Item 1.01. Entry into a Material Definitive Agreement.
Securities Purchase Agreement
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The Company expects to use the net proceeds from the sale of the
The Securities Purchase Agreement contains customary representations, warranties, covenants and indemnities of the Company and the Purchaser.
Purchaser Director and Nominees
Pursuant to the terms of the Securities Purchase Agreement, for so long as the
Purchaser owns shares of Common Stock constituting more than 4.9% of the Common
Stock issued and outstanding, the Purchaser will have the right to designate one
member (the "Purchaser Nominee") to the Board of Directors (the "Board") of the
Company (provided that such Purchaser Nominee must qualify as an independent
director under the listing standards of
Standstill
Subject to certain customary exceptions set forth in the Securities Purchase Agreement, the Purchaser and its affiliates are prohibited from, among other things, (i) acquiring securities or assets of the Company, (ii) effecting a tender offer, merger, acquisition, business combination, exchange offer, recapitalization, restructuring, liquidation, dissolution or similar transaction of the Company, (iii) making or participating in any proxy solicitation relating to the election of directors that has not been approved by the independent directors of the Company and (iv) seeking to control or influence the management or policies of the Company, in each case, until the later of (x) twenty-four months following the date of the Securities Purchase Agreement and (y) such time as the Purchaser is no longer entitled to nominate a Purchaser Nominee.
Restrictions on Transfer
Until the one-year anniversary of the date of the Securities Purchase Agreement, the Purchaser may not transfer any of the Common Shares without the prior written consent of the Company.
REIT-Related Covenants
Pursuant to the terms of the Securities Purchase Agreement, the Purchaser agreed to certain covenants related to the Company's plan to convert to a real estate investment trust.
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Hedging Transactions
So long as the Purchaser has the right to designate a Purchaser Nominee, the Purchaser may not enter into any Hedging Transactions (as such term is defined in the Securities Purchase Agreement) to the extent directors of the Company are prohibited from entering into such Hedging Transactions pursuant to a policy applicable to all directors of the Company.
Pre-emptive Rights
If, after the date of the Securities Purchase Agreement, the Company intends to issue new equity securities for cash to any person and the Purchaser owns shares of Common Stock constituting more than 4.9% of the Common Stock issued and outstanding, then the Purchaser has the right to participate in such equity offering, subject to certain exceptions, including, without limitation, equity securities issued in connection with an at-the-market offering program or any firm commitment underwritten offering, as set forth in the Securities Purchase Agreement.
Warrant
The Warrant is exercisable from the date of issuance and has a term of three years. The Exercise Price and the number of shares of Common Stock issuable upon exercise of each Warrant is subject to appropriate adjustments in the event of certain stock dividends, stock splits, stock combinations, reclassifications or similar events affecting the Common Stock. Upon a Fundamental Transaction (as defined in the Warrant) in which the consideration consists solely of cash, solely of marketable securities or a combination thereof, the remaining unexercised portion of the Warrant will automatically be deemed to be exercised or the Warrant will be terminated, depending on whether the purchase price per share of one share of Common Stock in such fundamental transaction is greater or less than the Exercise Price. In addition, if such Fundamental Transaction occurs prior to the one-year anniversary of the date of the Warrant, and the price per share of one share of Common Stock in such Fundamental Transaction is less than the Exercise Price, or if it is greater than the Exercise Price but less than the purchase price paid by the holder per Warrant Share, then the holder will be entitled to receive up to an amount equal to the purchase price paid by the holder per Warrant Share in respect of any unexercised portion of the Warrant.
The holder will not be entitled to exercise any portion of the Warrant, which, upon giving effect to such exercise, would cause the aggregate number of shares of Common Stock beneficially owned by the holder of the Warrant (together with its affiliates) to exceed 9.90% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrant. However, the holder may increase or decrease such percentage to any other percentage not in excess of 19.90% upon at least 61 days' prior notice from the holder to the Company, subject to the terms of the Warrant.
Registration Rights Agreement
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Additionally, in accordance with the terms of the Securities Purchase Agreement,
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description
4.1 Warrant to Purchase Common Stock, datedAugust 24, 2020 . 10.1 Securities Purchase Agreement, datedAugust 24, 2020 , by and betweenGriffin Industrial Realty, Inc. andCM Change Industrial LP . 10.2 Registration Rights Agreement, datedAugust 24, 2020 , by and betweenGriffin Industrial Realty, Inc. andCM Change Industrial LP . 10.3 Contingent Value Rights Agreement, datedAugust 24, 2020 , by and betweenGriffin Industrial Realty, Inc. andCM Change Industrial LP . Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, as codified in
Section 27A of the Securities Act, and Section 21E of the Securities Exchange
Act of 1934, as amended. These forward-looking statements include the Company's
beliefs and expectations regarding future events or conditions including,
without limitation, statements regarding the Company's expected use of the net
proceeds from the sale of the
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developments, and the Company's planned conversion to a real estate investment
trust. Although the Company believes that its plans, intentions and expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such plans, intentions or expectations will be achieved. The
projected information disclosed herein is based on assumptions and estimates
that, while considered reasonable by the Company as of the date hereof, are
inherently subject to significant business, economic, competitive and regulatory
uncertainties and contingencies, many of which are beyond the control of the
Company and which could cause actual results and events to differ materially
from those expressed or implied in the forward-looking statements. Other
important factors that could affect the outcome of the events set forth in these
statements are described in the Company's
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