Item 1.01 Entry into a Material Definitive Agreement.
On May 13, 2020, CoStar Realty Information, Inc. ("CRI"), a Delaware corporation
and wholly-owned subsidiary of CoStar Group, Inc., entered into an Agreement and
Plan of Merger (the "Agreement") with Crescendo Sub, Inc., a Delaware
corporation and wholly-owned subsidiary of CRI ("Merger Sub"), Ten-X Holding
Company, Inc., a Delaware corporation ("Ten-X"), and Thomas H. Lee Equity Fund
VII, L.P., a Delaware limited partnership, solely in its capacity as
representative thereunder. Pursuant to the Agreement, and subject to the terms
and conditions set forth therein, Merger Sub will merge with and into Ten-X (the
"Merger"), with Ten-X surviving the Merger as a wholly-owned subsidiary of CRI,
and the equityholders of Ten-X becoming entitled to receive an aggregate
purchase price of $190 million in cash, subject to certain adjustments.
The completion of the Merger is subject to customary closing conditions,
including, among others, (a) the expiration or termination of the applicable
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, (b) the absence of any law or order prohibiting the closing, (c) the
approval of the holders of a majority of the outstanding capital stock of Ten-X,
which approval was obtained on May 14, 2020, (d) the truth and accuracy of the
parties' respective representations and warranties in the Agreement (subject to
certain materiality thresholds) and (e) the performance of, and compliance with,
the parties' respective covenants and agreements in the Agreement (subject to
certain materiality thresholds). Each of Ten-X, CRI, and Merger Sub have made
customary representations and warranties in the Agreement. Ten-X also has agreed
to various covenants, including, among others, (i) to preserve its business
organization, including maintaining its permits and its broker licenses, (ii) to
conduct its business in the ordinary course during the period between the date
of the Agreement and the closing of the Merger and to refrain from taking
various non-ordinary course actions during that period, in each case, subject to
certain exceptions, (iii) not to solicit proposals relating to alternative
transactions to the Merger, (iv) to use its (and CRI also has agreed to use its)
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 parties in doing,
as promptly as practicable, all things necessary, proper and advisable to permit
the consummation of the Merger to occur as promptly as practicable, subject to
certain exceptions.
The Agreement may be terminated by CRI, on the one hand, or Ten-X, on the other
hand, under certain circumstances, including if the Merger is not consummated by
August 31, 2020 (which date may, subject to certain exceptions, be extended to
November 29, 2020 under certain circumstances).
In connection with the entrance into the Agreement, Ten-X and CRI entered into
agreements with certain stockholders of Ten-X and other related parties
containing, among other things, non-competition and non-solicitation provisions.
Additionally, pursuant to the terms of the Agreement, at closing, a subsidiary
of Ten-X will enter into an Intellectual Property License Agreement with an
entity affiliated with the current stockholders of Ten-X, pursuant to which,
among other things, Ten-X will obtain the benefit of certain intellectual
property rights related to the conduct of the Ten-X business.
The foregoing description of the Agreement is included to provide you with
information regarding its terms. It does not purport to be a complete
description and is qualified in its entirety by reference to the full text of
the Agreement, which is filed as Exhibit 10.1 hereto and is incorporated herein
by reference. The representations, warranties and covenants contained in the
Agreement were made only for purposes of such Agreement and as of specific
dates, were made solely for the benefit of the parties to the Agreement, may be
subject to limitations agreed upon by the parties and qualified by disclosures
not reflected in the text of the Agreement, are not intended to provide factual,
business, or financial information about the parties and may be subject to a
contractual standard of materiality different from those generally applicable to
stockholders or may have been used for purposes of allocating risk between CRI,
on the one hand, and Ten-X, on the other hand, rather than establishing matters
as facts. Moreover, information concerning the subject matter of the
representations, warranties and covenants may change after the date of the
Agreement, which subsequent information may or may not be fully reflected in the
public disclosures of CoStar Group, Inc.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 * Agreement and Plan of Merger, dated as of May 13, 2020, by and
among Ten-X
Holding Company, Inc., CoStar Realty Information, Inc., Crescendo
Sub, Inc., and
Thomas H. Lee Equity Fund VII, L.P., solely in its capacity as
representative thereunder
The cover page from this Current Report on Form 8-K, formatted as
104 Inline XBRL.
*Non-material schedules have been omitted pursuant to Item 601(a)(5) of
Regulation S-K. A copy of any omitted schedule will be furnished to the SEC upon
request.
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