The Merger Agreement requires the Company to convene a special meeting of stockholders for
purposes of obtaining approval of a majority of the outstanding shares of Company Common Stock and requires Omega to prepare and file with the Securities and Exchange Commission (the SEC) a Form
S-4
registering the Omega Common Stock issuable as part of the Merger Consideration and requires the Company to prepare and file a proxy statement with respect to such meeting as promptly as practical after
the date of the Merger Agreement, which proxy statement will contain, subject to certain exceptions, the Company Boards recommendation that the Companys stockholders vote in favor of the Merger.
The Merger is subject to customary closing conditions, including, among other things, (1) the affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock entitled to vote on the Merger, (2) the absence of any law, injunction, judgment, order or ruling prohibiting the Merger, (3) the accuracy of the representations and warranties
made by the parties (subject to customary materiality and other qualifications), (4) the performance by the parties in all material respects of their covenants, obligations and agreements under the Merger Agreement, (5) the receipt of certain
third party consents, (6) the delivery of tax opinions related to each of the Companys and Omegas status as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the Code), (7) the delivery
of tax opinions that the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Code and (8) the absence of a material adverse effect on the Company Parties or the Omega Parties prior to the closing. The
consummation of the Merger is not subject to any financing condition and does not require the vote of the stockholders or holders of debt securities of Omega.
The Merger Agreement contains certain termination rights for the Company and Omega, including, without limitation, the ability of the Company
to terminate the Merger Agreement if the Company Board approves and authorizes the Company to enter into a definitive agreement to implement a superior proposal, so long as the Company Parties are not in breach of the
non-solicitation
provisions of the Merger Agreement. In addition, the Merger Agreement may be terminated under certain circumstances, including: (A) by mutual written consent of the Company and Omega;
(B) by either the Company or Omega (1) if the Merger has not been consummated on or before June 30, 2019 (the Outside Date), (2) if any of the representations or warranties made by the other party were inaccurate when
made, or have become inaccurate as of a date subsequent to the date of the Merger Agreement, in each case which would result in the applicable closing condition of such party being incapable of being satisfied by the Outside Date (subject to certain
exceptions), (3) if there has been a breach by the other party of any covenant or agreement, which would result in the applicable closing condition of such party being incapable of being satisfied by the Outside Date (subject to certain
exceptions), (4) if a governmental authority issued a final,
non-appealable
order prohibiting the consummation of the Merger or (5) upon a failure of the Company to obtain approval of the requisite vote
of its stockholders; or (C) by Omega, (1) if the Company Board changes its recommendation that the Companys stockholders approve the Merger, (2) if the Company fails to include in its proxy statement the Company
Boards recommendation that the Companys stockholders approve the Merger or (3) if a tender or exchange offer relating to the Company Common Stock is commenced and the Company does not announce an adverse recommendation with respect
to such tender or exchange offer within ten business days.
If the Company terminates the Merger Agreement in connection with its entry
into an alternative transaction with respect to a superior proposal and under other specified circumstances, the Company will be required to pay to Omega: (i) a termination fee of $6,533,861 plus reimbursement of up to $1,500,000 in expenses,
with respect to any termination on or before the date that is 30 days following the date of the Merger Agreement (subject to extension if the Company Parties and the Omega Parties are engaged in a match-right process relating to a superior proposal,
as provided in the Merger Agreement) (the Initial Termination Period); or (ii) a termination fee of $12,250,989 with respect to any termination following the Initial Termination Period.
The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference
to the Merger Agreement, which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.
Item 1.02.
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Termination of a Material Definitive Agreement.
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As previously disclosed, the Company through certain wholly owned subsidiaries entered into a
triple-net
master lease agreement (the New Texas Ten Lease) with certain affiliates of Creative Solutions in Healthcare, Inc. for the Companys ten skilled nursing facilities in Texas (the
Texas Ten Portfolio). In connection with the