Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement
On
Transaction Structure
Under the terms and subject to the conditions set forth in the Merger Agreement,
upon the closing of the Merger (the "Effective Time"), each share of common
stock, par value
Treatment of Equity Awards
At the Effective Time, (i) each Monmouth stock option (a "Monmouth Option") outstanding immediately prior to the Effective Time, whether vested or unvested, will be cancelled and the holder thereof will receive EQC Common Shares equal to the product of (x) the number of net option shares in respect of such Monmouth Option (calculated pursuant to the Merger Agreement to take into account the exercise price of the Monmouth Option and applicable withholding taxes) multiplied by (y) the Exchange Ratio, and (ii) each unvested restricted stock award issued pursuant to a Monmouth incentive plan (each, a "Monmouth Restricted Stock Award") outstanding immediately prior to the Effective Time, will be cancelled and the holder thereof will receive EQC Common Shares equal to the product of (x) the number of net restricted stock shares in respect of such Monmouth Restricted Stock Award (calculated pursuant to the Merger Agreement to take into account applicable withholding taxes) multiplied by (y) the Exchange Ratio.
Certain Governance Matters
Following completion of the Merger, the
Certain Other Terms and Conditions of the Merger Agreement
The completion of the Merger is subject to certain customary closing conditions,
including, without limitation: (i) approval by EQC's common shareholders of the
issuance of EQC Common Shares and approval by the Monmouth common shareholders
of the Merger; (ii) approval from the
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The Merger Agreement contains representations and warranties customary for transactions of this nature. In addition, EQC and Monmouth have agreed to customary mutual covenants and agreements, including, among others, to conduct their businesses in the ordinary course during the period between the execution of the Merger Agreement and the Effective Time and to refrain from engaging in certain kinds of actions during this period.
For
The EQC Board and the Board of Directors of Monmouth have each unanimously approved the Merger Agreement and have recommended approval of the Merger by their respective shareholders. The Merger is expected to close during the second half of 2021.
Non Solicit; Termination; Termination Fee
Monmouth has agreed to customary restrictions on its ability to solicit alternative acquisition proposals from third parties or engage in discussions or negotiations with third parties regarding acquisition proposals, subject to customary exceptions. The Board of Directors of Monmouth may change its recommendation only in limited circumstances that are described in the Merger Agreement.
The Merger Agreement may be terminated, among other circumstances, by either
party if the Merger is not consummated by
The Merger Agreement also provides that either party must reimburse the other
party for its expenses up to
* * * * * *
The foregoing description of the Merger Agreement and the transactions contemplated thereby, including the Merger, is only a summary, does not purport to be complete, and is qualified in its entirety by reference to, the full text of the Merger Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference. The Merger Agreement has been attached to provide investors with information regarding its terms. It is not intended to provide any other factual information about EQC or Monmouth or Merger Sub. In particular, the assertions embodied in the representations and warranties contained in the Merger Agreement have been made solely for the benefit of the parties to the Merger Agreement and are qualified by information in confidential disclosure schedules provided by each of EQC and Monmouth in connection with the execution of the Merger Agreement. Moreover, certain representations and warranties in the Merger Agreement were used for the purpose of allocating risk between EQC and Monmouth rather than establishing matters as facts. Accordingly, the representations and warranties in the Merger Agreement should not be relied upon as characterizations of the actual state of facts about EQC, Monmouth or Merger Sub.
No Offer or Solicitation
This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to buy, sell or solicit any securities or any proxy, vote or approval in any jurisdiction pursuant to or in connection with the proposed merger and share issuance or otherwise, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be deemed to be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Additional Information and Where to Find It
In connection with the proposed merger, EQC intends to file a registration
statement on Form S-4 with the
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Participants in the Solicitation
EQC and certain of its trustees and executive officers may be deemed to be
participants in the solicitation of proxies from EQC's shareholders in
connection with the proposed merger and share issuance under the rules of the
Forward-Looking Statements
Some of the statements contained in this Current Report on Form 8-K constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.
The forward-looking statements contained in this Current Report on Form 8-K reflect EQC's current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances regarding EQC and Monmouth that may cause EQC's actual results to differ significantly from those expressed in any forward-looking statement, including, without limitation, (i) inability to complete the proposed merger because, among other reasons, one or more conditions to the closing of the proposed merger may not be satisfied or waived; (ii) uncertainty as to the timing of completion of the proposed merger; (iii) potential adverse effects or changes to relationships with EQC's and/or Monmouth's tenants, employees, service providers or other parties resulting from the announcement or completion of the proposed merger; (iv) the outcome of any legal proceedings that may be instituted against the parties and others related to the Merger Agreement; (v) possible disruptions from the proposed merger that could harm EQC's or Monmouth's respective business, including current plans and operations; (vi) unexpected costs, charges or expenses resulting from the proposed merger; (vii) uncertainty of the expected financial performance of EQC following completion of the proposed merger, including the possibility that the benefits anticipated from the proposed merger will not be realized or will not be realized within the expected time period; (viii) legislative, regulatory and economic developments; and (ix) unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism, outbreak of war or hostilities and epidemics and pandemics, including COVID-19, as well as EQC's or Monmouth's management's response to any of the aforementioned factors. EQC cannot provide any assurances that the mergers and events described in this Current Report on Form 8-K will happen as described or that they will happen at all. . . .
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description
2.1 Agreement and Plan of Merger, datedMay 4, 2021 , by and amongEquity Commonwealth , Monmouth Real Estate Investment Corporation and RS18 LLC(1) 104 The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. (1) Schedules have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. EQC agrees to furnish supplementally a copy of any omitted schedule to theSEC upon its request; provided, however, that EQC may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended for any schedule so furnished.
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