Item 1.01 Entry Into a Material Definitive Agreement.





Agreement and Plan of Merger

On June 7, 2021, QTS Realty Trust, Inc., a Maryland corporation ("QTS" or the "Company"), QualityTech LP, a Delaware limited partnership and the operating partnership of the Company (the "Partnership"), Volt Upper Holdings LLC, a Delaware limited liability company ("Parent"), Volt Lower Holdings LLC, a Delaware limited liability company ("Merger Sub I"), and Volt Acquisition LP, a Delaware limited partnership ("Merger Sub II") entered into an Agreement and Plan of Merger (the "Merger Agreement"). Parent, Merger Sub I and Merger Sub II are affiliates of Blackstone Infrastructure Partners L.P. and BREIT Operating Partnership L.P. ("BREIT OP") (the "Guarantors"), which are affiliates of The Blackstone Group Inc. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the closing of the Mergers (the "Closing"), Merger Sub II will merge with and into the Partnership (the "Partnership Merger"), and, immediately following the Partnership Merger, the Company will merge with and into Merger Sub I (the "Company Merger" and, together with the Partnership Merger, the "Mergers"). Upon completion of the Partnership Merger, the Partnership will survive and the separate existence of Merger Sub II will cease (the "Surviving Partnership"). Upon completion of the Company Merger, Merger Sub I will survive and the separate existence of the Company will cease (the "Surviving Company"). The Mergers and the other transactions contemplated by the Merger Agreement were unanimously approved by the Company's Board of Directors (the "Company Board").

Merger Consideration. Pursuant to the terms and conditions of the Merger Agreement, at the effective time of the Company Merger (the "Company Merger Effective Time"), among other things:

· Company Shares: each share of Class A Common Stock of the Company, par value

$0.01 per share (each, a "Company Class A Share") and each share of Class B
   Common Stock of the Company, par value $0.01 per share (each, a "Company Class
   B Share" and together with the Company Class A Shares, the "Company Shares"),
   other than shares owned by Parent, Merger Sub I or any subsidiary of Parent,
   the Company or Merger Sub I (such shares, the "Excluded Shares"), that is
   issued and outstanding immediately prior to the Company Merger Effective Time
   will automatically be converted into the right to receive an amount in cash
   equal to $78.00 (the "Per Company Share Merger Consideration"), without
   interest;

· Series A Preferred Stock: each share of 7.125% Series A Cumulative Redeemable


   Perpetual Preferred Stock of the Company, par value $0.01 per share (each, a
   "Company Series A Preferred Share") (other than any Excluded Shares) issued and
   outstanding immediately prior to the Company Merger Effective Time shall be
   automatically converted into the right to receive the redemption price per
   share equal to an amount in cash equal to $25.00 plus accrued and unpaid
   dividends, if any, to and including the date of Closing (the "Closing Date"),
   without interest; and prior to Closing, the Company will, following Parent's
   request, provide a notice of special optional redemption to the holders of
   record of Company Series A Preferred Shares in accordance with the Series A
   Articles Supplementary (as defined in the Merger Agreement) and the Merger
   Agreement; and

· Series B Preferred Stock: each share of 6.50% Series B Cumulative Convertible


   Perpetual Preferred Stock, par value $0.01 per share (each, a "Company Series B
   Preferred Share") (other than any Excluded Shares) issued and outstanding
   immediately prior to the Company Merger Effective Time shall be, subject to the
   terms and conditions set forth in the Merger Agreement, automatically converted
   into one Series A Preferred Unit of the Surviving Company. Such Series A
   Preferred Units shall have terms materially the same as the Company Series B
   Preferred Shares, with changes to such terms as are required pursuant to and
   made in compliance with the Series B Articles Supplementary (as defined in the
   Merger Agreement). No later than twenty business days prior to the anticipated
   Closing Date, the Company will provide the notice of fundamental change
   contemplated by the Series B Articles Supplementary (as defined in the Merger
   Agreement) to all holders of Company Series B Preferred Shares.

Class A Partnership Unit. Pursuant to the terms and conditions of the Merger Agreement, at the effective time of the Partnership Merger (the "Partnership Merger Effective Time"), each outstanding Class A Unit of the Partnership (a "Class A Partnership Unit"), other than Class A Partnership Units held by the Company or any of the Company's wholly-owned subsidiaries or Parent, Merger Sub II or any of their respective wholly-owned subsidiaries, that is issued and outstanding immediately prior to the Partnership Merger Effective Time will automatically be converted into, and will be cancelled in exchange for, the right to receive an amount in cash equal to the Per Company Share Merger Consideration, without interest (the "Per Partnership Unit Merger Consideration"), or in lieu of receiving the Per Partnership Unit Merger Consideration, each Class A Partnership Unit may elect to retain such Class A Partnership Unit as a Class A Partnership Unit in the Surviving Partnership.

Company LTIP Units. With respect to each Company Class O LTIP Unit ("Company LTIP Unit") that has vested in accordance with the terms of the relevant award agreement prior to the Partnership Merger Effective Time (each, a "Vested LTIP Unit"), the Company, as the general partner of the Partnership, will exercise . . .

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The disclosure contained in Item 8.01 under the section "Letter Agreement" is incorporated herein by reference.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On June 7, 2021, the Company Board approved the second amendment (the "Bylaws Amendment") to the Company's Second Amended and Restated Bylaws, as amended (the "Bylaws"), which provides that unless the Company consents in writing to the selection of an alternative forum, (i) the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Northern Division, shall be the sole and exclusive forum for (a) any Internal Corporate Claim as defined under the Maryland General Corporation Law (the "MGCL"), (b) any derivative action or proceeding brought in the right or on behalf of the Company, (c) any action asserting a claim of breach of any duty owed by any director, officer, employee or agent of the Company to the Company or its stockholders, (d) any action asserting a claim against the Company or any director, officer, employee or agent of the Company arising pursuant to any provision of the MGCL, the Company's charter or Bylaws or (e) any action asserting a claim against the Company or any director, officer, employee or agent of the Company that is governed by the internal affairs doctrine, and (ii) the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended (the "Securities Act"). The Bylaws Amendment became effective on June 7, 2021.

The foregoing description of the Bylaws Amendment is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Bylaws Amendment, which is filed as Exhibit 3.1 hereto, and is incorporated herein by reference.




Item 8.01 Other Events.



Support Agreement

On June 7, 2021, Chad L. Williams, in his capacities as a stockholder of the Company and a unitholder of the Partnership, and certain of his affiliates (collectively, the "Holders") entered into a Support Agreement with Parent pursuant to which the Holders agreed, among other things, (i) to have counted as present for purposes of establishing a quorum and to vote their respective Company Class A Shares, Company Class B Shares and units of the Partnership in favor of the adoption of the Merger Agreement and the approval of the Company Merger or Partnership Merger, as applicable, (ii) to have counted as present for purposes of establishing a quorum and to vote against any Company Acquisition Proposal (as defined in the Merger Agreement) and any other action that could reasonably be expected to impede, interfere with, delay, postpone or adversely affect the Mergers or other transactions contemplated by the Merger Agreement or result in a breach of any covenant, representation or warranty or other obligation or agreement of the Company or the Partnership under the Merger Agreement or of Holder under the Support Agreement, and (iii) not to transfer their respective Company Class A Shares, Company Class B Shares and units of the Partnership. The Support Agreement shall automatically terminate upon the earliest of (i) the Company Merger Effective Time, (ii) the termination of the Merger Agreement in accordance with its terms, and (iii) any amendment to the Merger Agreement effected without the consent of the Holders that is an Adverse Amendment (as defined in the Support Agreement).

The foregoing description of the Support Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Support Agreement, which is filed as Exhibit 99.1 hereto, and is incorporated herein by reference.











Letter Agreement

On June 7, 2021, Chad L. Williams, the Chairman, President and Chief Executive Officer of the Company, and certain of his affiliates (the "CW Parties") entered into a letter agreement (the "Letter Agreement") with Parent, Merger Sub I and Merger Sub II in connection with the Merger Agreement and with respect to certain provisions of (a) the Tax Protection Agreement, dated as of October 15, 2013 (as amended, restated, supplemented or otherwise modified from time to time, the "Tax Protection Agreement"), by and among the Company, the Partnership and the signatories party thereto, and (b) the Employment Agreement entered into on April 11, 2017 and effective as of April 3, 2017 (as amended June 23, 2017) by and among the Company, the Partnership, Quality Technology Services, LLC, a Delaware limited liability company and an affiliate of the Partnership (the "Employer"), and the Mr. Williams (the "Employment Agreement"), pursuant to which the Employer employs Mr. Williams and Mr. Williams serves as Chief Executive Officer of the Company, the Partnership and the Employer.

Pursuant to the Letter Agreement and subject to the terms and conditions of the Merger Agreement, the CW Parties agreed, among other things, to irrevocably and unconditionally elect to (a) retain in the Partnership Merger, in lieu of the Per Partnership Unit Merger Consideration (as defined in the Merger Agreement) to which the CW Parties would otherwise be entitled, a total of 5,489,898 Class A Partnership Units (the "Retained Class A Partnership Units") and (b) receive in the Partnership Merger the Per Partnership Unit Merger Consideration in respect of a total of 609,989 Class A Partnership Units (the "Cash-out Class A Partnership Units" and together with the Retained Class A Partnership Units, the "Owned Units"). In addition, the CW Parties agreed not to Transfer (as defined in the Letter Agreement) any of the Owned Units through the Partnership Merger Effective Time.

The Letter Agreement provides that the Partnership will make a payment, solely with respect to Cash-out Class A Partnership Units, to each CW Party who is a Tax Protected Party (as defined in the Letter Agreement) pursuant to the terms of the Tax Protection Agreement and with such amounts calculated in accordance with the terms of the Letter Agreement. The Letter Agreement also provides that (a) all of the restrictions in the Tax Protection Agreement will continue to apply with respect to any Tax Protected Party that holds Retained Class A Partnership Units after Closing, (b) the Surviving Company and the Partnership will be bound by the Tax Protection Agreement and (c) the Tax Protection Period (as defined in the Tax Protection Agreement) will be extended such that it will end at 12:01 a.m. on October 1, 2033.

In addition, the Letter Agreement provides that in the event Mr. Williams' employment is terminated without Cause (as defined in the Employment Agreement) or by Mr. Williams for Good Reason (as defined in the Employment Agreement, as amended by the Letter Agreement) upon or following the closing of the Mergers, the CW Parties will be entitled to exercise an exchange right to exchange the Retained Class A Partnership Units for Class I units of BREIT OP subject to the terms and conditions set forth in the Partnership's partnership agreement (other than with respect to limitations on the number of Retained Class A Partnership Units that may be subject to the exchange right during certain 12-month and 24-month periods), as expected to be amended in connection with Closing. In addition, the Letter Agreement provides that (a) effective as of Closing, the definition of "Good Reason" in the Employment Agreement will be modified so it no longer includes an adverse change in Mr. Williams' title as Chairman of the Board of the Company (including failure to be elected Chairman of the board at any annual meeting of the Company's stockholders), or failure to nominate Mr. Williams for election as Chairman of the Board at any annual meeting of the Company's stockholders, and (b) a termination of Mr. Williams' employment as a result of the Employer's delivery, within two years following the Closing, of notice that the Employment Agreement will not be renewed, will constitute a triggering event under the Employment Agreement.

The Letter Agreement will terminate upon the termination of the Merger Agreement.

The foregoing description of the Letter Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Letter Agreement, which is filed as Exhibit 99.2 hereto, and is incorporated herein by reference.

Additional Information and Where to Find It

This Current Report on Form 8-K relates to the proposed merger transaction involving the Company. In connection with the proposed transaction, the Company intends to file with the Securities and Exchange Commission (the "SEC") a proxy statement on Schedule 14A. Promptly after filing its definitive proxy statement with the SEC, the Company intends to mail the definitive proxy statement and a proxy card to each stockholder entitled to vote at the special meeting relating to the proposed transaction. INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE TRANSACTION THAT THE COMPANY FILES WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The definitive proxy statement, the preliminary proxy statement and any other documents filed by the Company with the SEC may be obtained free of charge at the SEC's website at www.sec.gov or at the Company's website at www.qtsdatacenters.com or by writing to QTS Realty Trust, Inc., Attn: Investor Relations, 12851 Foster Street, Overland Park, KS 66213.

The Company and its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from the Company's stockholders with respect to the proposed transaction. Information about the Company's directors and executive officers and their ownership of the Company securities is set forth in the Company's proxy statement for its 2021 annual meeting of stockholders on Schedule 14A filed with the SEC on March 18, 2021. To the extent holdings of the Company's securities by directors and executive officers have changed since the amounts disclosed in the Company's proxy statement, such changes have been or will be reflected on Statements of Changes in Beneficial Ownership on Form 4 filed with the SEC. You can obtain free copies of these documents at the SEC's website at www.sec.gov or by accessing the Company's website at www.qtsdatacenters.com. Additional information regarding the identity of participants in the solicitation of proxies, and their direct or indirect interests in the proposed transaction, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with the SEC in connection with the proposed transaction.

Cautionary Statement Regarding Forward Looking Statements

Some of the statements contained in this Current Report on Form 8-K constitute forward-looking statements within the meaning of the federal securities laws. 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," or "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 the Company's current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause actual results and future events to differ significantly from those expressed in any forward-looking statement. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: the ability of the Company to obtain stockholder approval required . . .

Item 9.01 Financial Statements and Exhibits.






(d)  Exhibits



Exhibit
Number      Exhibit Description
  2.1        Agreement and Plan of Merger, dated as of June 7, 2021, by and among
           QTS Realty Trust, Inc., Volt Upper Holdings LLC, Volt Lower Holdings
           LLC, Volt Acquisition LP, and QualityTech, LP.*
  3.1        Second Amendment to Second Amended and Restated Bylaws of QTS Realty
           Trust, Inc.
  99.1       Support Agreement, dated as of June 7, 2021, by and between Volt Upper
           Holdings LLC, Chad L. Williams and his affiliates signatory thereto.*
  99.2       Letter Agreement, dated as of June 7, 2021, by and among Chad L.
           Williams, his affiliates signatory thereto, Volt Upper Holdings LLC,
           Volt Lower Holdings LLC, and Volt Acquisition LP. *
104        Cover Page Interactive Data File (embedded within the Inline XBRL
           document).

* Pursuant to Item 601(a)(5) of Regulation S-K, certain schedules and exhibits have been omitted. The registrant hereby agrees to furnish a copy of any omitted schedule or exhibit to the SEC upon request by the SEC.

© Edgar Online, source Glimpses