company’s Trustees and Executive Officers in the Merger
Certain members of our Board and certain of the Company’s executive officers have various interests in the Merger that may be in addition to, or different from, the interests of Company shareholders generally. The members of the Board were aware of these potential interests and considered these potential interests at the time they approved the Merger Agreement and in making their recommendation that the Company shareholders approve the Merger Proposal. These potential interests are described below.
For purposes of this proxy statement, the “executive officers” include T. Wilson Eglin, Nathan Brunner, Joseph S. Bonventre, Brendan P. Mullinix, James Dudley, Nabil Andrawis, Mark Cherone and Beth Boulerice, and the “trustees” include T. Wilson Eglin, Jamie Handwerker, Lawrence L. Gray, Arun Gupta, Derrick Johnson, Claire A. Koeneman, Nancy Elizabeth Noe and Howard Roth. In accordance with SEC rules, we have included any individual who served as an executive or trustee since January 1, 2025. Effective as of March 1, 2025, Beth Boulerice resigned from her role as Chief Financial Officer and Treasurer of the Company and as a member of the Company’s Management/Investment Committee and is no longer an officer of the Company.
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Treatment of Company Restricted Share Awards
Each of our executive officers holds outstanding Company Restricted Share Awards. At the Effective Time, and as a result of the Merger, each Company Restricted Share Award that is outstanding as of immediately prior to the Effective Time will, to the extent not vested, become fully vested (with any applicable performance conditions deemed satisfied at the maximum level of performance) and will be cancelled in exchange for the right to receive a lump sum cash payment equal to the product of (i) the Merger Consideration and (ii) the number of Company Common Shares represented by such Company Restricted Share Award, together with any accrued but unpaid dividends thereon, in each case less any required withholding taxes.
Value of Payments
The following table sets forth, for each of our executive officers and non-employee trustees who served in such role at any point since January 1, 2025, (i) the aggregate number of outstanding Company Restricted Share Awards (with any applicable performance conditions deemed satisfied at the maximum level of performance) and Company Common Shares, together with any accrued but unpaid dividends with respect to such Company Restricted Share Awards, in each case, held as of September 15, 2026; and (ii) the estimated value of the payments that the Company’s executive officers and non-employee trustees are eligible to receive (before deduction of applicable tax withholding) in connection with the Merger in respect of such Company Restricted Share Awards and Company Common Shares, in each case, based on the aggregate number of Company Restricted Share Awards and Company Common Shares held as of September 15, 2026. Solely for purposes of the table below, we have assumed that the Effective Time occurs on September 15, 2026. These estimated values are based on the proposed Merger Consideration of $61.20 per share and assume that all Company Restricted Share Awards and Company Common Shares held by our executive officers and non-employee trustees as of the Record Date remain outstanding as of the Effective Time. The table below does not take into account any vesting or forfeiture of Company Restricted Share Awards, nor any additional Company Restricted Share Awards that may be granted, nor any transaction bonuses or tax gross-ups that may be paid, in each case between September 15, 2026 and the Effective Time.
| Unvested Company Restricted Share Awards (#) |
Value of Unvested Company Restricted Share Awards ($)(1) |
Company Common Shares Not Subject to Vesting (#) |
Value of Company Common Shares Not Subject to Vesting ($)(1) |
|||||||||||||
| Non-Employee Trustees | ||||||||||||||||
| Jamie Handwerker | – | – | 26,012 | 1,591,934 | ||||||||||||
| Lawrence L. Gray | – | – | 26,231 | 1,605,337 | ||||||||||||
| Arun Gupta | – | – | 19,305 | 1,181,466 | ||||||||||||
| Derrick Johnson | – | – | 12,490 | 764,388 | ||||||||||||
| Claire A. Koeneman | – | – | 27,193 | 1,664,212 | ||||||||||||
| Nancy Elizabeth Noe | – | – | 13,542 | 828,770 | ||||||||||||
| Howard Roth | – | – | 22,981 | 1,406,437 | ||||||||||||
| Executive Officers | ||||||||||||||||
| T. Wilson Eglin | 361,726 | 23,298,039 | 444,346 | 27,193,975 | ||||||||||||
| Nathan Brunner | 79,862 | 5,033,272 | 13,381 | 818,917 | ||||||||||||
| Joseph S. Bonventre | 129,088 | 8,320,706 | 82,421 | 5,044,165 | ||||||||||||
| Brendan P. Mullinix | 109,766 | 7,072,991 | 71,161 | 4,355,053 | ||||||||||||
| James Dudley | 82,022 | 5,275,837 | 32,834 | 2,009,441 | ||||||||||||
| Nabil Andrawis | 18,232 | 1,176,906 | 32,124 | 1,965,989 | ||||||||||||
| Mark Cherone | 19,316 | 1,222,354 | 10,550 | 645,660 | ||||||||||||
| Beth Boulerice | 24,974 | 1,680,122 | 11,713 | 716,836 | ||||||||||||
| (1) | For purposes of this table, dollar values are calculated based on the Merger Consideration of $61.20 per Company Common Share. |
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Severance Benefits
Messrs. Eglin, Brunner, Bonventre, Mullinix, Dudley, Andrawis and Cherone and Ms. Boulerice have entered into individualized severance agreements under the Company’s Executive Severance Plan, each of which provides that the applicable executive will be eligible to receive the following payments and other benefits in the event of a qualifying termination of employment which, for some of the executive officers, will increase if the termination occurs within the Change-in-Control Window (as defined in the applicable severance agreement, or the applicable period specified in the severance agreements for Messrs. Andrawis and Cherone), so long as they execute and do not revoke a general release of claims in favor of the Company:
| · | a lump sum cash payment equal to a multiple of two and one-half times for Mr. Eglin, two times for Messrs. Brunner, Bonventre, Mullinix, Dudley, Andrawis and Cherone and Ms. Boulerice (or three for Mr. Eglin and two and one-half times for Messrs. Brunner and Bonventre if the termination occurs within the Change-in-Control Window) the sum of (A) the executive officer’s base salary and (B) the average of the last two annual cash incentive awards for Messrs. Andrawis and Cherone, the greater of the target annual cash incentive award or the average of the last two annual cash incentive awards for Messrs. Eglin, Brunner, Bonventre, Mullinix and Dudley and a fixed amount of $85,000 for Ms. Boulerice; | |
| · | a pro-rated annual bonus for the year of termination based on the bonus in (B) above; | |
| · | vesting of all outstanding equity-based awards that are subject solely to time-based vesting conditions and prorated vesting of equity-based awards subject to performance-based vesting conditions determined based on the amount of time elapsed in the performance period (with 100% of such awards deemed to be earned if the termination occurs during the Change-In-Control Window or the applicable period specified in the severance agreements for Messrs. Andrawis and Cherone); and | |
| · | continuation of healthcare benefits for a number of years equal to the applicable severance multiple set forth above or if ineligible for such healthcare benefits, a lump sum payment of the cash equivalent of the premiums or other contributions that the Company would otherwise pay to continue coverage based on the premiums or other contributions in effect at the termination of employment. |
Transaction Bonuses and Related Payments
The Board or the Compensation Committee of the Board (the “Compensation Committee”) may, in consultation with and following notice to Parent, (i) grant transaction bonuses in connection with the Merger to employees, individual independent contractors, trustees or officers of the Acquired Companies (collectively, the “Transaction Bonuses”) and/or (ii) adopt a plan providing for tax indemnification, “gross-up” or similar payments in connection with Sections 280G and 4999 of the Code. The aggregate amount of all Transaction Bonuses and any such tax indemnification, gross-up or similar payments may not exceed $23,425,000. As of the date of this proxy statement, the Board or Compensation Committee has not approved any Transaction Bonuses or adopted any such tax indemnification or gross-up plan.
New Compensation and Other Arrangements with Parent
As of the date of this proxy statement, no executive officer of the Company has entered into any agreement with Parent or any of its affiliates regarding individual employment, consulting, services or similar arrangements with, or the right to purchase or participate in the equity or assets of, the Surviving Entity or one or more of its affiliates, or similar arrangements, in each case effective following the consummation of the Merger. Prior to and following the Closing, however, Parent may have discussions with certain employees and/or executive officers of the Company regarding employment, consulting, services or similar arrangements with, or the right to purchase or participate in the equity or assets of, the Surviving Entity or one or more of its affiliates, or similar arrangements, and certain employees and/or executive officers of the Company may enter into agreements with Parent and/or its subsidiaries or their respective affiliates regarding employment, consulting, services or similar arrangements with, or the right to purchase or participate in the equity or assets of, the Surviving Entity or one or more of its affiliates or similar arrangements.
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Employee Benefits
The Merger Agreement requires Parent to provide or cause to be provided certain compensation, severance and benefits for a period of one year following the Closing Date for Continuing Employees (as defined therein), including executive officers, of the Company and its subsidiaries, and to take certain actions in respect of employee benefits provided to such employees. For a detailed description of these requirements, please see the section of this proxy statement captioned “The Merger Agreement—Employee Matters.”
Indemnification; Trustees’ and Officers’ Insurance
The Merger Agreement provides that the Company is permitted to, prior to the Closing, and if the Company fails to do so, Parent will, or Parent will cause the Surviving Entity to, as of the Effective Time, obtain and fully pay the premium for a “tail” directors’ and officers’ liability insurance policy and fiduciary liability insurance policy that provides coverage for a period of six years from and after the Closing in respect of acts or omissions occurring prior to the Closing covering each person currently covered by the Company’s or its subsidiaries’ officers’ and directors’ liability insurance policy, on terms with respect to coverage and amount no less favorable than those of such existing policy in effect as of the date of the Merger Agreement and Parent will cause such policy to be maintained in full force and effect, for its full term, and will cause all obligations thereunder to be honored by the Surviving Entity; provided, however, that in no event will the premium of such policy be in excess of 300% of the amount per annum that the Company and its subsidiaries paid in its last full fiscal year prior to the date of the Merger Agreement (the “Current Premium”), but in such case, such policy will be purchased and maintained to provide for the maximum coverage available for 300% of the Current Premium. If the Company, Parent or Merger Sub for any reason fail to obtain such policies prior to, as of or after the Closing, Parent will, for a period of six years from the Effective Time, cause the Surviving Entity to purchase and maintain in effect the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by the Company and its subsidiaries as of immediately prior to the Closing in respect of acts or omissions occurring prior to the Closing covering each such person currently covered by the Company’s or its subsidiaries’ officers’ and directors’ liability insurance policy and provided that, after the Effective Time, in no event will Parent or the Surviving Entity be required to pay annual premiums in excess of 300% of the Current Premium in respect of the coverage required to be obtained pursuant to the Merger Agreement, but in such case will purchase and maintain the maximum coverage available for 300% of the Current Premium.
To the extent permitted by applicable law and the governing documents of the Parent Parties, during the period commencing as of the Closing and ending on the sixth (6th) anniversary of the Closing, Parent will, and Parent will cause the Surviving Entity to: (i) indemnify, defend and hold harmless each current or former manager, director, officer, partner, member and trustee of the Company or any subsidiary of the Company (each, an “Indemnified Party” and collectively, the “Indemnified Parties”) against and from any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any action to the extent such action arises out of or pertains to any action or omission or alleged action or omission in such Indemnified Party’s capacity as a manager, director, officer, agent, fiduciary, advisor or person acting in a similar capacity, partner, member or trustee of the Company or any subsidiary of the Company, including such alleged acts or omissions with respect to the Merger Agreement or any of the transactions contemplated by the Merger Agreement, including the Merger; and (ii) pay (as incurred) in advance of the final disposition of any such action all reasonable expenses (including reasonable attorneys’ fees and any expenses incurred by any Indemnified Party in connection with enforcing any rights with respect to indemnification) of any Indemnified Party without the requirement of any bond or other security, in each case to the fullest extent permitted by law and by the governing documents of the Surviving Entity, but subject to Parent’s or the Surviving Entity’s receipt of a written undertaking by or on behalf of such Indemnified Party to repay such amount if it is ultimately determined that such Indemnified Party is not entitled to be indemnified. Parent or the Surviving Entity, as applicable, (i) will not settle, compromise or consent to the entry of any judgment or otherwise seek termination with respect to any claim, action, suit or proceeding against or investigation of any Indemnified Party for which indemnification may be sought without the Indemnified Party’s prior written consent unless such settlement, compromise, consent or termination includes an unconditional release of such Indemnified Party from all liability arising out of such claim, action, suit, proceeding or investigation, (ii) will not be liable for any settlement effected without their prior written consent, and (iii) will not have any obligation hereunder to any Indemnified Party to the extent that a court of competent jurisdiction determines in a final and non-appealable order that indemnification is prohibited by applicable law.
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To the extent permitted by applicable law, the Surviving Entity will, and Parent agrees to cause the Surviving Entity to, during the period commencing as of the Closing and ending on the sixth (6th) anniversary of the Closing, honor all rights to indemnification, advancement and exculpation from liabilities for acts or omissions occurring at or prior to the Closing existing in favor of the Indemnified Parties as provided in (i) the Company governing documents and (ii) indemnification agreements between the Company or any of its subsidiaries, on the one hand, and any Indemnified Party, on the other hand, in each case, as of the date of the Merger Agreement. In addition, such obligations must be assumed by any successor entity to Parent or the Surviving Entity, as applicable, as a result of any (i) consolidation or merger, or (ii) liquidation, dissolution, transfer or conveyance of all or substantially all of its properties and assets.
Quantification of Potential Payments and Benefits
The information set forth in the table below is intended to comply with Item 402(t) of Regulation S-K, which requires disclosure of information about compensation for each of our named executive officers that is based on or otherwise relates to the Merger and assuming the Merger is consummated on the latest practicable date prior to the filing of this proxy statement. The compensation arrangements of our named executive officers and the equity award treatment of the Company Restricted Share Awards are described in the section of this proxy statement captioned “The Merger-Interests of the Company’s Trustees and Executive Officers in the Merger,” which is incorporated herein by reference.
Please note that the amounts indicated below are estimates based on the material assumptions described in the notes to the table below, which may or may not actually occur. Some of these assumptions are based on information not currently available and, as a result, the actual amounts, if any, that may become payable to a named executive officer may differ in material respects from the amounts set forth below. Furthermore, for purposes of calculating such amounts, we have assumed:
| · | a Closing Date of September 15, 2026; |
| · | the employment of each named executive officer is terminated by the Company or one of its subsidiaries without “cause” or by the named executive officer for “good reason,” in either case, immediately following the Effective Time; and |
| · | the value of the accelerated vesting of Company Restricted Share Awards is calculated based on a price per share of a Company Common Share of $61.20 (equal to the Merger Consideration). |
Golden Parachute Compensation
| Name | Cash ($)(1) | Equity
Award Acceleration ($)(2) |
Healthcare Continuation ($)(3) |
Other ($)(4) | Total ($) | |||||||||||||||
| T. Wilson Eglin | 7,016,456 | 23,298,039 | 114,229 | 1,242,583 | 31,671,307 | |||||||||||||||
| Nathan Brunner | 3,160,768 | 5,033,272 | 90,201 | 2,059,120 | 10,343,361 | |||||||||||||||
| Joseph S. Bonventre | 3,376,951 | 8,320,706 | 95,191 | 2,284,359 | 14,077,207 | |||||||||||||||
| Brendan P. Mullinix | 2,656,601 | 7,072,991 | 25,491 | 1,913,955 | 11,669,038 | |||||||||||||||
| James Dudley | 2,380,284 | 5,275,837 | 72,161 | 1,267,162 | 8,995,444 | |||||||||||||||
| Beth Boulerice | 370,000 | 1,680,122 | 48,783 | – | 2,098,905 | |||||||||||||||
| (1) | Amounts in this column reflect cash severance that the named executive officer would be eligible to receive under the executive’s severance agreement in the event of a termination of employment by the Company without “Cause” or by the executive for “Good Reason” within the “Change-in-Control Window” (each, as defined in the applicable severance agreement). We refer to each such termination of employment as a “Qualifying Termination”. |
The following table quantifies each separate form of compensation included in the total amount reported in this column. All amounts listed in the below table are considered to be payable pursuant to “double-trigger” arrangements.
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| Name | Base
Salary Severance ($) |
Average Incentive Bonus Severance ($) |
Pro-Rated Incentive Bonus Severance ($) |
|||||||||
| T. Wilson Eglin | 2,520,000 | 3,639,039 | 857,417 | |||||||||
| Nathan Brunner | 1,250,000 | 1,489,599 | 421,169 | |||||||||
| Joseph S. Bonventre | 1,325,000 | 1,599,663 | 452,288 | |||||||||
| Brendan P. Mullinix | 980,000 | 1,238,784 | 437,817 | |||||||||
| James Dudley | 920,000 | 1,078,955 | 381,329 | |||||||||
| Beth Boulerice | 200,000 | 170,000 | – | |||||||||
| (2) | The following table quantifies the number of unvested Company Restricted Share Awards (with any applicable performance conditions deemed satisfied at the maximum level of performance) held by the named executive officers, and quantifies the value of such awards based on a price per Company Common Share equal to the Merger Consideration, together with any accrued but unpaid dividends with respect to such Company Restricted Share Awards. Depending on when the Effective Time occurs, certain Company Restricted Share Awards may vest in accordance with their terms prior to the Effective Time. All amounts listed in the below table with respect to the Company Restricted Share Awards are considered to be payable pursuant to “single-trigger” arrangements pursuant to the Merger Agreement. |
| Name | Unvested Company Restricted Share Awards (#) | Unvested Company Restricted Share Awards ($) | ||||||
| T. Wilson Eglin | 361,726 | 23,298,039 | ||||||
| Nathan Brunner | 79,862 | 5,033,272 | ||||||
| Joseph S. Bonventre | 129,088 | 8,320,706 | ||||||
| Brendan P. Mullinix | 109,766 | 7,072,991 | ||||||
| James Dudley | 82,022 | 5,275,837 | ||||||
| Beth Boulerice | 24,974 | 1,680,122 | ||||||
| (3) | Amounts in this column reflect continuation of subsidized health care coverage on the same terms as in effect at the time of termination for three years for Mr. Eglin, two and a half years for each of Messrs. Brunner and Bonventre and two years for each of Messrs. Mullinix and Dudley and Ms. Boulerice. The named executive officer would be eligible to receive this subsidized continuation coverage under the executive’s severance agreement in the event of a Qualifying Termination within a Change-in-Control Window. |
| (4) | The Merger Agreement permits the Company to pay Transaction Bonuses and/or to enter into tax indemnification, gross-up or similar payments in connection with the Merger, subject to limits set forth in the Merger Agreement. As of the date of this proxy statement, the Board or Compensation Committee has not approved any such payments to the named executive officers but may do so prior to the closing of the Merger. The amounts reflected in this column represent a reasonable estimate of (i) Transaction Bonuses, in the case of Mr. Eglin, and (ii) Transaction Bonuses, tax indemnification, gross-up or similar payments, in the case of the other named executive officers, in each case that may be made to each named executive officer. |
Litigation Relating to the Merger
After filing its Preliminary Proxy Statement on September 4, 2026, the Company received a demand letter from a purported shareholder. The demand alleges that the Company’s disclosures were incomplete and misleading, in violation of federal securities laws. The Company does not believe that the allegations have any merit and intends to defend against them.
Material U.S. Federal Income Tax Consequences of the Merger
This discussion of the material U.S. federal income tax consequences of the Merger is based on the Code, as amended, applicable U.S. Treasury regulations promulgated under the Internal Revenue Code of 1986 (the “Code”), referred to as the “Treasury Regulations,” judicial decisions and published administrative rulings, all as currently in effect and all of which are subject to change, possibly with retroactive effect. Any such change could affect the accuracy of the statements and conclusions set forth in this discussion. The Company has not requested, and does not plan to request, any rulings from the Internal Revenue Service of the United States, referred to in this proxy statement as the “IRS”, concerning the Company’s tax treatment or the tax treatment of the Merger, and the statements in this proxy statement are not binding on the IRS or any other arm of government, including any courts. The Company can provide no assurance that the tax consequences contained in this discussion will not be challenged by the IRS or any other arm of the government, or if challenged, will be sustained by a court.
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This discussion does not address (i) U.S. federal taxes other than income taxes, (ii) state, local or non-U.S. taxes, or (iii) tax reporting requirements. This summary assumes that Company Common Shares are held as capital assets within the meaning of Section 1221 of the Code and does not address all aspects of taxation that may be relevant to particular holders in light of their personal investment or tax circumstances, and does not address the tax consequences of the Merger to holders of restricted shares or other awards received as compensation. In addition, this discussion does not address the U.S. federal income tax considerations applicable to Common Shareholders that are subject to special treatment under U.S. federal income tax law, including, for example:
| · | financial institutions; |
| · | pass-through entities (such as entities treated as partnerships for U.S. federal income tax purposes); |
| · | persons acting as nominees or otherwise not as beneficial owners; |
| · | insurance companies; |
| · | broker-dealers; |
| · | tax-exempt organizations; |
| · | dealers in securities or currencies; |
| · | traders in securities that elect to use a mark-to-market method of accounting; |
| · | persons that hold Company Common Shares as part of a straddle, hedge, constructive sale, conversion transaction, or other integrated transaction for U.S. federal income tax purposes; |
| · | regulated investment companies; |
| · | REITs; |
| · | certain U.S. expatriates; |
| · | foreign (non-U.S.) governments; |
| · | non-U.S. holders (as defined below) who own or who have owned (actually or constructively) more than 10% of shares of any class of Company shares (except to the extent specifically set forth below); |
| · | U.S. holders whose “functional currency” is not the U.S. dollar; |
| · | Common Shareholders that are subject to “applicable financial statement rules” under Section 451(b) of the Code; |
| · | persons who acquired Company Common Shares through the exercise of stock options or otherwise in connection with compensation; |
| · | “controlled foreign corporations,” “passive foreign investment companies,” or corporations that accumulate earnings to avoid U.S. federal income tax; and |
| · | persons who do not hold Company Common Shares as capital assets within the meaning of Section 1221 of the Code. |
For purposes of this discussion, a “U.S. holder” means a beneficial owner of Company Common Shares that is:
| · | an individual who is a citizen or resident of the United States for U.S. federal income tax purposes; |
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| · | a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any political subdivision thereof; |
| · | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
| · | a trust that (i) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons or (ii) has a valid election in place under the Treasury regulations to be treated as a U.S. person. |
For purposes of this discussion, a “non-U.S. holder” means a beneficial owner of Company Common Shares that, for U.S. federal income tax purposes, is an individual, corporation, estate or trust and is not a U.S. holder as described in the bullets above.
If a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds Company Common Shares, the tax treatment of a partner in the partnership generally will depend on the status of the partner and activities of the partnership. Any partnership or other entity or arrangement treated as a partnership for U.S. federal income tax purposes, and the partners in such partnership (as determined for U.S. federal income tax purposes), should consult their tax advisors.
This discussion of material U.S. federal income tax consequences is not binding on the IRS or any other arm of government. No assurance can be given that the IRS or any other arm of government would not assert, or that a court would not sustain, a position contrary to any described herein.
THE U.S. FEDERAL INCOME TAX RULES APPLICABLE TO THE MERGER AND DISPOSING OF COMPANY COMMON SHARES, AND TO REITS GENERALLY, ARE HIGHLY TECHNICAL AND COMPLEX. HOLDERS OF COMPANY COMMON SHARES ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF U.S. FEDERAL, STATE, LOCAL AND NON-U.S. INCOME AND OTHER TAX LAWS, AND POTENTIAL CHANGES IN APPLICABLE TAX LAWS, IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES.
Consequences to the Company of the Merger
For U.S. federal income tax purposes, the Company will treat the Merger as if the Company had (a) sold all of its assets to Merger Sub in a taxable transaction in exchange for the assumption of all of its liabilities and Merger Consideration, and then (b) made a taxable liquidating distribution of the Merger Consideration to its Common Shareholders in exchange for Company Common Shares in accordance with the terms of the Merger Agreement. As a REIT, the Company is generally entitled to receive a deduction for liquidating distributions, and the Company anticipates that its deemed liquidating distribution will exceed the taxable income recognized as a result of the Merger (together with any other undistributed taxable income recognized in the taxable year of the Merger). Accordingly, the Company anticipates that it will not be subject to U.S. federal income tax on any gain that it recognizes in connection with the Merger.
Consequences of the Merger to U.S. Holders
General. The receipt of Merger Consideration by a U.S. holder in exchange for Company Common Shares pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. holder will recognize gain or loss for U.S. federal income tax purposes equal to the difference, if any, between:
| · | the Merger Consideration received in exchange for Company Common Shares; and |
| · | the U.S. holder’s adjusted tax basis in such Company Common Shares. |
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Gain or loss will be calculated separately for each block of Company Common Shares, with a block consisting of shares acquired at the same cost in a single transaction. Assuming that the Company Common Shares constitute capital assets in the hands of the U.S. holder, this gain or loss will generally be capital gain or loss and will be long-term capital gain or loss if at the time of the Merger the U.S. holder has held its Company Common Shares for more than one year. An individual U.S. holder will be subject to tax on net capital gain at a maximum U.S. federal tax rate of 20%. In addition, a 3.8% Medicare unearned contribution tax will apply to all or a portion of the gain recognized by individuals, trusts and estates whose income exceeds certain threshold levels. Capital gains of corporate U.S. holders generally are taxable at the regular tax rates applicable to corporations. The deductibility of a capital loss recognized in the exchange is subject to limitations under the Code. In addition, the IRS has the authority to prescribe, but has not yet prescribed, regulations that would apply a tax rate of 25% to a portion of capital gain realized by a non-corporate stockholder on the sale of REIT shares that would correspond to the REIT’s “unrecaptured Section 1250 gain.”
Special Rule for U.S. Holders Who Have Held Company Common Shares Less than Six Months. A U.S. holder who has held Company Common Shares for less than six months at the time of the Merger, taking into account the holding period rules of Section 246(c)(3) and (4) of the Code, and who recognizes a loss on the exchange of Company Common Shares in the Merger, will be treated as recognizing a long-term capital loss to the extent of any capital gain dividends from the Company, or such holder’s share of any designated retained capital gains, with respect to such Company Common Shares.
Consequences of the Merger to Non-U.S. Holders
General. The U.S. federal income tax consequences of the Merger to a non-U.S. holder will depend on various factors, including whether the receipt of Merger Consideration is treated as a distribution from the Company to shareholders that is attributable to gain from the sale of “United States real property interests.” The IRS announced in Notice 2007-55 that it intends to take the position that under current law, unless an exception applies, a non-U.S. holder’s receipt of liquidating distribution from a REIT (including the receipt of Merger Consideration in exchange for Company Common Shares in the Merger, which as noted, will be treated as a deemed liquidation of the Company for U.S. federal income tax purposes) is generally subject to tax under FIRPTA as a distribution to the extent attributable to gain from the sale of United States real property interests. Although legislation effectively overriding Notice 2007-55 has been proposed, it is not possible to say if or when any such legislation will be enacted.
Accordingly, the Company intends at present to take the position that Merger Consideration received in exchange for Company Common Shares in the Merger will be subject to tax in accordance with Notice 2007-55, subject to the 10% Exception (as discussed in more detail below). In general, the provisions governing the taxation of distributions by REITs can be less favorable to non-U.S. holders than the taxation of sales or exchanges of REIT shares by non-U.S. holders, and non-U.S. holders should consult their tax advisors regarding the application of these provisions.
Distribution of Gain from the Disposition of U.S. Real Property Interests. As noted above, the Company intends at present to take the position that Merger Consideration received in exchange for Company Common Shares will be subject to tax in accordance with Notice 2007-55.
To the extent the tax treatment set forth in Notice 2007-55 applies, and the 10% Exception described in the next paragraph below does not apply, Merger Consideration received by a non-U.S. holder in the Merger is treated as a distribution attributable to gain from the deemed or actual sale of the Company’s United States real property interests (which the Company expects to be a substantial portion of such Merger Consideration). Such amount will be treated as income effectively connected with a U.S. trade or business of the non-U.S. holder, and generally will be subject to U.S. federal income tax on a net basis. A corporate non-U.S. holder will also be subject to the 30% branch profits tax (or such lower rate as may be specified by an applicable income tax treaty). In addition, 21% (or 20% to the extent provided in the Treasury Regulations) of any such amounts paid to a non-U.S. holder will be withheld and remitted to the IRS.
Notwithstanding the foregoing, if Company Common Shares are considered “regularly traded” (within the meaning of the applicable Treasury Regulations) on an established securities market located in the United States (and the non-U.S. holder did not hold more than 10% of such Company Common Shares at any time during the one year period ending on the date of the Merger, which is referred to in this proxy statement as the “10% Exception”), the tax treatment and consequences described above would not apply, and non-U.S. holders would instead be subject to the rules described below under “-Taxable Sale of Company Common Shares.” The Company believes that Company Common Shares are, and will be at the effective time of the Merger, considered regularly traded on an established securities market located in the United States within the meaning of the applicable Treasury Regulations. Non-U.S. holders should consult their tax advisors regarding tax consequences of the Merger to them.
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Taxable Sale of Company Common Shares. If both (A) the tax treatment set forth in Notice 2007-55 were not to apply to a non-U.S. holder’s receipt of Merger Consideration in the Merger (and the receipt of Merger Consideration were instead considered a sale of Company Common Shares), and (B) either (1) the “publicly traded exception” (as described below) applies or (2) the Company is a “domestically controlled qualified investment entity” (as described below), then non-U.S. holders should not be subject to tax on the disposition of Company Common Shares unless: (a) the gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States, or, if an applicable income tax treaty applies, the gain is attributable to a permanent establishment maintained by the non-U.S. holder in the United States; or (b) the non-U.S. holder is an individual present in the United States for 183 days or more in the taxable year of the Merger and certain other requirements are met.
The “publicly traded exception” applies to a non-U.S. holder if Company Common Shares are “regularly traded,” as defined by the applicable Treasury Regulations, and the non-U.S. holder has held 10% or less of Company Common Shares at all times during the 5-year period ending on the Merger date. The Company believes that Company Common Shares are, and will be at the effective time of the Merger, considered regularly traded on an established securities market located in the United States within the meaning of the applicable Treasury Regulations.
Assuming the Company qualifies to be taxed as a REIT, the Company will be a “domestically controlled qualified investment entity” at the time of the Merger if non-U.S. holders held directly or indirectly less than 50% in value of the Company Common Shares at all times during the five-year period ending with the sale/Merger. No assurances can be given that the actual ownership of its shares have been or will be sufficient for the Company to qualify as a “domestically controlled qualified investment entity” at the time of the Merger.
A non-U.S. holder whose gain is effectively connected with the conduct of a trade or business in the United States (or, if an applicable income tax treaty applies, is attributable to a permanent establishment maintained by the non-U.S. holder in the United States) will generally be subject to U.S. federal income tax on such gain on a net basis in the same manner as a U.S. holder. In addition, a non-U.S. holder that is a corporation may be subject to the 30% branch profits tax on such effectively connected gain described above.
A non-U.S. holder who is an individual present in the United States for 183 days or more in the taxable year of the sale and who meets other requirements will be subject to a flat 30% tax on the gain recognized on the sale, which may be offset by U.S. source capital losses. In addition, the non-U.S. holder may be subject to applicable alternative minimum taxes.
If a non-U.S. holder’s Company Common Shares constitute a United States real property interest under FIRPTA, any gain recognized by such holder on a sale of such shares will be treated as income effectively connected with a U.S. trade or business of the non-U.S. holder and generally will be subject to U.S. federal income tax on a net basis in the same manner as a U.S. holder.
Income Tax Treaties. If a non-U.S. holder is eligible for treaty benefits under an income tax treaty with the United States, the non-U.S. holder may be able to mitigate certain of the U.S. federal income tax consequences discussed above, such as the branch profits tax. Non-U.S. holders should consult their tax advisor regarding possible relief under an applicable income tax treaty.
U.S. Withholding Tax. As described above, it is not entirely clear whether the receipt of Merger Consideration by a non-U.S. holder will be treated as a sale or exchange of Company Common Shares (if Notice 2007-55 does not apply) or as a distribution from the Company that is attributable to gain from the deemed sale of its United States real property interests in the Merger (if Notice 2007-55 does apply and the holder does not qualify for the 10% Exception described above). Accordingly, the Company intends to withhold U.S. federal income tax at a rate of 21%, or the then-applicable rate if different from the portion of Merger Consideration that is, or is treated as, attributable to gain from the sale of United States real property interests and paid to a non-U.S. holder unless such holder qualifies for the 10% Exception described above.
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A non-U.S. holder may be entitled to a refund or credit against the holder’s U.S. federal income tax liability, if any, with respect to any amount withheld pursuant to FIRPTA, provided that the required information is furnished to the IRS on a timely basis. Non-U.S. holders should consult their tax advisors regarding tax and withholding considerations.
Information Reporting and Backup Withholding
Backup withholding, currently at a rate of 24%, and information reporting may apply to Merger Consideration received in the Merger. Backup withholding will not apply, however, to a holder who:
| · | in the case of a U.S. holder, furnishes a correct taxpayer identification number and certifies that it is not subject to backup withholding on an IRS Form W-9 or successor form; |
| · | in the case of a non-U.S. holder, furnishes an applicable IRS Form W-8 or successor form; or |
| · | is otherwise exempt from backup withholding and complies with other applicable rules and certification requirements. |
Backup withholding is not an additional tax and any amount withheld under these rules may be credited against the holder’s U.S. federal income tax liability and may entitle the holder to a refund if required information is timely furnished to the IRS.
Additional Withholding Tax on Payments Made to Foreign Accounts
Withholding taxes may be imposed under Sections 1471 through 1474 of the Code (such Sections commonly referred to as “FATCA”) on certain types of payments made to non-U.S. financial institutions and certain other non-U.S. entities. The application of FATCA to the payment of Merger Consideration made to a non-U.S. holder pursuant to the Merger is not entirely clear. The Company urges Common Shareholders to consult their tax advisors regarding FATCA and the application of these rules to such payment.
Possible Legislative Changes
This discussion is based upon the provisions of the Code, the Treasury Regulations and administrative and judicial interpretations thereof, all as of the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in U.S. federal income tax consequences (including applicable tax rates) different from those summarized above. The Company cannot assure Common Shareholders that a change in law will not alter significantly the tax considerations (including applicable tax rates) that are described herein. The Company has not sought and does not plan to seek any ruling from the IRS, with respect to statements made and the conclusions reached in the above discussion and there can be no assurance that the IRS or any other arm of government, including any court, will agree with these statements and conclusions.
THE FOREGOING DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OF THE POTENTIAL TAX CONSIDERATIONS RELATING TO THE MERGER AND IS NOT TAX ADVICE. THEREFORE, COMMON SHAREHOLDERS ARE STRONGLY URGED TO CONSULT THEIR TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF U.S. FEDERAL, STATE, LOCAL, NON-U.S. INCOME AND OTHER TAX LAWS IN THEIR PARTICULAR CIRCUMSTANCES.
Delisting and Deregistration of Company Shares
If the Merger is completed, the Company Common Shares and the Company Series C Preferred Shares will be delisted, will no longer be traded on the NYSE and the Company Common Shares will be deregistered under the Exchange Act.
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The following summarizes the material provisions of the Merger Agreement. This summary does not purport to be complete and may not contain all of the information about the Merger Agreement that is important to you. The summary of the material terms of the Merger Agreement below and elsewhere in this proxy statement is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached to this proxy statement as Annex A and which the Company incorporates by reference into this proxy statement. The Company recommends that you read the Merger Agreement attached to this proxy statement as Annex A carefully and in its entirety, as the rights and obligations of the parties are governed by the express terms of the Merger Agreement and not by this summary or any other information contained in this proxy statement.
The Merger Agreement contains representations and warranties made by, and to, the Company, Parent Parties and Merger Sub. These representations and warranties, which are set forth in the copy of the Merger Agreement attached to this proxy statement as Annex A, were made for the purposes of negotiating and entering into the Merger Agreement between the parties, or may have been used for the purpose of allocating risk between the parties instead of establishing such matters as facts. In addition, these representations and warranties may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating the terms of the Merger Agreement, were made as of specified dates, and may be subject to standards of materiality different from what may be viewed as material to the Company’s shareholders. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this proxy statement, may have changed since the date of the Merger Agreement and subsequent developments or new information qualifying a representation or warranty may have been included in this proxy statement. You should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or conditions of the Company or its affiliates.
Pursuant to the Merger Agreement and in accordance with the MRL and the MLLCA, at the Effective Time, the Company will merge with and into Merger Sub, and the separate existence of the Company will cease, with Merger Sub surviving the Merger, such that following and as a result of the Merger, the Surviving Entity will be controlled by Parent.
At the Effective Time, each Company Common Share issued and outstanding as of immediately prior to the Effective Time (other than Company Common Shares held by the Parent Parties or any of their respective subsidiaries or any of the Acquired Companies) will be converted into the right to receive the Merger Consideration, as discussed in the section of this proxy statement captioned “The Merger Agreement-Treatment of Company Common Shares.”
Following the completion of the Merger, the Company Common Shares and the Company Series C Preferred Shares will be delisted, will no longer be traded on NYSE and the Company Common Shares will be deregistered under the Exchange Act.
The Closing will take place (i) by electronic exchange of documents and signatures five business days following the satisfaction (or waiver, if permitted by applicable law) of the last to be satisfied of the conditions set forth in the Merger Agreement (other than those conditions that, by their nature, are to be satisfied at the Closing, but subject to the satisfaction (or waiver, if permitted by applicable law) of those conditions), or (ii) such other place or date as may be agreed in writing by the Company and Parent.
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On the Closing Date, the Company, Parent and Merger Sub will (i) cause Articles of Merger with respect to the Merger to be duly executed and filed with, and accepted for record by, the SDAT as provided under the MRL and the MLLCA and (ii) make any other filings, recordings or publications required to be made by the Company, Parent or Merger Sub under the MRL or MLLCA in connection with the Merger. The Merger will become effective upon the later of such time as the Articles of Merger have been accepted for record by the SDAT, and such time (not to exceed thirty (30) days after the Articles of Merger are accepted by the SDAT) as the parties will have agreed upon and designated in the Articles of Merger in accordance with the MRL and the MLLCA as the effective time of the Merger.
Treatment of Company Common Shares, Company Series C Preferred Shares and Company Restricted Share Awards
Company Common Shares
At the Effective Time, each Company Common Share, or fraction thereof, issued and outstanding as of immediately prior to the Effective Time (other than Company Common Shares held by the Parent Parties or any of their respective subsidiaries or any of the Acquired Companies) will automatically be cancelled and converted into the right to receive an amount in cash equal to $61.20 per share, without interest, upon the proper surrender of book-entry shares and certificated shares evidencing validly issued, fully paid and nonassessable Company Common Shares. The amount in cash payable to the shareholders is also subject to decrease in the event the Company declares and pays any dividends.
Each Company Common Share held by the Parent Parties or any of their respective subsidiaries or any of the Acquired Companies issued and outstanding as of immediately prior to the Effective Time will automatically be cancelled and will cease to exist, and no consideration will be paid therefor nor will any right inure or be made with respect thereto in connection with or as a consequence of the Merger.
Company Series C Preferred Shares
At the Effective Time, each Company Series C Preferred Share issued and outstanding as of immediately prior to the Effective Time will automatically be cancelled and converted into the right to receive one Surviving Entity Series C Preferred Unit, which will have materially the same rights, preferences, privileges and voting powers as the current rights, preferences, privileges and voting powers of the Company Series C Preferred Shares immediately prior to the Effective Time, including with respect to repurchase rights and any other economic or protective rights set forth in the Company’s Declaration of Trust with respect to the Company Series C Preferred Shares. From and after the Effective Time, all Company Series C Preferred Shares will no longer be outstanding and will automatically be cancelled and will cease to exist, and each holder of a Company Series C Preferred Share will cease to have any rights with respect thereto, except for the right to receive the Series C Preferred Consideration therefor in accordance with the terms of the Merger Agreement. We have been advised by the Parent Parties that immediately following the Effective Time, the Parent intends to effectuate a second step merger that will result in each Surviving Entity Series C Preferred Unit issued in the Merger being exchanged for a cash amount equal to the $50.00 liquidation preference per Surviving Entity Series C Preferred Unit plus an amount equal to any accrued and unpaid dividends to, but not including, the Closing Date.
Company Restricted Share Awards
At the Effective Time, each Company Restricted Share Award that is outstanding as of immediately prior to the Effective Time will (a) to the extent not vested, become fully vested, and any applicable performance conditions will be deemed to have been satisfied at the maximum level of performance, and (b) be cancelled and converted into the right to receive a lump sum cash payment equal to the Company Restricted Share Award Consideration, less any required withholding taxes.
The Merger Consideration paid upon proper surrender of any certificates (or automatically in the case of book-entry Company Common Shares) will be deemed to have been paid in full satisfaction of all rights pertaining to such certificates or book-entry shares.
From and after the Effective Time, all Company Common Shares will no longer be outstanding and will automatically be cancelled and will cease to exist, and each holder of a Company Common Share will cease to have any rights with respect thereto, except for the right to receive the Merger Consideration therefor in accordance with the terms of the Merger Agreement.
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At or prior to the Effective Time, Parent will deposit, or cause to be deposited, with a nationally recognized, reputable U.S. bank or trust company that is subject to the Company’s reasonable prior approval (the “Paying Agent”), in a non-interest bearing account, a cash amount in U.S. dollars that is sufficient in the aggregate to enable the Paying Agent to make the payments of the Merger Consideration (the “Exchange Fund”). In the event the Exchange Fund is insufficient to make such payments, Parent will promptly deposit, or cause to be deposited, with the Paying Agent such additional funds to ensure that the Paying Agent has sufficient funds to make such payments. The Paying Agent will make payments, in accordance with the Paying Agent’s customary procedures, of the Merger Consideration out of the Exchange Fund in accordance with the terms of the Merger Agreement.
As soon as practicable after the Effective Time (and in no event later than three business days after the Effective Time), Parent and the Surviving Entity will cause the Paying Agent to mail (and make available for collection by hand) to each person that was, immediately prior to the Effective Time, a holder of record of Company Common Shares evidenced by certificates (each, a “Certificate” and collectively, the “Certificates”), which Company Common Shares were converted into the right to receive the Merger Consideration at the Effective Time pursuant to the Merger Agreement: (i) a letter of transmittal, which will be in a customary form prepared by Parent and the Surviving Entity and reasonably acceptable to the Company and Parent prior to the Effective Time and will specify that delivery will be effected, and risk of loss and title to the Certificates will pass, only upon delivery of the Certificates to the Paying Agent, will have a customary release of all claims against Parent, Merger Sub and the Company arising out of or related to such holder’s ownership of Company Common Shares and (ii) instructions for effecting the surrender of the Certificates in exchange for payment of the Merger Consideration, the forms of which will be subject to the reasonable approval of the Company prior to the Effective Time.
Upon surrender to the Paying Agent of Certificates (or an affidavit of loss in lieu of a Certificate as described below), together with delivery of a properly executed letter of transmittal, the holder of such Certificates will be entitled to receive the amount of cash to which such holder (or transferee) is entitled pursuant to the Merger Agreement, and any Certificate so surrendered will be cancelled. No interest will be paid or accrued on any amount payable upon due surrender of any such Certificate. Exchange of book-entry shares evidencing Company Common Shares will be effected in accordance with The Depository Trust Company’s customary procedures with respect to securities represented by book entry. If any Certificate will have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if requested by Parent, the posting by such person of a bond, in such reasonable amount as Parent may direct, as indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent (or, if subsequent to the termination of the Exchange Fund, Parent) will issue, in exchange for such lost, stolen or destroyed Certificate, the Merger Consideration into which the Company Common Shares evidenced by such Certificate.
Any portion of the Exchange Fund that remains undistributed to the former holders of the Company Common Shares for twelve (12) months after the Closing Date will be delivered to the Surviving Entity upon demand from the Surviving Entity, and any former holders of the Company Common Shares who have not as of such time complied with the payment procedures outlined in the Merger Agreement will be entitled to look only to the Surviving Entity (and only as general creditors thereof) for payment of the Merger Consideration payable upon surrender of their Company Common Shares. None of Parent, the Surviving Entity, the Company, or the Paying Agent or any other person will be liable to any holder of Company Common Shares for any Merger Consideration, respectively, or other amounts properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. Any amounts remaining unclaimed by such holders of Company Common Shares immediately prior to the time at which such amounts would otherwise escheat to, or become the property of, any governmental authority will, to the extent permitted by applicable law, become the property of the Surviving Entity, respectively, free and clear of any claims or interest of any such holders or their successors, assigns or personal representatives previously entitled thereto.
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No holder of Company Series C Preferred Shares will be required to deliver a Certificate or an executed Letter of Transmittal to the Paying Agent or the Surviving Entity to receive the Series C Preferred Consideration that such holder is entitled to receive. In lieu thereof, each holder of record of any Company Series C Preferred Shares whose Company Series C Preferred Shares were converted into the right to receive the Series C Preferred Consideration will, upon the Effective Time, be entitled to receive Surviving Entity Series C Preferred Units, and the Surviving Entity will (i) record on its books and records the issuance of the Surviving Entity Series C Preferred Units to each holder of record of Company Series C Preferred Shares as of immediately prior to the Effective Time and (ii) deliver to each such holder written confirmation of such issuance, which confirmation will set forth the number of Surviving Entity Series C Preferred Units issued to such holder.
As of the Effective Time, the Company’s share transfer books will be closed and thereafter there will be no further registration of transfers of Company Common Shares or Company Series C Preferred Shares on the Company’s records. If, after the Effective Time, book-entry shares or Certificates evidencing Company Common Shares or Company Series C Preferred Shares are presented to the Surviving Entity for transfer, they will be cancelled and exchanged for the consideration provided in the Merger Agreement.
Representations and Warranties
The Company has made customary representations and warranties in the Merger Agreement that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement or in the disclosure letter delivered in connection therewith. These representations and warranties relate to, among other things:
| · | their organization, valid existence, good standing, qualification to do business and power and authority to own, lease and operate their properties and assets and to conduct their business as presently conducted by the Company and the Company’s subsidiaries; |
| · | their power and authority to enter into and perform their obligations under the Merger Agreement and to consummate the transactions contemplated by the Merger Agreement; |
| · | the enforceability of the Merger Agreement against them; |
| · | the organizational documents of the Company; |
| · | filings with or consents of any person required in connection with execution, delivery and performance of the Merger Agreement and the performance of the Merger Agreement or the consummation of the transactions contemplated by the Merger Agreement; |
| · | the capital structure of the Company and the Company’s subsidiaries, including the Company’s equity awards; |
| · | the Company’s SEC filings since January 1, 2024, and the financial statements contained in those filings; |
| · | the Company and its subsidiaries’ status under the Investment Company Act of 1940, as amended; |
| · | the Company’s system of internal control over financial reporting and disclosure controls and procedures; |
| · | the conduct of business in the ordinary course of business in all material respects and the absence of any Company material adverse effect since March 31, 2026 through the date of the Merger Agreement; |
| · | the absence of certain undisclosed liabilities; |
| · | possession of all permits necessary for the Company and its subsidiaries to own, lease and operate the Company and its subsidiaries’ properties and to carry on and operate the Company and its subsidiaries’ businesses as presently conducted and the absence of a failure by the Company or its subsidiaries to comply with such permits or applicable law; |
| · | the conduct by the Company’s and its subsidiaries’ businesses in compliance with applicable laws; |
| · | the absence of certain economic or financial sanctions imposed, administered or enforced from time to time by certain governmental authorities or other relevant sanctions authority; |
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| · | the absence of certain lawsuits, court actions, arbitrations or other court proceedings related to the Company or its subsidiaries; |
| · | real property owned and leased by the Company and its subsidiaries; |
| · | environmental matters relating to the Company and its subsidiaries; |
| · | the Company and its subsidiaries’ material contracts and the absence of certain violations, breaches or defaults under the provisions of such material contracts; |
| · | tax matters affecting the Company and its subsidiaries; |
| · | ownership of or rights with respect to the intellectual property of the Company and its subsidiaries; |
| · | information privacy and security safeguards and compliance therewith by the Company and its subsidiaries; |
| · | the Company and its subsidiaries’ insurance policies; |
| · | the Company and its subsidiaries’ compensation and company benefit plans; |
| · | labor matters related to the Company and its subsidiaries; |
| · | the receipt by the Board of the fairness opinion from BofA Securities; |
| · | Affiliate Transactions (as defined in the Merger Agreement); |
| · | the absence of any banking, broker’s, finder’s or similar fees or commissions, other than those payable to certain disclosed parties including BofA Securities, in connection with the transactions contemplated by the Merger Agreement; |
| · | the Board having taken all action necessary to render inapplicable certain Maryland law takeover statutes; and |
| · | the accuracy of the information supplied by the Company in this proxy statement. |
Many of the Company’s representations and warranties are qualified by the concept of a “material adverse effect.” Under the Merger Agreement, a “Company material adverse effect” means any event, change, circumstance, occurrence, effect or development (each an “Event”), that, individually or in the aggregate with any other Event, (x) would prevent or materially impair or materially delay the ability of the Acquired Companies to consummate the transactions contemplated by the Merger Agreement or (y) is material and adverse to the business, assets, properties, liabilities, financial condition or results of operations of the Acquired Companies, taken as a whole; provided, however, that, with respect to clause (y), no Event resulting from, attributable to or arising out of any of the following will (either alone or in combination) be deemed to be or constitute a “Company material adverse effect,” and no Event directly or indirectly resulting from, attributable to or arising out of any of the following will be taken into account when determining whether a “Company material adverse effect” has occurred, except (solely with respect to the first six bullet points below) to the extent such Event disproportionately affects the Acquired Companies in a manner relative to other similarly situated companies operating in the United States and in the industry in which the Acquired Companies operate, own or lease properties (in which case, the incremental disproportionate effects may be taken into account (and only to the extent thereof) in determining whether there has occurred a “Company material adverse effect”):
| · | general business or economic conditions (or general changes in such conditions) in the United States or any other country or region in the world, or conditions in the global economy generally; |
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| · | conditions (or changes in such conditions) in the securities markets, capital markets, credit markets, currency markets or other financial markets in the United States or any other country or region in the world, including (a) changes after the date of the Merger Agreement in interest rates in the United States or any other country or region in the world and changes in exchange rates for the currencies of any countries and (b) any suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally after the date of the Merger Agreement on any securities exchange or over-the-counter market operating in the United States or any other country or region in the world; |
| · | conditions (or changes in such conditions) generally affecting any of the industries in which the Acquired Companies operate; |
| · | political conditions (including the imposition or removal of trade restrictions, tariffs or similar taxes) (or changes in such conditions) in the United States or any other country or region in the world or acts of war (whether or not declared), civil unrest, protests, military or para-military actions or armed hostilities, sabotage, terrorism or cyberterrorism (including any outbreak, escalation or general worsening of any such acts of war, sabotage or terrorism) in the United States or any other country or region in the world; |
| · | the existence, occurrence or continuation of any earthquakes, hurricanes, tropical storms, tsunamis, tornadoes, floods, epidemics, pandemics, other significant illness or disease outbreaks, mudslides, wildfires or other natural disasters, weather conditions and other force majeure events in the United States or any other country or region in the world; |
| · | changes in law or other legal or regulatory conditions (or the interpretation or enforcement thereof) or changes in GAAP or other accounting standards (or the interpretation thereof) in each case after the date of the Merger Agreement, or the effects thereof; |
| · | (a) the entry into or the announcement of, or the compliance with, the Merger Agreement, or the pendency or consummation of the transactions contemplated by the Merger Agreement, (b) the identity of the Guarantors, Parent, Merger Sub or their affiliates, (c) the termination or potential termination of (or the failure or potential failure to renew or enter into) any contracts with tenants, customers, suppliers, lenders, investors, employees or other business partners as a result of the matters described in clauses (a) and (b), or (d) any other negative development in the Acquired Companies’ relationships with any of its tenants, customers, suppliers, lenders, investors, employees or other business partners as a result of the matters described in clauses (a) and (b), except in each case that this clause will not apply to the representations or warranties as specified in the Merger Agreement; |
| · | litigation arising in connection with the Merger Agreement and the transactions contemplated thereby; |
| · | any actions taken or failure to take action, in each case, by Parent or any of its controlled affiliates, or to which Parent has expressly consented in writing, or which Parent has expressly requested in writing (or, in the case of any action where the consent of Parent was expressly requested in writing in accordance with the terms of the Merger Agreement, where Parent’s consent was unreasonably withheld, conditioned or delayed) or the taking of any action expressly required by the Merger Agreement, other than certain obligations of the Company set forth in the Merger Agreement, or the failure to take any action prohibited by the Merger Agreement; |
| · | any departure or termination for cause of any trustees, officers, directors, employees or independent contractors of any of the Acquired Companies; or |
| · | changes in the Company’s share price or the trading volume of the Company’s shares of beneficial interest, or changes in the rating or ratings outlook of the Company, in and of itself, or any failure by the Company to meet any estimates or expectations of the Company’s revenue, earnings or other financial performance or results of operations for any period, in and of itself, or any failure by the Company to meet any internal budgets, plans, forecasts or projections of its revenues, earnings or other financial performance or results of operations, in and of itself (but not, in each case, the underlying cause of such changes or failures, unless such changes or failures would otherwise be expressly excepted from this definition). |
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The Merger Agreement also contains customary representations and warranties made, jointly and severally, by Parent Parties that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement or in the disclosure letter delivered in connection therewith. These representations and warranties relate to, among other things:
| · | their organization, valid existence, good standing, qualification to do business and power and authority to own and operate their properties and to conduct their businesses as presently conducted; |
| · | the ownership of Merger Sub and absence of prior conduct of business by Merger Sub; |
| · | their power and authority to enter into and perform their obligations under the Merger Agreement and to consummate the transactions contemplated by the Merger Agreement; |
| · | the enforceability of the Merger Agreement against them; |
| · | the absence of violations of organizational or governing documents or any applicable law, in each case, in connection with the execution, delivery and performance of the Merger Agreement or consummation of the transactions contemplated by the Merger Agreement; |
| · | filings with or consent of any person in connection with the execution, delivery and performance of the Merger Agreement or the consummation of the transactions contemplated by the Merger Agreement; |
| · | the receipt and acceptance, and delivery to the Company, of the Equity Commitment Letters and the Debt Commitment Letters; |
| · | the sufficiency of the Parent Parties’ and the Surviving Entity’s funds to pay all amounts required to be paid by them on the Closing Date in connection with the Merger and the Financing Commitment Letters; |
| · | the Financing Commitment Letters being (i) in full force and effect, (ii) legal, valid and binding obligations of Parent, Merger Sub, and (to the knowledge of Parent) each of the other parties thereto, and (iii) enforceable in accordance with its respective terms against Parent, Merger Sub, and (to the knowledge of Parent) each of the other parties thereto; |
| · | the solvency of Parent and the Surviving Entity as of the Effective Time and immediately after the consummation of the transactions contemplated by the Merger Agreement; |
| · | the limited guarantees entered into by each of the Guarantors in favor of the Company (the “Guarantees”) (i) being in full force and effect, (ii) being a legal, valid and binding obligation of the applicable Guarantor, subject to such Guarantor’s obligations set forth therein, and enforceable in accordance with its respective terms against such Guarantor, and (iii) containing all conditions precedent and other conditions and contingencies to the obligations of the parties thereunder to make the full amount of the Guarantees available to the Company on the terms therein; |
| · | the absence of any agreements (i) with any bank or investment bank or other potential provider of financing on an exclusive basis in connection with any transaction involving the Company, except for certain actions approved by the Company or certain debt financing “tree” arrangements, (ii) that entitle any holder of Company Common Shares to receive consideration of a different amount or nature than the Merger Consideration or pursuant to which any holder of Company Common Shares has agreed to vote against any Superior Proposal, or (iii) pursuant to which any shareholder of the Acquired Companies has agreed to make an investment in, or contribution to, any of the Parent Parties in connection with the transactions contemplated by the Merger Agreement, in each case, that would not terminate and be void concurrently with any termination of the Merger Agreement; |
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| · | the absence of certain contracts or any commitments to enter into any such contracts between the Parent Parties, the Guarantors or any of their respective affiliates, on the one hand, and any of the Company’s trustees, shareholders, or management, on the other hand, that relate in any way to, or are in connection with, the transactions contemplated by the Merger Agreement; |
| · | the absence of any lawsuits, court actions, arbitrations or other court proceedings against any of the Parent Parties that would reasonably be expected to have a Parent material adverse effect; |
| · | the absence of any requirement for a vote of the equityholders of Parent or Merger Sub in order for Parent to consummate the Merger which has not already been obtained prior to the date of the Merger Agreement; |
| · | their compliance with applicable laws since January 1, 2024, except where the failure to comply with such laws has not and would not reasonably be expected to prevent or materially impair their ability to timely perform any of their respective obligations under the Merger Agreement or to consummate the Merger; |
| · | the absence of any banking, broker’s, financial advisor or similar fees or commissions payable by the Company in connection with the Merger and the other transactions contemplated by the Merger Agreement based upon arrangements made by and on behalf of the Parent Parties; |
| · | the status of the Parent Parties and their affiliates under the Exchange Act; and |
| · | the accuracy of the information supplied by the Parent Parties and their subsidiaries in this proxy statement. |
The representations and warranties of each of the parties to the Merger Agreement will expire at the Effective Time.
Conduct of the Company’s Business Pending the Merger
The Company has agreed that, subject to certain exceptions in the Merger Agreement and the disclosure letter delivered in connection therewith, between the date of the Merger Agreement and the earlier to occur of the Effective Time or the date, if any, on which the Merger Agreement is terminated in accordance with its terms (the “Interim Period”), the Company will, and will cause each subsidiary of the Company to:
| · | conduct its business in all material respects in the ordinary course; |
| · | use its commercially reasonable efforts to maintain its material assets and properties in their current condition (normal wear and tear and damage caused by casualty or by any reason outside of Company’s or any Company subsidiary’s control excepted); |
| · | use its commercially reasonable efforts to preserve intact its current business organization, goodwill, ongoing businesses and significant relationships with tenants and other third parties having a material business relationship with the Company; and |
| · | use its commercially reasonable efforts to operate the Company in a manner that maintains the status of the Company as a REIT. |
The Company has also agreed that, subject to certain exceptions in the Merger Agreement and the disclosure letter delivered in connection therewith, during the Interim Period, the Company will not, and will not cause or permit any other subsidiary of the Company to, do any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):
| · | amend or propose to amend the Company’s governing documents, whether by merger, consolidation or otherwise; |
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| · | adjust, split, combine, reclassify or subdivide any shares of beneficial interest or other equity securities or ownership interests of any Acquired Company (other than any wholly owned Company subsidiary); |
| · | declare, set aside, or pay any dividend on or make any other actual, constructive or deemed distributions (whether in cash, shares of beneficial interest, property or otherwise) with respect to Company Capital Shares (as defined in the Merger Agreement) or other equity securities or ownership interests in any of the Acquired Companies or otherwise make any payment to its or their shareholders or other equity holders in their capacity as such, except for (i) the declaration and payment of dividends or other distributions to the Company by any wholly owned Company subsidiary, (ii) distributions resulting from the vesting or settlement of Company Restricted Share Awards, including in connection with any dividend equivalents or distributions associated with such Company Restricted Share Awards, as applicable (iii) dividends, distributions or other payments by any joint venture subsidiary of the Company to the extent expressly required in accordance with the terms of the applicable Joint Venture Agreements (as defined in the Merger Agreement) as in effect on the date of the Merger Agreement, and (iv) the declaration and payment of dividends or other distributions on or with respect to any Company Series C Preferred Shares in accordance with the terms thereof as in effect on the date of the Merger Agreement; provided that notwithstanding this restriction on dividends and other distributions, the Company and any subsidiary of the Company may declare and pay dividends to its shareholders, distributing cash in such amounts determined by the Company, in the reasonable discretion of the Board exercised in good faith, on advice of counsel to the Company and after consultation with Parent, to be reasonably required to be distributed in order for the Company to maintain its qualification as a REIT for such year and to avoid or reduce the incurrence of income or excise tax. |
| · | purchase, redeem, repurchase or otherwise acquire, directly or indirectly, any Company Capital Shares or other equity interests of a subsidiary of the Company, other than in connection with (i) the forfeiture of unvested Company Restricted Share Awards, and (ii) as otherwise permitted by Article IX of the Company’s declaration; |
| · | issue, sell, pledge, dispose, encumber or grant any Company Capital Shares, any equity interests in the subsidiaries of the Company or any options, warrants, convertible securities or other rights of any kind to acquire any Company Capital Shares or any equity interests in the subsidiaries of the Company, except for (i) transactions among the Company and one or more wholly owned Company subsidiaries or among one or more wholly owned Company subsidiaries, or (ii) with respect to any joint venture subsidiaries of the Company, to the extent expressly required in accordance with the terms of the applicable Joint Venture Agreements as in effect on the date of the Merger Agreement, (iii) as required for the conversion of the Company Series C Preferred Shares in accordance with their terms as in effect on the date of the Merger Agreement, or (iv) as otherwise expressly permitted by the Merger Agreement; |
| · | acquire or agree to acquire (whether by merger, consolidation or acquisition of stock or assets or otherwise) any material interests in any person, or any real property, material assets, material property (other than real property) or any business, except (i) acquisitions by the Company or any wholly owned Company subsidiary of or from an existing wholly owned Company subsidiary, (ii) acquisitions described in the disclosure letter, and (iii) other acquisitions of assets (other than real property) in the ordinary course of business for a purchase price of less than $500,000 in the aggregate; |
| · | sell, mortgage, pledge, assign, transfer, dispose of or permit any lien on, or otherwise encumber, or effect a deed in lieu of foreclosure with respect to, material Company property or material assets except (A) entering into purchase and sale agreements with respect to, or selling, transferring or otherwise disposing of, the assets as described in the disclosure letter; provided that any such sale, transfer or disposal will be at a price not less than ninety-five percent (95%) of the applicable minimum price set forth in the disclosure letter and otherwise on customary arm’s length terms, (B) as expressly permitted by the Merger Agreement, (C) pursuant to and required by existing contracts, material Company leases or Permitted Encumbrances (as defined in the Merger Agreement), (D) in the ordinary course of business, or (E) for transfers by the Company or any wholly owned Company subsidiary to or from the Company or any wholly owned Company subsidiary; provided that any sale, mortgage, pledge, lease, assignment, transfer, disposition or deed in connection with (x) the satisfaction of any margin call or (y) the posting of collateral in connection with any existing contract to which the Company or any subsidiary of the Company is a party will be considered to be done in the ordinary course of business; |
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| · | incur, create, issue, assume, guarantee, refinance, replace, terminate, agree to any waiver or forbearance or prepay any Indebtedness for borrowed money or issue or materially amend the terms of any Indebtedness of the Acquired Companies, or assume, guarantee or endorse, or otherwise become responsible (whether directly, contingently or otherwise) for the Indebtedness of any other person (other than a wholly owned Company subsidiary), except (i) Indebtedness incurred under the Company’s existing debt facilities in the ordinary course of business that does not exceed $50,000,000 in the aggregate (including to the extent necessary to pay dividends expressly permitted by certain applicable provisions of the Merger Agreement and to fund obligations under existing contracts or material Company leases, or contracts or material Company leases entered into after the date of the Merger Agreement in compliance with the Merger Agreement), (ii) funding any transactions permitted by certain applicable provisions of the Merger Agreement and the disclosure letter, (iii) such Indebtedness as described in the disclosure letter, and (iv) funding the prepayment, redemption, or other retirement of the Trust Preferred Securities (as defined in the Merger Agreement) or the Senior Notes (as defined in the Merger Agreement), in each case to the extent requested by Parent pursuant to the terms of the Merger Agreement, provided that none of the Indebtedness described here will be secured by Company property (if not already so secured); |
| · | make any loans, advances or capital contributions to, or investments in, any other person (including to any of its trustees, officers, directors, affiliates, agents or consultants), make any change in its existing borrowing or lending arrangements for or on behalf of such persons, or enter into any “keep well” or other similar arrangement to maintain any financial statement condition of another person, other than by the Company, or a wholly owned Company subsidiary (i) to the Company or a wholly owned Company subsidiary, (ii) to any joint venture subsidiary of the Company to the extent expressly required in the terms of the Joint Venture Agreements in effect as of the date of the Merger Agreement or (iii) in accordance with existing obligations for advancement of expenses under existing indemnification obligations in any contract as of the date of the Merger Agreement; |
| · | enter into, renew, materially or adversely modify, exercise any purchase, sale option or similar option, amend, extend or terminate, cancel, or waive, release, compromise or assign any rights or claims under any material contract or (or any contract that, if existing as of the date of the Merger Agreement, would be a material contract), other than (i) (a) any termination or renewal in accordance with the terms of any existing material contract that occurs automatically without any action (other than notice) by any of the Acquired Companies, (b) as may be reasonably necessary to comply with the terms of the Merger Agreement, or (c) any renewal of a material contract in the ordinary course of business, or (ii) except as described in the disclosure letter, any lease, license or occupancy agreement relating to a Company property; |
| · | waive, release, assign, settle or compromise any pending or threatened action, other than actions, waivers, releases, assignments, settlements or compromises that (i) with respect to the payment of monetary damages, involve only the payment of monetary damages (excluding any portion of such payment payable under an existing property-level insurance policy) that do not exceed $500,000 individually or $1,000,000 in the aggregate and does not involve the imposition of material injunctive relief against any Acquired Company (which for the avoidance of doubt includes any limitations on the operations of any Acquired Company or affiliate thereof beyond the obligation to comply with applicable law) or provide for any admission of liability by any of the Acquired Companies, (ii) relate to any action involving any present, former or purported holder or group of holders of Company Common Shares that comply with certain applicable provisions of the Merger Agreement, (iii) are set forth in the disclosure letter or (iv) relate to real property tax appeals and settlements in the ordinary course of business; |
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| · | except as required by applicable law, the terms of the Merger Agreement, or the terms of a company benefit plan in existence as of the date of the Merger Agreement: (i) grant or increase, or announce any grant or increase, of any salaries, wages, benefits, bonuses, severance or termination pay for any employee or individual independent contractor whose annualized base compensation exceeds $300,000, (ii) establish, adopt, or amend any company benefit plan, (iii) increase or announce an increase of compensation or employee benefits payable or provided to any (a) trustee of the Company or (b) employee or individual independent contractor of the Company whose annualized base compensation exceeds $300,000 prior to such increase, (iv) grant or increase, or announce a grant or increase of, any incentive, change in control, sale, or transaction bonuses, or any other similar incentive compensation for any employee or individual independent contractor, except, for employees whose annualized base salary does not exceed $300,000, in the ordinary course of business consistent with past practice in amounts that are reasonable compared to their total annual compensation opportunities, or (v) hire (except on an at-will basis) or terminate (except where due to cause, death or disability) the employment or engagement of any employee or individual independent contractor of the Company whose annualized base compensation exceeds $300,000; |
| · | make any material change to its methods of accounting, except as required by GAAP or in applicable law, or make any change with respect to accounting policies, principles or practices, in each case, except for such changes that are required by GAAP, the SEC or applicable law; |
| · | enter into any new line of business; |
| · | make, change or rescind any material election relating to taxes; change (or request to change) any aspect of its material method of tax accounting or change an annual accounting period; file or amend any federal or state annual income or other material tax return; settle or compromise any material federal, state, local or foreign tax liability, audit, claim or assessment; enter into any tax sharing, closing or other similar binding agreement related to taxes; obtain or request any Tax ruling; enter into or apply for any voluntary disclosure agreement regarding taxes with any Governmental Authority or surrender any right to claim any material tax refund or give or request any waiver of a statute of limitation with respect to any income or other material tax except, in each case, (i) in the ordinary course of business consistent with past practice, (ii) to the extent required by law or (iii) to the extent necessary (a) to preserve the Company’s qualification as a REIT under the Internal Revenue Code of 1986 (the “Code”), or (b) to qualify or preserve the status of any subsidiary of the Company as a disregarded entity or partnership for U.S. federal income tax purposes, a “qualified REIT subsidiary” within the meaning of Section 856(i)(2) of the Code, a “taxable REIT subsidiary” within the meaning of Section 856(l) of the Code, or a REIT under the applicable provisions of Section 856 of the Code, as the case may be, provided, however, that in the case of clause (ii), the Company promptly notify Parent of its intent to take such action no later than five business days prior to taking such action and will reasonably cooperate with Parent to mitigate any adverse effect on Parent or its stockholders of the taking of such action which is made known to the Company in writing by Parent or its advisors; |
| · | take any action that would, or fail to take any action, the failure of which to be taken would, reasonably be expected to cause the Company to fail to qualify as a REIT; |
| · | make or commit to make any capital expenditures other than (i) as set forth in the Company’s Budget (as defined in the Merger Agreement) or Property Budgets (as defined in the Merger Agreement), including any increases of up to five percent in any individual line item thereof and any reallocation of amounts among line items within such budgets, so long as the aggregate amount of capital expenditures contemplated by the Company Budget (as defined in the Merger Agreement) and the Property Budgets (as defined in the Merger Agreement), taken together, is not increased by more than five percent, (ii) as set forth in the disclosure letter, or (iii) in the ordinary course of business, to address obligations under Permitted Encumbrances (as defined in the Merger Agreement), existing contracts or material Company leases, or contracts or material Company leases entered into after the date of the Merger Agreement in compliance with the Merger Agreement, or for emergency repairs; |
| · | adopt a plan of merger, complete or partial liquidation, consolidation, dissolution, restructuring, recapitalization, or other reorganization or resolutions providing for or authorizing such merger, liquidation, or a dissolution, consolidation, recapitalization or bankruptcy reorganization, except in connection with any transaction expressly permitted by the Merger Agreement or disclosure letter in a manner that would not reasonably be expected to be materially adverse to the Company, taken as a whole, or to prevent or impair the ability of the Company to consummate the Merger; |
| · | enter into any collective bargaining agreement; |
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| · | commence, or permit to commence, any new offering period under the ESPP (as defined in the Merger Agreement), or permit any employee to increase such employee’s rate of contribution under the ESPP; |
| · | change its fiscal year; |
| · | sell, assign or transfer all or any portion of the Owned IP (as defined in the Merger Agreement); grant any licenses of Owned IP except for non-exclusive licenses of Owned IP granted in the ordinary course of business; abandon or cease to prosecute or maintain any of the Owned IP that is material to the conduct of the business of the Acquired Companies, or disclose any trade secret to any person, other than pursuant to a confidentiality contract with respect thereto; |
| · | fail to use commercially reasonable efforts to maintain the insurance policies or renew or extend any expiring insurance policies on substantially similar terms (and where possible on a month-to-month basis, paid ratably without prepayments, but in any event not for a term that exceeds 12 months from the date of renewal); or |
| · | report or otherwise disclose any sales of properties from 2024 or 2025 as prohibited transactions within the meaning of Code Section 857(b)(6)(B)(iii) on the tax returns of the Company or its subsidiaries. |
Notwithstanding the foregoing, nothing contained in the Merger Agreement will give the Parent Parties, directly or indirectly, the right to control or direct any of the Acquired Companies’ operations prior to the Effective Time, as applicable. Prior to the Effective Time, as applicable, the Company will exercise, consistent with the terms and conditions of the Merger Agreement, complete control and supervision over its and its subsidiaries’ respective operations.
Notwithstanding anything to the contrary set forth in the Merger Agreement, nothing will prohibit the Company from taking any action, or refraining from taking any action, at any time or from time to time, if in the reasonable judgment of the Board (or a committee thereof), upon written advice of counsel to the Company, prior notice to Parent, and (to the extent practicable) after consulting with Parent, such action or inaction is reasonably necessary (i) for the Company (a) to maintain its qualification as a REIT under the Code for any period or portion thereof ending on or prior to the Effective Time, including making dividend or other distribution payments to shareholders of the Company in accordance with the Merger Agreement or (b) avoid or to continue to avoid incurring entity level income or excise taxes under the Code, or (ii) to establish or maintain any exemption from or otherwise avoid the imposition of any requirement that any of the Acquired Companies be registered as an investment company under the Investment Company Act of 1940, as amended, including in the case of clause (i) only, making dividend or any other actual, constructive or deemed distribution payments to shareholders of the Company in accordance with or as otherwise expressly permitted by the Merger Agreement.
Competing Proposals and Obligations of the Board with Respect to its Recommendation
Go-Shop Period
During the Go-Shop Period, the Company, its subsidiaries and its representatives have the right to, directly or indirectly:
| · | solicit, initiate, or facilitate any inquiry or the making of any proposal which constitutes, or may reasonably be expected to result in, any competing proposal; |
| · | engage in, continue or otherwise participate in any discussions or negotiations regarding, or, subject to the following bullet point, furnish to any other person information in connection with or for the purpose of facilitating, a competing proposal subject to the terms of the Merger Agreement; |
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| · | enter into an Acceptable Confidentiality Agreement (as defined in the section of this proxy statement captioned “The Merger Agreement—Competing Proposals and Obligations of the Board with Respect to its Recommendation-Go-Shop Period”) with, and only following such entry into an Acceptable Confidentiality Agreement, (i) furnish information (including non-public information) relating to any of the Acquired Companies to, or (ii) afford access to the business, properties, assets, books, records or other non-public written information and data, or to any personnel of any of the Acquired Companies pursuant to an Acceptable Confidentiality Agreement (as defined in the section of this proxy statement captioned “The Merger Agreement—Competing Proposals and Obligations of the Board with Respect to its Recommendation-Go-Shop Period”) to, any person or group of persons or to such person’s representatives (including potential financing sources of such person); provided that the Company directly or indirectly provides the Parent Parties with any written information or data provided to such person and grants the Parent Parties equivalent access that was not previously made available to the Parent Parties prior to or substantially concurrently with such person; and |
| · | otherwise cooperate with or assist any competing proposal or inquiry, including by granting a waiver, amendment or release under any “standstill provision” or similar obligation of any third party with respect to the Company or any of its subsidiaries solely to allow for a competing proposal or amendment to a competing proposal to be made to the Board on a non-public basis (except as required by law). |
As used in this proxy statement:
| · | “Acceptable Confidentiality Agreement” means any confidentiality agreement containing provisions limiting the disclosure and use of non-public information of or with respect to the Company that (i) contains provisions that are not, in the aggregate, less favorable in any material respect to the Company than the terms of the non-disclosure agreement, dated as of April 8, 2025, between the Company and BPG Acquisitions LLC, a Delaware limited liability company (as amended, the “Nondisclosure Agreement”), except for such changes specifically necessary in order for the Company to be able to comply with its obligations under the Merger Agreement, and such immaterial changes requested by the counterparty to ensure the confidentiality agreement is consistent with its organization’s customary policies, procedures and practices with respect to confidentiality agreements, and except that such confidentiality agreement need not include explicit or implicit standstill provisions that would restrict the making of or amendment or modification to competing proposals; provided that such agreement does not contain any exclusivity or other provisions that would restrict in any manner the Company’s ability to consummate the Merger or comply with its obligations to the Parent Parties under the Merger Agreement, or (ii) was entered into prior to the date of the Merger Agreement. |
| · | “competing proposal” means any proposal or offer (other than from the Parent Parties or their affiliates), whether in one transaction or a series of related transactions, resulting in: |
| o | any acquisition by any person or “group” (as defined under Section 13(d) of the Exchange Act) of beneficial ownership of more than twenty-five percent (25%) of the outstanding voting securities, beneficial ownership or voting power of the Company or any tender offer or exchange offer that if consummated would result in any person or “group” (as defined under Section 13(d) of the Exchange Act) beneficially owning more than twenty-five percent (25%) of the outstanding voting securities of the Company; |
| o | any merger, consolidation, business combination, recapitalization, reorganization, liquidation or other similar transaction involving the Company or its subsidiaries pursuant to which any person or “group” (as defined in or under Section 13(d) of the Exchange Act), other than the shareholders of the Company (as a group) immediately prior to the consummation of such transaction, would hold, directly or indirectly, equity interests in the surviving or resulting entity of such transaction representing more than twenty-five percent (25%) of the voting power of the surviving or resulting entity; or |
| o | any sale or disposition of more than twenty-five percent (25%) of the assets, revenues or net income of the Company or its subsidiaries, in each case on a consolidated basis; provided, however, that the term “competing proposal” does not include (i) the Merger or any of the other transactions contemplated by the Merger Agreement or (ii) any merger, consolidation, business combination, reorganization, recapitalization, liquidation or similar transaction solely among the Company and one or more of the subsidiaries of the Company or solely among the subsidiaries of the Company. |
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| · | “Superior Proposal” means a bona fide written competing proposal (except for purposes of this definition, the references in the definition of “competing proposal” to twenty-five percent (25%) will be replaced with fifty percent (50%)), which (i) did not result from a breach of certain obligations of the Company specified in the Merger Agreement in any material respect, and (ii) the Board (or, if appropriate, any committee thereof) determines in good faith (after consultation with its outside legal counsel and financial advisor) to be more favorable from a financial point of view to the holders of Company Common Shares (solely in their capacities as shareholders) than the Merger and the other transactions contemplated by the Merger Agreement, taking into account the timing, financial, regulatory and other aspects of the competing proposal that the Board determines are relevant and that is reasonably likely to be consummated (if accepted) on the terms proposed, and taking into account any changes or modifications to the terms of the Merger Agreement irrevocably offered by Parent in accordance with the terms of the Merger Agreement that Parent has irrevocably committed in writing to make and that have not been withdrawn. |
| · | “Excluded Party” means any person or group of persons (i) from whom the Company receives a bona fide written competing proposal during the Go-Shop Period; and (ii) whose competing proposal the Board determines, during the Go-Shop Period or within one business day thereafter, in good faith and after consultation with its financial advisor and outside legal counsel, constitutes or could reasonably be expected to lead to a Superior Proposal; provided that a person or persons immediately cease to be an Excluded Party (and the provisions of the Merger Agreement applicable to Excluded Parties immediately cease to apply with respect to such person or persons) upon the earliest to occur of: |
| o | such time as the competing proposal made by such third-party prior to the No-Shop Period Start Date expired or is withdrawn, cancelled or terminated (provided that for the avoidance of doubt, any amended or revised competing proposal submitted by such Excluded Party will not in and of itself be deemed to constitute a withdrawal, cancellation or termination of such previously submitted competing proposal); |
| o | the time the Board determines in good faith (after consultation with its financial advisor and outside legal counsel) that such competing proposal would no longer reasonably be expected to lead to a Superior Proposal; |
| o | in the case of a group, if the persons in such group as of the time such group submitted such competing proposal that most recently rendered such group an Excluded Party cease to constitute in the aggregate at least 75% of the equity financing (measured by voting power or value) of such group, unless the remainder of such equity financing is to be provided by persons who were themselves in a group of person that constituted an Excluded Party prior to the No-Shop Period Start Date; and |
| o | 11:59 p.m. (New York City time) on September 2, 2026, subject to extension in certain circumstances. |
Promptly (and in any event within one business day) after commencement of the No-Shop Period Start Date, the Company must (i) notify Parent in writing of the identity of each person from whom the Company or any of its subsidiaries received a bona fide written competing proposal after the execution of the Merger Agreement and prior to the No-Shop Period Start Date, (ii) provide Parent a list identifying each Excluded Party as of the No-Shop Period Start Date, and (iii) provide Parent a copy of each such competing proposal and a written summary of any modifications to the financial and other material terms thereof.
Promptly after the No-Shop Period Start Date (and, in any event, within one business day thereafter), the Company must, (i) except if the Company has already done so in respect of the applicable confidentiality agreement, request each person (other than Parent, its affiliates and their respective representatives) that has executed (within one year prior to the date of the Merger Agreement) a confidentiality agreement in connection with any competing proposal or its consideration of any competing proposal to promptly return or destroy all nonpublic information furnished to such person by or on behalf of the Company, or any of the Acquired Companies prior to the No-Shop Period Start Date and (ii) terminate any data room or other diligence access to each such person (and its representatives) described in clause (i); provided that the Company will not be required to take any such action in respect of any third party who is an Excluded Party unless and until such third party ceases to be an Excluded Party (in which case all references in this sentence to the No-Shop Period Start Date will be read as the date on which such third party ceases to be an Excluded Party).
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No Solicitation of Transactions
Except as expressly permitted in the Merger Agreement, during the period commencing on (i) (a) with respect to any third party who is an Excluded Party as of the No-Shop Period Start Date, the date on which such third party is no longer an Excluded Party, or (b) with respect to any other person, the No-Shop Period Start Date, and (ii) continuing until the earlier of the Effective Time and the valid termination of the Merger Agreement in accordance with its terms, other than with respect to a third party who is an Excluded Party on the No-Shop Period Start Date (and only until such time as such Excluded Party is no longer an Excluded Party, at which time the no solicitation provisions will become applicable) the Company and its subsidiaries will, and will use its reasonable best efforts to cause their respective representatives to, promptly cease any solicitation, discussions, or negotiations with any persons that may be ongoing with respect to a competing proposal and promptly terminate all physical and electronic dataroom access granted to any such person or its representatives, and not directly or indirectly:
| · | solicit, initiate, provide any non-public information in response to, or knowingly encourage or knowingly facilitate any inquiry or the making of any proposal which constitutes, or may reasonably be expected to lead to, any competing proposal; |
| · | engage in, continue, knowingly encourage or facilitate or otherwise participate in any discussions or negotiations regarding, or furnish to any other person any information in connection with or for the purpose of facilitating, a competing proposal; |
| · | enter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement, agreement in principle or other contract (other than an Acceptable Confidentiality Agreement) with respect to a competing proposal or that would reasonably be expected to lead to a competing proposal; or |
| · | take any action to make any takeover statute or any restrictions in the governing documents of the Acquired Companies inapplicable to any transaction contemplated by a competing proposal. |
From and following the No-Shop Period Start Date and prior to obtaining the shareholder approval, the Company may, directly or indirectly through one or more of its representatives, participate or engage in discussions or negotiations with, enter into an Acceptable Confidentiality Agreement with, and subject to such Acceptable Confidentiality Agreement, (i) furnish information (including non-public information) relating to any of the Acquired Companies to, or (ii) afford access to the business, properties, assets, books, records or other non-public information or data, or to any personnel of any of the Acquired Companies to, any person or group of persons (including any person or group of persons who has ceased to be an Excluded Party, after such person or group of persons has ceased to be an Excluded Party, and such Competing Proposal will not be deemed to be solicited by reason of the fact that such person or group of persons was solicited while an Excluded Party) that has made, renewed or delivered to the Company a bona fide competing proposal after the date of the Merger Agreement that did not result from a breach of certain obligations of the Company as specified in the Merger Agreement in any material respect and to such person’s representatives (including potential financing sources of such person) and otherwise facilitate such competing proposal or assist such person (and its representatives and financing sources) with such competing proposal; provided that:
| · | the Board (or, if appropriate, any committee thereof) has determined in good faith, (a) after consultation with the Company’s financial advisor and outside legal counsel, based upon the information then-available, that such competing proposal either constitutes a Superior Proposal or would reasonably be expected to result in a Superior Proposal, and (b) after consultation with its outside legal counsel that failure to do so would be inconsistent with the duties of the trustees of the Board under applicable law; and |
| · | subject to applicable law, any material non-public information or access concerning any of the Acquired Companies that is provided to such person or its representatives pursuant to the Merger Agreement that was not previously provided to Parent or its representatives will be provided or made available to Parent promptly, but in any event within twenty-four (24) hours, following such time as it is provided or made available to such third party. |
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In addition, the Acquired Companies and their representatives may (i) contact and engage in any communications, negotiations or discussions in order to seek to clarify and understand the terms and conditions of any inquiry or proposal made by any person solely to determine whether such inquiry or proposal constitutes or is reasonably likely to result in a Superior Proposal, and (ii) inform a person that has made or is considering making a competing proposal of the applicable provisions of the Merger Agreement.
During the period commencing on the No-Shop Period Start Date and continuing until the earlier of the Effective Time and the valid termination of the Merger Agreement in accordance with its terms, the Company will promptly (but no later than twenty-four (24) hours) after receipt of any competing proposal (other than with respect to an Excluded Party, until such time as such person is no longer an Excluded Party):
| · | advise Parent in writing of the entry into any Acceptable Confidentiality Agreement, the receipt of such competing proposal or request for confidential information; and |
| · | keep Parent reasonably informed on a reasonably prompt basis of all material developments, discussions or negotiations regarding any competing proposal and the status of such competing proposal. |
The Company has also agreed that none of the Acquired Companies will enter into any confidentiality agreement with any person that prohibits any Acquired Company from providing any information required to be provided to Parent in accordance with the terms of the Merger Agreement.
During the period commencing on the No-Shop Period Start Date and continuing until the earlier of the Effective Time and the valid termination of the Merger Agreement in accordance with its terms, the Company will not grant any waiver or release under any standstill, confidentiality or similar agreement or provision to which the Company or any of its subsidiaries is a party; provided, however, prior to receipt of the shareholder approval, the Company may grant a waiver or release under any such standstill, confidentiality or similar agreement or provision, solely to allow for a competing proposal or amendment to a competing proposal to be made to the Board (provided that such waiver contains an express acknowledgment that such person cannot, directly or indirectly, acquire any securities of the Company or its subsidiaries prior to the valid termination of the Merger Agreement in accordance with its terms), if the Board determines in good faith (after consultation with the Company’s financial advisor and outside legal counsel) that the failure to take such action would be inconsistent with the duties of the trustees of the Board under applicable law.
Obligations of the Board with Respect to its Recommendation
Except in certain circumstances specified in the Merger Agreement, during the period commencing on the date of the Merger Agreement and continuing until the earlier of the Effective Time and the valid termination of the Merger Agreement in accordance with its terms, the Board will not:
| · | fail to recommend to its shareholders that shareholder approval be given or fail to include its recommendation that the Company’s shareholders approve the Merger Proposal in this proxy statement; |
| · | change, qualify, withhold, withdraw, rescind or modify, or publicly propose to change, qualify, withhold, withdraw or modify its recommendation; |
| · | fail to publicly reaffirm its recommendation and publicly recommend against any competing proposal that is a tender offer or exchange offer within ten (10) business days after the commencement thereof (it being understood that a communication by the Board pursuant to Rule 14d-9(f) of the Exchange Act will not, in and of itself, be deemed an Adverse Recommendation Change (as defined below)); |
| · | fail to publicly reaffirm its recommendation within ten (10) business days after Parent so requests in writing; provided that other than any reaffirmation following the public announcement of a competing proposal, or the public announcement of a modification thereto, Parent may only request such a reaffirmation on one occasion; |
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| · | adopt, approve or recommend, or publicly propose to adopt, approve or recommend to the shareholders of the Company a competing proposal; or |
| · | authorize, cause or permit any of the Acquired Companies to enter into a definitive agreement to effectuate a competing proposal. |
Any action in the first five bullet points above is referred to as an “Adverse Recommendation Change.”
At any time prior to obtaining the shareholder approval, if the Company receives a written competing proposal (that did not result from a breach of the terms of the Merger Agreement in any material respect) that the Board (or, if appropriate, any committee thereof) has determined in good faith based upon the information then-available (after consultation with the Company’s financial advisor and outside legal counsel) constitutes a Superior Proposal, then the Board (or, if appropriate, any committee thereof) may make an Adverse Recommendation Change with respect to such competing proposal or terminate the Merger Agreement to enter into an alternative acquisition agreement with respect to such competing proposal substantially concurrently with such termination (and provided that prior to or concurrently with, and as a condition to the effectiveness of, such termination the Company pays the Company Termination Payment in full to Parent); provided, however, that the Board (or any committee thereof) will not take any such action, unless:
| · | the Board determines in good faith (after consultation with the Company’s financial advisor and outside legal counsel) that failure to take such action would be inconsistent with the duties of the trustees of the Board under applicable law; |
| · | the Company has given Parent at least three business days (the “Notice Period”) prior written notice of its intention to take such actions (which notice will include the information with respect to such Superior Proposal that is specified in the notice provisions of the Merger Agreement as well as a copy of any proposal, agreement and all material documentation providing for such Superior Proposal); and |
| · | Parent and the Company have negotiated, and have caused their respective representatives to negotiate in good faith during such Notice Period (to the extent Parent desires to so negotiate) to allow Parent to propose in writing revisions to the terms of the Merger Agreement prior to 11:59 p.m. (New York City time) on the final day of the Notice Period so that such Superior Proposal ceases to constitute a Superior Proposal, and |
| · | following the end of the Notice Period, the Board (or any committee thereof) will have determined in good faith (after consultation with the Company’s financial advisor and outside legal counsel), taking into account any revisions to the Merger Agreement proposed in writing by Parent during the Notice Period or otherwise, that the Superior Proposal giving rise to the Notice Period continues to constitute a Superior Proposal and that the failure to make an Adverse Recommendation Change or enter into an alternative acquisition agreement in respect of such Superior Proposal would be inconsistent with the trustees’ duties under applicable law; provided that in the event of any subsequent change to the financial terms (including the form, amount and timing of payment of consideration) or any other material terms of such Superior Proposal, the Company will, in each case, be required to deliver to Parent an additional written notice and the Notice Period will recommence and the Company will be required to comply with the provisions above anew; provided, however, the Notice Period will be reduced to two business days. |
For purposes of the Merger Agreement, “intervening event” means a change in circumstances or development occurring or arising after the date of the Merger Agreement that materially affects the business, assets or operations of the Acquired Companies, taken as a whole, and that was not known or reasonably foreseeable to the Board prior to the execution of the Merger Agreement (or, if known, the material consequences of which were not reasonably foreseeable to the Board) and becomes known to the Board prior to receipt of the shareholder approval; provided, however, none of the following will constitute, or be considered when determining when there has been an intervening event: (i) existence or terms of a competing proposal or (ii) changes in the market price or trading volume of Company Common 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 will not be excluded by this clause (ii) in determining whether an “intervening event” has occurred).
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Notwithstanding anything to the contrary in the Merger Agreement, at any time prior to receipt of the shareholder approval, the Board (or, if appropriate, any committee thereof) may effect an Adverse Recommendation Change in response to an intervening event, if the Board (or, if appropriate, any committee thereof) determines in good faith (after consultation with the Company’s financial advisor and outside legal counsel), that the failure to do so would be inconsistent with the duties of the trustees of the Board under applicable law; provided, however, that the Board (or any committee thereof) will not take any such action, unless:
| · | the Company has given Parent prior written notice equal to the Notice Period of its intention to take such actions, which notice specifies and describes the facts and circumstances relating to the applicable Intervening Event in reasonable detail and the factual bases for the Board’s determination that such events or circumstances constitute an Intervening Event; and |
| · | prior to effecting such an Adverse Recommendation Change, (i) Parent and the Company have negotiated, and have caused their respective representatives to negotiate, in good faith during such Notice Period, (to the extent Parent desires to so negotiate) to allow Parent to propose irrevocable and binding written revisions to the terms of the Merger Agreement prior to 11:59 p.m. (New York City time) on the final day of the Notice Period so that the Board (or any committee thereof) would no longer determine that the failure to make an Adverse Recommendation Change would be inconsistent with the duties of the trustees of the Board (or any committee thereof) under applicable law, and (ii) following the end of the Notice Period, the Board has determined in good faith (after consultation with the Company’s financial advisor and outside legal counsel), taking into account Parent’s proposed written revisions to the Merger Agreement that Parent has irrevocably committed in writing to make and that have not been withdrawn, that the failure to make an Adverse Recommendation Change in response to such intervening event would be inconsistent with the duties of the trustees of the Board under applicable law. |
Nothing contained in the Merger Agreement prohibits the Company, the Board or the Company’s representatives from:
| · | taking and disclosing to the Company’s shareholders a position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or making a statement contemplated by Item 1012(a) of Regulation M-A or Rule 14d-9(f) promulgated under the Exchange Act, or from making any “stop, look and listen” communication to the Company shareholders pending disclosure of the Company’s position thereunder; or |
| · | disclosing to the Company’s shareholders any factual information regarding the Company’s business, financial condition or results of operations of the Acquired Companies or the fact that a competing proposal has been made, the identity of the party making such competing proposal or the material terms of such competing proposal, in each case, that the Board (or, if appropriate, any committee thereof) determines in good faith (after consultation with its outside legal counsel) that such disclosure is required under applicable law (it being understood that disclosure under this clause will not limit or otherwise affect the Company’s obligations or the obligations of the Board (or any committee thereof) under the Merger Agreement and no such disclosure will, taken by itself, be deemed to be an Adverse Recommendation Change); provided, however, that the Board (or any committee thereof) will not make an Adverse Recommendation Change, except in accordance with the terms of the Merger Agreement. |
Under the Merger Agreement, the Company is required, as promptly as reasonably practicable following the clearance of the proxy statement by the SEC, in accordance with applicable law and the Company’s organizational documents and after consultation with Parent, to set a record date for, duly call, give notice of, convene and hold a Special Meeting of the Company’s shareholders for the purpose of obtaining the shareholder approval. The Company may postpone, recess or adjourn the Special Meeting, following consultation with Parent, solely:
| · | to the extent required by law or duty; |
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| · | to allow reasonable additional time to solicit additional proxies to the extent the Company reasonably believes necessary in order to obtain the shareholder approval; |
| · | if as of the time for which the Special Meeting is originally scheduled (as set forth in this proxy statement) there are insufficient Company Common Shares represented (either in person or by proxy) and voting to constitute a quorum necessary to conduct the business of the Special Meeting; |
| · | to allow reasonable additional time for the filing and dissemination of any supplemental or amended disclosure which the Board has determined in good faith after consultation with outside counsel is necessary under applicable law or duty and for such supplemental or amended disclosure to be disseminated and reviewed by the Company’s shareholders prior to the Special Meeting; or |
| · | with the consent of Parent; |
provided that no such adjournment or postponement pursuant to the second or third bullet point above will delay the Special Meeting by more than thirty (30) days, in the aggregate, from the prior-scheduled date. Notwithstanding the foregoing, the Company will, at the request of Parent, to the extent permitted by law, adjourn the Special Meeting to a date mutually agreed to by the Company and Parent for the absence of a quorum or if the Company has not received proxies evidencing a sufficient number of Company Common Shares for the shareholder approval; provided that no such adjournment pursuant to this sentence will be required to be for a period exceeding ten (10) business days, in the aggregate.
Except in the case of an Adverse Recommendation Change, the Company (as discussed in the section of this proxy statement captioned “The Merger Agreement-Competing Proposals and Obligations of the Board with Respect to its Recommendation”) through the Board, will (i) recommend to its shareholders that they approve the Merger and (ii) include such recommendation in this proxy statement.
Efforts Obligations; Regulatory Approvals
Each party to the Merger Agreement has agreed to, and will cause their respective subsidiaries to, use its reasonable best efforts to, as promptly as practicable and in any event prior to the Outside Date:
| · | take all actions necessary to cause the conditions to Closing set forth in the Merger Agreement to be satisfied; |
| · | execute and deliver any additional instruments necessary to consummate the Merger and the other transactions contemplated by the Merger Agreement and to fully carry out the purposes of the Merger Agreement; |
| · | prepare and file any applications, notices, registrations and requests as may be required or advisable to be filed with or submitted to any governmental authority in order to consummate the transactions contemplated by the Merger Agreement; |
| · | obtain all necessary actions or nonactions, authorizations, permits, waivers, consents, clearances, approvals and expirations or terminations of waiting periods from governmental authorities necessary in connection with the consummation of the Merger and the other transactions contemplated by the Merger Agreement; and |
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| · | make all necessary or advisable registrations and filings (including filings with governmental authorities, if any) and take all reasonable steps as may be necessary or advisable to obtain an approval or waiver from, or to avoid an action or proceeding by, any governmental authority necessary in connection with the consummation of the Merger and the other transactions contemplated by the Merger Agreement. |
Each of the Parent Parties will avoid or eliminate each and every impediment under antitrust or similar law that may be asserted by any governmental authority with respect to the Merger Agreement so as to make effective as promptly as practicable the Merger and the other transactions contemplated by the Merger Agreement and to avoid any action or proceeding which would otherwise have the effect of preventing or delaying the Closing beyond the Outside Date. Parent will (i) propose, negotiate, commit to and effect, by consent decree, hold separate order or otherwise, conduct of business restrictions, a sale or disposition of such assets or businesses as are required to be divested or a license or grant of commercialization rights to businesses, product lines, fields of use, divisions, business arrangements, contracts, assets or interests therein of Parent or its affiliates (including, after the Closing, the Surviving Entity and its affiliates); (ii) agree to amend any venture or other arrangement of Parent or its affiliates (including, after the Closing, the Surviving Entity and its affiliates); (iii) use its respective reasonable best efforts to contest and resist any action and to have vacated, lifted, reversed or overturned any order that may result from such action, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the transactions contemplated by the Merger Agreement, and (iv) otherwise take or commit to take actions that after the Closing would limit Parent’s or its subsidiaries’ (including, after the Closing, the Surviving Entity’s) freedom of action with respect to, or their ability to retain, one or more of their assets (whether tangible or intangible), products, or businesses, in each case as may be required in order to avoid the entry of, or to effect the dissolution of, any injunction, temporary restraining order or other order that would otherwise have the effect of preventing or delaying the Closing; provided that none of the Parent Parties, the Company or any of its subsidiaries will be required to become subject to, or agree to or otherwise take any action with respect to, any requirement, condition, understanding, agreement or order to sell, divest, license, hold separate or otherwise dispose of, or to conduct, restrict, operate, invest or otherwise change the assets, operations or business of the Company or any of its subsidiaries, unless such requirement, condition, understanding, agreement or order (i) is binding on or otherwise applicable to the Company or its subsidiaries only from and after the Closing in the event that the Closing occurs; and (ii) together with all other requirements, conditions, understandings, agreements or order would not reasonably be expected to have a material adverse effect on the value of the transactions contemplated by the Merger Agreement to Parent; provided, further, that in no event will the Parent Parties or the Company or any of its subsidiaries be required to pay (and the Company will not, without the consent of Parent (not to be unreasonably withheld), commit to pay), directly or indirectly, prior to the Closing any fee, penalty or other consideration, or incur any liability, to any third party for any consent required for or triggered by the consummation of the transactions contemplated by the Merger Agreement.
Each of the parties will use, and cause each of their respective affiliates to use, its and their respective commercially reasonable efforts in obtaining all necessary consents from any persons (other than governmental authorities) required for or triggered by the Merger and the other transactions contemplated by the Merger Agreement (excluding any Assumption); provided that neither the Company nor any of the Acquired Companies will be required to become subject to, or consent or agree to or otherwise take any action with respect to, any requirement, condition, understanding, agreement or order to sell, divest, license, hold separate or otherwise dispose of, or to conduct, restrict, operate, invest or otherwise change the assets, operations or business of the Company or any of its subsidiaries, unless (i) such requirement, condition, understanding, agreement or order is binding on or otherwise applicable to the Company or its subsidiaries only from and after the Closing in the event that the Closing occurs and (ii) Parent has consented to such requirement, condition, understanding, agreement or order; provided, further, that in no event will the Company or any of its subsidiaries be required to pay (and the Company will not, without the consent of Parent, commit to pay), directly or indirectly, prior to the Closing any fee, penalty or other consideration, or incur any liability, to any third party for any non-governmental consent. The Company will have satisfied these obligations if the Company uses its commercially reasonable efforts to comply with such obligations whether or not any non-governmental consents are successful or obtained.
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Each of the parties will, and will cause their respective affiliates to, furnish the other with such necessary information and reasonable assistance as requested by the other in connection with the preparation of any such required applications, notices, registrations and requests, as may be required or advisable to be filed with any governmental authority, and each party will cooperate in responding to any inquiry from a governmental authority, including promptly informing the other party of such inquiry, consulting in advance before making any presentations or submissions to a governmental authority, and supply each other with copies of all material correspondence, filings or communications with respect to the Merger Agreement between either party and any governmental authority. To the extent reasonably practicable, the parties or their representatives will have the right to review in advance and each of the parties will consult with the others on, all the information relating to the other and each of their affiliates that appears in any filing made with, or written materials submitted to, any governmental authority in connection with the Merger and the other transactions contemplated by the Merger Agreement (except that confidential competitively sensitive business information may be redacted from such exchanges). To the extent reasonably practicable, neither party nor their respective representatives will participate independently in any meeting or engage in any conversation with any governmental authority in respect of any filing, investigation or other inquiry without giving the other party prior notice of such meeting or substantive conversation and, to the extent permitted by applicable law, without giving the other party the opportunity to attend or participate (whether by telephone or in person) in any such meeting with such governmental authority. Notwithstanding anything to the contrary in the Merger Agreement, Parent will have the sole right to control and direct all antitrust strategy in connection with the review of the transactions contemplated by the Merger Agreement by any governmental authority, or any litigation by, or negotiations with, any antitrust authority or other person relating to any antitrust law or similar law, and will take the lead in all meetings, discussions, and communications with any governmental authority relating to obtaining approval under any antitrust law or similar law for the transactions contemplated by the Merger Agreement; provided that Parent will consult with and consider in good faith the comments of the Company in connection with any filing, communication, defense, litigation, negotiation, or strategy relating to antitrust matters.
Parent has agreed, on behalf of itself and its affiliates, that, between the date of the Merger Agreement and the Closing, Parent will not, and will cause its affiliates not to, directly or indirectly, acquire, purchase, lease or license (or agree to acquire, purchase, lease or license), by merging with or into or consolidating with, or by purchasing a substantial portion of the assets of or equity in, or by any other manner, any business or any corporation, partnership, association or other business organization or division or part thereof, or any securities or collection of assets, or take any other action or refrain from taking any action, if doing so could (i) result in any material delay in obtaining, or increase the risk of not obtaining, any consent of any governmental authority or any non-governmental consent in connection with the Merger and the other transactions contemplated by the Merger Agreement or (ii) restrict, prevent, prohibit, impede or materially delay the consummation of the Merger and the other transactions contemplated by the Merger Agreement; provided that the foregoing will not apply to any part of Canada Pension Plan Investment Board or Brookfield Corporation and/or their respective affiliates (including any portfolio companies thereof) other than CPP Investment Board Private Holdings (6) Inc. and Brookfield Property Group. Nothing contained in the Merger Agreement will permit any Parent Party, directly or indirectly, the right to control or direct the operations of the Company prior to the consummation of the Merger. Prior to the Closing, the Company will exercise, consistent with the terms and conditions of the Merger Agreement, complete unilateral control and supervision over its business operations.
Notwithstanding anything to the contrary in the Merger Agreement, nothing set forth in the Merger Agreement, requires Brookfield Corporation or Canada Pension Plan Investment Board or any of their respective affiliates (in each case other than Parent and its subsidiaries, and, following the Closing, the Surviving Entity and its subsidiaries) to offer, agree to, accept or implement any action or otherwise be required to take any action, including selling, divesting, disposing of, licensing, holding separate, giving any undertaking or any other action that limits in any respect its freedom of action with respect to, or ability to retain, develop or acquire, any properties, assets, business, products, rights, services or licenses, of Brookfield or CPP Investment Board Private Holdings (6) Inc. or any of their respective affiliates (in each case other than Parent and its subsidiaries, the Company and its subsidiaries, and, following the Closing, the Surviving Entity and its subsidiaries).
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The Company and its representatives will promptly notify the Parent Parties, and the Parent Parties and their representatives are required to promptly notify the Company, of any action, including legal proceedings, commenced or, to such party’s knowledge, threatened against such party or any of its subsidiaries, respectively, or any of their respective trustees, directors, officers or partners relating to the Merger Agreement, the Merger or the transactions contemplated by the Merger Agreement, and to keep the other parties, as applicable, reasonably informed with respect to the status thereof. The Company and its representatives will give Parent the opportunity to reasonably participate in the defense and settlement of any shareholder or unitholder litigation against the Company or any of its trustees, directors, officers or partners relating to the Merger Agreement and the transactions contemplated by the Merger Agreement. Neither the Company nor any Parent Party will enter into any settlement in respect of any litigation against the Parent Parties or the Company, as applicable, or any of their respective trustees, directors, officers or partners relating to the Merger Agreement and the transactions contemplated by the Merger Agreement, without the other party’s prior written consent (not to be unreasonably withheld, conditioned or delayed).
From and after the Effective Time, the Surviving Entity will (and Parent will cause the Surviving Entity or any of their respective subsidiaries or affiliates to) assume and honor all Company benefit plans in accordance with their terms as in effect immediately prior to the Effective Time or as such terms may be amended in accordance with the applicable Company benefit plans after the Effective Time. Notwithstanding the foregoing, for a period commencing on the Closing and continuing for a period of twelve (12) months after the Closing Date (or, if earlier, a Continuing Employee’s termination of employment), Parent will, or will cause the Surviving Entity or one of their respective subsidiaries or affiliates (including, following the Effective Time, each of the Acquired Companies) to, provide to each individual who is employed by an Acquired Company as of immediately prior to the Merger Effective Time and who continues to be actively employed by the Surviving Entity (or any other Acquired Company), referred to herein as a “Continuing Employee” during such Continuing Employee’s period of employment (i) an annual base salary or hourly wage rate (as applicable) at least equal to the annual base salary or hourly wage rate (as applicable) provided to such Continuing Employee as of immediately prior to the Effective Time, (ii) target annual cash bonus opportunities that are no less favorable than the target annual cash bonus provided to such Continuing Employee immediately prior to the Effective Time, (iii) severance benefits and protections that are no less favorable than those provided to such Continuing Employee immediately prior to the Effective Time and (iv) retirement, health, welfare and employee and fringe benefits (excluding equity and other long-term incentive, change in control, retention, severance, post-employment welfare, and defined benefit pension benefits), that are no less favorable in the aggregate than those provided to such Continuing Employee immediately prior to the Effective Time. In addition, without limiting the generality of the foregoing, Parent will, or will cause the Surviving Entity or one of its subsidiaries or affiliates (including, following the Effective Time, each of the Acquired Companies), to continue to maintain the Company’s 401(k) plan during the period commencing on the Closing until at least December 31 of the plan year in which the Closing occurs on terms no less favorable to participants than those as of immediately prior to the Effective Time and to make safe harbor nonelective and discretionary nonelective contributions (“Employer Contributions”) thereunder with respect to the plan year in which the Closing occurs that are calculated on a basis and funded on a frequency that are no less favorable to participants than the basis and frequency used to calculate and fund such Employer Contributions with respect to the plan year immediately prior to the year in which the Closing Date occurs.
For purposes of vesting, eligibility to participate, benefit accrual and for calculating severance and vacation entitlements and accruals under the employee benefit plans of Parent, the Surviving Entity or any of their respective subsidiaries or affiliates (including, following the Effective Time, each of the Acquired Companies) (each, a “New Plan”), each Continuing Employee will be credited with his or her years of service with the Company, its affiliates or their respective predecessors before the Effective Time, to the same extent as such Continuing Employee was entitled before the Effective Time, to credit for such service under any similar Company benefit plan in which such Continuing Employee participated or was eligible to participate immediately prior to the Effective Time; provided that the foregoing will not apply to the extent that its application would result in a duplication of benefits with respect to the same period of service. In addition, (i) each Continuing Employee will be immediately eligible to participate, without any waiting time, in any and all New Plans to the extent that coverage under such New Plans replaces a Company benefit plan in which such Continuing Employee participated immediately prior to the Effective Time (such plans, collectively, the “Old Plans”) and (ii) for purposes of each New Plan providing medical, dental, pharmaceutical or vision benefits to any Continuing Employee, Parent will (or will cause the Surviving Entity to) use commercially reasonable efforts to cause all eligibility waiting periods, pre-existing condition exclusions and actively-at-work requirements of such New Plan to be waived for such Continuing Employee and his or her spouse and any covered dependent(s), unless such conditions would not have been waived under the comparable Old Plans, and Parent will (or will cause the Surviving Entity to) cause any eligible expenses incurred by such Continuing Employee and his or her spouse and any covered dependent(s) during the portion of the plan year of the Old Plans ending on the date such Continuing Employee’s participation in the corresponding New Plan begins to be taken into account under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such Continuing Employee and his or her spouse and any covered dependent(s) for the applicable plan year as if such amounts had been paid in accordance with such New Plan.
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None of the foregoing employee matters covenants (i) will limit the ability of Parent, the Company, the Surviving Entity or any of their respective affiliates to amend, modify, or terminate any benefit or compensation plan, policy, program, agreement, contract or arrangement at any time assumed, established, sponsored or maintained by any of them (subject to the obligations set forth in the foregoing employee matters covenants), (ii) will be deemed or construed to amend, establish, or modify any benefit or compensation plan, policy, program, agreement, contract or arrangement, (iii) will prevent Parent, the Company, the Surviving Entity or any of their respective affiliates from terminating the employment of any Continuing Employee, or (iv) create any third party beneficiary rights in any person (including to enforce the provisions of the Merger Agreement or any right to employment or continued employment, and including any rights in any Continuing Employee or any dependent or beneficiary thereof).
Financing Cooperation; Assumption
Prior to the Closing Date, the Company will use its commercially reasonable efforts to provide, and will use its commercially reasonable efforts to cause its representatives to provide, and to cause each subsidiary of the Company to use its commercially reasonable efforts to provide, to the Parent Parties, in each case at Parent’s sole expense, all cooperation reasonably necessary and customary in connection with the arrangement of the Debt Financing, which cooperation is reasonably requested in writing by Parent and will include using commercially reasonable efforts to:
| · | upon reasonable notice, the Company will direct senior management of the Company or its subsidiaries with appropriate seniority and expertise to participate in a reasonable number of meetings and presentations with bona fide prospective lenders at reasonable times and with reasonable advance notice and which such meetings will be telephonic or by videoconference unless otherwise agreed to by the Company; |
| · | assist with the preparation of customary materials for bank information memoranda and similar marketing documents reasonably necessary in connection with the Debt Financing and provide reasonable cooperation with the due diligence efforts of any source of any Debt Financing to the extent reasonable and customary for financings similar to the Debt Financing; in each case in this clause: (i) subject to customary confidentiality provisions and disclaimers; (ii) as reasonably requested by Parent; and (iii) limited to information to be contained therein with respect to the Acquired Companies; |
| · | (i) furnish Parent and the Debt Financing Sources (as defined in the Merger Agreement), reasonably promptly upon written request with such financial and other pertinent business information relating to the Acquired Companies as may be reasonably requested by Parent, as is usual and customary for financings similar to the Debt Financing and reasonably available and prepared by or for the Acquired Companies in the ordinary course of business, and (ii) provide the Debt Financing Sources (as defined in the Merger Agreement), or their representatives, reasonable access during normal business hours, upon reasonable notice and subject to customary access agreements, to the Company properties in connection with Parent’s efforts to arrange and consummate the Debt Financing; |
| · | assist with the preparation of customary definitive loan documentation contemplated by the Debt Financing (including schedules), including any customary guarantee, pledge and security documents, with such documents subject to the occurrence of, and to be effective no earlier than, the Closing Date and such documents to be consistent with the terms and conditions of the Debt Commitment Letter; |
| · | to the extent reasonably requested by Parent and necessary in connection with the Debt Financing, use commercially reasonable efforts to obtain estoppels and certificates from tenants, lenders, managers, franchisors, ground lessors, ground lessees and counterparties to reciprocal easement agreements, declarations and similar agreements under permitted encumbrances; and |
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| · | provide to Parent upon written request all documentation and other information with respect to the Acquired Companies reasonably requested by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001(Public Law 107-56), as amended from time to time, in connection with the Debt Financing, that has in each case been requested by Parent in writing at least eight business days prior to the Closing Date; |
provided, however, that notwithstanding anything to the contrary in this paragraph, the Company and its subsidiaries will not be required to provide any information, documents or materials in accordance with this paragraph to the extent such information, documents or materials have been (i) made available to Parent or its representatives in the electronic data room established in connection with the transactions contemplated by the Merger Agreement or (ii) otherwise provided to, or are in the possession of or reasonably accessible to, Parent or its representatives.
The Company will use commercially reasonable efforts to deliver to Parent at least two business days prior to the Closing Date an appropriate and customary payoff letter with respect to the Indebtedness set forth in the disclosure letter (the “Payoff Letters”), specifying the aggregate payoff amount of the Company’s obligations (including principal, interest, fees, expenses, premium (if any) and other amounts payable in respect of such Indebtedness) that will be outstanding under such Indebtedness as of the Closing and providing for a release of all guarantees (subject to customary surviving obligations) and liens, if any, thereunder upon the receipt of the payoff amounts specified in the Payoff Letters (it being understood and agreed that the Parent Parties will be responsible for paying all amounts under the Payoff Letters, and which releases will only be effective at or after the Closing).
Upon the terms and subject to the conditions set forth in the Merger Agreement, the Company will use, and cause each subsidiary of the Company to use, its and their respective commercially reasonable efforts to take any actions that are reasonably requested by Parent in writing to obtain any Assumption; provided that no Acquired Company will be required to:
| · | directly or indirectly, to become subject to, or consent or agree to or otherwise take any action with respect to, any requirement, condition, understanding, agreement or order to sell, divest, license, hold separate or otherwise dispose of, or to conduct, restrict, operate, invest or otherwise change the assets, operations or business of any Acquired Company, unless such requirement, condition, understanding, agreement or order is binding on or otherwise applicable to such Acquired Company only from and after the Closing in the event that the Closing occurs; |
| · | amend, modify, supplement or waive the terms and conditions of the outstanding Indebtedness or guarantees thereof, including changing any of the parties subject to the obligations of such Indebtedness or guarantees, of any Acquired Company, make any principal payments or financial covenant modifications, forfeit any rights, establish any reserves, cash sweep requirements or cash traps, or pay any other charges, including any “make-whole” premium or other prepayment penalty, or deposit any security, in connection with obtaining any Assumption, in each case that is effective prior to the Closing; or |
| · | pay, directly or indirectly, prior to the Closing, any fee, penalty or other consideration, or incur any liability that is effective prior to the Closing, to any third party for any Assumption. |
Obtaining any Assumption is not a condition to Closing and the consummation of the transactions contemplated by the Merger Agreement will not be conditioned on, or delayed or postponed as a result of the obtaining of (or the failure to obtain) any Assumption. For the avoidance of doubt, the parties acknowledge and agree that the provisions set forth in the Merger Agreement regarding the Assumption represent the sole obligation of the Acquired Companies and their respective affiliates with respect to cooperation in connection with the Assumptions.
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The Company will have satisfied its obligations discussed above if the Company used its commercially reasonable efforts to comply with such obligations whether or not any applicable deliverables are actually obtained or provided. Notwithstanding the foregoing, the Company will not be required to provide, or cause its subsidiaries or its subsidiaries’ respective representatives to provide, cooperation to the extent that it:
| · | unreasonably interferes with the ongoing business of the Acquired Companies; |
| · | requires the Acquired Companies to take any action that would reasonably be expected to cause the Acquired Companies to incur any liability (including any commitment fees and expense reimbursement) in connection with the Financing or any Assumption prior to the Closing; |
| · | requires the Acquired Companies or their respective representatives to execute, deliver or enter into, or perform any agreement, document, certificate, affidavit or instrument with respect to the Financing (other than with respect to customary authorization letters with respect to bank information memoranda) or any Assumption or adopt resolutions approving the agreements, documents and instruments pursuant to which the Financing or any Assumption is obtained that is not conditioned on the occurrence of the Closing or that would be effective prior to the Closing; |
| · | requires the Acquired Companies or their counsel to give any legal opinion; |
| · | requires the Acquired Companies to provide any information that is prohibited or restricted by applicable law; |
| · | requires the Acquired Companies to provide access to or disclose information that the Company or any of its subsidiaries determine in good faith would reasonably be expected to result in a loss or waiver of or jeopardize any attorney-client privilege, attorney work product or other legal privilege (provided that the Company will use commercially reasonable efforts to allow for such access or disclosure in a manner that does not result in the events set out in this bullet point); |
| · | requires the Acquired Companies to take any action that is prohibited or restricted by, or would reasonably be expected to conflict with or violate, its organizational documents, or would reasonably be expected to result in a violation or breach of, or default under, any contract, material Company lease or permitted encumbrance to which any of the Acquired Companies is a party, in each case, to the extent not created in contemplation thereof, or any applicable laws; |
| · | would reasonably be expected to result in any Acquired Company or any representative of the Acquired Companies incurring personal liability with respect to any matter relating to the Financing or any Assumption or requires any representative of the Company or any of its subsidiaries to deliver any certificate that such representative reasonably believes, in good faith, contains any untrue certifications; |
| · | requires the Acquired Companies or their respective representatives, as applicable, to waive or amend any terms of the Merger Agreement; or |
| · | such cooperation causes any covenant, representation or warranty in the Merger Agreement to be breached or causes any closing condition set forth in the Merger Agreement to fail to be satisfied. |
In no event will the Acquired Companies be required to pay any commitment or other fee or give an indemnity or incur any liability (including due to any act or omission by the Acquired Companies or any of their respective affiliates or representatives) or expense (including legal and accounting expenses) in connection with assisting the Parent Parties in arranging the Financing or any Assumption or as a result of any information provided by the Company, its subsidiaries or any of their respective affiliates or representatives in connection with the Financing or any Assumption.
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Notwithstanding anything to the contrary, the Company, its subsidiaries and its representatives will be deemed to have performed in all material respects all obligations, and complied in all material respects with all agreements and covenants, required to be performed by it in respect of the foregoing covenants, and any breach of such covenants will not be considered in determining the satisfaction of any condition to Closing, unless such breach constitutes a material breach that is a consequence of a deliberate act or omission undertaken by the Company with the knowledge or intent that the taking of such act or failure to take such action could cause or constitute a material breach of the Merger Agreement, whether or not breaching the Merger Agreement is the conscious object of such act or omission.
Parent is required to reimburse certain costs and indemnify the Financing Indemnified Parties (as defined in the Merger Agreement) in connection with the financing cooperation obligations, and such persons are entitled to enforce those provisions of the Merger Agreement.
The Merger is not conditioned on any financing arrangements. The Parent Parties have represented in the Merger Agreement that Parent or Merger Sub had fully paid any and all commitment fees or other fees due as of or prior to the date of the Merger Agreement in connection with the Financing Commitment Letters. The Parent Parties have also represented that the net proceeds contemplated by the Financing Commitment Letters (both before and after giving effect to any “flex” provisions contained in the Debt Commitment Letters) in the aggregate will be sufficient for the Parent Parties and the Surviving Entity to pay all amounts required to be paid by them on the Closing Date in connection with the Merger and Financing Commitment Letters (including payment of the Merger Consideration, payment of the Series C Preferred Consideration, repayment or refinancing of debt of any Acquired Company contemplated by the Merger Agreement or the Debt Commitment Letters, payment of all amounts discussed in the section of this proxy statement captioned “The Merger-Interests of the Company’s Trustees and Executive Officers in the Merger-Treatment of Company Restricted Share Awards,” in each case, on the Closing Date, and payment of all other fees and expenses and obligations required to be paid or satisfied by Parent or Merger Sub on the Closing Date in connection with the Merger and the Financing).
Each Parent Party has agreed to use its respective reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to arrange, obtain and consummate the Financing in an amount required to satisfy the Required Amount not later than the Closing Date on the terms and conditions described in or contemplated by the Financing Commitment Letters (or on other terms with respect to conditionality, availability, timing and amount that are not less favorable to the Parent Parties than those set forth in the Financing Commitment Letters on the date of the Merger Agreement and otherwise on terms and conditions as would not have certain results, events or consequences set forth in the Merger Agreement), including using reasonable best efforts to:
| · | maintain in full force and effect the Financing Commitment Letters and the Guarantees; |
| · | negotiate and execute definitive agreements with respect to the Debt Financing required to pay the Required Amount on the terms and conditions contained in the Debt Commitment Letters (or on other terms with respect to conditionality, availability, timing and amount that are not less favorable to the Parent Parties than those set forth in the Financing Commitment Letters on the date of the Merger Agreement and otherwise on terms and conditions as would not have certain result, event or consequence set forth in the Merger Agreement) (such definitive agreements, the “Definitive Financing Agreements”); |
| · | satisfy and comply with on a timely basis (except to the extent that the Parent Parties have obtained the waiver of) all conditions and covenants to the funding or investing of the Financing required to pay the Required Amount applicable to the Parent Parties in the Financing Commitment Letters and the Definitive Financing Agreements that are to be satisfied by the Parent Parties; |
| · | consummate the Financing in an amount required to pay the Required Amount at or prior to the Closing; and |
| · | enforce its rights under the Financing Commitment Letters and the Guarantees. |
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None of the Parent Parties will permit or consent to or agree to any amendment, restatement, replacement, supplement, termination or other modification or waiver of any provision or remedy under, (i) any Equity Commitment Letter (other than to increase the amount of Equity Financing (as defined in the Merger Agreement) available thereunder), (ii) any Guarantee, or (iii) the Debt Commitment Letters, in each case, without the prior written consent of the Company, if such amendment, restatement, supplement, termination, modification or waiver would (a) impose new or additional conditions precedent to the funding of the Financing or would otherwise adversely change, amend, modify or expand any of the conditions precedent to the funding of the Financing, (b) be reasonably expected to prevent or delay the availability of all or a portion of the Financing necessary to pay the Required Amount or the consummation of the transactions contemplated by the Merger Agreement, (c) reduce the aggregate amount of the Financing below the amount necessary to pay the Required Amount, or (d) otherwise adversely affect the ability of Parent or Merger Sub to enforce their rights under the Financing Commitment Letters; provided that Parent may amend the Debt Commitment Letters to add lenders, lead arrangers, bookrunners, syndication agents or other entities who had not executed the Debt Commitment Letters as of the date of the Merger Agreement, subject to the restrictions set forth in the Nondisclosure Agreement.
In the event that any portion of the Debt Financing in an amount required to pay the Required Amount becomes unavailable on the terms and conditions contemplated in the Debt Commitment Letters, Parent will promptly (and in any event within twenty-four (24) hours) notify the Company of such unavailability and Parent will use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to arrange to obtain alternative financing on terms and conditions not less favorable to Parent (as determined in the reasonable judgment of Parent) than the terms and conditions contained in the Debt Commitment Letters in an amount sufficient, when added to the portion of the Financing that is and remains available and taking into account any available Equity Financing, to pay the Required Amount (“Alternative Financing”) and to obtain and promptly provide the Company with a copy of the new executed commitment letter that provides for such Alternative Financing (the “Alternative Financing Commitment Letter”).
Prior to the Closing Date, (i) upon the request of the Company, Parent will keep the Company reasonably informed in reasonable detail of the status of its efforts to arrange and consummate the Debt Financing and (ii) Parent will promptly inform the Company upon the occurrence of any material development with respect to the Debt Financing. Further, Parent will give the Company prompt written notice (and in any event within twenty-four (24) hours) after the Parent Parties obtain knowledge (i) of any default or breach (or any event that, with or without notice, lapse of time or both, could, or could reasonably be expected to, give rise to any default or breach) by any party under any of the Financing Commitment Letters or the Definitive Financing Agreements, (ii) of any termination of any of the Financing Commitment Letters, (iii) of the receipt by the Parent Parties of any written notice or other written communication from any investor or Debt Financing Sources with respect to any (a) actual or potential default, breach, termination or repudiation of any Financing Commitment Letter or any Definitive Financing Agreement, or any material provision thereof, in each case by any party thereto, or (b) material dispute or disagreement between or among any parties to any Financing Commitment Letter or the Definitive Financing Agreements that would reasonably be expected to prevent or materially delay the Closing or make the timely funding of the Financing required to pay the Required Amount on the Closing Date materially less likely to occur or give rise to a right of termination under any such arrangement, and (iv) of the occurrence of any event or development that would reasonably be expected to adversely impact the ability of the Parent Parties to obtain all or any portion of the Financing necessary to pay the Required Amount. Without limitation of the foregoing, upon the request of the Company from time to time, Parent will promptly update the Company on the activity and developments of its efforts to arrange and obtain the Financing, including by providing copies of all definitive agreements (and drafts of all offering documents and marketing materials) related to the Financing, and any amendments, modifications or replacements to any Financing Commitment Letters (or any Alternative Financing Commitment Letter).
Each of the Parent Parties will, and will cause their respective subsidiaries and affiliates to, use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable to obtain or complete the Assumptions.
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During the period between (x) the later of the No-Shop Period Start Date and, in the event there is an Excluded Party, the Cut-Off Time in respect of the last Excluded Party and (y) the earlier to occur of the Effective Time and the date, if any, on which the Merger Agreement is terminated in accordance with its terms, the Company will use its commercially reasonable efforts to provide (at Parent’s sole cost and expense) such cooperation and assistance as Parent may reasonably request in writing to:
| · | prepare for sale any of the assets of the Company set forth in the disclosure letter (or the capital stock, shares of beneficial interests, partnership interests or limited liability interests owned, directly or indirectly, by the Company in the applicable subsidiary of the Company that directly owns any such assets) at a price (provided that the Company will not be required to sell any such assets for less than reasonably equivalent value) and on terms as reasonably designated by Parent (the “Requested Transactions”) including by selling such assets to one or more entities designated by Parent (including its affiliates) on the Closing Date; |
provided, however, that:
| · | the prior written consent of the Company (which consent will not be unreasonably withheld, delayed or conditioned) will be required if the Requested Transaction would involve the solicitation of, discussions, negotiations or any other contact with, or provisions of access or information to, any third parties (including prospective purchasers) or their respective representatives; |
| · | no Requested Transaction will include a commitment or other binding obligation on the part of the Company or any of its subsidiaries that cannot be terminated without any penalty or payment of any fee or other amount prior to the Closing; |
| · | in no event will the consummation of the Requested Transactions occur prior to the Closing Date but in all events will be subject to the Closing; |
| · | none of the Requested Transactions will delay or prevent the completion of the Merger or constitute a condition to the consummation of the Merger (or subject the completion of the Merger to any uncertainty); |
| · | neither the Company nor any subsidiary of the Company will be required to take any action in contravention of any laws or the Company’s declaration of trust or the bylaws or similar organizational documents of the Company or such subsidiary; |
| · | the Requested Transactions (or the inability to complete any or all Requested Transactions) will not affect or modify in any respect the obligations of the Parent Parties under the Merger Agreement, including payment of the Merger Consideration or the obligation to complete the Merger in accordance with the terms of the Merger Agreement; |
| · | neither the Company nor any subsidiary of the Company will be required to take any action that (i) would adversely affect the classification of the Company as a REIT, (ii) would reasonably be expected to cause the Company to be subject to “prohibited transactions” taxes or other material taxes under Sections 857(b), 860(c) or 4981 of the Code (or other material entity-level taxes) or (iii) would be reasonably likely to prevent counsel from delivering the tax opinion described in the Merger Agreement; |
| · | no Requested Transactions will require any of the Acquired Companies to give any legal opinions or fairness or solvency opinions; |
| · | no Requested Transaction will require any Acquired Company to take any action that unreasonably interferes with the ongoing business of the Acquired Companies; |
| · | no Requested Transactions will require any Acquired Company, prior to the Closing, to incur any liability (including any commitment fees and expense reimbursement) in connection therewith; |
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| · | neither the Company nor any subsidiary of the Company will be required to provide any material non-public information to any third party other than Parent and its affiliates or their respective representatives; and |
| · | no Requested Transaction will require any Acquired Company to pay any commitment or other fee or give an indemnity or incur any liability (including due to any act or omission by the Company, its subsidiaries or any of their respective affiliates or representatives) or expense (including legal and accounting expenses) in connection with assisting Parent and Merger Sub in arranging such Requested Transaction or as a result of any information provided by the Company, its subsidiaries or any of their respective affiliates or representatives in connection with such Requested Transaction. |
The Merger Agreement requires the Company to provide certain cooperation reasonably requested by Parent in connection with the Requested Transactions, subject to the limitations set forth in the Merger Agreement. Parent is required to reimburse certain costs and indemnify the Requested Transactions Indemnified Persons (as defined in the Merger Agreement) in connection with such Requested Transactions, and such persons are intended third-party beneficiaries of, and may enforce, those provisions of the Merger Agreement.
The Merger Agreement contains certain other covenants of the parties to the Merger Agreement relating to, among other things:
| · | the filing of this proxy statement with the SEC, and cooperation in preparing this proxy statement and in responding to any comments received from the SEC on this proxy statement; |
| · | (i) giving Parent and its representatives reasonable access during normal business hours and upon reasonable advance written notice to the Company and its subsidiaries’ properties, offices, books and records and personnel, (ii) furnishing to Parent and its representatives financial and other information concerning its business, properties and offices as Parent may reasonably request, and (iii) instructing its representatives to cooperate with Parent in the matters described in clauses (i) and (ii); |
| · | confidentiality; |
| · | the interim operations of Parent and Merger Sub; |
| · | the consultation regarding any press releases or other public statements or filings with respect to the Merger Agreement or the transactions contemplated by the Merger Agreement; |
| · | the indemnification of the Company and its subsidiaries’ trustees, directors and officers; |
| · | certain matters related to Section 16 of the Exchange Act; |
| · | actions necessary to eliminate or minimize the effects of any applicable anti-takeover statutes on the Merger Agreement, the Merger and the transactions contemplated by the Merger Agreement; |
| · | upon written request of Parent at least seventy-five (75) days prior to the Closing Date, the Company using commercially reasonable efforts to effect, substantially concurrently with the Effective Time, subject to the consummation of the transactions contemplated by the Merger Agreement and the occurrence of the Closing, the redemption, repayment or satisfaction in full of the outstanding Junior Subordinated Notes issued pursuant to the TRUPS Documents (as defined in the Merger Agreement); |
| · | upon written request of Parent, the Company using commercially reasonable efforts to cooperate with the redemption, satisfaction and discharge, exchange offers, consent solicitations and execution of supplemental indentures relating to the Company’s Senior Notes (consisting of the 6.750% Senior Notes due 2028, the 2.700% Senior Notes due 2030 and the 2.375% Senior Notes due 2031), in each case conditioned on and effective no earlier than the Effective Time and funded solely using consideration provided by Parent or its subsidiaries; |
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| · | certain tax matters; |
| · | the declaration and payment of dividends or other distributions by the Company or its subsidiaries to its shareholders in order for the Company to maintain its qualification as a REIT or avoid incurring entity level income or excise taxes under the Code; |
| · | the delisting of Company Common Shares and the Company Series C Preferred Shares from the NYSE and the deregistration of Company Common Shares under the Exchange Act; |
| · | if requested in writing by Parent at least five business days prior to the Closing, the delivery to Parent of resignations effective as of the Effective Time executed by each trustee, director and officer of any Acquired Company in office immediately prior to the Effective Time; and |
| · | if requested in writing by Parent, the delivery to the record holders of the Company Series C Preferred Shares any notice of Parent’s intention to effect a repurchase of the Company Series C Preferred Shares, cash out merger or liquidation, as directed by Parent. |
The respective obligations of each party to the Merger Agreement to effect the Merger and to consummate the other transactions contemplated by the Merger Agreement are subject to the satisfaction or, to the extent permitted by law, valid waiver by each of the parties, at or prior to Closing, of the following conditions:
| · | the shareholder approval has been obtained; |
| · | consents from certain governmental authorities have been obtained or must have occurred, as applicable, and must be in full force and effect; and |
| · | no judgment, injunction, order or decree issued by any governmental authority of competent jurisdiction prohibiting consummation of the Merger is in effect, and no law has been enacted, entered, promulgated or enforced by any governmental authority after the date of the Merger Agreement that, in any case, prohibits, restrains, enjoins or makes illegal the consummation of the Merger. |
The obligations of the Parent Parties to effect the Merger and to consummate the other transactions contemplated by the Merger Agreement are subject to the satisfaction or, to the extent permitted by law, waiver by Parent, at or prior to the Closing, of the following additional conditions:
| · | (i) the Company’s representations and warranties regarding certain fundamental representations must be true and correct in all material respects as of the date of the Merger Agreement and as of the Closing Date, as though made as of the Closing Date, (ii) certain of the representations and warranties of the Company regarding the capital structure of the Company must be true and correct in all respects except for failures of such representations and warranties to be true and correct that, in the aggregate, would not result in more than a de minimis increase in the aggregate consideration payable by the Parent Parties pursuant to the Merger Agreement, as of the date of the Merger Agreement and as of the Closing Date, as though made as of the Closing Date, and (iii) each of the other representations and warranties of the Company must be true and correct as of the date of the Merger Agreement and as of the Closing Date, as though made as of the Closing Date, except (a) in each case of clauses (i), (ii) and (iii), representations and warranties that are made as of a specific date will be true and correct only on and as of such date, and (b) in the case of clause (iii) where the failure of such representations or warranties to be true and correct (without giving effect to any materiality or Company material adverse effect qualifications set forth in the Merger Agreement), individually or in the aggregate, does not have and would not reasonably be expected to have a Company material adverse effect; |
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| · | the Company must have performed in all material respects all obligations, and complied in all material respects with all agreements and covenants, required to be performed by the Company under the Merger Agreement (excluding certain obligations set forth in the Merger Agreement) on or prior to the Closing Date; |
| · | since the date of the Merger Agreement, there must not have occurred any Company material adverse effect that is continuing; |
| · | Company must have delivered to Parent a certificate, dated as of the Closing Date, signed on the Company’s behalf by an executive officer, certifying that the conditions specified in the first, second and third bullet points above have been satisfied; and |
| · | Parent must have received a written tax opinion of HLC (or such other nationally recognized REIT counsel as may be reasonably acceptable to both Parent and the Company), dated as of the Closing Date, to the effect that beginning with the taxable year ended December 31, 2019 and through and including its short taxable year that ends on the Effective Time, the Company has been organized and operated in conformity with the requirements to qualify as a REIT under the Code. |
The obligations of the Company to effect the Merger and to consummate the other transactions contemplated by the Merger Agreement are subject to the satisfaction or, to the extent permitted by law, waiver by the Company, at or prior to the Closing, of the following additional conditions:
| · | (i) the Parent Parties’ representations and warranties of the Parent Parties regarding certain fundamental representations must be true and correct in all material respects as of the date of the Merger Agreement as of the Closing Date, as though made as of the Closing Date, and (ii) each of the other representations and warranties of the Parent Parties must be true and correct (without giving effect to any materiality or Parent material adverse effect qualifications set forth in the Merger Agreement) in all material respects as of the date of the Merger Agreement and as of the Closing Date, as though made as of the Closing Date, except, in each case, representations and warranties that are made as of a specific date, which must be true and correct (without giving effect to any materiality or Parent material adverse effect qualifications set forth in the Merger Agreement) in all material respects only on and as of such date; |
| · | the Parent Parties must have performed in all material respects all obligations, and complied in all material respects with all agreements and covenants, required to be performed by them under the Merger Agreement on or prior to the Closing Date; and |
| · | Parent must have delivered to the Company a certificate, dated as of the Closing Date, signed on behalf of Parent by an executive officer of Parent certifying that the conditions specified in the first and second bullet points above have been satisfied. |
Termination of the Merger Agreement
The Company and Parent may mutually agree to terminate the Merger Agreement and abandon the Merger at any time prior to the Effective Time, even after the Company has obtained the shareholder approval.
Termination by Either the Company or Parent
In addition, either the Company or Parent may terminate the Merger Agreement upon prior written notice to the other party at any time prior to the Effective Time, even after the Company has obtained the shareholder approval, if:
| · | the Merger has not occurred on or before 11:59 p.m., New York City time, on January 19, 2027 (the “Outside Date”); provided, however, that the right to terminate the Merger Agreement under this bullet point is not available to any party to the Merger Agreement if the primary cause of such failure of the Merger to be consummated by the Outside Date was the failure of such party (and, in the case of Parent, including the failure of the other Parent Parties) to perform in all material respects any of its obligations, covenants or agreements under the Merger Agreement; |
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| · | any governmental authority of competent jurisdiction has issued a final and non-appealable order permanently restraining or otherwise prohibiting the transactions contemplated by the Merger Agreement; provided that the right to terminate the Merger Agreement under this bullet point is not available to any party to the Merger Agreement if the issuance of such final, non-appealable order was primarily due to the failure of such party (and, in the case of Parent, including the failure of the other Parent Parties) to perform in all material respects any of its obligations, covenants or agreements under the Merger Agreement; or |
| · | the shareholder approval was not obtained at the Special Meeting, duly convened therefor or at any adjournment or postponement thereof at which a vote on the approval of the Merger was taken. |
Termination by Parent
Parent may also terminate the Merger Agreement, upon prior written notice to the Company, at any time prior to the Closing, even after the Company has obtained the shareholder approval, if:
| · | the Company has breached any of its representations or warranties or failed to perform any obligation, covenant or agreement set forth in the Merger Agreement (other than the covenants as discussed in the section of this proxy statement captioned “The Merger Agreement-Competing Proposals and Obligations of the Board with Respect to its Recommendation”), in each case, that would cause any of the mutual conditions to the parties’ obligations to effect the Merger or the additional conditions to the obligations of the Parent Parties to effect the Merger not to be satisfied, which breach or failure to perform cannot be cured, or if capable of cure, has not been cured by the earlier of thirty (30) days following the delivery of written notice thereof from Parent to the Company and two business days prior to the Outside Date; provided, however, that Parent will not have the right to terminate the Merger Agreement under this bullet point if, at the time Parent delivers notice of its election to terminate the Merger Agreement, the Parent Parties have breached any of their representations or warranties or failed to perform any obligation, covenant or agreement set forth in the Merger Agreement, in each case, that would cause any of the closing conditions relating to their representations, warranties or obligations of the Parent Parties not to be satisfied, subject to a cure period, which such breach is continuing at the time of delivery of notice of Parent’s election to terminate; or |
| · | prior to receipt of the shareholder approval, the Board (or any committee thereof), for any reason, has effected an Adverse Recommendation Change (as discussed in the section of this proxy statement captioned “The Merger Agreement-Competing Proposals and Obligations of the Board with Respect to its Recommendation- Obligations of the Board with Respect to its Recommendation”). |
Parent Termination Payment
Parent has agreed to pay to the Company the Parent Termination Payment if:
| · | the Company terminates the Merger Agreement pursuant to the provision described in the first bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by the Company”; |
| · | the Company terminates the Merger Agreement pursuant to the provision described in the third bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by the Company” under circumstances where the Company Termination Payment is not then payable; or |
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| · | the Company or Parent terminates the Merger Agreement pursuant to the provision described in the first bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by Either the Company or Parent” and the Company was then entitled to terminate the Merger Agreement pursuant to either the first or third bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement—Termination by the Company” under circumstances where the Company Termination Payment is not then payable. |
Termination by the Company
The Company may also terminate the Merger Agreement, upon prior written notice to Parent, at any time prior to the Closing, even after the Company has obtained the shareholder approval, if:
| · | the Parent Parties have breached any of their representations or warranties or failed to perform any obligation, covenant or agreement set forth in the Merger Agreement, in each case, that would cause any of the mutual conditions to the parties’ obligations to effect the Merger or the additional conditions to the Company’s obligation to effect the Merger not to be satisfied, which breach or failure to perform cannot be cured, or if capable of cure, has not been cured by the earlier of thirty (30) days following the delivery of written notice thereof from the Company to Parent and two Business Days prior to the Outside Date; provided that the Company will not have the right to terminate the Merger Agreement under this bullet point if, at the time the Company delivers notice of its election to terminate the Merger Agreement, the Company has breached any of its representations or warranties or failed to perform any obligation, covenant or agreement set forth in the Merger Agreement, in each case, that would cause any of the closing conditions relating to the representations, warranties or obligations of the Company not to be satisfied, subject to a cure period, which such breach is continuing at the time of delivery of notice of the Company’s election to terminate; |
| · | prior to receipt of the shareholder approval, the Board (or any committee thereof) has determined to terminate the Merger Agreement in order to enter into an alternative acquisition agreement with respect to a Superior Proposal in accordance with the terms of the Merger Agreement; provided that such termination will not be effective unless the Company has paid in full the Company Termination Payment and the Company concurrently enters into an alternative acquisition agreement with respect to such Superior Proposal; or |
| · | all of the following requirements are satisfied: |
| o | the mutual conditions to the parties’ obligations to effect the Merger and the additional conditions to the obligations of the Parent Parties to effect the Merger (other than those conditions that by their nature are to be satisfied at the Closing; provided that each such condition is, at the time of delivery of the notice referred to in the following bullet point, capable of being satisfied as if such time were the Closing) have been satisfied or waived by Parent; |
| o | on or after the date the Closing should have occurred pursuant to the Merger Agreement, the Company has delivered an irrevocable written notice to Parent that all of the conditions to the parties’ obligations to effect the Merger and the additional conditions to the obligations of the Parent Parties to effect the Merger have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing; provided that each such condition is then capable of being satisfied as if such time were the Closing) by Parent and the Company is ready, willing and able to consummate, and will consummate, the Closing at such time; and |
| o | the Parent Parties fail to consummate the Closing within three business days after the Company’s delivery to Parent of such notice and the Company was ready, willing and able to consummate the Closing during such three business day period (it being understood that during such three business day period, neither Parent nor the Company may terminate the Merger Agreement). |
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Company Termination Payment
The Company has agreed to pay Parent the Company Termination Payment of approximately $108 million, if:
| · | the Company terminates the Merger Agreement pursuant to the provision described in the second bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by the Company”; |
| · | the Merger Agreement is validly terminated by (i) Parent pursuant to the provision described in the second bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by Parent”, or (ii) the Company pursuant to the provision described in the third bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by Either the Company or Parent” at a time when Parent was entitled to terminate pursuant to the second bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by Parent”; or |
| · | all of the following requirements are satisfied: |
| o | the Company or Parent terminates the Merger Agreement pursuant to the provisions described in the first bullet point (and at the time of such termination, the Company would not have been entitled to terminate the Merger Agreement pursuant to the third bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by the Company”) or the third bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by Either the Company or Parent” or Parent terminates the Merger Agreement pursuant to the provision described in the first bullet point in the section of this proxy statement captioned “The Merger Agreement-Termination of the Merger Agreement-Termination by Parent”; and |
| o | (i) a competing proposal has been publicly announced or has become publicly disclosed or publicly known after the date of the Merger Agreement and prior to the Special Meeting and, in either case, has not been publicly withdrawn or otherwise publicly abandoned, and (ii) within twelve (12) months following such termination, the Company (x) enters into a definitive written agreement providing for such competing proposal that is later consummated or (y) consummates any competing proposal (provided that for purposes of this sub-bullet point, each percentage in the definition of “competing proposal” will be increased to “50%”). |
Notwithstanding the foregoing, the definition of “Company Termination Payment” provides that the Company has agreed to pay Parent a termination payment of approximately $54 million if, prior to the Cut-Off Time, the Company enters into a definitive agreement with an Excluded Party with respect to a Superior Proposal.
The parties to the Merger Agreement have agreed that all remedies conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred by the Merger Agreement or by law or equity, and the exercise of any one remedy will not preclude the exercise of any other remedy. The parties have agreed that irreparable damage would occur if any of the provisions of the Merger Agreement were not performed in accordance with their specific terms or were otherwise breached (including the failure of any party to take any action required to consummate the transactions contemplated by the Merger Agreement, including the obligation of the Parent Parties to pay, and the right of the holders of Company Common Shares, Company Restricted Share Awards and Company Series C Preferred Shares to receive, the aggregate Merger Consideration, Company Restricted Share Awards payments and Series C Preferred Consideration pursuant to the Merger, respectively, pursuant to the Merger, subject to the terms and conditions of the Merger Agreement), and that monetary damages would not be an adequate remedy, even if available, would not be an adequate remedy therefor. The parties have accordingly agreed that, prior to the valid termination of the Merger Agreement, each party will be entitled to an injunction or injunctions, specific performance or other equitable relief as specified in the Merger Agreement to prevent breaches of the Merger Agreement and to enforce specifically its terms and provisions of the Merger Agreement, without proof of damages or a remedy at law, in addition to any other remedy to which such party is entitled. Each party has waived (i) any defense in an action for specific performance that a remedy at law would be adequate and (ii) any requirement under any law to post a bond or other security to obtain equitable relief. Each party has agreed that the right of specific performance and other equitable relief is an integral part of the transactions contemplated by the Merger Agreement, and without that right, none of the parties would have entered into the Merger Agreement. The parties have also agreed that they may pursue both a grant of specific performance or other equitable remedies and the payment of damages; provided, however, that no party will be entitled to receive an award of damages or payment of the Company Termination Payment or the Parent Termination Payment if specific performance is awarded and the Merger is consummated, and no party will be entitled to receive an award of specific performance if damages are awarded or if the applicable termination payment is paid.
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Prior to Closing, the Company will be entitled to specific performance to cause the Parent Parties to draw down the full amount the Equity Financing (as defined in the Merger Agreement) and consummate the Merger, including to effect the Closing in accordance with the Merger Agreement, on the terms and subject to the conditions in the Merger Agreement, only if and for so long as, (i) all applicable closing conditions have been satisfied or waived, (ii) the Debt Financing (or any Alternative Financing (as defined in the section of this proxy statement captioned “Financing of the Merger”)) has been funded in accordance with its terms or the Debt Financing Sources (as defined in the Merger Agreement) having irrevocably confirmed in writing that the Debt Financing (or any Alternative Financing) will be funded in accordance with the terms thereof at the Closing if the Equity Financing (as defined in the Merger Agreement) is funded, (iii) the Parent Parties are required to and have failed to complete the Closing when required by the terms of the Merger Agreement, and (iv) the Company has irrevocably confirmed in writing to the Parent Parties that the Company stands ready, willing and able to consummate the transactions contemplated by the Merger Agreement if specific performance is granted and, if the Equity Financing and the Debt Financing are funded, then the Closing will occur within five business days after receipt of such irrevocable confirmation on the terms and conditions set forth in the Merger Agreement. In no event may the Company or any of its successors or permitted assigns seek specific performance of the Debt Commitment Letter against any Financing Source.
Remedies
Other than in the case of fraud, the maximum aggregate liability of the Parent Parties, together with the Guarantors under the Guarantees, for any monetary damages, losses, costs or expenses of the Company, its affiliates or any other person in connection with the failure of the Merger to be consummated, a breach (including a willful breach) of the Merger Agreement by any Parent Party, or otherwise relating to the Merger Agreement or the transactions contemplated by the Merger Agreement (including the Merger) will be limited to the Parent Termination Payment, plus the recovery costs (collectively, the “Parent Liability Cap”), with each Guarantor’s liability limited to the applicable cap set forth in its Guarantee on a several and not joint basis, and no Guarantor will be liable for any obligations of any other Guarantor. Other than in the case of fraud, in no event will the Company, or any of its affiliates or any other person seek or permit to be sought on their behalf any amount in excess of the Parent Liability Cap from the Parent Parties, the Guarantors or their respective affiliates or representatives in connection with the Merger Agreement or the transactions contemplated by the Merger Agreement (including the Merger), or in respect of the Guarantees, or any theory of law or equity or in respect of any oral representations made or alleged to be made in connection therewith. Other than in the case of fraud, the Company has agreed that it has no right of recovery against, and no liability will attach to, any of the Parent Parties or any of their affiliates or representatives (other than against the Parent Parties as provided by the Merger Agreement), through any Parent Party or otherwise, except for its rights to recover from the Guarantors under the Guarantees (but not any other Parent Parties or any of their affiliates) under and to the extent provided in the applicable Guarantee, in each case on a several and not joint basis, subject to each Guarantor’s applicable cap and the Parent Liability Cap and the other limitations described in the Merger Agreement. Other than in the case of fraud, in no event will the Company or any of its affiliates seek to enforce the Merger Agreement against, make any claims for breach of the Merger Agreement against, or seek to recover damages from, any of the affiliates or representatives of the Parent Parties (other than Guarantors to the extent provided in the Guarantees, and in each case on a several and not joint basis and subject to each Guarantor’s applicable cap, the Parent Liability Cap, and the other limitations described therein).
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Except for claims for fraud, each party has agreed that all claims, liabilities, or causes of action (whether in contract or in tort, in law or in equity, including clauses for piercing the corporate veil or similar causes of action, or granted by statute or otherwise) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to the Merger Agreement or the ancillary documents or transactions contemplated thereby, or the negotiation, execution, or performance of the Merger Agreement or the ancillary documents, or any claims or actions alleging breach of the Merger Agreement or the ancillary documents, may be made only against (and such representations and warranties are those solely of) the persons that are expressly identified as the parties to the Merger Agreement and, in the case of the ancillary documents, persons expressly identified as parties thereto (each, a “Contracting Party”). Except for the liabilities and obligations of the parties to the Guarantees, the Equity Commitment Letters, the Debt Commitment Letters and any other ancillary documents to which they are parties, no person who is not a Contracting Party, including (so long as such person is not a Contracting Party) any current, former or future director, trustee, officer, employee, incorporator, member, partner, manager, shareholder, equityholder, affiliate, agent, attorney, representative or assignee of, and any financial advisor or lender to, any Contracting Party, or any current, former or future director, trustee, officer, employee, incorporator, member, partner, manager, shareholder, equityholder, affiliate, agent, attorney, representative or assignee of any of the foregoing (the “Non-Recourse Party”) will have any liability for any claims, losses, liabilities, damages, costs or expenses arising under, out of, in connection with, or related in any manner to the Company properties, the Merger Agreement or the ancillary documents or the transactions contemplated thereby or based on, in respect of, or by reason of the Merger Agreement or any of the ancillary documents or the transactions contemplated thereby or the negotiation, execution, performance, or breach of the Merger Agreement or any of the ancillary documents, and, to the maximum extent permitted by applicable law, except as provided in the ancillary documents, each Contracting Party, on behalf of itself and its affiliates, waives and releases all such liabilities, claims, causes of action, and obligations against any such Non-Recourse Party.
Notwithstanding the foregoing limitations, nothing limits the Company’s right to (i) enforce the Guarantees to cause the Guarantors to provide funds to Parent to permit Parent to satisfy (x) any valid order or award of damages in favor of the Company, (y) Parent’s specified indemnification, payment and reimbursement obligations under the Merger Agreement, or (z) payment of the Parent Termination Payment and certain recovery costs associated with enforcing payment of the Parent Termination Payment, if applicable, in each case subject to the applicable caps and on a several and not joint basis, (ii) seek specific performance to cause the Equity Financing (as defined in the Merger Agreement) to be funded pursuant to and in accordance with the Equity Commitment Letters (as expressly permitted in the Merger Agreement), or (iii) pursue fraud remedies or remedies under the Nondisclosure Agreement or Access Agreement.
The Company has agreed that none of the Debt Financing Sources (as defined in the Merger Agreement) will have any liability to the Company or its subsidiaries or controlled affiliates arising out of or related to the Merger Agreement, the ancillary documents, the transactions contemplated thereby, or any breach thereof or failure of consummation; provided that this limitation does not limit the rights of Parent and Merger Sub under the Debt Commitment Letters.
The Merger Agreement generally does not confer any rights or remedies on persons other than the parties thereto, except that certain provisions of the Merger Agreement are intended to benefit and be enforceable by specified third parties, including: (i) the provisions discussed in the sections of this proxy statement captioned (a) “The Merger – Treatment of Company Common Shares, Company Series C Preferred Shares and Company Restricted Share Awards”, which, from and after the Effective Time, will be for the benefit of holders of Company Common Shares, Company Series C Preferred Shares and Company Restricted Share Awards immediately prior to the Effective Time, (b) “The Merger – Indemnification; Trustees’ and Officers’ Insurance”, which, from and after the Effective Time, will be for the benefit of and enforceable by the Indemnified Parties, (c) “The Merger Agreement-Financing Cooperation; Assumption”, which will be for the benefit of and enforceable by the Financing Indemnified Parties (as defined in the Merger Agreement), (d) “The Merger Agreement – Requested Transactions”, which will be for the benefit of and enforceable by the Requested Transactions Indemnified Persons (as defined in the Merger Agreement),(e) “The Merger Agreement – Remedies” which will be for the benefit of and enforceable by the Non-Recourse Parties, (ii) following the valid termination of the Merger Agreement, the right of the Company, as sole and exclusive agent for and on behalf of the shareholders of the Company and holders of Company Restricted Share Awards (each of which are third party beneficiaries of the Merger Agreement solely to the extent required for this proviso to be enforceable), to pursue damages in the event of a breach by any of the Parent Parties of the Merger Agreement (provided that in no event may any such holder be entitled to enforce any of their rights, or any obligations of any of the Parent Parties, under the Merger Agreement in the event of any such breach, but rather the Company will have the sole and exclusive right to do so, as agent for such shareholders of the Company and holders of Company Restricted Share Awards), and (iii) any claims that the Company may assert against Parent, if, as and when required pursuant to the terms and conditions of the applicable Guarantee, nothing in the Merger Agreement, express or implied, is intended to confer upon any person (other than the parties to the Merger Agreement) any rights or remedies of any nature whatsoever under or by reason of the Merger Agreement.
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In addition to the foregoing, the Debt Financing Sources (as defined in the Merger Agreement) will be third party beneficiaries of, and will be entitled to enforce, certain provisions of the Merger Agreement.
At any time before or after receipt of the shareholder approval and prior to the Effective Time, any provision of the Merger Agreement may be amended or modified by a written agreement of the parties executed in the same manner as the Merger Agreement; provided that after the shareholder approval has been obtained, there will not be (i) any amendment of the Merger Agreement that changes the amount or the form of the consideration to be delivered under the Merger Agreement to the holders of Company Common Shares or which, pursuant to applicable law, requires the further approval of the shareholders of the Company without such further approval of such shareholders (in which case, such further approval will be deemed the shareholder approval for purposes of the Merger Agreement), or (ii) any amendment or change not permitted under applicable law.
At any time prior to the Effective Time, the parties may, to the extent legally allowed and except as otherwise set forth in the Merger Agreement, (i) extend the time for the performance of any of the obligations or other acts of the other parties, (ii) waive any inaccuracies in the representations and warranties of the other party contained in the Merger Agreement or in any document delivered pursuant to the Merger Agreement, or (iii) subject to the requirements of applicable law, waive compliance with any of the agreements or conditions contained in the Merger Agreement. Any agreement on the part of a party to any such extension or waiver will be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to the Merger Agreement to assert any of its rights under the Merger Agreement or otherwise will not constitute a waiver of those rights and no single or partial exercise of any such right will preclude any other or further exercise thereof or of any other right.
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MARKET PRICE OF COMPANY COMMON SHARES
The Company Common Shares are listed on the NYSE under the trading symbol “LXP.” On September 17, 2026, there were approximately 1,450 holders of record of Company Common Shares. Certain Company Common Shares are held in “street” name and accordingly, the number of beneficial owners of such Company Common Shares is not known or included in the foregoing number. The table below sets forth the quarterly high and low closing sales prices of Company Common Shares on the NYSE for the periods indicated and the dividends declared by the Company with respect to the periods indicated.
| Year | High | Low | Cash
Dividend per Share(1) |
|||||||||
| Fiscal Year Ended December 31, 2023 | ||||||||||||
| First Quarter | $ | 59.05 | $ | 47.00 | $ | 0.625 | ||||||
| Second Quarter | $ | 53.40 | $ | 45.70 | $ | 0.625 | ||||||
| Third Quarter | $ | 53.50 | $ | 44.50 | $ | 0.625 | ||||||
| Fourth Quarter | $ | 50.45 | $ | 39.15 | $ | 0.650 | ||||||
| Fiscal Year Ended December 31, 2024 | ||||||||||||
| First Quarter | $ | 49.60 | $ | 42.45 | $ | 0.650 | ||||||
| Second Quarter | $ | 46.60 | $ | 41.70 | $ | 0.650 | ||||||
| Third Quarter | $ | 52.30 | $ | 45.70 | $ | 0.650 | ||||||
| Fourth Quarter | $ | 49.45 | $ | 40.60 | $ | 0.675 | ||||||
| Fiscal Year Ending December 31, 2025 | ||||||||||||
| First Quarter | $ | 46.10 | $ | 38.60 | $ | 0.675 | ||||||
| Second Quarter | $ | 44.25 | $ | 36.10 | $ | 0.675 | ||||||
| Third Quarter | $ | 46.70 | $ | 38.75 | $ | 0.675 | ||||||
| Fourth Quarter | $ | 50.84 | $ | 44.05 | $ | 0.700 | ||||||
| Fiscal Year Ending December 31, 2026 | ||||||||||||
| First Quarter | $ | 51.64 | $ | 46.10 | $ | 0.700 | ||||||
| Second Quarter | $ | 55.60 | $ | 46.01 | $ | 0.700 | ||||||
| Third Quarter (through September 17, 2026) | $ | 61.15 | $ | 54.56 | - | |||||||
| (1) | The third quarter 2025 and prior dividends have been adjusted to reflect the 1-for-5 reverse stock split the Company effected on November 10, 2025. |
On July 17, 2026, the last trading day before the Company publicly announced the execution of the Merger Agreement, the reported closing price per Company Common Share on the NYSE was $58.51. On September 17, 2026, the last trading day before the date of this proxy statement, the reported closing price per Company Common Share on the NYSE was $60.87. You are encouraged to obtain current market quotations for Company Common Shares.
Under the terms of the Merger Agreement, the Company is not permitted to issue its regular quarterly dividends during the pendency of the Merger. The Company may declare and pay dividends to its shareholders in limited circumstances, including as may be necessary for the Company to maintain its qualification to be taxed as a REIT. The amount in cash payable to the shareholders as the Merger Consideration is subject to decrease in the event the Company declares and pays any such dividends in cash or property other than stock. As of the date of this proxy statement, no such dividend is currently anticipated.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table presents information regarding the beneficial ownership of Company Common Shares as of September 15, 2026, with respect to:
| · | each person known by the Company to beneficially own more than 5% of Company Common Shares; |
| · | each of the Company’s trustees; |
| · | each of the Company’s named executive officers; and |
| · | all of the Company’s current executive officers and trustees as a group. |
Beneficial ownership of shares is determined under rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. Except as noted by footnote, and subject to community property laws where applicable, the Company believes based on the information provided to it that the persons and entities named in the table below have sole voting and investment power with respect to all Company Common Shares shown as beneficially owned by them. Company Common Shares that a person has the right to acquire within 60 days of September 15, 2026, are deemed to be outstanding and beneficially owned by the person having the right to acquire such shares or units for purposes of the table below, but are not deemed outstanding for the purpose of computing the percentage of beneficial ownership for any other person.
As of September 15, 2026, there were 58,957,264 Company Common Shares outstanding.
Unless otherwise indicated, all shares are owned directly. Except as indicated in the footnotes to the table below, the business address of the shareholders listed below is the address of our principal executive office, 515 N. Flagler Drive, Suite 408, West Palm Beach, Florida 33401.
| Name and Address of Beneficial Owner | Number of Company Common Shares Beneficially Owned(1) | Percentage of Class | ||||||
| BlackRock, Inc.(2) | 9,936,915 | 16.9 | % | |||||
| Vanguard Portfolio Management LLC(3) | 5,919,905 | 10.0 | % | |||||
| State Street Corporation(4) | 3,362,533 | 5.7 | % | |||||
| Vanguard Capital Management LLC(5) | 3,046,088 | 5.2 | % | |||||
| (1) | For purposes of this table, a person is deemed to beneficially own any Company Common Shares as of a given date which such person owns or has the right to acquire within 60 days after such date. | |
| (2) | Based on information contained in a Schedule 13G/A filed with the SEC on July 17, 2025, BlackRock, Inc., together with certain affiliates, collectively have sole voting power for 9,723,949 Company Common Shares and sole dispositive power for 9,936,315 Company Common Shares. BlackRock Inc. reported that the interests of iShares Core S&P Small-Cap ETF beneficially is more than 5% of the outstanding common shares. The address for BlackRock, Inc. is 50 Hudson Yards, New York, NY 10001. | |
| (3) | Based on information contained in a Schedule 13G filed with the SEC on February 5, 2026, Vanguard Portfolio Management LLC, together with certain affiliates, has sole voting power for 22,815 Company Common Shares and sole dispositive power for 5,919,905 Company Common Shares. The address of Vanguard Portfolio Management LLC is 100 Vanguard Blvd., Malvern, PA 19355. | |
| (4) | Based on information contained in a Schedule 13G filed with the SEC on February 9, 2026, State Street Corporation, together with certain affiliates, has shared voting power for 2,875,737 Company Common Shares and shared dispositive power for 3,362,533 Company Common Shares. The address of State Street Corporation is State Street Financial Center, 1 Congress Street, Suite 1, Boston, MA 02114-2016. | |
| (5) | Based on information contained in a Schedule 13G filed with the SEC on April 30, 2026, Vanguard Capital Management LLC, together with certain affiliates, has sole voting power for 484,804 Company Common Shares and sole dispositive power for 3,046,088 Company Common Shares. The address of Vanguard Capital Management LLC is 100 Vanguard Blvd., Malvern, PA 19355. |
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| Name and Address of Beneficial Owner | Number
of Company Common Shares Beneficially Owned(1) |
Percentage
of Class(2) |
||||||
| T. Wilson Eglin | 806,072 | (3) | 1.37 | % | ||||
| Nathan Brunner | 93,243 | (4) | * | |||||
| Beth Boulerice | 36,687 | (5) | * | |||||
| Joseph S. Bonventre | 211,509 | (6) | * | |||||
| Brendan P. Mullinix | 180,927 | (7) | * | |||||
| James Dudley | 114,856 | (8) | * | |||||
| Lawrence L. Gray | 26,231 | (9) | * | |||||
| Arun Gupta | 19,305 | * | ||||||
| Jamie Handwerker | 26,012 | * | ||||||
| Derrick Johnson | 12,490 | * | ||||||
| Claire A. Koeneman | 27,193 | * | ||||||
| Nancy Elizabeth Noe | 13,542 | (10) | * | |||||
| Howard Roth | 22,981 | * | ||||||
| All trustees and executive officers as a group (15 persons)(11) | 1,671,270 | 2.83 | % | |||||
| * | Represents beneficial ownership of less than 1.0%. | |
| (1) | For purposes of this table, a person is deemed to beneficially own any common shares as of a given date which such person owns or has the right to acquire within 60 days after such date. | |
| (2) | For purposes of computing the percentage of outstanding shares held by each beneficial owner named above on a given date, any security deemed owned by such person or persons is included in the total number of outstanding common shares but is not included in the total number of outstanding common shares for the purpose of computing the percentage ownership of any other beneficial owner (with the exception of determining the percentage owned by all trustees and executive officers as a group). | |
| (3) | Includes (i) 418,174 Company Common Shares held directly by Mr. Eglin, (ii) 361,726 Company Common Shares held by Mr. Eglin which are subject to performance or time-based vesting requirements, and (iii) 26,172 Company Common Shares held in trust in which Mr. Eglin is a beneficiary. | |
| (4) | Includes (i) 13,381 Company Common Shares held directly by Mr. Brunner, and (ii) 79,862 Company Common Shares held by Mr. Brunner which are subject to performance or time-based vesting requirements. | |
| (5) | Includes (i) 24,974 Company Common Shares held by Ms. Boulerice which are subject to performance or time-based vesting requirements, and (ii) 11,713 Company Common Shares held indirectly by Ms. Boulerice. | |
| (6) | Includes (i) 18,952 Company Common Shares held directly by Mr. Bonventre, (ii) 63,469 Company Common Shares held indirectly by Mr. Bonventre, and (iii) 129,088 Company Common Shares held directly by Mr. Bonventre which are subject to performance or time-based vesting requirements. | |
| (7) | Includes (i) 71,161 Company Common Shares held directly by Mr. Mullinix, and (ii) 109,766 Company Common Shares held directly by Mr. Mullinix which are subject to performance or time-based vesting requirements. | |
| (8) | Includes (i) 32,834 Company Common Shares held directly by Mr. Dudley, and (ii) 82,022 Company Common Shares held directly by Mr. Dudley which are subject to performance or time-based vesting requirements. | |
| (9) | All Company Common Shares held in a trust in which Mr. Gray is a trustee and/or beneficiary. | |
| (10) | All Company Common Shares held in a trust in which Ms. Noe is a trustee and/or beneficiary. | |
| (11) | Includes Nabil Andrawis, our Executive Vice President and Director of Taxation, and Mark Cherone, our Executive Vice President and Chief Accounting Officer, in addition to the listed trustees and named executive officers. |
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If the Merger is completed, there will be no annual meeting of shareholders in 2027. However, if the Merger Agreement is terminated for any reason, the Company expects to hold an annual meeting of shareholders in 2027 for all shareholders of record, as a public company. A date has not been set for the Company’s 2027 annual meeting of shareholders.
If you wish to submit a shareholder proposal pursuant to Rule 14a-8 under the Exchange Act for inclusion in our proxy statement and proxy card for our 2027 annual meeting of shareholders, you must submit the proposal to our Secretary at our principal executive office no later than December 7, 2026.
If you wish to submit a trustee nomination pursuant to the “proxy access” provisions of the Bylaws for inclusion in our proxy statement and proxy card for our 2027 annual meeting of shareholders, you must submit the trustee nomination in accordance with the requirements of Section 1.13 of the Bylaws not earlier than November 7, 2026 and not later than 5:00 p.m., Eastern Time, on December 7, 2026.
In addition, any shareholder who wishes to submit a proposal or trustee nomination pursuant to the “advance notice” provisions of the Bylaws for the 2027 annual meeting of shareholders (other than pursuant to Rule 14a-8 under the Exchange Act) must comply with Section 1.11 of the Bylaws, including delivering the required information and certifications to our Secretary at our principal executive offices not earlier than November 7, 2026 and not later than the close of business on December 7, 2026.
Further, in addition to satisfying the foregoing advance notice requirements under the Bylaws, to comply with the universal proxy rules under the Exchange Act, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act, no later than March 20, 2027.
The Board will review any shareholder proposals or trustee nominations that are submitted timely and will determine whether such proposals meet the criteria for inclusion in the proxy solicitation materials or for consideration at the 2027 annual meeting of shareholders.
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HOUSEHOLDING OF PROXY MATERIALS
If you and other residents at your mailing address own Company Common Shares in street name, your broker, bank or other nominee may have sent you a notice that your household will receive only one Notice of Special Meeting and proxy statement. This procedure, known as “householding,” is intended to reduce the volume of duplicate information shareholders receive and also reduce our printing and postage costs. Under applicable law, if you consented or were deemed to have consented, your broker, bank or other nominee may send one copy of the applicable proxy materials to your address for all residents that own Company Common Shares in street name. If you wish to revoke your consent to householding, you must contact your broker, bank or other nominee. If you are receiving multiple copies of our proxy materials, you may be able to request householding by contacting your broker, bank or other nominee.
If you wish to request extra copies free of charge of our proxy materials, please send your request in writing to:
LXP Industrial Trust
515 N. Flagler Drive, Suite 408
West Palm Beach, Florida 33401
Attention: Investor Relations
Email: IR@LXP.com
Telephone: (212) 692-7200
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Only the matters set forth in the Notice of Special Meeting may be brought before the Special Meeting.
| 108 |
NO DISSENTERS’ RIGHTS OF APPRAISAL
As provided under applicable Maryland law, because our Company Common Shares are listed on the NYSE as of the Record Date for determining shareholders entitled to vote at the Special Meeting, our shareholders who object to the Merger do not have any appraisal rights, dissenters’ rights or the rights of an objecting shareholder under Maryland law in connection with the Merger.
| 109 |
WHERE YOU CAN FIND ADDITIONAL INFORMATION
The Company files annual, quarterly and current reports, proxy statements and other information with the SEC. The Company’s SEC filings, including this proxy statement, are also available to you on the SEC’s website at www.sec.gov.
The SEC allows the Company to “incorporate by reference” the information it files with the SEC, which means that the Company can disclose important information to you by referring to those documents. The information incorporated by reference is an important part of this proxy statement. The incorporated documents contain significant information about the Company, its business and its finances. Any information contained in this proxy statement or in any document incorporated or deemed to be incorporated by reference in this proxy statement will be deemed to have been modified or superseded to the extent that a statement contained in this proxy statement, or in any other document the Company subsequently files with the SEC that also is incorporated or deemed to be incorporated by reference in this proxy statement, modifies or supersedes the original statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to be a part of this proxy statement. The Company incorporates by reference the following documents the Company filed with the SEC:
| · | the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 12, 2026; |
| · | the Company’s Quarterly Reports on Form 10-Q for the quarter ended March 31, 2026, filed with the SEC on April 29, 2026, and the quarter ended June 30, 2026, filed with the SEC on July 29, 2026; |
| · | the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on April 3, 2026; |
| · | the Company’s Current Reports on Form 8-K filed with the SEC on January 14, 2026 (except with respect to Item 7.01), May 20, 2026, and July 20, 2026 (except with respect to Item 7.01); and |
| · | all documents filed by the Company with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this proxy statement and prior to the date of the Special Meeting. |
To the extent that any information contained in any Current Report on Form 8-K, or any exhibit thereto, is or was furnished to, rather than filed with, the SEC, such information or exhibit is specifically not incorporated by reference in this proxy statement.
The Company will provide without charge to each person, including any beneficial owner of Company Common Shares, to whom a proxy statement is delivered, on written or oral request of that person, a copy of any or all of the documents the Company is incorporating by reference into this proxy statement, other than exhibits to those documents unless those exhibits are specifically incorporated by reference into those documents. A request for a copy of any such report should be directed to LXP Industrial Trust, 515 N. Flagler Drive, West Palm Beach, Florida 33401, Attention: Investor Relations or can be made via telephone by calling (212) 692-7200. In addition, any such report is available, free of charge, on the Company’s website at www.lxp.com. The information found on, or otherwise accessible through, the Company’s website is not incorporated into, and does not form a part of, this proxy statement or any other report or document the Company files with or furnishes to the SEC.
If you have any questions about this proxy statement, the Special Meeting or the Merger and the other transactions contemplated by the Merger Agreement, or if you would like additional copies of this proxy statement, please contact the Company’s proxy solicitor, Georgeson, as follows:
Call toll free (866) 920-7133
Or email at LXPIndustrial@Georgeson.com
| 110 |
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT TO VOTE YOUR COMPANY COMMON SHARES AT THE SPECIAL MEETING. THE COMPANY HAS NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM, OR IN ADDITION TO, WHAT IS CONTAINED IN THIS PROXY STATEMENT OR IN ANY OF THE MATERIALS THAT ARE INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT. THIS PROXY STATEMENT IS DATED SEPTEMBER 18, 2026. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE, UNLESS THE INFORMATION SPECIFICALLY INDICATES THAT ANOTHER DATE APPLIES, AND THE MAILING OF THIS PROXY STATEMENT TO COMPANY SHAREHOLDERS DOES NOT CREATE ANY IMPLICATION TO THE CONTRARY.
By Order of the Board of Trustees
LXP INDUSTRIAL TRUST
/s/ Joseph S. Bonventre |
Joseph S. Bonventre
Secretary
West Palm Beach, Florida
September 18, 2026
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Execution Version
AGREEMENT AND PLAN OF MERGER
by and among
LEOPARD REIT LLC,
LEOPARD MERGER SUB LLC,
and
LXP INDUSTRIAL TRUST
Dated as of July 19, 2026
A-1
TABLE OF CONTENTS
| Article 1 DEFINITIONS | A-7 | |
| Section 1.1 | Definitions | A-7 |
| Section 1.2 | Interpretation and Rules of Construction | A-23 |
| Article 2 THE MERGER | A-25 | |
| Section 2.1 | The Merger | A-25 |
| Section 2.2 | Closing | A-25 |
| Section 2.3 | Effective Time | A-25 |
| Section 2.4 | Organizational Documents of the Surviving Entity | A-25 |
| Section 2.5 | Board of Directors and Officers of the Surviving Entity | A-26 |
| Section 2.6 | Tax Consequences | A-26 |
| Article 3 EFFECTS OF THE MERGER | A-26 | |
| Section 3.1 | Effects of the Merger | A-26 |
| Section 3.2 | Payment Procedures | A-27 |
| Section 3.3 | Treatment of Company Restricted Share Awards | A-30 |
| Section 3.4 | ESPP | A-31 |
| Section 3.5 | Withholding Rights | A-31 |
| Section 3.6 | Dissenters Rights | A-31 |
| Section 3.7 | General Effects of the Merger | A-31 |
| Article 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY | A-32 | |
| Section 4.1 | Organization and Qualification; Subsidiaries | A-32 |
| Section 4.2 | Authority; Approval Required | A-33 |
| Section 4.3 | No Conflict; Required Filings and Consents | A-34 |
| Section 4.4 | Capital Structure | A-35 |
| Section 4.5 | SEC Documents; Financial Statements; Internal Controls; Off-Balance Sheet Arrangements; Investment Company Act; Anti-Corruption Laws | A-37 |
| Section 4.6 | Absence of Certain Changes or Events | A-38 |
| Section 4.7 | No Undisclosed Liabilities | A-38 |
| Section 4.8 | Permits; Compliance with Law | A-39 |
| Section 4.9 | Litigation | A-40 |
| Section 4.10 | Properties | A-40 |
| Section 4.11 | Environmental Matters | A-42 |
| Section 4.12 | Material Contracts | A-43 |
| Section 4.13 | Taxes | A-46 |
A-2
| Section 4.14 | Intellectual Property | A-49 |
| Section 4.15 | Information Privacy and Security | A-50 |
| Section 4.16 | Insurance | A-50 |
| Section 4.17 | Company Benefit Plans | A-51 |
| Section 4.18 | Labor Matters | A-53 |
| Section 4.19 | Related-Party Transactions | A-53 |
| Section 4.20 | Brokers | A-53 |
| Section 4.21 | Opinion of Financial Advisor | A-54 |
| Section 4.22 | Takeover Statutes | A-54 |
| Section 4.23 | Company Information | A-54 |
| Section 4.24 | No Other Representations and Warranties | A-55 |
| Article 5 REPRESENTATIONS AND WARRANTIES OF THE PARENT PARTIES | A-55 | |
| Section 5.1 | Organization and Qualification | A-55 |
| Section 5.2 | Authority | A-56 |
| Section 5.3 | No Conflict; Required Filings and Consents | A-56 |
| Section 5.4 | Sufficiency of Funds | A-56 |
| Section 5.5 | Solvency | A-58 |
| Section 5.6 | Guarantee | A-58 |
| Section 5.7 | Absence of Certain Agreements | A-59 |
| Section 5.8 | Litigation | A-59 |
| Section 5.9 | No Vote of Parent Equityholders | A-59 |
| Section 5.10 | Compliance | A-59 |
| Section 5.11 | Brokers | A-60 |
| Section 5.12 | Takeover Statutes | A-60 |
| Section 5.13 | Information Supplied | A-60 |
| Section 5.14 | No Other Representations and Warranties | A-60 |
| Article 6 COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE MERGER | A-61 | |
| Section 6.1 | Conduct of Business by the Company | A-61 |
| Section 6.2 | No Control of Other Parties’ Business | A-67 |
| Article 7 ADDITIONAL COVENANTS | A-67 | |
| Section 7.1 | Preparation of the Proxy Statement; Shareholder Approval | A-67 |
| Section 7.2 | Access to Information; Confidentiality | A-70 |
| Section 7.3 | Go-Shop; No Solicitation of Transactions; Change in Recommendation | A-70 |
| Section 7.4 | Interim Operations of Parent and Merger Sub | A-77 |
A-3
| Section 7.5 | Public Announcements | A-78 |
| Section 7.6 | Appropriate Action; Consents; Filings | A-79 |
| Section 7.7 | Notification of Certain Matters; Transaction Litigation | A-81 |
| Section 7.8 | Employee Matters | A-82 |
| Section 7.9 | Indemnification; Directors’ and Officers’ Insurance | A-84 |
| Section 7.10 | Section 16 Matters | A-86 |
| Section 7.11 | Financing Cooperation; Assumption | A-86 |
| Section 7.12 | Financing | A-91 |
| Section 7.13 | Takeover Statutes | A-93 |
| Section 7.14 | Treatment of Company Indebtedness | A-94 |
| Section 7.15 | Obligations of the Parties | A-96 |
| Section 7.16 | Tax Matters | A-96 |
| Section 7.17 | Dividends | A-97 |
| Section 7.18 | Deregistration and Delisting | A-97 |
| Section 7.19 | Trustee and Officer Resignations | A-97 |
| Section 7.20 | Requested Transactions | A-98 |
| Section 7.21 | Series C Preferred Shares Cooperation | A-99 |
| Article 8 CONDITIONS | A-99 | |
| Section 8.1 | Conditions to Each Party’s Obligation to Effect the Merger | A-99 |
| Section 8.2 | Conditions to Obligations of the Company | A-99 |
| Section 8.3 | Conditions to Obligations of the Parent Parties | A-100 |
| Section 8.4 | Failure of Closing Conditions | A-101 |
| Article 9 TERMINATION; FEES AND EXPENSES; AMENDMENT | A-101 | |
| Section 9.1 | Termination | A-101 |
| Section 9.2 | Effect of Termination | A-103 |
| Section 9.3 | Fees and Expenses | A-104 |
| Section 9.4 | Payment of Amount or Expenses | A-106 |
| Section 9.5 | Amendment | A-108 |
| Article 10 GENERAL PROVISIONS | A-108 | |
| Section 10.1 | Non-Survival of Representations and Warranties and Certain Covenants | A-108 |
| Section 10.2 | Notices | A-108 |
| Section 10.3 | Severability | A-110 |
| Section 10.4 | Counterparts | A-110 |
| Section 10.5 | Entire Agreement; Third-Party Beneficiaries | A-111 |
A-4
| Section 10.6 | Extension; Waiver | A-111 |
| Section 10.7 | Governing Law; Venue | A-112 |
| Section 10.8 | Assignment | A-112 |
| Section 10.9 | Obligation of Parent | A-113 |
| Section 10.10 | Specific Performance | A-113 |
| Section 10.11 | Non-Recourse | A-115 |
| Section 10.12 | Waiver of Jury Trial | A-116 |
| Section 10.13 | Authorship | A-116 |
| Exhibits | |
| Exhibit A | REIT Opinion |
| Exhibit B | REIT Officer’s Certificate |
A-5
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of July 19, 2026 (this “Agreement”), is made and entered into by and among Leopard REIT LLC, a Delaware limited liability company (“Parent”), Leopard Merger Sub LLC, a Maryland limited liability company and wholly owned indirect subsidiary of Parent (“Merger Sub”), and LXP Industrial Trust, a Maryland real estate investment trust (the “Company”). Each of Parent, Merger Sub and the Company are sometimes referred to herein as a “Party” and collectively as the “Parties.” Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in Article 1.
WHEREAS, the Parties wish to effect a business combination in which the Company will merge with and into Merger Sub (such merger transaction, the “Merger”), with Merger Sub being the surviving entity in the Merger, upon the terms and subject to the conditions set forth in this Agreement and in accordance with the Maryland REIT Law (the “MRL”) and the Maryland Limited Liability Company Act (the “MLLCA”), and pursuant to which each outstanding common share of beneficial interest, par value $0.0001 per share, of the Company (the “Company Common Shares”) issued and outstanding immediately prior to the Effective Time (as defined herein) will be converted into the right to receive the Merger Consideration (as defined herein), upon the terms and subject to the conditions set forth in this Agreement and in accordance with the MRL and the MLLCA;
WHEREAS, the board of trustees of the Company (the “Company Board”) has unanimously (i) determined and declared that the Merger and the other transactions contemplated by this Agreement are advisable and in the best interests of the Company and its shareholders, (ii) duly authorized and approved the execution, delivery and performance of this Agreement, including the consummation of the Merger and the other transactions contemplated by this Agreement, (iii) directed that the approval of the Merger and the other transactions contemplated by this Agreement be submitted for consideration by the holders of Company Common Shares at the Shareholders Meeting (as defined herein), and (iv) except as may be permitted pursuant to Section 7.3, resolved to recommend the approval of the Merger and the other transactions contemplated by this Agreement by the shareholders of the Company;
WHEREAS, the board of managers of Parent has duly and validly authorized, approved and declared advisable, the execution, delivery and performance of this Agreement and the consummation of the Merger and the other transactions contemplated by this Agreement;
WHEREAS, board of directors of Merger Sub has taken, or caused to be taken, all actions required for the execution of this Agreement by Merger Sub, to adopt and approve this Agreement and to approve the consummation by Merger Sub of the Merger and the other transactions contemplated by this Agreement;
WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition and a material inducement to the Company’s willingness to enter into this Agreement, each of Brookfield Asset Management Ltd. (the “Brookfield Sponsor”) and CPP Investment Board Private Holdings (6) Inc. (the “CPPIB Sponsor, and, together with the Brookfield Sponsor, the “Guarantors”), is entering into a limited guarantee in favor of the Company (each, a “Guarantee” and, collectively, the “Guarantees”), guaranteeing certain obligations of the Parent Parties under this Agreement;
A-6
WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition and a material inducement to each Party’s willingness to enter into this Agreement, each Guarantor is entering into an equity financing commitment letter in favor of Parent (each, an “Equity Commitment Letter” and, collectively, the “Equity Commitment Letters”), pursuant to which such Guarantor has committed, subject to the terms and conditions therein, to invest in Parent the amounts set forth therein;
WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition and a material inducement to each Party’s willingness to enter into this Agreement, Parent has delivered to the Company a true, correct and complete copy of a duly executed debt commitment letter, dated as of July 19, 2026, together with any fee letters (subject to redactions of fee amounts or other economic terms, so long as such redaction does not cover terms that could adversely affect the conditionality, amount, or availability of the Financing on the Closing Date) in connection therewith (together with the term sheet and any other annexes, exhibits, schedules or other attachments thereto, collectively, the “Debt Commitment Letters” and, together with the Equity Commitment Letters, the “Financing Commitment Letters”) by and among Parent and the Debt Financing Sources party thereto, pursuant to which the financial institutions will provide, on the terms and subject only to the conditions expressly stated therein, debt financing to Parent or its Affiliates in the amounts set forth therein; and
WHEREAS, each of the Parties desire to make certain representations, warranties, covenants and agreements in connection with the Merger, and to prescribe various conditions to the Merger.
NOW THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:
Article 1
DEFINITIONS
Section 1.1 Definitions.
(a) For purposes of this Agreement:
“Acceptable Confidentiality Agreement” shall mean any confidentiality agreement containing provisions limiting the disclosure and use of non-public information of or with respect to the Company that (i) contains provisions that are not, in the aggregate, less favorable in any material respect to the Company than the terms of the Nondisclosure Agreement, except for such changes specifically necessary in order for the Company to be able to comply with its obligations under Section 7.3 of this Agreement, and such immaterial changes requested by the counterparty to ensure the confidentiality agreement is consistent with its organization’s customary policies, procedures and practices with respect to confidentiality agreements, and except that such confidentiality agreement need not include explicit or implicit standstill provisions that would restrict the making of or amendment or modification to Competing Proposals; provided that such agreement does not contain any exclusivity or other provisions that would restrict in any manner the Company’s ability to consummate the Merger or comply with its obligations to the Parent Parties hereunder, or (ii) was entered into prior to the date of this Agreement.
A-7
“Acquired Companies” means the Company and its Subsidiaries, collectively.
“Action” means any claim, charge, counterclaim, action, cause of action, suit, litigation, arbitration, mediation, audit, hearing, subpoena, petition, or other legal proceeding (whether sounding in contract, tort or otherwise, whether civil or criminal and whether brought, conducted, tried or heard by or before any Governmental Authority).
“Affiliate” of a specified Person means a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. For purposes of the immediately preceding sentence, the term “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by Contract or otherwise. Notwithstanding the foregoing, (i) prior to the Closing, (A) the Parent Parties and their respective subsidiaries shall not be deemed to be Affiliates of the Company and (B) the Company shall not be deemed to be Affiliates of the Parent Parties, (ii) except for purposes of Section 7.6(d), Section 10.10(c) and Section 10.11(a), none of Brookfield Corporation (“Brookfield”) or Canada Pension Plan Investment Board (“CPPIB”) or their respective Affiliates, or any of the direct or indirect portfolio companies owned, managed, advised or controlled by either of Brookfield or CPPIB or their respective Affiliates, shall be considered to be an Affiliate of Parent or Merger Sub, and none of the limited partners or other direct or indirect investors in any investment fund affiliated with, advised or managed by either Brookfield or CPPIB or any of their respective Affiliates, or any of the respective Affiliates of any such limited partners or investors, shall be considered to be Affiliates of Parent or Merger Sub solely as a result of such Persons being limited partners or other direct or indirect investors in any such investment fund, (iii) in no event shall any Unconsolidated JV be deemed to be an Affiliate of the Company, (iv) in no event shall Brookfield Sponsor and CPPIB Sponsor be deemed to be an Affiliate of each other.
“Ancillary Documents” means the Guarantees, the Equity Commitment Letters, the Debt Commitment Letters, the Nondisclosure Agreement, the Access Agreement and any other agreements, documents, certificates or instruments that are required for the consummation of the transactions contemplated herein or therein.
“Anti-Corruption Laws” means (i) the U.S. Foreign Corrupt Practices Act of 1977, and (ii) any anti-bribery, anti-corruption or similar applicable Law of any other jurisdiction.
“Antitrust Laws” means the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the Federal Trade Commission Act, as amended, all applicable state, foreign or supranational antitrust Laws and all other applicable Laws issued by a Governmental Entity that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening of competition through merger or acquisition.
A-8
“Assumption” means any assumption, Consent or other approval required in connection with this Agreement or the transactions contemplated thereby related to the existing Indebtedness set forth on Section 1.1(a) of the Company Disclosure Letter.
“Book-Entry Share” means, with respect to any Party, a book-entry share registered in the transfer books of such Party.
“Business Day” means any day other than a Saturday, Sunday or any day on which banks located in New York, New York or Toronto, Canada are authorized or required to be closed.
“Certificated Share” means a Company Common Share represented by a physical share certificate and recorded in the books and records of the Company.
“Code” means the Internal Revenue Code of 1986.
“Company Benefit Plan” means each (i) employee benefit plan (as defined in Section 3(3) of ERISA (whether or not subject to ERISA)) and (ii) employment, consulting or individual independent contractor, severance, termination, change-in-control, bonus, retention, incentive, deferred compensation, equity or equity-based compensation, profits interests, stock or other equity option, stock appreciation right, restricted stock, restricted stock unit, deferred compensation, medical, prescription, dental, vision, health, life insurance, hospitalization, accident, short- or long-term disability or other welfare, retiree medical or life, vacation, paid time off, fringe benefit, retirement and any other compensatory or employee benefit plan, program, Contract or arrangement of any kind (whether or not subject to ERISA, written or oral), in each case, that is either (A) sponsored, maintained, contributed to, or required to be contributed to, by any of the Acquired Companies for the benefit of any of the current or former employees, individual independent contractors, or directors of the Acquired Companies, or (B) with respect to which any Acquired Company has any obligation or liability, contingent or otherwise, and in each case other than any plan, program, Contract or arrangement that is sponsored by a Governmental Authority.
“Company Bylaws” means the Third Amended and Restated Bylaws of the Company, as amended, modified or supplemented from time to time.
“Company Declaration” means the Amended and Restated Declaration of Trust of the Company, dated as of December 29, 2006, as amended, corrected or supplemented from time to time, including the Articles Supplementary dated as of December 8, 2004, classifying and designating the Company Series C Preferred Shares.
“Company Governing Documents” means the Company Bylaws and the Company Declaration.
“Company Material Adverse Effect” shall mean any Event, that, individually or in the aggregate with any other Event, (x) would prevent or materially impair or materially delay the ability of the Acquired Companies to consummate the transactions contemplated hereby or (y) is material and adverse to the business, assets, properties, liabilities, financial condition or results of operations of the Acquired Companies, taken as a whole; provided, however, that, with respect to clause (y), no Event resulting from, attributable to or arising out of any of the following shall (either alone or in combination) be deemed to be or constitute a “Company Material Adverse Effect,” and no Event directly or indirectly resulting from, attributable to or arising out of any of the following shall be taken into account when determining whether a “Company Material Adverse Effect” has occurred, except (solely with respect to subclause (i) through (vi) below) to the extent such Event disproportionately affects the Acquired Companies in a manner relative to other similarly situated companies operating in the United States and in the industry in which the Acquired Companies operate, own or lease properties (in which case, the incremental disproportionate effects may be taken into account (and only to the extent thereof) in determining whether there has occurred a “Company Material Adverse Effect”):
A-9
(i) general business or economic conditions (or general changes in such conditions) in the United States or any other country or region in the world, or conditions in the global economy generally;
(ii) conditions (or changes in such conditions) in the securities markets, capital markets, credit markets, currency markets or other financial markets in the United States or any other country or region in the world, including (A) changes after the date hereof in interest rates in the United States or any other country or region in the world and changes in exchange rates for the currencies of any countries and (B) any suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally after the date hereof on any securities exchange or over-the-counter market operating in the United States or any other country or region in the world;
(iii) conditions (or changes in such conditions) generally affecting any of the industries in which the Acquired Companies operate;
(iv) political conditions (including the imposition or removal of trade restrictions, tariffs or similar Taxes) (or changes in such conditions) in the United States or any other country or region in the world or acts of war (whether or not declared), civil unrest, protests, military or para-military actions or armed hostilities, sabotage, terrorism or cyberterrorism (including any outbreak, escalation or general worsening of any such acts of war, sabotage or terrorism) in the United States or any other country or region in the world;
(v) the existence, occurrence or continuation of any earthquakes, hurricanes, tropical storms, tsunamis, tornadoes, floods, epidemics, pandemics, other significant illness or disease outbreaks, mudslides, wildfires or other natural disasters, weather conditions and other force majeure events in the United States or any other country or region in the world;
(vi) changes in Law or other legal or regulatory conditions (or the interpretation or enforcement thereof) or changes in GAAP or other accounting standards (or the interpretation thereof) in each case after the date hereof, or the Effects thereof;
A-10
(vii) (A) the entry into or the announcement of, or the compliance with, this Agreement, or the pendency or consummation of the transactions contemplated hereby, (B) the identity of the Guarantors, Parent, Merger Sub or their Affiliates, (C) the termination or potential termination of (or the failure or potential failure to renew or enter into) any Contracts with tenants, customers, suppliers, lenders, investors, employees or other business partners as a result of the matters described in clauses (A) and (B), or (D) any other negative development in the Acquired Companies’ relationships with any of its tenants, customers, suppliers, lenders, investors, employees or other business partners as a result of the matters described in clauses (A) and (B), except in each case that this clause shall not apply to the representations and warranties set forth in Section 4.3;
(viii) litigation arising in connection with this Agreement and the transactions contemplated hereby;
(ix) any actions taken or failure to take action, in each case, by Parent or any of its controlled Affiliates, or to which Parent has expressly consented in writing, or which Parent has expressly requested in writing (or, in the case of any action where the consent of Parent was expressly requested in writing in accordance with Section 6.1(b), where Parent’s consent was unreasonably withheld, conditioned or delayed) or the taking of any action expressly required by this Agreement, other than the obligations of the Company set forth in Section 6.1, or the failure to take any action prohibited by this Agreement;
(x) any departure or termination for cause of any trustees, officers, directors, employees or independent contractors of any of the Acquired Companies; or
(xi) changes in the Company’s share price or the trading volume of the Company’s shares of beneficial interest, or changes in the rating or ratings outlook of the Company, in and of itself, or any failure by the Company to meet any estimates or expectations of the Company’s revenue, earnings or other financial performance or results of operations for any period, in and of itself, or any failure by the Company to meet any internal budgets, plans, forecasts or projections of its revenues, earnings or other financial performance or results of operations, in and of itself (but not, in each case, the underlying cause of such changes or failures, unless such changes or failures would otherwise be expressly excepted from this definition).
“Company Properties” means each real property owned or leased by the Acquired Companies as of the date of this Agreement (including an Acquired Company’s right, title and interest in and to all buildings, structures and other improvements and fixtures located on such real property owned by the Company and all easements, rights and other appurtenances to such real property).
“Company Restricted Share Award” means an award of restricted shares granted under the Incentive Plan.
A-11
“Company Series C Preferred Shares” means the shares of 6.50% Series C Cumulative Convertible Preferred Shares, par value $0.0001 per share, of the Company.
“Company Termination Payment” means an amount in cash equal to $108,245,537; provided that if the Company terminates this Agreement pursuant to Section 9.1(c)(ii) prior to the Cut-Off Time in order to enter into a definitive agreement with an Excluded Party with respect to a Superior Proposal, then the “Company Termination Payment” shall mean an amount in cash equal to $54,122,768.
“Continuing Employee” means each employee of the Acquired Companies who is employed by the Acquired Companies as of immediately prior to the Effective Time and who continues to be actively employed by the Surviving Entity (or any of the other Acquired Companies, Parent or any Affiliate of Parent or the Surviving Entity) on or following the Effective Time.
“Contract” means any written or oral contract, agreement, indenture, note, bond, instrument, lease, conditional sales contract, mortgage, license, guaranty, binding commitment or other agreement.
“Cut-Off Time” means 11:59 p.m. (New York City time) on September 2, 2026; provided that, if the foregoing time would be during (x) a Notice Period (including any new Notice Period pursuant to the last sentence of Section 7.3(g)(ii)) with respect to the Company’s intention to terminate this Agreement pursuant to Section 9.1(c)(ii) (Superior Proposal) to enter into a definitive agreement with respect to a Competing Proposal that the Company Board has determined (in accordance with Section 7.3(g)) constitutes a Superior Proposal, or (y) an Excluded Party Response Period (as defined below) or Extended Party Response Period (as defined below), then the Cut-Off Time shall be extended, solely with respect to the Excluded Party making such Competing Proposal (and solely with respect to such Competing Proposal) to the later of (x) 11:59 p.m. (New York City time) on the date that is one (1) Business Days after the conclusion of such Notice Period (the “Excluded Party Response Period”) and (y) in the event such Excluded Party makes any amendment to the financial terms or any other material amendment of such Competing Proposal prior to the expiration of the Excluded Party Response Period, 11:59 p.m. (New York City time) on the date that is one (1) Business Days following the expiration of the Excluded Party Response Period (an “Extended Excluded Party Response Period”); provided that a new Notice Period as provided in the last sentence of Section 7.3(g)(ii) has not commenced at or before the expiration of the Extended Excluded Party Response Period. For the avoidance of doubt, (A) if no new Notice Period commences at or before the expiration of the Extended Excluded Party Response Period, then there shall be no further Extended Excluded Party Response Periods with respect to such Excluded Party, but (B) if a new Notice Period commences at or before the expiration of the Extended Excluded Party Response Period, then there shall be successive Extended Excluded Party Response Periods until no new Notice Period commences prior to the conclusion of the last Extended Excluded Party Response Period, at which time the “Cut-Off Time” shall be 11:59 p.m. (New York City time) on the date that is the last day of the last Extended Excluded Party Response Period. Notwithstanding anything to the contrary in this definition, if Parent fails to submit its proposed changes, if any, to this Agreement in writing in response to the applicable notice of Adverse Recommendation Change by 5:00 p.m. (New York City time) on the second (2nd) Business Day of the applicable Notice Period, then the Cut-Off Time with respect to such Competing Proposal received from such Excluded Party shall be extended to 11:59 p.m. (New York City time) on the date that is the second (2nd) Business Day immediately following the last day of the applicable Excluded Party Response Period or Extended Excluded Party Response Period, as applicable.
A-12
“Debt Facilities” means, with respect to the Company, any Contract set forth in Section 4.12(b)(iv) of the Company Disclosure Letter.
“Debt Financing Sources” means, collectively, the Persons that have committed to provide and have otherwise entered into agreements in connection with the Debt Financing, and any other lender, arranger, bookrunner or agent under the Debt Financing, including the parties to any joinder agreements, credit agreements or other definitive financing documents entered into pursuant to or in connection with the Debt Financing, their respective Affiliates and their and their Affiliates’ respective officers, directors, incorporators, managers, members, employees, agents, advisors, partners, controlling parties, representatives, successors and permitted assigns.
“Environmental Law” means any state, federal, local or municipal Law relating to the pollution, remediation, or protection of the environment, or human health or safety (as such matters relate solely to exposure to Hazardous Substances).
“Environmental Permit” means any permit, approval, license, exemption, action, consent or other authorization issued, granted, or required under any applicable Environmental Law.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means, with respect to any Acquired Company, each trade or business, whether or not incorporated, under common control with such Acquired Company pursuant to Section 4001(a)(14) of ERISA and that, together with such Acquired Company, is treated as a single employer within the meaning of Section 414(b), (c), (m) or (o) of the Code.
“ESPP” means the Lexington Corporate Properties Trust 1994 Employee Stock Purchase Plan, as amended.
“Event” means any event, change, circumstance, occurrence, effect or development.
“Exchange Act” means the Securities Exchange Act of 1934.
“Excluded Party” means any Person or group of Persons (i) from whom the Company receives a bona fide written Competing Proposal during the Go-Shop Period; and (ii) whose Competing Proposal the Company Board determines, during the Go-Shop Period or within one (1) Business Day thereafter, in good faith (after consultation with its financial advisor and outside legal counsel) constitutes or could reasonably be expected to lead to a Superior Proposal; provided that a Person or Persons shall immediately cease to be an Excluded Party (and the provisions of this Agreement applicable to Excluded Parties shall immediately cease to apply with respect to such Person or Persons) upon the earliest to occur of: (A) such time as the Competing Proposal made by such third party prior to the No-Shop Period Start Date expires or is withdrawn, cancelled or terminated (provided that, for the avoidance of doubt, any amended or revised Competing Proposal submitted by such Excluded Party shall not in and of itself be deemed to constitute a withdrawal, cancellation or termination of such previously submitted Competing Proposal); (B) the time the Company Board determines in good faith (after consultation with its financial advisor and outside legal counsel) that such Competing Proposal would no longer reasonably be expected to lead to a Superior Proposal; (C) in the case of a group, if the Persons in such group as of the time such group submitted such Competing Proposal that most recently rendered such group an Excluded Party cease to constitute in the aggregate at least seventy-five percent (75%) of the equity financing (measured by voting power or value) of such group, unless the remainder of such equity financing is to be provided by Persons who were themselves in a group of Persons that constituted an Excluded Party prior to the No-Shop Period Start Date; and (D) the Cut-Off Time.
A-13
“Expenses” means all 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 other agreements and documents contemplated hereby, the preparation, printing, filing and mailing of the Proxy Statement (with respect to the Company), and all SEC, NYSE and other regulatory filing fees incurred in connection with the Proxy Statement, the solicitation of Shareholder Approval, engaging the services of the Paying Agent, obtaining any third-party consents, making any other filings with the SEC, NYSE and all other matters related to the Closing and the other transactions contemplated by this Agreement.
“GAAP” means the U.S. generally accepted accounting principles.
“Governmental Authority” means any U.S. federal, state or local government or any foreign government, or any other governmental or quasi-governmental regulatory, judicial, supervisory or administrative authority, instrumentality, board, bureau, agency, commission, self-regulatory organization, arbitration panel or similar entity.
“Hazardous Substances” means (i) those materials, substances, chemicals, wastes, products, compounds, solid, liquid, gas, and minerals, in each case, whether naturally occurring or man-made, that are listed in, defined or identified as a “contaminant”, “pollutant”, “toxic substance”, “toxic material”, “hazardous waste” or “hazardous substance” or words of similar meaning under any Environmental Law, including the following federal statutes and their state and local counterparts, as each may be amended from time to time, and all regulations thereunder, including: the Comprehensive, Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; and the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq., (ii) petroleum and petroleum-derived products, including crude oil and any fractions thereof and (iii) polychlorinated biphenyls, per and poly fluoroalkyl substances, urea formaldehyde foam insulation, methane, asbestos in any form, radioactive materials or wastes, and radon.
A-14
“Incentive Plan” means the Company’s 2022 Equity-Based Award Plan, as amended.
“Indebtedness” means, with respect to the Acquired Companies, without duplication, (i) the principal of and premium (if any) of all indebtedness, notes payable, accrued interest payable or other obligations for borrowed money, whether secured or unsecured, (ii) all obligations under conditional sale or other title retention agreements, or incurred as financing, in either case with respect to property, (iii) all obligations issued, undertaken or assumed as the deferred purchase price for any property or assets or any deferred revenue (including earn-outs or seller financing and other similar payments (whether contingent or otherwise)), (iv) all obligations under capital leases, (v) all obligations in respect of performance or surety bonds, bankers acceptances and guarantees, or letters of credit, (vi) net obligations of the Acquired Companies under interest rate cap, swap, collar or similar transaction or currency hedging transactions (valued at the termination value thereof), (vii) obligations to guarantee any of the foregoing, whether or not evidenced by a note, mortgage, bond, indenture or similar instrument, on behalf of any Person, other than the Acquired Companies, (viii) interest, premium, fees, expenses, penalties (including early termination premiums, fees, penalties and similar costs and expenses associated with repayment) and other amounts owed with respect to the foregoing clauses (i), (v) and (vi), and (ix) any agreement to provide any of the foregoing; provided that, for clarification, Indebtedness shall not include “trade debt” or “trade payables” constituting current liabilities in the ordinary course of business. Notwithstanding the foregoing, Indebtedness does not include any intercompany obligations between or among the Acquired Companies.
“Information Privacy and Security Laws” means applicable Laws or guidelines from Governmental Authorities concerning data privacy, data or cybersecurity, data protection, data breach notification, data localization, artificial intelligence or automated decision-making technology, sending solicited or unsolicited electronic mail or text messages, cookies or other tracking technology, or the Processing of Personal Information, including (to the extent applicable) the European General Data Protection Regulation of April 27, 2016 (Regulation (EU) 2016/679) or any implementing or equivalent national Laws, the UK Data Protection Act 2018 (the “DPA 2018”) and the UK GDPR as defined in the DPA 2018, Directive 2002/58/EC concerning the Processing of personal data and the protection of privacy in the electronic communications sector, the Privacy and Electronic Communications (EC Directive) Regulations 2003, Section 5 of the Federal Trade Commission Act, the U.S. Department of Justice’s Data Security Program (28 C.F.R. § 202), the Fair Credit Reporting Act, the Controlling the Assault of Non-Solicited Pornography And Marketing Act of 2003, the Telephone Consumer Protection Act, the California Online Privacy Protection Act of 2003 (CalOPPA), the New York SHIELD Act, the Illinois Biometric Information Privacy Act, Texas’s Capture or Use of Biometric Identifier Act, the Washington Biometric Privacy Protection Act, Nevada’s Consumer Health Data Privacy Law, Washington’s My Health My Data Act, wiretapping Laws (including the California Invasion of Privacy Act), U.S. state comprehensive privacy Laws (including the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020, and its implementing regulations), U.S. state consumer protection Laws and U.S. state data breach notification Laws.
“Information Privacy and Security Requirements” means, as they relate to data privacy, data or cybersecurity, data protection, data breach notification, data localization, artificial intelligence or automated decision-making technology, sending solicited or unsolicited electronic mail or text messages, cookies or other tracking technology, or the Processing of Personal Information: (i) all Information Privacy and Security Laws; (ii) binding industry standards, including the Payment Card Industry Data Security Standard; (iii) all contractual obligations binding upon any of the Acquired Companies; and (iv) each of the Acquired Companies’ published privacy notices, and any published statements or representations made by the Company or its Subsidiaries.
A-15
“Intellectual Property” means all intellectual property rights of every kind and description throughout the world, including all U.S. and non-U.S.: (i) patents, patent applications and invention disclosures, including amendments, certificates of correction, counterparts, continuations, continuations-in-part, divisionals, extensions, non-provisionals, provisionals, reexaminations, reissues, renewals, reviews and substitutions thereof; (ii) trademarks, service marks, trade dress, logos, trade names, corporate names, brand names, certification marks, collective marks, d/b/a’s, symbols, design rights, assumed names, fictitious names and other indicia of origin or source, all registrations and applications for all of the foregoing, including all extensions, modifications and renewals thereof, and all goodwill associated with all of the foregoing; (iii) published and unpublished works of authorship, copyrights therein and thereto, software (including source code, object code, development documentation, programming tools, drawings, specifications and data), and all registrations and applications for all of the foregoing, including all renewals, extensions, restorations and reversions thereof; (iv) trade secrets, know-how, proprietary information, inventions, discoveries and ideas, including financial, business, scientific, technical, economic and engineering information, patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, codes, schematics, databases, drawings, models, methodologies, and customer lists, whether tangible or intangible and whether stored, compiled or memorialized physically, electronically, graphically, photographically or in writing (collectively, “Trade Secrets”); (v) internet domain names, web addresses, accounts with social media companies (e.g., LinkedIn, Facebook) and the handles and identifiers and designations found thereon and related thereto, and URLs; (vi) data, whether in printed or electronic form and whether contained in a database or otherwise; (vii) rights of publicity, moral rights and rights of attribution and integrity; and (viii) all other intellectual property or proprietary rights.
“Investment Company Act” means the Investment Company Act of 1940.
“IRS” means the Internal Revenue Service or any successor agency.
“IT Asset” means the computer systems, hardware, networks, servers, workstations, routers, hubs, switches, data communication lines, platforms, firmware, applications, databases and other information technology equipment, infrastructure and related systems, including any outsourced systems and processes and internet websites and related content, in each case that is owned by or leased or licensed to the Acquired Companies and used by them in the conduct of their business.
“Junior Subordinated Notes” means the Junior Subordinated Notes due April 30, 2037 as issued by the Company pursuant to that certain Junior Subordinated Indenture, dated as of March 21, 2007, between the Company and The Bank of New York Trust Company, as trustee, as supplemented, amended or otherwise modified from time to time.
A-16
“Knowledge” means, whether or not capitalized, the actual knowledge of the persons named in Section 1.1 to the Company Disclosure Letter.
“Law” means any and all domestic (federal, state or local) or foreign laws (including common law), statutes, codes, ordinances, rules, and regulations, acts and Orders promulgated by any Governmental Authority.
“Lien” means any mortgage, deed of trust, hypothecation, claim, condition, covenant, license, lien, pledge, charge, security interest, preferential arrangement, option or other third-party right (including right of first refusal or first offer), restriction, right of way, encroachment, easement, servitude, or title or survey defect or encumbrance of any kind in respect of such asset, including any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership, excluding any restrictions on transfer of equity securities arising under applicable securities Laws.
“Lookback Date” means January 1, 2024.
“MGCL” means the Maryland General Corporation Law.
“Multiemployer Plan” means a “multiemployer plan” (as defined in or within the meaning of Section 4001(a)(3) of ERISA or Section 3(37) of ERISA).
“Nondisclosure Agreement” means the non-disclosure agreement, dated as of April 8, 2025, between the Company and BPG Acquisitions LLC, a Delaware limited liability company, as amended, modified or supplemented from time to time.
“Officer” means the officers of the Company set forth on Schedule I hereto.
“Order” means a judgment, injunction, order, directive, determination or decree of any Governmental Authority.
“Owned IP” means Intellectual Property owned or purported by any Acquired Company to be owned, in whole or in part, by any Acquired Company.
“Parent Material Adverse Effect” means, with respect to Parent, any Effect that, individually or in the aggregate, would prevent or materially impair or materially delay the ability of the Parent Parties to timely perform any of their respective obligations under this Agreement or to consummate the Merger.
“Parent Parties” means, collectively, Parent and Merger Sub.
“Parent Termination Payment” means an amount equal to $288,654,765.
A-17
“Permitted Encumbrances” means any of the following: (i) Liens for Taxes or governmental or public or private association assessments, charges or claims of payment not yet delinquent or, if delinquent, the amount or validity of which is being contested timely, diligently and in good faith in accordance with Laws by appropriate proceedings and for which adequate accruals or reserves have been established in accordance with GAAP; (ii) Liens created by tenants, including from work contracted for by a tenant, and inchoate mechanics’ and materialmen’s Liens for amounts incurred in the ordinary course of business and which are not yet due and payable or are being contested timely, diligently and in good faith by appropriate proceedings and for which adequate reserves or accruals have been established in accordance with GAAP; (iii) with respect to any former or current real property of the Acquired Companies now or ever owned (directly or indirectly), post-Closing escrow agreements, listing agreements, leasing brokerage agreements, leases, ground leases, license agreements and similar occupancy agreements, contribution and tax protection agreements, bottom dollar guarantees, terms and provisions of any joint venture agreements, arising hereafter in accordance herewith or existing as of the date of this Agreement, Liens that are on title, arising out of actions taken or omitted to be taken by any Acquired Company or anything related to work contracted for by or through tenants or their Affiliates, zoning regulations, building codes, entitlements (including associated security instruments encumbering any land for which the Acquired Companies have an option to purchase) or other land use or environmental regulations by any Governmental Authority or agreements implementing the same; (iv) with respect to the Acquired Companies, Liens that are disclosed on Section 4.10(a) of the Company Disclosure Letter (as defined herein) (together with associated documentation which evidences or secures such Liens, including notes, mortgages, deeds of trust, assignments of leases and rents, guarantees, pledge agreements and similar documentation); (v) with respect to the Acquired Companies, Liens that are disclosed on the most recent (as of the date hereof) consolidated balance sheet of the Company filed with the SEC pursuant to the Exchange Act, or notes thereto; (vi) Liens arising pursuant to any Contract which are not yet due and payable and created in the ordinary course of business as the result of, or specifically disclosed in or permitted under, any purchase or sale contracts, listing agreements, leasing brokerage agreements, contribution agreements, post-Closing escrow agreements, bottom dollar guarantees, joint venture agreements, leases, ground leases, license agreements and similar occupancy agreements relating to any Company Property, in each case, in existence as of the date hereof or entered into in accordance with the terms of this Agreement, and for which true and complete copies have been made available to Parent; (vii) with respect to any Company Property, Liens that are or would be disclosed on accurate current title searches or surveys or otherwise filed or recorded in the applicable public records; (viii) non-exclusive licenses of Intellectual Property granted in the ordinary course of business; (ix) with respect to any real property of the Acquired Companies, easements, covenants, conditions, restrictions, agreements, servitudes, encroachments and other similar matters affecting title to such real property and other title and survey matters which would not reasonably be expected to have a Company Material Adverse Effect; or (x) Liens that were incurred in the ordinary course of business since the Lookback Date, and that do not, individually or in the aggregate, materially interfere with the use, operation or transfer of, or any of the benefits of ownership or market value of, the property of the Acquired Companies, taken as a whole.
“Person” or “person” means an individual, corporation, partnership, limited partnership, limited liability company, group (including a “person” as defined in Section 13(d)(3) of the Exchange Act), trust, association or other entity or organization (including any Governmental Authority or a political subdivision, agency or instrumentality of a Governmental Authority).
“Personal Information” means data or other information that identifies, relates to, describes, is linked to, is reasonably capable of being associated with, or could reasonably be linked to, directly or indirectly, an identified or identifiable natural person or household, and any information covered by definitions of “personal data,” “personally identifiable information,” “personal information,” or any substantial equivalent of these terms under any Laws.
A-18
“Process”, “Processed”, or “Processing” means any operation or set of operations performed, whether by manual or automated means, on data (including Personal Information) or on sets of data (including Personal Information), including the collection, use, sale, storage, transfer, disclosure, analysis, deletion, or modification thereof.
“REIT” means a real estate investment trust within the meaning of Sections 856 through 860 of the Code.
“Representative” means, with respect to any Person, such Person’s trustees, directors, members, managers, partners, officers, employees, advisors (including attorneys, accountants, consultants, investment bankers and financial advisors), agents and other representatives.
“Sanctioned Jurisdiction” means, at any time, a country or territory that is itself the subject or target of any Sanctions (at the time of this Agreement, Cuba, Iran, North Korea, the Crimea, so-called Luhansk People’s Republic, and so-called Donetsk People’s Republic regions of Ukraine, and the non-government controlled areas of the Kherson and Zaporizhzhia oblasts of Ukraine).
“Sanctioned Person” means any Person that is target of any Sanctions, including (i) any Person listed on any Sanctions-related list of designated Persons, including those maintained by the U.S. Department of the Treasury’s Office of Foreign Assets Control, the U.S. Department of State, the United Nations Security Council, the European Union, any European Union Member State, or His Majesty’s Treasury of the United Kingdom, (ii) the Government of Venezuela or any Person that is located, organized, or resident in a Sanctioned Jurisdiction, (iii) any Person otherwise subject to Sanctions, or (iv) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (i)-(iii).
“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered, or enforced from time to time by relevant Governmental Authorities, including the U.S. Department of the Treasury’s Office of Foreign Assets Control, the U.S. Department of State, the United Nations Security Council, the European Union, any EU Member State, or His Majesty’s Treasury of the United Kingdom.
“SDAT” means the State Department of Assessments and Taxation of Maryland.
“SEC” means the Securities and Exchange Commission (including the staff thereof).
“Securities Act” means the Securities Act of 1933.
“Senior Notes” means, collectively, the Company’s (i) 6.750% Senior Notes due 2028, (ii) 2.700% Senior Notes due 2030 and (iii) 2.375% Senior Notes due 2031, in each case issued by the Company pursuant to the applicable Senior Notes Indenture.
“Senior Notes Indentures” means, collectively, the Indenture, dated as of May 9, 2014 (the “Base Indenture”), between the Company and U.S. Bank Trust Company, National Association (as successor to U.S. Bank National Association), as trustee (the “Notes Trustee”), as supplemented by (i) the Second Supplemental Indenture, dated as of August 28, 2020 (relating to the 2.700% Senior Notes due 2030), (ii) the Third Supplemental Indenture, dated as of August 30, 2021 (relating to the 2.375% Senior Notes due 2031) and (iii) the Fourth Supplemental Indenture, dated as of November 13, 2023 (relating to the 6.750% Senior Notes due 2028), and, in each case, as further amended, supplemented or otherwise modified from time to time; and each of the Base Indenture, as supplemented by the applicable supplemental indenture with respect to a particular series of Senior Notes, is referred to herein as a “Senior Notes Indenture.”
A-19
“Shareholder Approval” means the affirmative vote of the holders of Company Common Shares entitled to cast a majority of all the votes entitled to be cast at the Shareholders Meeting on the Merger.
“Shareholders Meeting” means the meeting of the holders of Company Common Shares for the purpose of seeking the Shareholder Approval, including any postponement or adjournment thereof.
“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, joint venture, real estate investment trust, or other organization, whether incorporated or unincorporated, or other legal entity of which (i) such Person directly or indirectly owns or controls at least a majority of the capital stock or other equity interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions, (ii) such Person is the controlling general partner, co-general partner, managing member or otherwise manages or controls such other Person (disregarding major decision and veto rights of other investors), or (iii) such Person, directly or indirectly, holds a majority of the beneficial, equity, capital, profits or economic interest; provided, however, that “Subsidiary” shall not include any Unconsolidated JV.
“Surviving Entity Series C Preferred Units” means a class or series of preferred equity interests of the Surviving Entity having rights, preferences, privileges and voting powers that are materially unchanged with respect to the rights, preferences, privileges and voting powers of the Company Series C Preferred Shares immediately prior to the Effective Time, including with respect to repurchase rights and any other economic or protective rights set forth in the Company Declaration.
“Tax” or “Taxes” means any U.S. federal, state, local and foreign income, gross receipts, capital gains, withholding, property, stock, ad valorem, transaction, profits, gains, registration, license, wages, lease, service, service use, social security, unemployment, welfare, disability, severance, occupation, workers’ compensation, premium, windfall profits, net worth, value-added, alternative minimum or add-on minimum, customs duties, recording, stamp, transfer, sales, use, franchise, employment, payroll, excise, environmental and any other taxes, duties, assessments, charges or levies, or similar governmental charges (whether imposed directly or through withholding), together with penalties, interest or additions imposed with respect to such amounts by the U.S. or any Governmental Authority or additional amounts with respect thereto.
“Tax Return” means any return, declaration, report, certificate, bill, election, claim for refund, or information return or statement or other written information and any other document relating to Taxes filed or required to be filed with a Governmental Authority, including any schedule, attachment, or supplement thereto, and including any amendment thereof.
A-20
“Trust Preferred Securities” means the trust preferred securities issued pursuant to that certain Amended and Restated Trust Agreement of LXP Capital Trust I, dated as of March 21, 2007, among the Company, as depositor, The Bank of New York Trust Company, National Association, as property trustee, The Bank of New York (Delaware), as Delaware trustee, and the administrative trustees named therein, as amended, supplemented or otherwise modified from time to time (the “Trust Agreement”).
“TRUPS Documents” means, collectively, the Junior Subordinated Indenture, the Trust Agreement, the related guarantee agreement, and each other material agreement governing the Junior Subordinated Notes or the Trust Preferred Securities, in each case as supplemented, amended or otherwise modified from time to time.
“TRUPS Redemption Amount” means the aggregate amount required under the TRUPS Documents to redeem, repay, satisfy and discharge in full all outstanding Junior Subordinated Notes, together with accrued and unpaid interest thereon to, but excluding, the applicable redemption, repayment, or satisfaction date and, as a result thereof, cause the redemption, repayment, satisfaction or discharge of all outstanding Trust Preferred Securities, together with all accrued and unpaid distributions thereon to, but excluding, the applicable redemption date, and any other amounts required to be paid under the TRUPS Documents in connection with such redemption, repayment, satisfaction or discharge.
“Unconsolidated JV” means any joint venture entity in which the Company directly or indirectly owns an interest that is not consolidated in the financial statements of the Company prepared in accordance with GAAP.
“Wholly Owned Company Subsidiary” means any directly or indirectly wholly owned Subsidiary of the Company.
“Willful Breach” means a material breach of any covenant set forth in this Agreement that is a consequence of a deliberate act or omission undertaken by the breaching Party with the knowledge or intent that the taking of such act or failure to take such action could cause or constitute a material breach of this Agreement, whether or not breaching this Agreement is the conscious object of such act or omission.
(b) In addition to the terms defined in Section 1.1(a), the following terms shall have the respective meanings set forth in the sections set forth below opposite such term:
Access Agreement Acquisition Agreement |
Section 7.2 Section 7.3(f)(ii) |
| Adverse Recommendation Change | Section 7.3(f)(i) |
| Affiliate Transaction | Section 4.18(b) |
| Agreement | Preamble |
| Alternative Financing | Section 7.12(b) |
| Alternative Financing Commitment Letter | Section 7.12(b) |
A-21
| Articles of Merger | Section 2.3 |
| Board Recommendation | Section 4.2(c) |
| Brookfield Sponsor | Recitals |
| Capitalization Date | Section 4.4(a) |
| Certificates | Section 3.2(c) |
| Closing | Section 2.2 |
| Closing Date | Section 2.2 |
| COBRA | Section 4.17(b) |
| Company | Preamble |
| Company Board | Recitals |
| Company Budget | Section 6.1(b) |
| Company Common Share | Recitals |
| Company Disclosure Letter | Article 4 |
| Company IP | Section 4.14(b) |
| Company Preferred Shares | Section 4.4(a) |
| Company SEC Documents | Section 4.5(a) |
| Company Terminating Breach | Section 9.1(d)(i) |
| Competing Proposal | Section 7.3(j)(i) |
| Consents | Section 7.6(a) |
| Contracting Party | Section 10.11(a) |
| CPPIB Sponsor | Recitals |
| Debt Commitment Letters | Recitals |
| Debt Financing | Section 5.4(a) |
| Definitive Financing Agreements | Section 7.12(a) |
| Discharge | Section 7.14(b) |
| Effective Time | Section 2.4 |
| Equity Commitment Letter | Recitals |
| Equity Financing | Section 5.4(a) |
| Exchange Fund | Section 3.2(a) |
| Excluded Shares | Section 3.1(a)(ii) |
| Financing | Section 5.4(a) |
| Financing Commitment Letters | Recitals |
| Financing Indemnified Parties | Section 7.11(e) |
| Go-Shop Period | Section 7.3(a) |
| Governing Document Restrictions | Section 7.13 |
| Ground Leases | Section 4.10(b) |
| Guarantee | Recitals |
| Guarantors | Recitals |
| Indemnified Parties | Section 7.9(c) |
| Inside Date | Section 2.2 |
| Insurance Policies | Section 4.16 |
| Interim Period | Section 6.1(a) |
| Intervening Event | Section 7.3(j)(iii) |
| Joint Venture Agreements | Section 4.10(g) |
| Letter of Transmittal | Section 3.2(c) |
| Management Agreements | Section 4.12(e) |
A-22
| Material Company Leases | Section 4.10(b) |
| Material Contract | Section 4.12(c) |
| Merger | Recitals |
| Merger Consideration | Section 3.1(a)(i) |
| Merger Sub | Recitals |
| MLLCA | Recitals |
| MRL | Recitals |
| Non-Governmental Consents | Section 7.6(a) |
| Non-Recourse Party | Section 10.11(a) |
| Notice Period | Section 7.3(g)(ii) |
| Old Plans | Section 7.8(a) |
| Outside Date | Section 9.1(b)(i) |
| Parent | Preamble |
| Parent Liability Cap | Section 10.10(c) |
| Parent Parties | Preamble |
| Parent Terminating Breach | Section 9.1(c)(i) |
| Parties | Preamble |
| Party | Preamble |
| Paying Agent | Section 3.2(a) |
| Payoff Letters | Section 7.11(b) |
| Permits | Section 4.8(a) |
| Property Budget | Section 6.1(b) |
| Proxy Statement | Section 4.23 |
| Qualifying Income | Section 9.4(a) |
| Recovery Costs | Section 9.3(c)(ii) |
| REIT Counsel | Section 7.16(a) |
| REIT Officer’s Certificate | Section 7.16(a) |
| Required Amount | Section 5.4(b) |
| Sarbanes-Oxley Act | Section 4.5(a) |
| Series C Preferred Consideration | Section 3.1(a)(ii) |
| Scheduled Closing Date | Section 2.2 |
| Solvent | Section 5.5 |
| Superior Proposal | Section 7.3(j)(ii) |
| Surviving Entity | Section 2.1 |
| Takeover Statutes | Section 4.22 |
| Transfer Taxes | Section 7.16(a) |
| Voting Debt | Section 4.4(d) |
Section 1.2 Interpretation and Rules of Construction. In this Agreement, except to the extent otherwise provided or that the context otherwise requires:
(a) when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or Exhibit or Schedule to, this Agreement unless otherwise indicated;
(b) the table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;
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(c) whenever the words “include,” “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limiting the generality of the foregoing” unless expressly provided otherwise;
(d) “or” shall be construed in the inclusive sense of “and/or”;
(e) the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement, except to the extent otherwise specified;
(f) all references herein to “$” or dollars shall refer to U.S. dollars;
(g) no specific provision, representation or warranty shall limit the applicability of a more general provision, representation or warranty;
(h) it is the intent of the Parties that each representation, warranty, covenant, condition and agreement contained in this Agreement shall be given full, separate, and independent effect and that such provisions are cumulative;
(i) the phrases “delivered” or “made available” means that the information referred to has been physically or electronically delivered to the relevant parties or their respective Representatives, including, in the case of “made available” to Parent, Merger Sub or their Representatives or Affiliates, material that has been posted in the “data room” (virtual or otherwise) established by the Company prior to the execution of this Agreement;
(j) references to a Person are also to its successors and permitted assigns;
(k) any reference in this Agreement to a date or time shall be deemed to be such date or time in the City of New York, New York, unless otherwise specified;
(l) whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified;
(m) whenever any action must be taken hereunder on or by a day that is not a Business Day, then such action may be validly taken on or by the next day that is a Business Day;
(n) all terms defined in this Agreement have the defined meanings when used in any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein;
(o) words of any gender include each other gender, and words using the singular or plural number also include the plural or singular number, respectively;
(p) any Law defined or referred to herein or in any agreement or instrument that is referred to herein means such Law as from time to time amended, modified or supplemented and (in the case of statutes) to any rules or regulations promulgated thereunder, including (in the case of statutes) by succession of comparable successor Laws; and
(q) an accounting term used herein and not otherwise defined has the meaning assigned to it in accordance with GAAP.
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Article 2
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the satisfaction or waiver of the conditions set forth in this Agreement, and in accordance with the MRL and the MLLCA, at the Effective Time, the Company shall be merged with and into Merger Sub, whereupon the separate existence of the Company will cease, with Merger Sub surviving the Merger (Merger Sub, as the surviving entity in the Merger, sometimes being referred to herein as the “Surviving Entity”), and the Surviving Entity shall continue under the name “Leopard Merger Sub LLC” (or such other name that Parent selects). The Merger shall have the effects provided in this Agreement and the Articles of Merger (as defined below) and as specified in the applicable provisions of the MRL and the MLLCA.
Section 2.2 Closing. Unless this Agreement shall have been terminated in accordance with Article 9 hereof, the closing of the Merger (the “Closing”) will take place (a) by electronic exchange of documents and signatures on the date that is five (5) Business Days following the satisfaction (or waiver, if permitted by applicable Law) of the last to be satisfied of the conditions set forth in Article 8 (other than those conditions that, by their nature, are to be satisfied at the Closing, but subject to the satisfaction (or waiver, if permitted by applicable Law) of those conditions, or (b) such other place or date as may be agreed in writing by Parent and the Company. The date on which the Closing actually takes place is referred to herein as the “Closing Date.”
Section 2.3 Effective Time. Prior to the Closing, the Company, Parent and Merger Sub shall prepare and, on the Closing Date, the Company, Parent and Merger Sub shall (i) cause articles of merger with respect to the Merger (the “Articles of Merger”) to be duly executed and filed with, and accepted for record by, the Maryland SDAT as provided under the MRL and the MLLCA and (ii) make any other filings, recordings or publications required to be made by the Company, Parent or Merger Sub under the MRL or MLLCA in connection with the Merger. The Merger shall become effective upon the later of such time as the Articles of Merger have been accepted for record by the SDAT, and such later time (not to exceed thirty (30) days after the Articles of Merger are accepted for record by the SDAT) as the Parties shall have agreed upon and designated in the Articles of Merger in accordance with the MRL and the MLLCA as the effective time of the Merger (the “Effective Time”).
Section 2.4 Organizational Documents of the Surviving Entity. Subject to Section 7.9(b) and the last sentence of this Section 2.4, at the Effective Time and by virtue of the Merger, the articles of organization and limited liability company operating agreement of Merger Sub, as in effect immediately prior to the Effective Time shall be the articles of organization and limited liability company operating agreement of the Surviving Entity, until thereafter amended in accordance with applicable Law and the applicable provisions of such certificate of formation and limited liability company operating agreement. Prior to the Effective Time, Parent and Merger Sub shall take all actions necessary to authorize the Surviving Entity Series C Preferred Units and, at the Effective Time, issue such Surviving Entity Series C Preferred Units to the holders of Company Series C Preferred Shares in accordance with this Agreement. Prior to the Effective Time, Parent and Merger Sub shall cause the organizational documents of Merger Sub (and the Surviving Entity), to contain provisions necessary to give effect to the rights, preferences, privileges and voting powers of the Surviving Entity Series C Preferred Units as contemplated hereby.
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Section 2.5 Board of Directors and Officers of the Surviving Entity. The board of directors of Merger Sub immediately prior to the Effective Time shall be the board of directors of the Surviving Entity immediately after the Effective Time, and the officers of Merger Sub immediately prior to the Effective Time shall be the officers of the Surviving Entity immediately after the Effective Time, each to serve until such time as its, his or her resignation or removal or such time as its, his or her successor shall be duly elected and qualified, in each case in accordance with the articles of organization and limited liability company operating agreement of the Surviving Entity.
Section 2.6 Tax Consequences. Each of the Parties hereby agrees to treat, for U.S. federal and applicable state income tax purposes, (a) the Merger as a taxable sale or exchange by the Company of all of its assets to and the assumption of all of its liabilities by Merger Sub, followed by a distribution of the Merger Consideration to the shareholders of the Company in liquidation of the Company under Section 331 of the Code (which distribution shall be deemed to give rise to a distribution under Section 562(b) of the Code), and (b) this Agreement as a “plan of liquidation” of the Company for U.S. federal income tax purposes, and hereby adopt it as such. The Parties shall not take any position contrary to the preceding sentence in any U.S. federal income Tax Return or tax proceeding unless otherwise required by Law.
Article 3
EFFECTS OF THE MERGER
Section 3.1 Effects of the Merger.
(a) At the Effective Time, by virtue of the Merger and without any further action on the part of the Parent Parties, the Company or the holders of any securities of the Company:
(i) Except as noted below, each Company Common Share, or fraction thereof, issued and outstanding as of immediately prior to the Effective Time (other than Excluded Shares in accordance with Section 3.1(a)(ii)), shall automatically be cancelled and converted into the right to receive, in accordance with the terms of this Agreement, an amount in cash equal to $61.20 per share, without interest (such amount per share, the “Merger Consideration”), upon the proper surrender of Book-Entry Shares and Certificated Shares evidencing validly issued, fully paid and nonassessable Company Common Shares in accordance with Section 3.2 and subject to Section 3.1(a)(ii), Section 3.1(b), Section 3.5 and the next sentence of this Section 3.1(a)(i). From and after the Effective Time, all Company Common Shares shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and each holder of a Company Common Share shall cease to have any rights with respect thereto, except for the right to receive the Merger Consideration therefor in accordance with Section 3.2.
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(ii) Each Company Common Share issued and outstanding as of immediately prior to the Effective Time and then held by the Parent Parties or any of their respective Subsidiaries or any of the Acquired Companies (collectively, the “Excluded Shares”) shall automatically be cancelled and shall cease to exist, and no consideration shall be paid therefor, nor shall any right inure or be made with respect thereto in connection with or as a consequence of the Merger.
(iii) Each Company Series C Preferred Share issued and outstanding as of immediately prior to the Effective Time shall automatically be cancelled and converted into the right to receive, in accordance with the terms of this Agreement, one (1) Surviving Entity Series C Preferred Unit (the “Series C Preferred Consideration”). From and after the Effective Time, all Company Series C Preferred Shares shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and each holder of a Company Series C Preferred Share shall cease to have any rights with respect thereto, except for the right to receive the Series C Preferred Consideration therefor in accordance with Section 3.2.
(b) Adjustment to Merger Consideration. The Merger Consideration and other similarly dependent items shall be equitably adjusted to reflect the effect of any stock split, reverse stock split, stock dividend (including any dividend or other distribution of securities convertible into Company Common Shares), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the number of Company Common Shares outstanding after the date hereof and prior to the Effective Time so as to provide the holders of Company Common Shares with the same economic effect as contemplated by this Agreement prior to such event and as so adjusted shall, from and after the date of such event, be the Merger Consideration and other similarly dependent items.
Section 3.2 Payment Procedures.
(a) Prior to the Effective Time, Parent shall appoint a nationally recognized, reputable U.S. bank or trust company (the identity and terms of designation and appointment of which shall be subject to the reasonable prior approval of the Company) to act as paying agent with respect to the Merger (the “Paying Agent”). Not less than five (5) Business Days prior to the Effective Time, Parent shall enter into an exchange and paying agent and nominee agreement with the Paying Agent, in a form reasonably acceptable to the Company and Parent, setting forth the procedures to be used in accomplishing the deliveries and other actions contemplated by this Section 3.2. Parent shall pay, or cause to be paid, the fees and expenses of the Paying Agent.
(b) At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, with the Paying Agent, in a non-interest bearing account, a cash amount in U.S. dollars that is sufficient in the aggregate to enable the Paying Agent to make the payments of the Merger Consideration (the “Exchange Fund”). In the event the Exchange Fund is insufficient to make the payments contemplated pursuant to Section 3.2, Parent shall promptly deposit, or cause to be deposited, with the Paying Agent such additional funds to ensure that the Paying Agent has sufficient funds to make such payments. The Paying Agent shall make payments, in accordance with the Paying Agent’s customary procedures, of the Merger Consideration out of the Exchange Fund in accordance with this Agreement. Any and all interest earned on cash deposited in the Exchange Fund shall be paid to the Surviving Entity.
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(c) Certificates. As soon as practicable after the Effective Time (and in no event later than three (3) Business Days after the Effective Time), Parent and the Surviving Entity shall cause the Paying Agent to mail (and make available for collection by hand) to each Person that was, immediately prior to the Effective Time, a holder of record of Company Common Shares evidenced by certificates (the “Certificates”), which Company Common Shares were converted into the right to receive the Merger Consideration at the Effective Time pursuant to Section 3.1(a)(i) of this Agreement: (A) a letter of transmittal, which shall be in a customary form as prepared by Parent and the Surviving Entity and reasonably acceptable to the Company and Parent prior to the Effective Time and shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Paying Agent, shall have a customary release of all claims against Parent, Merger Sub and the Company arising out of or related to such holder’s ownership of Company Common Shares (a “Letter of Transmittal”) and (B) instructions for effecting the surrender of the Certificates (or affidavits of loss in lieu thereof) in exchange for payment of the Merger Consideration, the forms of which Letter of Transmittal and instructions shall be subject to the reasonable approval of the Company prior to the Effective Time. Upon surrender of a Certificate (or affidavit of loss in lieu thereof) to the Paying Agent or to such other agent or agents as may be appointed in writing by Merger Sub, and upon delivery of a Letter of Transmittal, duly executed and in proper form, with respect to such Certificates, the holder of such Certificates shall be entitled to receive the Merger Consideration for each Company Common Share formerly evidenced by such Certificates (after giving effect to any required Tax withholdings as provided in Section 3.5), and any Certificate so surrendered shall forthwith be cancelled. If payment of the Merger Consideration is to be made to a Person other than the Person in whose name any surrendered Certificate is registered, it shall be a condition precedent of payment that the Certificate so surrendered shall be properly endorsed or shall otherwise be in proper form for transfer, and the Person requesting such payment shall have paid any Transfer Taxes required by reason of the payment of the Merger Consideration to a Person other than the registered holder of the Certificate so surrendered and shall have established to the satisfaction of the Surviving Entity that such Taxes either have been paid or are not required to be paid. No interest will be paid or accrued on any amount payable upon due surrender of the Certificates. Until surrendered as contemplated hereby, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive the Merger Consideration as contemplated by this Agreement, except for Excluded Shares.
(d) Book-Entry Shares. Notwithstanding anything to the contrary contained in this Agreement, no holder of Book-Entry Shares shall be required to deliver a Certificate or, in the case of holders of Book-Entry Shares held through The Depository Trust Company, an executed Letter of Transmittal to the Paying Agent, to receive the Merger Consideration that such holder is entitled to receive pursuant to the terms hereof. In lieu thereof, each holder of record of one (1) or more Book-Entry Shares held through The Depository Trust Company whose Company Common Shares were converted into the right to receive the Merger Consideration shall upon the Effective Time, in accordance with The Depository Trust Company’s customary procedures (including receipt by the Paying Agent of an “agent’s message” (or such other evidence of transfer or surrender as the Paying Agent may reasonably request)) and such other procedures as agreed by the Company, Parent, the Paying Agent and The Depository Trust Company, be entitled to receive, and Parent shall cause the Paying Agent to pay and deliver to The Depository Trust Company or its nominee, for the benefit of the holder of such Book-Entry Shares held through it, as promptly as practicable after the Effective Time, in respect of each such Book-Entry Share, the Merger Consideration out of the Exchange Fund for each such Book-Entry Share (after giving effect to any required Tax withholdings as provided in Section 3.5) and such Book-Entry Shares of such holder shall forthwith be cancelled. As soon as practicable after the Effective Time (and in no event later than three (3) Business Days after the Effective Time), Parent and the Surviving Entity shall cause the Paying Agent to mail to each Person that was, immediately prior to the Effective Time, a holder of record of Book-Entry Shares not held through The Depository Trust Company (A) a Letter of Transmittal and (B) instructions for returning such Letter of Transmittal in exchange for the Merger Consideration, the forms of which Letter of Transmittal and instructions shall be subject to the reasonable approval of the Company prior to the Effective Time. Upon delivery of such Letter of Transmittal, in accordance with the terms of such Letter of Transmittal, duly executed and in proper form, the holder of such Book-Entry Shares shall be entitled to receive in exchange therefor the Merger Consideration, for each such Book-Entry Share (after giving effect to any required Tax withholdings as provided in Section 3.5), and such Book-Entry Shares so surrendered shall forthwith be cancelled. Payment of the Merger Consideration with respect to Book-Entry Shares shall only be made to the Person in whose name such Book-Entry Shares are registered. No interest will be paid or accrued on any amount payable upon due surrender of Book-Entry Shares. Until paid or surrendered as contemplated hereby, each Book-Entry Share shall be deemed at any time after the Effective Time to represent only the right to receive the Merger Consideration as contemplated by this Agreement, except for Excluded Shares.
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(e) Lost Certificates. If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if requested by Parent, the posting by such Person of a bond, in such reasonable amount as Parent may direct, as indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent (or, if subsequent to the termination of the Exchange Fund, Parent) shall issue, in exchange for such lost, stolen or destroyed Certificate, the Merger Consideration into which the Company Common Shares evidenced by such Certificate were converted pursuant to Article 3.
(f) Remaining Exchange Fund. Any portion of the Exchange Fund that remains undistributed to the former holders of the Company Common Shares for twelve (12) months after the Closing Date shall be delivered to the Surviving Entity upon demand from the Surviving Entity, and any former holders of the Company Common Shares who have not theretofore complied with this Article 3 shall thereafter look only to the Surviving Entity (and only as general creditors thereof) for payment of the Merger Consideration payable upon surrender of their Company Common Shares. None of Parent, the Surviving Entity, the Company or the Paying Agent or any other Person shall be liable to any holder of Company Common Shares for any Merger Consideration or other amounts properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law. Any amounts remaining unclaimed by such holders of Company Common Shares immediately prior to the time at which such amounts would otherwise escheat to, or become the property of, any Governmental Authority shall, to the extent permitted by applicable Law, become the property of the Surviving Entity, free and clear of any claims or interest of any such holders or their successors, assigns or personal Representatives previously entitled thereto.
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(g) Company Series C Preferred Shares. Notwithstanding anything to the contrary contained in this Agreement, no holder of Company Series C Preferred Shares shall be required to deliver a Certificate or an executed Letter of Transmittal to the Paying Agent or the Surviving Entity to receive the Series C Preferred Consideration that such holder is entitled to receive pursuant to the terms hereof. In lieu thereof, each holder of record of one (1) or more Company Series C Preferred Shares whose Company Series C Preferred Shares were converted into the right to receive the Series C Preferred Consideration shall, upon the Effective Time, be entitled to receive, and the Surviving Entity shall (and Parent shall cause the Surviving Entity to) (i) record on its books and records the issuance of the Surviving Entity Series C Preferred Units to each holder of record of Company Series C Preferred Shares as of immediately prior to the Effective Time and (ii) deliver to each such holder written confirmation of such issuance, which confirmation shall set forth the number of Surviving Entity Series C Preferred Units issued to such holder.
(h) Share Transfer Books. As of the Effective Time, the share transfer books of the Company shall be closed, and thereafter, there shall be no further registration of transfers of Company Common Shares or Company Series C Preferred Shares on the records of the Company. The Merger Consideration or Series C Preferred Consideration, as applicable, paid in accordance with the terms of this Article 3 automatically upon surrender of Company Common Shares or Company Series C Preferred Shares, respectively, shall be deemed to have been paid in full satisfaction of all rights pertaining to such Company Common Shares or Company Series C Preferred Shares, respectively. From and after the Effective Time, the holders of Company Common Shares or Company Series C Preferred Shares, as applicable, outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such Company Common Shares or Company Series C Preferred Shares, as applicable, except as otherwise provided for herein or by applicable Law. If, after the Effective Time, Book-Entry Shares or Certificates evidencing Company Common Shares or Company Series C Preferred Shares, as applicable, are presented to the Surviving Entity for transfer, they shall be cancelled and exchanged as provided in this Agreement.
(i) Investment of Exchange Fund. After the Closing Date, the Paying Agent shall invest any cash included in the Exchange Fund as directed by Parent and in accordance with the Paying Agent’s customary procedures. Any interest and other income resulting from such investments shall be paid to Parent or its designee. No investment or losses thereon of the Exchange Fund shall affect the consideration to which holders of Company Common Shares are entitled pursuant to Section 3.1(a)(i). Until the termination of the Exchange Fund, to the extent that there are losses with respect to such investments, or the cash portion of the Exchange Fund diminishes for other reasons below the level required to make prompt payments of the Merger Consideration as contemplated hereby, Parent shall promptly replace or restore the cash portion of the Exchange Fund lost through investments or other events so as to ensure that the cash portion of the Exchange Fund is, at all times, maintained at a level sufficient to make all such payments.
Section 3.3 Treatment of Company Restricted Share Awards. At the Effective Time, by virtue of the Merger and without any action on the part of the Company, Parent or the holder thereof, (a) each Company Restricted Share Award that is outstanding as of immediately prior to the Effective Time shall, to the extent not vested, become fully vested; provided that to the extent that such award is subject to performance conditions, any performance conditions shall be deemed to have been satisfied at the maximum level of performance, and (b) each Company Restricted Share Award shall be canceled without any action on the part of any holder or beneficiary thereof in consideration for the right to receive, within three (3) Business Days after the Effective Time, a lump sum cash payment with respect thereto equal to the product of: (x) the Merger Consideration; and (y) the number of Company Common Shares represented by such Company Restricted Share Award, less any required withholding taxes. As of the Effective Time, all accrued but unpaid dividends, if any, with respect to Company Restricted Share Awards outstanding immediately prior to the Effective Time, automatically and without any action on the part of the holder or beneficiary thereof, shall, to the extent not vested, become fully vested and be paid to such holder or beneficiary, as applicable, less any required withholding taxes.
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Section 3.4 ESPP. Prior to the date hereof, the Company Board adopted resolutions suspending the ESPP and provided notice to participants in the ESPP describing the suspension of the ESPP. Prior to the Effective Time, the Company Board (or, if appropriate, the compensation committee of the Company Board), shall adopt resolutions providing that the ESPP shall terminate effective upon the Effective Time.
Section 3.5 Withholding Rights. Each Party hereto and the Paying Agent shall be entitled to deduct and withhold, or cause to be deducted and withheld, from any amounts payable pursuant to this Agreement such amounts as are required to be deducted or withheld therefrom under the Code or any provision of state, local or foreign tax Law. To the extent that such amounts are so deducted and withheld, each such payor shall take all action as may be necessary to ensure any such amounts so withheld are timely and properly remitted to the appropriate Governmental Authority. Any amounts deducted and withheld under this Agreement that are remitted to the appropriate Governmental Authority shall be treated for all purposes under this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid.
Section 3.6 Dissenters Rights. No dissenters’ rights, appraisal rights, or other similar rights (including rights of an objecting shareholder pursuant to Section 8-501.1(j) of the MRL and Section 3-202 of the MGCL) shall be available with respect to the Merger or the other transactions contemplated by this Agreement.
Section 3.7 General Effects of the Merger. At the Effective Time, the effect of the Merger shall be as set forth in this Agreement and as provided in the applicable provisions of the MRL and the MLLCA. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all of the assets, property, rights, privileges, powers and franchises of the Company and Merger Sub shall transfer to, vest in, and devolve on, the Surviving Entity, and all debts, obligations, liabilities and duties of the Company and Merger Sub shall become the debts, obligations, liabilities and duties of the Surviving Entity.
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Article 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (a) as set forth in the disclosure letter prepared by the Company and delivered to Parent at or prior to the execution and delivery of this Agreement (the “Company Disclosure Letter”) (it being acknowledged and agreed that disclosure of any item in any section or subsection of the Company Disclosure Letter shall be deemed disclosed with respect to the section or subsection of this Agreement to which it corresponds and any other section or subsection of this Agreement to the extent (notwithstanding the absence of a specific cross reference) the applicability of such disclosure to such other section or subsection of this Agreement is reasonably apparent on its face; provided that the Company Disclosure Letter shall not be construed as constituting representations, warranties, covenants or agreements of the Company or any Company Subsidiary, other than any such covenants or agreements expressly and affirmatively set forth in the Company Disclosure Letter (including, for the avoidance of doubt, any undertaking by the Company to consult with, or provide information to, Parent), or broadening the scope of any representation or warranty of the Company made herein), or (b) as disclosed in the Company SEC Documents (as defined below) and available on the SEC’s Electronic Data Gathering, Analysis and Retrieval system at least two (2) Business Days prior to the date of this Agreement (excluding any information or documents incorporated by reference therein, or filed as exhibits thereto, and excluding any disclosures contained in such documents under the heading “Forward Looking Statements” or “Risk Factors” or any similarly titled captions and any other disclosures contained therein that are cautionary or forward looking in nature, but, for the purpose of clarification, including and giving effect to any factual or historical statements included in any such statements), the Company hereby represents and warrants to the Parent Parties that:
Section 4.1 Organization and Qualification; Subsidiaries.
(a) The Company is a real estate investment trust duly formed, validly existing and in good standing under the laws of the State of Maryland and has the requisite real estate investment trust power and authority to own, lease and, to the extent applicable, operate its properties and assets and to carry on its business as it is now being conducted. The Company is duly qualified or licensed to do business and is in good standing, in each jurisdiction where the character of the properties owned, operated or leased by it or the nature of its business makes such qualification, licensing or good standing necessary, except for such failures to be so qualified, licensed or in good standing that, individually or in the aggregate, would not have, and would not reasonably be expected to have, a Company Material Adverse Effect.
(b) Each Subsidiary of the Company is duly organized, validly existing and in good standing (to the extent applicable) under the Laws of the jurisdiction of its incorporation or organization, as the case may be, and has the requisite organizational power and authority to own, lease and, to the extent applicable, operate its properties and assets and to carry on its business as it is now being conducted, except for such failures to be so organized, validly existing, in good standing, or to have such power and authority that, individually or in the aggregate, would not have, and would not reasonably be expected to have, a Company Material Adverse Effect. Each Subsidiary of the Company is duly qualified or licensed to do business and is in good standing, in each jurisdiction where such qualification, licensing and good standing is legally required due to the character of the properties owned, operated or leased by it or the nature of its business, except for such failures to be so qualified, licensed or in good standing that, individually or in the aggregate, would not have, and would not reasonably be expected to have, a Company Material Adverse Effect.
(c) Section 4.1(c) of the Company Disclosure Letter sets forth a true and complete list of the Subsidiaries of the Company and their respective jurisdictions of incorporation or organization, as the case may be, the jurisdictions in which the Company and each Subsidiary of the Company are qualified or licensed to do business, and the type of and percentage of interest held, directly or indirectly, by the Company in each Subsidiary of the Company.
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(d) Except as set forth in Section 4.1(d) of the Company Disclosure Letter, none of the Acquired Companies, directly or indirectly, owns any equity interest, membership interest, partnership interest, joint venture interest, or investment (whether equity or debt), or any interest convertible into, exercisable or exchangeable for any of the foregoing in, nor is it under any current or prospective obligation to make any loan, capital contribution, or other investment in any Person (other than in the Subsidiaries of the Company and investments in short-term investment securities).
(e) The Company has made available to Parent complete and correct copies of the Company Governing Documents in effect as of the date of this Agreement. The Company is in compliance with the terms of its Company Governing Documents in all material respects. The Company Governing Documents were duly adopted and are in full force and effect.
Section 4.2 Authority; Approval Required.
(a) The Company has the requisite real estate investment trust power to execute and deliver this Agreement, to perform its obligations hereunder and, subject to receipt of the Shareholder Approval, to consummate the transactions contemplated by this Agreement, including the Merger. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated by this Agreement have been duly and validly authorized by all necessary real estate investment trust action, and no other real estate investment trust proceedings on the part of the Company are necessary to authorize this Agreement or the Merger or to consummate the other transactions contemplated by this Agreement, subject, with respect to the Merger, to receipt of the Shareholder Approval and the filing of the Articles of Merger with, and acceptance for record of the Articles of Merger by, the SDAT.
(b) This Agreement has been duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery by the Parent Parties, constitutes a legally valid and binding obligation of the Company, enforceable against the Company on and in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).
(c) The Company Board has duly adopted resolutions unanimously (i) declaring that the Merger and the other transactions contemplated by this Agreement are advisable and in the best interests of the Company and its shareholders, (ii) authorizing and approving the execution, delivery and performance of this Agreement and, subject to obtaining the Shareholder Approval, the consummation of the transactions contemplated by this Agreement, including the Merger, (iii) directed that the approval of the Merger and the transactions contemplated by this Agreement be submitted to a vote of the holders of Company Common Shares at the Shareholders Meeting, and (iv) except as may be permitted pursuant to Section 7.3, resolved to include in the Proxy Statement the recommendation of the Company Board to holders of Company Common Shares to vote in favor of approval of the Merger and the other transactions contemplated by this Agreement (such recommendation, the “Board Recommendation”), which resolutions remain in full force and effect and have not been subsequently rescinded, modified or withdrawn in any way, except as may be permitted after the date hereof by Section 7.3.
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(d) The Shareholder Approval is the only vote or consent of the holders of any class or series of securities of the Company necessary to approve the Merger and the other transactions contemplated by this Agreement.
Section 4.3 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Company do not, and the performance of this Agreement and their obligations hereunder will not, (i) assuming receipt of the Shareholder Approval, conflict with or violate any provision of (A) the Company Governing Documents, or (B) any equivalent organizational or governing documents of any other Subsidiary of the Company, (ii) assuming that all consents, approvals, authorizations and permits described in Section 4.3(b) have been obtained, all filings and notifications described in Section 4.3(b) have been made and any waiting periods thereunder have terminated or expired, conflict with or violate any Law applicable to the Acquired Companies or by which any property or asset of the Acquired Companies is bound, or (iii) except as set forth in Section 4.3(a)(iii) of the Company Disclosure Letter, require any consent or approval (except as contemplated by Section 4.3(b)) under, result in any breach of any obligation or any loss of any benefit or material increase in any cost or obligation of any of the Acquired Companies under, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to any other Person any right of termination, acceleration or cancellation (with or without notice or the lapse of time or both) of, or give rise to any right of purchase, first offer or forced sale under or result in the creation of a Lien (other than a Permitted Encumbrance) on any property or asset of the Acquired Companies pursuant to, any Material Contract or Permit (as defined herein) to which any of the Acquired Companies is a party, except, as to clauses (i)(B), (ii) and (iii) above, for any such conflicts, violations, breaches, defaults or other occurrences which, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company do not, and the performance of this Agreement by the Company will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority by the Company, except (i) the filing with the SEC of the Proxy Statement and such reports under, and other compliance with, the Exchange Act and the Securities Act as may be required in connection with this Agreement and the transactions contemplated by this Agreement, (ii) the filing of the Articles of Merger with, and the acceptance for record of the Articles of Merger by, the SDAT pursuant to the MRL and the MLLCA, (iii) such filings and approvals as may be required by any applicable state securities or “blue sky” Laws, (iv) the consents, authorizations, orders or approvals of each Governmental Authority listed in Section 8.1(a) of the Company Disclosure Letter, and (v) where failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications which, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect.
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Section 4.4 Capital Structure.
(a) The authorized shares of beneficial interest of the Company consist of 1,400,000,000 shares, of which (x) 600,000,000 are designated as Company Common Shares, (y) 100,000,000 are designated as preferred shares of beneficial interest, par value $0.0001 per share (“Company Preferred Shares”), and (z) 700,000,000 shares are designated as excess shares of beneficial interest ((x)-(z), collectively, the “Company Capital Shares”). As of the close of business on July 17, 2026 (the “Capitalization Date”), (i) 58,040,726 Company Common Shares were issued and outstanding, (ii) 1,935,375 Company Preferred Shares were issued and outstanding, all of which are designated as Company Series C Preferred Shares, (iii) Company Restricted Share Awards covering 916,538 unvested Company Common Shares were issued and outstanding, (iv) 199,932 Company Common Shares were reserved for issuance under the ESPP, (v) 553,333 Company Common Shares were reserved for issuance under the Company’s direct share purchase plan, (vi) 7,936,507 Company Common Shares were reserved for issuance pursuant to the Company’s at-the-market equity offering program, (vii) 800,205 Company Common Shares were reserved for issuance pursuant to future awards under the Incentive Plan, (viii) 861,158 Company Common Shares were reserved for issuance upon conversion of the outstanding Company Series C Preferred Shares, and (ix) 1,089 Company Common Shares were reserved for issuance in connection with the Company’s reverse stock split that was effectuated on November 10, 2025. All of the outstanding Company Capital Shares are duly authorized, validly issued, fully paid and nonassessable. From the close of business on the Capitalization Date until the date of this Agreement, no Company Common Shares, Company Preferred Shares or Company Restricted Share Awards have been issued, awarded or granted. Except as set forth in this Section 4.4(a), there are no other outstanding Company Capital Shares as of the close of business on the Capitalization Date. As of the Capitalization Date, the Conversion Rate (as defined in the Company Declaration) for the Company Series C Preferred Shares was 0.487 shares of Company Common Shares per Company Series C Preferred Share.
(b) Section 4.4(b) of the Company Disclosure Letter sets forth the following information with respect to outstanding Company Restricted Share Awards as of the close of business on the Capitalization Date: (i) the name (or employee identification number) of the holder thereof; (ii) the number of Company Common Shares underlying such Company Restricted Share Award; (iii) the grant date, (iv) the amount of any accrued but unpaid dividends associated with such Company Restricted Share Award, and (v) the expiration date (if any).
(c) All of the outstanding shares of capital stock of each Subsidiary of the Company that is a corporation are duly authorized, validly issued, fully paid and nonassessable. All of the outstanding equity interests in each Subsidiary of the Company that is a partnership or limited liability company are duly authorized and validly issued. All outstanding shares of capital stock of, or equity interests in, each Subsidiary of the Company that may be issued upon exercise of outstanding options or exchange rights are duly authorized and, upon issuance will be validly issued, fully paid and nonassessable, as applicable. Except as set forth on Section 4.4(c) of the Company Disclosure Letter, the Company owns, directly or indirectly, all of the issued and outstanding capital stock of, or equity interests in, each Subsidiary of the Company, free and clear of all Liens, other than Permitted Encumbrances and for Liens and transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities laws. Section 4.4(c) of the Company Disclosure Letter sets forth the respective ownership percentages of the members in each joint venture Subsidiary of the Company and each Unconsolidated JV as of the date hereof.
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(d) As of the close of business on the Capitalization Date, there are no bonds, debentures, notes or other Indebtedness having general voting rights (or that are convertible into securities having such rights) of the Acquired Companies (“Voting Debt”) issued and outstanding. Except for (i) Company Restricted Share Awards (and any related accrued but unpaid dividends), (ii) the Company Series C Preferred Shares and (iii) as set forth on Section 4.4(d) of the Company Disclosure Letter, as of the close of business on the Capitalization Date (and Company Common Shares issuable on the vesting or settlement thereof, as applicable), there are no outstanding subscriptions, securities options, warrants, calls, rights, profits interests, share appreciation rights, phantom shares, convertible securities, preemptive rights, anti-dilutive rights, rights of first refusal or other similar rights, agreements, arrangements, undertakings or commitments of any kind to which the Acquired Companies is a party or by which any of them is bound obligating any of the Acquired Companies to (A) issue, transfer or sell or create, or cause to be issued, transferred or sold or created any additional shares or other equity interests or phantom shares or other contractual rights the value of which is determined in whole or in part by the value of any equity security of any of the Acquired Companies or securities convertible into or exchangeable for such shares or equity interests, (B) issue, grant, extend or enter into any such subscriptions, options, warrants, calls, rights, profits interests, share appreciation rights, phantom shares, convertible securities or other similar rights, agreements, arrangements, undertakings or commitments, or (C) redeem, repurchase or otherwise acquire any such shares, Voting Debt or other equity interests.
(e) The Company is not party to or bound by any Contracts concerning the voting (including voting trusts and proxies) of any Company Common Shares or Company Preferred Shares. Except as set forth in Section 4.4(e) of the Company Disclosure Letter, none of the Acquired Companies has granted any registration rights on Company Capital Shares. No Company Capital Shares are owned by any Subsidiary of the Company.
(f) The Company does not have a “poison pill” or similar shareholder rights plan.
(g) All dividends or other distributions on Company Common Shares, all dividends or other distributions on Company Series C Preferred Shares, and any material dividends or other distributions on any securities of any Subsidiary of the Company, which have been authorized or declared prior to the date hereof, have been paid in full (except to the extent such dividends have been publicly announced and are not yet due and payable). As of the date of this Agreement, full cumulative dividends on the Company Series C Preferred Shares for all past dividend periods have been declared and paid in cash. There has been no repurchase of Company Capital Shares between the close of business on the Capitalization Date and the date of this Agreement.
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Section 4.5 SEC Documents; Financial Statements; Internal Controls; Off-Balance Sheet Arrangements; Investment Company Act; Anti-Corruption Laws.
(a) The Company has timely filed with, or furnished (on a publicly available basis) to, the SEC, or, with respect to any late disclosure, timely responded to the SEC or subsequently filed, all forms, documents, statements, schedules and reports required to be filed or furnished by the Company under the Exchange Act or the Securities Act (together with all certifications required pursuant to the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”)) since the Lookback Date (the forms, documents, statements and reports filed or furnished with the SEC on or after the Lookback Date and those filed or furnished with the SEC since the date of this Agreement, if any, including any amendments or supplements thereto, the “Company SEC Documents”). As of their respective filing or furnishing dates (or the date of their most recent amendment, supplement or modification), the Company SEC Documents (i) complied as to form in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as the case may be, the Sarbanes-Oxley Act and the applicable rules and regulations of the SEC thereunder, and (ii) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading; provided, however, that no representation is made as to the accuracy of any financial projections or forward-looking statements or the completeness of any information filed or furnished by the Company to the SEC solely for the purposes of complying with Regulation FD promulgated under the Exchange Act. As of the date of this Agreement, to the Knowledge of the Company, there are no outstanding or unresolved comments in comment letters received from the SEC staff with respect to the Company SEC Documents and, to the Knowledge of the Company, none of the Company SEC Documents is the subject of ongoing SEC review. As of the date hereof, no Subsidiary of the Company is separately required to file any form or report with the SEC pursuant to the periodic and current disclosure requirements under Section 13(a) or Section 15(d) of the Exchange Act.
(b) The consolidated audited and unaudited financial statements of the Company and the consolidated Subsidiaries of the Company included, or incorporated by reference, in the Company SEC Documents, including the related notes and schedules (as amended, supplemented or modified by later Company SEC Documents), (i) complied as to form, as of their respective dates, in all material respects with the then-applicable accounting requirements of the Securities Act and the Exchange Act and the published rules and regulations of the SEC with respect thereto, (ii) were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto, or, in the case of the unaudited financial statements, for normal and recurring year-end adjustments and as may be permitted by the SEC on Form 10-Q, Form 8-K, Regulation S-X or any successor or like form under the Exchange Act), and (iii) fairly present, in all material respects (subject, in the case of unaudited financial statements, for normal and recurring year-end adjustments, none of which is material, individually or in the aggregate), the consolidated financial position of the Company and the consolidated Subsidiaries of the Company, taken as a whole, as of their respective dates and the consolidated results of operations of the Company and the consolidated Subsidiaries of the Company for the periods presented therein.
(c) The Company has designed and maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) to provide reasonable assurance that all material information required to be disclosed by the Company in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure. The Company has designed and maintains a system of internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) intended to provide reasonable assurances regarding the reliability of financial reporting for the Company and the consolidated Subsidiaries of the Company.
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(d) Except as set forth on Section 4.5(d) of the Company Disclosure Letter, none of the Acquired Companies is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar Contract, including any Contract relating to any securitization transaction or “off-balance sheet arrangements” (as defined in Item 303(b) of Regulation S-K of the SEC), where the result, purpose or intended effect of such transaction or arrangement is to avoid disclosure of any material transaction involving, or material liabilities of, the Acquired Companies in the Company’s audited financial statements or other Company SEC Documents.
(e) Neither the Company nor any Subsidiary of the Company is required to be registered as an investment company under the Investment Company Act.
(f) Except as permitted by the Exchange Act, including Sections 13(k)(2) and (3), since the Lookback Date, none of the Acquired Companies has made or permitted to remain outstanding any “extensions of credit” (within the meaning of Section 402 of the Sarbanes-Oxley Act) or prohibited loans to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or trustee of the Company.
(g) Except as would not have, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, since the Lookback Date, (i) neither the Company nor any of its Subsidiaries nor, to the Knowledge of the Company, any trustee, director, Officer, employee, auditor, accountant or Representative of the Company or any of its Subsidiaries has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any of its Subsidiaries or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company or any of its Subsidiaries has engaged in questionable accounting or auditing practices and (ii) no attorney representing the Company or any of its Subsidiaries, whether or not employed by the Company or any of its Subsidiaries, has reported evidence of a material violation of securities Laws, breach of duty or similar violation by the Company or any of its Subsidiaries or any of their respective trustees, Officers, directors, employees or agents to the Company Board or any committee thereof or to any trustee or Officer of the Company or any of its Subsidiaries.
Section 4.6 Absence of Certain Changes or Events. Except as set forth in Section 4.6 of the Company Disclosure Letter, since March 31, 2026 through the date of this Agreement, (a) the Acquired Companies have conducted their respective business in all material respects in the ordinary course of business and (b) there has not been any Company Material Adverse Effect.
Section 4.7 No Undisclosed Liabilities. Except (a) as specifically disclosed or reflected and, if required, reserved against in the financial statements or in the notes thereto contained in the Company SEC Documents, (b) for liabilities or obligations incurred in connection with the transactions contemplated by this Agreement, (c) for liabilities or obligations incurred in the ordinary course of business since March 31, 2026, or (d) liabilities that would not, individually or in the aggregate, have had or would reasonably be expected to have a Company Material Adverse Effect, none of the Acquired Companies has any liabilities of the type required to be disclosed in the liabilities column of a balance sheet prepared in accordance with GAAP or obligations or Indebtedness (whether accrued, absolute, contingent or otherwise).
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Section 4.8 Permits; Compliance with Law.
(a) Except for Property compliance and Environmental Permits, which are addressed solely in Section 4.10(a) and Section 4.11, respectively, each of the Acquired Companies is in possession of all authorizations, licenses, permits, certificates, approvals, variances, exemptions, Orders, franchises, certifications and clearances of any Governmental Authority necessary for such Acquired Company to own, lease and, to the extent applicable, operate its properties or to carry on its respective business substantially as they are being conducted (the “Permits”), and all such Permits are valid and in full force and effect, and are sufficient for the operation of the business as presently conducted by the Acquired Companies, except where the failure to be in possession of, or the failure to be valid or in full force and effect of or the sufficiency of, any of the Permits, individually or in the aggregate, would not have, and would not reasonably be expected to have a Company Material Adverse Effect. Except as would not have, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, no event has occurred with respect to any of the Permits which permits, or after notice or lapse of time or both would permit, revocation, suspension or termination thereof or would result in any other material impairment of the rights of the holder of any such Permits. To the Knowledge of the Company, there is not pending any applicable petition, objection or other pleading with any Governmental Authority having jurisdiction or authority over the operations of the Acquired Companies that impairs the validity of any Permit or which would reasonably be expected, if accepted or granted, to result in the revocation of any Permit, except where the impairment or revocation of any such Permit, individually or in the aggregate, would not have, and would not reasonably be expected to have, a Company Material Adverse Effect. None of the Acquired Companies has, since the Lookback Date: (i) received any written notice from any Governmental Authority regarding any material violation by any Acquired Company of any Law; or (ii) provided any written notice required by applicable Law to any Governmental Authority regarding any material violation by an Acquired Company of any Law, which notice in either case remains outstanding or unresolved as of the date hereof, except for such notices that, individually or in the aggregate, have not had, and would not reasonably be expected to have, a Company Material Adverse Effect.
(b) None of the Acquired Companies is in, nor since the Lookback Date has received written notice of, default or violation of (i) any Law applicable to any of the Acquired Companies or by which any property or asset of any of the Acquired Companies is bound or (ii) any Permits, except, in each case, for any such conflicts, defaults, non-compliances, violations or investigations that have been cured, or that, individually or in the aggregate, would not have, and would not reasonably be expected to have, a Company Material Adverse Effect. The Company has not received written notice from any Governmental Authority of any investigations the outcomes of which, individually or in the aggregate, would not have, and would not reasonably be expected to have, a Company Material Adverse Effect.
(c) Except as, individually or in the aggregate, would not have, and would not reasonably be expected to have, a Company Material Adverse Effect, in the last five (5) years, none of the Acquired Companies, nor, to the Knowledge of the Company, any of their respective Officers, trustees or directors, (in their capacity as such), has (i) violated any Anti-Corruption Laws applicable to such person, (ii) been in violation of Sanctions or knowingly conducted any business or transaction with or involving any Sanctioned Jurisdiction or Sanctioned Person or (iii) been a Sanctioned Person. To the Knowledge of the Company, in the last five (5) years, neither the Company nor any of its Subsidiaries has received any written notice from a Governmental Authority of any pending formal investigation, enforcement proceeding or other regulatory action by any Governmental Authority regarding any violation or alleged violation of Anti-Corruption Laws or Sanctions.
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Section 4.9 Litigation. As of the date hereof, there is no Action pending or, to the Knowledge of the Company, threatened in writing seeking to prevent, hinder, modify, delay or challenge the Merger or any of the other transactions contemplated by this Agreement. There is no other Action (excluding the Actions of the nature described in the prior sentence) pending or, to the Knowledge of the Company, threatened in writing against any of the Acquired Companies that, individually or in the aggregate, would reasonably be expected to have a Company Material Adverse Effect. None of the Acquired Companies, nor any of their respective properties or assets, is named in or subject to any outstanding Order that, individually or in the aggregate, would reasonably be expected to have a Company Material Adverse Effect.
Section 4.10 Properties.
(a) Subject to the immediately succeeding sentence, Section 4.10(a) of the Company Disclosure Letter lists the Company Properties and sets forth the applicable Acquired Company that owns (or leases, as applicable, and as indicated) each such property. Subject to (i) debt and other matters set forth in Section 4.10(a) of the Company Disclosure Letter and (ii) Permitted Encumbrances, the Acquired Companies own marketable fee simple title to, or a valid leasehold interest in, the Company Properties, in each case free and clear of Liens. Except as, individually or in the aggregate, would not have, and would not reasonably be expected to have, a Company Material Adverse Effect: (i) to the Knowledge of the Company as of the date hereof, none of the Acquired Companies has received written notice of any violation of any Law affecting any portion of any of the Company Properties issued by any Governmental Authority that have not been cured or contested in good faith and (ii) to the Knowledge of the Company as of the date hereof, none of the Acquired Companies has received written notice to the effect that there are (A) condemnation, rezoning or other public land use proceedings from any Governmental Authority that are pending or threatened with respect to any of the Company Properties or (B) zoning, building or similar Laws, codes, ordinances, Orders or regulations that are violated by the operation or use of any buildings or other improvements on any of the Company Properties as currently conducted.
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(b) To the Knowledge of the Company, as of the date hereof, the Company has delivered to or made available to Parent correct and complete, in all material respects, copies of each lease pursuant to which an Acquired Company is a lessor, which demises more than 250,000 rentable square feet, together with all material amendments and modifications thereto and all guarantees thereof (if any) (collectively, the “Material Company Leases”). Except as would not have, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, as of the date hereof, each Material Company Lease is in full force and effect and no Acquired Company nor, to the Knowledge of the Company, any other party to a Material Company Lease, is in default beyond any applicable notice and cure period under any Material Company Lease and, to the Knowledge of the Company, there exists no event which, with notice or lapse of time or both, would constitute a material default thereunder by any Acquired Company or that would reasonably be expected to result in termination thereof by the tenant or, to the Knowledge of the Company, any other party thereto, and no Acquired Company has received any written notice from the tenant of any such default or potential default. Except as set forth on Section 4.10(b) of the Company Disclosure Letter or except as has been resolved prior to the date hereof, as of the date of this Agreement, no Acquired Company has received notice of any insolvency or bankruptcy proceeding (or threatened proceedings) involving any tenant under any Material Company Lease where such proceeding remains pending, except, in each case, as would not reasonably be expected, individually or in the aggregate, to have a Company Material Adverse Effect. To the Knowledge of the Company, as of the date hereof, the Company has delivered or made available to Parent correct and complete copies of each ground lease pursuant to which an Acquired Company is the ground tenant, together with all material amendments and modifications thereto (collectively, the “Ground Leases”); provided, however, that the term “Ground Leases” shall not include any ground lease entered into primarily for the purpose of obtaining tax incentives where the applicable Acquired Company has the option to purchase the underlying property for a nominal amount. To the Knowledge of the Company, each Ground Lease is in full force and effect and no Acquired Company nor any other party to a Ground Lease, is in material default beyond any applicable notice and cure period under any Ground Lease and, to the Knowledge of the Company, there exists no event which, with notice or lapse of time or both, would constitute a material default thereunder by any Acquired Company or that would reasonably be expected to result in termination thereof by the ground lessor, and no Acquired Company has received any written notice from the ground lessor of any such material default or potential default.
(c) The Acquired Companies have marketable title to, or a valid and enforceable leasehold interest in, all material personal property owned, used or held for use by them, except in each case, as would not reasonably be expected, individually or in the aggregate to have a Company Material Adverse Effect. The Acquired Companies’ ownership of any such personal property is not subject to any Liens, other than Permitted Encumbrances, except as would not reasonably be expected, individually or in the aggregate, to have a Company Material Adverse Effect.
(d) A rent roll for each Company Property as of July 18, 2026 is set forth in Section 4.10(d) of the Company Disclosure Letter, which sets forth the identity of the tenant, the lease start date and expiration date, approximate square feet of rentable area, usable acres or leasable area, and monthly rent, which is true and correct as to the information thereon as of the date stated thereon, except, in each case, as would not reasonably be expected, individually or in the aggregate, to have a Company Material Adverse Effect.
(e) With respect to each Company Property, except as would not reasonably be expected, individually or in the aggregate, to have a Company Material Adverse Effect, no written claim has been made against an owner’s or leasehold policy of title insurance by any Acquired Company, that to the Knowledge of the Company, remains outstanding.
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(f) Except as set forth on Section 4.10(f) of the Company Disclosure Letter or as set forth in the Material Company Leases, as of the date of this Agreement, neither the Company nor any Acquired Company has entered into any written agreement pursuant to which the Company or any such Acquired Company is obligated to purchase or sell any interest in real property on or after the date of this Agreement. Except as set forth on Section 4.10(f) of the Company Disclosure Letter or as set forth in the Material Company Leases, and except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, to the Knowledge of the Company, neither the Company nor any Acquired Company has granted any unexpired options, rights of first offer or rights of first refusal to purchase or otherwise convey any real property interest in the Company Property or any portion thereof. To the Knowledge of the Company, there are no brokerage commissions or brokerage fees which are now due or which may be due in the future relating to the purchase or sale of any interest(s) in real property or to any of the Material Company Leases, except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
(g) To the Knowledge of the Company, Section 4.10(g) of the Company Disclosure Letter lists in all material respects each Company Property which is under development, the contract amount for which exceeds $5,000,000 and is ongoing as of the date hereof, and describes the general status of such development or capital improvement work, as of the date hereof.
Section 4.11 Environmental Matters. Except as set forth on Section 4.11 of the Company Disclosure Letter or as, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect, since the Lookback Date or such shorter period of its ownership of a Company Property: (a) no Acquired Company has received written notice from any Governmental Authority that such Acquired Company, as to its respective Company Property, is not in compliance with all Environmental Laws and all applicable Environmental Permits; (b) to the Knowledge of the Company, each of the Acquired Companies is in possession of all Environmental Permits necessary for such Acquired Company to own, lease and, to the extent applicable, operate its Company Property or to carry on its respective business substantially as they are being conducted as of the date hereof, and all such Environmental Permits are valid and in full force and effect with all necessary applications for renewal thereof having been timely filed; (c) the Acquired Companies, as to their respective Company Properties, have not received written notice from any Governmental Authority that any and all Hazardous Substances disposed of by any of the Acquired Companies were not done so in accordance with all applicable Environmental Laws and Environmental Permits; (d) the Acquired Companies, as to their respective Company Properties, have not received any written notice, demand, letter, claim or request from any Governmental Authority for information alleging any violation by any Acquired Company of, or liability of any Acquired Company under, applicable Environmental Law; and (e) to the Knowledge of the Company, the Acquired Companies as to their respective Company Properties, are not subject to any Order, writ, judgment, injunction, decree, stipulation, determination, administrative action, or award by any Governmental Authority pursuant to any Environmental Laws or any Environmental Permit (other than any such Order, writ, judgment, injunction, decree, stipulation, determination, administrative action, or award arising out of or relating to the acts or omissions of any current or former tenant, subtenant, or other occupant of any Company Property).
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Section 4.12 Material Contracts.
(a) All Contracts, including amendments thereto, required to be filed with the SEC as an exhibit to any Company SEC Documents filed on or after the Lookback Date pursuant to the Exchange Act of the type described in Item 601(b)(10) of Regulation S-K promulgated by the SEC have been filed. All such filed Contracts shall be deemed to have been made available to Parent.
(b) Section 4.12(b) of the Company Disclosure Letter sets forth, as of the date hereof, a true and complete list of, and the Company has made available to Parent a true, correct and complete copy of, each Contract (other than a Company Benefit Plan and a Material Company Lease) in effect as of the date hereof to which any of the Acquired Companies is a party that:
(i) is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the Exchange Act);
(ii) is required to be described pursuant to Item 404 of Regulation S-K promulgated under the Securities Act;
(iii) contains any non-compete, non-solicit, “most favored nation” or exclusivity provisions in favor of an unaffiliated party with respect to any line of business or geographic area that restricts the business of the Acquired Companies in any material respect, including upon consummation of the transactions contemplated by this Agreement, or that otherwise restricts the lines of business conducted by the Acquired Companies or the geographic area in which the Acquired Companies may conduct business in any material respect, except in each case for (A) any Contracts that may be cancelled by the Acquired Companies without material liability to an Acquired Company upon notice of sixty (60) days or less and (B) customary non-disclosure or confidentiality agreement;
(iv) constitutes an Indebtedness obligation for borrowed money of the Acquired Companies that (A) has an outstanding principal amount as of the date hereof greater than $1,000,000, (B) is secured, by a Company Property or a pledge of the equity ownership interests therein, or (C) relates to any interest rate caps, interest rate collars, swaps or hedging, other than (x) any Contract in respect of a real property lease or obligations thereunder, (y) surety or performance bonds, letters of credit or similar agreements entered into in the ordinary course of business in each case to the extent not drawn upon and (z) any Contract solely among or between Company and any Wholly Owned Company Subsidiary;
(v) requires the Acquired Companies to purchase or sell, as applicable, equity interests of any Person or assets, including through a pending purchase or sale of assets, merger, consolidation or similar business combination transaction, that (together with all of the assets and properties subject to such requirement in such Contract) have a fair market value or purchase price in excess of $1,000,000;
(vi) sets forth the operational or governance terms of a joint venture, partnership, limited liability company or strategic alliance of the Acquired Companies, including for each of the Unconsolidated JVs and any other joint venture that is material to the Acquired Companies, taken as a whole (collectively, the “Joint Venture Agreements”);
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(vii) relates to the settlement (or proposed settlement) of any pending or threatened Action, in writing, other than any settlement that is covered by insurance or indemnification, or provides solely for the payment of less than $250,000 and does not contain, in each case, any ongoing obligations, restrictions on the Acquired Companies’ business operations, or admissions of fault;
(viii) involves, by its terms, either (A) annual receipts by an Acquired Company of more than $500,000 or (B) annual payments by any Acquired Company of more than $500,000, in each case, received or incurred in the fiscal year ended December 31, 2025, or reasonably expected to be received or incurred in the fiscal year ending December 31, 2026, and which is not terminable by an Acquired Company for convenience without penalty; provided that the foregoing clause (A) shall not apply to any Contract relating to real property (including leases, subleases, licenses, services, constructions, or other occupancy agreements); and provided, further, that foregoing clause (B) shall not apply to any Contract where a tenant is obligated under its lease to make such payment on behalf of an Acquired Company or reimburse an Acquired Company for such payment;
(ix) relates to an acquisition, divestiture, merger or similar transaction that has continuing material indemnification, guarantee, “earn-out” or other contingent payment obligations on an Acquired Company, other than pursuant to customary non-disclosure or confidentiality agreements;
(x) other than Contracts for ordinary repair, replacement, and maintenance, any Contract relating to the development or construction of, or renovations, additions or expansions to, the Company Properties, under which any Acquired Company has obligations individually of $500,000 or more;
(xi) any Contract with respect to an Affiliate Transaction;
(xii) is a collective bargaining agreement with any trade union, works council or other labor organization; or
(xiii) grants (A) to an Acquired Company any license or other right with respect to material Intellectual Property (other than (1) non-exclusive licenses of commercially available “off-the-shelf” software, (2) non-exclusive licenses of other Intellectual Property available at no cost or that are generally commercially available on standard terms, (3) non-exclusive licenses of Intellectual Property that are merely incidental to the transaction contemplated by the applicable Contract entered into in the ordinary course of business, and (4) any other non-exclusive licenses for Intellectual Property with an annual cost of $100,000 or less) or (B) to any third party any license or other right with respect to material Owned IP (except for (1) non-exclusive licenses granted to customers, vendors and service providers of any Acquired Company entered into in the ordinary course of business and (2) non-exclusive licenses of Intellectual Property that are merely incidental to the transaction contemplated by the applicable Contract entered into in the ordinary course of business).
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(c) Each Contract in any of the categories set forth in Section 4.12(a) and (b) to which any of the Acquired Companies is a party or by which it is bound as of the date hereof is referred to herein as a “Material Contract”.
(d) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) each Material Contract is legal, valid, binding and enforceable on each Acquired Company that is a party thereto and, to the Knowledge of the Company, each other party thereto, and is in full force and effect, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at Law) and (ii) each Acquired Company has performed all obligations required to be performed by it prior to the date hereof under each Material Contract and, to the Knowledge of the Company, each other party thereto has performed all obligations required to be performed by it under such Material Contract prior to the date hereof. None of the Acquired Companies nor, to the Knowledge of the Company, any other party thereto, is in breach or violation of, or default under, any Material Contract, and no event has occurred that, with notice or lapse of time or both, would constitute a violation, breach or default under any Material Contract, except in each case where such breach, violation or default, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect. None of the Acquired Companies has received notice of any violation or default under, or currently owes any termination, cancellation or other similar fees or any liquidated damages with respect to, any Material Contract, except for violations, defaults, fees or damages that, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect. Except as, individually or in the aggregate, would not have, and would not reasonably be expected to have, a Company Material Adverse Effect, there are no disputes pending, or, to the Knowledge of the Company, threatened with respect to any Material Contract, and none of the Acquired Companies has received any written notice of the intention of any other party to a Material Contract to terminate for default, convenience or otherwise any Material Contract.
(e) Section 4.12(e) of the Company Disclosure Letter lists each management agreement pursuant to which any third party manages or operates any of the Company Properties on behalf of any Acquired Company, and describes the property that is subject to such management agreement, the applicable Acquired Company that is a party and the date of such management agreement (collectively, the “Management Agreements”). True, correct and complete copies of all Management Agreements as of the date hereof (together with all amendments, guaranties and other related agreements) have been made available to Parent. As of the date hereof, each Management Agreement is valid, binding and in full force and effect as against the applicable Acquired Company and, to the Knowledge of the Company, as against the other party thereto. None of the Acquired Companies have received notice of any violation or default under, or currently owes any termination, cancellation or other similar fees or any liquidated damages to any third-party manager or operator, except for fees or damages that, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect.
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Section 4.13 Taxes.
(a) Each Acquired Company has timely filed with the appropriate Governmental Authority all annual income and any other material Tax Returns required to be filed, taking into account any valid extensions of time within which to file such Tax Returns, and all such Tax Returns were complete and correct in all material respects. Each Acquired Company has duly paid (or there has been paid on its behalf) all material Taxes required to be paid by them (whether or not shown on a Tax Return) and adequate reserves or accruals for Taxes have been provided in accordance with GAAP with respect to any period for which Tax Returns have not yet been filed or for which Taxes are not yet due and owing. No written claim has been proposed, or threatened, by any Governmental Authority in any jurisdiction where the Acquired Companies do not file Tax Returns that any Acquired Company is or may be subject to a material Tax by such jurisdiction.
(b) The Company (i) for all taxable years beginning with the taxable year ended December 31, 1993 through the taxable year ended December 31, 2025, has been organized and operated in conformity with the requirements to qualify as a REIT under the Code and has been subject to U.S. federal taxation as a REIT within the meaning of Section 856 of the Code, (ii) for its taxable year beginning on January 1, 2026 has been organized and operated, and will continue to operate, for the short taxable year of the Company that ends at the Effective Time, in conformity with the requirements to qualify as a REIT under the Code, and (iii) has not taken or omitted to take any action that would reasonably be expected to result in the Company’s failure to qualify as a REIT and, to the Knowledge of the Company, no challenge to the Company’s status or qualification for taxation as a REIT is pending or threatened.
(c) The classification of the Acquired Companies for U.S. federal income tax purposes as of the date of this Agreement is provided in Section 4.13(c) of the Company Disclosure Letter. Each entity that is listed in Section 4.13(c) of the Company Disclosure Letter as a disregarded entity for U.S. federal income tax purposes has been treated as a disregarded entity from and after the date of its formation and each entity listed in Section 4.13(c) of the Company Disclosure Letter as a partnership for U.S. federal income tax purposes has been treated as a disregarded entity or partnership from and after the date of its formation. Each entity that is listed in Section 4.13(c) of the Company Disclosure Letter as a corporation has, since the later of the date of its formation or the date on which the Company acquired an interest in such entity, been treated for U.S. federal income tax purposes as a REIT, a “qualified REIT subsidiary” within the meaning of Section 856(i)(2) of the Code or a “taxable REIT subsidiary” within the meaning of Section 856(l) of the Code as set forth on such schedule.
(d) (i) There are no audits, investigations by any Governmental Authority or other proceedings pending with regard to any income or other material Taxes or income or other material Tax Returns of any of the Acquired Companies; (ii) no deficiency for material Taxes of any of the Acquired Companies has been claimed, proposed or assessed in writing by any Governmental Authority, which deficiency has not yet been settled, satisfied by payment, withdrawn or otherwise resolved, except for such deficiencies which are being contested in good faith by appropriate proceedings and for which adequate accruals or reserves have been established in accordance with GAAP; (iii) none of the Acquired Companies has waived any statute of limitations with respect to the assessment of any income or other material Taxes or agreed to any extension of time with respect to any income or other material Tax assessment or deficiency for any open tax year (other than extensions entered into in the ordinary course of business and not in connection with any audit, investigation, or proceeding); (iv) none of the Acquired Companies is currently the beneficiary of any extension of time within which to file any income Tax Return, which income Tax Return has since not been filed (other than extensions entered into in the ordinary course of business and not in connection with any audit, investigation, or proceeding); (v) none of the Acquired Companies are contesting any liability for material Taxes, and (vi) none of the Acquired Companies has entered into any “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income tax Law).
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(e) The Acquired Companies have complied in all material respects with all applicable Laws relating to the payment and withholding of Taxes and have duly and timely withheld and, in each case, have paid over to the appropriate taxing authorities all amounts required to be so withheld and paid over on or prior to the due date thereof under all applicable Laws and has in all material respects properly completed and timely filed all IRS Forms W-2 and 1099 required with respect to each employee and independent contractor of the Acquired Companies.
(f) None of the Acquired Companies is a party to any Tax indemnity, allocation or sharing agreement or similar arrangement, other than (i) any agreement or arrangement between any of the Acquired Companies, and (ii) provisions in commercial contracts not primarily relating to Taxes.
(g) None of the Acquired Companies (i) has been a member of an affiliated group filing a consolidated federal income Tax Return (other than an affiliated group the common parent of which is an Acquired Company), or (ii) has any liability for the Taxes of any Person (other than any Subsidiary of the Company) under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee or successor, by Contract, or otherwise.
(h) None of the Acquired Companies has participated in any “reportable transaction” (other than a “loss transaction”) within the meaning of Treasury Regulations Section 1.6011-4(b).
(i) For all taxable years commencing with the taxable year ended December 31, 2016, the Company has not incurred (i) any liability for Taxes under Sections 857(b)(1), 857(b)(4), 857(b)(5), 857(b)(6)(A) (prohibited transactions), 857(b)(7) (redetermined rents, redetermined deductions and excess interest), 857(f), 860(c) or 4981 of the Code or Treasury Regulations Sections 1.337(d)-5, 1.337(d)-6, or 1.337(d)-7, or (ii) any liability for Taxes under Sections 857(b)(5) (for income test violations), 856(c)(7)(C) (for asset test violations), or 856(g)(5)(C) (for violations of other qualification requirements applicable to REITs). None of the Acquired Companies have incurred any material liability for Tax other than (A) in the ordinary course of business consistent with past practice (including, for the avoidance of doubt, ad valorem and similar property Taxes), or (B) transfer or similar Taxes arising in connection with sales of property. To the Knowledge of the Company, no event has occurred, and no condition or circumstances exists, that presents a material risk that any material liability for Taxes described clause (i) of the first sentence of this paragraph or the preceding sentence or any liability for Taxes described in clause (ii) of the first sentence of this paragraph will be imposed upon any Acquired Company.
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(j) There are no Tax Protection Agreements (as hereinafter defined) in force at the date of this Agreement, and, as of the date of this Agreement, no person has raised in writing, or to the Knowledge of the Company threatened to raise, a material claim against any Acquired Company for any breach of any Tax Protection Agreements. As used herein, “Tax Protection Agreements” means any written agreement to which any Acquired Company is a party pursuant to which: (i) any liability to holders of interests in a Company Subsidiary Partnership relating to Taxes may arise, whether or not as a result of the consummation of the transactions contemplated by this Agreement, or (ii) in connection with the deferral of income Taxes of a holder of interests in a Company Subsidiary Partnership, an Acquired Company has agreed to (A) maintain a minimum level of debt, continue a particular debt or provide rights to guarantee debt, (B) retain or not dispose of assets, (C) make or refrain from making Tax elections, (D) use or refrain from using a particular method of taking into account book-tax disparities under Section 704(c) of the Code with respect to one or more assets of such Person or any of its subsidiaries, (E) use or refrain from using a particular method for allocating one or more liabilities of such Person or any of its subsidiaries under Section 752 of the Code, or (F) only dispose of assets in a particular manner. As used herein, “Company Subsidiary Partnership” means any Subsidiary of the Company that is a partnership for United States federal income tax purposes.
(k) The Company does not have any earnings and profits attributable to a non-REIT year of any predecessor or any other corporation that would constitute “earnings and profits accumulated in any non-REIT year” (determined for purposes of Section 857(a)(2)(B) of the Code).
(l) None of the assets of any of the Acquired Companies (other than those of any Acquired Company that is a taxable REIT subsidiary) are property held as stock in trade, inventory, or primarily for sale to customers in the ordinary course of a trade or business.
(m) There are no Liens for Taxes upon any property or assets of the Acquired Companies except for Permitted Encumbrances.
(n) The Company does not directly or indirectly hold any asset the disposition of which would subject it to U.S. federal, state or local tax on built-in gain pursuant to IRS Notice 88-19, Treasury Regulations Section 1.337(d)-7, or any other temporary or final regulations issued under Section 337(d) of the Code, any elections made thereunder or any similar state or local law.
(o) No power of attorney with respect to any Tax matter is currently in force for any of the Acquired Companies.
(p) The total adjusted tax basis of the assets of the Company exceeds the aggregate liabilities of the Company.
(q) In the last two years, none of the Acquired Companies has been a “distributing corporation” or a “controlled corporation” within the meaning of Section 355(a)(1)(A) of the Code in a distribution intended to qualify for tax-free treatment under Section 355 of the Code.
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(r) None of the Acquired Companies is subject to any private letter ruling of the Internal Revenue Service or any comparable ruling of any other Governmental Authority and has not executed or entered into any binding written agreement relating to Taxes with any Governmental Authority.
Section 4.14 Intellectual Property.
(a) Section 4.14(a) of the Company Disclosure Letter sets forth a true and complete list of all issued, registered or applied-for Owned IP as of the date of this Agreement (collectively, the “Registered IP”), including, for each item, the record owner, jurisdiction and issuance, registration and application number, as applicable. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) the Registered IP is subsisting, and to the Knowledge of the Company, valid and enforceable; (ii) an Acquired Company is the sole and exclusive record owner of each item of Registered IP (free and clear of all Liens except for Permitted Encumbrances); (iii) no Acquired Company has taken any action or, to the Knowledge of the Company, failed to take any action that would reasonably be expected to result in the abandonment, cancellation, forfeiture, relinquishment, or invalidation of any Registered IP (including the failure to pay any filing, examination, issuance, post registration and maintenance fees, annuities and the like), other than any such action or inaction that has been remedied or is subject to available grace periods; and (iv) no Registered IP has been abandoned, cancelled or adjudicated invalid, or is subject to any outstanding order, writ, injunction, judgment, stipulation or decree materially restricting use thereof by an Acquired Company.
(b) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, the Acquired Companies solely and exclusively own the Owned IP (free and clear of all Liens except for Permitted Encumbrances), and possess valid rights pursuant to written Contracts or otherwise to use all other Intellectual Property that is used in or necessary for the conduct of the business of the Acquired Companies as currently conducted (such other Intellectual Property, together with the Owned IP, collectively, the “Company IP”). Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, the Company IP shall be available for use by the Acquired Companies immediately after the Closing Date on terms and conditions substantially similar to those under which the Acquired Companies owned or were permitted to use the Company IP immediately prior to the Closing Date.
(c) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, the conduct of the business of the Acquired Companies as currently conducted does not misappropriate, infringe, dilute or otherwise violate any Intellectual Property of any third party, and has not done so since the Lookback Date. To the Knowledge of the Company, no Person is misappropriating, infringing, diluting or otherwise violating any Owned IP in any manner that would be material to the Acquired Companies. Since the Lookback Date, no Acquired Company has sent or received any written (or, to the Knowledge of the Company, other) claim or notice alleging misappropriation, infringement, dilution or other violation of any Intellectual Property, except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
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Section 4.15 Information Privacy and Security.
(a) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, the Acquired Companies and, to the Knowledge of the Company, all third Persons that Process or have Processed Personal Information on their behalf, are and have at all times been in compliance with all applicable Information Privacy and Security Requirements. None of the Acquired Companies has received any notice, nor to the Knowledge of the Company are the Acquired Companies the subject of or have been subject to any audit or investigation, in each case regarding the Processing of Personal Information or alleging a violation of any Information Privacy and Security Requirements.
(b) (i) The Acquired Companies have adopted and at all times maintained technical, physical, administrative and organizational policies and procedures with respect to privacy, data protection, security, confidentiality, integrity, availability and the Processing of Personal Information and Company data in the course of the operations of the Acquired Companies and designed to prevent any unlawful, accidental or unauthorized access thereto or use, disclosure, acquisition, exfiltration, theft, loss, alteration, modification, corruption, destruction, or unavailability thereof, (ii) those policies and procedures are commercially reasonable and comply with applicable Information Privacy and Security Requirements, and (iii) the Acquired Companies are in compliance in all material respects with such policies and procedures, except, for the purposes of subclause (iii) above, in each case, as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
(c) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, to the Knowledge of the Company, no Acquired Company has experienced an incident, including any data security breach, of any IT Assets or in which any Personal Information that is or was Processed by or on behalf of any Acquired Company that has resulted in any access, use, modification, deletion, disclosure, acquisition, exfiltration, theft, loss, alteration, destruction, unavailability or corruption unlawfully or without authorization (a “Security Incident”), nor to the Knowledge of the Company are there any facts or circumstances which could reasonably suggest the likelihood of the foregoing. No Acquired Company has notified or been required by any Information Privacy and Security Requirement to notify any Person (including any Governmental Authority) of a Security Incident.
Section 4.16 Insurance. Section 4.16 of the Company Disclosure Letter sets forth a true and complete list of all material insurance policies and all material fidelity bonds or other material insurance Contracts providing coverage for the Acquired Companies (the “Insurance Policies”). Except as, individually or in the aggregate, would not have, and would not reasonably be expected to have, a Company Material Adverse Effect (a) each Insurance Policy is in full force and effect, (b) all premiums due and payable under all Insurance Policies have been paid, and (c) the Acquired Companies have otherwise complied in all material respects with the terms and conditions of all Insurance Policies and all claims, events and occurrences that may be covered under any Insurance Policy have been noticed pursuant to the conditions in such policy. From the Lookback Date, (i) no written notice of premature cancellation or termination has been received by any Acquired Company with respect to any such policy which has not been replaced on substantially similar terms prior to the date of such cancellation and (ii) no Acquired Company has had any material claim denied, except as, individually or in the aggregate, would not have, and would not reasonably be expected to have, a Company Material Adverse Effect.
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Section 4.17 Company Benefit Plans.
(a) Section 4.17(a) of the Company Disclosure Letter sets forth an accurate and complete list of each material Company Benefit Plan (other than employment offer letters or individual independent contractor or consultant agreements substantially similar to a form provided to Parent prior to the date hereof that are terminable upon no more than thirty (30) days’ notice (or such other period provided by applicable Law) without further liability, and that do not contain any transaction, retention or similar incentives, in each case, provided that such form is set forth on Section 4.17(a) of the Company Disclosure Letter). To the extent applicable, the Acquired Companies have either delivered or made available to Parent prior to the execution of this Agreement with respect to each Company Benefit Plan scheduled on Section 4.17(a) of the Company Disclosure Letter true, correct and complete copies of: (i) all plan documents and all amendments thereto, and all related trust or other funding documents, and in the case of unwritten Company Benefit Plans, written descriptions thereof, (ii) the most recent determination letters, rulings, opinion letters, information letters or advisory opinions issued by the IRS or the United States Department of Labor, (iii) the three most recently filed annual return/report (Form 5500) and accompanying schedules and attachments thereto, (iv) the most recently prepared actuarial report and financial statements, (v) the most recent prospectus or summary plan descriptions and any material modifications thereto, (vi) all nondiscrimination and compliance testing reports for the three most recently completed plan years, (vii) IRS Forms 1094-C and sample IRS Forms 1095-C for 2023, 2024 and 2025, and (viii) all material non-routine correspondence to and from any Governmental Authority since the Lookback Date.
(b) None of the Acquired Companies or their respective ERISA Affiliates has, during the past six (6) years, maintained, sponsored, contributed to, or participated in, has been required to contribute to or has or would reasonably expected to have any direct, indirect or contingent liability with respect to, (i) any plan that is subject to Title IV or Section 302 of ERISA or Section 412 of the Code, (ii) any “single employer” defined benefit plan within the meaning of Section 4001(a)(15) of ERISA for which any Acquired Company or any of their respective ERISA Affiliates has incurred or could incur liability under Section 4063 or 4064 of ERISA, (iii) a Multiemployer Plan, (iv) any “multiple employer welfare arrangement” as defined in Section 3(40) of ERISA, or (v) any “multiple employer plan” subject to Section 413(c) of the Code, in the case of clauses (iv) and (v), other than any Company Benefit Plan maintained or provided by a professional employer organization.
(c) No Company Benefit Plan provides for post-retirement health or welfare benefits, other than (i) health care continuation coverage required by Section 4980B of the Code (“COBRA”) or other applicable Law and for which the covered participant pays the full cost of coverage, (ii) coverage through the end of the calendar month in which a termination of employment occurs or (iii) pursuant to an applicable Company Benefit Plan requiring the Company or any Subsidiary to pay or subsidize COBRA premiums for a terminated employee following the employee’s termination.
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(d) Each Company Benefit Plan has been established, administered and maintained in all material respects in accordance with its terms and in compliance with the applicable provisions of ERISA, the Code and other applicable Laws. Each Company Benefit Plan is maintained in the United States and is subject only to the Laws of the United States or a political subdivision thereof. Each Company Benefit Plan that is intended to be qualified under Code Section 401(a) has received a determination from the IRS that such Company Benefit Plan is so qualified (or if it is a prototype plan, it has a favorable opinion letter, or if it is a volume submitter plan, it has a favorable advisory letter), and, to the Knowledge of the Company, nothing has occurred that has or would reasonably be expected to adversely affect the qualification of such Company Benefit Plan. To the Knowledge of the Company, no audits, investigations, Actions, suits, or claims (other than routine claims for benefits) are pending or threatened, anticipated or expected to be asserted with respect to any Company Benefit Plan.
(e) Except as provided in Section 3.3 herein or as set forth in Section 4.17(e)(i) of the Company Disclosure Letter, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (in each case, either alone or in conjunction with any other event): (A) entitle any current or former employee, individual independent contractor, Officer, trustee or director of the Acquired Companies to any severance pay, change in control, retention or similar payment under any Company Benefit Plan or any other arrangement; (B) result in any increase in payment, or acceleration of the time of payment or vesting of any compensation, equity-based award or benefit due to any current or former employee, individual independent contractor, Officer, trustee or director of the Acquired Companies under any Company Benefit Plan or any other arrangement, (C) require the funding of any Company Benefit Plan, or (D) restrict the right to amend or terminate any Company Benefit Plan. Except as set forth in Section 4.17(e)(ii) of the Company Disclosure Letter, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby could (in each case, either alone or in conjunction with any other event) result in the payment of any “excess parachute payment” within the meaning of Section 280G of the Code. As of the date hereof, neither the Company, the Company Board nor any committee of the Company Board (including the Compensation Committee) has (i) granted transaction bonuses to employees, individual independent contractors, trustees, or officers of the Acquired Companies and/or (ii) adopted a gross-up plan providing for tax indemnification, “gross-up” or similar payments in connection with Sections 280G and 4999 of the Code.
(f) Except as, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect, all required premiums of any Acquired Company for, or contributions required to be made by any Acquired Company to, any Company Benefit Plans have been timely made in accordance with the terms of the applicable Company Benefit Plan and applicable Law or, to the extent not yet due, accrued in accordance with GAAP. No Acquired Company has incurred (whether or not assessed) any material penalty or Tax under Sections 4980B, 4980D, 4980H, 6721 or 6722 of the Code and, to the Knowledge of the Company, no circumstances exist or events have occurred that could result in the imposition of any such material penalties or Taxes. There have been no non-exempt “prohibited transactions” within the meaning of Section 4975 of the Code or Sections 406 or 407 of ERISA with respect to any Company Benefit Plan, except as, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect.
(g) Except as, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect, each Company Benefit Plan, and any award thereunder, that is or forms part of a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been operated and maintained in all material respects with all applicable requirements of Sections 409A of the Code and all applicable Department of Treasury guidance thereunder. The Acquired Companies have no obligation to gross-up or indemnify any Person for any Tax incurred pursuant to Section 409A or 4999 of the Code.
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Section 4.18 Labor Matters.
(a) Except as, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect, the Acquired Companies are, and have been since the Lookback Date, in compliance with all applicable Laws with respect to applicable employment and labor matters, including those relating to labor relations (including the National Labor Relations Act), collective bargaining, wages (including, but not limited to, minimum wage, meal and rest breaks and requirements of applicable wage orders), paid sick leave/time, vacation/paid time off, hours of work, holiday pay, overtime, employee classification (including, but not limited to, exempt vs. non-exempt and the classification of independent contractors), equal opportunity, discrimination, harassment, sexual harassment, retaliation, whistle-blowing, child labor, pay equity, disability rights and benefits, employee privacy leaves of absence, work authorization/visas, immigration (including collection of I-9 forms for all U.S. employees), employee safety and health (including the Occupational Safety and Health Act and any applicable state or local Laws), background checks (including, but not limited to, the Fair Credit Reporting Act and any similar state and local laws), workers’ compensation, unemployment insurance, plant closures, furloughs, and layoffs (including the Worker Adjustment and Retraining Notification Act of 1988, and any comparable state or local Law relating to plant closings and layoffs).
(b) None of the Acquired Companies is party to any collective bargaining agreement, works council agreement or other labor union contract applicable to employees of an Acquired Company. Since the Lookback Date, no labor union has made a written pending demand for recognition or certification to the Acquired Companies, or has filed a petition or proceeding for recognition or certification with the National Labor Relations Board or any other similar Governmental Authority that has been served on one of the Acquired Companies, and, since the Lookback Date, to the Knowledge of the Company, there has been no organizational campaign, petition or other unionization activity seeking recognition of a collective bargaining unit relating to any employees of any Acquired Company. Since the Lookback Date, there has not been any labor-related strike or lockout, concerted work slowdown, concerted work stoppage, or picketing or, to the Knowledge of the Company, any threat thereof, by any employees of the Acquired Companies with respect to their employment with the Acquired Companies.
Section 4.19 Related-Party Transactions. Except as described in Company SEC Documents, no agreements, arrangements or understandings between any of the Acquired Companies (or binding on any of their respective properties or assets), on the one hand, and any other Person, on the other hand (other than those exclusively among the Acquired Companies), are in existence that are not, but are required to be, disclosed under Item 404 of Regulation S-K promulgated by the SEC (an “Affiliate Transaction”).
Section 4.20 Brokers. Except for the fees and expenses payable to those Persons set forth on Section 4.20 of the Company Disclosure Letter, pursuant to the terms of the engagement letter between the Company and such Person, true, correct and complete copies of which have been provided to Parent prior to the date hereof), no broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s or other similar fee or commission in connection with the Merger and the other transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company or any Company Subsidiary.
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Section 4.21 Opinion of Financial Advisor. The Company Board has received the oral opinion of BofA Securities, Inc., financial advisor to the Company, which was confirmed in writing as of the date of this Agreement, to the effect that, as of the date of such opinion and based on and subject to the assumptions, limitations, qualifications and conditions set forth in its written opinion, the Merger Consideration to be paid by Parent to holders of Company Common Shares is fair, from a financial point of view, to the holders of Company Common Shares (other than Parent and its Affiliates).
Section 4.22 Takeover Statutes. Assuming the accuracy of the representations contained in Section 5.12, (a) the Company Board (or a committee thereof) has taken all action necessary to render inapplicable to the Merger the restrictions on business combinations contained in Subtitle 6 of Title 3 of the MGCL and all other applicable similar or relevant statutes, (b) the restrictions on control share acquisitions contained in Subtitle 7 of Title 3 of the MGCL are not applicable to the Merger, and (c) no other “business combination,” “control share acquisition,” “fair price,” “moratorium” or other similar antitakeover statutes or regulations enacted under state or federal Laws in the United States applicable to the Company (collectively, “Takeover Statutes”) are applicable to the Merger and the other transactions contemplated by this Agreement. No dissenters’, appraisal or similar rights are available to the holders of Company Common Shares or Company Series C Preferred Shares with respect to the Merger.
Section 4.23 Company Information. The information supplied or to be supplied by the Company for inclusion in the proxy statement (including any letter to shareholders, notice of meeting, or form of proxy) relating to the Shareholders Meeting (together with any amendments or supplements thereto, the “Proxy Statement”) will not, at the time the Proxy Statement is first disseminated to the shareholders of the Company, at the time of any amendment or supplement thereof or at the time of the Shareholders Meeting, contain any untrue statement of a 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, except that no representation or warranty is made by the Company with respect to statements made therein based on information supplied by Parent for inclusion or incorporation by reference therein. The Proxy Statement, at the time first sent or given to the shareholders of the Company, at the time of the Shareholders Meeting and at the time of any amendment or supplement thereof, will comply as to form in all material respects with the requirements of the Exchange Act.
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Section 4.24 No Other Representations and Warranties. Except for the representations or warranties expressly set forth in this Article 4 or any document, agreement, certificate or other instrument contemplated hereby, none of the Company or any other Person on behalf of a Company has made any representation or warranty, expressed or implied, with respect to the Acquired Companies, their respective businesses, operations, assets, liabilities, condition (financial or otherwise), results of operations, future operating or financial results, estimates, projections, forecasts, plans or prospects (including the reasonableness of the assumptions underlying such estimates, projections, forecasts, plans or prospects) or the accuracy or completeness of any information regarding the Acquired Companies. In particular, without limiting the foregoing disclaimer, none of the Company or any other Person on behalf of a Company makes or has made any representation or warranty to any Parent Party or any of their respective Affiliates or Representatives with respect to any oral or written information presented to the Parent Parties or any of their respective Affiliates or Representatives in the course of their due diligence of the Company, the negotiation of this Agreement or in the course of the transactions contemplated by this Agreement, except for the representations and warranties made by the Company in this Article 4 or any document, agreement, certificate or other instrument contemplated hereby. Notwithstanding anything contained in this Agreement to the contrary, the Company acknowledges and agrees that none of the Parent Parties or any other Person on behalf of a Parent Party has made or is making any representations or warranties relating to the Parent Parties whatsoever, express or implied, beyond those expressly given by the Parent Parties in Article 5 or any document, agreement, certificate or other instrument contemplated hereby, including any implied representation or warranty as to the accuracy or completeness of any information regarding any Parent Party furnished or made available to the Company or its Representatives.
Article 5
REPRESENTATIONS AND WARRANTIES OF THE PARENT PARTIES
The Parent Parties hereby jointly and severally represent and warrant to the Company, as follows:
Section 5.1 Organization and Qualification.
(a) Each of the Parent Parties is duly organized, validly existing and in good standing (to the extent applicable) under the Laws of the jurisdictions of its formation or organization, as the case may be, and has the requisite limited liability company power and authority to own, lease and, to the extent applicable, operate its properties and to carry on its business as it is now being conducted. Each of the Parent Parties is duly qualified or licensed to do business and is in good standing in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except for such failures to be so qualified, licensed or in good standing that, individually or in the aggregate, would not have, and would not reasonably be expected to have, a Parent Material Adverse Effect. Parent was formed solely for the purpose of engaging in the transactions contemplated by this Agreement and it has not conducted any business prior to the date hereof and, as of the date hereof, has no assets, liabilities, or obligations of any nature other than those incident to its formation and in connection with the transactions contemplated by this Agreement.
(b) Merger Sub was formed solely for the purpose of engaging in the transactions contemplated by this Agreement, and Merger Sub has not conducted any activities other than in connection with its organization, the negotiation and execution of this Agreement and the consummation of the transactions contemplated hereby and thereby, and prior to the Effective Time, Merger Sub will have no assets, liabilities or obligations of any nature other than those incident to its formation and pursuant to this Agreement and the transactions contemplated by this Agreement.
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Section 5.2 Authority.
(a) Parent has the requisite limited liability company power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated by this Agreement, including the Merger. The execution and delivery of this Agreement by Parent and the consummation by Parent of the transactions contemplated by this Agreement have been duly and validly authorized by all necessary action on the part of Parent, and no other proceedings on the part of Parent are necessary to authorize this Agreement or the Merger or to consummate the other transactions contemplated by this Agreement. This Agreement has been duly and validly executed and delivered on behalf of the Parent Parties, and assuming due authorization, execution and delivery by the Company, constitutes a legally valid and binding obligation of the Parent Parties, enforceable against the Parent Parties on and in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).
(b) Merger Sub has the limited liability company power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated by this Agreement, including the Merger. The execution and delivery of this Agreement by Merger Sub and the consummation by Merger Sub of the transactions contemplated by this Agreement have been duly and validly authorized by all necessary action on the part of Merger Sub, and no other proceedings on the part of Merger Sub are necessary to authorize this Agreement or the Merger or to consummate the other transactions contemplated by this Agreement.
Section 5.3 No Conflict; Required Filings and Consents. The execution and delivery of this Agreement by each of the Parent Parties do not, and the performance of this Agreement and its obligations hereunder will not, (a) conflict with or violate any provision of the governing documents of any Parent Party, or (b) conflict with or violate any Law applicable to any Parent Party. Except as may be required by the Exchange Act, the MRL, the MLLCA or any applicable antitrust Laws, none of the Parent Parties is required to make any filing with or to obtain any consent from any Person at or prior to the Effective Time in connection with the execution and delivery of this Agreement by the Parent Parties or the consummation by the Parent Parties of the Merger, except where the failure to make any such filing or obtain any such consent would not have a Parent Material Adverse Effect. No vote of Parent’s equity holders is necessary to approve the Merger or to approve any of the other transactions contemplated by this Agreement.
Section 5.4 Sufficiency of Funds
(a) Parent has received and accepted, and has delivered to the Company true, correct and complete fully executed copies of (i) the Equity Commitment Letters, pursuant to which the Guarantors or one or more of their respective Affiliates have committed to invest, subject to the terms and conditions therein, cash in the respective amounts set forth therein (being collectively referred to as the “Equity Financing”), and (ii) the Debt Commitment Letters pursuant to which the Debt Financing Sources have committed to provide, on the terms and subject only to the conditions expressly stated therein, debt financing to Parent or its Affiliates in the amounts set forth therein (the debt financing committed pursuant to the Debt Commitment Letters being collectively referred to as the “Debt Financing” and, together with the Equity Financing, the “Financing”). As of the date hereof, none of the Financing Commitment Letters has been withdrawn, terminated, repudiated, rescinded, supplemented, amended or modified and no terms thereunder have been waived, in each case, except as permitted by Section 7.12(c) and no such withdrawal, termination, repudiation, rescission, supplement, amendment, modification or waiver is contemplated.
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(b) Parent or Merger Sub has fully paid any and all commitment fees or other fees due as of or prior to the date hereof in connection with the Financing Commitment Letters. The net proceeds contemplated by the Financing Commitment Letters (both before and after giving effect to any “flex” provisions contained in the Debt Commitment Letters) in the aggregate will be sufficient for the Parent Parties and the Surviving Entity to pay all amounts required to be paid by them on the Closing Date in connection with the Merger and Financing Commitment Letters (including payment of the Merger Consideration, payment of the Series C Preferred Consideration, repayment or refinancing of debt of any Acquired Company contemplated by this Agreement or the Debt Commitment Letters, payment of all amounts contemplated by Section 3.3, in each case, on the Closing Date, and payment of all other fees and Expenses and obligations required to be paid or satisfied by Parent or Merger Sub on the Closing Date in connection with the Merger and the Financing) (the “Required Amount”).
(c) As of the date of this Agreement, the Financing Commitment Letters are each in full force and effect and each Financing Commitment Letter is (i) a legal, valid and binding obligation of Parent, Merger Sub and (to the Knowledge of Parent) each of the other parties thereto, and (ii) enforceable in accordance with its respective terms against Parent, Merger Sub and (to the Knowledge of Parent) each of the other parties thereto, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). As of the date of this Agreement, assuming the conditions in Article 8 are satisfied as of the Closing, Parent has no reason to believe (and is not aware of any fact, occurrence or condition) that (x) any of the conditions to the funding of the full amount of the Financing will not be satisfied on a timely basis on or prior to the Closing Date, (y) that any Debt Financing Source or Guarantor intends not to fund its respective portion of the Financing or the Guarantee or (z) that the full amount of the Financing will not be available to Parent or Merger Sub on the Closing Date. The Financing Commitment Letters contain all of the conditions precedent and other conditions and contingencies to the obligations of the parties thereunder to make the full amount of the Financing available to Parent or its Affiliates on the terms therein. Other than any agreements or arrangements solely between the Guarantors, there are no side letters or other agreements, arrangements or understandings (written or oral) to which Parent or any of its Affiliates is a party related (directly or indirectly) to the Financing or the Guarantee, other than as expressly set forth in the Financing Commitment Letters.
(d) The obligations of the Parent Parties under this Agreement are not subject to any conditions regarding Guarantors’, Parent’s, Merger Sub’s, their respective Affiliates’ or any other Person’s (including, for the avoidance of doubt, the Acquired Companies’) ability to obtain the Financing.
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Section 5.5 Solvency. Assuming (a) satisfaction or waiver of the conditions to Parent’s obligation to consummate the Merger, and after giving effect to the Merger, including the Financing and the payment of the Merger Consideration, (b) any repayment or refinancing of debt contemplated in this Agreement or the Financing Commitment Letters, (c) the accuracy of the representations and warranties of the Company set forth in Article 4 hereof, (d) payment of all amounts required to be paid in connection with the consummation of the Merger and the Financing, and (e) payment of all related fees and Expenses, and the payment of all amounts contemplated by Section 3.3, each of Parent and the Surviving Entity will be Solvent as of the Effective Time and immediately after the consummation of the Merger. For purposes of this Agreement, the term “Solvent” when used with respect to any Person, means that, as of any date of determination (i) the amount of the “fair saleable value” of the assets of such Person will, as of such date, exceed (A) the value of all “liabilities of such Person, including contingent and other liabilities,” as of such date, as such quoted terms are generally determined in accordance with applicable Laws governing determinations of the insolvency of debtors, and (B) the amount that will be required to pay the probable liabilities of such Person on its existing debts (including contingent and other liabilities) as such debts become absolute and mature, (ii) such Person will not have, as of such date, an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged following such date, and (iii) such Person will be able to pay its liabilities, including contingent and other liabilities, as they mature. For purposes of this definition, “not have an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged” and “able to pay its liabilities, including contingent and other liabilities, as they mature” means that such Person will be able to generate enough cash from operations, asset dispositions or refinancing, or a combination thereof, to meet its obligations as they become due.
Section 5.6 Guarantees. Parent has furnished the Company with a duly executed, accurate and complete copy of each Guarantee. Each Guarantee is in full force and effect as of the date hereof. Each Guarantee is (a) a legal, valid and binding obligation of the applicable Guarantor, subject to such Guarantor’s obligations set forth therein and (b) enforceable in accordance with its respective terms against such Guarantor, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). As of the date of this Agreement, there is no breach or default under any Guarantee by the applicable Guarantor, and no event has occurred that would constitute a breach or default (or with notice or lapse of time or both would constitute a breach or default) thereunder by the applicable Guarantor. As of the date of this Agreement, assuming the conditions in Section 8.1 and Section 8.3 are satisfied as of the Closing, Parent does not have any reason to believe that any of the conditions to providing any Guarantee will not be satisfied on a timely basis on or prior to the Closing Date or that the full amount of each Guarantee will not be available to Parent on the Closing Date. As of the date of this Agreement, neither Parent nor Merger Sub is aware of any fact, event or other occurrence that makes any of the representations or warranties of Parent or Merger Sub in any Guarantee misleading or inaccurate in any material respect. Each Guarantee contains all of the conditions precedent and other conditions and contingencies to the obligations of the parties thereunder to make the full amount of such Guarantee available to Parent on the terms therein. There are no side letters or other agreements, arrangements or understandings (written or oral) to which Parent or any of its Affiliates is a party related (directly or indirectly) to terms that could adversely affect the conditionality, amount, timing, availability or termination of any Guarantee other than as expressly set forth in the Guarantees.
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Section 5.7 Absence of Certain Agreements. As of the date hereof, none of the Parent Parties nor any of their respective Affiliates has entered into any agreement, arrangement or understanding (in each case, whether oral or written), or authorized, committed or agreed to enter into any agreement, arrangement or understanding (in each case, whether oral or written), (a) with any bank or investment bank or other potential provider of debt or equity financing on an exclusive basis in connection with any transaction involving the Company (or otherwise on terms that would prohibit such provider from providing or seeking to provide such financing to any third party in connection with a transaction relating to the Company or any of the Company Subsidiaries), except for such actions which the Company has previously agreed in writing and, in the case of debt financing providers, customary “tree” arrangements, (b) pursuant to which any shareholder of the Company would be entitled to receive, in respect of Company Common Shares, consideration of a different amount or nature than the Merger Consideration or pursuant to which any shareholder of the Company has agreed to vote to approve the Merger or has agreed to vote against any Superior Proposal, or (c) pursuant to which any shareholder of any Acquired Company has agreed to make an investment in, or contribution to, any of the Parent Parties in connection with the transactions contemplated by this Agreement, in each case that would not terminate and be void concurrently with any termination of this Agreement. As of the date hereof, there are no agreements, arrangements or understandings (in each case, whether oral or written) between the Parent Parties, the Guarantors or any of their respective Affiliates, on the one hand, and any member of the Company’s management or the Company Board, on the other hand, that relate in any way to, or are in connection with, the transactions contemplated by this Agreement.
Section 5.8 Litigation. There is no material Action or investigation against any of the Parent Parties pending or, to the knowledge of the Parent Parties, threatened before any Governmental Authority, and, to the knowledge of the Parent Parties, there is no basis for any such action, suit, proceeding or investigation that is expected to have a Parent Material Adverse Effect. None of the Parent Parties has been permanently or temporarily enjoined by any Order, judgment or decree of any Governmental Authority from engaging in or continuing to conduct the business of such Parent Party that is expected by Parent to have a Parent Material Adverse Effect.
Section 5.9 No Vote of Parent Equityholders. Except for the approval of the Merger and the other transactions contemplated by the Agreement by Parent as the sole direct or indirect equityholder of Merger Sub, no vote of the equityholders of Parent or Merger Sub, or the holders of any other securities of any of them (equity or otherwise), is required by any applicable Law, the organizational documents of Parent or Merger Sub or the applicable rules of any exchange on which securities of Parent are traded in order for Parent to consummate the Merger and other transactions contemplated by this Agreement that has not been obtained prior to the date of this Agreement.
Section 5.10 Compliance. Each of the Parent Parties is in, and since the Lookback Date has been in, compliance with all Laws applicable to its businesses and operations, except where the failure to comply with such Laws has not had and would not reasonably be expected to have a Parent Material Adverse Effect. None of the Parent Parties, and none of their operations or businesses, has, since the Lookback Date: (a) received any written notice from any Governmental Authority regarding any material violation by the Parent Parties of any Law; or (b) provided any written notice to any Governmental Authority regarding any material violation by any of the Parent Parties of any Law, which notice in either case remains outstanding or unresolved as of the date hereof, except for such notices that would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
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Section 5.11 Brokers. No broker, investment banker, financial advisor or other Person that has been retained by or is authorized to act on behalf of the Parent Parties is entitled to any broker’s, finder’s or other similar fee or commission payable by the Company or any of its Affiliates or any of their respective shareholders in connection with the Merger and the other transactions contemplated by this Agreement.
Section 5.12 Takeover Statutes. None of the Parent Parties or any of their respective Affiliates or Associates, within the past two (2) years, has beneficially owned (as defined in Rule 13d-3 under the Exchange Act) any Company Capital Shares or any securities that are convertible into or exchangeable or exercisable for Company Capital Shares, or holds any rights to acquire or vote any Company Capital Shares other than pursuant to this Agreement. For purposes of this Section 5.12, the terms “Affiliate”, “Associate” and “beneficially owned” shall have the meanings given to such terms in Title 3, Subtitle 6 of the MGCL.
Section 5.13 Information Supplied. None of the information supplied or to be supplied in writing on or behalf of the Parent Parties or any of their respective Subsidiaries for inclusion or incorporation by reference in the Proxy Statement (including any letter to shareholders, notice of meeting, or form of proxy) will, at the time it is first mailed to the Company’s shareholders, and at the time of the Shareholders Meeting, contain any untrue statement of a 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 are made, not misleading, except that no representation or warranty is made by Parent with respect to information supplied to Parent by the Company or its Representatives.
Section 5.14 No Other Representations and Warranties. Except for the representations or warranties expressly set forth in this Article 5 or any document, agreement, certificate or other instrument contemplated hereby, none of the Parent Parties or any other Person on behalf of a Parent Party has made any representation or warranty, expressed or implied, with respect to the Parent Parties or any of their respective Subsidiaries, their respective businesses, operations, assets, liabilities, condition (financial or otherwise), results of operations, future operating or financial results, estimates, projections, forecasts, plans or prospects (including the reasonableness of the assumptions underlying such estimates, projections, forecasts, plans or prospects) or the accuracy or completeness of any information regarding the Parent Parties or any of their respective Subsidiaries. In particular, without limiting the foregoing disclaimer, none of the Parent Parties or any other Person on behalf of a Parent Party makes or has made any representation or warranty to the Company or any of its Affiliates or Representatives with respect to, except for the representations and warranties made by the Parent Parties in this Article 5 or any document, agreement, certificate or other instrument contemplated hereby, any oral or written information presented to the Company or any of its Affiliates or Representatives in the course of their due diligence of the Parent Parties, the negotiation of this Agreement or in the course of the transactions contemplated by this Agreement. Notwithstanding anything contained in this Agreement to the contrary, the Parent Parties acknowledge and agree that none of the Company or any other Person on behalf of the Company have made or is making any representations or warranties relating to the Acquired Companies whatsoever, express or implied, beyond those expressly given by the Company in Article 4 or any document, agreement, certificate or other instrument contemplated hereby, including any implied representation or warranty as to the accuracy or completeness of any information regarding any Acquired Company furnished or made available to the Parent Parties or any of their respective Representatives.
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Article 6
COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.1 Conduct of Business by the Company.
(a) The Company covenants and agrees that, between the date of this Agreement and the earlier to occur of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 9.1 (the “Interim Period”), except (i) to the extent required by Law, (ii) as expressly consented to in advance in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) as is expressly contemplated, expressly required or expressly permitted by this Agreement, or (iv) as set forth in Section 6.1(a) of the Company Disclosure Letter, the Company shall, and shall cause each Subsidiary of the Company to (A) conduct its business in all material respects in the ordinary course, (B) use its commercially reasonable efforts to (1) maintain its material assets and properties in their current condition (normal wear and tear and damage caused by casualty or by any reason outside of Company or any Company Subsidiary’s control excepted), (2) preserve intact its current business organization, goodwill, ongoing businesses and significant relationships with tenants and other third parties having a material business relationship with the Company, and (3) operate the Company in a manner that maintains the status of the Company as a REIT (it being agreed that no action taken or omitted to be taken by the Company, its Subsidiaries, or any of their respective Affiliates or Representatives, in order to comply, or in compliance, with this Section 6.1(a) shall constitute a breach of Section 6.1(b)).
(b) Without limiting the foregoing, the Company covenants and agrees that, during the Interim Period, except (w) to the extent required by Law, (x) as is expressly consented to in advance in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned, and it being understood that with respect to items requiring consent regarding the Material Company Leases if, within three (3) Business Days after Company provides written notice requesting Parent’s consent pursuant to this Section 6.1(b), Parent has not either affirmatively provided or withheld consent or reasonably requested additional information from the Company with respect to such request, then the Company may provide a second notice requesting such consent, which notice shall specifically state that it is a second notice under this Section 6.1(b), and to the extent no response is received from Parent within two (2) Business Days after Company delivers such second notice, Parent’s consent shall be deemed given), (y) as is expressly contemplated, expressly required or expressly permitted by this Agreement, any Material Company Lease, any other Contract, the Company’s budget for fiscal year 2026 (the “Company Budget”) or the budget for each Subsidiary of the Company for fiscal year 2026 (each, a “Property Budget” and, collectively, the “Property Budgets”), or (z) as set forth in Section 6.1(b) of the Company Disclosure Letter, the Company shall not, and shall not cause or permit any other Subsidiary of the Company to, do any of the following:
(i) amend or propose to amend the Company Governing Documents, whether by merger, consolidation or otherwise;
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(ii) adjust, split, combine, reclassify or subdivide any shares of beneficial interest or other equity securities or ownership interests of any Acquired Company (other than any Wholly Owned Company Subsidiary);
(iii) declare, set aside or pay any dividend on or make any other actual, constructive or deemed distributions (whether in cash, shares of beneficial interest, property or otherwise) with respect to Company Capital Shares or other equity securities or ownership interests in any Acquired Company or otherwise make any payment to its or their shareholders or other equity holders in their capacity as such, except for (A) the declaration and payment of dividends or other distributions to the Company by any Wholly Owned Company Subsidiary, and (B) distributions resulting from the vesting or settlement of Company Restricted Share Awards, including in connection with any dividend equivalents or distributions associated with such Company Restricted Share Awards, as applicable; (C) dividends, distributions or other payments by any joint venture Subsidiary of the Company to the extent expressly required in accordance with the terms of the applicable Joint Venture Agreements as in effect on the date of this Agreement, and (D) the declaration and payment of dividends or other distributions on or with respect to any Company Series C Preferred Shares in accordance with the terms thereof as in effect on the date of this Agreement; provided that, notwithstanding the restriction on dividends and other distributions in this Section 6.1(b), the Company and any Subsidiary of the Company shall be permitted to make distributions as set forth in Section 7.17;
(iv) purchase, redeem, repurchase or otherwise acquire, directly or indirectly, any Company Capital Shares or other equity interests of a Subsidiary of the Company, other than in connection with (A) the forfeiture of unvested Company Restricted Share Awards and (B) as otherwise expressly permitted by Article NINTH of the Company Declaration;
(v) issue, sell, pledge, dispose, encumber or grant any Company Capital Shares, any equity interests in the Subsidiaries of the Company or any options, warrants, convertible securities or other rights of any kind to acquire any Company Capital Shares or any equity interests in the Subsidiaries of the Company, except (A) for transactions among the Company and one or more Wholly Owned Company Subsidiaries or among one or more Wholly Owned Company Subsidiaries, (B) with respect to any joint venture Subsidiaries of the Company, to the extent expressly required in accordance with the terms of the applicable Joint Venture Agreements as in effect on the date of this Agreement, (C) as required for the conversion of the Company Series C Preferred Shares in accordance with their terms as in effect on the date hereof, or (D) as otherwise expressly permitted by this Section 6.1(b);
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(vi) acquire or agree to acquire (whether by merger, consolidation or acquisition of stock or assets or otherwise) any material interests in any Person, or any real property, material assets, material property (other than real property) or any business, except (A) acquisitions by the Company or any Wholly Owned Company Subsidiary of or from an existing Wholly Owned Company Subsidiary, (B) acquisitions described in Section 6.1(b)(vi) of the Company Disclosure Letter, and (C) other acquisitions of assets (other than real property) in the ordinary course of business for a purchase price of less than $500,000 in the aggregate;
(vii) sell, mortgage, pledge, assign, transfer, dispose of or permit any Lien on, or otherwise encumber, or effect a deed in lieu of foreclosure with respect to, any material Company Property or material assets except (A) entering into purchase and sale agreements with respect to, or selling, transferring or otherwise disposing of, the assets as described in Section 6.1(b)(vii) of the Company Disclosure Letter; provided that any such sale, transfer or disposal shall be at a price not less than ninety-five percent (95%) of the applicable minimum price set forth in Section 6.1(b)(vii) of the Company Disclosure Letter and otherwise on customary arm’s length terms, (B) as expressly permitted by Section 6.1(b)(viii), (C) pursuant to and required by existing Contracts, Material Company Leases or Permitted Encumbrances, (D) in the ordinary course of business, or (E) for transfers by the Company or any Wholly Owned Company Subsidiary to or from the Company or any Wholly Owned Company Subsidiary; provided that any sale, mortgage, pledge, lease, assignment, transfer, disposition or deed in connection with (x) the satisfaction of any margin call or (y) the posting of collateral in connection with any existing Contract to which the Company or any Subsidiary of the Company is a party shall be considered to be done in the ordinary course of business;
(viii) incur, create, issue, assume, guarantee, refinance, replace, terminate, agree to any waiver or forbearance or prepay any Indebtedness for borrowed money or issue or materially amend the terms of any Indebtedness of the Acquired Companies, or assume, guarantee or endorse, or otherwise become responsible (whether directly, contingently or otherwise) for the Indebtedness of any other Person (other than a Wholly Owned Company Subsidiary), except (A) Indebtedness incurred under the Company’s existing Debt Facilities in the ordinary course of business that does not exceed $50,000,000 in the aggregate (including to the extent necessary to pay dividends expressly permitted by Section 6.1(b)(iii) and to fund obligations under existing Contracts or Material Company Leases, or Contracts or Material Company Leases entered into after the date hereof in compliance with this Section 6.1(b)), (B) funding any transactions expressly permitted by this Section 6.1(b) (including as set forth in Section 6.1(b) of the Company Disclosure Letter), (C) such Indebtedness as set forth on Section 6.1(b)(viii) of the Company Disclosure Letter, and (D) funding the prepayment, redemption, or other retirement of the Trust Preferred Securities or the Senior Notes, in each case to the extent requested by Parent pursuant to Section 7.16; provided that none of the Indebtedness described in clauses (A), (B), (C) or (D) shall be secured by Company Property (if not already so secured);
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(ix) make any loans, advances or capital contributions to, or investments in, any other Person (including to any of its trustees, Officers, directors, Affiliates, agents or consultants), make any change in its existing borrowing or lending arrangements for or on behalf of such Persons, or enter into any “keep well” or other similar arrangement to maintain any financial statement condition of another Person, other than by the Company or a Wholly Owned Company Subsidiary (A) to the Company or a Wholly Owned Company Subsidiary, (B) to any joint venture Subsidiary of the Company to the extent expressly required in accordance with the terms of the applicable Joint Venture Agreements as in effect on the date of this Agreement, or (C) in accordance with existing obligations for advancement of expenses under existing indemnification obligations in any Contract as of the date hereof;
(x) enter into, renew, materially or adversely modify, exercise any purchase, sale option or similar option, amend, extend or terminate, cancel, or waive, release, compromise or assign any rights or claims under, any Material Contract (or any Contract that, if existing as of the date hereof, would be a Material Contract), other than (A) (1) any termination or renewal in accordance with the terms of any existing Material Contract that occurs automatically without any action (other than notice) by any Acquired Company, (2) as may be reasonably necessary to comply with the terms of this Agreement, or (3) any renewal of a Material Contract in the ordinary course of business, or (B) except as described in Section 6.1(b)(x) of the Company Disclosure Letter, any lease, license or occupancy agreement relating to a Company Property;
(xi) waive, release, assign, settle or compromise any pending or threatened Action, other than Actions, waivers, releases, assignments, settlements or compromises that (A) with respect to the payment of monetary damages, involve only the payment of monetary damages (excluding any portion of such payment payable under an existing property-level insurance policy) that do not exceed $500,000 individually or $1,000,000 in the aggregate and does not involve the imposition of material injunctive relief against any Acquired Company (which for the avoidance of doubt includes any limitations on the operations of any Acquired Company or Affiliate thereof beyond the obligation to comply with applicable Law) or provide for any admission of liability by any of the Acquired Companies, (B) relate to any Action involving any present, former or purported holder or group of holders of Company Common Shares that complies with Section 7.7(b), (C) are set forth on Section 6.1(b)(xi) of the Company Disclosure Letter, or (D) real property tax appeals and settlements in the ordinary course of business;
(xii) except as required by applicable Law, the terms of this Agreement, or the terms of a Company Benefit Plan in existence as of the date hereof: (A) grant or increase, or announce any grant or increase, of any salaries, wages, benefits, bonuses, severance or termination pay for any employee or individual independent contractor whose annualized base compensation exceeds $300,000, (B) establish, adopt or amend any Company Benefit Plan, (C) increase or announce an increase of compensation or employee benefits payable or provided to any (I) trustee of the Company or (II) employee or individual independent contractor of the Company whose annualized base compensation exceeds $300,000 prior to such increase, (D) grant or increase, or announce a grant or increase of, any incentive, change in control, sale, or transaction bonuses, or any other similar incentive compensation for any employee or individual independent contractor, except, for employees whose annualized base salary does not exceed $300,000, in the ordinary course of business consistent with past practice in amounts that are reasonable compared to their total annual compensation opportunities, or (E) hire (except on an at-will basis) or terminate (except where due to cause, death or disability) the employment or engagement of any employee or individual independent contractor of the Company whose annualized base compensation exceeds $300,000;
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(xiii) make any material change to its methods of accounting, except as required by GAAP or in applicable Law, or make any change with respect to accounting policies, principles or practices, in each case, except for such changes that are required by GAAP, the SEC or applicable Law;
(xiv) enter into any new line of business;
(xv) make, change or rescind any material election relating to Taxes; change (or request to change) any aspect of its material method of Tax accounting or change an annual accounting period; file or amend any federal or state annual income or other material Tax Return; settle or compromise any material federal, state, local or foreign Tax liability, audit, claim or assessment; enter into any Tax sharing, closing or other similar binding written agreement related to Taxes; obtain or request any Tax ruling; enter into or apply for any voluntary disclosure agreement regarding Taxes with any Governmental Authority surrender any right to claim any material Tax refund or give or request any waiver of a statute of limitation with respect to any income or other material Tax except, in each case, (A) in the ordinary course of business consistent with past practice, (B) to the extent required by Law or (C) to the extent necessary (1) to preserve the Company’s qualification as a REIT under the Code, or (2) to qualify or preserve the status of any Subsidiary of the Company as a disregarded entity or partnership for U.S. federal income tax purposes, a “qualified REIT subsidiary” within the meaning of Section 856(i)(2) of the Code, a “taxable REIT subsidiary” within the meaning of Section 856(l) of the Code, or a REIT under the applicable provisions of Section 856 of the Code, as the case may be; provided, however, that in the case of clause (C), the Company shall promptly notify Parent of its intent to take such action no later than five (5) Business Days prior to taking such action and shall reasonably cooperate with Parent to mitigate any adverse effect on Parent or its stockholders of the taking of such action which is made known to the Company in writing by Parent or its advisors;
(xvi) take any action that would, or fail to take any action, the failure of which to be taken would, reasonably be expected to cause the Company to fail to qualify as a REIT;
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(xvii) make or commit to make any capital expenditures, other than (A) as set forth in the Company Budget or the Property Budgets, including any increases of up to five percent (5%) in any individual line item thereof and any reallocation of amounts among line items within such budgets, so long as the aggregate amount of capital expenditures contemplated by the Company Budget and the Property Budgets, taken together, is not increased by more than five percent (5%), (B) as set forth on Section 6.1(b)(xvii) of the Company Disclosure Letter or (C) in the ordinary course of business, to address obligations under Permitted Encumbrances, existing Contracts or Material Company Leases, or Contracts or Material Company Leases entered into after the date hereof in compliance with this Section 6.1(b), or for emergency repairs;
(xviii) adopt a plan of merger, complete or partial liquidation, consolidation, dissolution, restructuring, recapitalization, or other reorganization or resolutions providing for or authorizing such merger, liquidation, or a dissolution, consolidation, recapitalization or bankruptcy reorganization, except in connection with any transaction expressly permitted by Section 6.1(b)(vi) or Section 6.1(b)(vii) in a manner that would not reasonably be expected to be materially adverse to the Company, taken as a whole, or to prevent or impair the ability of the Company to consummate the Merger;
(xix) enter into any collective bargaining agreement;
(xx) commence, or permit to commence, any new offering period under the ESPP, or permit any employee to increase such employee’s rate of contribution under the ESPP;
(xxi) change its fiscal year;
(xxii) sell, assign or transfer all or any portion of the Owned IP; grant any licenses of Owned IP except for non-exclusive licenses granted in the ordinary course of business; abandon or cease to prosecute or maintain any of the Owned IP that is material to the conduct of the business of the Acquired Companies; or disclose any Trade Secret to any Person, other than pursuant to a confidentiality Contract with respect thereto or other legally-binding confidentiality obligations;
(xxiii) fail to use commercially reasonable efforts to maintain the Insurance Policies or renew or extend any expiring Insurance Policies on substantially similar terms (and where possible on a month-to-month basis, paid ratably without prepayments, but in any event not for a term that exceeds twelve (12) months from the date of renewal);
(xxiv) report or otherwise disclose any sales of properties from 2024 or 2025 as prohibited transactions within the meaning of Section 857(b)(6)(B)(iii) of the Code on the Tax Returns of the Company or its subsidiaries; or
(xxv) authorize or enter into any Contract to do any of the foregoing.
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(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 from taking any action, at any time or from time to time, if in the reasonable judgment of the Company Board (or a committee thereof), upon written advice of counsel to the Company, prior notice to Parent, and (to the extent practicable) after consulting with Parent, such action or inaction is reasonably necessary (i) for the Company (a) to maintain its qualification as a REIT under the Code for any period or portion thereof ending on or prior to the Effective Time, including making dividend or other distribution payments to shareholders of the Company in accordance with Section 7.17 or as expressly permitted by Section 6.1(b)(iii), or (b) avoid or to continue to avoid incurring entity level income or excise Taxes under the Code, or (ii) to establish or maintain any exemption from or otherwise avoid the imposition of any requirement that any of the Acquired Companies be registered as an investment company under the Investment Company Act, including in the case of clause (i) only, making dividend or any other actual, constructive or deemed distribution payments to shareholders of the Company in accordance with this Agreement or otherwise as expressly permitted pursuant to Section 6.1(b)(iii).
Section 6.2 No Control of Other Parties’ Business. Notwithstanding the foregoing, nothing contained in this Agreement shall give the Parent Parties, directly or indirectly, the right to control or direct any of the Acquired Companies’ operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Article 7
ADDITIONAL COVENANTS
Section 7.1 Preparation of the Proxy Statement; Shareholder Approval.
(a) As promptly as reasonably practicable following the date of this Agreement but in no event later than five (5) Business Days following the later of (i) the No-Shop Period Start Date and (ii) in the event there is an Excluded Party, the Cut-Off Time in respect of the last Excluded Party (in each case, unless any filing is delayed due to a temporary closure of any Governmental Authority), the Company shall prepare and cause to be filed with the SEC the Proxy Statement in preliminary form, as required by the Exchange Act, with respect to the Shareholders Meeting. The Company shall promptly notify the Parent Parties upon the receipt of any comments, written or oral, from the SEC or any request from the SEC for amendments or supplements to the Proxy Statement, and shall, as promptly as practicable after receipt thereof, provide the Parent Parties with copies of (i) all correspondence between it or its Representatives, as applicable, on the one hand, and the SEC, on the other hand, and (ii) all written comments with respect to the Proxy Statement received from the SEC. The Company shall use its commercially reasonable efforts to respond as promptly as practicable to any comments from the SEC with respect to the Proxy Statement. At the time the Proxy Statement is first disseminated to the Company’s shareholders, at the time of the amendment or supplement thereof and at the time of the Shareholders Meeting, the Company shall use its commercially reasonable efforts so that the Proxy Statement will comply as to form and substance in all material respects with the provisions of the Exchange Act (other than with respect to any disclosures contained in the Proxy Statement provided by Parent). Notwithstanding the foregoing, prior to filing the Proxy Statement (or any amendment or supplement thereto) with the SEC or responding to any comments of the SEC with respect thereto, each of the Parent Parties shall cooperate with the Company in connection with the preparation and filing of the Proxy Statement, including promptly furnishing to the Company in writing upon request any and all information relating to the Parent Parties and their respective Affiliates as may be required, or otherwise reasonably requested by the Company, to be set forth in the Proxy Statement under applicable Law, including providing to its and the Company’s counsel such representations as reasonably necessary to render the opinions required to be filed therewith. The Proxy Statement shall include all information reasonably requested by such other Party to be included therein. The Proxy Statement shall contain the Board Recommendation, except to the extent that the Company Board (or any committee thereof) shall have effected an Adverse Recommendation Change, as permitted by and determined in accordance with Section 7.3. The Company shall use its commercially reasonable efforts to have the Proxy Statement cleared by the SEC as promptly as practicable after the filing thereof.
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(b) If, at any time prior to the receipt of the Shareholder Approval, any information relating to the Company or Parent, as the case may be, or any of their respective Subsidiaries or Affiliates, should be discovered by the Company or Parent which, in the reasonable judgment of the Company or Parent, should be set forth in an amendment of, or a supplement to, the Proxy Statement, so that any of such documents 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 were made, not misleading, the Party that discovers such information shall promptly notify the other Parties, and the Company and Parent shall cooperate in the prompt filing with the SEC of any necessary amendment of, or supplement to, the Proxy Statement and, to the extent required by Law, in disseminating the information contained in such amendment or supplement to shareholders of the Company and Parent. Nothing in this Section 7.1(b) shall limit the obligations of any Party under Section 7.1(a). For purposes of Section 4.23, Section 5.13 and this Section 7.1, any information concerning or related to the Company, its Affiliates or the Shareholders Meeting will be deemed to have been provided by the Company and any information concerning or related to Parent or its Affiliates will be deemed to have been provided by Parent. Prior to filing the Proxy Statement (or any amendment or supplement thereto) or responding to any comments of the SEC with respect thereto, the Company shall provide Parent and its counsel a reasonable opportunity to review and to propose comments on such document or response and shall give due consideration to all reasonable additions, deletions or changes suggested thereto by the Parent Parties and their counsel. Notwithstanding the foregoing, the Company assumes no responsibility hereunder with respect to information supplied in writing by or on behalf of Parent or Merger Sub for inclusion or incorporation by reference in the Proxy Statement.
(c) As promptly as practicable after the date of this Agreement, the Company shall commence a broker search pursuant to Section 14a-13 of the Exchange Act. As promptly as reasonably practicable following the clearance of the Proxy Statement by the SEC, the Company shall, in accordance with applicable Law and the Company Governing Documents and after consultation with Parent, establish a record date for, duly call, give notice of, convene and hold the Shareholders Meeting; provided that the record date for the Shareholders Meeting shall not be more than ninety (90) days prior to the date of the Shareholders Meeting. The Company shall use its commercially reasonable efforts to cause the definitive Proxy Statement to be mailed to the Company’s shareholders entitled to vote at and to receive notice of the Shareholders Meeting as promptly as reasonably practicable and in any event within five (5) Business Days, following the earlier of (i) the tenth (10th) day after the preliminary Proxy Statement has been filed with the SEC if by such date the SEC has not informed the Company that it intends to review the Proxy Statement or (ii) if the SEC has informed the Company that it intends to review the Proxy Statement, clearance of the Proxy Statement by the SEC. The Company shall use its commercially reasonable efforts to hold the Shareholders Meeting as soon as reasonably practicable following the date of this Agreement; provided that unless otherwise agreed to by the Parties, and subject to Section 7.3(d), the Company shall use commercially reasonable efforts to cause the Shareholders Meeting to be no later than thirty-five (35) days after the mailing of the Proxy Statement to the Company’s shareholders.
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(d) The Company shall, through the Company Board, recommend to its shareholders that they give the Shareholder Approval, include the Board Recommendation in the Proxy Statement and solicit and use its reasonable best efforts to obtain the Shareholder Approval, except to the extent that the Company Board shall have effected an Adverse Recommendation Change, as permitted by and determined in accordance with Section 7.3(g) or Section 7.3(h); provided, however, that, unless this Agreement is terminated in accordance with its terms, the Company’s obligation to duly call, give notice of, convene and hold the Shareholders Meeting shall be unconditional and the Company shall not submit any Competing Proposal for approval by its shareholders. Notwithstanding the foregoing provisions of this Section 7.1(c), the Company may, following consultation with Parent, postpone, recess or adjourn such meeting solely (A) to the extent required by Law or duty, (B) to allow reasonable additional time to solicit additional proxies to the extent the Company reasonably believes necessary in order to obtain the Shareholder Approval, (C) if as of the time for which the Shareholders Meeting is originally scheduled (as set forth in the Proxy Statement) there are insufficient Company Common Shares represented (either in person or by proxy) and voting to constitute a quorum necessary to conduct the business of the Shareholders Meeting, (D) to allow reasonable additional time for the filing and dissemination of any supplemental or amended disclosure which the Company Board has determined in good faith after consultation with outside counsel is necessary under applicable Law or duty and for such supplemental or amended disclosure to be disseminated and reviewed by the Company’s shareholders prior to the Shareholders Meeting or (E) with the consent of Parent; provided that no such adjournment or postponement pursuant to subclauses (B) or (C) shall delay the Shareholders Meeting by more than thirty (30) days, in the aggregate, from the prior-scheduled date. Notwithstanding the foregoing, the Company shall, at the request of Parent, to the extent permitted by Law, adjourn the Shareholders Meeting to a date mutually agreed to by the Company and Parent for the absence of a quorum or if the Company has not received proxies representing a sufficient number of Company Common Shares for the Shareholder Approval; provided that no such adjournment pursuant to this sentence shall be required to be for a period exceeding ten (10) Business Days, in the aggregate.
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Section 7.2 Access to Information; Confidentiality. During the period commencing on the date of this Agreement and continuing until the earlier to occur of the termination of this Agreement and the Effective Time, and solely for purposes of furthering the Merger, the Financing (including the marketing, negotiation and consummation thereof) and for purposes of Section 7.20 (and nothing set forth in this Section 7.2 shall limit the Company’s obligations set forth in Section 7.20), the Company shall (and shall cause its Subsidiaries to) (A) afford Parent and its Representatives reasonable access during normal business hours, upon reasonable advance notice, to the properties, offices, books and records and personnel of the Company and its Subsidiaries, (B) furnish to Parent and its Representatives such information (financial or otherwise) concerning its business, properties and offices as Parent may reasonably request, and (C) instruct its Representatives to cooperate with Parent in the matters described in clauses (A) and (B); provided, however, that the Company may restrict or otherwise prohibit access to any documents or information pursuant to this Section 7.2 or Section 7.20 to the extent that (i) any applicable Law requires the Acquired Companies to restrict or otherwise prohibit access to such documents or information, (ii) granting such access would violate any obligations of any Acquired Company with respect to confidentiality to any third party or otherwise breach, contravene or violate, constitute a default under, or give a third party the right to terminate or accelerate an obligation under, any then effective Contract (including a Material Company Lease) to which such Acquired Company is a party, in each case, as of the date hereof, (iii) access to such documents or information would reasonably be expected to result in a waiver of any attorney-client privilege, work product doctrine or other applicable privilege applicable to such documents or information or (iv) such documents or information relate to the evaluation or negotiation of this Agreement, the transactions contemplated hereby or, subject to Section 7.3(a), a Competing Proposal or Superior Proposal (each as defined herein) or any other transactions that the Company Board has considered as potentially competing with, or as an alternative to, the Merger, or relating to any deliberation of the Company Board or any duly authorized committee thereof regarding any Competing Proposal or Adverse Recommendation Change. In the event that the Company does not provide access or information in reliance on clauses (i), (ii), or (iii) of the preceding sentence, it shall use its commercially reasonable efforts to communicate the applicable information to Parent in a way that would not violate any applicable Law, Contract or obligation or waive such privilege. Notwithstanding anything to the contrary in this Section 7.2, any access to properties of the Company shall be governed solely by, and subject to, the terms and conditions of that certain Access Agreement, by and between the Company and BPG Acquisitions LLC, a Delaware limited liability company, dated as of June 14, 2026 (as amended, modified or supplemented from time to time, the “Access Agreement”), notwithstanding the expiration or termination thereof (it being understood and agreed that this Agreement shall constitute an amendment to the Access Agreement extending the term thereof). The terms and conditions of the Nondisclosure Agreement shall apply to any information obtained by Parent or any of its Representatives in connection with any investigation conducted pursuant to the access contemplated by this Section 7.2. Nothing in this Section 7.2 or elsewhere in this Agreement (other than to the extent required under Section 7.20) shall be construed to require any Acquired Company or any Representatives of any of the foregoing to prepare any reports, analyses, appraisals, opinions or other information. Parent agrees that it will not, and will direct its Representatives not to use any information obtained pursuant to this Section 7.2 for any competitive purpose in violation of applicable Law or other purpose unrelated to the transactions contemplated by this Agreement.
Section 7.3 Go-Shop; No Solicitation of Transactions; Change in Recommendation.
(a) Go-Shop. Notwithstanding anything to the contrary contained in this Agreement, during the period commencing on the date of this Agreement and continuing until 11:59 p.m. (New York City time) on August 28, 2026 (the “No-Shop Period Start Date”) and such period of time, the “Go-Shop Period”), the Company, its Subsidiaries and its Representatives shall have the right to, directly or indirectly:
(i) solicit, initiate, or facilitate any inquiry or the making of any proposal which constitutes, or may reasonably be expected to result in, any Competing Proposal;
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(ii) engage in, continue or otherwise participate in any discussions or negotiations regarding, or, subject to clause (iii) below, to furnish to any other Person information in connection with or for the purpose of facilitating, a Competing Proposal subject to the terms hereof;
(iii) enter into an Acceptable Confidentiality Agreement with, and only following such entry into an Acceptable Confidentiality Agreement, (A) furnish information (including non-public information) relating to any of the Acquired Companies to, or (B) afford access to the business, properties, assets, books, records or other non-public written information and data, or to any personnel of any of the Acquired Companies pursuant to an Acceptable Confidentiality Agreement to, any Person or group of Persons or to such Person’s Representatives (including potential financing sources of such Person); provided that the Company directly or indirectly provide the Parent Parties with any written information or data provided to such Person and grants the Parent Parties equivalent access that was not previously made available to the Parent Parties prior to or substantially concurrently with such Person; and
(iv) otherwise cooperate with or assist any Competing Proposal or inquiry, including by granting a waiver, amendment or release under any “standstill provision” or similar obligation of any third party with respect to the Company or any of its Subsidiaries solely to allow for a Competing Proposal or amendment to a Competing Proposal to be made to the Company Board on a non-public basis (except as required by Law).
(b) Promptly (and in any event one (1) Business Day) after commencement of the No-Shop Period Start Date, the Company shall (i) notify Parent in writing of the identity of each Person from whom the Company or any of its Subsidiaries received a bona fide written Competing Proposal after the execution of this Agreement and prior to the No-Shop Period Start Date, (ii) provide Parent a list identifying each Excluded Party as of the No-Shop Period Start Date and (iii) provide Parent a copy of each such Competing Proposal and a written summary of any modifications to the financial and other material terms thereof. Promptly after the No-Shop Period Start Date (and, in any event, within one (1) Business Day thereafter), the Company shall, (A) except if the Company has already done so in respect of the applicable confidentiality agreement, request each Person (other than Parent, its Affiliates and their respective Representatives) that has executed (within one (1) year prior to the date hereof) a confidentiality agreement in connection with any Competing Proposal or its consideration of any Competing Proposal to promptly return or destroy all nonpublic information furnished to such Person by or on behalf of the Company or any of the Acquired Companies prior to the No-Shop Period Start Date and (B) terminate any data room or other diligence access to each such Person (and its Representatives) described in clause (A); provided that the Company shall not be required to take any such action in respect of any third party who is an Excluded Party unless and until such third party ceases to be an Excluded Party (in which case all references in this sentence to the No-Shop Period Start Date shall be read as the date on which such third party ceases to be an Excluded Party).
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(c) No Solicitation. Except as expressly permitted by this Section 7.3, during the period commencing on (i) (A) with respect to any third party who is an Excluded Party as of the No-Shop Period Start Date, the date on which such third party is no longer an Excluded Party, or (B) with respect to any other Person, the No-Shop Period Start Date, and (ii) continuing until the earlier of the Effective Time and the valid termination of this Agreement pursuant to Article 9, other than with respect to a third party who is an Excluded Party on the No-Shop Period Start Date (and only until such time as such Excluded Party is no longer an Excluded Party, at which time the provisions of this Section 7.3(c) shall become applicable), the Company and its Subsidiaries shall, and shall use its reasonable best efforts to cause their respective Representatives to, (i) promptly cease any solicitation, discussions or negotiations with any Persons that may be ongoing with respect to a Competing Proposal and promptly terminate all physical and electronic dataroom access granted to any such Person or its Representatives and (ii) not, directly or indirectly, (A) solicit, initiate, provide any non-public information in response to, or knowingly encourage or knowingly facilitate any inquiry or the making of any proposal which constitutes, or may reasonably be expected to lead to, any Competing Proposal, (B) engage in, continue, knowingly encourage or facilitate or otherwise participate in any discussions or negotiations regarding, or furnish to any other Person information in connection with or for the purpose of facilitating, a Competing Proposal, (C) enter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement, agreement in principle or other Contract (other than an Acceptable Confidentiality Agreement) with respect to a Competing Proposal or that would reasonably be expected to lead to a Competing Proposal, or (D) take any action to make any Takeover Statute or any Governing Document Restrictions of the governing documents of the Acquired Companies inapplicable to any transaction contemplated by a Competing Proposal.
(d) Superior Proposals and Other Exceptions. Notwithstanding anything to the contrary contained in this Section 7.3, from and following the No-Shop Period Start Date and prior to obtaining the Shareholder Approval, the Company may, directly or indirectly through one or more of its Representatives, participate or engage in discussions or negotiations with, enter into an Acceptable Confidentiality Agreement with, and subject to such Acceptable Confidentiality Agreement, (i) furnish information (including non-public information) relating to any of the Acquired Companies to, or (ii) afford access to the business, properties, assets, books, records or other non-public information or data, or to any personnel of any of the Acquired Companies to, any Person or group of Persons (including any Person or group of Persons who has ceased to be an Excluded Party, after such Person or group of Persons has ceased to be an Excluded Party, and such Competing Proposal shall not be deemed to be solicited by reason of the fact that such Person or group of Persons was solicited while an Excluded Party) that has made, renewed or delivered to the Company a bona fide Competing Proposal after the date of this Agreement (that did not result from a breach of Section 7.3(c) in any material respect) and to such Person’s Representatives (including potential financing sources of such Person), and otherwise facilitate such Competing Proposal or assist such Person (and its Representatives and financing sources) with such Competing Proposal; provided that the Company Board (or, if appropriate, any committee thereof) has determined in good faith, (i) after consultation with the Company’s financial advisors and outside legal counsel, based upon the information then-available, that such Competing Proposal either constitutes a Superior Proposal or would reasonably be expected to result in a Superior Proposal, and (ii) after consultation with its outside legal counsel that failure to do so would be inconsistent with the duties of the trustees of the Company Board under applicable Law; provided, further, that, subject to applicable Law, any material non-public information or access concerning any of the Acquired Companies that is provided to such Person or its Representatives pursuant to this Section 7.3(d) that was not previously provided to Parent or its Representatives shall be provided or made available to Parent promptly, but in any event within twenty-four (24) hours, following such time as it is provided or made available to such third party. In addition, notwithstanding Section 7.3(c), the Acquired Companies and their Representatives may (A) contact and engage in any communications, negotiations or discussions in order to seek to clarify and understand the terms and conditions of any inquiry or proposal made by any Person solely to determine whether such inquiry or proposal constitutes or is reasonably likely to result in a Superior Proposal, and (B) inform a Person that has made or is considering making a Competing Proposal of the provisions of this Section 7.3.
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(e) Notices. During the period commencing on the No-Shop Period Start Date and continuing until the earlier of the Effective Time and the valid termination of this Agreement pursuant to Article 9, the Company shall promptly (but no later than twenty-four (24) hours) after receipt of any Competing Proposal (other than with respect to an Excluded Party, until such time as such Person is no longer an Excluded Party), (i) advise Parent in writing of the entry into any Acceptable Confidentiality Agreement, the receipt of such Competing Proposal or request for confidential information and (ii) keep Parent reasonably informed on a reasonably prompt basis of all material developments, discussions or negotiations regarding any Competing Proposal and the status of such Competing Proposal. During the period commencing on the No-Shop Period Start Date and continuing until the earlier of the Effective Time and the valid termination of this Agreement pursuant to Article 9, the Company agrees that none of the Acquired Companies will enter into any confidentiality agreement with any Person that prohibits any Acquired Company from providing any information required to be provided to Parent in accordance with Section 7.3 within the time periods contemplated hereby. During the period commencing on the No-Shop Period Start Date and continuing until the earlier of the Effective Time and the valid termination of this Agreement pursuant to Article 9, the Company shall not grant any waiver or release under any standstill, confidentiality or similar agreement or provision to which the Company or any of its Subsidiaries is a party; provided, however, prior to receipt of the Shareholder Approval, the Company may grant a waiver or release under any such standstill, confidentiality or similar agreement or provision, solely to allow for a Competing Proposal or amendment to a Competing Proposal to be made to the Company Board (provided that such waiver contains an express acknowledgment that such person cannot, directly or indirectly, acquire any securities of the Company or its Subsidiaries prior to the valid termination of this Agreement pursuant to Article 9), if the Company Board determines in good faith (after consultation with the Company’s financial advisors and outside legal counsel) that the failure to take such action would be inconsistent with the duties of the trustees of the Company Board under applicable Law.
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(f) No Change in Board Recommendation or Entry into an Alternative Acquisition Agreement. Except as expressly permitted by Section 7.3(g), Section 7.3(h), and Section 7.3(i), during the period commencing on the date of this Agreement and continuing until the earlier of the Effective Time and the valid termination of this Agreement pursuant to Article 9, the Company Board shall not:
(i) (A) fail to recommend to its shareholders that the Shareholder Approval be given or fail to include the Board Recommendation in the Proxy Statement, (B) change, qualify, withhold, withdraw, rescind or modify, or publicly propose to change, qualify, withhold, withdraw or modify, the Board Recommendation, (C) fail to publicly reaffirm its recommendation and publicly recommend against any Competing Proposal that is a tender offer or exchange offer within ten (10) Business Days after the commencement thereof (it being understood that a communication by the Company Board pursuant to Rule 14d-9(f) of the Exchange Act shall not, in and of itself, be deemed an Adverse Recommendation Change), (D) fail to publicly reaffirm its recommendation within ten (10) Business Days after Parent so requests in writing (provided that, other than any reaffirmation following the public announcement of a Competing Proposal, or the public announcement of a modification thereto, Parent may only request such a reaffirmation on one occasion), or (E) adopt, approve or recommend, or publicly propose to adopt, approve or recommend to the shareholders of the Company a Competing Proposal (any of the actions described in this clause (i) being referred to as an “Adverse Recommendation Change”); or
(ii) authorize, cause or permit any Acquired Company to enter into definitive agreement to effectuate a Competing Proposal (each, an “Acquisition Agreement”).
(g) Adverse Recommendation Change; Entry into Alternative Acquisition Agreement. Notwithstanding anything to the contrary in this Agreement, at any time prior to the time the Shareholder Approval is obtained, if the Company has received a written Competing Proposal (that did not result from a breach of Section 7.3(c) in any material respect) that the Company Board (or, if appropriate, any committee thereof) has determined in good faith based upon the information then available (after consultation with the Company’s financial advisors and outside legal counsel) constitutes a Superior Proposal, then the Company Board (or, if appropriate, any committee thereof) may make an Adverse Recommendation Change with respect to such Competing Proposal or terminate this Agreement pursuant to Section 9.1(c)(ii) (Superior Proposal) to enter into an alternative Acquisition Agreement with respect to such Competing Proposal substantially concurrently with such termination (provided that, prior to or concurrently with, and as a condition to the effectiveness of, such termination the Company pays the Company Termination Payment in full to Parent in accordance with and as required by Section 9.3(b)); provided, however, that the Company Board (or any committee thereof) shall not take any action described in this Section 7.3(g) unless:
(i) the Company Board determines in good faith (after consultation with the Company’s financial advisor and outside legal counsel) that failure to take such action would be inconsistent with the duties of the trustees of the Company Board under applicable Law;
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(ii) (A) the Company has given Parent three (3) Business Days (the “Notice Period”) prior written notice of its intention to take such actions (which notice shall include the information with respect to such Superior Proposal that is specified in Section 7.3(e) as well as a copy of any proposal, agreement and all material documentation providing for such Superior Proposal), (B) Parent and the Company have negotiated, and have caused their respective Representatives to negotiate, in good faith during such Notice Period (to the extent Parent desires to so negotiate) to allow Parent to propose in writing revisions to the terms of this Agreement prior to 11:59 p.m. (New York City time) on the final day of the Notice Period so that such Superior Proposal ceases to constitute a Superior Proposal, and (C) following the end of the Notice Period, the Company Board (or any committee thereof) shall have determined in good faith (after consultation with the Company’s financial advisor and outside legal counsel), taking into account any revisions to this Agreement proposed in writing by Parent during the Notice Period or otherwise, that the Superior Proposal giving rise to the Notice Period continues to constitute a Superior Proposal and that the failure to make an Adverse Recommendation Change or enter into an alternative Acquisition Agreement in respect of such Superior Proposal would be inconsistent with the trustees’ duties under applicable Law; provided that, in the event of any subsequent change to the financial terms (including the form, amount and timing of payment of consideration) or any other material terms of such Superior Proposal, the Company shall, in each case, be required to deliver to Parent an additional written notice consistent with that described in subclause (A) above and the Notice Period shall recommence and the Company shall be required to comply with subclauses (B) and (C) above anew; provided, however, that the Notice Period shall be reduced to two (2) Business Days.
(h) Intervening Event. Notwithstanding anything to the contrary in this Agreement, at any time prior to receipt of the Shareholder Approval, the Company Board (or, if appropriate, any committee thereof) may effect an Adverse Recommendation Change in response to an Intervening Event if the Company Board (or, if appropriate, any committee thereof) determines in good faith (after consultation with the Company’s financial advisor and outside legal counsel), that the failure to do so would be inconsistent with the duties of the trustees of the Company Board under applicable Law; provided, however, that the Company Board (or any committee thereof) shall not make such an Adverse Recommendation Change unless:
(i) the Company has given Parent prior written notice equal to the Notice Period of its intention to take such actions, which notice will specify and describe the facts and circumstances relating to the applicable Intervening Event in reasonable detail and the factual bases for the Company Board’s determination that such events or circumstances constitute an Intervening Event; provided that the delivery of such notice shall not, in and of itself, constitute an Adverse Recommendation Change; and
(ii) prior to effecting such an Adverse Recommendation Change, (A) Parent and the Company have negotiated, and have caused their respective Representatives to negotiate, in good faith during such Notice Period (to the extent Parent desires to so negotiate) to allow Parent to propose irrevocable and binding written revisions to the terms of this Agreement prior to 11:59 p.m. (New York City time) on the final day of the Notice Period so that the Company Board (or any committee thereof) would no longer determine that the failure to make an Adverse Recommendation Change would be inconsistent with the duties of the trustees of the Company Board (or any committee thereof) under applicable Law, and (B) following the end of the Notice Period, the Company Board shall have determined in good faith (after consultation with the Company’s financial advisor and outside legal counsel), taking into account Parent’s proposed written revisions to this Agreement that Parent has irrevocably committed in writing to make and that have not been withdrawn, that the failure to make an Adverse Recommendation Change in response to such Intervening Event would be inconsistent with the duties of the trustees of the Company Board under applicable Law.
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(i) Certain Disclosures. Nothing in this Section 7.3 or elsewhere in this Agreement shall prohibit the Company, the Company Board or their Representatives from: (i) taking and disclosing to the shareholders of the Company a position contemplated by Rule 14e-2(a) promulgated under the Exchange Act, making a statement contemplated by Item 1012(a) of Regulation M-A or Rule 14d-9 promulgated under the Exchange Act or making any “stop, look and listen” communication to the shareholders of the Company pending disclosure of its position thereunder; or (ii) disclosing to the Company’s shareholders any factual information regarding the business, financial condition or results of operations of the Acquired Companies or the fact that a Competing Proposal has been made, the identity of the party making such Competing Proposal or the material terms of such Competing Proposal, in each case, that the Company Board (or, if appropriate, any committee thereof) determines in good faith (after consultation with its outside legal counsel) that such disclosure is required under applicable Law (it being understood that disclosure under this clause (ii) shall not limit or otherwise affect the obligations of the Company or the Company Board (or any committee thereof) under this Agreement and no such disclosure shall, taken by itself, be deemed to be an Adverse Recommendation Change); provided, however, that the Company Board (or any committee thereof) shall not make an Adverse Recommendation Change, except in accordance with Section 7.3(g) or Section 7.3(h).
(j) For purposes of this Agreement:
(i) “Competing Proposal” means, any proposal or offer (other than from the Parent Parties or their Affiliates), whether in one transaction or a series of related transactions, resulting in: (A) any acquisition by any Person or “group” (as defined under Section 13(d) of the Exchange Act) of beneficial ownership of more than twenty-five percent (25%) of the outstanding voting securities, beneficial ownership or voting power of the Company or any tender offer or exchange offer that if consummated would result in any Person or “group” (as defined under Section 13(d) of the Exchange Act) beneficially owning more than twenty-five percent (25%) of the outstanding voting securities of the Company; (B) any merger, consolidation, business combination, recapitalization, reorganization, liquidation or other similar transaction involving the Company or its Subsidiaries pursuant to which any Person or “group” (as defined in or under Section 13(d) of the Exchange Act), other than the shareholders of the Company (as a group) immediately prior to the consummation of such transaction, would hold, directly or indirectly, equity interests in the surviving or resulting entity of such transaction representing more than twenty-five percent (25%) of the voting power of the surviving or resulting entity; or (C) any sale or disposition of more than twenty-five percent (25%) of the assets, revenues or net income of the Company or its Subsidiaries, in each case on a consolidated basis; provided, however, that the term “Competing Proposal” shall not include (I) the Merger or any of the other transactions contemplated by this Agreement or (II) any merger, consolidation, business combination, reorganization, recapitalization, liquidation or similar transaction solely among the Company and one or more of the Subsidiaries of the Company or solely among the Subsidiaries of the Company.
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(ii) “Superior Proposal” means a bona fide written Competing Proposal (except for purposes of this definition, the references in the definition of “Competing Proposal” to twenty-five percent (25%) shall be replaced with fifty percent (50%)), which (A) did not result from a breach of Section 7.3 in any material respect, and (B) the Company Board (or, if appropriate, any committee thereof) determines in good faith (after consultation with its outside legal counsel and financial advisors) to be more favorable from a financial point of view to the holders of Company Common Shares (solely in their capacities as shareholders) than the Merger and the other transactions contemplated by this Agreement, taking into account the timing, financial, regulatory and other aspects of the Competing Proposal that the Company Board determines are relevant and that is reasonably likely to be consummated (if accepted) on the terms proposed, and taking into account any changes or modifications to the terms of this Agreement irrevocably offered by Parent in accordance with the terms of this Agreement that Parent has irrevocably committed in writing to make and that have not been withdrawn.
(iii) “Intervening Event” means a change in circumstances or development occurring or arising after the date of this Agreement that materially affects the business, assets or operations of the Acquired Companies, taken as a whole, and that was not known or reasonably foreseeable to the Company Board prior to the execution of this Agreement (or, if known, the material consequences of which were not reasonably foreseeable to the Company Board) and becomes known to the Company Board prior to receipt of the Shareholder Approval; provided, however, that none of the following will constitute, or be considered when determining when there has been an Intervening Event: (I) the existence or terms of a Competing Proposal or (II) changes in the market price or trading volume of the Company Common 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) in determining whether an Intervening Event has occurred).
Section 7.4 Interim Operations of Parent and Merger Sub . During the period from the date hereof through the earlier of the Effective Time or the date of termination of this Agreement, Parent will cause Merger Sub to not engage in any activities of any nature except as provided in or contemplated by this Agreement.
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Section 7.5 Public Announcements. Except with respect to any Adverse Recommendation Change or any action taken pursuant to, and in accordance with, Section 7.1 or Section 7.3, so long as this Agreement is in effect, the Parties shall consult with each other before issuing any press release or otherwise making any public statements or filings with respect to this Agreement or any of the transactions contemplated by this Agreement and provide such other party an opportunity to review and comment thereon, except to the extent it is not reasonably practicable to do so, and none of the Parties shall issue any such press release or make any such public statement or filing prior to obtaining the other Parties’ consent (which consent shall not be unreasonably withheld, delayed or conditioned), except (a) as may be required by applicable Law or Order or the rules or regulations of any applicable United States securities exchange or regulatory or governmental body to which the relevant party is subject, in which case, to the extent permitted by applicable Law or Order and practicable under the circumstances, the party proposing to issue such press release or make such public announcement shall consult in good faith with the other party before making any such public announcement, (b) with respect to any press release or other public statement by the Company permitted by Section 7.3 (including to announce an Adverse Recommendation Change in accordance with Section 7.3), (c) statements consistent in all material respects with any release, disclosure or other public statements previously made in accordance with this Section 7.5, (d) to the extent that such public statement relates to any dispute between the Parties relating to this Agreement or the transactions contemplated by this Agreement, (e) confidential communications or statements by Brookfield Sponsor or CPPIB Sponsor, or any of their respective Affiliates or their respective Representatives to any existing or potential investor or limited partner in any current or future investment funds or investment vehicles affiliated with, or managed or advised by, Brookfield Sponsor, CPPIB Sponsor or any of their respective Affiliates, in each case who are subject to customary confidentiality obligations, to the extent such communications are consistent in all material respects with descriptions of the Company’s business contained in the Parties’ prior joint disclosures, or (f) public statements regarding the transactions contemplated hereby in response to questions from the press, analysts, investors or those attending industry conferences, and make internal announcements to employees, in each case, to the extent that such statements are consistent with previous press releases, public disclosures or public statements made jointly by the parties or approved by the parties, and otherwise in compliance with this Section 7.5, and provided that such public statements do not reveal material nonpublic information regarding this Agreement or the transactions contemplated hereby. The press release announcing the execution and delivery of this Agreement shall be a joint release of, and shall not be issued prior to the approval of each of, the Company and Parent (which approval shall not be unreasonably withheld, conditioned or delayed).
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Section 7.6 Appropriate Action; Consents; Filings.
(a) Upon the terms and subject to the conditions set forth in this Agreement (and subject to Section 7.6(b) in respect of Non-Governmental Consents), the Company and each of the Parent Parties shall, and shall cause their respective Subsidiaries to, use reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other Party in doing, all things necessary, proper or advisable under applicable Law to consummate and make effective, as promptly as practicable and in any event prior to the Outside Date, the Merger and the other transactions contemplated by this Agreement, including (i) taking all actions necessary to cause the conditions to the Closing set forth in Article 8 to be satisfied, (ii) preparing and filing any applications, notices, registrations and requests as may be required or advisable to be filed with or submitted to any Governmental Authority in order to consummate the transactions contemplated by this Agreement, (iii) executing and delivering any additional instruments necessary to consummate the Merger and the other transactions contemplated by this Agreement and to fully carry out the purposes of this Agreement, and (iv) obtaining all necessary actions or nonactions, authorizations, permits, waivers, consents, clearances, approvals and expirations or terminations of waiting periods (collectively, “Consents”) (other than Non-Governmental Consents, which shall be solely governed by Section 7.6(b)) from Governmental Authorities necessary in connection with the consummation of the Merger and the other transactions contemplated by this Agreement and the making of all necessary or advisable registrations and filings (including filings with Governmental Authorities, if any) and the taking of all reasonable steps as may be necessary or advisable to obtain an approval or waiver from, or to avoid an action or proceeding by, any Governmental Authority necessary in connection with the consummation of the Merger and the other transactions contemplated by this Agreement. Further, and without limiting the generality of the foregoing, each of the Parent Parties shall avoid or eliminate each and every impediment under Antitrust Laws or similar Law that may be asserted by any Governmental Authority with respect to this Agreement so as to make effective as promptly as practicable the Merger and the other transactions contemplated by this Agreement and to avoid any Action or proceeding which would otherwise have the effect of preventing or delaying the Closing beyond the Outside Date. Parent shall (A) propose, negotiate, commit to and effect, by consent decree, hold separate order or otherwise, conduct of business restrictions, a sale or disposition of such assets or businesses as are required to be divested or a license or grant of commercialization rights to businesses, product lines, fields of use, divisions, business arrangements, Contracts, assets or interests therein of Parent or its Affiliates (including, after the Closing, the Surviving Entity and its Affiliates), (B) agree to amend any venture or other arrangement of Parent or its Affiliates (including after the Closing, the Surviving Entity and its Affiliates), (C) use its reasonable best efforts to contest and resist any Action and to have vacated, lifted, reversed or overturned any Order that may result from such Action, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the transactions contemplated by this Agreement, and (D) otherwise take or commit to take actions that after the Closing would limit Parent’s or its Subsidiaries’ (including after the Closing, the Surviving Entity’s) freedom of action with respect to, or their ability to retain, one or more of their assets (whether tangible or intangible), products, or businesses, in each case as may be required in order to avoid the entry of, or to effect the dissolution of, any injunction, temporary restraining order or other order that would otherwise have the effect of preventing or delaying the Closing; provided that none of the Parent Parties, the Company or any of its Subsidiaries shall be required to become subject to, or consent or agree to or otherwise take any action with respect to, any requirement, condition, understanding, agreement or order to sell, divest, license, hold separate or otherwise dispose of, or to conduct, restrict, operate, invest or otherwise change the assets, operations or business of the Company or any of its Subsidiaries, unless such requirement, condition, understanding, agreement or order (1) is binding on or otherwise applicable to the Company or its Subsidiaries only from and after the Closing in the event that the Closing occurs, and (2) together with all other requirements, conditions, understandings, agreements or orders, would not reasonably be expected to have a material adverse effect on the value of the transactions contemplated by this Agreement to Parent; provided, further, that in no event shall the Parent Parties or the Company or any of its Subsidiaries be required to pay (and the Company will not, without the consent of Parent (not to be unreasonably withheld), commit to pay), directly or indirectly, prior to the Closing any fee, penalty or other consideration, or incur any liability, to any third party for any Consent required for or triggered by the consummation of the transactions contemplated by this Agreement. Each of the Parties will, and shall cause their respective Affiliates to, furnish to the other such necessary information and reasonable assistance as the other may request in connection with the preparation of any required applications, notices, registrations and requests as may be required or advisable to be filed with any Governmental Authority and will cooperate in responding to any inquiry from a Governmental Authority, including promptly informing the other Party of such inquiry, consulting in advance before making any presentations or submissions to a Governmental Authority, and supplying each other with copies of all material correspondence, filings or communications between either Party and any Governmental Authority with respect to this Agreement. To the extent reasonably practicable, the Parties or their Representatives shall have the right to review in advance and each of the Parties will consult the others on, all the information relating to the other and each of their Affiliates that appears in any filing made with, or written materials submitted to, any Governmental Authority in connection with the Merger and the other transactions contemplated by this Agreement, except that confidential competitively sensitive business information may be redacted from such exchanges and instead shared on a counsel to counsel basis. To the extent reasonably practicable, neither Party shall, nor shall they permit their respective Representatives to, participate independently in any meeting or engage in any substantive conversation with any Governmental Authority in respect of any filing, investigation or other inquiry without giving the other Party prior notice of such meeting or conversation and, to the extent permitted by applicable Law, without giving the other Party the opportunity to attend or participate (whether by telephone or in person) in any such meeting with such Governmental Authority. Notwithstanding anything to the contrary in this Agreement, Parent shall have the sole right to control and direct all antitrust strategy in connection with the review of the transactions contemplated by this Agreement by any Governmental Authority, or any litigation by, or negotiations with, any antitrust authority or other Person relating to any Antitrust Law or similar Law, and shall take the lead in all meetings, discussions, and communications with any Governmental Authority relating to obtaining approval under any Antitrust Law or similar Law for the transactions contemplated by this Agreement; provided that Parent shall consult with and consider in good faith the comments of the Company in connection with any filing, communication, defense, litigation, negotiation, or strategy relating to antitrust matters.
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(b) Upon the terms and subject to the conditions set forth in this Agreement, each of the Parties shall use, and cause each of their respective Affiliates to use, its and their respective commercially reasonable efforts in obtaining all necessary Consents from any Persons (other than Governmental Authorities) required for or triggered by the Merger and the other transactions contemplated by this Agreement (excluding any Assumption) (the “Non-Governmental Consents”) that are requested by Parent in writing; provided that neither the Company nor any of the Acquired Companies shall be required to become subject to, or consent or agree to or otherwise take any action with respect to, any requirement, condition, understanding, agreement or order to sell, divest, license, hold separate or otherwise dispose of, or to conduct, restrict, operate, invest or otherwise change the assets, operations or business of the Company or any of its Subsidiaries, unless (x) such requirement, condition, understanding, agreement or order is binding on or otherwise applicable to the Company or its Subsidiaries only from and after the Closing in the event that the Closing occurs and (y) Parent has consented to such requirement, condition, understanding, agreement or order; provided, further, that in no event shall the Company or any of its Subsidiaries be required to pay (and the Company will not, without the consent of Parent, commit to pay), directly or indirectly, prior to the Closing any fee, penalty or other consideration, or incur any liability, to any third party for any Non-Governmental Consent. The Company shall have satisfied its obligations set forth in this Section 7.6(b) if the Company shall have used its commercially reasonable efforts to comply with such obligations whether or not any Non-Governmental Consents are successful or obtained.
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(c) Parent agrees, on behalf of itself and its Affiliates, that, between the date of this Agreement and the Closing, Parent shall not, and shall cause its Affiliates not to, directly or indirectly, acquire, purchase, lease or license (or agree to acquire, purchase, lease or license), by merging with or into or consolidating with, or by purchasing a substantial portion of the assets of or equity in, or by any other manner, any business or any corporation, partnership, association or other business organization or division or part thereof, or any securities or collection of assets, or take any other action or refrain from taking any action, if doing so could (i) result in any material delay in obtaining, or increase the risk of not obtaining, any Consent of any Governmental Authority or any Non-Governmental Consent in connection with the Merger and the other transactions contemplated by this Agreement or (ii) restrict, prevent, prohibit, impede or materially delay the consummation of the Merger and the other transactions contemplated by this Agreement, provided that the foregoing shall not apply to any part of CPPIB or Brookfield and/or their respective Affiliates (including any portfolio companies thereof) other than the CPPIB Real Estate Group and Brookfield Property Group. Nothing contained in this Agreement shall permit any Parent Party, directly or indirectly, the right to control or direct the operations of either Company Party prior to the consummation of the Merger. Prior to the Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations.
(d) Notwithstanding anything to the contrary herein, nothing in this Section 7.6 or any other provision of this Agreement, shall require Brookfield or CPPIB, or any of their respective Affiliates (in each case other than Parent and its Subsidiaries and, following the Closing, the Surviving Entity and its Subsidiaries) to offer, agree to, accept or implement any action or otherwise be required to take any action, including selling, divesting, disposing of, licensing, holding separate, giving any undertaking or any other action that limits in any respect its freedom of action with respect to, or ability to retain, develop or acquire, any properties, assets, business, products, rights, services or licenses, or any portion of, or interest in, any properties, assets, business, products, rights, services or licenses, of Brookfield Sponsor or CPPIB Sponsor, or their respective Affiliates (in each case other than Parent and its Subsidiaries and, following the Closing, the Surviving Entity and its Subsidiaries).
Section 7.7 Notification of Certain Matters; Transaction Litigation.
(a) The Company and its Representatives shall, to the extent legally permissible, give prompt notice to the Parent Parties, and the Parent Parties and their Representatives shall, to the extent legally permissible, give prompt notice to the Company, of any notice or other communication received by such Party from any Governmental Authority in connection with this Agreement, the Merger or the other transactions contemplated by this Agreement, or from any Person alleging that the consent of such Person is or may be required in connection with the Merger or the other transactions contemplated by this Agreement.
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(b) The Company and its Representatives shall give prompt notice to the Parent Parties, and the Parent Parties and their Representatives shall give prompt notice to the Company, of any Action commenced or, to such Party’s knowledge, threatened against, relating to or involving such Party or any of its Subsidiaries, respectively, or any of their respective trustees, directors, officers or partners that relates to this Agreement, the Merger or the other transactions contemplated by this Agreement, and shall keep the other Parties, as applicable, reasonably informed with respect to the status thereof. The Company and its Representatives shall give Parent the opportunity to reasonably participate in the defense and settlement of any shareholder or unitholder litigation against the Company or any of their respective trustees, directors, officers or partners relating to this Agreement and the transactions contemplated by this Agreement. Neither the Company nor any Parent Party shall enter into any settlement in respect of any litigation against the Parent Parties or the Company, as applicable, or any of their respective trustees, directors, officers or partners relating to this Agreement and the transactions contemplated by this Agreement, without the other Party’s prior written consent (not to be unreasonably withheld, conditioned or delayed).
Section 7.8 Employee Matters.
(a) From and after the Effective Time, the Surviving Entity shall (and Parent shall cause the Surviving Entity or any of their respective Subsidiaries or Affiliates to) assume and honor all Company Benefit Plans in accordance with their terms as in effect immediately prior to the Effective Time or as such terms may be amended in accordance with the applicable Company Benefit Plan after the Effective Time. Notwithstanding the generality of the foregoing, for a period commencing on the Closing and continuing for a period of twelve (12) months after the Closing Date (or, if earlier, a Continuing Employee’s termination of employment), Parent shall, or shall cause the Surviving Entity or one of its Subsidiaries or Affiliates (including, following the Effective Time, each of the Acquired Companies) to, provide to each Continuing Employee during such Continuing Employee’s period of employment (i) an annual base salary or hourly wage rate (as applicable) at least equal to the annual base salary or hourly wage rate (as applicable) provided to such Continuing Employee immediately prior to the Effective Time, (ii) target annual cash bonus opportunities that are no less favorable than the target annual cash bonus provided to such Continuing Employee immediately prior to the Effective Time, (iii) severance benefits and protections that are no less favorable than those provided to such Continuing Employee immediately prior to the Effective Time, and (iv) retirement, health, welfare and employee and fringe benefits (excluding equity and other long-term incentive, change in control, retention, severance, post-employment welfare and defined benefit pension benefits), that are no less favorable in the aggregate than those provided to such Continuing Employee immediately prior to the Effective Time. In addition, without limiting the generality of the foregoing, Parent shall, or shall cause the Surviving Entity or one of their respective Subsidiaries or Affiliates (including, following the Effective Time, each of the Acquired Companies), to continue to maintain the LXP Industrial Trust 401(k) Plan during the period commencing on the Closing and continuing until at least December 31 of the plan year in which the Closing occurs on terms no less favorable to participants than those in effect immediately prior to the Merger Effective Time and to make safe harbor nonelective and discretionary nonelective contributions (“Employer Contributions”) thereunder with respect to the plan year in which the Closing occurs that are calculated on a basis and funded on a frequency that are no less favorable to participants than the basis and frequency used to calculate and fund such Employer Contributions with respect to the plan year immediately prior to the year in which the Closing Date occurs.
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(b) For purposes of vesting, eligibility to participate, benefit accrual and for calculating severance and vacation entitlements and accruals under the employee benefit plans of Parent, the Surviving Entity or any of their respective Subsidiaries or Affiliates (including, following the Effective Time, each of the Acquired Companies) (each, a “New Plan”), each Continuing Employee shall be credited such Continuing Employee’s year(s) of service with an Acquired Company, an Affiliate thereof or a respective predecessor thereof before the Effective Time, to the same extent as such Continuing Employee was entitled before the Effective Time, to credit for such service under any similar Company Benefit Plan in which such Continuing Employee participated or was eligible to participate immediately prior to the Effective Time; provided that the foregoing shall not apply to the extent that its application would result in a duplication of benefits with respect to the same period of service. In addition and without limiting the generality of the foregoing, (A) each Continuing Employee shall be immediately eligible to participate, without any waiting time, in any and all New Plans to the extent that coverage under such New Plans replaces a Company Benefit Plan in which such Continuing Employee participated immediately prior to the Effective Time (such plans, collectively, the “Old Plans”) and (B) for purposes of each New Plan providing medical, dental, pharmaceutical or vision benefits to any Continuing Employee, Parent shall (or shall cause the Surviving Entity to) use commercially reasonable efforts to cause all eligibility waiting periods, pre-existing condition exclusions and actively-at-work requirements of such New Plan to be waived for such Continuing Employee and such Continuing Employee’s spouse and covered dependent(s) if any, unless such conditions would not have been waived under the comparable Old Plans, and Parent shall (or shall cause the Surviving Entity to) cause any eligible expenses incurred by such Continuing Employee and such Continuing Employee’s spouse and covered dependent(s) if any during the portion of the plan year of the Old Plans ending on the date such Continuing Employee’s participation in the corresponding New Plan begins to be taken into account under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to Continuing Employee and such Continuing Employee’s spouse and covered dependent(s) (if any) for the applicable plan year as if such amounts had been paid in accordance with such New Plan.
(c) Nothing in this Section 7.8: (i) shall limit the ability of Parent, the Company, the Surviving Entity or any of their respective Affiliates to amend, modify or terminate any Company Benefit Plan or any other benefit or compensation plan, policy, program, agreement, Contract, or arrangement at any time assumed, established, sponsored or maintained by any of them, in each case, in accordance with its terms, subject to the obligations set forth in Section 7.8(a) and Section 7.8(b) above, (ii) shall be deemed or construed to amend, establish, or modify any Company Benefit Plan or any other benefit or compensation plan, policy, program, agreement, Contract or arrangement, (iii) shall prevent Parent, the Company, the Surviving Entity or any of their respective Affiliates from terminating the employment of any Continuing Employees or (iv) create any third party beneficiary rights in any person (including to enforce the provisions of this Agreement or any right to employment or continued employment, and including any rights in any Continuing Employee or any dependent or beneficiary thereof). Nothing in this Section 7.8: (i) shall limit the ability of Parent, the Company, the Surviving Entity or any of their respective Affiliates to amend, modify or terminate any Company Benefit Plan or any other benefit or compensation plan, policy, program, agreement, Contract, or arrangement at any time assumed, established, sponsored or maintained by any of them, in each case, in accordance with its terms, subject to the obligations set forth in Section 7.8(a) and Section 7.8(b) above, (ii) shall be deemed or construed to amend, establish, or modify any Company Benefit Plan or any other benefit or compensation plan, policy, program, agreement, Contract or arrangement, (iii) shall prevent Parent, the Company, the Surviving Entity or any of their respective Affiliates from terminating the employment of any Continuing Employees or (iv) create any third party beneficiary rights in any person (including to enforce the provisions of this Agreement or any right to employment or continued employment, and including any rights in any Continuing Employee or any dependent or beneficiary thereof).
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Section 7.9 Indemnification; Directors’ and Officers’ Insurance.
(a) The Company shall be permitted to, prior to the Closing, and if the Company fails to do so, Parent shall, or Parent shall cause the Surviving Entity to, as of the Effective Time, obtain and fully pay the premium for a “tail” directors’ and officers’ liability insurance policy and fiduciary liability insurance policy that provides coverage for a period of six (6) years from and after the Closing in respect of acts or omissions occurring prior to the Closing covering each such Person currently covered by the Company’s or its Subsidiaries’ officers’ and directors’ liability insurance policy on terms with respect to coverage and amount no less favorable than those of such policy in effect on the date hereof and Parent shall cause such policy to be maintained in full force and effect, for its full term, and shall cause all obligations thereunder to be honored by the Surviving Entity; provided, however, that in no event shall the premium of such policy be in excess of 300% of the amount per annum the Company and its Subsidiaries paid in its last full fiscal year prior to the date hereof (the “Current Premium”), but in such case, such policy shall be purchased and maintained to provide for the maximum coverage available for 300% of the Current Premium. If the Company, Parent or Merger Sub for any reason fail to obtain such policies prior to, as of or after the Closing, Parent shall, for a period of six (6) years from the Effective Time, cause the Surviving Entity to purchase and maintain in effect the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by the Company and its Subsidiaries as of immediately prior to the Closing in respect of acts or omissions occurring prior to the Closing covering each such Person currently covered by the Company’s or its Subsidiaries’ officers’ and directors’ liability insurance policy and provided that, after the Effective Time, in no event shall Parent or Surviving Entity be required to pay annual premiums in excess of 300% of the Current Premium in respect of the coverage required to be obtained pursuant hereto, but in such case shall purchase and maintain the maximum coverage available for 300% of the Current Premium.
(b) Without limiting or being limited by the provisions of Section 7.7 and to the extent permitted by applicable Law and the governing documents of the Parent Parties, during the period commencing as of the Closing and ending on the sixth (6th) anniversary of the Closing, Parent shall, and shall cause the Surviving Entity to: (i) indemnify, defend and hold harmless each Indemnified Party against and from any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any Action to the extent such Action arises out of or pertains to any action or omission or alleged action or omission in such Indemnified Party’s capacity as a manager, director, officer, agent, fiduciary advisor or Person acting in similar capacity, partner, member or trustee of the Company or any Subsidiary of the Company, including such alleged acts or omissions with respect to this Agreement or any of the transactions contemplated by this Agreement, including the Merger; and (ii) pay (as incurred) in advance of the final disposition of any such Action all reasonable expenses (including reasonable attorneys’ fees and any expenses incurred by any Indemnified Party in connection with enforcing any rights with respect to indemnification) of any Indemnified Party without the requirement of any bond or other security, in each case to the fullest extent permitted by Law and the governing documents of the Surviving Entity, but subject to Parent’s or the Surviving Entity’s receipt of a written undertaking by or on behalf of such Indemnified Party to repay such amount if it shall ultimately be determined that such Indemnified Party is not entitled to be indemnified. Notwithstanding anything to the contrary set forth in this Agreement, Parent or the Surviving Entity, as applicable, (A) shall not settle or compromise or consent to the entry of any judgment or otherwise seek termination with respect to any claim, action, suit or proceeding against or investigation of any Indemnified Party for which indemnification may be sought under this Section 7.9(b) without the Indemnified Party’s prior written consent unless such settlement, compromise, consent or termination includes an unconditional release of such Indemnified Party from all liability arising out of such claim, action, suit, proceeding or investigation, (B) shall not be liable for any settlement effected without their prior written consent, and (C) shall not have any obligation hereunder to any Indemnified Party to the extent that a court of competent jurisdiction shall determine in a final and non-appealable order that such indemnification is prohibited by applicable Law.
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(c) To the extent permitted by applicable Law, the Surviving Entity shall, and Parent agrees to cause the Surviving Entity to, during the period commencing as of the Closing and ending on the sixth (6th) anniversary of the Closing, honor all rights to indemnification, advancement and exculpation from liabilities for acts or omissions occurring at or prior to the Closing now existing in favor of the current or former managers, directors, officers, partners, members and trustees of the Company or any Subsidiary of the Company (the “Indemnified Parties”) as currently provided in (i) the Company Governing Documents, and (ii) indemnification agreements between the Company or any of its Subsidiaries, on the one hand, and any Indemnified Party, on the other hand, as scheduled on Section 7.9(c) of the Company Disclosure Letter. For a period of six (6) years following the Closing, the governing documents of the Surviving Entity and the equivalent governing or organizational documents of any applicable Subsidiary of Parent or the Company shall not be amended, repealed or otherwise modified in any manner that would adversely modify these rights, unless such modification shall be required by applicable Law and then only to the minimum extent required by Law.
(d) If Parent or the Surviving Entity or any of their respective successors or assigns (i) consolidates with or merges with or into any other Person and shall not be the continuing or surviving corporation, partnership or other entity of such consolidation or merger or (ii) liquidates, dissolves or winds-up, or transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each such case, proper provision shall be made so that the successors and assigns of Parent or the Surviving Entity, as applicable, assume the obligations set forth in this Section 7.9.
(e) Parent shall cause the Surviving Entity to pay all reasonable expenses, including reasonable attorneys’ fees, that may be incurred by any Indemnified Party in enforcing the obligations provided in this Section 7.9.
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(f) The provisions of this Section 7.9 are intended to be for the express benefit of, and shall be enforceable by, each Indemnified Party (who are intended third-party beneficiaries of this Section 7.9), his or her heirs and his or her personal Representatives, shall be binding on all successors and assigns of the Company, Parent, and the Surviving Entity and shall not be amended in a manner that is adverse to any Indemnified Party (including his or her successors, assigns and heirs) without the prior written consent of such Indemnified Party (including such successors, assigns and heirs) affected thereby, except to the extent otherwise required by applicable Law, contract or otherwise. Nothing in this Agreement, including this Section 7.9, is intended to, shall be construed to or shall release, waive or impair any rights to directors’ and officers’ insurance claims under any policy that is or has been in existence with respect to Company, any Company Subsidiaries or the Indemnified Parties, it being understood and agreed that the indemnification provided for in this Section 7.9 is not prior to, or in substitution for, any such claims under any such policies. The provisions of this Section 7.9 shall survive the consummation of the Merger.
Section 7.10 Section 16 Matters. Prior to the Effective Time, the Company shall, and shall be permitted to, take all such steps as may reasonably be necessary to cause the transactions contemplated by this Agreement, including any dispositions of Company Common Shares by each Person who is or will be subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company, to be exempt under Rule 16b-3 under the Exchange Act.
Section 7.11 Financing Cooperation; Assumption.
(a) Prior to the Closing Date, the Company shall use its commercially reasonable efforts to provide, and shall use its commercially reasonable efforts to cause its Representatives to provide, and shall cause each Subsidiary of the Company to use its commercially reasonable efforts to provide, to Parent and Merger Sub, in each case at Parent’s sole expense, all cooperation reasonably necessary and customary in connection with the arrangement of the Debt Financing, which cooperation is reasonably requested in writing by Parent and will include using commercially reasonable efforts to:
(i) upon reasonable notice, the Company shall direct senior management of the Company or its Subsidiaries with appropriate seniority and expertise to participate in a reasonable number of meetings and presentations with bona fide prospective lenders at reasonable times and with reasonable advance notice and which such meetings shall be telephonic or by videoconference unless otherwise agreed to by the Company;
(ii) assist with the preparation of customary materials for bank information memoranda and similar marketing documents reasonably necessary in connection with the Debt Financing and provide reasonable cooperation with the due diligence efforts of any source of any Debt Financing to the extent reasonable and customary for financings similar to the Debt Financing; in each case in this clause: (A) subject to customary confidentiality provisions and disclaimers; (B) as reasonably requested by Parent; and (C) limited to information to be contained therein with respect to the Acquired Companies;
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(iii) (A) furnish Parent and the Debt Financing Sources reasonably promptly upon written request with such financial and other pertinent business information relating to the Acquired Companies as may be reasonably requested by Parent, as is usual and customary financings similar to the for Debt Financing and reasonably available and prepared by or for the Acquired Companies in the ordinary course of business, and (B) provide the Debt Financing Sources, or their Representatives, reasonable access during normal business hours, upon reasonable notice and subject to customary access agreements, to the Company Properties in connection with Parent’s efforts to arrange and consummate the Debt Financing;
(iv) assist with the preparation of customary definitive loan documentation contemplated by the Debt Financing (including schedules), including any customary guarantee, pledge and security documents, with such documents subject to the occurrence of, and to be effective no earlier than, the Closing Date and such documents to be consistent with the terms and conditions of the Debt Commitment Letter;
(v) to the extent reasonably requested by Parent and necessary in connection with the Debt Financing, use commercially reasonable efforts to obtain estoppels and certificates from tenants, lenders, managers, franchisors, ground lessors, ground lessees and counterparties to reciprocal easement agreements, declarations and similar agreements under Permitted Encumbrances; and
(vi) provide to Parent upon written request all documentation and other information with respect to the Acquired Companies reasonably requested by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act in connection with the Debt Financing, that has in each case been requested by Parent in writing at least eight (8) Business Days prior to the Closing Date;
provided, however, that notwithstanding anything to the contrary in this Section 7.11(a), the Company and its Subsidiaries shall not be required to provide any information, documents or materials pursuant to this Section 7.11(a) to the extent such information, documents or materials have been (x) made available to Parent or its Representatives in the electronic data room established in connection with the transactions contemplated by this Agreement or (y) otherwise provided to, or are in the possession of or reasonably accessible to, Parent or its Representatives.
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(b) The Company shall use commercially reasonable efforts to deliver to Parent at least two (2) Business Days prior to the Closing Date an appropriate and customary payoff letter with respect to the Indebtedness set forth on Section 7.11(b) of the Company Disclosure Letter (the “Payoff Letters”), specifying the aggregate payoff amount of the Company’s obligations (including principal, interest, fees, Expenses, premium (if any) and other amounts payable in respect of such Indebtedness) that will be outstanding under such Indebtedness as of the Closing and providing for a release of all guarantees (subject to customary surviving obligations) and Liens, if any, thereunder upon the receipt of the payoff amounts specified in the Payoff Letters (it being understood and agreed that Parent and Merger Sub shall be responsible for paying all amounts under the Payoff Letters, and which releases shall only be effective at or after the Closing).
(c) Upon the terms and subject to the conditions set forth in this Agreement, the Company shall use, and cause each Subsidiary of the Company to use, its and their respective commercially reasonable efforts to take any actions that are reasonably requested by Parent in writing to obtain any Assumption; provided that no Acquired Company shall be required, directly or indirectly, to become subject to, or consent or agree to or otherwise take any action with respect to, any requirement, condition, understanding, agreement or order to sell, divest, license, hold separate or otherwise dispose of, or to conduct, restrict, operate, invest or otherwise change the assets, operations or business of any Acquired Company, unless such requirement, condition, understanding, agreement or order is binding on or otherwise applicable to such Acquired Company only from and after the Closing in the event that the Closing occurs; provided, further, that in no event shall any Acquired Company be required to (i) amend, modify, supplement or waive the terms and conditions of the outstanding Indebtedness or guarantees thereof, including changing any of the parties subject to the obligations of such Indebtedness or guarantees, of any Acquired Company, make any principal payments or financial covenant modifications, forfeit any rights, establish any reserves, cash sweep requirements or cash traps, or pay any other charges, including any “make-whole” premium or other prepayment penalty, or deposit any security, in connection with obtaining any Assumption, in each case that is effective prior to the Closing or (ii) pay, directly or indirectly, prior to the Closing any fee, penalty or other consideration, or incur any liability that is effective prior to the Closing, to any third party for any Assumption. Parent acknowledges and agrees that obtaining any Assumption is not a condition to Closing and that the consummation of the transactions contemplated by this Agreement shall not be conditioned on, or delayed or postponed as a result of the obtaining of (or the failure to obtain) any Assumption. For the avoidance of doubt, the Parties hereto acknowledge and agree that the provisions contained in this Section 7.11(c) represent the sole obligation of the Acquired Companies and their respective Affiliates with respect to cooperation in connection with the Assumptions.
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(d) The Company shall have satisfied its obligations set forth in Section 7.11(a), Section 7.11(b) and Section 7.11(c) if the Company shall have used its commercially reasonable efforts to comply with such obligations whether or not any applicable deliverables are actually obtained or provided. Notwithstanding the foregoing, the Company shall not be required to provide, or cause its Subsidiaries or its or its Subsidiaries’ respective Representatives to provide, cooperation under Section 7.11 to the extent that it: (i) unreasonably interferes with the ongoing business of the Acquired Companies; (ii) requires the Acquired Companies to take any action that would reasonably be expected to cause the Acquired Companies to incur any liability (including any commitment fees and expense reimbursement) in connection with the Financing or any Assumption prior to the Closing; (iii) requires the Acquired Companies or their respective Representatives to execute, deliver or enter into, or perform any agreement, document, certificate, affidavit or instrument with respect to the Financing (other than with respect to customary authorization letters with respect to bank information memoranda) or any Assumption or adopt resolutions approving the agreements, documents and instruments pursuant to which the Financing or any Assumption is obtained that is not conditioned on the occurrence of Closing or that would be effective prior to Closing; (iv) requires the Acquired Companies or their counsel to give any legal opinion; (v) requires the Acquired Companies to provide any information that is prohibited or restricted by applicable Law; (vi) provide access to or disclose information that the Company or any of its Subsidiaries determines in good faith would reasonably be expected to result in a loss or waiver of or jeopardize any attorney-client privilege, attorney work product or other legal privilege (provided that the Company shall use commercially reasonable efforts to allow for such access or disclosure in a manner that does not result in the events set out in this clause (vi)); (vii) requires the Acquired Companies to take any action that is prohibited or restricted by, or would reasonably be expected to conflict with or violate, its organizational documents, or would reasonably be expected to result in a violation or breach of, or default under, any Contract, Material Company Lease or Permitted Encumbrance to which any of the Acquired Companies is a party, in each case, to the extent not created in contemplation hereof, or any applicable Laws; (viii) would reasonably be expected to result in any Acquired Company or any Representative of the Acquired Companies incurring personal liability with respect to any matter relating to the Financing or any Assumption or requires any Representative of the Company or any of its Subsidiaries to deliver any certificate that such Representative reasonably believes, in good faith, contains any untrue certifications; (ix) requires the Acquired Companies or their Representatives, as applicable, to waive or amend any terms of this Agreement; or (x) such cooperation causes any representation, warranty, covenant or other term in this Agreement to be breached or causes any Closing condition set forth in Article 8 to fail to be satisfied. In no event shall the Company be in breach of this Agreement because of the failure to deliver any financial or other information that is not currently readily available to the Acquired Companies (other than information which an Acquired Company is entitled to receive and actually receives following request pursuant to any Management Agreement) on the date hereof or is not otherwise prepared in the ordinary course of business of Acquired Companies at the time requested by Parent or for the failure to obtain review of any financial or other information by its accountants and in no event shall the Company or its Subsidiaries be required to provide or assist in the preparation of any projections or “pro forma” financial statements. In no event shall the Acquired Companies be required to pay any commitment or other fee or give an indemnity or incur any liability (including due to any act or omission by the Company, its Subsidiaries or any of their respective Affiliates or Representatives) or expense (including legal and accounting expenses) in connection with assisting Parent and Merger Sub in arranging the Financing or any Assumption or as a result of any information provided by the Company, its Subsidiaries or any of their respective Affiliates or Representatives in connection with the Financing or any Assumption. None of the representations, warranties or covenants of the Company set forth in this Agreement shall be deemed to apply to, or deemed breached or violated by, any of the actions taken by the Company, any of its Subsidiaries, or any of their respective Representatives at the request of Parent pursuant to Section 7.11. For the avoidance of doubt, the Parties hereto acknowledge and agree that the provisions contained in this Section 7.11 represent the sole obligation of the Acquired Companies and their respective Affiliates with respect to cooperation in connection with the Debt Financing. Notwithstanding anything to the contrary in this Agreement, the Company, its Subsidiaries and its Representatives shall be deemed to have performed in all material respects all obligations, and complied in all material respects with all agreements and covenants, required to be performed by it under Section 7.11, and any breach by the Company or its Subsidiaries or its Representatives of any of the covenants required to be performed by it under this Section 7.11 shall not be considered in determining the satisfaction of any condition to Closing set forth in this Agreement, including the condition to Closing set forth in Section 8.3(b), or in determining the entitlement of any party to terminate this Agreement, including any entitlement to termination arising from Section 9.1, other than, for purposes of (x) determining the satisfaction of the condition to Closing set forth in Section 8.3(b), or (y) the entitlement of Parent or Merger Sub to terminate this Agreement, in each case, as a result of a Willful Breach of this Section 7.11 by the Company or any of its Subsidiaries.
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(e) Parent shall reimburse the Acquired Companies promptly upon demand for all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ and accountants’ fees) incurred by the Acquired Companies and their Representatives in connection with the cooperation under Section 7.11, any action taken by them at the request of Parent pursuant to Section 7.11 (including the dissolution and termination of any subsidiaries formed and documentation entered into pursuant to Section 7.11), and shall indemnify, defend and hold harmless the Acquired Companies and their Representatives and each of the Acquired Companies’ and their Representatives’ respective present and former trustees, directors, officers, employees and agents (collectively, the “Financing Indemnified Parties”) from and against any and all costs, expenses, losses, damages, claims, judgments, fines, penalties, interest, settlements, awards and liabilities suffered or incurred by any of them in connection with the arrangement and consummation of the Financing or any Assumption and any information used in connection therewith, except in the event such matters arose out of or resulted from the intentional misrepresentation of or willful misconduct by the Company, its Subsidiaries or any of its or their respective Affiliates or Representatives. The provisions of this Section 7.11(e) are intended to be for the benefit of, and shall be enforceable by, each of the foregoing Financing Indemnified Parties. This Section 7.11(e) shall survive the termination of this Agreement, and is intended to benefit, and may be enforced following consummation of the Merger and the Closing or any termination of this Agreement, by Affiliates and Representatives of the Acquired Companies, in each case, who are each third-party beneficiaries of this Section 7.11(e). In the event the Merger and the other transactions contemplated hereby are not consummated, Parent shall promptly reimburse the Company for any reasonable out-of-pocket costs incurred by the Company and its Subsidiaries in connection with the cooperation under Section 7.11 and not previously reimbursed.
(f) After the later of the No-Shop Period Start Date and, in the event there is an Excluded Party, the Cut-Off Time in respect of the last Excluded Party, at the reasonable request of Parent with and subject to the consent of the Company (in its sole discretion, but subject to reasonable consultation with Parent), the Company shall use commercially reasonable efforts to file a Form 8-K with the SEC disclosing information identified by Parent relating to the Company for purposes of permitting such information to be included in the debt marketing materials to be provided to potential investors who do not wish to receive material nonpublic information with respect the Company or its securities.
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Section 7.12 Financing.
(a) Each of Parent and Merger Sub shall use their respective reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to arrange, obtain and consummate the Financing in an amount required to satisfy the Required Amount not later than the Closing Date on the terms and conditions described in or contemplated by the Financing Commitment Letters (including complying with any valid request requiring the exercise of “market flex” provisions in the Debt Commitment Letters) (or on other terms with respect to conditionality, availability, timing and amount that are not less favorable to Parent and Merger Sub than those set forth in the Financing Commitment Letters on the date hereof and otherwise on terms and conditions as would not have any result, event or consequence described in any of clauses (A) through (D) of Section 7.12(c)), including using reasonable best efforts to (i) maintain in full force and effect the Financing Commitment Letters and the Guarantees, (ii) negotiate and execute definitive agreements with respect to the Debt Financing required to pay the Required Amount (after taking into account any available Equity Financing) on the terms and conditions contained in the Debt Commitment Letters (which may reflect “market flex” provisions in the Debt Commitment Letters) (or on other terms with respect to conditionality, availability, timing and amount that are not less favorable to Parent and Merger Sub, than those set forth in the Financing Commitment Letters on the date hereof and otherwise on terms and conditions as would not have any result, event or consequence described in any of clauses (A) through (D) of Section 7.12(c)) (such definitive agreements, the “Definitive Financing Agreements”), (iii) satisfy and comply with on a timely basis (except to the extent that Parent and Merger Sub have obtained the waiver of) all conditions and covenants to the funding or investing of the Financing required to pay the Required Amount applicable to Parent or Merger Sub in the Financing Commitment Letters and the Definitive Financing Agreements that are to be satisfied by Parent or Merger Sub, (iv) consummate the Financing in an amount required to pay the Required Amount at or prior to the Closing, and (v) enforce its rights under the Financing Commitment Letters and the Guarantees. Without limiting the generality of the foregoing, Parent shall, and shall cause each of its Affiliates to, take all actions necessary to enforce its rights under the Financing Commitment Letters and the Guarantee. Neither of Parent nor Merger Sub shall release or consent to the termination of the obligations of any investor to provide the Equity Financing if such release or termination would cause the Equity Financing, together with proceeds of the Debt Financing, to be less than the Required Amount, or release or consent to the termination of obligations under the Guarantee.
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(b) In the event that any portion of the Debt Financing in an amount required to pay the Required Amount (after taking into account any available Equity Financing) becomes unavailable on the terms and conditions (including any “market flex” provisions) contemplated in the Debt Commitment Letters, Parent shall promptly (and in any event within twenty-four (24) hours) notify the Company of such unavailability and Parent shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to arrange to obtain alternative financing on terms and conditions not less favorable to Parent (as determined in the reasonable judgment of Parent) than the terms and conditions (including any “market flex” provisions) contained in the Debt Commitment Letters (provided that, for the avoidance of doubt, any financing that has higher pricing, interest rates, fees or other yield than as set forth in the Debt Commitment Letters after giving effect to the “market flex” provisions therein shall be deemed less favorable to Parent) in an amount sufficient, when added to the portion of the Financing that is and remains available and taking into account any available Equity Financing, to pay the Required Amount (“Alternative Financing”) and to obtain and promptly provide the Company with a copy of the new executed commitment letter that provides for such Alternative Financing (and any related executed fee letters and fee credit letter, as applicable, in connection therewith, copies of which shall be provided to the Company (it being understood that any such fee letter and fee credit letter may be redacted as to fee amounts, “flex” terms and other economic terms, so long as such redactions do not relate to any terms that may adversely affect the conditionality, enforceability, availability or termination of the Alternative Financing Commitment Letter or reduce the aggregate principal amount of the Debt Financing)) (the “Alternative Financing Commitment Letter”). For purposes of this Agreement (other than with respect to representations in this Agreement made by Parent or Merger Sub that speak to the date of this Agreement) references to (i) the “Financing” and “Debt Financing” shall include the debt financing contemplated by the Debt Commitment Letters and any such Alternative Financing, (ii) the “Financing Commitment Letters” and the “Debt Commitment Letters” shall include the Debt Commitment Letters to the extent not superseded by the Alternative Financing Commitment Letter and any such Alternative Financing Commitment Letter, (iii) the “Definitive Financing Agreements” shall include the definitive documentation relating to the debt financing completed by the Debt Commitment Letters and any such Alternative Financing and (iv) the “Debt Financing Sources” shall include the financial institutions and other entities party to any Alternative Financing Commitment Letter.
(c) Neither Parent nor Merger Sub shall permit or consent to or agree to any amendment, restatement, replacement, supplement, termination or other modification or waiver of any provision or remedy under, (i) any Equity Commitment Letter (other than to increase the amount of Equity Financing available thereunder), (ii) any Guarantee or (iii) the Debt Commitment Letters, in each case, without the prior written consent of the Company, if such amendment, restatement, supplement, termination, modification or waiver would (A) impose new or additional conditions precedent to the funding of the Financing or would otherwise adversely change, amend, modify or expand any of the conditions precedent to the funding of the Financing, (B) be reasonably expected to prevent or delay the availability of all or a portion of the Financing necessary to pay the Required Amount or the consummation of the transactions contemplated by this Agreement, (C) reduce the aggregate amount of the Financing below the amount necessary to pay the Required Amount, or (D) otherwise adversely affect the ability of Parent or Merger Sub to enforce their rights under the Financing Commitment Letters; provided that Parent may amend the Debt Commitment Letters to add lenders, lead arrangers, bookrunners, syndication agents or other entities who had not executed the Debt Commitment Letters as of the date of this Agreement, subject to the restrictions set forth in the Nondisclosure Agreement. For purposes of this Agreement (other than with respect to representations in this Agreement made by Parent or Merger Sub that speak as of the date of this Agreement), references to (i) the “Equity Financing”, “Debt Financing” and “Financing” will include the financing contemplated by the Financing Commitment Letters as permitted by this Section 7.12 to be amended, restated, replaced, supplemented or otherwise modified or waived and (ii) the “Debt Commitment Letters”, “Equity Commitment Letters” or “Financing Commitment Letters” shall include such documents as permitted by this Section 7.12(c) to be amended, restated, replaced, supplemented or otherwise modified or waived, in each case from and after such amendment, restatement, replacement, supplement or other modification or waiver. Notwithstanding anything to the contrary in this Agreement, in no event shall any Alternative Financing Commitment Letter, or any amendment, restatement, amendment and restatement, modification or supplement to, or replacement of, the Debt Commitment Letters, be deemed to adversely expand the obligations of the Company and its Subsidiaries to assist with respect to the Debt Financing under Section 7.11.
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(d) Prior to the Closing Date, (i) upon the request of the Company, Parent shall keep the Company reasonably informed in reasonable detail of the status of its efforts to arrange and consummate the Debt Financing and (ii) Parent shall promptly inform the Company upon the occurrence of any material development with respect to the Debt Financing. Further, Parent shall give the Company prompt written notice (and in any event within twenty-four (24) hours) after Parent or Merger Sub obtains knowledge (i) of any default or breach (or any event that, with or without notice, lapse of time or both, could, or could reasonably be expected to, give rise to any default or breach) by any party under any of the Financing Commitment Letters or the Definitive Financing Agreements, (ii) of any termination of any of the Financing Commitment Letters, (iii) of the receipt by Parent or Merger Sub of any written notice or other written communication from any investor or Debt Financing Source with respect to any (A) actual or potential default, breach, termination or repudiation of any Financing Commitment Letter or any Definitive Financing Agreement, or any material provision thereof, in each case by any party thereto, or (B) material dispute or disagreement between or among any parties to any Financing Commitment Letter or the Definitive Financing Agreements that would reasonably be expected to prevent or materially delay the Closing or make the timely funding of the Financing required to pay the Required Amount on the Closing Date materially less likely to occur or give rise to a right of termination under any such arrangement and (iv) of the occurrence of any event or development that would reasonably be expected to adversely impact the ability of Parent or Merger Sub to obtain all or any portion of the Financing necessary to pay the Required Amount. Without limitation of the foregoing, upon the request of the Company from time to time, Parent will promptly update the Company on the activity and developments of its efforts to arrange and obtain the Financing, including by providing copies of all definitive agreements (and drafts of all offering documents and marketing materials) related to the Financing, and any amendments, modifications or replacements to any Financing Commitment Letters (or any Alternative Financing Commitment Letter).
(e) Each of the Parent Parties shall, and shall cause their respective Subsidiaries and Affiliates to, use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable to obtain or complete the Assumptions.
(f) Parent acknowledges and agrees that obtaining the Debt Financing is not a condition to Closing and that the consummation of the transactions contemplated by this Agreement shall not be conditioned on, or delayed or postponed as a result of, the obtaining of (or the failure to obtain) the Debt Financing.
Section 7.13 Takeover Statutes. The Parties shall use their respective commercially reasonable efforts (a) to take all action necessary so that no Takeover Statute is or becomes applicable to the Merger or any of the other transactions contemplated by this Agreement, and (b) if any such Takeover Statute is or 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 Company Governing Documents or the governing documents of the Parent Parties (“Governing Document Restrictions”) on the Merger and the other transactions contemplated by this Agreement. The Company and the Company Board shall not take any action on or after the date hereof to exempt any Person (other than any Parent Party or their respective Affiliates) from or render inapplicable (i) the “Ownership Limit” (as defined in the Company Declaration) (including by establishing or increasing an exemption of any Person from the “Ownership Limit” under the Company Declaration) or other Governing Document Restrictions or (ii) any Takeover Statute of any jurisdiction.
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Section 7.14 Treatment of Company Indebtedness.
(a) Trust Preferred Securities. Upon written request of Parent at least seventy-five (75) days prior to the Closing Date, the Company shall use commercially reasonable efforts to take, or cause to be taken, such actions as are reasonably necessary under the TRUPS Documents to effect, substantially concurrently with Effective Time, subject to the consummation of the transactions contemplated by this Agreement and the occurrence of the Closing, the redemption, repayment or satisfaction in full of the outstanding Junior Subordinated Notes issued pursuant to the TRUPS Documents, including payment in full of the outstanding principal amount of such Junior Subordinated Notes, together with all accrued and unpaid interest thereon to, but excluding, the applicable redemption, repayment or satisfaction date, and, in connection therewith, the related redemption, repayment or satisfaction of the outstanding Trust Preferred Securities, together with all accrued and unpaid distributions thereon to, but excluding, the applicable redemption or satisfaction date, and any other amounts required to be paid under the TRUPS Documents in connection with such redemption, repayment, satisfaction or discharge, in each case in accordance with, and subject to, the terms and conditions of the TRUPS Documents and applicable Law. Without limiting the foregoing, the Company shall use commercially reasonable efforts to deliver, or cause to be delivered, any notices, certificates, opinions, instructions and other documentation required to be delivered by the Company under the TRUPS Documents in connection with such redemption, repayment or satisfaction, provided that the Company shall deliver a copy of any such notice, certificate, opinion, instruction and other documentation to Parent at least three (3) Business Days prior to delivering or entering into such document and the Company shall include any proposed changes thereon that Parent reasonably requests (and Parent shall consider in good faith comments of the Company and its counsel thereon). Parent shall, or shall cause Merger Sub to, provide or make available to the Company (or Parent shall direct the Company or any of its Subsidiaries to use funds on their balance sheet), immediately prior to the Effective Time, funds sufficient to pay the TRUPS Redemption Amount. Notwithstanding anything to the contrary in this Agreement, the completion of the redemption, repayment or satisfaction of the Junior Subordinated Notes or Trust Preferred Securities pursuant to the TRUPS Documents shall not be a condition to the obligations of any party to consummate the Closing.
(b) Senior Notes.
(i) Upon written request of Parent, the Company shall, and shall cause its Subsidiaries and its and their Representatives to, as applicable, use commercially reasonable efforts to (i) deliver to the Notes Trustee under the applicable Senior Notes Indenture, at the Effective Time, a notice of optional redemption and any required customary officers’ certificates, in each case, in the form required by the applicable Senior Notes Indenture and prepared by Parent and its counsel, for up to all of the outstanding aggregate principal amount of any series of Senior Notes outstanding and identified by Parent pursuant to the redemption provisions of the applicable Senior Notes Indenture and the Senior Notes, and (ii) provide assistance reasonably requested by Parent to facilitate the redemption of any series of Senior Notes identified by Parent or the satisfaction and discharge of any series of Senior Notes identified by Parent at the Effective Time pursuant to the redemption and satisfaction and discharge provisions, respectively, and other applicable provisions of the applicable Senior Notes Indenture (each, a “Discharge”); provided, however, that Parent shall have provided to the Company a draft of any notice of redemption and officers’ certificates a reasonable period of time in advance of the distribution and/or execution thereof to allow the Company and its counsel to review and comment on such notice of redemption and officers' certificates (and Parent shall consider in good faith comments of the Company and its counsel thereon). Notwithstanding anything herein to the contrary, in no event shall this Section 7.14(b) require the Company or any of its Subsidiaries to cause any redemption or Discharge to be effective unless and until the Effective Time has occurred and Parent has provided or caused to be provided to the Notes Trustee under the applicable Senior Notes Indenture funds (or Parent has directed the Company or any of its Subsidiaries to use funds on their balance sheet) sufficient to effect any such redemption or Discharge in compliance with the provisions of such applicable Senior Notes Indenture.
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(ii) Parent or any Subsidiary of Parent will also be permitted to commence and conduct, in accordance with the terms of the Senior Notes Indentures and applicable legal requirements, one or more exchange offers or consent solicitations with respect to any or all of the Senior Notes; provided that, the closing of any such exchange offer or consent solicitation shall not be consummated prior to the Effective Time, shall be subject to the occurrence of, the Effective Time, and any such transaction shall be funded solely using consideration provided by Parent or any of its Subsidiaries. Parent shall consult with the Company regarding the material terms and conditions of any such transaction, including the timing and commencement thereof and any exchange or consent deadlines. In the event that Parent or any Subsidiary of Parent initiates any exchange offer or consent solicitation with respect to any Senior Notes, Parent shall give the Company and its counsel a reasonable opportunity to review and comment on any disclosure in respect of the Company proposed to be included in any offering or marketing documents related to such exchange offer or consent solicitation, including all amendments and supplements thereto, prior to the first use of such documents or disseminating them to prospective investors, and shall consider any comments proposed by the Company or its counsel in good faith. Each of the Company and its Subsidiaries shall use its commercially reasonable efforts to provide assistance reasonably requested by Parent to facilitate any exchange offer or consent solicitation initiated by Parent or any Subsidiary of Parent in connection with any Senior Notes, and, in each case, take any other actions reasonably requested by Parent that are customary or necessary in connection therewith; provided that, prior to the Effective Time, neither the Company nor any of its Subsidiaries nor counsel for any of them shall be required to furnish any certificates, legal opinions or negative assurance letters in connection with any exchange offer or consent solicitation (other than, in connection with the execution of a supplemental indenture relating to a consent solicitation, the Company delivering customary officers’ certificates (prepared by Parent and its counsel as described in the immediately following paragraph) that are required to be delivered to the Notes Trustee under a Senior Notes Indenture, to the extent such certificates would not, in the reasonable opinion of the Company, its counsel or the Notes Trustee under any Senior Notes Indenture, conflict with applicable legal requirements or such Senior Notes Indenture and would be accurate in light of the facts and circumstances at the time delivered) or execute any other instruments or agreements in connection therewith other than the supplemental indenture described in the immediately following paragraph with respect to a consent solicitation. All legal opinions and negative assurance letters customary or required in connection with any exchange offer or consent solicitation shall be delivered by counsel to Parent.
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(iii) Subject to the receipt of any requisite consents in connection with any consent solicitation, the Company and its Subsidiaries shall use commercially reasonable efforts to execute one or more supplemental indentures to the Senior Notes Indentures prepared by Parent and its counsel in accordance with the Senior Notes Indentures, amending the terms and provisions of the Senior Notes Indentures as described in the applicable consent solicitation, as reasonably requested by Parent, which supplemental indentures shall become effective upon the execution thereof (or as otherwise contemplated in the applicable consent solicitation) and operative no earlier than, and subject to the occurrence of, the Effective Time; provided, however, that (i) Parent shall have provided to the Company drafts of any supplemental indenture and related officers’ certificates a reasonable period of time in advance of the execution thereof to allow the Company and its counsel to review and comment on such supplemental indenture and officers’ certificates (and Parent shall consider in good faith comments of the Company and its counsel thereon) and (ii) in no event shall the Company, its Subsidiaries or any of their respective officers, directors or other Representatives have any obligation to authorize, adopt or execute any amendments or other agreement that would, in the reasonable opinion of the Company, its counsel or the Notes Trustee under the Senior Notes Indentures, be inconsistent with the terms of the Senior Notes Indentures or applicable legal requirements or that would become operative before the Effective Time. Notwithstanding anything herein to the contrary, in no event shall this Section 7.14(b) require the Company or any of its Subsidiaries to cause any supplemental indenture to become operative unless and until the Effective Time has occurred and Parent or a Subsidiary of Parent has provided or caused to be provided to the Notes Trustee under the applicable Senior Notes Indenture funds (or Parent has directed the Company or any of its Subsidiaries to use funds on their balance sheet) sufficient to pay any applicable fees owed to the holders of any Senior Notes in compliance with the terms and conditions of any applicable exchange offer or consent solicitation initiated by Parent or any Subsidiary of Parent with respect to any Senior Notes.
Section 7.15 Obligations of the Parties. The Company shall take all actions necessary to perform its obligations under this Agreement. Parent shall take all actions necessary to (a) cause the Parent Parties to perform their obligations under this Agreement and to consummate the Merger on the terms and conditions set forth in this Agreement, and (b) ensure that, prior to the Closing, Merger Sub shall not conduct any business or make any investments or incur or guarantee any Indebtedness other than as specifically contemplated by this Agreement.
Section 7.16 Tax Matters.
(a) The Company and Parent shall reasonably 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, conveyance, documentary 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 such taxes, “Transfer Taxes”), and shall reasonably cooperate in attempting to minimize the amount of Transfer Taxes.
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(b) The Company shall deliver to Hogan Lovells Cadwalader US LLP (or such other nationally recognized REIT counsel as may be reasonably acceptable to both Parent and the Company) (“REIT Counsel”) an officer’s certificate (“REIT Officer’s Certificate”), dated as of the Closing Date, and signed by an Officer of the Company and in form and substance substantially in the form of Exhibit B or otherwise reasonably satisfactory to REIT Counsel and Parent, containing representations of the Company reasonably necessary or appropriate to enable REIT Counsel to render the tax opinion set forth in Exhibit A hereto pursuant to Section 8.3(d).
(c) The Company shall cause each of its Subsidiaries that is a “qualified REIT subsidiary” within the meaning of Section 856(i)(2) of the Code to elect to be treated as (or otherwise convert or merge into an entity that is) a disregarded entity for U.S. federal income tax purposes effective prior to the Closing Date and shall provide timely evidence of the filing of such election, conversion or merger, as applicable, on or before the Closing Date.
Section 7.17 Dividends. Notwithstanding anything to the contrary in this Agreement, prior to the Closing Date, the Company may declare and pay dividends to its shareholders, distributing cash in such amounts determined by the Company, in the reasonable discretion of the Company Board exercised in good faith, on advice of counsel to the Company and after consultation with Parent, to be reasonably required to be distributed in order for the Company to maintain its qualification as a REIT for such year and to avoid or reduce the incurrence of income or excise Tax. In the event the Company makes any dividends or other distributions pursuant to this Section 7.17, the Merger Consideration shall be decreased by an amount equal to the per share amount of any such dividend or other distribution on Company Common Shares so declared or paid by the Company pursuant to this Section 7.17 (provided that the per share decrease shall be adjusted, if applicable, in accordance with Section 3.1(b)).
Section 7.18 Deregistration and Delisting. Prior to the Effective Time, the Company and, following the Effective Time, Parent and the Surviving Entity, shall use reasonable best efforts to take, or cause to be taken, all actions, and to do or cause to be done all things necessary, proper or advisable on its part under applicable Law and rules and policies of the New York Stock Exchange to cause the delisting of the Company and of the Company Common Shares and the Company Series C Preferred Shares from the New York Stock Exchange as promptly as practicable after the Effective Time and the deregistration of the Company Common Shares under the Exchange Act as promptly as practicable after such delisting.
Section 7.19 Trustee and Officer Resignations. If requested in writing by Parent at least five (5) Business Days prior to the Closing, the Company shall use reasonable best efforts to obtain and deliver to Parent at the Closing, in form reasonably satisfactory to Parent, resignations effective as of the Effective Time executed by each trustee, director and officer of any Acquired Company in office immediately prior to the Effective Time.
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Section 7.20 Requested Transactions. During the period between (x) the later of the No-Shop Period Start Date and, in the event there is an Excluded Party, the Cut-Off Time in respect of the last Excluded Party and (y) the earlier to occur of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Article 9, the Company shall use its commercially reasonable efforts to provide (at Parent’s sole cost and expense) such cooperation and assistance as Parent may reasonably request in writing to prepare for sale any of the assets of the Company set forth on Section 7.20 of the Company Disclosure Letter (or the capital stock, shares of beneficial interests, partnership interests or limited liability interests owned, directly or indirectly, by the Company in the applicable Subsidiary of the Company that directly owns any such assets) at a price (provided that the Company shall not be required to sell any such assets for less than reasonably equivalent value) and on terms as reasonably designated by Parent (the “Requested Transactions”) including by selling such assets to one or more entities designated by Parent (including its Affiliates) on the Closing Date; provided, however, that (i) the prior written consent of the Company (which consent shall not be unreasonably withheld, delayed or conditioned) shall be required if the Requested Transaction would involve the solicitation of, discussions, negotiations or any other contact with, or provisions of access or information to, any third parties (including prospective purchasers) or their respective Representatives, (ii) no Requested Transaction shall include a commitment or other binding obligation on the part of the Company or any of its Subsidiaries that cannot be terminated without any penalty or payment of any fee or other amount prior to the Closing, (iii) in no event shall the consummation of the Requested Transactions occur prior to the Closing Date but in all events shall be subject to the Closing, (iv) none of the Requested Transactions shall delay or prevent the completion of the Merger or constitute a condition to the consummation of the Merger (or subject the completion of the Merger to any uncertainty), (v) neither the Company nor any Subsidiary of the Company shall be required to take any action in contravention of any Laws or the declaration of trust or bylaws or similar organizational documents of the Company or such Subsidiary, (vi) the Requested Transactions (or the inability to complete any or all Requested Transactions) shall not affect or modify in any respect the obligations of the Parent Parties under this Agreement, including payment of the Merger Consideration or the obligation to complete the Merger in accordance with the terms of this Agreement, (vii) neither the Company nor any Subsidiary of the Company shall be required to take any action that (x) would adversely affect the classification of the Company as a REIT, (y) would reasonably be expected to cause the Company to be subject to “prohibited transactions” Taxes or other material Taxes under Sections 857(b), 860(c) or 4981 of the Code (or other material entity-level Taxes) or (z) would be reasonably likely to prevent counsel from delivering the opinion described in Section 8.3(e) in the form set forth in Exhibit A, (viii) no Requested Transactions shall require any of the Acquired Companies to give any legal opinions or fairness or solvency opinions, (ix) no Requested Transaction shall require any Acquired Company to take any action that unreasonably interferes with the ongoing business of the Acquired Companies, (x) no Requested Transactions shall require any Acquired Company, prior to the Closing, to incur any liability (including any commitment fees and expense reimbursement) in connection therewith, (xi) neither the Company nor any Subsidiary of the Company shall be required to provide any material non-public information to any third party other than Parent and its Affiliates or their respective Representatives, and (xii) no Requested Transaction shall require any Acquired Company to pay any commitment or other fee or give an indemnity or incur any liability (including due to any act or omission by the Company, its Subsidiaries or any of their respective Affiliates or Representatives) or expense (including legal and accounting expenses) in connection with assisting Parent and Merger Sub in arranging such Requested Transaction or as a result of any information provided by the Company, its Subsidiaries or any of their respective Affiliates or Representatives in connection with such Requested Transaction. Such actions or transactions shall be undertaken in the manner (including in the order) specified by Parent and, subject to the limits set forth above and except as agreed by Parent and the Company, such actions or transactions shall be implemented on the Closing Date contingent on Closing; provided that in no event shall the consummation of the Requested Transactions occur prior to the Closing Date. Notwithstanding anything to contrary in this Agreement, any breach by the Company or its Subsidiaries or its Representatives of any of the covenants required to be performed by it under this Section 7.20 shall not be considered in determining the satisfaction of any condition to Closing set forth in this Agreement, including the condition to Closing set forth in Section 8.3(a), or in determining the entitlement of any party to terminate this Agreement, including any entitlement to termination arising from Section 9.1. Without limiting the foregoing, none of the representations, warranties or covenants of the Acquired Companies shall be deemed to apply to, or be deemed to be breached or violated by, and no condition set forth in Article 8 shall be deemed to have failed to be satisfied as a result of, the transactions or cooperation contemplated by this Section 7.20. The Company shall not be deemed to have made an Adverse Recommendation Change or entered into or agreed to enter into an Alternative Acquisition Agreement as a result of providing any cooperation or taking any actions to the extent requested by Parent in connection with a Requested Transaction. The consummation of any Requested Transaction shall not constitute consummation of a Competing Proposal for purposes of Section 9.3(b)(iii), nor shall any Competing Proposal made in respect of a Requested Transaction constitute a Competing Proposal for purposes of Section 9.3(b)(iii). If this Agreement is validly terminated in accordance with Article 9 without the Closing having occurred, the Parties shall take all actions necessary to reverse or otherwise not consummate any such transactions, without any liability to any Acquired Company. Parent shall promptly reimburse the Company for all reasonable out-of-pocket costs incurred by the Company in connection with any actions taken by the Company in accordance with this Section 7.20 (including reasonable fees and expenses of its Subsidiaries) and Parent hereby agrees to indemnify and hold harmless the Company Board, the Company, its Subsidiaries and their respective Affiliates and Representatives (the “Requested Transactions Indemnified Persons”) from and against any and all liabilities, losses, damages, claims, costs, expenses, interest, awards, judgments and penalties suffered or incurred by them in connection with or as a result of taking such actions (it being understood that the indemnification obligations of Parent and Merger Sub in this Section 7.20 are for the express benefit of and may be enforced by each Requested Transactions Indemnified Person, whether or not such Person is a party to this Agreement).
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Section 7.21 Series C Preferred Shares Cooperation. Upon written request of Parent, at any time following the date of this Agreement and not less than two (2) days prior to the Closing Date, the Company shall, and shall cause its Subsidiaries and its and their Representatives to, as applicable, use commercially reasonable efforts to promptly deliver to the record holders of the Company Series C Preferred Shares, the transfer agent and any other Person entitled thereto under the Company Declaration, any notice of Parent’s intention to effect, subsequent to and conditioned upon the occurrence of the Effective Time, a repurchase of the Company Series C Preferred Shares, cash out merger or liquidation, as directed by Parent, such notice to be in the form required by the Company Declaration and prepared by Parent and its counsel and to include (a) a description of the holders’ special redemption right under the terms of the Company Series C Preferred Shares, and (b) such other notices and information required by Article SIXTH of the Company Declaration, in each case which would arise as a result of the effectiveness of the Merger. Parent shall provide to the Company a draft of any such notice a reasonable period of time in advance of its distribution to allow the Company and its counsel to review and comment thereon, and Parent shall consider in good faith any comments proposed by the Company or its counsel. Notwithstanding anything herein to the contrary, in no event shall any such repurchase, cash out merger or liquidation become effective, or any related notice to be issued on a basis that is irrevocable, unless and until the Effective Time has occurred (and such notice shall automatically be revoked and of no force or effect if the Closing is not consummated (including if this Agreement is terminated), and the completion of any such repurchase, cash out merger or liquidation shall not be a condition to the obligations of any Party to consummate the Closing.
Article 8
CONDITIONS
Section 8.1 Conditions to Each Party’s Obligation to Effect the Merger. The respective obligations of the Parties to effect the Merger and to consummate the other transactions contemplated by this Agreement on the Closing Date are subject to the satisfaction or, to the extent permitted by Law, valid waiver by each of the Parties at or prior to the Closing of the following conditions:
(a) Approvals. (i) The Shareholder Approval shall have been obtained in accordance with applicable Law and the Company Governing Documents, and (ii) the Consents of each Governmental Authority set forth in Section 8.1(a) of the Company Disclosure Letter shall have been obtained or shall have occurred, as applicable, and shall be in full force and effect.
(b) No Injunctions or Restraints. No Order issued by any Governmental Authority of competent jurisdiction prohibiting consummation of the Merger shall be in effect, and no Law shall have been enacted, entered, promulgated or enforced by any Governmental Authority after the date of this Agreement that, in any case, prohibits, restrains, enjoins or makes illegal the consummation of the Merger.
Section 8.2 Conditions to Obligations of the Company. The obligations of the Company to effect the Merger and to consummate the other transactions contemplated by this Agreement are subject to the satisfaction or, to the extent permitted by Law, waiver by the Company, at or prior to the Closing, of the following additional conditions:
(a) Representations and Warranties. (i) The representations and warranties of the Parent Parties set forth in Section 5.1 (Organization and Qualification), Section 5.2 (Authority) and Section 5.11 (Brokers) shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date, as though made as of the Closing Date, and (ii) each of the other representations and warranties of the Parent Parties contained in this Agreement shall be true and correct (without giving effect to any materiality or Parent Material Adverse Effect qualifications set forth therein) in all material respects as of the date of this Agreement and as of the Closing Date, as though made as of the Closing Date, except, in each case, representations and warranties that are made as of a specific date shall be true and correct (without giving effect to any materiality or Parent Material Adverse Effect qualifications set forth therein) in all material respects only on and as of such date.
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(b) Performance of Covenants and Obligations of the Parent Parties. The Parent Parties shall have performed in all material respects all obligations, and complied in all material respects with all agreements and covenants, required to be performed by them under this Agreement on or prior to the Closing Date.
(c) Delivery of Certificate. Parent shall have delivered to the Company a certificate, dated as of the Closing Date, signed on behalf of Parent by an executive officer of Parent, certifying that the conditions set forth in Section 8.2(a) and Section 8.2(b) have been satisfied.
Section 8.3 Conditions to Obligations of the Parent Parties. The obligations of the Parent Parties to effect the Merger and to consummate the other transactions contemplated by this Agreement are subject to the satisfaction or, to the extent permitted by Law, waiver by Parent at or prior to the Closing, of the following additional conditions:
(a) Representations and Warranties. (i) The representations and warranties of the Company set forth in Section 4.1(a) and Section 4.1(b) (Organization and Qualification; Subsidiaries), Section 4.2 (Authority; Approval Required), Section 4.20 (Brokers), Section 4.21 (Opinion of Financial Advisor), Section 4.22 (Takeover Statutes) shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date, as though made as of the Closing Date, (ii) the representations and warranties set forth in Section 4.4(a) and Section 4.4(b) (Capital Structure) shall be true and correct in all respects, except for failures of such representations and warranties to be true and correct that, in the aggregate, would not result in more than a de minimis increase in the aggregate consideration payable by the Parent Parties pursuant to Article 3 of this Agreement, as of the date of this Agreement and as of the Closing Date, as though made as of the Closing Date, and (iii) each of the other representations and warranties of the Company set forth in Article 4 of this Agreement shall be true and correct as of the date of this Agreement and as of the Closing Date, as though made as of the Closing Date, except (A) in each case of clauses (i), (ii) and (iii), representations and warranties that are made as of a specific date shall be true and correct only on and as of such date, and (B) in the case of clause (iii) where the failure of such representations or warranties to be true and correct (without giving effect to any materiality or Company Material Adverse Effect qualifications set forth therein), individually or in the aggregate, does not have and would not reasonably be expected to have a Company Material Adverse Effect.
(b) Performance of Covenants and Obligations of the Company. The Company shall have performed in all material respects all obligations, and complied in all material respects with all agreements and covenants, required to be performed by it under this Agreement (excluding Section 7.11 (other than as a result of Willful Breach) and Section 7.20) on or prior to the Closing Date.
(c) No Company Material Adverse Effect. Since the date of this Agreement, there shall not have occurred any Company Material Adverse Effect that is continuing.
(d) Delivery of Certificate. The Company shall have delivered to Parent a certificate, dated as of the Closing Date and signed on behalf of the Company by an Officer certifying that the conditions set forth in Section 8.3(a), Section 8.3(b) and Section 8.3(c) have been satisfied.
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(e) REIT Opinion. Parent shall have received a written tax opinion of REIT Counsel, substantially in the form of Exhibit A to this Agreement and dated as of the Closing Date (which such opinion shall be subject to customary assumptions, qualifications and representations, as set forth in such form opinion, including representations made by the Acquired Companies in the REIT Officer’s Certificate, and which may contain such changes or modifications from the language set forth in such form as may be deemed reasonably necessary or appropriate by REIT Counsel; provided that such opinion and REIT Officer’s Certificate remain substantially in the forms of Exhibit A and Exhibit B, and agreed to by Parent (with such agreement not to be unreasonably withheld, conditioned or delayed)), to the effect that beginning with its taxable year ended December 31, 2019 and through and including its short taxable year that ends on the Effective Time, the Company has been organized and operated in conformity with the requirements to qualify as a REIT under the Code.
Section 8.4 Failure of Closing Conditions. None of the Parent Parties, on the one hand, nor the Company, on the other hand, may rely on the failure of any condition set forth in Section 8.1, Section 8.2 or Section 8.3, as the case may be, to be satisfied (or to be able to be satisfied) to excuse it from its obligation to effect the Merger if such failure (or inability to be satisfied) was caused by such Party’s failure to comply with or perform its obligations under this Agreement (excluding, with respect to the Company, Section 7.11 (to the extent such failure to perform does not constitute a Willful Breach) and Section 7.20).
Article 9
TERMINATION; FEES AND EXPENSES; AMENDMENT
Section 9.1 Termination. This Agreement may be terminated and the Merger and the other transactions contemplated by this Agreement may be abandoned at any time prior to the Effective Time, notwithstanding receipt of the Shareholder Approval (except as otherwise specified in this Section 9.1):
(a) by mutual written consent of each of the Company and Parent;
(b) by either the Company or Parent, upon prior written notice to the other Party:
(i) if the Merger shall not have occurred on or before 11:59 p.m. (New York City time) on January 19, 2027 (the “Outside Date”); provided, however, that the right to terminate this Agreement pursuant to this Section 9.1(b)(i) shall not be available to any Party if the primary cause of such failure of the Merger to be consummated by the Outside Date was the failure of such Party (and, in the case of Parent, including the failure of the other Parent Parties) to perform in all material respects any of its obligations, covenants or agreements under this Agreement;
(ii) if any Governmental Authority of competent jurisdiction shall have issued an Order permanently restraining or otherwise prohibiting the transactions contemplated by this Agreement, and such Order shall have become final and non-appealable (provided, however, that the right to terminate this Agreement under this Section 9.1(b)(ii) shall not be available to a Party if the issuance of such final, non-appealable Order was primarily due to the failure of such Party (and, in the case of Parent, including the failure of the other Parent Parties) to perform in all material respects any of its obligations, covenants or agreements under this Agreement); or
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(iii) if the Shareholder Approval shall not have been obtained at the Shareholders Meeting, duly convened therefor or at any adjournment or postponement thereof at which a vote on the approval of the Merger was taken;
(c) by the Company, upon prior written notice to Parent:
(i) if a breach of any representation or warranty or failure to perform any obligation, covenant or agreement on the part of any of the Parent Parties set forth in this Agreement, has occurred that would cause any of the conditions set forth in Section 8.1 or Section 8.2 not to be satisfied (a “Parent Terminating Breach”), which breach or failure to perform cannot be cured, or, if capable of cure, has not been cured by the earlier of (A) thirty (30) days following the delivery of written notice thereof from the Company to Parent and (B) two (2) Business Days prior to the Outside Date; provided, however, that the Company shall not have the right to terminate this Agreement pursuant to this Section 9.1(c)(i) if a Company Terminating Breach shall have occurred and be continuing at the time the Company delivers notice of its election to terminate this Agreement pursuant to this Section 9.1(c)(i);
(ii) if, at any time prior to receipt of the Shareholder Approval, the Company Board (or a committee thereof) shall have determined to terminate this Agreement in accordance with Section 7.3(g) in order to enter into an alternative Acquisition Agreement with respect to a Superior Proposal in accordance with Section 7.3(g); provided, however, that this Agreement may not be so terminated (and such termination shall not be effective) unless (A) prior to or concurrently with such termination the Company pays the Company Termination Payment in accordance with and as required by Section 9.3(b), and (B) concurrently with the occurrence of such termination the alternative Acquisition Agreement relating to such Superior Proposal is entered into by the Company; or
(iii) if (A) all of the conditions set forth in Section 8.1 and Section 8.3 have been and continue to be satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing; provided that each such condition is, at the time of delivery of the notice referred to in the following clause (B) of this Section 9.1(c)(iii), capable of being satisfied as if such time were the Closing), (B) on or after the date the Closing should have occurred pursuant to Section 2.2, the Company has delivered an irrevocable written notice to Parent to the effect that all of the conditions set forth in Section 8.1 and Section 8.2 have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing; provided that each such condition is then capable of being satisfied as if such time were the Closing) and the Company is ready, willing and able to consummate, and will consummate, the Closing at such time, and (C) the Parent Parties fail to consummate the Closing within three (3) Business Days after delivery of the notice referenced in the preceding clause (B) of this Section 9.3(c)(iii) and the Company was ready, willing and able to consummate the Closing during such three (3) Business Day period (it being understood that during such three (3) Business Day period, neither Parent nor the Company shall be entitled to terminate this Agreement); or
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(d) by Parent, upon prior written notice to the Company:
(i) if a breach of any representation or warranty or failure to perform any obligation, covenant or agreement on the part of the Company set forth in this Agreement (other than the covenants contained in Section 7.3), has occurred that would cause any of the conditions set forth in Section 8.1 and Section 8.3 not to be satisfied (a “Company Terminating Breach”), which breach or failure to perform cannot be cured, or if capable of cure, has not been cured by the earlier of (A) thirty (30) days following the delivery of written notice thereof from Parent to the Company and (B) two (2) Business Days prior to the Outside Date; provided, however, that Parent shall not have the right to terminate this Agreement pursuant to this Section 9.1(d)(i) if a Parent Terminating Breach shall have occurred and be continuing at the time Parent delivers notice of its election to terminate this Agreement pursuant to this Section 9.1(d)(i); or
(ii) if, at any time prior to receipt of the Shareholder Approval, the Company Board (or any committee thereof), for any reason, shall have effected an Adverse Recommendation Change.
The Party desiring to terminate this Agreement pursuant to this Section 9.1 (other than pursuant to Section 9.1(a)) shall give a notice of such termination to the other Party setting forth the basis on which, and the subsection of this Section 9.1 pursuant to which, such Party is terminating this Agreement.
Section 9.2 Effect of Termination. In the event of the valid termination of this Agreement as provided in Section 9.1, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of the Company or the Parent Parties, except that the Nondisclosure Agreement, the Guarantees and the provisions of Section 7.2 (Access to Information; Confidentiality), Section 7.5 (Public Announcements), Section 7.11(e) (Financing Cooperation), the last two sentences of Section 7.20 (Requested Transactions), this Section 9.2 (Effect of Termination), Section 9.3 (Fees and Expenses), Section 9.4 (Payment of Amount or Expenses), Section 9.5 (Amendment), and Article 10 (General Provisions) of this Agreement shall survive the termination hereof and shall remain in full force and effect, in each case, in accordance with the terms thereof; provided that no such termination shall relieve any Party from any liability or damages resulting from any fraud, or for any Willful Breach of any of such Party’s covenants, obligations or agreements set forth in this Agreement that occurs prior to such termination, subject only, with respect to any such liabilities of the Company, to Section 9.3(b), determined taking into account all relevant factors, including the loss of the benefit of the Merger to the Company and its equityholders (including the lost premium), all of which shall be deemed to be damages of the Company, and with respect to any such liabilities of the Parent Parties, to Section 9.3(c) and Section 10.10(c).
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Section 9.3 Fees and Expenses.
(a) Except as otherwise provided in this Section 9.3, all Expenses shall be paid by the Party incurring such fees or Expenses, whether or not the Merger is consummated, except that Parent shall pay, whether or not the Merger or any other transaction contemplated by this Agreement is consummated, all costs and Expenses incurred in connection with the Paying Agent. Notwithstanding anything to the contrary contained herein, Parent shall pay the amount of any documentary, sales, use, real property transfer, real property gains, registration, value-added, transfer, stamp, recording and other similar Taxes, fees, and costs together with any interest thereon, penalties, fines, costs, fees, additions to tax or additional amounts with respect thereto incurred in connection with this Agreement and the transactions contemplated by this Agreement.
(b) In the event that:
(i) this Agreement is validly terminated by the Company pursuant to Section 9.1(c)(ii) (Superior Proposal);
(ii) this Agreement is validly terminated by (A) Parent pursuant to Section 9.1(d)(ii) (Adverse Recommendation Change) or (B) by the Company pursuant to Section 9.1(b)(iii) (Failure to Obtain Shareholder Approval) (at a time when Parent could have terminated this Agreement pursuant to Section 9.1(d)(ii) (Adverse Recommendation Change)); or
(iii) (A) this Agreement is terminated by Parent or the Company pursuant to Section 9.1(b)(i) (Outside Date) (and at the time of such termination the Company would not have been entitled to terminate this Agreement pursuant to Section 9.1(c)(iii) (Parent Failure to Close)) or Section 9.1(b)(iii) (Failure to Obtain Shareholder Approval), or by Parent pursuant to Section 9.1(d)(i) (Company Terminating Breach), (B) a Competing Proposal shall have been publicly announced or shall have become publicly disclosed or publicly known after the date of this Agreement and prior to the Shareholders Meeting and, in either case, shall not have been publicly withdrawn or otherwise publicly abandoned, and (C) within twelve (12) months following such termination, the Company (x) enters into a definitive written agreement providing for such Competing Proposal that is later consummated or (y) consummates any Competing Proposal (provided that for purposes of this Section 9.3(b)(iii), the term “Competing Proposal” will have the meaning assigned to such term herein, except that percentages included in the definition of “Competing Proposal” increased to 50%);
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then the Company shall pay to Parent, or as otherwise directed by Parent, the Company Termination Payment. Payment of the Company Termination Payment shall be made by wire transfer of same day funds to the account or accounts designated by Parent as follows: (1) in the case of Section 9.3(b)(i), prior to or substantially concurrently with and as a condition to the effectiveness of termination of this Agreement pursuant to Section 9.1(c)(ii); (2) in the case of Section 9.3(b)(ii), within three (3) Business Days after termination of this Agreement pursuant to Section 9.1(d)(ii); and (3) in the case of Section 9.3(b)(iii), within three (3) Business Days of the consummation of such Competing Proposal. For the avoidance of doubt, any payment made by the Company under this Section 9.3(b) shall be payable only once with respect to Section 9.3(b), and not in duplication, even though such payment may be payable under one or more provisions hereof. The payment of the Company Termination Payment in accordance with this Section 9.3(b) shall be deemed to be liquidated damages (and not a penalty) for any and all losses or damages suffered or incurred by the Parent Parties, any of their respective Affiliates or any other Person in connection with this Agreement (and the termination hereof), the transactions contemplated by this Agreement (and the abandonment thereof) or any matter forming the basis for such termination and, upon payment in full of the Company Termination Payment, the Company shall have no further liability, whether pursuant to a claim at Law or in equity, to the Parent Parties or any of their respective Affiliates under this Agreement (and the termination hereof), the transactions contemplated by this Agreement (and the abandonment thereof) or any matter forming the basis for such termination, and none of the Parent Parties, any of their respective Affiliates or any other Person shall be entitled to bring or maintain any Action against the Acquired Companies or their Affiliates for damages or any equitable relief arising out of or in connection with this Agreement (other than equitable relief to require payment of the Company Termination Payment), any of the contemplated by this Agreement or any matters forming the basis for such termination; provided that if the Company fails to pay the Company Termination Payment and any Parent Party commences a suit which results in a final, non-appealable judgment against the Company for the Company Termination Payment or any portion thereof, then the Company shall pay the Parent Parties their costs and expenses (including reasonable documented fees of outside counsel and disbursements) in connection with such suit, together with interest on the Company Termination Payment at the “prime rate” as published in The Wall Street Journal, Eastern Edition, in effect on the date such payment was required to be made through the date of payment (calculated daily on the basis of a year of 365 days and the actual number of days elapsed, without compounding).
(c) In the event that:
(i) this Agreement is validly terminated by the Company pursuant to Section 9.1(c)(i) (Parent Terminating Breach);
(ii) this Agreement is validly terminated by the Company pursuant to Section 9.1(c)(iii) (Failure to Close); or
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(iii) this Agreement is validly terminated by Parent or the Company pursuant to Section 9.1(b)(i) (Outside Date) and the Company was then entitled to terminate this Agreement pursuant to Section 9.1(c)(i) or Section 9.1(c)(iii);
in the case of Section 9.3(c)(ii) or Section 9.3(c)(iii) (unless the Company was then entitled to terminate this Agreement pursuant to Section 9.1(c)(i)), under circumstances in which the Company Termination Payment is not payable pursuant to Section 9.3(b)(i) or Section 9.1(b)(ii), then, subject to Section 10.10(c), Parent shall pay or cause to be paid, as directed by the Company, the Parent Termination Payment by wire transfer of same-day funds to an account designated by the Company within three (3) Business Days following such termination in accordance with this Section 9.3(c) and subject to Section 9.4. For the avoidance of doubt, any payment made by Parent of the Parent Termination Payment pursuant to the terms of this Agreement shall be payable only once, and not in duplication, even though such payment may be payable under one or more provisions hereof. The payment of the Parent Termination Payment in accordance with this Section 9.3(c) shall be deemed to be liquidated damages (and not a penalty) for any and all losses or damages, suffered or incurred by the Company or any of its Affiliates under this Agreement (and the termination hereof), the transactions contemplated by this Agreement (and the abandonment thereof) or any matter forming the basis for such termination, and, upon payment in full of the Parent Termination Payment and, if applicable, the Recovery Costs, none of the Parent Parties or any of their Affiliates or Representatives shall have any further liability, whether pursuant to a claim at Law or in equity, to the Company, any of its Affiliates or any other Person in connection with this Agreement (and the termination hereof), the transactions contemplated by this Agreement (and the abandonment thereof) or any matter forming the basis for such termination, and none of the Company, any of its Affiliates or any other Person shall be entitled to bring or maintain any Action against the Parent Parties or any of their Affiliates or Representatives for damages or any equitable relief arising out of or in connection with this Agreement, any of the transactions contemplated by this Agreement or any matters forming the basis for such termination (other than equitable relief to require payment of the Parent Termination Payment); provided that if Parent fails to pay the Parent Termination Payment and the Company commences a suit which results in a final, non-appealable judgment against Parent for the Parent Termination Payment, or any portions thereof, then Parent shall pay the Company in accordance with Section 9.4, its costs and expenses (including reasonable documented fees of outside counsel and disbursements) in connection with such suit, together with interest on the Parent Termination Payment at the “prime rate” as published in The Wall Street Journal, Eastern Edition, in effect on the date such payment was required to be made through the date of payment (calculated daily on the basis of a year of 365 days and the actual number of days elapsed, without compounding) plus any amounts payable or reimbursable by Parent pursuant to Section 7.11(e) or Section 7.20 which remain unpaid at the time of such termination (the “Recovery Costs”).
Section 9.4 Payment of Amount or Expenses.
(a) In the event that this Agreement is validly terminated and Parent is obligated to pay the Company the Parent Termination Payment, plus the Recovery Costs, pursuant to and as set forth in Section 9.3(c), but subject to Section 10.10(c), Parent shall pay to the Company from the Parent Termination Payment, plus the Recovery Costs, deposited into escrow in accordance with the next sentence, an amount equal to the lesser of (i) the Parent Termination Payment, plus the Recovery Costs, and (ii) the sum of (A) the maximum amount that can be paid to the Company without causing the Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code for the relevant tax year, determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (I) or 856(c)(3)(A) through (I) of the Code (“Qualifying Income”), as determined by the Company’s independent certified public accountants (taking into account any known or anticipated income of the Company that is not Qualifying Income and any appropriate “cushion” as reasonably determined by such accountants), plus (B) in the event the Company receives either (x) a letter from the Company’s counsel or accountants indicating that the Company has received a ruling from the IRS described in Section 9.4(b)(ii), or (y) an opinion from the Company’s outside counsel as described in Section 9.4(b)(ii), an amount equal to the Parent Termination Payment, plus the Recovery Costs, less the amount payable under clause (A) above. To secure Parent’s obligation to pay these amounts, Parent shall deposit into escrow an amount in cash equal to the Parent Termination Payment, plus the Recovery Costs, with an escrow agent selected by Parent (that is reasonably satisfactory to the Company) and on such terms (subject to Section 9.4(b)) as shall be mutually agreed upon by the Company, Parent and the escrow agent. All fees, costs and expenses of the escrow agent shall be paid by the Company. The payment or deposit into escrow of the Parent Termination Payment, plus the Recovery Costs, pursuant to this Section 9.4(a) shall be made at the time Parent is obligated to pay the Company such amount pursuant to Section 9.3(c) by wire transfer of immediately available funds.
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(b) The escrow agreement shall provide that the Parent Termination Payment, plus the Recovery Costs, in escrow or any portion thereof shall not be released to the Company (or its designee) unless the escrow agent receives any one or combination of the following: (i) a letter from the Company’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Company (or its designee) without causing the Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code for the relevant tax year determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Company’s accountants revising that amount, in which case the escrow agent shall release such amount to the Company (or its designee); or (ii) a letter from the Company’s counsel or accountants indicating that the Company received a ruling from the IRS holding that the receipt by the Company (or its designee) of the Parent Termination Payment, plus the Recovery Costs, should either constitute Qualifying Income or should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Company’s outside counsel has rendered a legal opinion to the effect that the receipt by the Company of the Parent Termination Payment, plus the Recovery Costs, should either constitute Qualifying Income or should 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 the remainder of the Parent Termination Payment, plus the Recovery Costs, to the Company. Parent shall be deemed to have satisfied its obligations to pay the Parent Termination Payment, plus the Recovery Costs, to the Company so long as it deposits into escrow the Parent Termination Payment, plus the Recovery Costs, notwithstanding any delay or reduction in payment to the Company arising from this Section 9.4(b), and shall have no further liability with respect to payment of the Parent Termination Payment, the Recovery Costs, or otherwise. Parent agrees to amend this Section 9.4(b), at the request of the Company and provided that such amendment would not increase Parent’s or its Affiliates obligations hereunder or result in Parent or its Affiliates incurring any unreimbursed costs or expenses, in order to (x) maximize the portion of the Parent Termination Payment, plus the Recovery Costs, that may be distributed to the Company (or its designee) hereunder without causing the Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Company’s chances of securing a favorable ruling described in this Section 9.4(b) or (z) assist the Company in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b). The escrow agreement shall also provide that any portion of the Parent Termination Payment, plus the Recovery Costs, that remains unpaid as of the end of a tax year shall be paid as soon as possible during the following tax year, subject to the foregoing limitations of this Section 9.4; provided, however, that any portion of the Parent Termination Payment, plus the Recovery Costs, that remains unpaid as of December 31 following the date which is five (5) years from the date of this Agreement shall be released by the escrow agent to Parent, and Parent shall have no further obligations to the Company with respect thereto. Parent shall not be a party to such escrow agreement.
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Section 9.5 Amendment. Subject to compliance with applicable Law, at any time before or after receipt of the Shareholder Approval and prior to the Effective Time, any provision of this Agreement may be amended or modified by a written agreement of the Parties executed in the same manner as this Agreement; provided that after the Shareholder Approval has been obtained, there shall not be (a) any amendment of this Agreement that changes the amount or the form of the consideration to be delivered under this Agreement to the holders of Company Common Shares, or which, pursuant to applicable Law, requires the further approval of the shareholders of the Company without such further approval of such shareholders (in which case, such further approval shall be deemed the Shareholder Approval for purposes of this Agreement), or (b) any amendment or change not permitted under applicable Law. Notwithstanding anything else to the contrary herein, no amendment, modification or alteration to this sentence of Section 9.5 or the provisions of Section 10.8 (Assignment), Section 10.5 (Third Party Beneficiaries), Section 10.7(b) (Venue), and Section 10.11(b) (Non-Recourse) (in each case, solely to the extent that it relates to the Debt Financing Sources) (and any related definitions to the extent an amendment, modification or alteration of such definitions would modify the substance of any of the foregoing provisions) in any manner materially adverse to the Debt Financing Sources shall be effective as to the Debt Financing Sources without the prior written consent of the Debt Financing Sources party to the Debt Commitment Letters.
Article 10
GENERAL PROVISIONS
Section 10.1 Non-Survival of Representations and Warranties and Certain Covenants. None of the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such representations and warranties, shall survive the Effective Time. The covenants to be performed prior to or at the Closing, including any rights arising out of any breach of such covenants, shall terminate at and as of the Closing. This Section 10.1 shall not limit any covenant or agreement of the Parties that by its terms contemplates performance, in whole or in part, after the Effective Time, which shall remain in force and effect following the Closing.
Section 10.2 Notices. All notices, requests, claims, consents, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (A) if delivered in person, on the date delivered, (B) if sent by electronic mail, on the same day it was received; provided that if such email is received after 5:00 p.m. local time of the recipient or on a day that is not a Business Day, such email shall be deemed received on the next Business Day; and provided, further, that the sender of such email does not receive a notice of failure to deliver and the subject line of such email states that it is a notice delivered pursuant to this Agreement, or (C) if sent by prepaid overnight courier, on the next Business Day (providing proof of delivery), in each case, to the intended recipient as set forth below (or at such other address or email address for a Party as shall be specified by like notice given not less than five (5) Business Days prior to the effectiveness of such change). For the avoidance of doubt, counsel for a Party may send notices, requests, claims, consents, demands or other communications on behalf of such Party.
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(a) if to the Parent Parties or the Surviving Entity, to:
c/o Brookfield Asset Management
225 Liberty Street, 8th Floor
New York, New York 10281
Attention: Alexander Elawadi; Legal Department
E-Mail: [***];[***]
and
c/o Canada Pension Plan Investment Board
One Queen Street East, Suite 2500
Toronto, ON
Attention: Janet Chung, Delia Price and Legal Department
E-Mail: [***],[***], and [***]
with a copy (which shall not constitute notice) to:
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, NY 10166
Attention: Brian Scrivani; Drew Flowers; David Perechocky
E-Mail: bscrivani@gibsondunn.com; dflowers@gibsondunn.com;
dperechocky@gibsondunn.com
and
DLA Piper LLP
33 Arch Street, 26th Floor
Boston, MA 02110
Attention: Cara Nelson
E-Mail: cara.nelson@us.dlapiper.com
(b) if to the Company to:
LXP Industrial Trust
515 N Flagler Dr, Suite 408,
West Palm Beach, FL
Attention: Joe Bonventre
E-mail: [***]
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with copies (which shall not constitute notice) to:
Hogan Lovells Cadwalader US LLP
555 13th Street NW
Washington, DC 20024
Attention: Michael McTiernan
Stacey McEvoy
E-mail: michael.mctiernan@hlc.com
stacey.mcevoy@hlc.com
Section 10.3 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced under any present or future applicable Law or public policy, (a) such term or other provision shall be fully separable, (b) this Agreement shall be construed and enforced as if such invalid, illegal or unenforceable provision had never comprised a part hereof, and (c) all other conditions and provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable term or other provision or by its severance herefrom so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party. 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 a mutually acceptable manner in order that transactions contemplated by this Agreement be consummated as originally contemplated to the fullest extent possible.
Section 10.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall be deemed one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered (by telecopy, electronic delivery or otherwise) to the other Parties. Signatures to this Agreement transmitted by facsimile transmission, by electronic mail in .pdf format, by DocuSign or other electronic signature platform, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.
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Section 10.5 Entire Agreement; Third-Party Beneficiaries. (a) This Agreement (including the Exhibits, Schedules and the Company Disclosure Letter), the Access Agreement and the Nondisclosure Agreement, the Financing Commitment Letters and the Guarantees constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, between the Parties with respect to the subject matter of this Agreement; provided that nothing in this Section 10.5 shall limit any rights or remedies of the Company under the Guarantees or the Financing Commitment Letters, and (b) this Agreement shall be binding upon and inure solely to the benefit of each Party hereto, and nothing in this Agreement, express or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Agreement, except (i) Article 3 (which, from and after the Effective Time, shall be for the benefit of holders of Company Common Shares, Company Series C Preferred Shares and Company Restricted Share Awards immediately prior to the Effective Time), (ii) Section 7.9 (which, from and after the Effective Time shall be for the benefit of and enforceable by the Indemnified Parties), (iii) Section 7.11(e) (which shall be for the benefit of and enforceable by the Financing Indemnified Parties), (iv) Section 7.20 (which shall be for the benefit of and enforceable by the Requested Transactions Indemnified Persons), (v) Section 10.11(a) (Non-Recourse) (which shall be for the benefit of and enforceable by the Non-Recourse Parties), (vi) following the valid termination of this Agreement pursuant to Article 9 and subject to Section 9.2 and Section 10.10(c), the right of the Company, as sole and exclusive agent for and on behalf of the shareholders of the Company and holders of Company Restricted Share Awards (each of which are third party beneficiaries of this Agreement solely to the extent required for this proviso to be enforceable), to pursue damages in accordance with this Agreement (which may include the benefit of the bargain lost by such holders) in the event of a breach by any of the Parent Parties of this Agreement (it being agreed that in no event shall any such holder be entitled to enforce any of their rights, or any obligations of any of the Parent Parties, under this Agreement in the event of any such breach, but rather the Company shall have the sole and exclusive right to do so, as agent for such shareholders of the Company and holders of Company Restricted Share Awards), and (vii) any claims that the Company may assert against Parent, if, as and when required pursuant to the terms and conditions of the applicable Guarantee. In addition to the foregoing, the Debt Financing Sources shall be third party beneficiaries of, and shall be entitled to enforce the provisions of the second sentence of Section 9.5 (Amendment), Section 10.8 (Assignment), this Section 10.5, Section 10.7(b) (Venue), and Section 10.11(b) (Non-Recourse) (in each case, solely to the extent that it relates to the Debt Financing Sources in their capacities as such). The representations and warranties in this Agreement, including the Company Disclosure Letter, 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 10.6 (Extension; Waiver) without notice or liability to any other Person. 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. Accordingly, Persons other than the Parties may not rely upon the representations and warranties in this Agreement or the Company Disclosure Letter as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.
Section 10.6 Extension; Waiver. At any time prior to the Effective Time, the Parties may, to the extent legally allowed and except as otherwise set forth herein, (a) extend the time for the performance of any of the obligations or other acts of the other Parties, (b) waive any inaccuracies in the representations and warranties of the other Party contained in this Agreement or in any document delivered pursuant to this Agreement, or (c) subject to the requirements of applicable Law, waive compliance with any of the agreements or conditions contained in this Agreement. Any agreement on the part of a Party to any such extension or waiver shall be valid only if set forth in an instrument in writing 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 those rights and no single or partial exercise of any such right shall preclude any other or further exercise thereof or of any other right.
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Section 10.7 Governing Law; Venue.
(a) This Agreement, and all claims or causes of actions (whether at Law, in contract or in tort) that may be based upon, arise out of or related to this Agreement or the negotiation, execution or performance of this Agreement, shall be governed by, and construed in accordance with, the laws of the State of Maryland without giving effect to its conflicts of laws principles (whether the State of Maryland or any other jurisdiction that would cause the application of the Laws of any jurisdiction other than the State of Maryland).
(b) All disputes arising out of or relating to this Agreement shall be heard and determined exclusively by the Business and Technology Case Management Program of the Circuit Court for Baltimore City, Maryland, or if that court does not have jurisdiction, in the United States District Court for the District of Maryland, Northern Division (collectively, the “Chosen Courts”). Each of the Parties hereby irrevocably and unconditionally (i) submits to the exclusive jurisdiction and forum of any such Chosen Court, for the purpose of any dispute arising out of or relating to this Agreement brought by any Party, (ii) agrees not to commence any such dispute except in such courts, (iii) agrees that any claim in respect of any such dispute may be heard and determined in any such Chosen Court, (iv) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such dispute, (v) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such dispute, and (vi) agrees, with respect to any Action filed in a Maryland state court, to jointly request an assignment to the Maryland Business and Technology Case Management Program. Each of the Parties agrees that a final judgment in any such dispute shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each Party irrevocably consents to service of process in the manner provided for notices in Section 10.2. Nothing in this Agreement will affect the right of any Party to serve process in any other manner permitted by Law. Notwithstanding anything in this Agreement to the contrary, each of the parties hereto agrees that it will not bring or support any legal proceedings against the Debt Financing Sources in their capacities as such arising out of or relating to this Agreement, including any dispute arising out of or relating in any way to the Debt Financing or the performance thereof, in any forum other than a court of competent jurisdiction located within the Borough of Manhattan in the City of New York, New York, whether a state or Federal court.
Section 10.8 Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned or delegated, in whole or in part, by operation of Law or otherwise by any of the Parties without the prior written consent of the other Parties; provided that each of Parent and Merger Sub shall have the right, without the prior written consent of the Company, to assign all or any portion of their respective rights, interests and obligations, hereunder to a wholly owned direct or indirect Subsidiary of Parent, but only if Parent provides prior written notice of such assignment to the Company, and such assignment would not reasonably be expected to (i) prevent, impede or delay the consummation of the Merger or the other transactions contemplated by this Agreement, (ii) impair the ability of Parent or Merger Sub to perform its obligations under this Agreement, (iii) require any amendment or supplement to the Proxy Statement prior to receipt of the Shareholder Approval or any additional filing (other than on a Form 8-K), notice, consent or approval of the Company shareholders, (iv) adversely affect the Company’s ability to enforce this Agreement, the Guarantees, the Financing Commitment Letters or any other agreement entered into in connection herewith or the remedies available to the Company hereunder or thereunder, or (v) adversely affect the validity, availability, enforceability, amount or timing of the Financing or the Guarantees; provided that no such assignment shall relieve Parent or Merger Sub of any of their respective obligations hereunder or any liability hereunder, and Parent shall remain jointly and severally liable for all obligations and liabilities of Merger Sub and any permitted assignee hereunder. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of, and be enforceable by, the Parties hereto and their respective successors and permitted assigns. Any purported assignment not permitted under this Section shall be null and void.
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Section 10.9 Obligation of Parent. Parent shall cause Merger Sub to comply in all respects with each of the representations, warranties, covenants, obligations, agreements and undertakings made or required to be performed by Merger Sub in accordance with the terms of this Agreement, the Merger and the other transactions contemplated by this Agreement. Parent represents, acknowledges and agrees that any breach or default in the performance of any representation, warranty, covenant, obligation, agreement or undertaking of Merger Sub set forth in this Agreement shall also be deemed to be a breach of any such representation and warranty or default of Parent, and the Company shall have the right, exercisable in its sole discretion, to pursue any and all available remedies it may have under this Agreement arising out of any such breach or nonperformance directly against Parent and Merger Sub, jointly and severally in the first instance without any obligation to first seek recovery from, or exhaust remedies against, Merger Sub or the Surviving Entity. Parent shall not, and shall cause Merger Sub not to, assert as a defense to any claim by the Company that any such breach, default or nonperformance was caused by or attributable to the actions or omissions of Merger Sub or the Surviving Entity or that the Company is required to proceed against any such Person before proceeding against Parent. As applicable, references in this Section 10.9 to “Merger Sub” shall also include the Surviving Entity following the Effective Time.
Section 10.10 Specific Performance.
(a) Except as otherwise provided herein, any and all remedies 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 damage would occur if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached (including if any of the Parties fail to take any action required of them hereunder to consummate the transactions contemplated by this Agreement, including the Parties’ obligations to consummate the Merger and the obligation of any of the Parent Parties to pay, and the right of the holders of Company Common Shares, Company Restricted Share Awards and Company Series C Preferred Shares to receive the aggregate Merger Consideration, the aggregate Company Restricted Share Awards payments and the aggregate Series C Preferred Consideration, respectively, pursuant to the Merger, subject to the terms and conditions of this Agreement), and that monetary damages, even if available, would not be an adequate remedy therefor. It is accordingly agreed that, prior to the valid termination of this Agreement pursuant to Article 9, each Party shall be entitled to an injunction or injunctions, specific performance or other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, without proof of damages or a remedy at Law (including the Parties’ obligations to consummate the Merger and the obligation of any of the Parent Parties to pay, and the right of the holders of Company Common Shares, Company Restricted Share Awards and Company Series C Preferred Shares to receive the aggregate Merger Consideration, the aggregate Company Restricted Share Awards payments and the aggregate Series C Preferred Consideration, respectively, pursuant to the Merger, subject to the terms and conditions of this Agreement), in addition to any other remedy to which such Party is entitled at Law or in equity. Each of the Parties hereby waives (i) any defense in an Action for specific performance that a remedy at law would be adequate and (ii) any requirement under any Law to post a bond or other security to obtain equitable relief. Each Party agrees that the right of specific performance and other equitable relief is an integral part of the transactions contemplated by this Agreement and without that right neither the Company, on the one hand, nor any of the Parent Parties, on the other hand, would have entered into this Agreement. For the avoidance of doubt, the Parties may pursue both a grant of specific performance or other equitable remedies to the extent permitted by Section 10.10(b) and the payment of damages as contemplated by Section 9.2 and permitted by Section 9.3, but shall not be entitled or permitted to receive an award of damages or payment of the Company Termination Payment or the Parent Termination Payment, as applicable, if specific performance or other equitable remedies are awarded and consummation of the Merger occurs, and shall not be entitled or permitted to receive an award of specific performance or other equitable remedies if damages are awarded or if the Company Termination Payment or the Parent Termination Payment, as applicable, is paid.
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(b) Without limitation of the foregoing and notwithstanding anything in this Agreement to the contrary, the Parties hereby further acknowledge and agree that prior to the Closing, the Company shall be entitled to specific performance to cause the Parent Parties to draw down the full amount of the Equity Financing under the Equity Commitment Letter, and to cause the Merger and the other transactions contemplated by this Agreement to be consummated, including to effect the Closing in accordance with Section 2.2, on the terms and subject to the conditions in this Agreement only if and for so long as, (i) all conditions in Section 8.1 and Section 8.3 or have been waived (other than those conditions that by their nature are to be satisfied by actions taken at the Closing, but subject to such conditions being reasonably capable of being satisfied at the Closing, assuming a Closing would occur on such date) have been and continue to be satisfied, (ii) the Debt Financing (or any Alternative Financing) has been funded in accordance with the terms thereof or the Debt Financing Sources have irrevocably confirmed in writing that the Debt Financing (or any Alternative Financing) will be funded in accordance with the terms thereof at the Closing if the Equity Financing is funded at the Closing, (iii) the Parent Parties are required to, and any of the Parent Parties fail to, complete the Closing by the date the Closing is required to have occurred pursuant to Section 2.2, and (iv) the Company has irrevocably confirmed in writing to the Parent Parties that the Company stands ready, willing and able to consummate the transactions contemplated by this Agreement if specific performance is granted and, if the Equity Financing and the Debt Financing are funded, then the Closing will occur within five (5) Business Days after receipt of such irrevocable confirmation on the terms and conditions set forth in this Agreement. For the avoidance of doubt, but subject to the last sentence of Section 10.10(a), nothing in this Section 10.10(b) shall prevent the Company from concurrently seeking (i) specific performance against the Guarantors under the Guarantee to the extent expressly permitted under, and in accordance with, the terms and conditions set forth therein and herein and (ii) payment of the Parent Termination Payment. For the avoidance of doubt, in no event shall the Company or any of its successors or permitted assigns be entitled to enforce or seek to enforce specifically the remedy of specific performance of the Debt Commitment Letter against any Financing Source.
(c) Notwithstanding anything to the contrary in this Agreement, other than in the case of fraud, the maximum aggregate liability of the Parent Parties, together with Guarantors under the Guarantees, for monetary damages, losses, costs or expenses of the Company, its Affiliates or any other Person in connection with the failure of the Merger to be consummated, a breach (including a Willful Breach) of this Agreement by any Parent Party, or otherwise relating to this Agreement or the transactions contemplated by this Agreement (including the Merger) shall be limited to an amount equal to the Parent Termination Payment, plus the Recovery Costs (collectively, the “Parent Liability Cap”); provided that the maximum liability of each Guarantor under its Guarantee shall be limited to the applicable cap set forth in such Guarantee, and no Guarantor shall be liable for any obligations of any other Guarantor. Other than in the case of fraud, in no event shall the Company or any of its Affiliates or any other Person seek or permit to be sought on their behalf any amount in excess of the Parent Liability Cap in the aggregate from the Parent Parties, the Guarantors or their respective Affiliates or Representatives in connection with this Agreement or the transactions contemplated by this Agreement (including the Merger), or in respect of the Guarantees, or any theory of law or equity (including by or through attempted piercing of the corporate, limited partnership or limited liability company veil) or in respect of any oral representations made or alleged to be made in connection herewith or therewith, whether at law or in equity, in contract, in tort or otherwise, or, with respect to any Guarantor, in excess of the applicable cap set forth in such Guarantor’s Guarantee. Other than in the case of fraud, the Company agrees that it has no right of recovery against, and no liability shall attach to, any of the Parent Parties or any of their Affiliates or Representatives (other than against the Parent Parties as provided by Section 9.3(c) and this Section 10.10(c)), through any Parent Party or otherwise, whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil, by or through a claim by or on behalf of any Parent Party against the Parent Parties or any of their Affiliates or Representatives, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any applicable Law, whether in contract, tort or otherwise, except for its rights to recover from the Guarantors under the Guarantees (but not any other Parent Parties or any of their Affiliates) under and to the extent provided in the applicable Guarantee, in each case on a several and not joint basis, subject to each Guarantor’s applicable cap and the Parent Liability Cap and the other limitations described herein. Other than in the case of fraud, in no event shall the Company or any of its Affiliates seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover damages from, any of the Affiliates or Representatives of the Parent Parties (other than Guarantors to the extent provided in the Guarantees, and in each case on a several and not joint basis and subject to each Guarantor’s applicable cap, the Parent Liability Cap and the other limitations described therein).
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Section 10.11 Non-Recourse.
(a) Except for claims for fraud, each party agrees that all claims, liabilities, or causes of action (whether in contract or in tort, in law or in equity, including clauses for piercing the corporate veil or similar causes of action, or granted by statute or otherwise) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to this Agreement or the Ancillary Documents or transactions contemplated hereby or thereby, or the negotiation, execution, or performance of this Agreement or the Ancillary Documents (including any representation or warranty made in, in connection with, or as an inducement to enter into, this Agreement or such Ancillary Documents), or any claims or actions alleging breach of this Agreement or the Ancillary Documents, may be made only against (and such representations and warranties are those solely of) the Persons that are expressly identified as the parties to this Agreement and, in the case of the Ancillary Documents, Persons expressly identified as parties thereto (each, a “Contracting Party”). Except for the liabilities and obligations of the parties to the Guarantees, the Equity Commitment Letters, the Debt Commitment Letters and any other Ancillary Documents to which they are parties, no Person who is not a Contracting Party, including (so long as the same is not a Contracting Party) any current, former or future director, trustee, officer, employee, incorporator, member, partner, manager, shareholder, equityholder, Affiliate, agent, attorney, Representative or assignee of, and any financial advisor or lender to, any Contracting Party, or any current, former or future director, trustee, officer, employee, incorporator, member, partner, manager, shareholder, equityholder, Affiliate, agent, attorney, Representative or assignee of any of the foregoing (collectively (and so long as any such Person is not a Contracting Party), the “Non-Recourse Party”), shall have any liability (whether in contract or in tort, in law or in equity, including clauses for piercing the corporate veil or similar causes of action, or granted by statute) for any claims, losses, liabilities, damages, costs or expenses arising under, out of, in connection with, or related in any manner the Company Properties or to this Agreement or the Ancillary Documents or the transactions contemplated hereby or thereby or based on, in respect of, or by reason of this Agreement or any of the Ancillary Documents or the transactions contemplated hereby or thereby or the negotiation, execution, performance, or breach of this Agreement or any of the Ancillary Documents, and, to the maximum extent permitted by applicable Law, except as provided in the Ancillary Documents, each Contracting Party, on behalf of itself and its Affiliates, hereby waives and releases all such liabilities, claims, causes of action, and obligations against any such Non-Recourse Party. Except as specifically set forth in this Agreement, the rights and remedies contained in this Agreement shall constitute Parent’s sole and exclusive means of recourse with respect to the Company Properties relating to any Environmental Law, and Parent Parties expressly waive any and all other claims, rights, or causes of action Parent Parties may have against the Company now or in the future arising under, in connection with or relating to any Environmental Law (whether by statute, regulation, or common law). Notwithstanding the foregoing provisions of this Section 10.11(a) and any other provision of this Agreement to the contrary, but subject to the terms and conditions of the Ancillary Documents (and without limiting the Company’s respective remedies thereunder), nothing in this Section 10.11(a) shall limit the Company’s right to enforce the terms of the Guarantees to cause the applicable parties thereto to provide funds to Parent to permit Parent to satisfy (x) any valid Order or award of damages in favor of the Company obtained by the Company pursuant to and in accordance with Section 9.3, (y) payment by Parent of Parent’s indemnification, payment and reimbursement obligations pursuant to Section 7.11(e) and Section 7.20 or (z) payment by Parent of the Parent Termination Payment and any Recovery Costs pursuant to and in accordance with Section 9.3, in each case, solely to the extent provided therein and in accordance with their respective terms, on a several and not joint basis and subject to the respective caps set forth therein. Notwithstanding anything herein to the contrary and for the avoidance of doubt, (A) nothing in this Section 10.11(a) shall limit the Company’s right to seek specific performance against Parent to cause the Equity Financing to be funded pursuant to and in accordance with the Equity Commitment Letters (as solely permitted by Section 10.10(b)), and (B) nothing in this Section 10.11(a) nor Section 10.10 (Specific Performance) shall limit in any way any fraud remedies or the remedies of the parties under the Nondisclosure Agreement or the Access Agreement.
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(b) The Company, on behalf of itself, and its Subsidiaries and each of their respective controlled Affiliates, hereby agrees that none of the Debt Financing Sources shall have any liability to the Company or any of its Subsidiaries or any of their respective controlled Affiliates based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to: (i) this Agreement and any Ancillary Documents and any of the transactions contemplated hereunder or thereunder (including the Financing); (ii) the negotiation, execution or performance of this Agreement or any of the Ancillary Documents (including any representation or warranty made in connection with, or as an inducement to, this Agreement or any of the Ancillary Documents); (iii) any breach or violation of this Agreement or any of the Ancillary Documents; and (iv) any failure of any of the transactions contemplated hereunder or thereunder (including the Financing) to be consummated; provided that nothing in this Section 10.11(b) shall limit the rights of Parent and Merger Sub under the Debt Commitment Letters.
Section 10.12 Waiver of Jury Trial. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS Section 10.12.
Section 10.13 Authorship. The Parties agree that the terms and language of this Agreement are the result of negotiations between the Parties and their respective advisors and, as a result, there shall be no presumption that any ambiguities in this Agreement shall be resolved against any Party. Any controversy over construction of this Agreement shall be decided without regard to events of authorship or negotiation.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their respective duly authorized officers, all as of the date first written above.
| LEOPARD REIT LLC, a Delaware limited liability company | ||
| By: | /s/ Gautam Huded | |
| Name: Gautam Huded | ||
| Title: Executive Vice President | ||
| LEOPARD MERGER SUB LLC, a Maryland limited liability company | ||
| By: | /s/ Gautam Huded | |
| Name: Gautam Huded | ||
| Title: Executive Vice President | ||
[Signature Page to Merger Agreement]
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| LXP INDUSTRIAL TRUST | ||
| By: | /s/ T. Wilson Eglin | |
| Name: T. Wilson Eglin | ||
| Title: Chief Executive Officer | ||
[Signature Page to Merger Agreement]
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EXHIBIT A
REIT Opinion
EXHIBIT B
REIT Officer’s Certificate
Schedule I
Officers
Global Corporate & Investment Banking
BofA Securities, Inc.
One Bryant Park, New York, NY 10036
July 19, 2026
The Board of Trustees
LXP Industrial Trust
515 N. Flagler Drive, Ste. 408
West Palm Beach, Florida 33401
Members of the Board of Trustees:
We understand that LXP Industrial Trust (“LXP”) proposes to enter into an Agreement and Plan of Merger (the “Agreement”), by and among LXP, Leopard REIT LLC (“Parent”) and Leopard Merger Sub LLC, a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, among other things, LXP will merge with and into Merger Sub (the “Merger”) and each outstanding common share of beneficial interest, par value $0.0001, of LXP (“LXP Common Shares”) (other than the Excluded Shares (as defined in the Agreement)) will be converted into the right to receive $61.20 per share in cash, without interest thereon (the “Consideration”). The terms and conditions of the Merger are more fully set forth in the Agreement.
You have requested our opinion as to the fairness, from a financial point of view, to the holders of LXP Common Shares (other than the Excluded Shares) of the Consideration to be received by such holders in the Merger.
In connection with this opinion, we have, among other things:
| (1) | reviewed certain publicly available business and financial information relating to LXP; |
| (2) | reviewed certain internal financial and operating information with respect to the business, operations and prospects of LXP furnished to or discussed with us by the management of LXP, including certain financial forecasts relating to LXP prepared by the management of LXP (such forecasts, “LXP Forecasts”); |
| (3) | discussed the past and current business, operations, financial condition and prospects of LXP with members of senior management of LXP; |
| (4) | reviewed the trading history for LXP Common Shares and a comparison of that trading history with the trading histories of other companies we deemed relevant; |
| (5) | compared certain financial and stock market information of LXP with similar information of other companies we deemed relevant; |
| (6) | compared certain financial terms of the Merger to financial terms, to the extent publicly available, of other transactions we deemed relevant; |
| BofA Securities, Inc. member FINRA/SIPC, is a subsidiary of Bank of America Corporation | Page 1 of 4 |
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| (7) | reviewed a draft, dated July 19, 2026, of the Agreement (the “Draft Agreement”); and |
| (8) | performed such other analyses and studies and considered such other information and factors as we deemed appropriate. |
In arriving at our opinion, we have assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with us and have relied upon the assurances of the management of LXP that they are not aware of any facts or circumstances that would make such information or data inaccurate or misleading in any material respect. With respect to the LXP Forecasts, we have been advised by LXP, and have assumed, that they have been reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of LXP as to the future financial performance of LXP. We have relied, at the direction of LXP, upon the assessments of the management of LXP as to the potential impact of market, governmental and regulatory trends and developments relating to or affecting LXP and its business. We have not made or been provided with any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of LXP, nor have we made any physical inspection of the properties or assets of LXP. We have not evaluated the solvency or fair value of LXP or Parent under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. We have assumed, at the direction of LXP, that the Merger will be consummated in accordance with its terms, without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the Merger, no delay, limitation, restriction or condition, including any divestiture requirements or amendments or modifications, will be imposed that would have an adverse effect on LXP or the contemplated benefits of the Merger. We also have assumed, at the direction of LXP, that the final executed version of the Agreement will not differ in any material respect from the Draft Agreement reviewed by us.
We express no view or opinion as to any terms or other aspects or implications of the Merger (other than the Consideration to the extent expressly specified herein), including, without limitation, the form or structure of the Merger, any related transaction or any other agreement, arrangement or understanding entered into in connection with or related to the Merger or otherwise. As you are aware, we were not requested to, and we did not, solicit indications of interest or proposals from third parties regarding a possible acquisition of all or any part of LXP or any alternative transaction. Our opinion is limited to the fairness, from a financial point of view, of the Consideration to be received by holders of LXP Common Shares (other than the Excluded Shares) and no opinion or view is expressed with respect to any consideration received in connection with the Merger by the holders of any other class of securities, creditors or other constituencies of any party. In addition, no opinion or view is expressed with respect to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to any of the officers, directors, trustees or employees of any party to the Merger, or class of such persons, relative to the Consideration or otherwise. Furthermore, no opinion or view is expressed as to the relative merits of the Merger in comparison to other strategies or transactions that might be available to LXP or in which LXP might engage or as to the underlying business decision of LXP to proceed with or effect the Merger. We are also not expressing any view or opinion with respect to, and we have relied at the direction of LXP, upon the assessments of representatives of LXP regarding legal, regulatory, accounting, tax and similar matters relating to LXP, Parent and the Merger (including the contemplated benefits of the Merger), as to which we understand that LXP obtained such advice as it deemed necessary from qualified professionals. In addition, we express no opinion or recommendation as to how any shareholder should vote or act in connection with the Merger or any other matter.
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We have acted as financial advisor to the Board of Trustees of LXP in connection with the Merger and will receive a fee for our services, a portion of which is payable upon the delivery of this opinion and a significant portion of which is contingent upon consummation of the Merger. In addition, LXP has agreed to reimburse our expenses and indemnify us against certain liabilities arising out of our engagement.
We and our affiliates comprise a full service securities firm and commercial bank engaged in securities, commodities and derivatives trading, foreign exchange and other brokerage activities, and principal investing as well as providing investment, corporate and private banking, asset and investment management, financing and financial advisory services and other commercial services and products to a wide range of companies, governments and individuals. In the ordinary course of our businesses, we and our affiliates may invest on a principal basis or on behalf of customers or manage funds that invest, make or hold long or short positions, finance positions or trade or otherwise effect transactions in equity, debt or other securities or financial instruments (including derivatives, bank loans or other obligations) of (i) LXP and certain of its affiliates, (ii) Brookfield Corporation (“Brookfield”), an affiliate of Parent, and certain of Brookfield’s affiliates and/or portfolio companies and (iii) the Canada Pension Plan Investment Board (“CPPIB”), an affiliate of Parent, and certain of CPPIB’s affiliates and/or portfolio companies.
We and our affiliates in the past have provided, currently are providing, and in the future may provide, investment banking, commercial banking and other financial services to LXP and certain of its affiliates and have received or in the future may receive compensation for the rendering of these services, including (i) providing syndicated loans, commercial loans and other commercial credit services, (ii) providing checking, deposit and other liquidity and treasury services, and (iii) providing short-term fixed income and other markets services.
In addition, we and our affiliates in the past have provided, currently are providing, and in the future may provide, investment banking, commercial banking and other financial services to Brookfield and certain of its affiliates and/or portfolio companies and have received or in the future may receive compensation for the rendering of these services, including (i) providing mergers and acquisition advisory services to Brookfield and certain of its portfolio companies with respect to the purchase, sale and spin-off of certain portfolio companies and portfolio assets, (ii) acting as underwriter in connection with certain equity, debt and equity linked securities of Brookfield and certain of its portfolio companies, (iii) providing acquisition financing with respect to the purchase and sale of certain Brookfield portfolio companies and portfolio assets, (iv) providing commercial leases, commercial lending and trade finance to Brookfield and certain of its portfolio companies, (v) providing foreign exchange, swaps, derivatives and other markets products to Brookfield and certain of its portfolio companies, (vi) providing commercial credit card, checking and other liquidity and treasury services to Brookfield and certain of its portfolio companies, and (vii) providing certain workplace benefit financial products to Brookfield and certain of its portfolio companies.
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In addition, we and our affiliates in the past have provided, currently are providing, and in the future may provide, investment banking, commercial banking and other financial services to CPPIB and its affiliates including (i) providing credit card and other liquidity and treasury services, (ii) providing debt, equity, swap, option, futures, interest rate and derivative trading, execution and financing services, foreign exchange trading, forward and swap services, and other markets services, and (iii) mergers and acquisitions advisory services, debt capital markets underwriting, equity capital markets block trade underwriting and other investment banking services.
It is understood that this letter is for the benefit and use of the Board of Trustees of LXP (in its capacity as such) in connection with and for purposes of its evaluation of the Merger.
Our opinion is necessarily based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and the information made available to us as of, the date hereof. As you are aware, the credit, financial and stock markets have been experiencing unusual volatility and we express no opinion or view as to any potential effects of such volatility on LXP or the Merger. It should be understood that subsequent developments may affect this opinion, and we do not have any obligation to update, revise, or reaffirm this opinion. The issuance of this opinion was approved by a fairness opinion review committee of BofA Securities, Inc.
Based upon and subject to the foregoing, including the various assumptions and limitations set forth herein, we are of the opinion on the date hereof that the Consideration to be received in the Merger by holders of LXP Common Shares (other than the Excluded Shares) is fair, from a financial point of view, to such holders.
Very truly yours,
/s/ BofA Securities, Inc.
BOFA SECURITIES, INC.
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