UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT
TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 17, 2021
Retail Properties of America, Inc.
(Exact name of registrant as specified in its charter)
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Maryland
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001-35481
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42-1579325
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(State or Other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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2021 Spring Road, Suite 200, Oak Brook, Illinois 60523
(Address of Principal Executive Offices) (Zip Code)
(630) 634-4200
(Registrants telephone number, including area code)
Not Applicable
(Former
name or former address, if changed since last report)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange
on which registered
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Class A common stock, $0.001 par value
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RPAI
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New York Stock Exchange
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of
1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On July 18, 2021, Retail Properties of America, Inc., a Maryland corporation that has elected to be treated as a real estate investment trust for federal
income tax purposes (the Company), entered into a definitive Agreement and Plan of Merger (the Merger Agreement) with Kite Realty Group Trust, a Maryland real estate investment trust (Parent), and KRG Oak, LLC, a
Maryland limited liability company and wholly-owned subsidiary of Parent (Merger Sub). Upon the terms and subject to the conditions set forth in the Merger Agreement, the Company will merge with and into Merger Sub, with Merger Sub
surviving the merger (the Merger). Immediately following closing of the Merger, Merger Sub will merge with and into Kite Realty Group, L.P., the operating partnership of Parent, so that all of the assets of Parent are owned at or below
the operating partnership level.
Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the
Merger (the Effective Time), each share of Class A common stock, par value $0.001 per share, of the Company (Company Common Stock) issued and outstanding immediately prior to the Effective Time will be converted into the
right to receive 0.623 (the Exchange Ratio) common shares of Parent, par value $0.01 per share (Parent Common Shares, and such consideration, the Merger Consideration), plus the right, if any, to receive cash in
lieu of fractional Parent Common Shares into which such shares of Company Common Stock would have been converted pursuant to the terms and subject to the conditions set forth in the Merger Agreement. The Merger is intended to qualify as a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.
The Companys board of
directors (the Company Board) unanimously (a) declared that the Merger Agreement, the Merger and the transactions contemplated by the Merger Agreement are fair to, advisable and in the best interests of Company and its stockholders,
(b) approved the Merger Agreement, the Merger and the transactions contemplated by the Merger Agreement, (c) directed that the Merger and the other transactions contemplated by the Merger Agreement be submitted for consideration at a
meeting of Company stockholders and (d) recommended the approval of the Merger and the other transactions contemplated by the Merger Agreement by Company stockholders.
At the closing of the Merger, the board trustees of Parent will consist of 13 members, nine of whom will be current trustees of Parent and four of whom have
been designated by the Company, including Steven P. Grimes, the current Chief Executive Officer of the Company. John A. Kite will remain the Chairman and Chief Executive Officer of Parent following the Merger.
At the Effective Time, by virtue of the Merger and without any further action on the part of the Company, Parent or Merger Sub or the holders thereof,
(i) each Company option (Company Option) that is outstanding and unexercised as of immediately prior to the Effective Time (whether or not then vested) shall be cancelled, terminated, and extinguished as of the Effective Time, and
upon cancellation thereof the holder of each such Company Option shall be entitled to receive, in full satisfaction of the rights of such holder with respect thereto, an amount in cash equal to the excess of (1) the product of the number of
shares of Company Common Stock subject to such Company Option as of immediately prior to the Effective Time, multiplied by the Exchange Ratio, multiplied by the Parent Common Share price, over (2) the product of the number of shares of Company
Common Stock subject to such Company Option as of immediately prior to the Effective Time, multiplied by the exercise price per share of Company Common Stock subject to such Company Option less any applicable withholding or other taxes or other
amounts required by law to be withheld) (it being understood that, if the value determined in accordance with the Merger Agreement does not exceed $0, then no consideration shall be payable to the holder of such Company Option pursuant to the terms
of the Merger Agreement), (ii) each Company Restricted Share Award other than a Scheduled Company Restricted Share Award that is issued and outstanding as of immediately prior to the Effective Time shall be assumed by Parent and shall be converted
into a number of whole Parent Common Shares (rounded up to the nearest whole share) equal to the product obtained by multiplying (A) the number of shares of Company Common Stock subject to such Company Restricted Share Award as of immediately
prior to the Effective Time, by (B) the Exchange Ratio, (iii) each Company Restricted Share Award that is scheduled in accordance with the Merger Agreement of the Company Disclosure Letter (a Scheduled Company Restricted Share
Award) that is issued and outstanding as of immediately prior to the Effective Time shall automatically become fully vested and all
restrictions with respect thereto shall lapse as of immediately prior to the Effective Time, and as of the Effective Time, each such share of Company Common Stock will be cancelled and retired
and automatically converted into the right to receive (upon the proper surrender of the Certificate or, in the case of a book-entry share, the proper surrender of such book-entry share) the sum of (A) the Merger Consideration, plus (B) the
fractional consideration, if any (less any applicable withholding or other taxes or other amounts required by law to be withheld, including but not limited to withholding the issuance or delivery of Parent Common Shares otherwise payable as Merger
Consideration to satisfy such obligations), and (iv) (A) each Company RSU subject to any performance condition that has not been satisfied and that is outstanding as of immediately prior to the Effective Time shall be cancelled, terminated, and
extinguished as of the Effective Time, and (B) upon cancellation thereof, the holder of each such Company RSU shall be entitled to receive, in full satisfaction of the rights of such holder with respect thereto, for each earned Company RSU
determined assuming 153% achievement of the performance metrics applicable to such Company RSUs as of the date of the Merger Agreement through the day prior to the consummation of the transactions contemplated by the Merger Agreement (an
Earned Company RSU), the sum of (1) the Merger Consideration, plus (2) the fractional consideration, if any, plus (3) a cash amount equal to the value, as of immediately prior to the Effective Time, of the Company Dividend
Equivalent with respect to such Earned Company RSU (such cash amount pursuant to this subsection (3), the Company Dividend Equivalent Consideration) (less any applicable withholding or other taxes or other amounts required by law to be
withheld, including but not limited to withholding the issuance or delivery of Parent Common Shares otherwise payable as Merger Consideration to satisfy such obligations) (it being understood that no consideration shall be payable with respect to
any Company RSUs that do not become Earned Company RSUs).
The consummation of the Merger is subject to certain customary closing conditions, including
(a) each of the Company stockholder approval and the Parent shareholder approval shall be obtained, (b) the Form S-4 shall become effective in accordance with the provisions of the Securities Act and
a no stop order suspending the effectiveness of the Form S-4 shall not be issued by the Securities and Exchange Commission (SEC) and shall not remain in effect and no proceeding to that effect
shall be commenced or threatened by the SEC and not withdrawn, (c) no temporary restraining order, preliminary or permanent injunction or other judgement, order or decree issued by any government authority of competent jurisdiction prohibiting
consummation of the Merger or any other transaction contemplated hereby shall be in effect, and no law shall be enacted, entered, promulgated or enforced by any governmental entity after the date of the Merger Agreement that, any case, makes illegal
the consummation of the Merger, (d) the Parent Common Shares to be issued in the Merger shall have been approved for listing on the NYSE, subject to official notice of issuance, (e) the absence of a material adverse effect on either the
Company or Parent, (f) the accuracy of each partys representations and warranties and performance in all material respects of each partys covenants and agreements in the Merger Agreement, (g) the receipt of tax opinions
relating to the status as a real estate investment trust (REIT) of each company and the tax-free nature of the transaction, and (h) other customary conditions specified in the Merger
Agreement.
The Merger Agreement contains customary representations, warranties and covenants of the Company, Parent and Merger Sub, including, among
others, covenants by each party to conduct its business in the ordinary course of business during the period between execution of the Merger Agreement and consummation of the Merger and covenants prohibiting each party from engaging in certain kinds
of activities during such period without the consent of the other party, and covenants obligating Company to cooperate with Parent in pursuing lender and other third-party consents and related matters.
The Merger Agreement provides that, during the period from the date of the Merger Agreement until the Effective Time, subject to customary exceptions, the
Company and Parent will be subject to certain restrictions on (a) soliciting proposals relating to certain alternative transactions, (b) entering into discussions or negotiating or providing
non-public information in connection with any proposal for an alternative transaction from a third party, (c) approving or entering into any agreements providing for any such alternative transaction or
(d) agreeing to or proposing publicly to do any of the foregoing. Notwithstanding these no-shop restrictions, prior to obtaining the approval of Company stockholder and the approval of Parent
shareholders, under specified circumstances the Company Board and the Parent Board, respectively, may change their recommendations of the transaction, and the Company and Parent may each also terminate the Merger Agreement to accept a superior
proposal upon payment of the termination fees described below.
The Merger Agreement may be terminated under certain circumstances, including by either Parent or the
Company if (i) the Merger has not been consummated on or before March 31, 2022, (ii) a governmental authority of competent jurisdiction shall have issued an order or taken any other action permanently restraining or otherwise prohibiting
the Merger, and such order or other action shall have become final and non-appealable, (iii) upon a failure of either party to obtain approval of its shareholders or stockholders, (iv) upon a
material, uncured breach by the other party that would cause the closing conditions not to be satisfied, subject to a 45-day cure period, (v) if the other partys board makes an adverse
recommendation change with respect to the transaction, or (vi) prior to obtaining approval of its shareholders or stockholders, and upon payment of the applicable termination fee, in order to enter into a definitive agreement with a third party
with respect to a superior acquisition proposal.
If the Merger Agreement is terminated because (i) a partys board changes its recommendation
in favor of the transactions contemplated by the Merger Agreement, (ii) a party terminates the Merger Agreement to enter into a definitive agreement with a third party with respect to a superior acquisition proposal, or (iii) a party
consummates or enters into an agreement for an alternative transaction within 12 months following termination under certain circumstances, such party must pay a termination fee to the other party. The termination fee payable by the Company to Parent
in such circumstances is $107 million. The termination fee payable by Parent to the Company in such circumstances is $70 million. The Merger Agreement also provides that each party must pay the other party an expense reimbursement of up to
$15 million if the Merger Agreement is terminated for breach or because such partys shareholders or stockholders vote against the transactions contemplated by the Merger Agreement. The actual amount of each termination fee and expense
reimbursement payment is subject to an escrow and adjustment mechanism for REIT compliance purposes to provide for a lesser amount if necessary to be paid to the receiving party without causing such party to fail to meet its REIT requirements for
such year.
The Merger Agreement provides Parent with the right, subject to certain terms and conditions, to elect to effect a business combination
involving Parent and the Company and certain of their subsidiaries in accordance with an alternative structure, in lieu of the current Merger structure, provided that such alternative business combination qualifies as a tax-free reorganization and does not adjust or change the relative and/or total consideration payable under the Merger Agreement.
The foregoing summary of the Merger Agreement does not purport to be a complete description and is qualified in its entirety by the full text of the Merger
Agreement, which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
The Merger Agreement has been included to provide investors
with information regarding its terms and conditions. It is not intended to provide any other factual information about the Company or Parent. In particular, the assertions embodied in the representations and warranties in the Merger Agreement were
made only for purposes of the Merger Agreement and as of specific dates, are solely for the benefit of the parties to the Merger Agreement, are modified or qualified by information in confidential disclosure letters provided by each party to the
other in connection with the signing of the Merger Agreement, may be subject to a contractual standard that is different from what might be viewed as material to stockholders, or may have been used for the purpose of allocating risk between the
parties. Accordingly, the representations and warranties in the Merger Agreement are not necessarily characterizations of the actual state of facts about the Company and Parent at the time they were made or otherwise and should only be read in
conjunction with the other information that the Company or Parent makes publicly available in reports, statements and other documents filed with the SEC. Stockholders are not third-party beneficiaries to the representations and warranties contained
in the Merger Agreement and should not rely on the representations and warranties or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or
affiliates.
Item 5.02 Departure of Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On July 18, 2021, Steven P. Grimes, Chief Executive Officer, Shane C. Garrison, President and Chief Operating Officer, and Julie M.
Swinehart, Executive Vice President, Chief Financial Officer and Treasurer, each entered into a letter agreement with the Company providing that, subject to the consummation of the Merger, (i) such executive will be entitled, subject to such
executives continued employment through the consummation of the Merger, to an annual cash bonus for 2021 equal to 200% of such executives target amount, which is consistent with the
percentage each such executive was on track to receive with respect to the formulaic company goals prior to the execution of the Merger Agreement to be paid on or within 30 days following the
consummation of the Merger, (ii) such executive will earn 153% of the target amount of each currently outstanding award of performance-based restricted stock units for which the performance period had not ended (i.e., awards granted in 2019,
2020 and 2021), which was agreed upon based, in part, on an approximation of the amount of these awards that would have been earned based on the value of the Merger Consideration if the performance period had ended upon the execution of the Merger
Agreement, (iii) in the event such executives employment is terminated without cause or for good reason during 2021 in connection with or following the Merger, such executives cash severance under the existing retention agreement
with the Company will be calculated using an amount equal to the 2021 annual cash bonus to be paid to such executive as described above in clause (i) (instead of the greater of the target amount or the amount paid for the prior year) and such
executive will not be entitled to payment of a pro rata bonus for 2021 as 2021 bonuses are to be paid as described above in clause (i), (iv) dividend equivalents on any of such executives earned performance-based restricted stock units will be
paid in cash instead of shares of Company Common Stock, and (v) the Merger will constitute a change in control under such executives existing retention agreement with the Company and performance-based restricted stock unit awards.
Item 5.03 Amendments to Articles of Incorporation or By-laws; Change in Fiscal Year.
On July 17, 2021, the Company Board approved an amendment to the Companys Sixth Amended and Restated Bylaws, as amended (the Bylaws) to
explicitly provide that the Circuit Court for Baltimore City, Maryland, Business and Technology Case Management Program, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, shall be the sole
and exclusive forum for state law claims for (a) any derivative action or proceeding brought on behalf of the Company, other than actions arising under federal securities laws, (b) any Internal Corporate Claim, as such term is defined in
the Maryland General Corporate Law (MGCL), or any successor provision thereof, including, without limitation, (i) any action asserting a claim of breach of any duty owed by any current or former director or officer or other employee
of the Company to the Company or to the stockholders of the Company, (ii) any other action asserting a claim against the Company or any current or former director or officer or other employee of the Company arising pursuant to any provision of
the MGCL, the Companys charter or bylaws, or (iii) any action asserting a claim against the Company or any current or former director or officer or other employee of the Company that is governed by the internal affairs doctrine.
A copy of the amendment is attached as Exhibit 3.1 hereto and is hereby incorporated into this Current Report on Form
8-K by reference.
Item 8.01 Other Events.
On July 19, 2021, the Company and Parent issued a press release announcing the entry into the Merger Agreement and the Company posted an investor presentation
to its website related to the transactions contemplated by the Merger Agreement. The presentation provides information on both the Company and Parent and an overview of the strategic rationale for the transaction. Copies of the press release and
presentation are attached as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K and each is incorporated by reference herein.
FORWARD LOOKING STATEMENTS
This Current Report on Form
8-K contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Exchange Act. The Company intends such
forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with the safe harbor
provisions. Words such as expects, anticipates, intends, plans, believes, seeks, estimates, will, should, may,
projects, could, estimates or variations of such words and other similar expressions are intended to identify such forward-looking statements, which generally are not historical in nature, but not all
forward-looking statements include such identifying words. Forward-looking statements include, but are not limited to, statements related to the anticipated merger with Parent and the anticipated timing and benefits thereof; and other statements
that are not historical facts. These forward-looking statements are based on the Companys current plans, objectives, estimates, expectations and intentions and inherently involve significant risks and uncertainties. Actual results and the
timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks and uncertainties associated with: the possibility that the
proposed transaction is not
completed on the proposed terms or on the anticipated timeline, or at all, including risks and uncertainties related to securing the necessary shareholder approvals and satisfaction of other
closing conditions to consummate the acquisition; the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the proposed transaction; risks related to
diverting the attention of the Company and Parent management from ongoing business operations; failure to realize the expected benefits of the acquisition; unexpected costs or liabilities relating to the proposed transaction; the risk of shareholder
litigation in connection with the proposed transaction, including resulting expense or delay; the risk that the Companys business will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than
expected; risks related to future opportunities and plans for the combined company, including the uncertainty of expected future financial performance and results of the combined company following completion of the acquisition; effects relating to
the announcement of the acquisition or any further announcements or the consummation of the acquisition on the market price of Parents common stock or the Companys common stock; the possibility that, if Parent does not achieve the
perceived benefits of the acquisition as rapidly or to the extent anticipated by financial analysts or investors, the market price of Parents common stock could decline; general adverse economic and local real estate conditions; the inability
of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business; increases in interest rates; foreign currency exchange rates; increases in operating costs and real estate taxes;
changes in the dividend policy for Parents common stock or preferred stock or Parents ability to pay dividends; impairment charges; unanticipated changes in the companys intention or ability to prepay certain debt prior to maturity
and/or hold certain securities until maturity; adverse effects of pandemics or other health crises, such as coronavirus disease 2019 (COVID-19); and other risks and uncertainties affecting Parent and the Company, including those described from time
to time under the caption Risk Factors and elsewhere in Parents and the Companys Securities and Exchange Commission (SEC) filings and reports, including Parents Annual Report on Form 10-K for the year
ended December 31, 2020, the Companys Annual Report on Form 10-K for the year ended December 31, 2020, and future filings and reports by either company. Moreover, other risks and uncertainties of which Parent or the Company are not
currently aware may also affect the Companys forward-looking statements and may cause actual results and the timing of events to differ materially from those anticipated. The forward-looking statements made in this communication are made only
as of the date hereof or as of the dates indicated in the forward-looking statements, even if they are subsequently made available by the Company on its website or otherwise. The Company undertakes no obligation to update or supplement any
forward-looking statements to reflect actual results, new information, future events, changes in its expectations or other circumstances that exist after the date as of which the forward-looking statements were made.
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the proposed transaction, Parent will file with the SEC a registration statement on Form S-4, which will include a document that serves as
a joint proxy statement/prospectus of Parent and the Company. A joint proxy statement/prospectus will be sent to all Company stockholders. Each party also will file other documents regarding the proposed transaction with the SEC. BEFORE MAKING ANY
VOTING DECISION, INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4 AND THE RELATED JOINT PROXY STATEMENT/PROSPECTUS, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS
TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PARENT, THE COMPANY AND THE PROPOSED TRANSACTION.
Investors and security holders may obtain copies of these documents free of charge through the website maintained by the SEC at www.sec.gov. Documents filed
with the SEC by Parent also will be available free of charge by accessing Parents investor relations website at http://ir.kiterealty.com/ or, alternatively, by directing a request to Investor Relations, Kite Realty Group Trust, 30 S. Meridian
Street, Suite 1100, Indianapolis, IN 46204 and documents filed with the SEC by the Company also will be available free of charge by accessing the Companys website at www.rpai.com under the heading Invest or, alternatively, by directing a
request to the Company at ir@rpai.com or 2021 Spring Road, Suite 200, Oak Brook, IL 60523, telephone: (855) 247-RPAI (7724).
PARTICIPANTS IN THE SOLICITATION
The Company and Parent and their respective trustees, directors and executive officers may be deemed to be participants in the solicitation of proxies from
Parents shareholders and the Companys stockholders in connection with the proposed transaction. Information about Parents trustees and executive officers and their ownership of Parents common shares and units of limited
partnership interest of Kite Realty Group, L.P. is set forth in Parents proxy statement for its Annual Meeting of Shareholders on Schedule 14A filed with the SEC on March 31, 2021. Information about the Companys directors and executive
officers and their ownership of the Companys common stock is set forth in the Companys proxy statement for its Annual Meeting of Stockholders on Schedule 14A filed with the SEC on March 31, 2021. To the extent that holdings of
Parents or the Companys securities have changed since the amounts reported in Parents or the Companys proxy statement, such changes have been or will be reflected on Statements of Changes in Beneficial Ownership on Form 4
filed with the SEC. Additional information regarding the interests of those persons and other persons who may be deemed participants in the proposed transaction may be obtained by reading the joint proxy statement/prospectus regarding the proposed
transaction when it becomes available. You may obtain free copies of these documents as described in the preceding paragraph.
NO OFFER OR SOLICITATION
This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy any securities, 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 offering of securities shall be made except by means of
a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits.
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Exhibit
Number.
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Description
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2.1
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Agreement and Plan of Merger, dated as of July 18, 2021, by and among Kite Realty Group Trust, KRG Oak, LLC and Retail Properties of America, Inc.(1)
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3.1
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Amendment No. 3 to the Sixth Amended and Restated Bylaws of Retail Properties of America, Inc., dated July 17, 2021
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99.1
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Press Release issued by Kite Realty Group Trust and Retail Properties of America, Inc. on July 19, 2021
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99.2
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Investor Presentation Material
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101.SCH
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Inline XRBL Taxonomy Extension Schema Document
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101.CAL
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Inline XBRL Taxonomy Extension Calculation Linkbase Document
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101.LAB
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Inline XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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Inline XBRL Taxonomy Extension Presentation Linkbase Document
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101.DEF
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Inline XBRL Taxonomy Extension Definition Linkbase Document
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104
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Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*).).
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(1)
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(Schedules and exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K). The Company agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange
Commission upon request.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
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RETAIL PROPERTIES OF AMERICA, INC.
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Date: July 19, 2021
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By:
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/s/ Steven P. Grimes
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Steven P. Grimes
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Chief Executive Officer
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Exhibit 2.1
EXECUTION VERSION
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
KITE
REALTY GROUP TRUST,
KRG OAK, LLC
AND
RETAIL PROPERTIES
OF AMERICA, INC.
DATED AS OF JULY 18, 2021
TABLE OF CONTENTS
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Page
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ARTICLE 1 DEFINITIONS
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2
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Section 1.1
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Definitions
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2
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Section 1.2
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Interpretation and Rules of Construction
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16
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ARTICLE 2 THE MERGER
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18
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Section 2.1
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The Merger
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Section 2.2
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Closing
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Section 2.3
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Effective Times
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Section 2.4
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Governing Documents
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Section 2.5
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Officers of the Surviving Entity
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Section 2.6
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Parent Board Representation
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Section 2.7
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Tax Consequences
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Section 2.8
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Alternative Structure
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ARTICLE 3
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19
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EFFECTS OF THE MERGER
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Section 3.1
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Effects on Shares
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Section 3.2
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Exchange Fund; Exchange Agent
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22
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Section 3.3
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Withholding Rights
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25
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Section 3.4
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Lost Certificates
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25
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Section 3.5
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Dissenters Rights
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25
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Section 3.6
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No Fractional Shares
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26
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Section 3.7
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General Effects of the Merger
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26
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|
|
|
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF COMPANY
|
|
|
26
|
|
|
|
|
Section 4.1
|
|
Organization and Qualification; Subsidiaries
|
|
|
27
|
|
Section 4.2
|
|
Organizational Documents
|
|
|
28
|
|
Section 4.3
|
|
Capital Structure
|
|
|
28
|
|
Section 4.4
|
|
Authority
|
|
|
30
|
|
Section 4.5
|
|
No Conflict; Required Filings and Consents
|
|
|
30
|
|
Section 4.6
|
|
Permits; Compliance with Law
|
|
|
31
|
|
Section 4.7
|
|
SEC Documents; Financial Statements
|
|
|
32
|
|
Section 4.8
|
|
Absence of Certain Changes or Events
|
|
|
34
|
|
Section 4.9
|
|
No Undisclosed Material Liabilities
|
|
|
34
|
|
Section 4.10
|
|
No Default
|
|
|
34
|
|
Section 4.11
|
|
Litigation
|
|
|
34
|
|
Section 4.12
|
|
Taxes
|
|
|
34
|
|
Section 4.13
|
|
Benefit Plans; Employees
|
|
|
38
|
|
Section 4.14
|
|
Information Supplied
|
|
|
41
|
|
|
|
|
|
|
|
|
Section 4.15
|
|
Intellectual Property
|
|
|
41
|
|
Section 4.16
|
|
Environmental Matters
|
|
|
42
|
|
Section 4.17
|
|
Properties
|
|
|
43
|
|
Section 4.18
|
|
Material Contracts
|
|
|
47
|
|
Section 4.19
|
|
Insurance
|
|
|
49
|
|
Section 4.20
|
|
Opinion of Financial Advisor
|
|
|
50
|
|
Section 4.21
|
|
Approval Required
|
|
|
50
|
|
Section 4.22
|
|
Brokers
|
|
|
50
|
|
Section 4.23
|
|
Investment Company Act
|
|
|
50
|
|
Section 4.24
|
|
Takeover Statutes
|
|
|
50
|
|
Section 4.25
|
|
Related Party Transactions
|
|
|
51
|
|
Section 4.26
|
|
No Other Representations and Warranties
|
|
|
51
|
|
|
|
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PARENT
|
|
|
51
|
|
|
|
|
Section 5.1
|
|
Organization and Qualification; Subsidiaries
|
|
|
52
|
|
Section 5.2
|
|
Organizational Documents
|
|
|
53
|
|
Section 5.3
|
|
Capital Structure
|
|
|
53
|
|
Section 5.4
|
|
Authority
|
|
|
54
|
|
Section 5.5
|
|
No Conflict; Required Filings and Consents
|
|
|
55
|
|
Section 5.6
|
|
Permits; Compliance with Law
|
|
|
56
|
|
Section 5.7
|
|
SEC Documents; Financial Statements
|
|
|
57
|
|
Section 5.8
|
|
Absence of Certain Changes or Events
|
|
|
58
|
|
Section 5.9
|
|
No Undisclosed Material Liabilities
|
|
|
59
|
|
Section 5.10
|
|
No Default
|
|
|
59
|
|
Section 5.11
|
|
Litigation
|
|
|
59
|
|
Section 5.12
|
|
Taxes
|
|
|
59
|
|
Section 5.13
|
|
Benefit Plans; Employees
|
|
|
62
|
|
Section 5.14
|
|
Information Supplied
|
|
|
65
|
|
Section 5.15
|
|
Intellectual Property
|
|
|
65
|
|
Section 5.16
|
|
Environmental Matters
|
|
|
66
|
|
Section 5.17
|
|
Properties
|
|
|
67
|
|
Section 5.18
|
|
Material Contracts
|
|
|
71
|
|
Section 5.19
|
|
Insurance
|
|
|
73
|
|
Section 5.20
|
|
Opinion of Financial Advisor
|
|
|
73
|
|
Section 5.21
|
|
Approval Required.
|
|
|
73
|
|
Section 5.22
|
|
Brokers
|
|
|
74
|
|
Section 5.23
|
|
Investment Company Act
|
|
|
74
|
|
Section 5.24
|
|
Takeover Statutes
|
|
|
74
|
|
Section 5.25
|
|
Related Party Transactions
|
|
|
74
|
|
Section 5.26
|
|
Sufficient Funds
|
|
|
74
|
|
Section 5.27
|
|
No Other Representations and Warranties
|
|
|
74
|
|
Section 5.28
|
|
Merger Sub
|
|
|
75
|
|
ii
|
|
|
|
|
|
|
ARTICLE 6 COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE MERGER
|
|
|
75
|
|
|
|
|
Section 6.1
|
|
Conduct of Business by Company
|
|
|
75
|
|
Section 6.2
|
|
Conduct of Business by Parent
|
|
|
81
|
|
Section 6.3
|
|
No Control of Other Partys Business
|
|
|
87
|
|
|
|
ARTICLE 7 ADDITIONAL COVENANTS
|
|
|
87
|
|
|
|
|
Section 7.1
|
|
Preparation of the Form S-4, the Joint Proxy Statement; Stockholders Meetings
|
|
|
87
|
|
Section 7.2
|
|
Access to Information; Confidentiality
|
|
|
90
|
|
Section 7.3
|
|
No Solicitation; Company Acquisition Proposals
|
|
|
91
|
|
Section 7.4
|
|
No Solicitation; Parent Acquisition Proposals
|
|
|
96
|
|
Section 7.5
|
|
Public Announcements
|
|
|
101
|
|
Section 7.6
|
|
Indemnification; Directors and Officers Insurance
|
|
|
101
|
|
Section 7.7
|
|
Appropriate Action; Consents; Filings
|
|
|
104
|
|
Section 7.8
|
|
Notification of Certain Matters; Transaction Litigation
|
|
|
105
|
|
Section 7.9
|
|
Listing
|
|
|
106
|
|
Section 7.10
|
|
Section 16 Matters
|
|
|
106
|
|
Section 7.11
|
|
Certain Tax Matters
|
|
|
106
|
|
Section 7.12
|
|
Dividends
|
|
|
106
|
|
Section 7.13
|
|
Voting of Shares
|
|
|
107
|
|
Section 7.14
|
|
Takeover Statutes
|
|
|
107
|
|
Section 7.15
|
|
Tax Representation Letters
|
|
|
108
|
|
Section 7.16
|
|
Financing Cooperation
|
|
|
108
|
|
Section 7.17
|
|
Other Transactions
|
|
|
111
|
|
Section 7.18
|
|
Resignations
|
|
|
112
|
|
Section 7.19
|
|
Employee Matters
|
|
|
112
|
|
Section 7.20
|
|
Company Equity Awards
|
|
|
114
|
|
Section 7.21
|
|
Delisting; Deregistration
|
|
|
115
|
|
Section 7.22
|
|
Merger Sub; Parent Subsidiaries; Company Subsidiaries
|
|
|
115
|
|
|
|
ARTICLE 8 CONDITIONS
|
|
|
115
|
|
|
|
|
Section 8.1
|
|
Conditions to Each Partys Obligation to Effect the Merger
|
|
|
115
|
|
Section 8.2
|
|
Conditions to Obligations of Parent and Merger Sub
|
|
|
116
|
|
Section 8.3
|
|
Conditions to Obligations of Company
|
|
|
117
|
|
|
|
ARTICLE 9 TERMINATION, FEES AND EXPENSES, AMENDMENT AND WAIVER
|
|
|
118
|
|
|
|
|
Section 9.1
|
|
Termination
|
|
|
118
|
|
Section 9.2
|
|
Effect of Termination
|
|
|
121
|
|
Section 9.3
|
|
Fees and Expenses
|
|
|
121
|
|
Section 9.4
|
|
Amendment
|
|
|
128
|
|
Section 9.5
|
|
Transfer Taxes
|
|
|
128
|
|
iii
|
|
|
|
|
|
|
ARTICLE 10 GENERAL PROVISIONS
|
|
|
128
|
|
|
|
|
Section 10.1
|
|
Nonsurvival of Representations and Warranties and Certain Covenants
|
|
|
128
|
|
Section 10.2
|
|
Notices
|
|
|
129
|
|
Section 10.3
|
|
Severability
|
|
|
130
|
|
Section 10.4
|
|
Counterparts
|
|
|
130
|
|
Section 10.5
|
|
Entire Agreement
|
|
|
130
|
|
Section 10.6
|
|
No Third-Party Beneficiaries
|
|
|
130
|
|
Section 10.7
|
|
Extension; Waiver
|
|
|
131
|
|
Section 10.8
|
|
Governing Law
|
|
|
131
|
|
Section 10.9
|
|
Consent to Jurisdiction
|
|
|
131
|
|
Section 10.10
|
|
Assignment
|
|
|
131
|
|
Section 10.11
|
|
Specific Performance
|
|
|
132
|
|
Section 10.12
|
|
Waiver of Jury Trial
|
|
|
132
|
|
Section 10.13
|
|
Authorship
|
|
|
132
|
|
EXHIBITS
Exhibit A
Alternative Structure
Exhibit B Form of Company REIT Qualification Opinion
Exhibit C Form of Parent Section 368 Opinion
Exhibit
D Form of Parent REIT Qualification Opinion
Exhibit E Form of Company Section 368 Opinion
iv
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of July 18, 2021 (this Agreement), is by and among Kite Realty
Group Trust, a Maryland real estate investment trust that has elected to be treated as a real estate investment trust for federal income tax purposes (Parent), KRG Oak, LLC, a Maryland limited liability company and a wholly-owned
subsidiary of Parent (Merger Sub), and Retail Properties of America, Inc., a Maryland corporation that has elected to be treated as a real estate investment trust for federal income tax purposes (Company). Each
of Parent, Merger Sub and Company is sometimes referred to herein as a Party and collectively as the Parties. Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in
Article 1.
WHEREAS, the Parties wish to effect a business combination transaction in which Company will be merged with and
into Merger Sub (the Merger), with Merger Sub being the surviving entity (the Surviving Entity) in the Merger, whereby each outstanding share of Class A common stock, $0.001 par value per share, of Company
(the Company Common Stock) issued and outstanding immediately prior to the Effective Time will be converted into the right to receive the Merger Consideration, upon the terms and conditions set forth in this Agreement and in
accordance with the Maryland General Corporation Law (the MGCL) and the Maryland Limited Liability Company Act (MLLCA);
WHEREAS, the Board of Directors of Company (the Company Board) has unanimously (a) declared that this Agreement, the
Merger and the transactions contemplated by this Agreement are fair to, advisable and in the best interests of Company and its stockholders, (b) approved this Agreement, the Merger and the transactions contemplated by this Agreement,
(c) directed that the Merger and the other transactions contemplated by this Agreement be submitted for consideration at a meeting of Company stockholders and (d) recommended the approval of the Merger and the other transactions
contemplated by this Agreement by Company stockholders;
WHEREAS, the Board of Trustees of Parent (the Parent Board)
has unanimously (a) determined that this Agreement, the Merger and the other transactions contemplated by this Agreement, including the issuance of Parent Common Shares in the Merger, are advisable and in the best interests of Parent and its
shareholders, (b) approved this Agreement, the Merger and the other transactions contemplated by this Agreement, including the issuance of Parent Common Shares in the Merger as contemplated by this Agreement, (c) directed that the issuance
of Parent Common Shares in the Merger as contemplated by this Agreement be submitted for approval at a meeting of Parents shareholders, and (d) recommended the approval of the issuance of Parent Common Shares in the Merger as contemplated
by this Agreement by Parents shareholders;
WHEREAS, Parent, in its capacity as the sole member of Merger Sub, has taken all actions
required for the execution of this Agreement by Merger Sub and has adopted and approved this Agreement and approved the consummation by Merger Sub of the Merger and the other transactions contemplated by this Agreement;
WHEREAS, for U.S. federal income tax purposes, it is intended that the Merger shall qualify as a reorganization within the meaning
of Section 368(a) of the Code, and this Agreement is intended to be and is adopted as a plan of reorganization for the Merger for purposes of Sections 354 and 361 of the Code;
WHEREAS, the Parties acknowledge and agree that, following the Closing, Parent will effect a
business combination transaction in which the Surviving Entity will be merged with and into Parent OP (the Dropdown Transaction), with Parent OP being the surviving entity in such Dropdown Transaction; and
WHEREAS, the Parties desire to make certain representations, warranties, covenants and agreements in connection with the execution of this
Agreement and to prescribe various conditions to the Merger.
NOW THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as
follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions.
(a) For purposes of this Agreement:
Action means any claim, action, cause of action, suit, litigation, proceeding, arbitration, mediation, interference, audit,
assessment, hearing, or other legal proceeding (whether sounding in contract, tort or otherwise, whether civil or criminal and whether brought, conducted, tried or heard by or before, or otherwise involving, any Governmental Authority).
Affiliate of a specified Person means a Person that directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, such specified Person.
Benefit Plan means, with respect to any
entity, any employee benefit plan (within the meaning of Section 3(3) of ERISA) and any employment, individual consulting, termination, separation, severance, supplemental unemployment, change in control, transaction-based,
retention, stock option, restricted stock, profits interest unit, performance award, outperformance, stock purchase, stock or equity or equity-related awards, deferred compensation, bonus, incentive compensation, fringe benefit, health, medical,
dental, vision, disability, accident, life insurance, welfare benefit, cafeteria, vacation, sick or paid time off, perquisite, retirement, supplemental retirement, profit sharing, pension, savings and any other remuneration, compensation or employee
benefit plan, agreement, program, policy, practice or other arrangement of any kind, whether or not subject to ERISA and whether written or unwritten, or funded or unfunded.
Book-Entry Share means a book-entry share registered in the transfer books of Company.
2
Business Day means any day other than a Saturday, Sunday or any day on
which banks located in New York, New York are authorized or required to be closed.
Code shall mean the United States
Internal Revenue Code of 1986, as amended.
Company Acceptable Confidentiality Agreement means a confidentiality
agreement between the Company and a Person making a Company Acquisition Proposal that contains provisions that are not materially less favorable in the aggregate to Company than those contained in the Confidentiality Agreement, provided that such an
agreement may contain provisions that permit Company to comply with the provisions of Section 7.3.
Company
Bylaws means the Sixth Amended and Restated Bylaws of Company, as amended and supplemented and in effect on the date hereof.
Company Charter means the Sixth Articles of Amendment and Restatement of Company filed with the SDAT on March 20,
2012, as amended, supplemented and corrected and in effect on the date hereof.
Company Debt Agreement means
(i) any note or note purchase agreement entered into by Company or any Company Subsidiary, (ii) any credit agreement or credit facility entered into by Company or any Company Subsidiary, (iii) any mortgage, construction loan or other
Indebtedness for borrowed money entered into by Company or any Company Subsidiary, (iv) letters of credit and reimbursement obligations in respect thereof and (v) any obligations of Company or any Company Subsidiary under any interest rate
cap, swap, collar or similar transaction, any currency hedging transactions or any other hedging derivative transaction of any kind.
Company Director Plan means Companys Third Amended and Restated Independent Director Stock Option and Incentive Plan.
Company Dividend Equivalents means a right to receive an equivalent value (in cash or in Company Common Stock) of
dividends paid on Company Common Stock (whether granted by Company pursuant to the Company Equity Incentive Plans, assumed by Company in connection with any merger, acquisition or similar transaction or otherwise issued or granted).
Company Equity Awards means any Company Options, any Company Restricted Share Awards, any Company RSUs, any Company
Dividend Equivalents and any other equity-based award granted under the Company Equity Incentive Plans.
Company Equity Incentive
Plans means, collectively, Companys Amended and Restated 2014 Long-Term Equity Compensation Plan and the Company Director Plan.
Company Expense Base Amount means the reasonable, documented out-of-pocket Expenses actually incurred by Company, not to
exceed $15,000,000.
Company Intellectual Property means all Intellectual Property owned or purported to be owned by
the Company or any Company Subsidiary or used or held for use by the Company or any Company Subsidiary in their business.
3
Company Intervening Event means a material fact, event, circumstance,
change or development that (w) materially affects the business, assets or operations of Company and the Company Subsidiaries, taken as a whole (other than any fact, event, circumstance, change or development resulting from a breach of this
Agreement by Company or its Representatives), (x) has occurred or arisen after the date of this Agreement, (y) was not known to the Company Board on the date of this Agreement (or, if known, the consequences of which were not reasonably
foreseeable to the Company Board as of the date of this Agreement), and which does not relate to a Company Acquisition Proposal or Parent Acquisition Proposal, and (z) first becomes known to the Company Board before the Company Stockholder
Approval is obtained; provided, however, that in no event shall any of the following constitute or be taken into account in determining whether a Company Intervening Event has occurred: (i) the receipt, existence of or
terms of a Company Acquisition Proposal or Parent Acquisition Proposal or any matter relating thereto, (ii) a change in the market price or trading volume of the debt securities or capital stock of Company or of the equity or credit ratings or
the ratings outlook for Company or any of the Company Subsidiaries by any applicable rating agency and (iii) the fact that, in and of itself, Company meets, exceeds or fails to meet any internal or published projections, estimates or
expectations of Companys revenue, earnings or other financial performance or results of operation for any period (provided further that, with respect to the foregoing clauses (ii) and (iii), any fact, event, circumstance, change or
development giving rise to such change, meeting, exceeding or failure may otherwise constitute or be taken into account in determining whether a Company Intervening Event has occurred if not falling into the foregoing clause (i) of this
definition).
Company Leases means each lease or sublease (including ground leases) to which Company or the Company
Subsidiaries are parties as lessors or sublessors with respect to each of the applicable Company Properties (together with all amendments, modifications, supplements, renewals, exercise of options and extensions related thereto).
Company Material Adverse Effect means, with respect to the Company, any event, circumstance, change, effect, development,
condition or occurrence that, individually or in the aggregate, would, or would reasonably be expected to (i) materially adversely affect the business, assets, liabilities, condition (financial or otherwise) or results of operations of Company
and the Company Subsidiaries, taken as a whole, or (ii) prevent or materially impair or delay the ability of Company to consummate the Merger or other transactions contemplated hereby before the Outside Date; provided, that for purposes
of clause (i) Company Material Adverse Effect shall not include any event, circumstance, change, effect, development, condition or occurrence to the extent arising out of or resulting from (A) any decline in the market price,
or change in trading volume, of the capital stock of Company or any failure of Company to meet any internal or publicly announced projections or forecasts or any estimates of earnings, revenues or other metrics for any period (provided, that
any event, circumstance, change, effect, development, condition or occurrence giving rise to such decline, change or failure may be taken into account in determining whether there has been a Company Material Adverse Effect if not falling into one of
the other exceptions contained in this definition), (B) any events, circumstances, changes or effects that affect the retail real estate industry generally, (C) any changes in the conditions in the United States or global economy or
capital, financial or securities markets generally, including changes in interest or exchange rates, trade disputes or the imposition of trade restrictions, tariffs or similar taxes, (D) any changes in general legal, regulatory or political
conditions in the United States or
4
in any other country or region of the world, (E) the commencement, escalation or worsening of a war or armed hostilities or the occurrence of acts of terrorism or sabotage occurring after
the date hereof, (F) the negotiation, execution and delivery of this Agreement, the consummation or anticipation of consummation of the Merger or the other transactions contemplated hereby, or the public announcement or performance of this
Agreement, the Merger or the other transactions contemplated hereby, (G) the taking of any action expressly required by, or the failure to take any action expressly prohibited by, this Agreement, or the taking of any action at the written
request or with the prior written consent of Parent, (H) earthquakes, hurricanes, floods or other natural disasters, (I) any epidemic, pandemic or disease outbreak (including COVID-19) or worsening thereof, including governmental or other
commercially reasonable measures related thereto (including the COVID-19 Measures), (J) any damage or destruction of any Company Property that is substantially covered by insurance, (K) changes in Law or GAAP (or any binding interpretation
thereof), or (L) any Action made or initiated by any holder of Company Common Stock, including any derivative claims, arising out of or relating to this Agreement or the transactions contemplated hereby, provided, however, that, in the case of
each of clauses (B), (C), (D), (E) and (K) do not disproportionately affect Company and the Company Subsidiaries, taken as a whole, relative to others in the retail real estate industry in the United States, and in the case of clauses
(H) and (I), do not disproportionately affect Company and the Company Subsidiaries, taken as a whole, relative to others in the retail real estate industry in the geographic regions in which Company and the Company Subsidiaries operate.
Company Option means each option to purchase shares of Company Common Stock (whether granted by Company pursuant to the
Company Equity Incentive Plans, assumed by Company in connection with any merger, acquisition or similar transaction or otherwise issued or granted).
Company Permitted Liens shall mean any of the following: (i) Lien for Taxes or governmental assessments, charges or
claims of payment not yet due, being contested in good faith or for which adequate accruals or reserves have been established; (ii) Lien that is a landlords, workers, carriers, warehousemens, mechanics,
materialmens, repairmens or other similar Lien arising in the ordinary course of business consistent with past practice that are not yet due and payable or the validity of which is being contested in good faith by appropriate
proceedings; (iii) Lien that is a zoning regulation, entitlement or other land use or environmental regulation by any Governmental Authority; (iv) Lien relating to Indebtedness that is disclosed on Section 4.18(a)(v) of the
Company Disclosure Letter or incurred in connection with the transactions contemplated by Section 7.17 in accordance with the provisions of Section 6.1(b)(viii); (v) Lien that is disclosed on the most recent consolidated
balance sheet of Company or notes thereto (or securing liabilities reflected on such balance sheet); (vi) any Company Material Contracts, or leases to third parties for the occupation of portions of Company Properties as tenants only by such
third parties, subject to any purchase rights including rights of first refusal or offer that may be set forth in such leases; (vii) air rights affecting any Company Property, (viii) non-exclusive licenses of Intellectual Property granted
in the ordinary course of business consistent with past practice; (ix) Liens recorded in a public record or other minor imperfections of title, which may include (A) easements whether or not shown by the public records, overlaps,
encroachments and any matters not of record which would be disclosed by an accurate survey or personal inspection of the property, (B) any supplemental Taxes or assessments not shown by the public records and (C) title
5
to any portion of the premises lying within the right of way or boundary of any public road or private road, in all cases to the extent such Liens do not, individually or in the aggregate,
materially impair the value of the applicable Company Property or the continued use and operation of the applicable Company Property, in each case, as currently used and operated; or (x) Lien that was incurred in the ordinary course of business
since the date of the most recent consolidated balance sheet of Company and that does not, individually or in the aggregate, materially impair the value of the applicable Company Property or interfere with the continued use (assuming its continued
use in the manner it is currently used), current operation or transfer of, any Company Property.
Company Properties
means each real property owned, or leased (including ground leased) as lessee or sublessee, by Company or any Company Subsidiary as of the date of this Agreement (including all buildings, structures and other improvements and fixtures located on or
under such real property and all easements, rights and other appurtenances to such real property).
Company Protected
Information means any and all Trade Secrets owned or purported to be owned by the Company or any Company Subsidiary or used or held for use by the Company or any Company Subsidiary in their business, including without limitation all
confidential information of Company or Company Subsidiaries, Trade Secrets of Company or Company Subsidiaries, information to which Company or any Company Subsidiary has undertaken an obligation of confidentiality to a third party, or information
that is related to or capable of being linked to a person that is held, used, disclosed or collected by Company or any Company Subsidiary.
Company Restricted Share Award means each award of shares of Company Common Stock (or portion thereof) that is unvested or
is subject to a repurchase option or obligation, risk of forfeiture or other condition (whether granted by Company pursuant to the Company Equity Incentive Plans, assumed by Company in connection with any merger, acquisition or similar transaction
or otherwise issued or granted).
Company RSU means each restricted stock unit representing the right to vest in and be
issued shares of Company Common Stock (whether granted by Company pursuant to the Company Equity Incentive Plans, assumed by Company in connection with any merger, acquisition or similar transaction or otherwise issued or granted).
Company Stockholder Meeting means the duly called and held meeting of the holders of shares of Company Common Stock for the
purpose of seeking the Company Stockholder Approval, including any postponement or adjournment thereof.
Company
Subsidiary means any corporation, partnership, limited liability company, joint venture, business trust, real estate investment trust or other organization, whether incorporated or unincorporated, or other legal entity of which
(i) Company directly or indirectly owns or controls at least a majority of the capital stock or other equity interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar
functions, (ii) Company and/or any Person that is a Company Subsidiary by reason of the application of clause (i) or clause (iii) of this definition of Company Subsidiary is a general partner, manager, managing member,
trustee, director or the equivalent, or (iii) Company, directly or indirectly, holds a majority of the beneficial, equity, capital, profits or other economic interest.
6
Confidentiality Agreement means the Confidentiality Agreement, dated as
of June 17, 2021, between Parent and Company.
COVID-19 means SARS-CoV-2 or COVID-19, and any variants, mutations
or evolutions thereof.
COVID-19 Measures means any quarantine, shelter in place, stay at home,
workforce reduction, social distancing, shut down, closure, sequester or any other Law, order, directive, guidelines or recommendations by any Governmental Authority in connection with or in response to COVID-19, including the Coronavirus Aid,
Relief, and Economic Security Act (Pub. L. 116-136), as amended.
Environmental Law means any applicable Law (including
common law) relating to pollution or the regulation or protection of the environment (including air, surface water, groundwater, land surface or subsurface land), or human health or safety (as such matters relate to Hazardous Substances), including
Laws relating to the generation, recycling, processing, labeling, production, manufacture, use, handling, presence, transportation, treatment, storage, disposal, release or discharge of Hazardous Substances.
Environmental Permit means any permit, approval, license, registration, identification number, exemption or other
authorization required under any applicable Environmental Law.
ERISA means the Employee Retirement Income Security Act
of 1974, as amended.
ERISA Affiliate means, with respect to an entity (the Referenced Entity), any
other entity, which, together with the Referenced Entity, would be treated as a single employer under Code Section 414 or ERISA Section 4001.
Exchange Act means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
Expenses means all expenses (including all fees and expenses of counsel, accountants, investment bankers,
experts and consultants to a Party and its Affiliates) incurred by a Party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement, including the preparation,
printing, and filing of the Form S-4, the preparation, printing, filing and mailing of the Joint Proxy Statement and all SEC and other regulatory filing fees incurred in connection with the Form S-4 and the Joint Proxy Statement, the solicitation of
shareholder or stockholder approvals, engaging the services of the Exchange Agent, any other filings with the SEC and all other matters related to the closing of the Merger and the other transactions contemplated by this Agreement.
GAAP means the United States generally accepted accounting principles.
Governmental Authority means the United States (federal, state or local) government or any foreign government, or any other
governmental or quasi-governmental regulatory, judicial or administrative authority, instrumentality, board, bureau, agency, commission, self-regulatory organization, arbitration panel or similar entity.
7
Hazardous Substances means: (i) those substances listed in, defined
in or regulated under any Environmental Law, including the following federal statutes and their state counterparts, as amended, and all regulations thereunder: the Resource Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation and Liability Act, the Toxic Substances Control Act, the Clean Water Act, the Safe Drinking Water Act, the Atomic Energy Act and the Clean Air Act; (ii) petroleum and petroleum products, including crude oil and any fractions
thereof; and (iii) polychlorinated biphenyls, toxic mold, methane, asbestos, per- and poly-fluoroalkyl substances, 1-4, dioxane and radon.
Indebtedness means, with respect to any Person and without duplication, (i) the principal of and premium (if any) of
all indebtedness, notes payable, accrued interest payable or other obligations for borrowed money, whether secured or unsecured, (ii) all obligations under conditional sale or other title retention agreements, or incurred as financing, in
either case with respect to property acquired by such Person, (iii) all obligations issued, undertaken or assumed as the deferred purchase price for any property or assets, (iv) all obligations under capital leases, (v) all
obligations in respect of bankers acceptances or letters of credit, (vi) all obligations under interest rate cap, swap, collar or similar transactions or currency hedging transactions (valued at the termination value thereof), (vii) any
guarantee of any of the foregoing, whether or not evidenced by a note, mortgage, bond, indenture or similar instrument and (viii) any agreement to provide any of the foregoing.
Intellectual Property means all United States and foreign (i) patents, patent applications, invention disclosures, and
all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions and extensions thereof (collectively, Patents), (ii) registered and unregistered trademarks, service marks, trade dress, logos,
trade names, corporate names, Internet domain names, design rights and other source identifiers, together with the goodwill symbolized by any of the foregoing and related registrations and applications for registration (collectively,
Marks), (iii) registered and unregistered copyrights in both published and unpublished works and copyrightable works and all copyright registrations and applications (collectively, Copyrights), (iv) confidential and
proprietary information, including trade secrets, know-how, ideas, formulae, models, algorithms and methodologies, and rights under applicable trade secret Law in the foregoing (collectively, Trade Secrets), (v) all rights in the
foregoing and in other similar intangible assets, and (vi) all applications and registrations for the foregoing.
Investment
Company Act means the Investment Company Act of 1940, as amended.
IRS means the United States Internal
Revenue Service or any successor agency.
Joint Proxy Statement means a joint proxy statement in preliminary and
definitive form relating to the Company Stockholder Meeting and the Parent Shareholder Meeting, together with any amendments or supplements thereto.
Knowledge (i) with respect to Company means the knowledge, after reasonable inquiry, of the persons named in
Section 1.1(a) of the Company Disclosure Letter and (ii) with respect to Parent means the knowledge, after reasonable inquiry, of the persons named in Section 1.1(b) of the Parent Disclosure Letter. For purposes of
Section 4.16 and Section 5.16, reasonable inquiry does not require environmental sampling or testing of any kind.
8
Law means any and all domestic (federal, state or local) or foreign laws,
rules, regulations and Orders promulgated by any Governmental Authority.
Lien means with respect to any asset
(including any security), any mortgage, deed of trust, claim, condition, covenant, lien, licenses, pledge, charge, security interest, preferential arrangement, option or other third party right (including right of first refusal or first offer),
restriction, right of way, easement, or title defect or encumbrance of any kind in respect of such asset, including any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership.
NYSE means the New York Stock Exchange.
Order means a judgment, order or decree of any Governmental Authority.
Parent Acceptable Confidentiality Agreement means a confidentiality agreement between Parent and a Person making a Parent
Acquisition Proposal that contains provisions that are not materially less favorable in the aggregate to Parent than those contained in the Confidentiality Agreement, provided that such an agreement may contain provisions that permit Parent to
comply with the provisions of Section 7.4.
Parent Bylaws means the Bylaws of Parent as amended and
supplemented and in effect on the date hereof.
Parent Common Share Price means the volume weighted average of the
closing sale prices per Parent Common Share on the NYSE, as reported in the New York City edition of The Wall Street Journal (or, if not reported thereby, as reported in another authoritative source mutually agreed by the Parties), on each of the
ten (10) full consecutive trading days ending on and including the third (3rd) Business Day prior to the Closing Date.
Parent Common Shares means the common shares of beneficial interest, $0.01 par value per share, of Parent.
Parent Declaration of Trust means the Articles of Amendment and Restatement of Declaration of Trust of Parent filed with
the SDAT on August 12, 2004, as amended and supplemented, and in effect on the date hereof.
Parent DRIP means
Parents Distribution Reinvestment and Share Purchase Plan, as amended.
Parent Equity Incentive Plans means the
Parent 2004 Equity Incentive Plan and the Parent 2013 Equity Incentive Plan, each as amended and/or restated.
Parent Expense
Base Amount means the reasonable, documented out-of-pocket Expenses actually incurred by Parent, not to exceed $15,000,000.
Parent Intellectual Property means all Intellectual Property owned or purported to be owned by Parent or any Parent
Subsidiary or used or held for use by Parent or any Parent Subsidiary in their business.
9
Parent Intervening Event means a material fact, event, circumstance,
change or development that (w) materially affects the business, assets or operations of Parent and the Parent Subsidiaries, taken as a whole (other than any fact, event, circumstance, change or development resulting from a breach of this
Agreement by Parent or its Representatives), (x) has occurred or arisen after the date of this Agreement, (y)was not known to the Parent Board on the date of this Agreement (or, if known, the consequences of which were not reasonably
foreseeable to the Parent Board as of the date of this Agreement), and which does not relate to a Parent Acquisition Proposal or Company Acquisition Proposal, and (z) first becomes known to the Parent Board before the Parent Shareholder
Approval is obtained; provided, however, that in no event shall any of the following constitute or be taken into account in determining whether a Parent Intervening Event has occurred: (i) the receipt, existence of or
terms of a Parent Acquisition Proposal or Company Acquisition Proposal or any matter relating thereto, (ii) a change in the market price or trading volume of the debt securities or capital stock of Parent or of the equity or credit ratings or
the ratings outlook for Parent or any of the Parent Subsidiaries by any applicable rating agency and (iii) the fact that, in and of itself, Parent meets, exceeds or fails to meet any internal or published projections, estimates or expectations
of Parents revenue, earnings or other financial performance or results of operation for any period (provided further that, with respect to the foregoing clauses (ii) and (iii), any fact, event circumstance, change or development
giving rise to such change, meeting, exceeding or failure may otherwise constitute or be taken into account in determining whether a Parent Intervening Event has occurred if not falling into the foregoing clause (i) of this definition).
Parent Leases means each lease or sublease (including ground leases) to which Parent or Parent Subsidiaries are parties as
lessors or sublessors with respect to each of the applicable Parent Properties (together with all amendments, modifications, supplements, renewals, exercise of options and extensions related thereto).
Parent LP Agreement means that certain Amended and Restated Agreement of Limited Partnership of Parent OP, dated
August 16, 2004, as amended.
Parent Material Adverse Effect means, with respect to Parent, any event,
circumstance, change, effect, development, condition or occurrence that, individually or in the aggregate, would, or would reasonably be expected to (i) materially adversely affect the business, assets, liabilities, condition (financial or
otherwise) or results of operations of Parent and the Parent Subsidiaries, taken as a whole, or (ii) prevent or materially impair or delay the ability of Parent or to consummate the Merger or other transactions contemplated hereby before the
Outside Date; provided, that for purposes of clause (i) Parent Material Adverse Effect shall not include any event, circumstance, change, effect, development, condition or occurrence to the extent arising out of or resulting
from (A) decline in the market price, or change in trading volume, of the capital stock of Parent or any failure of Parent to meet any internal or publicly announced projections or forecasts or any estimates of earnings, revenues or other
metrics for any period (provided, that any event, circumstance, change, effect, development, condition or occurrence giving rise to such decline, change or failure may be taken into account in determining whether there has been a Parent
Material Adverse Effect if not falling into one of the other exceptions contained in this definition), (B) any events, circumstances, changes or effects that affect the retail real estate industry generally, (C) any changes in the
conditions in the United States or global economy or capital, financial or securities markets generally, including changes in interest or exchange rates, trade disputes or the
10
imposition of trade restrictions, tariffs or similar taxes, (D) any changes in general legal, regulatory or political conditions in the United States or in any other country or region of the
world, (E) the commencement, escalation or worsening of a war or armed hostilities or the occurrence of acts of terrorism or sabotage occurring after the date hereof, (F) the negotiation, execution and delivery of this Agreement, the
consummation or anticipation of consummation of the Merger or the other transactions contemplated hereby, or the public announcement or performance of this Agreement, the Merger or the other transactions contemplated hereby, (G) the taking of
any action expressly required by, or the failure to take any action expressly prohibited by, this Agreement, or the taking of any action at the written request or with the prior written consent of Company, (H) earthquakes, hurricanes, floods or
other natural disasters, (I) any epidemic, pandemic or disease outbreak (including COVID-19) or worsening thereof, including governmental or other commercially reasonable measures related thereto (including the COVID-19 Measures), (J) any
damage or destruction of any Parent Property that is substantially covered by insurance, (K) changes in Law or GAAP (or any binding interpretation thereof), or (L) any Action made or initiated by any holder of Parent Common Shares,
including any derivative claims, arising out of or relating to this Agreement or the transactions contemplated hereby, provided, however, that in the case of each of clauses (B), (C), (D), (E) and (K) do not disproportionately affect
Parent and the Parent Subsidiaries, taken as a whole, relative to others in the retail real estate industry in the United States, and in the case of clauses (H) and (I) do not disproportionately affect Parent and the Parent Subsidiaries,
taken as a whole, relative to others in the retail real estate industry in the geographic regions in which Parent and the Parent Subsidiaries operate.
Parent OP means Kite Realty Group, L.P., a Delaware limited partnership and the operating partnership of Parent.
Parent OP Units means the units of partnership interest in Kite Realty Group, L.P., which includes general partnership
interest units and units of partnership interest designated as Class A Units and Class B Units pursuant to the Parent LP Agreement.
Parent Permitted Liens shall mean any of the following: (i) Lien for Taxes or governmental assessments, charges or
claims of payment not yet due, being contested in good faith or for which adequate accruals or reserves have been established; (ii) Lien that is a landlords, workers, carriers, warehousemens, mechanics,
materialmens, repairmens or other similar Lien arising in the ordinary course of business consistent with past practice that are not yet due and payable or the validity of which is being contested in good faith by appropriate
proceedings; (iii) Lien that is a zoning regulation, entitlement or other land use or environmental regulation by any Governmental Authority; (iv) Lien relating to Indebtedness that is disclosed on Section 5.18(a)(v) of the
Parent Disclosure Letter; (v) Lien that is disclosed on the most recent consolidated balance sheet of Parent or notes thereto (or securing liabilities reflected on such balance sheet); (vi) any Parent Material Contracts, or leases to third
parties for the occupation of portions of the Parent Properties as tenants only by such third parties, subject to any purchase rights including rights of first refusal or offer that may be set forth in such leases; (vii) air rights affecting
any Parent Property, (viii) non-exclusive licenses of Intellectual Property granted in the ordinary course of business consistent with past practice; (ix) Liens recorded in a public record or other minor imperfections of title, which may
include (A) easements whether or not shown by the public records, overlaps, encroachments and any matters not of record which would be disclosed by an accurate survey or personal inspection of the property, (B) any supplemental Taxes or
assessments
11
not shown by the public records and (C) title to any portion of the premises lying within the right of way or boundary of any public road or private road, in all cases to the extent such
Liens do not, individually or in the aggregate, materially impair the value of the applicable Parent Property or the continued use and operation of the applicable Parent Property, in each case, as currently used and operated; or (x) Lien that
was incurred in the ordinary course of business since the date of the most recent consolidated balance sheet of Parent and that does not, individually or in the aggregate, materially impair the value of the applicable Parent Property or with the
continued use (assuming its continued use in the manner currently used), current operation or transfer of, any Parent Property.
Parent Properties means each real property owned, or leased (including ground leased) as lessee or sublessee, by Parent or
any Parent Subsidiary as of the date of this Agreement (including all buildings, structures and other improvements and fixtures located on or under such real property and all easements, rights and other appurtenances to such real property).
Parent Protected Information means and all Trade Secrets owned or purported to be owned by Parent or any Parent Subsidiary
or used or held for use by Parent or any Parent Subsidiary in their business, including without limitation all any confidential information of Parent or Parent Subsidiaries, Trade Secrets of Parent or Parent Subsidiaries, information to which Parent
or any Parent Subsidiary has undertaken an obligation of confidentiality to a third party, or information that is related to or capable of being linked to a person that is held, used, disclosed or collected by Parent or any Parent Subsidiary.
Parent Shareholder Meeting means the duly called and held meeting of the holders of Parent Common Shares for the purpose of
seeking the Parent Shareholder Approval, including any postponement or adjournment thereof.
Parent Subsidiary means
any corporation, partnership, limited liability company, joint venture, business trust, real estate investment trust or other organization, whether incorporated or unincorporated, or other legal entity of which (i) Parent directly or indirectly
owns or controls at least a majority of the capital stock or other equity interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions, (ii) Parent and/or any Person
that is a Parent Subsidiary by reason of the application of clause (i) or clause (iii) of this definition of Parent Subsidiary is a general partner, manager, managing member, trustee, director or the equivalent, or
(iii) Parent, directly or indirectly, holds a majority of the beneficial, equity, capital, profits or other economic interest.
Person or person means an individual, corporation, partnership, limited partnership, limited liability
company, person (including a person as defined in Section 13(d)(3) of the Exchange Act), trust, association or other entity or organization (including any Governmental Authority or a political subdivision, agency or instrumentality
of a Governmental Authority).
Qualifying Income means income described in Sections 856(c)(2)(A)-(I) and
856(c)(3)(A)-(I) of the Code.
12
Release means any presence, emission, spill, seepage, leak, escape,
leaching, discharge, injection, pumping, pouring, emptying, dumping, disposal, migration, or release of Hazardous Substances from any source into or upon the indoor or outdoor environment.
Representative means, with respect to any Person, such Persons directors, trustees, officers, employees, advisors
(including attorneys, accountants, consultants, investment bankers, and financial advisors), agents and other representatives.
SEC means the U.S. Securities and Exchange Commission (including the staff thereof).
Securities Act means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
Tax or Taxes means any federal, state, local and foreign income, excise, gross receipts, capital
gains, withholding, property, recording, stamp, transfer, sales, use, abandoned property, escheat, franchise, employment, payroll, excise, environmental and any other taxes, duties, assessments or similar governmental charges, together with
penalties, interest or additions imposed with respect to such amounts.
Tax Guidance means a reasoned opinion from a
nationally recognized federal income tax counsel experienced in REIT tax matters or a ruling from the IRS.
Tax Return
means any return, declaration, report, claim for refund, or information return or statement relating to Taxes filed or required to be filed with a Governmental Authority, including any schedule or attachment thereto, and including any amendment
thereof.
Tenant Improvement(s) means the construction, improvement or alteration of long-term real property (not
including furniture, fixtures, equipment or inventory) for use in a tenants trade or business at Company Properties or Parent Properties, as the case may be.
WARN means the Worker Adjustment and Retraining Notification Act of 1988, as amended, and any and all comparable Laws of
applicable jurisdictions relating to mass layoffs, termination, relocation or any plant closing.
(b) The following terms have the respective meanings set forth in the sections set forth below opposite such term:
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Defined Terms
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Location of Definition
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Agreement
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Preamble
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Articles of Merger
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Section 2.3
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Assumed Awards
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Section 7.20(b)
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Certificate
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Section 3.1(a)(ii)
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Claim
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Section 7.6(a)
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Claim Expenses
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Section 7.6(a)
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Closing
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Section 2.2
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Closing Date
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Section 2.2
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Company
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Preamble
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13
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Company Acquisition Proposal
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Section 7.3(h)(i)
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Company Adverse Recommendation Change
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Section 7.3(b)
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Company Alternative Acquisition Agreement
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Section 7.3(a)
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Company Base Amount
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Section 9.3(g)
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Company Board
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Recitals
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Company Board Recommendation
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Section 4.4(b)
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Company Capitalization Date
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Section 4.3(a)
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Company Common Stock
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Recitals
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Company Employees
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Section 4.13(f)
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Company Designees
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Section 2.6
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Company Disclosure Letter
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Article 4
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Company Dividend Equivalent Consideration
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Section 3.1(c)(iii)
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Company Expense Reimbursement
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Section 9.3(f)
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Company Expense Reimbursement Base Amount
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Section 9.3(f)
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Company Expense Reimbursement Escrow
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Section 9.3(f)
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Company Insurance Policies
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Section 4.19
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Company Material Contract
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Section 4.18(b)
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Company Notice Period
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Section 7.3(e)
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Company Parties
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Section 9.3(b)
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Company Permits
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Section 4.6(a)
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Company Preferred Stock
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Section 4.3(a)
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Company Qualified DC Plan
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Section 7.19(c)
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Company Related Party Agreement
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Section 4.25
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Company SEC Documents
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Section 4.7(a)
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Company Stock Repurchase Program
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Section 4.3(c)
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Company Stockholder Approval
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Section 4.21
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Company Subsidiary Partnership
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Section 4.12(i)
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Company Superior Proposal
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Section 7.3(h)(ii)
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Company Superior Proposal Termination
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Section 7.3(d)
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Company Tax Accrual Opinion
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Section 9.3(e)
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Company Tax Protection Agreements
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Section 4.12(i)
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Company Terminating Breach
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Section 9.1(c)(i)
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Company Termination Fee
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Section 9.3(g)
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Company Termination Fee Escrow
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Section 9.3(g)
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Company Third Party
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Section 4.17(j)
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Company Title Insurance Policy(ies)
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Section 4.17(l)
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Continuing Employees
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Section 7.19(a)
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Debt Transaction
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Section 7.16(b)
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Debt Transaction Documents
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Section 7.16(b)
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Dropdown Transaction
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Preamble
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Earned Company RSU
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Section 3.1(c)(iii)
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Effective Time
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Section 2.3
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Exchange Agent
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Section 3.2(a)
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Exchange Fund
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Section 3.2(b)
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Exchange Ratio
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Section 3.1(a)(ii)
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Form S-4
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Section 4.5(b)
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Fractional Share Consideration
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Section 3.1(a)(ii)
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Indemnified Parties
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Section 7.6(a)
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Indemnity Exceptions
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Section 7.16(c)
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Interim Period
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Section 6.1(a)
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Letter of Transmittal
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Section 3.2(d)(i)
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Listing
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Section 7.9
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Maryland Courts
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Section 10.9
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Material Company Leases
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Section 4.17(g)
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Material Parent Leases
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Section 5.17(g)
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Maximum Amount
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Section 7.6(c)
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Merger
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Recitals
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Merger Consideration
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Section 3.1(a)(ii)
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Merger Sub
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Preamble
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MGCL
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Recitals
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MLLCA
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Recitals
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Option Consideration
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Section 3.1(c)(i)
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Outside Date
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Section 9.1(b)(i)
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Parent
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Preamble
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Parent Acquisition Proposal
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Section 7.4(h)(i)
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Parent Adverse Recommendation Change
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Section 7.4(b)
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Parent Alternative Acquisition Agreement
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Section 7.4(a)
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Parent-Approved Transaction
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Section 7.17
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Parent Base Amount
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Section 9.3(e)
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Parent Benefit Plans
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Section 5.13(a)
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Parent Board
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Recitals
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Parent Board Recommendation
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Section 5.4(b)
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Parent Capitalization Date
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Section 5.3(a)
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Parent Disclosure Letter
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Article 5
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Parent Expense Reimbursement
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Section 9.3(h)
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Parent Expense Reimbursement Base Amount
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Section 9.3(h)
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Parent Expense Reimbursement Escrow
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Section 9.3(h)
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Parent Insurance Policies
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Section 5.19
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Parent Material Contract
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Section 5.18(b)
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Parent Notice Period
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Section 7.4(e)
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Parent Parties
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Section 9.3(c)
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Parent Permits
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Section 5.6(a)
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Parent Preferred Shares
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Section 5.3(a)
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Parent SEC Documents
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Sections 5.7(a)
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Parent Shareholder Approval
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Section 5.21
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Parent Subsidiary Partnership
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Section 5.12(i)
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Parent Superior Proposal
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Section 7.4(h)(ii)
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Parent Superior Proposal Termination
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Section 7.4(d)
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Parent Tax Accrual Opinion
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Section 9.3(g)
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Parent Tax Protection Agreements
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Section 5.12(i)
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Parent Terminating Breach
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Section 9.1(d)(i)
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15
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Parent Termination Fee
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Section 9.3(e)
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Parent Termination Fee Escrow
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Section 9.3(e)
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Parent Third Party
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Section 5.17(j)
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Parent Title Insurance Policy(ies)
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Section 5.17(l)
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Party(ies)
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Preamble
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Payoff Indebtedness
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Section 7.16(c)
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Payoff Letters
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Section 7.16(c)
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Pdf
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Section 10.4
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Permitted REIT Dividend
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Section 6.1(b)(iii)
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Prime Rate
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Section 9.3(d)
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Qualified REIT Subsidiary
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Section 4.1(c)
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REIT
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Section 4.12(b)
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REIT Requirements
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Section 9.3(e)
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Scheduled Company Restricted Share Award
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Section 3.1(c)(ii)(B)
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SDAT
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Section 2.3
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Shadow Anchor
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Section 4.17(r)
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SOX Act
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Section 4.7(b)
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Surviving Entity
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Recitals
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Takeover Statutes
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Section 4.24
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Taxable REIT Subsidiary
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Section 4.1(c)
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Transfer Taxes
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Section 9.5
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Section 1.2 Interpretation and Rules of Construction. In this Agreement, except to
the extent otherwise provided or that the context otherwise requires:
(a) when a reference is made in this Agreement to an Article,
Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated;
(b) the table of contents and headings for this Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement;
(c) whenever the words include, includes or including are used in
this Agreement, they are deemed to be followed by the words without limitation unless the context expressly provides otherwise;
(d) the words hereof, herein and hereunder and words of similar import, when used in this Agreement, refer
to this Agreement as a whole and not to any particular provision of this Agreement, except to the extent otherwise specified;
(e) the
phrases transactions contemplated by this Agreement, transactions contemplated hereby and words or phrases of similar import, when used in this Agreement, refer to the Merger and the other transactions contemplated by this
Agreement, including the Dropdown Transaction;
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(f) when a reference is made in this Agreement, the Company Disclosure Letter or the Parent
Disclosure Letter, to information or documents being provided, made available or disclosed by a Party to another Party or its Affiliates, such information or documents shall include any information or documents
(a) included in the Company SEC Reports or the Parent SEC Reports, as the case may be, that are publicly available at least two (2) Business Days prior to the date of this Agreement, (b) furnished at least two (2) Business Days
prior to the date of this Agreement in the electronic data room established by the disclosing Party and to which access has been granted to the other Party and its Representatives at least two (2) Business Days prior to the date of this
Agreement, or (c) otherwise provided in writing (including electronically) to the chief financial officer and chief accounting officer of the other Party at least two (2) Business Days prior to the date of this Agreement;
(g) the word extent in the phrase, to the extent shall mean the degree to which a subject or other thing extends and
such phrase shall not mean simply if;
(h) any Law defined or referred to herein or in any agreement or instrument that is
referred to herein means such Law as from time to time amended, modified or supplemented, including (in the case of statutes) by succession of comparable successor Laws;
(i) any agreement, instrument or statute defined or referred to herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes, and all attachments thereto and instruments incorporated
therein;
(j) except when used together with the word either or otherwise for the purpose of identifying mutually exclusive
alternatives, the term or has the inclusive meaning represented by the phrase and/or;
(k) any period of time
hereunder ending on a day that is not a Business Day shall be extended to the next succeeding Business Day;
(l) where this Agreement
states that a Party shall, will or must perform in some manner, it means that the Party is legally obligated to do so under this Agreement;
(m) all references to the ordinary course of business shall mean the ordinary course of business consistent with past
practice subject to any commercially reasonable modifications to past practice made in good faith to respond to the actual or anticipated effects of COVID-19 or any COVID-19 Measures;
(n) any pronoun shall include the corresponding masculine, feminine and neuter forms;
(o) all terms defined in this Agreement have the defined meanings when used in any certificate or other document made or delivered pursuant
hereto, unless otherwise defined therein; and
(p) the definitions contained in this Agreement are applicable to the singular as well as
the plural forms of such terms.
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ARTICLE 2
THE MERGER
Section
2.1 The Merger. Upon the terms and subject to the satisfaction or waiver of the conditions set forth in this Agreement, and in accordance with the MGCL and the MLLCA, at the Effective Time, Company shall be merged with and into Merger Sub
with Merger Sub surviving the Merger, whereupon the separate existence of Company shall cease, and Merger Sub shall continue under the name KRG Oak, LLC. The Merger shall have the effects provided in this Agreement and as specified in
the MGCL and the MLLCA.
Section 2.2 Closing. The closing (the Closing) of the Merger will take
place at the offices of Hogan Lovells US LLP, 555 13th Street NW, Washington, DC 20004, or remotely by exchange of documents and signatures (or their electronic counterparts), on a date and at a
time to be mutually agreed upon by the Parties, but in no event later than the third (3rd) Business Day after all the conditions set forth in Article 8 (other than those conditions that by their nature are to be satisfied or waived at
the Closing, but subject to the satisfaction or valid waiver of such conditions) shall have been satisfied or validly waived by the Party entitled to the benefit of such condition (subject to applicable Law), unless such date is extended by mutual
agreement of the Parties (the Closing Date).
Section 2.3 Effective Times. Prior to the Closing,
Parent and Company shall prepare and, on the Closing Date, Parent, Merger Sub and Company shall (a) cause articles of merger with respect to the Merger (the Articles of Merger) to be duly executed and filed with the State
Department of Assessments and Taxation of Maryland (the SDAT) in accordance with the MGCL and the MLLCA and (b) make any other filings, recordings or publications required to be made by Parent or Company under the MGCL or the
MLLCA in connection with the Merger. The Merger shall become effective upon the date and at the time set forth in the Articles of Merger (such date and time, the Effective Time).
Section 2.4 Governing Documents. Subject to Section 7.6, at the Effective Time and by virtue of the Merger, the
certificate of formation and limited liability company agreement of Merger Sub as in effect immediately prior to the Effective Time shall be the certificate of formation and limited liability company agreement of the Surviving Entity, until
thereafter amended in accordance with applicable Law and the applicable provisions of such certificate of formation and limited liability company agreement.
Section 2.5 Officers of the Surviving Entity. From and after the Effective Time, until successors are duly elected or
appointed, the officers of Merger Sub immediately prior to the Effective Time shall be and remain the officers of the Surviving Entity.
Section 2.6 Parent Board Representation. The Parent Board shall take all action necessary to, upon and subject to the
occurrence of the Effective Time, cause the Parent Board to consist of thirteen (13) trustees, including the four (4) individuals (the Company Designees) set forth in Section 2.6 of the Company Disclosure
Letter, provided that, unless otherwise approved in writing by Parent, each Company Designee must: (a) meet the definition of independent director set forth in the rules and regulations of the NYSE for companies listed on the
NYSE and
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applicable regulations promulgated by the SEC, and (b) not have been party to or involved in an event that would be required to be disclosed pursuant to Item 401(f) of Regulations S-K
under the Securities Act and the Exchange Act, provided, further, that to the extent the Company Designees fail to satisfy the requirements set forth in clauses (a) and (b) above, then Parent and Company shall work together
in good faith to select qualified candidates in a number sufficient to result in a total of four (4) Company Designees.
Section
2.7 Tax Consequences. It is intended that, for U.S. federal income tax purposes, the Merger shall qualify as a reorganization within the meaning of Section 368(a) of the Code, and that this Agreement be, and is hereby adopted as, a plan
of reorganization for purposes of Section 354 and Section 361 of the Code.
Section 2.8 Alternative Structure.
Notwithstanding anything to the contrary set forth in this Agreement, Parent may, in its sole discretion and upon written notice to Company, elect to effect a business combination involving Company and Parent and certain of Subsidiaries thereof in
accordance with Exhibit A (the Alternative Structure) in lieu of the Merger and the Dropdown Transaction, and following such election, the Parties hereby agree to work together in good faith to amend and/or restate
this Agreement consistent with the terms of Exhibit A to provide for such alternative business combination; provided that the alternative business combination shall qualify as a reorganization within the meaning of
Section 368(a) of the Code and in no event shall Parents election of or the implementation of the Alternative Structure adjust or change the relative and/or total consideration payable under this Agreement as described in
Exhibit A.
ARTICLE 3
EFFECTS OF THE MERGER
Section 3.1 Effects on Shares.
(a) Treatment of Equity Interests. At the Effective Time and by virtue of the Merger and without any further action on the part of
Company, Parent or Merger Sub or the holders of any securities of Company, Parent or Merger Sub:
(i) Cancellation of Company Common
Stock. Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time that is held by any wholly owned Company Subsidiary shall automatically be retired and shall cease to exist, and no Merger Consideration
shall be paid, nor shall any other payment be made or right inure with respect thereto in connection with or as a consequence of the Merger. Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time that is
held by Parent or any Parent Subsidiary shall no longer be outstanding and shall automatically be retired and shall cease to exist, and no Merger Consideration shall be paid, nor shall any other payment be made or right inure with respect thereto in
connection with or as a consequence of the Merger.
(ii) Conversion of Company Common Stock. Except as provided in
Section 3.1(a)(i) or Section 3.1(c) and subject to Section 3.1(b), each share of Company Common Stock issued and outstanding immediately prior to the Effective Time will be cancelled and retired and automatically
converted into the right to receive (upon the automatic surrender of the
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certificate representing such share (Certificate) or, in the case of a Book-Entry Share, the automatic surrender of such Book-Entry Share), 0.623 (the Exchange
Ratio, subject to any adjustment pursuant to Section 3.1(b), 7.12(b) or 7.12(c)) Parent Common Shares (the Merger Consideration), without interest, plus the right, if any, to receive pursuant to
Section 3.6, cash in lieu of fractional Parent Common Shares into which such shares of Company Common Stock would have been converted pursuant to this Section 3.1(a) (the Fractional Share Consideration).
(iii) Treatment of Merger Sub Membership Interests. All membership interests of Merger Sub issued and outstanding immediately
prior to the Effective Time shall remain as membership interests of the Surviving Entity.
(iv) Treatment of Parent Common Shares.
At and after the Effective Time, each Parent Common Share issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding.
(b) Adjustments. Without limiting the provisions of this Agreement and subject to Sections 6.1(b)(ii) and 6.1(b)(iii),
between the date of this Agreement and the Effective Time, if the outstanding shares of Company Common Stock are changed into a different number or class of shares by reason of any stock split, division or subdivision of shares, stock dividend,
reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction, then without limiting any other rights of the other Parties hereunder, the Exchange Ratio will be ratably adjusted to the extent necessary
or appropriate to reflect fully the effect of such change. Without limiting the provisions of this Agreement and subject to Sections 6.2(b)(ii) and 6.2(b)(iii), between the date of this Agreement and the Effective Time, if the
outstanding Parent Common Shares are changed into a different number or class of shares by reason of any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization
or other similar transaction, then without limiting any other rights of the other Parties hereunder, the Exchange Ratio will be ratably adjusted to the extent necessary or appropriate to reflect fully the effect of such change.
(c) Treatment of Company Equity Awards.
(i) Treatment of Company Options. At the Effective Time, by virtue of the Merger and without any further action on the part of Company,
Parent or Merger Sub or the holders thereof, each Company Option that is outstanding and unexercised as of immediately prior to the Effective Time (whether or not then vested) shall be cancelled, terminated, and extinguished as of the Effective
Time, and upon cancellation thereof the holder of each such Company Option shall be entitled to receive, in full satisfaction of the rights of such holder with respect thereto, an amount in cash equal to the excess of (1) the product of the
number of shares of Company Common Stock subject to such Company Option as of immediately prior to the Effective Time, multiplied by the Exchange Ratio, multiplied by the Parent Common Share Price, over (2) the product of the number of shares
of Company Common Stock subject to such Company Option as of immediately prior to the Effective Time, multiplied by the exercise price per share of Company Common Stock subject to such Company Option (it being understood that, if the value
determined in accordance with this section does not exceed $0, then no consideration shall be payable to the holder of such Company Option pursuant to this Section 3.1(c)(i)). Parent shall cause the consideration described in this
Section 3.1(c)(i), if any (the Option Consideration), to be paid promptly following the Effective Time, without interest and less any applicable withholding or other Taxes or other amounts required by Law to be
withheld.
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(ii) Treatment of Company Restricted Share Awards.
(A) At the Effective Time and by virtue of the Merger and without any further action on the part of Company, Parent or Merger Sub or the
holders thereof, each Company Restricted Share Award other than a Scheduled Company Restricted Share Award that is issued and outstanding as of immediately prior to the Effective Time shall be assumed by Parent and shall be converted into a number
of whole Parent Common Shares (rounded up to the nearest whole share) equal to the product obtained by multiplying (A) the number of shares of Company Common Stock subject to such Company Restricted Share Award as of immediately prior to the
Effective Time, by (B) the Exchange Ratio. Except as otherwise provided in this Section 3.1(c)(ii)(A) and Section 3.1(c)(ii)(A) of the Company Disclosure Letter, each Company Restricted Share Award assumed and
converted pursuant to this Section 3.1(c)(ii)(A) shall continue to have, and shall be subject to, the same terms and conditions as applied to the corresponding Company Restricted Share Award as of immediately prior to the Effective Time.
(B) As of immediately prior to the Effective Time, by virtue of the Merger and without any further action on the part of Company, Parent
or Merger Sub or the holders thereof, each Company Restricted Share Award that is scheduled on Section 3.1(c)(ii)(B) of the Company Disclosure Letter (a Scheduled Company Restricted Share Award) that is issued and
outstanding as of immediately prior to the Effective Time shall automatically become fully vested and all restrictions with respect thereto shall lapse as of immediately prior to the Effective Time. As of the Effective Time, each such share of
Company Common Stock will be cancelled and retired and automatically converted into the right to receive (upon the proper surrender of the Certificate or, in the case of a Book-Entry Share, the proper surrender of such Book-Entry Share) the sum of
(i) the Merger Consideration, plus (ii) the Fractional Consideration, if any. Parent shall cause the consideration described in this Section 3.1(c)(ii)(B) to be paid promptly following the Effective Time, without interest and less any
applicable withholding or other Taxes or other amounts required by Law to be withheld (including but not limited to withholding the issuance or delivery of Parent Common Shares otherwise payable as Merger Consideration to satisfy such obligations).
(iii) Treatment of Company RSUs. At the Effective Time, by virtue of the Merger and without any further action on the part of
Company, Parent or Merger Sub or the holders thereof, (A) each Company RSU subject to any performance condition that has not been satisfied and that is outstanding as of immediately prior to the Effective Time shall be cancelled, terminated,
and extinguished as of the Effective Time, and (B) upon cancellation thereof, the holder of each such Company RSU shall be entitled to receive, in full satisfaction of the rights of such holder with respect thereto, for each earned Company RSU
determined assuming 153% achievement of the performance metrics applicable to such Company RSUs as of the date of this Agreement through the day prior to the consummation of the transactions contemplated by this Agreement (an Earned Company
RSU), the sum of (1) the Merger Consideration, plus (2) the Fractional Consideration, if any, plus (3) a cash amount equal to the value, as of immediately prior to the Effective Time, of the Company Dividend Equivalent with
respect to such Earned Company RSU (such cash amount pursuant to this subsection (3), the Company Dividend Equivalent
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Consideration) (it being understood that no consideration shall be payable with respect to any Company RSUs that do not become Earned Company RSUs). Parent shall cause the
consideration described in this Section 3.1(c)(iii) to be paid promptly following the Effective Time, without interest and less any applicable withholding or other Taxes or other amounts required by Law to be withheld (including but not
limited to withholding the issuance or delivery of Parent Common Shares otherwise payable as Merger Consideration to satisfy such obligations).
(d) Share Transfer Books. From and after the Effective Time, the share transfer books of Company shall be closed and thereafter there
shall be no further registration of transfers of Company Common Stock. From and after the Effective Time, Persons who held Company Common Stock immediately prior to the Effective Time shall cease to have rights with respect to such shares, except as
otherwise provided for in this Agreement. On or after the Effective Time, any Certificates or Book-Entry Shares of Company presented to the Exchange Agent, Parent or the Surviving Entity for any reason shall be cancelled and exchanged for the Merger
Consideration with respect to Company Common Stock formerly represented thereby.
Section 3.2 Exchange Fund; Exchange
Agent.
(a) Prior to the mailing of the Joint Proxy Statement in a definitive form, Parent will designate a bank or trust company
reasonably acceptable to Company to act as exchange agent (the Exchange Agent) for the payment and delivery of the Merger Consideration and the Fractional Share Consideration, as provided in Sections 3.1(a)(ii) and
3.6.
(b) At or before the Effective Time, Parent shall deposit, or cause to be deposited, with the Exchange Agent (i) evidence
of the Parent Common Shares in book-entry form equal to the aggregate shares to be issued as Merger Consideration and (ii) cash in immediately available funds in an amount sufficient to pay the Fractional Share Consideration, the Option
Consideration, the Company Dividend Equivalent Consideration and any dividends or other distributions in accordance with Section 3.2(e) (such evidence of book-entry Parent Common Shares, and cash amounts, together with any dividends or
other distributions with respect thereto, the Exchange Fund), in each case, for the sole benefit of the holders of shares of Company Common Stock and the holders of Company Options, Scheduled Company Restricted Share Awards and
Company RSUs. Parent shall cause the Exchange Agent to make, and the Exchange Agent shall make delivery of the Merger Consideration, payment of the Fractional Share Consideration, the Option Consideration, the Company Dividend Equivalent
Consideration and any amounts payable in respect of dividends or other distributions on Parent Common Shares in accordance with Section 3.2(e) out of the Exchange Fund in accordance with this Agreement (provided that any amounts payable
to holders of Company Equity Awards with respect to whom Company has a Tax withholding obligation shall be paid as applicable to Parent, the Surviving Entity, any of their respective Affiliates, or a third-party payroll provider for payment through
an applicable payroll system). The Exchange Fund shall not be used for any other purpose.
(c) The cash portion of the Exchange Fund shall
be invested by the Exchange Agent as directed by Parent or the Surviving Entity. Interest and other income on the Exchange Fund shall be the sole and exclusive property of the Surviving Entity and shall be paid to the Surviving Entity as the
Surviving Entity directs. No investment of the Exchange Fund shall relieve Parent, the Surviving Entity or the Exchange Agent from making the payments required by this
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Article 3, and following any losses from any such investment, Parent or the Surviving Entity shall promptly provide additional funds to the Exchange Agent to the extent necessary to
satisfy Parents and the Surviving Entitys obligations hereunder for the benefit of the holders of shares of Company Common Stock at the Effective Time, which additional funds will be deemed to be part of the Exchange Fund.
(d) Exchange Procedures.
(i) As soon as reasonably practicable after the Effective Time, Parent or the Surviving Entity shall cause the Exchange Agent to mail (and to
make available for collection by hand) to each holder of record or a Certificate (or affidavit of loss in lieu thereof) (A) a letter of transmittal (a Letter of Transmittal), in customary form as prepared by Parent and
reasonably acceptable to Company, which shall specify, among other things, that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates (or affidavits of loss in lieu
thereof) to the Exchange Agent, and (B) instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration into which the number of shares of Company Common Stock previously represented by such
Certificate shall have been converted pursuant to this Agreement and the Merger, together with any amounts payable in respect of the Fractional Share Consideration in accordance with Section 3.6 and dividends or other distributions on
Parent Common Shares in accordance with Section 3.2(e).
(ii) Upon surrender of a Certificate (or affidavit of loss in lieu
thereof) to the Exchange Agent, together with a properly completed and validly executed Letter of Transmittal, and such other documents as may reasonably be required by the Exchange Agent, the holder of such Certificate shall be entitled to receive
in exchange therefor the Merger Consideration for each share of Company Common Stock formerly represented by such Certificate pursuant to the provisions of this Article 3 plus any Fractional Share Consideration that such holder has the right
to receive pursuant to the provisions of Section 3.6 and any amounts that such holder has the right to receive in respect of dividends or other distributions on Parent Common Shares in accordance with Section 3.2(e), by mail
or by wire transfer after the Exchange Agents receipt of such Certificate (or affidavit of loss in lieu thereof) and Letter of Transmittal, and the Certificate (or affidavit of loss in lieu thereof) so surrendered so transferred, as
applicable, shall be forthwith cancelled. The Exchange Agent shall accept such Certificates (or affidavits of loss in lieu thereof) upon compliance with such reasonable terms and conditions as the Exchange Agent may impose to effect an orderly
exchange thereof in accordance with customary exchange practices. No interest shall be paid or accrued for the benefit of holders of the Certificates on the Merger Consideration or the Fractional Share Consideration payable upon the surrender of the
Certificates and any distributions to which such holder is entitled pursuant to Section 3.2(e). In the event of a transfer of ownership of shares of Company Common Stock that is not registered in the transfer records of Company, it shall
be a condition of payment that any Certificate surrendered or transferred in accordance with the procedures set forth in this Section 3.2 shall be properly endorsed or shall be otherwise in proper form for transfer, and that the Person
requesting such payment shall have paid any Transfer Taxes and other Taxes required by reason of the payment of the Merger Consideration to a Person other than the registered holder of the Certificate surrendered, or shall have established to the
reasonable satisfaction of Parent that such Tax either has been paid or is not applicable.
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(iii) Any holder of Book-Entry Shares shall not be required to deliver an executed Letter
of Transmittal to the Exchange Agent to receive the Merger Consideration or other amounts pursuant to the provisions of this Article 3 from Parent that such holder is entitled to receive pursuant to this Article 3 with respect to
such Book-Entry Shares. Subject to receipt of any documentation as may reasonably be required by the Exchange Agent, each holder of one or more Book-Entry Shares shall automatically upon the Effective Time be entitled to receive, and Parent shall
cause the Exchange Agent to pay and deliver as soon as reasonably practicable after the Effective Time (but in no event later than three (3) Business Days thereafter), the Merger Consideration for each such Book-Entry Share pursuant to the
provisions of this Article 3 plus any Fractional Share Consideration that such holder has the right to receive pursuant to the provisions of Section 3.6 and any amounts that such holder has the right to receive in respect of
dividends or other distributions on Parent Common Shares in accordance with Section 3.2(e). Payment of the Merger Consideration or the Fractional Share Consideration payable and any dividends and other distributions with respect to
Book-Entry Shares shall only be made to the person in whose name such Book-Entry Shares are registered. No interest shall be paid or accrued for the benefit of holders of Book-Entry Shares on the Merger Consideration or the Fractional Share
Consideration payable and any dividends or distributions to which such holder is entitled pursuant to Section 3.2(e).
(iv) At
the Effective Time, holders of Company Common Stock shall cease to be, and shall have no rights as, stockholders of Company other than the right to receive the Merger Consideration from Parent that such holder has the right to receive pursuant to
the provisions of this Article 3 plus any Fractional Share Consideration that such holder has the right to receive pursuant to the provisions of Section 3.6 and any amounts that such holder has the right to receive in respect of
dividends or other distributions on Parent Common Shares in accordance with Section 3.2(e). The Merger Consideration paid upon the surrender for exchange of Certificates (or affidavits of loss in lieu thereof) representing Company Common
Stock (or automatic conversion in the case of Book-Entry Shares) in accordance with the terms of this Article 3 shall be deemed to have been paid in full satisfaction of all rights and privileges pertaining to the Company Common
Stock theretofore evidenced by such Certificates or Book-Entry Shares.
(e) Dividends with respect to Parent Common Shares. No
dividends or other distributions with respect to Parent Common Shares with a record date after the Effective Time shall be paid to the holder of any unsurrendered Certificate or Book-Entry Share not transferred with respect to the number of whole
Parent Common Shares issuable to such holder hereunder, and all such dividends and other distributions shall instead be paid by Parent to the Exchange Agent and shall be included in the Exchange Fund, in each case until the surrender of such
Certificate (or affidavit of loss in lieu thereof) or transfer of such Book-Entry Share in accordance with this Agreement. Subject to applicable Laws, following surrender of any such Certificate (or affidavit of loss in lieu thereof) or transfer of
any Book-Entry Share there shall be paid to the holder thereof, without interest: (i) the amount of dividends or other distributions with a record date after the Effective Time theretofore paid with respect to the number of whole Parent Common
Shares to which such holder is entitled pursuant to this Agreement; and (ii) at the appropriate payment date, the amount of dividends or other distributions with a record date after the Effective Time but prior to such surrender and with a
payment date subsequent to such surrender payable with respect to such Parent Common Shares.
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(f) Termination of Exchange Fund. Any portion of the Exchange Fund (including any
interest and income received with respect thereto and any Fractional Share Consideration and any applicable dividends or other distributions with respect to Parent Common Shares) that remains undistributed to the former holders of shares of Company
Common Stock for twelve (12) months after the Effective Time shall be delivered to Parent, upon demand, and any former holders of Company Common Stock prior to the Merger who have not theretofore complied with this Article 3 shall
thereafter look only to Parent and the Surviving Entity (and only as general creditors thereof) for payment of the Merger Consideration.
(g) No Liability. None of Parent, Merger Sub, Company, the Surviving Entity, the Exchange Agent, or any employee, officer, director,
agent or Affiliate thereof, shall be liable to any Person in respect of the Merger Consideration, as applicable, if the Exchange Fund has been delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law. Any
amounts remaining unclaimed by holders of any shares of Company Common Stock immediately prior to the time at which such amounts would otherwise escheat to, or become property of, any Governmental Authority shall, to the extent permitted by
applicable Law, become the property of the Surviving Entity, free and clear of any claims or interest of such holders or their successors, assigns or personal representatives previously entitled thereto.
Section 3.3 Withholding Rights. Parent, Merger Sub, the Surviving Entity and the Exchange Agent, as applicable, shall be
entitled to deduct and withhold from the Merger Consideration, Fractional Share Consideration and any other amounts otherwise payable to any holder of Company Common Stock pursuant to this Agreement, such amounts as it is required to deduct and
withhold with respect to such payments under applicable Law. Any such amounts so deducted and withheld shall be paid over to the applicable Governmental Authority in accordance with applicable Law and shall be treated for all purposes of this
Agreement as having been paid to the Person in respect of which such deduction and withholding was made.
Section 3.4 Lost
Certificates. If any Certificate shall have been lost, stolen or destroyed, then upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent or the Surviving
Entity, the posting by such Person of a bond in such reasonable amount as Parent or the Surviving Entity may direct, as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration to which the holder thereof is entitled pursuant to this Article 3.
Section 3.5 Dissenters Rights. No dissenters or appraisal rights, or rights of objecting stockholders under Title 3,
Subtitle 2 of the MGCL, shall be available with respect to the Merger or the other transactions contemplated by this Agreement, including any remedy under Sections 3-201 et seq. of the MGCL.
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Section 3.6 No Fractional Shares. No certificate or scrip representing
fractional Parent Common Shares shall be issued upon the surrender for exchange of Certificates or the transfer of Book-Entry Shares, and such fractional share interests shall not entitle the owner thereof to vote
or to any other rights of a shareholder of Parent. Notwithstanding any other provision of this Agreement, each holder of shares of Company Common Stock
converted into the right to receive the Merger Consideration pursuant to Section 3.1(a) who would otherwise have been entitled to receive a fraction of a Parent Common Share shall receive, in lieu thereof, cash, without interest, in an
amount equal to the product of (i) the Parent Common Share Price, multiplied by (ii) such fraction of a Parent Common Share.
Section 3.7 General Effects of the Merger. At the Effective Time, the effect of the Merger shall be as set forth in this
Agreement and as provided in the applicable provisions of the MGCL and the MLLCA. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all of the property, rights, privileges, powers and franchises of Company
shall vest in the Surviving Entity, and all debts, liabilities and duties of Company shall become the debts, liabilities and duties of the Surviving Entity.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF COMPANY
Except (a) as set forth in the disclosure letter prepared by Company, with numbering corresponding to the numbering of this
Article 4 delivered by Company to Parent prior to the execution and delivery of this Agreement (the Company Disclosure Letter) (it being acknowledged and agreed that disclosure of any item in any Section or subsection of
the Company Disclosure Letter with respect to any Section or subsection of this Article 4 shall be deemed disclosed with respect to any other Section or subsection of this Article 4 to the extent the applicability of such disclosure is
reasonably apparent on the face of such disclosure (it being understood that to be so reasonably apparent it is not required that the other Sections or subsections be cross-referenced); provided, that nothing in the Company Disclosure Letter
is intended to broaden the scope of any representation, warranty, covenant or agreement of Company made herein and no reference to or disclosure of any item or other matter in the Company Disclosure Letter shall be construed as an admission or
indication that (1) such item or other matter is material, (2) such item or other matter is required to be referred to in the Company Disclosure Letter or (3) any breach or violation of applicable Laws or any contract, agreement,
arrangement or understanding to which Company or any Company Subsidiary is a party exists or has actually occurred), or (b) as disclosed in the Company SEC Documents publicly available, filed with, or furnished to, as applicable, the SEC on or
after January 1, 2019 and at least two (2) Business Days prior to the date of this Agreement (excluding any risk factor disclosures contained in such documents under the heading Risk Factors (but including any description of
historic facts or events included therein) and any disclosure of risks or other matters included in any forward-looking statements disclaimer (but including any description of historic facts or events included therein) or other
statements that are cautionary, predictive or forward-looking in nature, which in no event shall be deemed to be an exception to or disclosure for purposes of any representation or warranty set forth in this Article 4), Company hereby
represents and warrants to Parent that:
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Section 4.1 Organization and Qualification; Subsidiaries.
(a) Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland and has the
requisite organizational power and authority to own, lease and, to the extent applicable, operate its properties and to carry on its business as it is now being conducted. Company is duly qualified or licensed to do business as a foreign
corporation, and is in good standing, in each jurisdiction where the character of the properties owned, operated or leased by it or the nature of its business makes such qualification, licensing or good standing necessary, except for such failures
to be so qualified, licensed or in good standing that would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
(b) Each Company Subsidiary is duly organized, validly existing and in good standing (to the extent applicable) under the Laws of the
jurisdiction of its incorporation or organization, as the case may be, and has the requisite organizational power and authority to own, lease and, to the extent applicable, operate its properties and to carry on its business as it is now being
conducted, except where the failure to be so organized, validly existing or in good standing (to the extent applicable), or to have such power or authority, would not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. Each Company Subsidiary is duly qualified or licensed to do business as a foreign corporation, company or partnership, as applicable, and is in good standing (to the extent applicable), in each jurisdiction where the
character of the properties owned, operated or leased by it or the nature of its business makes such qualification, licensing or good standing necessary, except for such failures to be so qualified, licensed or in good standing (to the extent
applicable) that would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
(c)
Section 4.1(c) of the Company Disclosure Letter sets forth in all material respects a true and complete list of each Company Subsidiary and their respective jurisdiction of incorporation or organization, as the case may be, and the type
of and percentage of interest held, directly or indirectly, by Company in each Company Subsidiary, including a list of each Company Subsidiary that is a qualified REIT subsidiary within the meaning of Section 856(i)(2) of the Code
(each a Qualified REIT Subsidiary) or a taxable REIT subsidiary within the meaning of Section 856(l) of the Code (each, a Taxable REIT Subsidiary).
(d) Except as set forth in Section 4.1(d) of the Company Disclosure Letter, neither Company nor any Company Subsidiary directly or
indirectly owns any interest or investment (whether equity or debt) in any Person (other than in the Company Subsidiaries and investments in short-term investment securities).
(e) Except as set forth in Section 4.1(e) of the Company Disclosure Letter, Company has not exempted any Person from or waived any
stock ownership limit or created or increased an Excepted Holder Limit (as defined in the Company Charter) under the Company Charter, which exemption or waiver is currently in effect.
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Section 4.2 Organizational Documents. Company has made available to
Parent complete and correct copies of the Company Charter and the Company Bylaws and the Organizational Documents of each Company Subsidiary that is not wholly owned by Company or another Company Subsidiary and each other entity in which Company or
any Company Subsidiary has any equity interests, in each case as in effect on the date hereof.
Section 4.3 Capital
Structure.
(a) The authorized capital stock of Company consists of 475,000,000 shares of Company Common Stock and 10,000,000 shares of
preferred stock, $0.001 par value per share (Company Preferred Stock). At the close of business on July 16, 2021 (the Company Capitalization Date), (i) 214,797,869 shares of Company Common Stock were
issued and outstanding, (ii) 2,330,760 shares of Company Common Stock were reserved for issuance pursuant to the terms of outstanding Company Equity Awards granted pursuant to the Company Equity Incentive Plans, (iii) 4,039,082 shares of
Company Common Stock were available for grant under the Company Equity Incentive Plans, and (iv) no shares of Company Preferred Stock were issued and outstanding.
(b) Section 4.3(b) of the Company Disclosure Letter sets forth a true and complete list, as of the Company Capitalization Date, of
(i) each Company Option, Company Restricted Share Award, Company RSU, Company Dividend Equivalent and any other Company Equity Award, (ii) the name of the holder thereof and whether such holder is a current or former director, employee or
other individual service provider of Company and its Subsidiaries, (iii) the number of shares of Company Common Stock underlying each such award (indicating both target-level and maximum-level performance, as applicable, in the case of the
Company Equity Awards subject to performance-based vesting) or in the case of each Company Dividend Equivalent, the accrued but unpaid cash amount underlying such award, (iv) the grant date, (v) the extent to which each such award is
vested and the times and extent to which each such award will vest, (vi) in the case of each Company Option, (A) the exercise price per share of Company Common Stock, (B) the termination date of such Company Option, and
(C) whether it is intended to qualify as an incentive stock option (as defined in Section 422 of the Code) or a non-qualified stock option, and (vii) in the case of each Company RSU and Company Dividend Equivalent, whether
such award is subject to Section 409A of the Code. The exercise price per share of Company Common Stock of each Company Option is no less than the fair market value of a share of Company Common Stock as determined on the date of grant of such
Company Option.
(c) Company does not have a dividend or distribution reinvestment plan or program. Effective as of July 17, 2021,
Company has suspended repurchases of Company Common Stock pursuant to Companys stock repurchase program (the Company Stock Repurchase Program), and such suspension remains in effect. All issued and outstanding shares of the
capital stock of Company are duly authorized, validly issued, fully paid and nonassessable, and no class of capital stock is entitled to preemptive rights. There are no outstanding bonds, debentures, notes or other Indebtedness of Company having the
right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which holders of shares of Company Common Stock may vote.
(d) Except as set forth on Section 4.3(d) of the Company Disclosure Letter, all of the outstanding shares of capital stock of each
of the Company Subsidiaries that is a corporation are duly authorized, validly issued, fully paid and nonassessable. All equity interests in each of the Company Subsidiaries that is a partnership or limited liability company are duly authorized
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and validly issued. All shares of capital stock of (or other ownership interests in) each of the Company Subsidiaries which may be issued upon exercise of outstanding options or exchange rights
are duly authorized and, upon issuance will be validly issued, fully paid and nonassessable. Company owns, directly or indirectly, all of the issued and outstanding capital stock and other ownership interests of each of the Company Subsidiaries,
free and clear of all encumbrances other than statutory or other Liens for Taxes or assessments which are not yet due or delinquent or the validity of which is being contested in good faith by appropriate proceedings and for which adequate accruals
and reserves are maintained on Companys financial statements in accordance with GAAP (if such reserves are required pursuant to GAAP).
(e) Except for the Company Equity Awards set forth on Section 4.3(b) of the Company Disclosure Letter, there are no outstanding
subscriptions, securities, options, warrants, calls, rights, profits interests, stock appreciation rights, phantom stock, convertible securities, rights of first refusal or other similar rights, agreements, arrangements, undertakings or commitments
of any kind to which Company or any of the Company Subsidiaries is a party or by which any of them is bound obligating Company or any of the Company Subsidiaries to (i) issue, transfer, deliver or sell or create, or cause to be issued,
transferred, delivered or sold or created any additional shares of capital stock or other equity interests or phantom stock or other contractual rights the value of which is determined in whole or in part by the value of any equity security of
Company or any Company Subsidiary or securities convertible into or exchangeable for such shares or equity interests, (ii) issue, grant, extend or enter into any such subscriptions, securities, options, warrants, calls, rights, profits
interests, stock appreciation rights, phantom stock, convertible securities, rights of first refusal or other similar rights, agreements, arrangements, undertakings or commitments or (iii) redeem, repurchase or otherwise acquire any such shares
of capital stock or other equity interests.
(f) Neither Company nor any Company Subsidiary is a party to or, to the Knowledge of Company,
bound by any agreements or understandings concerning the voting (including voting trusts and proxies) of any capital stock of Company or any of the Company Subsidiaries.
(g) Company does not have a poison pill or similar stockholder rights plan.
(h) Neither Company nor any Company Subsidiary is under any obligation, contingent or otherwise, by reason of any contract to register the
offer and sale or resale of any of their securities under the Securities Act.
(i) Except for the Company Dividend Equivalents set forth on
Section 4.3(b) of the Company Disclosure Letter, all dividends or other distributions on the shares of Company Common Stock and any material dividends or other distributions on any securities of any Company Subsidiary which have been
authorized or declared prior to the date hereof have been paid in full (except to the extent such dividends have been publicly announced and are not yet due and payable).
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Section 4.4 Authority.
(a) Company has the requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and,
subject to receipt of the Company Stockholder Approval, to consummate the transactions contemplated by this Agreement to which Company is a party, including the Merger. The execution and delivery of this Agreement by Company and the consummation by
Company of the transactions contemplated by this Agreement have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of Company are necessary to authorize this Agreement or the Merger or
to consummate the other transactions contemplated by this Agreement, subject, with respect to the Merger, to receipt of the Company Stockholder Approval, and to the filing of the Articles of Merger with, and acceptance for record of the Articles of
Merger by, the SDAT. This Agreement has been duly executed and delivered by Company, and assuming due and valid authorization, execution and delivery by Parent and Merger Sub, constitutes a legally valid and binding obligation of Company enforceable
against Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors rights generally and by general principles of
equity (regardless of whether enforceability is considered in a proceeding in equity or at law).
(b) The Company Board at a duly held
meeting, has unanimously (i) determined that the terms of this Agreement and the transactions contemplated hereby are in the best interests of the holders of Company Common Stock, (ii) approved, adopted and declared advisable this
Agreement and the Merger, (iii) duly and validly authorized the execution and delivery of this Agreement, (iv) directed that the Merger and the other transactions contemplated by this Agreement be submitted for consideration at the Company
Stockholder Meeting and (v) resolved to recommend that holders of Company Common Stock vote in favor of approval of the Merger and the other transactions contemplated by this Agreement and to include such recommendation in the Joint Proxy
Statement (such recommendations, the Company Board Recommendation), which resolutions remain in full force and effect and have not been subsequently rescinded, modified or withdrawn in any way, except as may be permitted after the
date hereof by Section 7.3.
Section 4.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Company does not, and, assuming receipt of the Company Stockholder Approval and that all
consents, approvals, authorizations and permits described in Section 4.5(b) have been obtained, all filings and notifications described in Section 4.5(b) have been made and any waiting periods thereunder have terminated or
expired, as applicable, the performance of this Agreement, the transactions contemplated hereby and Companys obligations hereunder will not, (i) conflict with or result in a violation of any provision of (A) the Company Charter or
the Company Bylaws, or (B) any comparable Organizational Documents of any Company Subsidiary, (ii) conflict with or result in any violation of any Law applicable to Company or any Company Subsidiary or by which any property or asset of
Company or any Company Subsidiary is bound, or (iii) require any consent or approval (except as contemplated by Section 4.5(b)) under, result in any breach of any obligation or any loss of any benefit or material increase in any
cost or obligation of Company or any Company Subsidiary under, or constitute a default (or an event which with notice or lapse of time
30
or both would become a default) under, or give to any other Person any right of, or result in a, termination, acceleration or cancellation (with or without notice or the lapse of time or both)
of, or give rise to any right of purchase, first offer or forced sale under or result in the creation of a Lien on any property or asset of Company or any Company Subsidiary pursuant to, any note, bond, debt instrument, indenture, contract,
agreement, ground lease, license, permit or other legally binding obligation to which Company or any Company Subsidiary is a party, other than a Company Permitted Lien, except, as to clauses (i)(B), (ii) and (iii) above, as, individually
or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect.
(b) The execution and delivery of this
Agreement by Company does not, and the performance of this Agreement by Company will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority, except (i) the filing with the
SEC of (A) the Joint Proxy Statement in preliminary and definitive form and of a registration statement on Form S-4 pursuant to which the offer and sale of Parent Common Shares in the Merger will be registered pursuant to the Securities Act and
in which the Joint Proxy Statement will be included (together with any amendments or supplements thereto, the Form S-4), and declaration of effectiveness of the Form S-4, and (B) such reports under, and other compliance with,
the Exchange Act and the Securities Act as may be required in connection with this Agreement and the transactions contemplated hereby, (ii) the filing of the Articles of Merger with, and the acceptance for record of the Articles of Merger by,
the SDAT pursuant to the MGCL and the MLLCA, (iii) such filings and approvals as may be required by any applicable state securities or blue sky Laws, (iv) such filings as may be required in connection with state and local
Transfer Taxes, (v) any filings or approvals required under the rules and regulations of the NYSE, and (vi) where failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, individually
or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect or as otherwise set forth on Section 4.5(b) of the Company Disclosure Letter.
Section 4.6 Permits; Compliance with Law.
(a) Except for the authorizations, licenses, permits, certificates, approvals, variances, exemptions, orders, franchises, certifications and
clearances that are the subject of Section 4.16 and Section 4.17, which are addressed solely in those Sections, Company and each Company Subsidiary is in possession of all authorizations, licenses, permits, certificates,
approvals, variances, exemptions, orders, franchises, certifications and clearances of any Governmental Authority, including building permits and certificates of occupancy, necessary for Company and each Company Subsidiary to own, lease and, to the
extent applicable, operate its properties or to carry on its respective business substantially as they are being conducted as of the date hereof (the Company Permits), and all such Company Permits are valid and in full force and
effect, except where the failure to be in possession of, or the failure to be valid or in full force and effect of, any of the Company Permits, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse
Effect. All applications required to have been filed for the renewal of the Company Permits have been duly filed on a timely basis with the appropriate Governmental Authority, except where the failure to do so would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, and all other filings required to have been made with respect to such Company Permits have been duly made on a timely basis with the appropriate Governmental Authority.
Neither Company nor any
31
Company Subsidiary has received any written notice from a Governmental Authority asserting a failure, or possible failure, to comply with any Company Permit, the subject of which written notice
has not been resolved prior to the date of this Agreement as required thereby or otherwise to the satisfaction of the Governmental Authority sending such notice, except for such failures as would not reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect.
(b) Neither Company nor any Company Subsidiary is or has been in conflict with, or in
default or violation of (i) any Law or Order applicable to Company or any Company Subsidiary or by which any property or asset of Company or any Company Subsidiary is bound (except for Laws addressed in Section 4.12,
Section 4.15, Section 4.16, or Section 4.17 which are solely addressed in those Sections), or (ii) any Company Permits (except for Company Permits addressed in Section 4.16 or
Section 4.17 which are solely addressed in those Sections), except, in each case, for any such conflicts, defaults or violations that, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse
Effect.
Section 4.7 SEC Documents; Financial Statements.
(a) Company has timely filed with, or furnished (on a publicly available basis) to, the SEC all forms, documents, statements, schedules and
reports required to be filed or furnished by Company with the SEC, including any amendments or supplements thereto, since January 1, 2019 (the forms, documents, statements, schedules and reports filed or furnished with the SEC since
January 1, 2019 and those filed with the SEC since the date of this Agreement, if any, including any amendments or supplements thereto, the Company SEC Documents). As of their respective dates, the Company SEC Documents
(other than preliminary materials) complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, applicable to such Company SEC Documents, and none of the Company SEC Documents, at the time of
filing or being furnished (or effectiveness in the case of registration statements), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except to the extent such statements have been modified or superseded by later Company SEC Documents filed or furnished and publicly available prior to the date of this
Agreement. Company does not have any outstanding and unresolved comments from the SEC with respect to any Company SEC Documents. No Company Subsidiary is required to file any form or report with the SEC.
(b) Company has made available to Parent complete and correct copies of all written correspondence between the SEC, on one hand, and Company,
on the other hand, since January 1, 2019. At all applicable times, Company has complied in all material respects with the applicable provisions of the Sarbanes-Oxley Act of 2002 (the SOX Act) and the rules and regulations
thereunder, as amended from time to time.
(c) The consolidated financial statements of Company and the Company Subsidiaries included, or
incorporated by reference, in the Company SEC Documents, including the related notes and schedules, complied as to form in all material respects with the applicable accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP applied on a consistent basis during the periods
32
involved (except as may be indicated in the notes thereto, or, in the case of the unaudited statements, as permitted by Rule 10-01 of Regulation S-X under the Exchange Act) and fairly presented,
in all material respects, in accordance with applicable requirements of GAAP and the applicable rules and regulations of the SEC (subject, in the case of the unaudited statements, to normal, recurring adjustments, none of which are material), the
consolidated financial position of Company and the Company Subsidiaries, taken as a whole, as of their respective dates and the consolidated statements of income and the consolidated cash flows of Company and the Company Subsidiaries for the periods
presented therein, in each case, except to the extent such financial statements have been modified or superseded by later Company SEC Documents filed and publicly available prior to the date of this Agreement.
(d) Neither Company nor any Company Subsidiary is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet
partnership or any similar contract or arrangement, including any contract relating to any transaction or relationship between or among Company and any Company Subsidiary, on the one hand, and any unconsolidated Affiliate of Company or any Company
Subsidiary, including any structured finance, special purpose or limited purpose entity or Person, on the other hand, or any off-balance sheet arrangements (as defined in Item 303(a) of
Regulation S-K of the SEC), where the result, purpose or effect of such contract is to avoid disclosure of any material transaction involving, or material liabilities of, Company, any Company Subsidiary or such Companys or Company
Subsidiarys audited financial statements or other Company SEC Documents.
(e) Since January 1, 2019, Company maintains a system
of internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f), as applicable, under the Exchange Act) that is effective in providing reasonable assurance regarding the reliability of Companys financial reporting and
the preparation of financial statements for external purposes in accordance with GAAP. There has been no change in Companys internal control over financial reporting that has occurred since December 31, 2020 that has materially affected,
or is reasonably likely to materially affect, Companys internal control over financial reporting. Since December 31, 2020, there have been no significant deficiencies or material weaknesses in Companys internal control over
financial reporting (whether or not remediated). Company has disclosed as of the date hereof, based on the most recent evaluation of its Chief Executive Officer and its Chief Financial Officer prior to the date of this Agreement, to Companys
auditors and the audit committee of the Company Board (i) any significant deficiencies or material weaknesses in the design or operation of its internal controls over financial reporting that are reasonably likely to materially affect
Companys ability to record, process, summarize, and report financial information and (ii) any fraud, whether or not material, that involves management or other employees of Company or any Subsidiary who have a significant role in
Companys internal control over financial reporting, and each such deficiency, weakness and fraud so disclosed to auditors, if any, has been disclosed to Parent prior to the date of this Agreement. As used in this Section 4.7(e),
the terms significant deficiency and material weakness have the meanings assigned to such terms in Auditing Standard No. 5 of the Public Company Accounting Oversight Board as in effect on the date of this Agreement. As
of the date of this Agreement, the principal executive officer and principal financial officer of Company have made all certifications required by the Sarbanes-Oxley Act and the regulations of the SEC promulgated thereunder, and the statements
contained in all such certifications were, as of their respective dates made, complete and correct in all material respects.
33
(f) Company is in compliance in all material respects with all current listing requirements
of the New York Stock Exchange.
Section 4.8 Absence of Certain Changes or Events. From December 31, 2020
through the date of this Agreement, Company and each Company Subsidiary has conducted its business in all material respects in the ordinary course of business consistent with past practice and there has not been any Company Material Adverse Effect
or any event, circumstance, change, effect, development, condition or occurrence that, individually or in the aggregate with all other events, circumstances, changes, effects, developments, conditions or occurrences, would reasonably be expected to
have a Company Material Adverse Effect.
Section 4.9 No Undisclosed Material Liabilities. There are no material
liabilities of Company or any of the Company Subsidiaries of any nature that would be required under GAAP to be set forth on the financial statements of Company or the notes thereto, other than: (a) liabilities reflected or reserved against on
the balance sheet of Company dated as of March 31, 2021 (including the notes thereto) as required by GAAP, (b) liabilities incurred in connection with the transactions contemplated by this Agreement or (c) liabilities incurred in the
ordinary course of business consistent with past practice since March 31, 2021.
Section 4.10 No Default. None of
Company or any of the Company Subsidiaries is in default or violation (and to the Knowledge of Company, no event has occurred which, with notice or the lapse of time or both, would constitute a default or violation) of any term, condition or
provision of (a) (i) the Company Charter or the Company Bylaws, or (ii) the comparable Organizational Documents of any of the Company Subsidiaries, or (b) any loan or credit agreement, note, or any bond, mortgage or indenture, to
which Company or any of the Company Subsidiaries is a party or by which Company, any of the Company Subsidiaries or any of their respective properties or assets is bound, except in the case of clause (a)(ii) and (b) for defaults or violations
which, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect.
Section 4.11 Litigation. Except as individually or in the aggregate would not reasonably be expected to have a Company
Material Adverse Effect, as of the date of this Agreement, (a) there is no Action pending or, to the Knowledge of Company, threatened in writing by or before any Governmental Authority, nor, to the Knowledge of Company, is there any
investigation pending by any Governmental Authority, in each case, against or affecting Company or any Company Subsidiary or any director or officer of Company or any Company Subsidiary, in their capacity as a director or an officer of Company or
such Company Subsidiary, and (b) neither Company nor any Company Subsidiary, nor any of their respective properties, is subject to any outstanding Order of any Governmental Authority.
Section 4.12 Taxes.
(a) Company and each Company Subsidiary has timely filed with the appropriate Governmental Authority all income and other material Tax Returns
required to be filed, taking into account any extensions of time within which to file such Tax Returns, and all such Tax Returns were complete and correct in all material respects. Company and each Company Subsidiary has duly paid (or there has been
paid on its behalf), or made adequate provisions in accordance with GAAP for, all material Taxes required to be paid by it, whether or not shown on any Tax Return.
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(b) Company (i) for all taxable years commencing with Companys taxable year
ending December 31, 2003 and through December 31, 2020, has been subject to taxation as a real estate investment trust within the meaning of Section 856 of the Code (a REIT) and has satisfied all requirements
to qualify as a REIT for such years; (ii) has operated since January 1, 2021 to the date hereof, in a manner consistent with the requirements for qualification and taxation as a REIT; (iii) intends to continue to operate in such a
manner as to qualify as a REIT (including with regard to the REIT distribution requirements) for its taxable year that ends on the day of the Merger; and (iv) has not taken or omitted to take any action that could reasonably be expected to
result in the Companys failure to qualify as a REIT or in a challenge by the IRS or any other Governmental Authority to its status as a REIT, and no such challenge is pending or threatened, to the Knowledge of Company. Companys dividends
paid deduction, within the meaning of Section 561 of the Code, for each taxable year commencing and including the taxable year ended December 31, 2013, taking into account any dividends subject to Sections 857(b)(9) or 858 of the Code, has
not been less than the sum of (x) Companys REIT taxable income, as defined in Section 857(b)(2) of the Code, determined without regard to any dividends paid deduction for such year and (y) Companys net capital gain for
such year.
(c) Except as set forth on Section 4.12(c) of the Company Disclosure Letter, (i) There are no audits, investigations
by any Governmental Authority or other proceedings pending or, to the Knowledge of Company, threatened with regard to any material Taxes or Tax Returns of Company or any Company Subsidiary; (ii) no material deficiency for Taxes of Company or
any Company Subsidiary has been claimed, proposed or assessed in writing or, to the Knowledge of Company, threatened, by any Governmental Authority, which deficiency has not yet been settled except for such deficiencies which are being contested in
good faith or with respect to which the failure to pay, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect; (iii) neither Company nor any Company Subsidiary has waived any statute of
limitations with respect to the assessment of material Taxes or agreed to any extension of time with respect to any material Tax assessment or deficiency for any open tax year; (iv) neither Company nor any Company Subsidiary currently is the
beneficiary of any extension of time within which to file any material Tax Return; and (v) neither Company nor any Company Subsidiary has entered into any closing agreement as described in Section 7121 of the Code (or any
corresponding or similar provision of state, local or foreign income Tax Law).
(d) Each Company Subsidiary that is a partnership, joint
venture or limited liability company and that has not elected to be a Taxable REIT Subsidiary has been since its formation treated for United States federal income tax purposes as a partnership, disregarded entity, or Qualified REIT Subsidiary, as
the case may be, and not as a corporation or an association taxable as a corporation whose separate existence is respected for federal income tax purposes. No Company Subsidiary is a corporation or an association taxable as a corporation, other than
a corporation or an association taxable as a corporation that qualifies as a Taxable REIT Subsidiary.
35
(e) Neither Company nor any Company Subsidiary holds any asset the disposition of which
would be subject to (or to rules similar to) Section 1374 of the Code (or otherwise result in any built-in gains Tax under Section 337(d) of the Code and the applicable Treasury Regulations thereunder).
(f) For each taxable year since and including the year ended December 31, 2013, Company and each Company Subsidiary have not incurred
(i) any material liability for Taxes under Sections 857(b), 857(f), 860(c) or 4981 of the Code and (ii) neither Company nor any Company Subsidiary has incurred any material liability for Taxes other than (A) in the ordinary course of
business consistent with past practice, or (B) transfer or similar Taxes arising in connection with acquisitions or dispositions of property. To the Knowledge of Company, no event has occurred, and no condition or circumstances exists, which
presents a material risk that any material Tax described in the preceding sentences will be imposed upon Company or any Company Subsidiary.
(g) Neither Company nor any Company Subsidiary (other than a Taxable REIT Subsidiary of Company) has engaged at any time in any
prohibited transactions within the meaning of Section 857(b)(6) of the Code. Neither Company nor any Company Subsidiary has engaged in any transaction that would give rise to redetermined rents, redetermined
deductions, excess interest or redetermined TRS service income, in each case as defined in Section 857(b)(7) of the Code.
(h) Company and each Company Subsidiary has complied, in all material respects, with all applicable Laws, rules and regulations relating to the
payment and withholding of Taxes (including withholding of Taxes pursuant to Sections 1441, 1442, 1445, 1446, 1471 through 1474, and 3402 of the Code or similar provisions under any state and foreign Laws) and have duly and timely withheld and, in
each case, have paid over to the appropriate Governmental Authority all material amounts required to be so withheld and paid over on or prior to the due date thereof under all applicable Laws, and are not liable for any arrears or wages or any taxes
or any penalty for failure to withhold or pay such amounts.
(i) There are no Company Tax Protection Agreements in force at the date of
this Agreement, and, as of the date of this Agreement, no person has raised in writing, or to the Knowledge of Company threatened to raise, a material claim against Company or any Company Subsidiary for any breach of any Company Tax Protection
Agreements. As used herein, Company Tax Protection Agreements means any written agreement to which Company or any Company Subsidiary is a party pursuant to which: (i) any liability to holders of limited partnership interests
in a Company Subsidiary Partnership relating to Taxes may arise, whether or not as a result of the consummation of the transactions contemplated by this Agreement; and/or (ii) in connection with the deferral of income Taxes of a holder of
limited partnership interests or limited liability company in a Company Subsidiary Partnership, Company or Company Subsidiary have agreed to (A) maintain a minimum level of debt, continue a particular debt or provide rights to guarantee debt,
(B) retain or not dispose of assets, (C) make or refrain from making Tax elections, and/or (D) only dispose of assets in a particular manner. As used herein, Company Subsidiary Partnership means a Company Subsidiary
that is a partnership for United States federal income tax purposes.
(j) There are no Tax Liens upon any property or assets of Company or
any Company Subsidiary except Liens for Taxes not yet due and payable or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP.
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(k) There are no Tax allocation or sharing agreements or similar arrangements with respect
to or involving Company or any Company Subsidiary (other than customary arrangements under commercial contracts or borrowings entered into in the ordinary course of business), and after the Closing Date neither Company nor any Company Subsidiary
shall be bound by any such Tax allocation agreements or similar arrangements or have any liability thereunder for amounts due in respect of periods prior to the Closing Date.
(l) Neither Company nor any Company Subsidiary has requested, has received or is subject to any written ruling of a Governmental Authority or
has entered into any written agreement with a Governmental Authority with respect to any Taxes.
(m) Neither Company nor any Company
Subsidiary (i) has been a member of an affiliated group filing a consolidated federal income Tax Return or (ii) has any liability for the Taxes of any Person (other than Company or any Company Subsidiary) under Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract (excluding customary indemnification provisions contained in credit or other commercial agreements entered into in the
ordinary course of business and the primary purposes of which do not relate to Taxes), or otherwise.
(n) Neither the Company nor any
Company Subsidiary has participated in any listed transaction within the meaning of Treasury Regulation Section 1.6011-4(b)(2).
(o) As of the date of this Agreement, Company is not aware of any fact or circumstances that could reasonably be expected to prevent the Merger
from qualifying as a reorganization within the meaning of Section 368(a) of the Code.
(p) None of Company nor any Company Subsidiary
has constituted either a distributing corporation or a controlled corporation (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax-free treatment under Section 355
of the Code (i) in the two (2) years prior to the date of this Agreement or (ii) in a distribution which could otherwise constitute part of a plan or series of related transactions (within the meaning of
Section 355(e) of the Code) in conjunction with transactions contemplated by this Agreement.
(q) Except as set forth on
Section 4.12(q) of the Company Disclosure Letter, no written power of attorney that has been granted by Company or any Company Subsidiary (other than to Company or a Company Subsidiary) currently is in force with respect to any matter
relating to Taxes, except for powers of attorney granted to counsel with respect to appeals of real estate tax assessments.
(r) As of the
date hereof, the amount of the Companys liabilities does not exceed the aggregate U.S. federal income tax basis of the Companys assets (each as computed for U.S. federal income tax purposes).
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(s) Neither the Company nor any Company Subsidiary (other than any Company Subsidiary that
is a taxable REIT subsidiary) has or has had any earnings and profits attributable to such entity or any other corporation in any non-REIT year within the meaning of Section 857 of the Code.
(t) Each Company Subsidiary that is a Qualified REIT Subsidiary set forth on Section 4.12(t) of the Company Disclosure Letter
directly or indirectly owns interests in real property, and no such Qualified REIT Subsidiary has made an entity classification election on IRS Form 8832 in the sixty (60) month period preceding the date of this Agreement. The aggregate
value of all property owned by the Company Subsidiaries that are Qualified REIT Subsidiaries is less than 20% of the gross value of Companys assets (as computed for REIT asset test purposes). No Company Subsidiary that is a Qualified REIT
Subsidiary is party to a mortgage loan or engages in any activity described in Section 856(l)(3)(A) or (B) of the Code.
Section 4.13 Benefit Plans; Employees.
(a) Section 4.13(a) of the Company Disclosure Letter sets forth, as of the date of this Agreement, a list of each material Benefit
Plan (i) maintained, sponsored, contributed to, required to be contributed to, or participated in by Company or any of the Company Subsidiaries or with respect to which Company or any of the Company Subsidiaries is a party for the benefit of or
relating to any current or former director, employee, or other individual service provider of Company and Company Subsidiaries or (ii) with respect to which Company or any of the Company Subsidiaries has or may have any material obligation or
liability (contingent or otherwise and including as a result of being an ERISA Affiliate with any person) (Company Benefit Plans), excluding former agreements under which neither Company nor any Company Subsidiary has any
remaining obligations and any of the foregoing that are required to be maintained by Company or any Company Subsidiary under the Laws of any jurisdiction. Company has provided or made available to Parent, in each case, to the extent applicable and
as of the date of this Agreement: (i) accurate and complete copies of all documents setting forth the terms of each material Company Benefit Plan including all amendments thereto; (ii) the most recent summary plan description, together
with summaries of the material modifications thereto, if any, required under ERISA with respect to each material Company Benefit Plan; (iii) all trust agreements, insurance contracts and funding agreements, including all amendments thereto;
(iv) all discrimination and compliance tests performed under the Code for the most recent plan year; (v) the most recent IRS determination or opinion letter issued with respect to each Company Benefit Plan intended to be qualified under
Section 401(a) of the Code; and (vi) all material, non-routine and written filings, notices, correspondence or other communications relating to any Company Benefit Plan that was submitted to or received from the IRS, the Pension Benefit
Guaranty Corporation, the Department of Labor, the SEC, or any other Governmental Authority in the past three years.
(b) None of Company,
any Company Subsidiary or any of their respective ERISA Affiliates maintains, sponsors, contributes to, is required to contribute to or participates in, or has ever maintained, sponsored, contributed to, been required to contribute to or
participated in, or otherwise has any obligation or liability in connection with: (i) a pension plan under Section 3(2) of ERISA that is subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code,
(ii) a multiemployer plan (as defined in Section 3(37) of ERISA), (iii) a multiple employer welfare arrangement (as defined in Section 3(40) of ERISA), or (iv) a multiple
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employer plan (as defined in Section 413(c) of the Code). None of Company, any Company Subsidiary or any of their respective ERISA Affiliates have incurred, nor are there any
circumstances under which they could reasonably incur, any liability or obligations under Title IV of ERISA. Except as set forth in Section 4.13(b) of the Company Disclosure Letter, none of Company, any Company Subsidiary or any of their
respective ERISA Affiliates have any liability or obligation to provide post-termination or retiree life insurance, post-termination or retiree health benefits or other post-termination or retiree employee welfare benefits to any person for any
reason (or to any such persons eligible dependents), other than coverage mandated by Part 6 of Title I of ERISA or Section 4980B of the Code at the recipients sole premium cost. No Company Benefit Plan provides or reflects or
represents any liability or obligation of Company or any Company Subsidiary to provide life insurance, health benefits or other welfare benefits to any member of Companys Board of Directors for any reason, unless such director is also an
employee of Company or any Company Subsidiary.
(c) Except as set forth on Section 4.13(c) of the Company Disclosure Letter,
neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will, individually or together with the occurrence of any other event, (i) result in any payment (whether of bonus, change in control,
retention, severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any current or former director, trustee, employee or other individual
service provider of Company or any of the Company Subsidiaries; (ii) create any limitation or restriction on the right to merge, amend or terminate any Company Benefit Plan; or (iii) result in the payment of any amount or benefit to a
disqualified individual (as such term is defined in Treasury Regulation Section 1.280G-1) that could, individually or in combination with any other payment, constitute an excess parachute payment as defined in
Section 280G(b)(1) of the Code. Neither Company nor any Company Subsidiary has any obligation to gross-up or otherwise reimburse or compensate any current or former director, trustee, employee, or other individual service provider for any Taxes
incurred by such individual under or pursuant to Section 409A of the Code, Section 4999 of the Code, or otherwise.
(d) Each
Company Benefit Plan and the administrators and fiduciaries of each Company Benefit Plan have complied with the applicable requirements of ERISA, the Code, and any other applicable Law, except where the failure to so comply has not had and would not
reasonably be expected to have a Company Material Adverse Effect. Each Company Benefit Plan that is intended to comply with Section 401(a) of the Code has received a favorable determination letter issued by the IRS or is maintained under a
prototype or volume submitter plan and may rely upon a favorable opinion or advisory letter issued by the IRS with respect to such prototype or volume submitter plan. To the Knowledge of Company, no event has occurred with respect to any Company
Benefit Plan which will or could give rise to disqualification of such plan, the loss of intended Tax consequences under the Code, or any material Tax or liability or penalty. All contributions and payments due from Company, any Company Subsidiary
or any of their respective ERISA Affiliates with respect to each Company Benefit Plan as required by Law and by the terms of the Company Benefit Plans have been timely made or to the extent not yet due, have been timely accrued in accordance with
GAAP in the consolidated financial statements (including any related notes) contained or incorporated by reference in the Company SEC Documents.
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(e) (i) There are no material proceedings pending (other than routine claims for benefits)
or, to the Knowledge of the Company, threatened with respect to a Company Benefit Plan or the assets of a Company Benefit Plan; (ii) to the Knowledge of the Company, no fiduciary (as defined in ERISA Section 3(21) of a Company Benefit
Plan) has breached any fiduciary, co-fiduciary or other duty imposed under Title I of ERISA; and (iii) to the Knowledge of the Company, no party in interest (as defined in Section 3(14) of ERISA) or disqualified
person (as defined in Code Section 4975) of any Company Benefit Plan has engaged in any nonexempt prohibited transaction (as defined in Code Section 4975 or ERISA Section 406) which has had or would reasonably be
expected to have a Company Material Adverse Effect.
(f) Company has provided or made available to Parent under separate cover a true,
correct, and complete listing of all employees of Company and Company Subsidiaries (the Company Employees) as of the date of this Agreement, including each such Company Employees name, job title or function, employer entity
name, classification as exempt or non-exempt under applicable Law, job location, leave of absence status and expected return to work date, and date of hire, as well as a true, correct, and complete listing of his or her current base salary or wage
payable, the amount of all incentive compensation paid or payable to such Company Employee for the most recently-completed calendar year, the amount of accrued but unused vacation time, and his or her current participation in any Company Benefit
Plan, each as of the date of this Agreement. The employment of all Company Employees may be terminated on an at-will basis.
(g) Neither
Company nor any Company Subsidiary is or has ever been a party to or bound (in whole or in part) by any collective bargaining agreement or other labor union contract applicable to employees of Company or any Company Subsidiary, nor is any such
agreement or contract presently being negotiated. There are no activities or proceedings of any labor union or employee group to organize any employees of Company or any Company Subsidiary or any current union representation questions involving such
employees nor have there been any such activities or proceedings within the past three (3) years. There is no labor strike, controversy, slowdown, work stoppage or lockout occurring, or, to the Knowledge of Company, threatened by or with
respect to any employees of Company or any Company Subsidiary, nor has any such action occurred or, to the Knowledge of Company, been threatened, within the past three (3) years. There are no material unfair labor practice complaints pending
or, to the Knowledge of Company, threatened against Company or any Company Subsidiary before the National Labor Relations Board or any other Governmental Authority. No material charges with respect to or relating to Company or any Company Subsidiary
are pending or, to the Knowledge of Company, threatened before the Equal Employment Opportunity Commission or any other Governmental Authority. There is no material employment-related Action pending or, to the Knowledge of Company, threatened with
respect to any current or former employees of Company or any Company Subsidiary, including any Actions with respect to payment of wages, salary or overtime pay, discrimination, harassment or wrongful discharge. Neither Company nor any Company
Subsidiary is a party to, or otherwise bound by, any consent decree with or citation by any Governmental Authority relating to employees or employment practices, and there are no pending or, to the Knowledge of Company, threatened investigations,
audits or similar proceedings alleging breach or violation of any labor or employment law. Neither Company nor any Company Subsidiary has or will become subject to any obligation under applicable Law or otherwise to notify or consult with, prior to
or after the Closing, any Company Employee, Governmental Authority or other Person with respect to the impact of the transactions contemplated hereby on the employment of any of the Company Employees or the compensation or benefits provided to any
of the Company Employees.
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(h) Neither Company nor any Company Subsidiary has taken any action in the past three
(3) years that has triggered any liability or an obligation to provide notice under WARN.
Section 4.14 Information
Supplied. None of the information relating to Company and the Company Subsidiaries contained in the Joint Proxy Statement or that is provided by Company and the Company Subsidiaries in writing for inclusion or incorporation by reference in the
Form S-4 or any other document filed with the SEC in connection with the transactions contemplated by this Agreement will (a) in the case of the Form S-4, at the time it becomes effective under the Securities Act, contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, (b) in the case of the Joint
Proxy Statement, at the time of the mailing thereof, at the time the Company Stockholder Meeting or the Parent Shareholder Meeting is held, contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, or (c) with respect to any other document to be filed by Company with the SEC in connection with the Merger
or the other transactions contemplated by this Agreement, at the time of its filing with the SEC, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not misleading. The Form S-4 and the Joint Proxy Statement will (with respect to Company, its officers and directors and the Company Subsidiaries) comply as to form in all
material respects with the applicable requirements of the Securities Act and the Exchange Act; provided, that no representation or warranty is made hereunder as to statements made or incorporated by reference in the Form S-4 or the Joint
Proxy Statement that were not supplied by or on behalf of Company or any Company Subsidiaries.
Section 4.15 Intellectual
Property. Except as set forth on Section 4.15(b) of the Company Disclosure Letter or as, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect:
(a) Company and the Company Subsidiaries own all Intellectual Property owned or purported to be owned by the Company or any Company Subsidiary,
free and clear of all Liens other than Company Permitted Liens, and are licensed to use, or otherwise possess valid rights to use, all other Intellectual Property used in or held for use in, and necessary for the conduct of, the business of Company
and the Company Subsidiaries as it is currently conducted,
(b) all Company Intellectual Property owned or purported to be owned by the
Company or any Company Subsidiary that has been issued by or registered with, or the subject of an application filed with, as applicable, the U.S. Patent and Trademark Office, the U.S. Copyright Office or any similar office or agency anywhere in the
world are not expired, cancelled or abandoned and, to the Knowledge of the Company, are valid and enforceable,
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(c) there are no pending or, to the Knowledge of the Company, threatened claims against the
Company or any Company Subsidiary alleging that the Company Intellectual Property infringes, misappropriates or otherwise violates (or since January 1, 2019, infringed, misappropriated or otherwise violated) any Intellectual Property rights of
any third party or that any of the Company Intellectual Property is invalid or unenforceable,
(d) to the Knowledge of Company, the conduct
of the business of Company and Company Subsidiaries as it is currently conducted does not infringe, misappropriate or otherwise violate (or since January 1, 2019, infringed, misappropriated or otherwise violated) any Intellectual Property
rights of any third party,
(e) to the Knowledge of Company, no third party is misappropriating, infringing or otherwise violating any
Company Intellectual Property,
(f) Company and Company Subsidiaries have taken reasonable measures to protect the security, privacy and
confidentiality of all Company Protected Information,
(g) Company and Company Subsidiaries have implemented and maintain reasonable data
security programs that are consistent with industry standards and applicable Laws,
(h) Company and Company Subsidiaries have not
experienced any breach of security, unauthorized access or disclosure, or loss of control of Company Protected Information since January 1, 2019,
(i) Company and Company Subsidiaries have complied with all security, privacy or data protection Laws applicable to that entity or to Company
Protected Information that entity collects, holds, uses or discloses, and
(j) following the Closing Date, the Surviving Entity will have
the same rights and privileges in the Company Intellectual Property as the Company and Company Subsidiaries had in the Company Intellectual Property immediately prior to the Closing Date.
Section 4.16 Environmental Matters. Except as set forth on Section 4.16 of the Company Disclosure Letter or as
would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect:
(a) Company and each
Company Subsidiary are in compliance and, except for matters that have been fully and finally resolved, Company and each Company Subsidiary have for the past three (3) years complied with all Environmental Laws.
(b) Company and each Company Subsidiary have timely applied for, obtained and maintain all Environmental Permits necessary to conduct their
current operations and are in compliance with their respective Environmental Permits, and all such Environmental Permits are valid and in good standing.
(c) Neither Company nor any Company Subsidiary has received any written request for information from a Governmental Authority, or any notice,
demand, letter or claim alleging that Company or any such Company Subsidiary is in violation of, or liable under, any Environmental Law or with respect to Hazardous Substances.
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(d) Neither Company nor any Company Subsidiary is subject to any Order relating to
compliance with or liability under Environmental Laws, Environmental Permits or the investigation, sampling, monitoring, treatment, remediation, removal, Release or cleanup of Hazardous Substances and no Action is pending or, to the Knowledge of
Company, threatened against Company or any Company Subsidiary under any Environmental Law or relating to Hazardous Substances.
(e) Neither
Company nor any Company Subsidiary has assumed by contract, operation of law or otherwise, any liability of any person under any Environmental Law or relating to any Hazardous Substances, or is an indemnitor in connection with any threatened or
asserted claim by any third-party indemnitee for any liability under any Environmental Law or relating to any Hazardous Substances.
(f)
Neither Company nor any Company Subsidiary has caused, and to the Knowledge of Company, no third party has caused any Release of a Hazardous Substance that would reasonably be expected to result in liability to Company or any Company Subsidiary
under any Environmental Law or relating to Hazardous Substances.
(g) Neither Company nor any Company Subsidiary has transported, disposed,
or arranged for the transport, treatment or disposal of Hazardous Substances at any location such that Company or such Company Subsidiary is or would reasonably be expected to be liable, or become the subject of any Action under Environmental Law or
with respect to Hazardous Substances.
(h) Section 4.16(h) of the Company Disclosure Letter sets forth a true and complete list
of all active, pending or threatened environmental contamination investigations, plans or remedial obligations of Company or any Company Subsidiary, including a brief description of each such investigation, plan or obligation.
Section 4.17 Properties.
(a) Section 4.17(a) of the Company Disclosure Letter sets forth a true and complete list of the address and common name of each
Company Property and identifies each Company Property under which Company or any Company Subsidiary is a lessee or sublessee, including any other real property in which Company or any Company Subsidiary holds any air rights.
Section 4.17(a) of the Company Disclosure Letter sets forth a true and complete list of the real property which, as of the date of this Agreement, is under contract to be purchased by Company or a Company Subsidiary after the date of
this Agreement or that is required under a binding contract to be leased or subleased by Company or a Company Subsidiary as lessee or sublessee after the date of this Agreement. Except for any pending acquisitions under contract disclosed on
Section 6.1 of the Company Disclosure Letter, there are no real properties that either Company or any Company Subsidiary is obligated to buy, lease or sublease at some future date. Section 4.17(a) of the Company Disclosure
Letter sets forth a true and complete list of the mortgage notes receivables and commercial mortgage backed and similar securities owned by Company or any Company Subsidiary.
43
(b) Either Company or a Company Subsidiary owns good and valid fee simple title (with
respect to jurisdictions that recognize such form of title or substantially similar title with respect to all other jurisdictions) or leasehold title (as applicable) or air rights to each of the Company Properties, in each case, free and clear of
Liens, except for Company Permitted Liens none of which Company Permitted Liens have had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Section 4.17(b) of the Company
Disclosure Letter describes the material Company Permitted Liens which are being contested in good faith by appropriate proceedings.
(c)
Neither Company nor any of the Company Subsidiaries has received (i) written notice that any certificate, permit or license from any Governmental Authority having jurisdiction over any of the Company Properties or any agreement, easement or
other right of an unlimited duration that is necessary to permit the lawful use and operation of the buildings and improvements on any of the Company Properties or that is necessary to permit the lawful use and operation of all utilities, parking
areas, retention ponds, driveways, roads and other means of egress and ingress to and from any of the Company Properties is not in full force and effect as of the date of this Agreement (or of any pending written threat of modification or
cancellation of any of same), except for such failures to be in full force and effect that, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect, or (ii) written notice of any uncured
violation of any Laws affecting any of the Company Properties which, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect.
(d) No certificate, variance, permit or license from any Governmental Authority having jurisdiction over any of the Company Properties or any
agreement, easement or other right that is necessary to permit the current use and operation of the buildings and improvements on any of the Company Properties as currently used and operated or that is necessary to permit the current use of all
parking areas, driveways, roads and other means of egress and ingress to and from any of the Company Properties has failed to be obtained or is not in full force and effect, and neither Company nor any Company Subsidiary has received written notice
of any outstanding threat of modification or cancellation of any such certificate, variance, permit or license, except for any of the foregoing as, individually or in the aggregate, has not had and would not reasonably be expected to have a Company
Material Adverse Effect.
(e) Except as listed on Section 4.17(e) of the Company Disclosure Letter, since January 1, 2019,
no written notice to the effect that there are condemnation, eminent domain or similar proceedings or material rezoning proceedings has been received or is pending with respect to any material portion of any of the Company Properties, and, to the
Knowledge of Company, since January 1, 2019, no (i) condemnation or material rezoning proceedings are threatened with respect to any material portion of any of the Company Properties, and (ii) no zoning regulation or ordinance
(including with respect to parking), Board of Fire Underwriters rules, building, fire, health or other Law has been violated (and remains in violation) for any Company Property, which violation or any enforcement action related thereto would prevent
the Company Property and any associated improvements from continuing to be operated in the ordinary course of business.
44
(f) Except for discrepancies, errors or omissions that, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect, the rent rolls for each of the Company Properties, as of June 30, 2021, which rent rolls have previously been made available by or on behalf of Company or any Company
Subsidiary to Parent (including an indication of whether any Company Property is subject to net leases), are true and correct in all respects and (i) correctly reference each lease or sublease that was in effect as of June 30, 2021, and to
which Company or a Company Subsidiary is a party as lessor or sublessor with respect to each of the Company Properties and (ii) identify the rent payable under the Company Leases as of such date. Company or a Company Subsidiary has received all
security deposits required by the applicable Company Lease other than immaterial deficiencies, and such security deposits have been held and applied in all material respects in accordance with Law and the applicable Company Leases.
(g) True and complete (in all material respects) copies of all ground leases with respect to the Company Properties where Company or any
Company Subsidiary is the lessee or sublessee, in each case in effect as of the date hereof, have been made available to Parent. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect
or as disclosed on Section 4.17(g) of the Company Disclosure Letter, (i) neither Company nor any Company Subsidiary is and, to the Knowledge of Company, no other party is in breach or violation of, or default under, any of the
(x) ground leases with respect to the Company Properties where Company or any Company Subsidiary is the lessee or sublessee and (y) Company Leases (A) for real property in excess of 15,000 square feet or (B) providing for
aggregate annual base rent in an amount in excess of $750,000 (the Material Company Leases), (ii) no event has occurred that would result in a breach or violation of, or a default under, any Material Company Lease by Company
or any Company Subsidiary, or, to the Knowledge of Company, any other party thereto (in each case, with or without notice or lapse of time) and no tenant under a Material Company Lease is in monetary default under such Material Company Lease,
(iii) no tenant under a Material Company Lease is the beneficiary or has the right to become a beneficiary of (A) a loan or forbearance from Company or Company Subsidiary in connection with COVID-19 or COVID-19 Measures, unless set forth
on Section 4.17(g) of the Company Disclosure Letter, or (B) any other loans or forbearances from Company or any Company Subsidiary in excess of $500,000 in the aggregate, and (iv) each Material Company Lease is valid, binding
and enforceable in accordance with its terms and is in full force and effect with respect to Company or a Company Subsidiary and, to the Knowledge of Company, with respect to the other parties thereto, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting creditors rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at Law). Except as would not
reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or as disclosed on Section 4.17(g) of the Company Disclosure Letter, (x) neither Company nor any Company Subsidiary has received
written notice from any tenant under any Material Company Lease that such tenant is challenging the calculation of any amounts to be paid by any such tenant under any Material Company Lease which has not been resolved, (y) no tenant under a
Material Company Lease is currently asserting in writing a right to cancel or terminate such Material Company Lease prior to the end of the current term, and (z) neither Company nor any Company Subsidiary has received a notice of any insolvency
or bankruptcy proceeding involving any tenant under a Material Company Lease. Except as set forth on Section 4.17(g) of the Company Disclosure Letter, no tenant under a Material Company Lease is in monetary default in an amount in excess
of $250,000 relating to the payment of any amounts payable under such Material Company Lease.
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(h) To the Knowledge of Company, there are no material Tax abatements or exemptions
specifically affecting any of the Company Properties. Neither Company nor any Company Subsidiary has received any written notice of (and Company and Company Subsidiaries do not have any Knowledge of) any proposed increase in the assessed valuation
of any Company Property or of any proposed public improvement assessments that, in any of the foregoing, will result in the Taxes or assessments payable in the next tax period increasing by an amount material to Company and Company Subsidiaries,
considered as a whole, in each case, to the extent such Tax is on a Company Property for which Company is not entitled by the terms of Company Leases to be reimbursed for a significant portion of such Tax.
(i) As of the date of this Agreement, no material purchase option has been exercised under any Company Lease for which the purchase has not
closed prior to the date of this Agreement.
(j) Except for Company Permitted Liens, as set forth in Company Leases, joint venture
agreements and title documents provided to Parent prior to the date hereof or as set forth on Section 4.17(j) of the Company Disclosure Letter, (i) there are no unexpired option to purchase agreements, rights of first refusal or
first offer or any other rights to purchase or otherwise acquire any Company Property or any material portion thereof, and (ii) there are no other outstanding rights or agreements to enter into any contract for sale, ground lease or letter of
intent to sell or ground lease any Company Property or any material portion thereof that is owned by any Company Subsidiary, which, in each case, is in favor of any party other than Company or a Company Subsidiary (a Company Third
Party).
(k) Except pursuant to a Company Lease, or any ground lease affecting any Company Property, neither Company nor any
Company Subsidiary is a party to any agreement pursuant to which Company or any Company Subsidiary manages or manages the development of any real property for any Company Third Party.
(l) Except as would not, individually or in the aggregate, materially impair the value of the applicable Company Property or the continued use
and operation of the applicable Company Property as would not have a material adverse impact on Company, Company and each Company Subsidiary, as applicable, are in possession of title insurance policies or valid marked-up title commitments
evidencing title insurance with respect to each Company Property (each, a Company Title Insurance Policy and, collectively, the Company Title Insurance Policies). Since January 1, 2019, no written claim has
been made against any Company Title Insurance Policy that would be material to any Company Property.
(m) Section 4.17(m) of
the Company Disclosure Letter lists each Company Property that is (i) under development (or for which development is imminent) as of the date hereof (other than normal repair, maintenance and landlord or tenant improvement projects in the
ordinary course of business) or (ii) subject to a binding agreement for development or commencement of construction by Company or a Company Subsidiary, in each case other than those pertaining to customary capital repairs, replacements and
other similar correction or deferred maintenance items in the ordinary course of business.
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(n) Section 4.17(n) of the Company Disclosure Letter lists the parties currently
providing third-party property management services to Company or a Company Subsidiary and the number of Company Properties currently managed by each such party.
(o) The Company Properties (x) are supplied with utilities and other services as reasonably required for their continued operation as they
are now being operated, (y) are, to the Knowledge of Company, either (A) sufficient for their normal operation in the manner currently being operated and without any material structural defects other than as may be disclosed in any
physical condition reports that have been made available to Parent or (B) scheduled for maintenance or repair in the ordinary course of business, and (z) are, to the Knowledge of Company, adequate and suitable for the purposes for which
they are presently being used.
(p) To the Knowledge of Company, each of the Company Properties has sufficient access to and from publicly
dedicated streets for its current use and operation, without any constraints that interfere with the normal use, occupancy and operation thereof.
(q) Company and any Company Subsidiaries have good and valid title to, or a valid and enforceable leasehold interest in, or other right to use,
all material personal property owned, used or held for use by them as of the date of this Agreement (other than property owned by tenants and used or held in connection with the applicable tenancy) except as individually or in the aggregate has not
had and would not reasonably be expected to have a Company Material Adverse Effect. None of Companys or any Company Subsidiaries ownership of or leasehold interest in any such personal property is subject to any Liens, except for Company
Permitted Liens and Liens that have not and would not reasonably be expected to have a Company Material Adverse Effect.
(r) With respect
to any Company Property that includes or is adjacent to any retail store in excess of 30,000 square feet that is owned by a third party (a Shadow Anchor) (other than Company or a Company Subsidiary), since January 1, 2019,
neither Company nor to the Knowledge of Company any Shadow Anchor or any other party has received written notice of material default under any reciprocal easement agreement or joint operating agreement or similar agreement that relates to the
operation of such Company Property.
(s) Section 4.17(s) of the Company Disclosure Letter sets forth a list of all outstanding
obligations of Company or any Company Subsidiary for Tenant Improvements as of the date of this Agreement, which individually exceed $2,000,000, including (i) the applicable Company Lease, (ii) the total amount of such Tenant Improvement
obligation and (iii) a brief description of the project.
Section 4.18 Material Contracts.
(a) Except for contracts listed in Section 4.18(a) of the Company Disclosure Letter, this Agreement or contracts filed as exhibits
to the Company SEC Documents, as of the date of this Agreement, neither Company nor any Company Subsidiary is a party to or bound by any contract that, as of the date hereof:
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(i) is required to be filed as an exhibit to the Company SEC Documents pursuant to
Item 601(b)(2), (4), (9) or (10) of Regulation S-K promulgated under the Securities Act (but, for the avoidance of doubt, no Company Benefit Plan);
(ii) obligates Company or any Company Subsidiary to make non-contingent aggregate annual expenditures (other than principal and/or interest
payments or the deposit of other reserves with respect to debt obligations) in excess of $2,000,000 and is not cancelable within ninety (90) days without material penalty to Company or any Company Subsidiary, except for any Company Lease or any
ground lease affecting any Company Property;
(iii) contains any non-compete or exclusivity provisions with respect to any line of
business or geographic area that restricts or limits in any material respect the business of Company or any Company Subsidiary, or that otherwise restricts or limits, in each case, in any material respect, the lines of business conducted by Company
or any Company Subsidiary or the geographic area in which Company or any Company Subsidiary may conduct business, other than any ground lease or exclusive lease provisions, non-compete provisions and other similar leasing restrictions entered into
by the Company and its Subsidiaries in the ordinary course of business;
(iv) is an agreement that obligates Company or any Company
Subsidiary to indemnify any past or present directors, officers, trustees, employees and agents of Company or any Company Subsidiary pursuant to which Company or a Company Subsidiary is the indemnitor (other than the Company Charter and Company
Bylaws and the Organizational Documents of the Company Subsidiaries);
(v) constitutes an Indebtedness obligation of Company or any
Company Subsidiary with a principal amount as of the date hereof greater than $5,000,000 other than (x) surety or performance bonds, letters of credit or similar agreements entered into in the ordinary course of business in each case to the
extent not drawn upon and (y) any contract solely among or between the Company and its wholly owned Subsidiaries;
(vi) requires
Company or any Company Subsidiary to dispose of or acquire assets or real properties (other than in connection with the expiration of a Company Lease or a ground lease affecting any Company Property) with a fair market value in excess of $5,000,000,
or involves any pending or contemplated merger, consolidation or similar business combination transaction, except for any Company Lease or any ground lease affecting any Company Property;
(vii) constitutes an interest rate cap, interest rate collar, interest rate swap or other contract or agreement relating to a hedging
transaction;
(viii) sets forth the operational terms of a joint venture, partnership, limited liability company with a Company Third
Party member or strategic alliance of Company or any Company Subsidiary;
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(ix) constitutes a loan to any Person (other than a wholly owned Company Subsidiary) by
Company or any Company Subsidiary (other than advances made pursuant to and expressly disclosed in Company Leases or pursuant to any disbursement agreement, development agreement, or development addendum entered into in connection with a Company
Lease with respect to the development, construction, or equipping of Company Properties or the funding of improvements to Company Properties) in an amount in excess of $2,000,000;
(x) constitutes an agreement under which Company or a Company Subsidiary has purchased or sold real property and has uncompleted financial
obligations in excess of $2,000,000; or
(xi) requires payment of commissions (including leasing commissions on brokerage fees) or Tenant
Improvement costs, allowances or other concessions in excess of $2,000,000.
(b) Each contract in any of the categories set forth in
Section 4.18(a) to which Company or any Company Subsidiary is a party or by which it is bound is referred to herein as a Company Material Contract.
(c) Except as, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect, each Company
Material Contract is legal, valid, binding and enforceable on Company and each Company Subsidiary that is a party thereto and, to the Knowledge of Company, each other party thereto, and is in full force and effect, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at Law). Except
as, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect, Company and each Company Subsidiary has performed all obligations required to be performed by it prior to the date hereof under each
Company Material Contract and, to the Knowledge of Company, each other party thereto has performed all obligations required to be performed by it under such Company Material Contract prior to the date hereof. None of Company or any Company
Subsidiary, nor, to the Knowledge of Company, any other party thereto, is in material breach or violation of, or default under, any Company Material Contract, and no event has occurred that, with notice or lapse of time or both, would constitute a
violation or breach of, or default under, any Company Material Contract, except where in each case such breach, violation or default is not reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. Neither
Company nor any Company Subsidiary has received notice of any violation of or default under any Company Material Contract, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
Section 4.19 Insurance. Section 4.19 of the Company Disclosure Letter sets forth
a list of all material insurance policies and all material fidelity bonds or other material insurance contracts providing coverage for all Company Properties (the Company Insurance Policies). The Company Insurance Policies include
all material insurance policies and all material fidelity bonds or other material insurance service contracts required by any Material Company Lease. Except as individually or in the aggregate, would not reasonably be expected to have a Company
Material
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Adverse Effect, all premiums due and payable under all the Company Insurance Policies have been paid, and Company and Company Subsidiaries have otherwise complied in all material respects with
the terms and conditions of all the Company Insurance Policies. Except as, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect, or as set forth on Section 4.19 of the Company
Disclosure Letter, there is no claim for coverage by Company or any Company Subsidiary pending under any of the Company Insurance Policies that has been denied or disputed by the issuer. To the Knowledge of Company, such Company Insurance Policies
are valid and enforceable in accordance with their terms and are in full force and effect. Since January 1, 2019, no written notice of cancellation or termination has been received by Company or any Company Subsidiary with respect to any such
policy which has not been replaced on substantially similar terms prior to the date of such cancellation.
Section 4.20
Opinion of Financial Advisor. The Company Board has received the oral opinion of Citigroup Global Markets Inc. (to be confirmed in writing) to the effect that, as of the date of such opinion and based on and subject to the assumptions,
qualifications, limitations and other matters set forth in such opinion, the Exchange Ratio is fair, from a financial point of view, to holders (other than any Company Subsidiary, Parent and any Parent Subsidiary) of Company Common Stock.
Section 4.21 Approval Required. The affirmative vote of holders of shares of Company Common Stock entitled to cast a
majority of all the votes entitled to be cast with respect to such action at the Company Stockholder Meeting (the Company Stockholder Approval) is the only vote of holders of securities of Company required to approve this
Agreement, the Merger and the other transactions contemplated by this Agreement.
Section 4.22 Brokers. Except for the
fees and expenses payable to Citigroup Global Markets Inc., no broker, investment banker or other Person is entitled to any brokers, finders or other similar fee or commission in connection with the Merger and the other transactions
contemplated by this Agreement based upon arrangements made by or on behalf of Company or any Company Subsidiary; a true and complete copy of the agreement with respect to the engagement of Citigroup Global Markets Inc. has previously been made
available to Parent.
Section 4.23 Investment Company Act. Neither Company nor any Company Subsidiary is required to be
registered as an investment company under the Investment Company Act.
Section 4.24 Takeover Statutes. The Company
Board has taken all action necessary to render inapplicable to the Merger and the other transactions contemplated by this Agreement the restrictions on business combinations and control share acquisitions contained in Subtitle 6 of Title 3 of the
MGCL and Subtitle 7 of Title 3 of the MGCL. To the Knowledge of Company, no other business combination, control share acquisition, fair price, moratorium or other takeover or anti-takeover statute or
similar federal or state Law (collectively, Takeover Statutes) is applicable to this Agreement, the Merger or the other transactions contemplated by this Agreement. Neither Company nor any Company Subsidiary is, nor at any time
during the last two (2) years has been, an interested stockholder or an affiliate of an interested stockholder of Parent as defined in Section 3-601 of the MGCL.
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Section 4.25 Related Party Transactions. Except for this Agreement or as
set forth in the Company SEC Documents filed through and including the date of this Agreement or as permitted by this Agreement, from January 1, 2019 through the date of this Agreement there have been no transactions, agreements, arrangements
or understandings between Company or any Company Subsidiary, on the one hand, and any Affiliates (other than Company Subsidiaries) of Company, on the other hand, that would be required to be disclosed under Item 404 of Regulation S-K
promulgated by the SEC. Except for agreements not required to be disclosed under Item 404 of Regulation S-K promulgated by the SEC, Section 4.25 of the Company Disclosure Letter sets forth each agreement between Company or any
Company Subsidiary, on the one hand, and any Affiliates (other than the Company Subsidiaries) of Company, on the other hand (each, a Company Related Party Agreement).
Section 4.26 No Other Representations and Warranties. Except for the representations or warranties expressly set forth in
this Article 4, neither Company nor any other Person on behalf of Company has made any representation or warranty, expressed or implied, with respect to Company or Company Subsidiaries, their businesses, operations, assets, liabilities,
condition (financial or otherwise), results of operations, future operating or financial results, estimates, projections, forecasts, plans or prospects (including the reasonableness of the assumptions underlying such estimates, projections,
forecasts, plans or prospects) or the accuracy or completeness of any information regarding Company or Company Subsidiaries. In particular, without limiting the foregoing disclaimer, neither Company nor any other Person makes or has made any
representation or warranty to Parent or any of its Affiliates or Representatives with respect to, except for the representations and warranties made by Company in this Article 4, any oral or written information presented to Parent or any of
its Affiliates or Representatives in the course of their due diligence of Company, the negotiation of this Agreement or in the course of the transactions contemplated hereby. Notwithstanding anything contained in this Agreement to the contrary,
Company acknowledges and agrees that none of Parent or any other Person has made or is making any representations or warranties relating to Parent whatsoever, express or implied, beyond those expressly given by Parent in Article 5, including
any implied representation or warranty as to the accuracy or completeness of any information regarding Parent furnished or made available to Company or any of its Representatives.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT
Except (a) as set forth in the disclosure letter prepared by Parent, with numbering corresponding to the numbering of this Article
5 delivered by Parent to Company prior to the execution and delivery of this Agreement (the Parent Disclosure Letter) (it being acknowledged and agreed that disclosure of any item in any Section or subsection of the Parent
Disclosure Letter with respect to any Section or subsection of this Article 5 shall be deemed disclosed with respect to any other Section or subsection of this Article 5 to the extent the applicability of such disclosure is reasonably
apparent on the face of such disclosure (it being understood that to be so reasonably apparent it is not required that the other Sections or subsections be cross-referenced); provided, that nothing in the Parent Disclosure Letter is intended
to broaden the scope of any representation, warranty, covenant or agreement of Parent or Merger Sub made herein and no reference to or disclosure of any item or other matter in the Parent Disclosure Letter shall be construed as an
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admission or indication that (1) such item or other matter is material, (2) such item or other matter is required to be referred to in the Parent Disclosure Letter or (3) any
breach or violation of applicable Laws or any contract, agreement, arrangement or understanding to which Parent or any Parent Subsidiary is a party exists or has actually occurred); or (b) as disclosed in the Parent SEC Documents publicly
available, filed with, or furnished to, as applicable, the SEC on or after January 1, 2019 and at least two (2) Business Days prior to the date of this Agreement (excluding any risk factor disclosures contained in such documents under the
heading Risk Factors (but including any description of historic facts or events included therein) and any disclosure of risks or other matters included in any forward-looking statements disclaimer (but including any
description of historic facts or events included therein) or other statements that are cautionary, predictive or forward-looking in nature, which in no event shall be deemed to be an exception to or disclosure for purposes of, any representation or
warranty set forth in this Article 5), Parent hereby represents and warrants to Company that:
Section 5.1
Organization and Qualification; Subsidiaries.
(a) Parent is a real estate investment trust duly organized, validly existing and in
good standing under the laws of the State of Maryland and has the requisite organizational power and authority to own, lease and, to the extent applicable, operate its properties and to carry on its business as it is now being conducted. Merger Sub
is a limited liability company, validly existing and in good standing under the laws of the State of Maryland and has the requisite limited liability company power and authority to own, lease and, to the extent applicable, operate its properties and
to carry on its business as it is now being conducted. Parent is duly qualified or licensed to do business as a foreign real estate investment trust, and is in good standing, in each jurisdiction where the character of the properties owned, operated
or leased by it or the nature of its business makes such qualification, licensing or good standing necessary, except for such failures to be so qualified, licensed or in good standing that would not, individually or in the aggregate, reasonably be
expected to have a Parent Material Adverse Effect.
(b) Each Parent Subsidiary is duly organized, validly existing and in good standing (to
the extent applicable) under the Laws of the jurisdiction of its incorporation or organization, as the case may be, and has the requisite organizational power and authority to own, lease and, to the extent applicable, operate its properties and to
carry on its business as it is now being conducted, except where the failure to be so organized, validly existing or in good standing (to the extent applicable), or to have such power or authority, would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect. Each Parent Subsidiary is duly qualified or licensed to do business as a foreign corporation, company or partnership, as applicable, and is in good standing (to the extent
applicable), in each jurisdiction where the character of the properties owned, operated or leased by it or the nature of its business makes such qualification, licensing or good standing necessary, except for such failures to be so qualified,
licensed or in good standing (to the extent applicable) that would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.
(c) Section 5.1(c) of the Parent Disclosure Letter sets forth in all material respects a true and complete list of the Parent
Subsidiaries and their respective jurisdiction of incorporation or organization, as the case may be, and the type of and percentage of interest held, directly or indirectly, by Parent in each Parent Subsidiary, including a list of each Parent
Subsidiary that is a Qualified REIT Subsidiary or a Taxable REIT Subsidiary.
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(d) Except as set forth in Section 5.1(d) of the Parent Disclosure Letter,
neither Parent nor any Parent Subsidiary directly or indirectly owns any interest or investment (whether equity or debt) in any Person (other than in the Parent Subsidiaries and investments in short-term investment securities).
(e) Except as set forth in Section 5.1(e) of the Parent Disclosure Letter, Parent has not exempted any Person from or waived any
ownership limit or created or increased an Excepted Holder Limit (as defined in the Parent Charter) under the Parent Charter, which exemption or waiver is currently in effect.
Section 5.2 Organizational Documents. Parent has made available to Company complete and correct copies of the Parent
Declaration of Trust and Parent Bylaws and the Organizational Documents of each Parent Subsidiary that is not wholly owned by Parent or another Parent Subsidiary and each other entity in which Parent or any Parent Subsidiary has any equity
interests, in each case as in effect on the date hereof.
Section 5.3 Capital Structure.
(a) As of July 16, 2021 (the Parent Capitalization Date), the authorized shares of beneficial interest of Parent
consist of 225,000,000 Parent Common Shares and 40,000,000 preferred shares of beneficial interest, $0.01 par value per share (Parent Preferred Shares). At the close of business on the Parent Capitalization Date,
(i) 84,546,649 Parent Common Shares were issued and outstanding, (ii) 5,374,248 Parent Common Shares were reserved for issuance pursuant to the terms of outstanding options or equity or equity-based awards granted pursuant to the Parent
Equity Incentive Plans, (iii) 1,278,650 Parent Common Shares were available for grant under the Parent Equity Incentive Plans, (iv) 2,455,853 Parent Common Shares were reserved for issuance upon redemption of outstanding Parent OP Units in
accordance with the Parent LP Agreement, and (v) no Parent Preferred Shares were issued and outstanding.
(b) Except as set forth in
Section 5.3(b) of the Parent Disclosure Letter, all issued and outstanding shares of beneficial interest of Parent are duly authorized, validly issued, fully paid and nonassessable, and no class of beneficial interest is entitled to
preemptive rights. There are no outstanding bonds, debentures, notes or other Indebtedness of Parent having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which holders of Parent
Common Shares may vote.
(c) All of the outstanding shares of capital stock of each of the Parent Subsidiaries that is a corporation are
duly authorized, validly issued, fully paid and nonassessable. All equity interests in each of the Parent Subsidiaries that is a partnership or limited liability company are duly authorized and validly issued. Except as set forth in
Section 5.3(c) of the Parent Disclosure Letter, all shares of capital stock of (or other ownership interests in) each of the Parent Subsidiaries which may be issued upon exercise of outstanding options or exchange rights are duly
authorized and, upon issuance will be validly issued, fully paid and nonassessable. Parent owns, directly or indirectly, all of the issued and outstanding capital stock and other ownership interests
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of each of the Parent Subsidiaries, free and clear of all encumbrances other than statutory or other Liens for Taxes or assessments which are not yet due or delinquent or the validity of which is
being contested in good faith by appropriate proceedings and for which adequate accruals and reserves are maintained on Parents financial statements in accordance with GAAP (if such reserves are required pursuant to GAAP).
(d) Except as set forth in the Parent LP Agreement or in Section 5.3(d) of the Parent Disclosure Letter, there are no outstanding
subscriptions, securities, options, warrants, calls, rights, profits interests, stock appreciation rights, phantom stock, convertible securities, rights of first refusal or other similar rights, agreements, arrangements, undertakings or commitments
of any kind to which Parent or any of the Parent Subsidiaries is a party or by which any of them is bound obligating Parent or any of the Parent Subsidiaries to (i) issue, transfer, deliver or sell or create, or cause to be issued, transferred,
delivered or sold or created any additional shares of beneficial interest or other equity interests or phantom stock or other contractual rights the value of which is determined in whole or in part by the value of any equity security of Parent or
any Parent Subsidiary or securities convertible into or exchangeable for such shares or equity interests, (ii) issue, grant, extend or enter into any such subscriptions, securities, options, warrants, calls, rights, profits interests, stock
appreciation rights, phantom stock, convertible securities, rights of first refusal or other similar rights, agreements, arrangements, undertakings or commitments or (iii) redeem, repurchase or otherwise acquire any such shares of beneficial
interest or other equity interests.
(e) Neither Parent nor any Parent Subsidiary is a party to or, to the Knowledge of Parent, bound by
any agreements or understandings concerning the voting (including voting trusts and proxies) of any capital stock of Parent or any of the Parent Subsidiaries.
(f) Parent does not have a poison pill or similar shareholder rights plan.
(g) Except as set forth in Section 5.3(g) of the Parent Disclosure Letter, neither Parent nor any Parent Subsidiary is under any
obligation, contingent or otherwise, by reason of any contract to register the offer and sale or resale of any of their securities under the Securities Act.
(h) All dividends or other distributions on the Parent Common Shares, the Parent Preferred Shares and any material dividends or other
distributions on any securities of any Parent Subsidiary which have been authorized or declared prior to the date hereof have been paid in full (except to the extent such dividends have been publicly announced and are not yet due and payable).
Section 5.4 Authority.
(a) Parent and Merger Sub each have the requisite power and authority to execute and deliver this Agreement, to perform their obligations
hereunder and, subject to receipt of the Parent Shareholder Approval, to consummate the transactions contemplated by this Agreement to which Parent and Merger Sub are parties, including the Merger. The execution and delivery of this Agreement by
Parent and Merger Sub and the consummation by Parent and Merger Sub of the transactions contemplated by this Agreement have been duly and validly authorized by
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all necessary real estate investment trust and limited liability company action, respectively, and no other proceedings on the part of Parent or Merger Sub are necessary to authorize this
Agreement or the Merger or to consummate the other transactions contemplated by this Agreement, subject, with respect to the Merger and the issuance of Parent Common Shares contemplated by this Agreement, to receipt of the Parent Shareholder
Approval, and to the filing of the Articles of Merger with, and acceptance for record of the Articles of Merger by the SDAT. This Agreement has been duly executed and delivered by Parent and Merger Sub and assuming due and valid authorization,
execution and delivery by Company, constitutes a legally valid and binding obligation of Parent and Merger Sub, enforceable against Parent and Merger Sub in accordance with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).
(b) The Parent Board, at a duly held meeting, has unanimously (i) determined that the terms of this Agreement and the transactions
contemplated hereby are in the best interests of the holders of Parent Common Shares, (ii) approved, adopted and declared advisable this Agreement and the Merger, authorized the issuance of Parent Common Shares as payment of the Merger
Consideration, subject to the Parent Shareholder Approval, (iii) duly and validly authorized the execution and delivery of this Agreement, (iv) directed that the issuance of Parent Common Shares be submitted for consideration at the Parent
Shareholder Meeting and (v) resolved to recommend that holders of Parent Common Shares vote in favor of the issuance of Parent Common Shares and to include such recommendation in the Joint Proxy Statement (such recommendations, the
Parent Board Recommendation), which resolutions remain in full force and effect and have not been subsequently rescinded, modified or withdrawn in any way, except as may be permitted after the date hereof by
Section 7.4.
Section 5.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Parent does not, and assuming receipt of the Parent Shareholder Approval and that all
consents, approvals, authorizations and permits described in Section 5.5(b) have been obtained, all filings and notifications described in Section 5.5(b) have been made and any waiting periods thereunder have terminated or
expired, as applicable, the performance of this Agreement, the transactions contemplated hereby and Parents obligations hereunder will not, (i) conflict with or result in a violation of any provision of (A) the Parent Declaration of
Trust or Parent Bylaws, or (B) any comparable Organizational Documents of any Parent Subsidiary, (ii) conflict with or result in any violation of any Law applicable to Parent, or any Parent Subsidiary or by which any property or asset of
Parent, or any Parent Subsidiary is bound, or (iii) require any consent or approval (except as contemplated by Section 5.5(b) or as set forth in Section 5.5(a)(iii) of the Parent Disclosure Letter) under, result in any
breach of any obligation or any loss of any benefit or material increase in any cost or obligation of Parent or any Parent Subsidiary under, or constitute a default (or an event which with notice or lapse of time or both would become a default)
under, or give to any other Person any right of, or result in, termination, acceleration or cancellation (with or without notice or the lapse of time or both) of, or give rise to any right of purchase, first offer or forced sale under or result in
the creation of a Lien on any property or asset of Parent, or any Parent Subsidiary pursuant to, any note, bond, debt instrument, indenture, contract, agreement, ground
55
lease, license, permit or other legally binding obligation to which Parent or any Parent Subsidiary is a party, other than a Permitted Lien, except, as to clauses (i)(B), (ii) and
(iii) above, as which, individually or in the aggregate, would not reasonably be expected to have a Parent Material Adverse Effect.
(b) The execution and delivery of this Agreement by Parent does not, and the performance of this Agreement by Parent will not, require any
consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority, except (i) the filing with the SEC of (A) the Joint Proxy Statement in preliminary and definitive form and the Form S-4 and
declaration of effectiveness of the Form S-4, and (B) such reports under, and other compliance with, the Exchange Act and the Securities Act as may be required in connection with this Agreement and the transactions contemplated hereby,
(ii) the filing of the Articles of Merger with, and the acceptance for record of the Articles of Merger by, the SDAT pursuant to the MGCL and the MLLCA, (iii) such filings and approvals as may be required by any applicable state securities
or blue sky Laws, in connection with the issuance of Parent Common Shares pursuant to this Agreement and approval of listing the Parent Common Shares including the Merger Consideration on the NYSE, (iv) such filings as may be
required in connection with state and local Transfer Taxes (v) any filings or approvals required under the rules and regulations of the NYSE, and (vi) where failure to obtain such consents, approvals, authorizations or permits, or to make
such filings or notifications, individually or in the aggregate, would not reasonably be expected to have a Parent Material Adverse Effect.
Section 5.6 Permits; Compliance with Law.
(a) Except for the authorizations, licenses, permits, certificates, approvals, variances, exemptions, orders, franchises, certifications and
clearances that are the subject of Section 5.16 and Section 5.17, which are addressed solely in those Sections, Parent and each Parent Subsidiary is in possession of all authorizations, licenses, permits, certificates,
approvals, variances, exemptions, orders, franchises, certifications and clearances of any Governmental Authority, including building permits and certificates of occupancy, necessary for Parent and each Parent Subsidiary to own, lease and, to the
extent applicable, operate its properties or to carry on its respective business substantially as they are being conducted as of the date hereof (the Parent Permits), and all such Parent Permits are valid and in full force and
effect, except where the failure to be in possession of, or the failure to be valid or in full force and effect of, any of the Parent Permits, individually or in the aggregate, would not reasonably be expected to have a Parent Material Adverse
Effect. All applications required to have been filed for the renewal of the Parent Permits have been duly filed on a timely basis with the appropriate Governmental Authority, except where the failure to do so would not, individually or in the
aggregate, reasonably be expected to have a Parent Material Adverse Effect, and all other filings required to have been made with respect to such Parent Permits have been duly made on a timely basis with the appropriate Governmental Authority.
Neither Parent nor any Parent Subsidiary has received any written notice from a Governmental Authority asserting a failure, or possible failure, to comply with any Company Permit, the subject of which written notice has not been resolved prior to
the date of this Agreement as required thereby or otherwise to the satisfaction of the Governmental Authority sending such notice, except for such failures as would not reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect.
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(b) Neither Parent nor any Parent Subsidiary is or has been in conflict with, or in default
or violation of (i) any Law or Order applicable to Parent, or any Parent Subsidiary or by which any property or asset of Parent or any Parent Subsidiary is bound (except for Laws addressed in Section 5.12, Section 5.15,
Section 5.16 or Section 5.17 which are solely addressed in those Sections), or (ii) any Parent Permits (except for Parent Permits addressed in Section 5.16 or Section 5.17 which are solely
addressed in those Sections), except, in each case, for any such conflicts, defaults or violations that, individually or in the aggregate, would not reasonably be expected to have a Parent Material Adverse Effect.
Section 5.7 SEC Documents; Financial Statements.
(a) Parent has timely filed with, or furnished (on a publicly available basis) to, the SEC all forms, documents, statements, schedules and
reports required to be filed or furnished by Parent with the SEC, including any amendments or supplements thereto, since January 1, 2019 (the forms, documents, statements, schedules and reports filed or furnished with the SEC since
January 1, 2019 and those filed with the SEC since the date of this Agreement, if any, including any amendments or supplements thereto, the Parent SEC Documents). As of their respective dates, the Parent SEC Documents (other
than preliminary materials) complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, applicable to such Parent SEC Documents, and none of the Parent SEC Documents, at the time of filing
or being furnished (or effectiveness in the case of registration statements), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, except to the extent such statements have been modified or superseded by later Parent SEC Documents filed or furnished and publicly available prior to the date of this Agreement.
Parent does not have any outstanding and unresolved comments from the SEC with respect to any Parent SEC Documents. Other than Parent OP, no Parent Subsidiary is required to file any form or report with the SEC.
(b) Parent has made available to Company complete and correct copies of all written correspondence between the SEC on one hand, and Parent, on
the other hand, since January 1, 2019. At all applicable times, Parent has complied in all material respects with the applicable provisions of the SOX Act and the rules and regulations thereunder, as amended from time to time.
(c) The consolidated financial statements of Parent and the Parent Subsidiaries included, or incorporated by reference, in the Parent SEC
Documents, including the related notes and schedules, complied as to form in all material respects with the applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance
with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto, or, in the case of the unaudited statements, as permitted by Rule 10-01 of Regulation S-X under the Exchange Act) and fairly
presented, in all material respects, in accordance with applicable requirements of GAAP and the applicable rules and regulations of the SEC (subject, in the case of the unaudited statements, to normal, recurring adjustments, none of which are
material), the consolidated financial position of Parent and the Parent Subsidiaries, taken as a whole, as of their respective dates and the consolidated statements of income and the consolidated cash flows of Parent and the Parent Subsidiaries for
the periods presented therein, in each case, except to the extent such financial statements have been modified or superseded by later Parent SEC Documents filed and publicly available prior to the date of this Agreement.
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(d) Neither Parent nor any Parent Subsidiary is a party to, or has any commitment to become
a party to, any joint venture, off-balance sheet partnership or any similar contract or arrangement, including any contract relating to any transaction or relationship between or among Parent and any Parent Subsidiary, on the one hand, and any
unconsolidated Affiliate of Parent or any Parent Subsidiary, including any structured finance, special purpose or limited purpose entity or Person, on the other hand, or any off balance sheet arrangements (as defined in Item 303(a)
of Regulation S-K of the SEC), where the result, purpose or effect of such contract is to avoid disclosure of any material transaction involving, or material liabilities of, Parent, any Parent Subsidiary or such Parents or Parent
Subsidiarys audited financial statements or other Parent SEC Documents.
(e) Since January 1, 2019, Parent maintains a system of
internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f), as applicable, under the Exchange Act) that is effective in providing reasonable assurance regarding the reliability of Parents financial reporting and the
preparation of financial statements for external purposes in accordance with GAAP. There has been no change in Parents internal control over financial reporting that has occurred since December 31, 2020 that has materially affected, or is
reasonably likely to materially affect, Parents internal control over financial reporting. Since December 31, 2020, there have been no significant deficiencies or material weaknesses in Parents internal control over financial
reporting (whether or not remediated). Parent has disclosed as of the date hereof, based on the most recent evaluation of its Chief Executive Officer and its Chief Financial Officer prior to the date of this Agreement, to Parents auditors
and the audit committee of the Parent Board (i) any significant deficiencies or material weaknesses in the design or operation of its internal controls over financial reporting that are reasonably likely to materially affect Parents
ability to record, process, summarize, and report financial information and (ii) any fraud, whether or not material, that involves management or other employees of Parent or any Subsidiary who have a significant role in Parents internal
control over financial reporting, and each such deficiency, weakness and fraud so disclosed to auditors, if any, has been disclosed to Parent prior to the date of this Agreement. As used in this Section 5.7(e), the terms
significant deficiency and material weakness have the meanings assigned to such terms in Auditing Standard No. 5 of the Public Company Accounting Oversight Board as in effect on the date of this Agreement. As of the date
of this Agreement, the principal executive officer and principal financial officer of Parent have made all certifications required by the Sarbanes-Oxley Act and the regulations of the SEC promulgated thereunder, and the statements contained in all
such certifications were, as of their respective dates made, complete and correct in all material respects.
(f) Parent is in compliance in
all material respects with all current listing requirements of the New York Stock Exchange.
Section 5.8 Absence of Certain
Changes or Events. From December 31, 2020 through the date of this Agreement, Parent and each Parent Subsidiary has conducted its business in all material respects in the ordinary course of business consistent with past practice and there
has not been any Parent Material Adverse Effect or any event, circumstance, change, effect, development, condition or occurrence that, individually or in the aggregate with all other events, circumstances, changes, effects, developments, conditions
or occurrences, would reasonably be expected to have a Parent Material Adverse Effect.
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Section 5.9 No Undisclosed Material Liabilities. There are no material
liabilities of Parent or any of the Parent Subsidiaries of any nature that would be required under GAAP to be set forth on the financial statements of Company or the notes thereto, other than: (a) liabilities reflected or reserved against on
the balance sheet of Parent dated as of March 31, 2021 (including the notes thereto) as required by GAAP, (b) liabilities incurred in connection with the transactions contemplated by this Agreement or (c) liabilities incurred in the
ordinary course of business consistent with past practice since March 31, 2021.
Section 5.10 No Default. Except
as set forth in Section 5.10 of the Parent Disclosure Letter, none of Parent or any of the Parent Subsidiaries is in default or violation (and to the Knowledge of Parent, no event has occurred which, with notice or the lapse of time or
both, would constitute a default or violation) of any term, condition or provision of (a) (i) the Parent Declaration of Trust or the Parent Bylaws, or (ii) the comparable Organizational Documents of any of the Parent Subsidiaries, or
(b) any loan or credit agreement, note, or any bond, mortgage or indenture, to which Parent or any of the Parent Subsidiaries is a party or by which Parent, any of the Parent Subsidiaries or any of their respective properties or assets is
bound, except in the case of clause (a)(ii) or (b) for defaults or violations which, individually or in the aggregate, would not reasonably be expected to have a Parent Material Adverse Effect.
Section 5.11 Litigation. Except as individually or in the aggregate would not reasonably be expected to have a Parent
Material Adverse Effect, as of the date of this Agreement, (a) there is no Action pending or, to the Knowledge of Parent, threatened in writing by or before any Governmental Authority, nor, to the Knowledge of Parent, is there any investigation
pending by any Governmental Authority, in each case, against or affecting Parent or any Parent Subsidiary or any director or officer of Parent or any Parent Subsidiary, in their capacity as a director or an officer of Parent or such Parent
Subsidiary, and (b) neither Parent nor any Parent Subsidiary, nor any of their respective properties, is subject to any outstanding Order of any Governmental Authority.
Section 5.12 Taxes.
(a) Parent and each Parent Subsidiary has timely filed with the appropriate Governmental Authority all income and other material Tax Returns
required to be filed, taking into account any extensions of time within which to file such Tax Returns, and all such Tax Returns were complete and correct in all material respects. Parent and each Parent Subsidiary has duly paid (or there has been
paid on its behalf), or made adequate provisions in accordance with GAAP for, all material Taxes required to be paid by it, whether or not shown on any Tax Return.
(b) Parent (i) for all taxable years commencing with Parents taxable year ending December 31, 2004 and through
December 31, 2020, has been subject to taxation as a REIT and has satisfied all requirements to qualify as a REIT for such years; (ii) has operated since January 1, 2021 to the date hereof, in a manner consistent with the requirements
for qualification and taxation as a REIT; (iii) intends to continue to operate in such a manner as to qualify as a REIT (including with regard to the REIT distribution requirements) for its taxable year that ends on the
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day of the Merger; and (iv) has not taken or omitted to take any action that could reasonably be expected to result in Parents failure to qualify as a REIT or in a challenge by the IRS
or any other Governmental Authority to its status as a REIT, and, no such challenge is pending or threatened to the Knowledge of Parent. Parents dividends paid deduction, within the meaning of Section 561 of the Code, for each taxable
year commencing with and including the taxable year ended December 31, 2013, taking into account any dividends subject to Sections 857(b)(9) or 858 of the Code, has not been less than the sum of (x) Parents REIT taxable income, as
defined in Section 857(b)(2) of the Code, determined without regard to any dividends paid deduction for such year and (y) Parents net capital gain for such year.
(c) (i) There are no audits, investigations by any Governmental Authority or other proceedings pending or, to the Knowledge of Parent,
threatened with regard to any material Taxes or Tax Returns of Parent or any Parent Subsidiary; (ii) no material deficiency for Taxes of Parent or any Parent Subsidiary has been claimed, proposed or assessed in writing or, to the Knowledge of
Parent, threatened, by any Governmental Authority, which deficiency has not yet been settled except for such deficiencies which are being contested in good faith or with respect to which the failure to pay, individually or in the aggregate, would
not reasonably be expected to have a Parent Material Adverse Effect; (iii) neither Parent nor any Parent Subsidiary has waived any statute of limitations with respect to the assessment of material Taxes or agreed to any extension of time with
respect to any material Tax assessment or deficiency for any open tax year; (iv) neither Parent nor any Parent Subsidiary currently is the beneficiary of any extension of time within which to file any material Tax Return; and (v) neither
Parent nor any Parent Subsidiary has entered into any closing agreement as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax Law).
(d) Each Parent Subsidiary that is a partnership, joint venture or limited liability company and that has not elected to be a Taxable REIT
Subsidiary has been since its formation treated for United States federal income tax purposes as a partnership, disregarded entity, or Qualified REIT Subsidiary, as the case may be, and not as a corporation or an association taxable as a corporation
whose separate existence is respected for federal income tax purposes. No Parent Subsidiary is a corporation or an association taxable as a corporation other than a corporation or an association taxable as a corporation that qualifies as a Taxable
REIT Subsidiary.
(e) Neither Parent nor any Parent Subsidiary holds any asset the disposition of which would be subject to (or to rules
similar to) Section 1374 of the Code (or otherwise result in any built-in gains Tax under Section 337(d) of the Code and the applicable Treasury Regulations thereunder).
(f) For each taxable year commencing with and including the taxable year ended December 31, 2013, Parent and each Parent Subsidiary have
not incurred (i) any material liability for Taxes under Sections 857(b), 857(f), 860(c) or 4981 of the Code and (ii) neither Parent nor any Parent Subsidiary has incurred any material liability for Tax other than (A) in the ordinary
course of business consistent with past practice, or (B) transfer or similar Taxes arising in connection with acquisitions or dispositions of property. To the Knowledge of Parent, no event has occurred, and no condition or circumstance exists,
which presents a material risk that any material Tax described in the preceding sentences will be imposed upon Company or any Company Subsidiary.
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(g) Neither Parent nor any Parent Subsidiary (other than a Taxable REIT Subsidiary of
Parent) has engaged at any time in any prohibited transactions within the meaning of Section 857(b)(6) of the Code. Neither Parent nor any Parent Subsidiary has engaged in any transaction that would give rise to redetermined
rents, redetermined deductions, excess interest or redetermined TRS service income, in each case as defined in Section 857(b)(7) of the Code.
(h) Parent and each Parent Subsidiary have complied, in all material respects, with all applicable Laws, rules and regulations relating to the
payment and withholding of Taxes (including withholding of Taxes pursuant to Sections 1441, 1442, 1445, 1446, 1471 through 1474 and 3402 of the Code or similar provisions under any state and foreign Laws) and have duly and timely withheld and, in
each case, have paid over to the appropriate Governmental Authority all material amounts required to be so withheld and paid over on or prior to the due date thereof under all applicable Laws, and are not liable for any arrears or wages or any taxes
or any penalty for failure to withhold or pay such amounts.
(i) There are no Parent Tax Protection Agreements (as hereinafter defined) in
force at the date of this Agreement, and, as of the date of this Agreement, no person has raised in writing, or to the Knowledge of Parent threatened to raise, a material claim against Parent or any Parent Subsidiary for any breach of any Parent Tax
Protection Agreements. As used herein, Parent Tax Protection Agreements means any written agreement to which Parent or any Parent Subsidiary is a party pursuant to which: (i) any liability to holders of limited partnership
interests in a Parent Subsidiary Partnership relating to Taxes may arise, whether or not as a result of the consummation of the transactions contemplated by this Agreement; and/or (ii) in connection with the deferral of income Taxes of a holder
of limited partnership interests or limited liability company in a Parent Subsidiary Partnership, Parent or Parent Subsidiary have agreed to (A) maintain a minimum level of debt, continue a particular debt or provide rights to guarantee debt,
(B) retain or not dispose of assets, (C) make or refrain from making Tax elections, and/or (D) only dispose of assets in a particular manner. As used herein, Parent Subsidiary Partnership means a Parent Subsidiary
that is a partnership for United States federal income tax purposes.
(j) There are no Tax Liens upon any property or assets of Parent or
any Parent Subsidiary except Liens for Taxes not yet due and payable or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP.
(k) There are no Tax allocation or sharing agreements or similar arrangements with respect to or involving Parent or any Parent Subsidiary
(other than customary arrangements under commercial contracts or borrowings entered into in the ordinary course of business), and after the Closing Date, neither Parent nor any Parent Subsidiary shall be bound by any such Tax allocation agreements
or similar arrangements or have any liability thereunder for amounts due in respect of periods prior to the Closing Date.
(l) Neither
Parent nor any Parent Subsidiary has requested, has received or is subject to any written ruling of a Governmental Authority or has entered into any written agreement with a Governmental Authority with respect to any Taxes.
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(m) Neither Parent nor any Parent Subsidiary (i) has been a member of an affiliated
group filing a consolidated federal income Tax Return or (ii) has any liability for the Taxes of any Person (other than any Parent Subsidiary) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign
law), as a transferee or successor, by contract (excluding customary indemnification provisions contained in credit or other commercial agreements entered into in the ordinary course of business and the primary purposes of which do not relate to
Taxes), or otherwise.
(n) Neither Parent nor any Parent Subsidiary has participated in any listed transaction within the
meaning of Treasury Regulation Section 1.6011-4(b)(2).
(o) As of the date of this Agreement, Parent is not aware of any fact or
circumstances that could reasonably be expected to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.
(p) Neither Parent nor any Parent Subsidiary has constituted either a distributing corporation or a controlled
corporation (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code (i) in the two (2) years prior to the date of this Agreement or
(ii) in a distribution which could otherwise constitute part of a plan or series of related transactions (within the meaning of Section 355(e) of the Code) in conjunction with transactions contemplated by this
Agreement.
(q) No written power of attorney that has been granted by Parent or any Parent Subsidiary (other than to Parent or a Parent
Subsidiary) currently is in force with respect to any matter relating to Taxes, except for powers of attorney granted to counsel with respect to appeals of real estate tax assessments.
(r) Neither Parent nor any Parent Subsidiary (other than any Parent Subsidiary that is a taxable REIT subsidiary) has or has had any earnings
and profits attributable to such entity or any other corporation in any non-REIT year within the meaning of Section 857 of the Code.
Section 5.13 Benefit Plans; Employees.
(a) Section 5.13(a) of the Parent Disclosure Letter sets forth, as of the date of this Agreement, a list of each material Benefit
Plan (i) maintained, sponsored, contributed to, required to be contributed to or participated in by Parent or any of the Parent Subsidiaries or with respect to which Parent or any of the Parent Subsidiaries is a party for the benefit of or
relating to any current or former director, trustee, employee, or other individual service provider of Parent and the Parent Subsidiaries or (ii) with respect to which Parent or any of the Parent Subsidiaries has or may have any material
obligation or liability (contingent or otherwise and including as a result of being an ERISA Affiliate with any person) (Parent Benefit Plans), excluding former agreements under which neither Parent nor any Parent Subsidiary has
any remaining obligations and any of the foregoing that are required to be maintained by Parent or any Parent Subsidiary under the Laws of any jurisdiction. Parent has provided or made available to Company a copy of the material plan documents
governing each such Parent Benefit Plan.
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(b) None of Parent, any Parent Subsidiary or any of their respective ERISA Affiliates
maintains, sponsors, contributes to, is required to contribute to or participates in, or has ever maintained, sponsored, contributed to, been required to contribute to or participated in, or otherwise has any obligation or liability in connection
with: (i) a pension plan under Section 3(2) of ERISA that is subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code, (ii) a multiemployer plan (as defined in Section 3(37)
of ERISA), (iii) a multiple employer welfare arrangement (as defined in Section 3(40) of ERISA), or (iv) a multiple employer plan (as defined in Section 413(c) of the Code). None of Parent, any Parent
Subsidiary or any of their respective ERISA Affiliates have incurred, nor are there any circumstances under which they could reasonably incur, any liability or obligations under Title IV of ERISA. Except as set forth in Section 5.13(b)
of the Parent Disclosure Letter, none of Parent, any Parent Subsidiary or any of their respective ERISA Affiliates have any liability or obligation to provide post-termination or retiree life insurance, post-termination or retiree health benefits or
other post-termination or retiree employee welfare benefits to any person for any reason (or to any such persons eligible dependents), other than coverage mandated by Part 6 of Title I of ERISA or Code Section 4980B at the
recipients sole premium cost. No Parent Benefit Plan provides or reflects or represents any liability or obligation of Parent or any Parent Subsidiary to provide life insurance, health benefits or other welfare benefits to any member of
Parents Board of Directors for any reason, unless such director is also an employee of Parent or any Parent Subsidiary.
(c) Except
as set forth on Section 5.13(c) of the Parent Disclosure Letter, neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will, individually or together with the occurrence of any other event,
(i) result in any payment (whether of bonus, change in control, retention, severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to
any current or former director, trustee, employee or other individual service provider of Parent or any of the Parent Subsidiaries; (ii) create any limitation or restriction on the right to merge, amend or terminate any Parent Benefit Plan; or
(iii) result in the payment of any amount or benefit to a disqualified individual (as such term is defined in Treasury Regulation Section 1.280G-1) that could, individually or in combination with any other payment, constitute
an excess parachute payment as defined in Section 280G(b)(1) of the Code. Neither Parent nor any Parent Subsidiary has any obligation to gross-up or otherwise reimburse or compensate any current or former director, trustee,
employee, or other individual service provider for any Taxes incurred by such individual under or pursuant to Section 409A of the Code, Section 4999 of the Code, or otherwise.
(d) Each Parent Benefit Plan and the administrators and fiduciaries of each Parent Benefit Plan have complied with the applicable requirements
of ERISA, the Code, and any other applicable Law, except where the failure to so comply has not had and would not reasonably be expected to have a Parent Material Adverse Effect. Each Parent Benefit Plan that is intended to comply with
Section 401(a) of the Code has received a, favorable determination letter issued by the IRS or is maintained under a prototype or volume submitter plan and may rely upon a, favorable opinion or advisory letter issued by the IRS with respect to
such prototype or volume submitter plan. To the Knowledge of Parent, no event has occurred with respect to any Parent Benefit Plan which will or could give rise to disqualification of such plan, the loss of intended Tax consequences under the Code,
or any material Tax or liability or penalty. All contributions and payments due
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from Parent, any Parent Subsidiary or any of their respective ERISA Affiliates with respect to each Parent Benefit Plan as required by Law and by the terms of the Parent Benefit Plans have been
timely made or to the extent not yet due, have been timely accrued in accordance with GAAP in the consolidated financial statements (including any related notes) contained or incorporated by reference in the Parent SEC Documents.
(e) (i) There are no material proceedings pending (other than routine claims for benefits) or, to the Knowledge of Parent, threatened with
respect to a Parent Benefit Plan or the assets of a Parent Benefit Plan; (ii) to the Knowledge of Parent, no fiduciary (as defined in ERISA Section 3(21) of a Parent Benefit Plan) has breached any fiduciary, co-fiduciary or other duty
imposed under Title I of ERISA; and (iii) to the Knowledge of Parent, no party in interest (as defined in Section 3(14) of ERISA) or disqualified person (as defined in Code Section 4975) of any Parent Benefit
Plan has engaged in any nonexempt prohibited transaction (as defined in Code Section 4975 or ERISA Section 406) which has had or would reasonably be expected to have a Parent Material Adverse Effect.
(f) Neither Parent nor any Parent Subsidiary is or has ever been a party to or bound (in whole or in part) by any collective bargaining
agreement or other labor union contract applicable to employees of Parent or any Parent Subsidiary, nor is any such agreement or contract presently being negotiated. There are no activities or proceedings of any labor union or employee group to
organize any employees of Parent or any Parent Subsidiary or any current union representation questions involving such employees nor have there been any such activities or proceedings within the past three (3) years. There is no labor strike,
controversy, slowdown, work stoppage or lockout occurring, or, to the Knowledge of Parent, threatened by or with respect to any employees of Parent or any Parent Subsidiary, nor has any such action occurred or, to the Knowledge of Parent, been
threatened, within the past three (3) years. There are no material unfair labor practice complaints pending or, to the Knowledge of Parent, threatened against Parent or any Parent Subsidiary before the National Labor Relations Board or any
other Governmental Authority. No material charges with respect to or relating to Parent or any Parent Subsidiary are pending or, to the Knowledge of Parent, threatened before the Equal Employment Opportunity Commission or any other Governmental
Authority. There is no material employment-related Action pending or, to the Knowledge of Parent, threatened with respect to any current or former employees of Parent or any Parent Subsidiary, including any Actions with respect to payment of wages,
salary or overtime pay, discrimination, harassment or wrongful discharge. Neither Parent nor any Parent Subsidiary is a party to, or otherwise bound by, any consent decree with or citation by any Governmental Authority relating to employees or
employment practices, and there are no pending or, to the Knowledge of Parent, threatened investigations, audits or similar proceedings alleging breach or violation of any labor or employment law. Neither Parent nor any Parent Subsidiary has or will
become subject to any obligation under applicable Law or otherwise to notify or consult with, prior to or after the Closing, any employee of Parent or any Parent Subsidiary, Governmental Authority or other Person with respect to the impact of the
transactions contemplated hereby on the employment of any of the employees of Parent or any Parent Subsidiary or the compensation or benefits provided to any employee of Parent or any Parent Subsidiary.
(g) Neither Parent nor any Parent Subsidiary has taken any action in the past three (3) years that has triggered any liability or an
obligation to provide notice under WARN.
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Section 5.14 Information Supplied. None of the information relating to
Parent and the Parent Subsidiaries contained in the Joint Proxy Statement or that is provided by Parent and the Parent Subsidiaries in writing for inclusion or incorporation by reference in the Form S-4 or any other document filed with the SEC in
connection with the transactions contemplated by this Agreement will (a) in the case of the Form S-4, at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, (b) in the case of the Joint Proxy Statement, at the time of the mailing thereof, at
the time the Company Stockholder Meeting or the Parent Shareholder Meeting is held, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not misleading, or (c) with respect to any other document to be filed by Parent with the SEC in connection with the Merger or the other transactions contemplated by this
Agreement, at the time of its filing with the SEC, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. The Form S-4 and the Joint Proxy Statement will (with respect to Parent, its officers and trustees and the Parent Subsidiaries) comply as to form in all material respects with the applicable requirements of
the Securities Act and the Exchange Act; provided, that no representation or warranty is made hereunder as to statements made or incorporated by reference in the Form S-4 or the Joint Proxy Statement that were not supplied by or on behalf of
Parent or any Parent Subsidiaries.
Section 5.15 Intellectual Property. Except as set forth on
Section 5.15(b) of the Parent Disclosure Letter or as, individually or in the aggregate, would not reasonably be expected to have a Parent Material Adverse Effect:
(a) Parent and the Parent Subsidiaries own all Intellectual Property owned or purported to be owned by Parent or any Parent Subsidiary, free
and clear of all Liens other than Parent Permitted Liens, and are licensed to use, or otherwise possess valid rights to use, all other Intellectual Property used in or held for use in, and necessary for the conduct of, the business of Parent and the
Parent Subsidiaries as it is currently conducted,
(b) all Parent Intellectual Property owned or purported to be owned by Parent or any
Parent Subsidiary that has been issued by or registered with, or the subject of an application filed with, as applicable, the U.S. Patent and Trademark Office, the U.S. Copyright Office or any similar office or agency anywhere in the world are not
expired, cancelled or abandoned and, to the Knowledge of Parent, are valid and enforceable,
(c) there are no pending or, to the Knowledge
of Parent, threatened claims against Parent or any Parent Subsidiary alleging that the Parent Intellectual Property infringes, misappropriates or otherwise violates (or since January 1, 2019, infringed, misappropriated or otherwise violated)
any Intellectual Property rights of any third party or that any of Parent Intellectual Property is invalid or unenforceable,
(d) to the
Knowledge of Parent, the conduct of the business of Parent and Parent Subsidiaries as it is currently conducted does not infringe, misappropriate or otherwise violate (or since January 1, 2019, infringed, misappropriated or otherwise violated)
any Intellectual Property rights of any third party,
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(e) to the Knowledge of Parent, no third party is misappropriating, infringing or otherwise
violating any Parent Intellectual Property,
(f) Parent and Parent Subsidiaries have taken reasonable measures to protect the security,
privacy and confidentiality of all Parent Protected Information,
(g) Parent and Parent Subsidiaries have implemented and maintain
reasonable data security programs that are consistent with industry standards and applicable Laws,
(h) Parent and Parent Subsidiaries have
not experienced any breach of security, unauthorized access or disclosure, or loss of control of Parent Protected Information since January 1, 2019,
(i) Parent and Parent Subsidiaries have complied with all security, privacy or data protection Laws applicable to that entity or to Parent
Protected Information that entity collects, holds, uses or discloses, and
(j) following the Closing Date, the Surviving Entity will have
the same rights and privileges in the Parent Intellectual Property as Parent and Parent Subsidiaries had in the Parent Intellectual Property immediately prior to the Closing Date.
Section 5.16 Environmental Matters. Except as set forth on Section 5.16 of the Parent Disclosure Letter or as
would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect:
(a) Parent and each Parent
Subsidiary are in compliance and, except for matters that have been fully and finally resolved, Parent and each Parent Subsidiary have for the past three (3) years complied with all Environmental Laws.
(b) Parent and each Parent Subsidiary have timely applied for, obtained and maintain all Environmental Permits necessary to conduct their
current operations and are in compliance with their respective Environmental Permits, and all such Environmental Permits are valid and in good standing.
(c) Neither Parent nor any Parent Subsidiary has received any written request for information from a Governmental Authority, or any notice,
demand, letter or claim alleging that Parent or any such Parent Subsidiary is in violation of, or liable under, any Environmental Law or with respect to Hazardous Substances.
(d) Neither Parent nor any Parent Subsidiary is subject to any Order relating to compliance with or liability under Environmental Laws,
Environmental Permits or the investigation, sampling, monitoring, treatment, remediation, removal, Release or cleanup of Hazardous Substances and no Action is pending or, to the Knowledge of Parent, threatened against Parent or any Parent Subsidiary
under any Environmental Law or relating to Hazardous Substances.
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(e) Neither Parent nor any Parent Subsidiary has assumed by contract, operation of law or
otherwise, any liability of any person under any Environmental Law or relating to any Hazardous Substances, or is an indemnitor in connection with any threatened or asserted claim by any third-party indemnitee for any liability under any
Environmental Law or relating to any Hazardous Substances.
(f) Neither Parent nor any Parent Subsidiary has caused, and to the Knowledge
of Parent, no third party has caused any Release of a Hazardous Substance that would reasonably be expected to result in liability to Parent or any Parent Subsidiary under any Environmental Law or relating to Hazardous Substances.
(g) Neither Parent nor any Parent Subsidiary has transported, disposed, or arranged for the transport, treatment or disposal of Hazardous
Substances at any location such that Parent or such Parent Subsidiary, is or would reasonably be expected to be liable or become the subject of any Action under Environmental Law or with respect to Hazardous Substances.
(h) Section 5.16(h) of the Parent Disclosure Letter sets forth a true and complete list of all active, pending or threatened
environmental contamination investigations, plans or remedial obligations of Parent or any Parent Subsidiary, including a brief description of each such investigation, plan or obligation.
Section 5.17 Properties.
(a) Section 5.17(a) of the Parent Disclosure Letter sets forth a true and complete list of the address and common name of each
Parent Property and identifies each Parent Property under which Parent or any Parent Subsidiary is a lessee or sublessee, including any other real property in which Parent or any Parent Subsidiary holds any air rights. Section 5.17(a) of
the Parent Disclosure Letter sets forth a true and complete list of the real property which, as of the date of this Agreement, is under contract to be purchased by Parent or a Parent Subsidiary after the date of this Agreement or that is required
under a binding contract to be leased or subleased by Parent or a Parent Subsidiary as lessee or sublessee after the date of this Agreement. Except for any pending acquisitions under contract disclosed on Section 6.2 of the Parent
Disclosure Letter, there are no real properties that either Parent or any Parent Subsidiary is obligated to buy, lease or sublease at some future date. Section 5.17(a) of the Parent Disclosure Letter sets forth a true and complete list
of the mortgage notes receivables and commercial mortgage backed and similar securities owned by Parent or any Parent Subsidiary.
(b)
Either Parent or a Parent Subsidiary owns good and valid fee simple title (with respect to jurisdictions that recognize such form of title or substantially similar title with respect to all other jurisdictions) or leasehold title (as applicable) or
air rights to each of the Parent Properties, in each case, free and clear of Liens, except for Parent Permitted Liens none of which Parent Permitted Liens have had and would not reasonably be expected to have, individually or in the aggregate, a
Parent Material Adverse Effect. Section 5.17(b) of the Parent Disclosure Letter describes the material Parent Permitted Liens which are being contested in good faith by appropriate proceedings.
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(c) Neither Parent nor any of the Parent Subsidiaries has received (i) written notice
that any certificate, permit or license from any Governmental Authority having jurisdiction over any of the Parent Properties or any agreement, easement or other right of an unlimited duration that is necessary to permit the lawful use and operation
of the buildings and improvements on any of the Parent Properties or that is necessary to permit the lawful use and operation of all utilities, parking areas, retention ponds, driveways, roads and other means of egress and ingress to and from any of
the Parent Properties is not in full force and effect as of the date of this Agreement (or of any pending written threat of modification or cancellation of any of same), except for such failures to be in full force and effect that, individually or
in the aggregate, would not reasonably be expected to have a Parent Material Adverse Effect, or (ii) written notice of any uncured violation of any Laws affecting any of the Parent Properties which, individually or in the aggregate, has had or
would reasonably be expected to have a Parent Material Adverse Effect.
(d) No certificate, variance, permit or license from any
Governmental Authority having jurisdiction over any of the Parent Properties or any agreement, easement or other right that is necessary to permit the current use and operation of the buildings and improvements on any of the Parent Properties as
currently used and operated or that is necessary to permit the current use of all parking areas, driveways, roads and other means of egress and ingress to and from any of the Parent Properties has failed to be obtained or is not in full force and
effect, and neither Parent nor any Parent Subsidiary has received written notice of any outstanding threat of modification or cancellation of any such certificate, variance, permit or license, except for any of the foregoing as, individually or in
the aggregate, has not had and would not reasonably be expected to have a Parent Material Adverse Effect.
(e) Except as listed on
Section 5.17(e) of the Parent Disclosure Letter, since January 1, 2019, no written notice to the effect that there are condemnation, eminent domain or similar proceedings or material rezoning proceedings has been received or is
pending with respect to any material portion of any of the Parent Properties, and, to the Knowledge of Parent, since January 1, 2019, no (i) condemnation or material rezoning proceedings are threatened with respect to any material portion
of any of the Parent Properties, and (ii) no zoning regulation or ordinance (including with respect to parking), Board of Fire Underwriters rules, building, fire, health or other Law has been violated (and remains in violation) for any Parent
Property, which violation or any enforcement action related thereto would prevent the Parent Property and any associated improvements from continuing to be operated in the ordinary course of business.
(f) Except for discrepancies, errors or omissions that, individually or in the aggregate, would not reasonably be expected to have a Parent
Material Adverse Effect, the rent rolls for each of the Parent Properties, as of June 30, 2021, which rent rolls have previously been made available by or on behalf of Parent or any Parent Subsidiary to Company (including an indication of
whether any Parent Property is subject to net leases), are true and correct in all respects and (i) correctly reference each lease or sublease that was in effect as of June 30, 2021 and to which Parent or a Parent Subsidiary is a party as
lessor or sublessor with respect to each of the Parent Properties and (ii) identify the rent payable under the Parent Lease as of such date. Parent or a Parent Subsidiary has received all security deposits required by the applicable Parent
Lease other than immaterial deficiencies, and such security deposits have been held and applied in all material respects in accordance with Law and the applicable Parent Leases.
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(g) True and complete (in all material respects) copies of all ground leases with respect to
the Parent Properties where Parent or any Parent Subsidiary is the lessee or sublessee, in each case in effect as of the date hereof, have been made available to Company. Except as would not, individually or in the aggregate, reasonably be expected
to have a Parent Material Adverse Effect or as disclosed on Section 5.17(g) of the Parent Disclosure Letter, (i) neither Parent nor any Parent Subsidiary is and, to the Knowledge of Parent, no other party is in breach or violation
of, or default under, any of the (x) ground leases with respect to the Parent Properties where Parent or any Parent Subsidiary is the lessee or sublessee and (y) Parent Leases (A) for real property in excess of 15,000 square feet or
(B) providing for aggregate annual base rent in an amount in excess of $750,000 (the Material Parent Leases), (ii) no event has occurred that would result in a breach or violation of, or a default under, any Material
Parent Lease by Parent or any Parent Subsidiary, or, to the Knowledge of Parent, any other party thereto (in each case, with or without notice or lapse of time) and no tenant under a Material Parent Lease is in monetary default under such Material
Parent Lease, (iii) no tenant under a Material Parent Lease is the beneficiary or has the right to become a beneficiary of (A) a loan or forbearance from Parent or any Parent Subsidiary in connection with COVID-19 or COVID-19 Measures,
unless set forth on Section 5.17(g) of the Parent Disclosure Letter, or (B) any other loans or forbearances from Parent or any Parent Subsidiary in excess of $500,000 in the aggregate, and (iv) each Material Parent Lease is
valid, binding and enforceable in accordance with its terms and is in full force and effect with respect to Parent or a Parent Subsidiary and, to the Knowledge of Parent, with respect to the other parties thereto, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at Law). Except
as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect or as disclosed on Section 5.17(g) of the Parent Disclosure Letter, (x) neither Parent nor any Parent Subsidiary has
received written notice from any tenant under any Material Parent Lease that such tenant is challenging the calculation of any amounts to be paid by any such tenant under any Material Parent Lease which has not been resolved, (y) no tenant
under a Material Parent Lease is currently asserting in writing a right to cancel or terminate such Material Parent Lease prior to the end of the current term, and (z) neither Parent nor any Parent Subsidiary has received a notice of any
insolvency or bankruptcy proceeding involving any tenant under a Material Parent Lease. No tenant under a Material Parent Lease is in monetary default in an amount in excess of $250,000 relating to the payment of any amounts payable under such
Material Parent Lease.
(h) To the Knowledge of the Parent and except as set forth in Section 5.17(h) of the Parent Disclosure
Letter, there are no material Tax abatements or exemptions specifically affecting any of the Parent Properties. Neither Parent nor any Parent Subsidiary has received any written notice of (and Parent and Parent Subsidiaries do not have any Knowledge
of) any proposed increase in the assessed valuation of any Parent Property or of any proposed public improvement assessments that, in any of the foregoing, will result in the Taxes or assessments payable in the next tax period increasing by an
amount material to Parent and Parent Subsidiaries, considered as a whole, in each case, to the extent such Tax is on a Parent Property for which Parent is not entitled by the terms of Parent Leases to be reimbursed for a significant portion of such
Tax.
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(i) As of the date of this Agreement, no material purchase option has been exercised under
any Parent Lease for which the purchase has not closed prior to the date of this Agreement.
(j) Except for Parent Permitted Liens, as set
forth in Parent Leases, joint venture agreements and title documents provided to Company prior to the date hereof or as set forth on Section 5.17(j) of the Parent Disclosure Letter, (i) there are no unexpired option to purchase
agreements, rights of first refusal or first offer or any other rights to purchase or otherwise acquire any Parent Property or any material portion thereof and (ii) there are no other outstanding rights or agreements to enter into any contract
for sale, ground lease or letter of intent to sell or ground lease any Parent Property or any material portion thereof that is owned by any Parent Subsidiary, which, in each case, is in favor of any party other than Parent or a Parent Subsidiary (a
Parent Third Party).
(k) Except pursuant to a Parent Lease, or any ground lease affecting any Parent Property, neither
Parent nor any Parent Subsidiary is a party to any agreement pursuant to which Parent or any Parent Subsidiary manages or manages the development of any real property for any Parent Third Party.
(l) Except as would not, individually or in the aggregate, materially impair the value of the applicable Parent Property or the continued use
and operation of the applicable Parent Property as would not have a material adverse impact on Parent, Parent and each Parent Subsidiary, as applicable, are in possession of title insurance policies or valid marked-up title commitments evidencing
title insurance with respect to each Parent Property (each, a Parent Title Insurance Policy and, collectively, the Parent Title Insurance Policies). Since January 1, 2019, no written claim has been made
against any Parent Title Insurance Policy that would be material to any Parent Property.
(m) Section 5.17(m) of the Parent
Disclosure Letter lists each Parent Property that is (i) under development (or for which development is imminent) as of the date hereof (other than normal repair, maintenance and landlord or tenant improvement projects in the ordinary course of
business) or (ii) subject to a binding agreement for development or commencement of construction by Parent or a Parent Subsidiary, in each case other than those pertaining to customary capital repairs, replacements and other similar correction
or deferred maintenance items in the ordinary course of business.
(n) Section 5.17(n) of the Parent Disclosure Letter lists
the parties currently providing third-party property management services to Parent or a Parent Subsidiary and the number of Parent Properties currently managed by each such party.
(o) The Parent Properties (x) are supplied with utilities and other services as reasonably required for their continued operation as they
are now being operated, (y) are, to the Knowledge of Parent, either (A) sufficient for their normal operation in the manner currently being operated and without any material structural defects other than as may be disclosed in any physical
condition reports that have been made available to Company or (B) scheduled for maintenance or repair in the ordinary course of business, and (z) are, to the Knowledge of Parent, adequate and suitable for the purposes for which they are
presently being used.
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(p) To the Knowledge of Parent, each of the Parent Properties has sufficient access to and
from publicly dedicated streets for its current use and operation, without any constraints that interfere with the normal use, occupancy and operation thereof.
(q) Parent and any Parent Subsidiaries have good and valid title to, or a valid and enforceable leasehold interest in, or other right to use,
all material personal property owned, used or held for use by them as of the date of this Agreement (other than property owned by tenants and used or held in connection with the applicable tenancy) except as individually or in the aggregate has not
had and would not reasonably be expected to have a Parent Material Adverse Effect. None of Parents or any Parent Subsidiaries ownership of or leasehold interest in any such personal property is subject to any Liens, except for Parent
Permitted Liens and Liens that have not and would not reasonably be expected to have a Parent Material Adverse Effect.
(r) With respect to
any Parent Property that includes or is adjacent to any Shadow Anchor that is owned by a third party (other than Parent or a Parent Subsidiary) since January 1, 2019, neither Parent nor to the Knowledge of Parent any Shadow Anchor or any other
party has received written notice of material default under any reciprocal easement agreement or joint operating agreement or similar agreement that relates to the operation of such Parent Property.
(s) Section 5.17(s) of the Parent Disclosure Letter sets forth a list of all outstanding obligations of Parent or any Parent
Subsidiary for Tenant Improvements as of the date of this Agreement, which individually exceed $2,000,000, including (i) the applicable Parent Lease, (ii) the total amount of such Tenant Improvement obligation and (iii) a brief
description.
Section 5.18 Material Contracts.
(a) Except for contracts listed in Section 5.18(a) of the Parent Disclosure Letter, this Agreement or contracts filed as exhibits
to the Parent SEC Documents, as of the date of this Agreement, neither Parent nor any Parent Subsidiary is a party to or bound by any contract that, as of the date hereof:
(i) is required to be filed as an exhibit to the Parent SEC Documents pursuant to Item 601(b)(2), (4), (9) or (10) of
Regulation S-K promulgated under the Securities Act (but for the avoidance of doubt, no Parent Benefit Plan);
(ii) obligates Parent or
any Parent Subsidiary to make non-contingent aggregate annual expenditures (other than principal and/or interest payments or the deposit of other reserves with respect to debt obligations) in excess of $2,000,000 and is not cancelable within ninety
(90) days without material penalty to Parent or any Parent Subsidiary, except for any Parent Lease or any ground lease affecting any Parent Property;
(iii) contains any non-compete or exclusivity provisions with respect to any line of business or geographic area that restricts or limits in
any material respect the business of Parent or any Parent Subsidiary, or that otherwise restricts or limits, in each case, in any material respect, the lines of business conducted by Parent or any Parent Subsidiary or the geographic area in which
Parent or any Parent Subsidiary may conduct business, other than any ground lease or exclusive lease provisions, non-compete provisions and other similar leasing restrictions entered into by Parent and its Subsidiaries in the ordinary course of
business;
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(iv) is an agreement that obligates Parent or any Parent Subsidiary to indemnify any past
or present directors, officers, trustees, employees and agents of Parent or any Parent Subsidiary pursuant to which Parent or a Parent Subsidiary is the indemnitor (other than the Parent Declaration of Trust and Parent Bylaws and the Organizational
Documents of the Parent Subsidiaries);
(v) constitutes an Indebtedness obligation of Parent or any Parent Subsidiary with a principal
amount as of the date hereof greater than $5,000,000 other than (x) surety or performance bonds, letters of credit or similar agreements entered into in the ordinary course of business in each case to the extent not drawn upon and (y) any
contract solely among or between the Parent and its wholly owned Subsidiaries;
(vi) requires Parent or any Parent Subsidiary to dispose
of or acquire assets or real properties (other than in connection with the expiration of a Parent Lease or a ground lease affecting any Parent Property) with a fair market value in excess of $5,000,000, or involves any pending or contemplated
merger, consolidation or similar business combination transaction, except for any Parent Lease or any ground lease affecting any Parent Property;
(vii) constitutes an interest rate cap, interest rate collar, interest rate swap or other contract or agreement relating to a hedging
transaction;
(viii) sets forth the operational terms of a joint venture, partnership, limited liability company with a Parent Third Party
member or strategic alliance of Parent or any Parent Subsidiary;
(ix) constitutes a loan to any Person (other than a wholly owned Parent
Subsidiary) by Parent or any Parent Subsidiary (other than advances made pursuant to and expressly disclosed in Parent Leases or pursuant to any disbursement agreement, development agreement, or development addendum entered into in connection with a
Parent Lease with respect to the development, construction, or equipping of Parent Properties or the funding of improvements to Parent Properties) in an amount in excess of $2,000,000;
(x) constitutes an agreement under which Parent or a Parent Subsidiary has purchased or sold real property and has uncompleted financial
obligations in excess of $2,000,000; or
(xi) requires payment of commissions (including leasing commissions on brokerage fees) or Tenant
Improvement costs, allowances or other concessions in excess of $2,000,000.
(b) Each contract in any of the categories set forth in
Section 5.18(a) to which Parent or any Parent Subsidiary is a party or by which it is bound is referred to herein as a Parent Material Contract.
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(c) Except as, individually or in the aggregate, would not reasonably be expected to have a
Parent Material Adverse Effect, each Parent Material Contract is legal, valid, binding and enforceable on Parent and each Parent Subsidiary that is a party thereto and, to the Knowledge of Parent, each other party thereto, and is in full force and
effect, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors rights generally and by general principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at Law). Except as, individually or in the aggregate, would not reasonably be expected to have a Parent Material Adverse Effect, Parent and each Parent Subsidiary has performed all obligations required to be performed by it
prior to the date hereof under each Parent Material Contract and, to the Knowledge of Parent, each other party thereto has performed all obligations required to be performed by it under such Parent Material Contract prior to the date hereof. None of
Parent or any Parent Subsidiary, nor, to the Knowledge of Parent, any other party thereto, is in material breach or violation of, or default under, any Parent Material Contract, and no event has occurred that, with notice or lapse of time or both,
would constitute a violation or breach of, or default under, any Parent Material Contract, except where in each case such breach, violation or default is not reasonably likely to have, individually or in the aggregate, a Parent Material Adverse
Effect. Neither Parent nor any Parent Subsidiary has received notice of any violation of or default under any Parent Material Contract, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to
have a Parent Material Adverse Effect.
Section 5.19 Insurance. Section 5.20 Section 5.19 of the Parent
Disclosure Letter sets forth a list of all material insurance policies and all material fidelity bonds or other material insurance contracts providing coverage for all Parent Properties (the Parent Insurance Policies). The Parent
Insurance Policies include all material insurance policies and all material fidelity bonds or other material insurance service contracts required by any Material Parent Lease. Except as individually or in the aggregate, would not reasonably be
expected to have a Parent Material Adverse Effect, all premiums due and payable under all the Parent Insurance Policies have been paid, and Parent and the Parent Subsidiaries have otherwise complied in all material respects with the terms and
conditions of all the Parent Insurance Policies. Except as individually or in the aggregate would not reasonably be expected to have a Parent Material Adverse Effect, there is no claim for coverage by Parent or any Parent Subsidiary pending under
any of the Parent Insurance Policies that has been denied or disputed by the issuer. To the Knowledge of Parent, such Parent Insurance Policies are valid and enforceable in accordance with their terms and are in full force and effect. Since
January 1, 2019, no written notice of cancellation or termination has been received by Parent or any Parent Subsidiary with respect to any such policy which has not been replaced on substantially similar terms prior to the date of such
cancellation.
Section 5.20 Opinion of Financial Advisor. Section 5.18 The Parent Board has received the oral
opinion of BofA Securities, Inc. (to be confirmed in writing), to the effect that, as of the date of such opinion and based on and subject to the various qualifications, assumptions and limitations set forth therein, that the Exchange Ratio is fair,
from a financial point of view, to Parent.
Section 5.21 Approval Required. The affirmative votes of holders of a
majority of the votes cast by the holders of Parent Common Shares at the Parent Shareholder Meeting to approve the issuance of the Parent Common Shares to be issued in the Merger is the only votes of holders of securities of Parent required to
approve the issuance of the Parent Common Shares to be issued in the Merger.
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Section 5.22 Brokers. Except for the fees and expenses payable to BofA
Securities, Inc. and KeyBanc Capital Markets Inc., no broker, investment banker or other Person is entitled to any brokers, finders or other similar fee or commission in connection with the Merger and the other transactions contemplated
by this Agreement based upon arrangements made by or on behalf of Parent, or any Parent Subsidiary; true and complete copies of the agreement with respect to the engagement of BofA Securities, Inc. and the agreement with respect to the engagement of
KeyBanc Capital Markets Inc. have previously been made available to Company.
Section 5.23 Investment Company Act.
Neither Parent nor any Parent Subsidiary is required to be registered as an investment company under the Investment Company Act.
Section 5.24 Takeover Statutes. The Parent Board has taken all action necessary to render inapplicable to the Merger and
the other transactions contemplated by this Agreement the restrictions on business combinations and control share acquisitions contained in Subtitle 6 of Title 3 of the MGCL and Subtitle 7 of Title 3 of the MGCL. To the Knowledge of Parent, no other
Takeover Statute is applicable to this Agreement, the Merger or the other transactions contemplated by this Agreement. Neither Parent nor any Parent Subsidiary is, nor at any time during the last two (2) years has been, an interested
stockholder or an affiliate of an interested stockholder of Company as defined in Section 3-601 of the MGCL.
Section 5.25 Related Party Transactions. Except for this Agreement or as set forth in the Parent SEC Documents filed
through and including the date of this Agreement or as permitted by this Agreement, from January 1, 2019 through the date of this Agreement there have been no transactions, agreements, arrangements or understandings between Parent or any Parent
Subsidiary, on the one hand, and any Affiliates (other than Parent Subsidiaries) of Parent, on the other hand, that would be required to be disclosed under Item 404 of Regulation S-K promulgated by the SEC. Except for agreements not required to
be disclosed under Item 404 of Regulation S-K promulgated by the SEC, Section 5.25 of the Parent Disclosure Letter sets forth each agreement between Parent or any Parent Subsidiary, on the one hand, and any Affiliates (other than
the Parent Subsidiaries) of Parent, on the other hand.
Section 5.26 Sufficient Funds. Parent has available sufficient
cash or lines of credit available to pay the Fractional Share Consideration, and Parent will have, at the Closing, all amounts required to be paid by Parent in connection with the consummation of the transactions contemplated by this Agreement and
any other related fees and expenses.
Section 5.27 No Other Representations and Warranties. Except for the
representations or warranties expressly set forth in this Article 5, neither Parent nor any other Person on behalf of Parent has made any representation or warranty, expressed or implied, with respect to Parent or Parent Subsidiaries, their
businesses, operations, assets, liabilities, condition (financial or otherwise), results of operations, future operating or financial results, estimates, projections, forecasts, plans or prospects (including the reasonableness of the assumptions
underlying such estimates, projections, forecasts, plans or prospects) or the accuracy or completeness of any information regarding Parent or Parent Subsidiaries. In particular, without limiting the foregoing
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disclaimer, neither Parent nor any other Person makes or has made any representation or warranty to Company or any of its Affiliates or Representatives with respect to, except for the
representations and warranties made by Parent in this Article 5, any oral or written information presented to Company or any of its Affiliates or Representatives in the course of their due diligence of Parent, the negotiation of this
Agreement or in the course of the transactions contemplated hereby. Notwithstanding anything contained in this Agreement to the contrary, Parent acknowledges and agrees that none of Company or any other Person has made or is making any
representations or warranties relating to Company whatsoever, express or implied, beyond those expressly given by Company in Article 4, including any implied representation or warranty as to the accuracy or completeness of any information
regarding Company furnished or made available to Parent or any of its Representatives.
Section 5.28 Merger Sub. All of
the authorized membership interests of Merger Sub are, and at the Effective Time will be, owned by Parent and such membership interests are validly issued and outstanding. Merger Sub was formed solely for the purpose of engaging in the transactions
contemplated by this Agreement, and, prior to the Effective Time, Merger Sub will have engaged in no business and have no liabilities or obligations other than in connection with the transactions contemplated by this Agreement.
ARTICLE 6
COVENANTS
RELATING TO CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.1 Conduct of Business by Company.
(a) Company covenants and agrees that, between the date of this Agreement and the earlier to occur of the Effective Time and the date, if any,
on which this Agreement is terminated pursuant to Section 9.1 (the Interim Period), except (v) to the extent required by applicable Law or the regulations or requirements of any stock exchange or regulatory
organization applicable to the Company or any Company Subsidiary, (w) to the extent action is reasonably taken (or reasonably omitted) in response to COVID-19 or COVID-19 Measures, provided that such action (or omission) is reasonably
consistent with Companys and Company Subsidiaries actions taken (or omitted) prior to the date hereof in response to COVID-19 or COVID-19 Measures and discussed in advance with Parent, (x) as may be consented to in advance in
writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) as may be expressly required or expressly permitted pursuant to this Agreement, or (z) as otherwise set forth in Section 6.1 of
the Company Disclosure Letter, Company shall, and shall cause each of the Company Subsidiaries to, (i) conduct its business in all material respects in the ordinary course and in a manner consistent with past practice, and (ii) use its
commercially reasonable efforts to (A) maintain its material assets and properties in their current condition (normal wear and tear and damage caused by casualty or by any reason outside of Companys or any Company Subsidiarys
control excepted), (B) preserve intact in all material respects its current business organization, goodwill, ongoing businesses and significant relationships with third parties, (C) keep available the services of its present officers,
(D) maintain all Company Insurance Policies and (E) maintain the status of Company as a REIT.
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(b) Without limiting the foregoing, Company covenants and agrees that, during the Interim
Period, except (w) to the extent required by applicable Law or the regulations or requirements of any stock exchange or regulatory organization applicable to the Company or any Company Subsidiary, (x) as may be consented to in writing by
Parent (which consent shall not in any case be unreasonably withheld, delayed or conditioned (it being understood that with respect to items requiring consent pursuant to clause (xi) below (regarding certain Company Leases) if, within two
(2) Business Days after Company provides notice requesting Parents consent pursuant to this Section 6.1(b), Parent has not either affirmatively provided or withheld consent or reasonably requested additional information
from Company with respect to such request, Company may provide a second notice requesting such consent, which notice shall specifically state that it is a second notice under this Section 6.1(b), and to the extent no response is received
from Parent within one (1) Business Days after Company delivers such second notice, Parents consent shall be deemed given)), (y) as may be expressly required or expressly permitted by this Agreement, or (z) as set forth in
Section 6.1 of the Company Disclosure Letter, Company shall not, and shall not cause or permit any Company Subsidiary to, do any of the following:
(i) amend (A) the Company Charter or the Company Bylaws, (B) such comparable Organizational Documents of any Company Subsidiary, if
such amendment would be materially adverse to Company or Parent or (C) exempt or waive any stock ownership limit or create or increase an Excepted Holder Limit (as defined in the Company Charter) under the Company Charter;
(ii) split, combine, reclassify or subdivide any shares of stock or other equity securities or ownership interests of Company or any Company
Subsidiary (other than any wholly owned Company Subsidiary);
(iii) declare, set aside or pay any dividend on or make any other
distributions (whether in cash, stock, property or otherwise) with respect to shares of capital stock of Company or any Company Subsidiary or other equity securities or ownership interests in Company or any Company Subsidiary, except for
(A) the declaration and payment by Company of regular quarterly dividends, aggregated and paid quarterly in accordance with past practice, at a quarterly rate not to exceed $0.075 per share of Company Common Stock, (B) the declaration and
payment of dividends in accordance with Section 7.12, (C) the declaration and payment of dividends or other distributions to Company by any directly or indirectly wholly owned Company Subsidiary, and (D) distributions by any
Company Subsidiary that is not wholly owned, directly or indirectly, by Company, in accordance with the requirements of the Organizational Documents of such Company Subsidiary; provided, that, notwithstanding the restriction on dividends and
other distributions in this Section 6.1(b)(iii) and Section 7.12, Company and any Company Subsidiary shall be permitted to make distributions, including under Sections 858 or 860 of the Code, reasonably necessary for Company
and any Company Subsidiary that is qualified as a REIT under the Code as of the date hereof to maintain its status as a REIT under the Code or applicable state Law and avoid or reduce the imposition of any entity-level income or excise Tax under the
Code or applicable state Law, after taking into account the dividends made or expected to be made pursuant to Section 7.12(a) (any such dividend, a Permitted REIT Dividend);
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(iv) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of its
beneficial interests or other equity interests of Company or a Company Subsidiary, other than (A) the acquisition by Company of shares of Company Common Stock in connection with the forfeiture or surrender of shares of Company Common Stock by
holders of Company Options in order to pay the exercise price of the Company Option in connection with the exercise of such Company Option, (B) the forfeiture or withholding of shares of Company Common Shares to satisfy withholding Tax
obligations with respect to outstanding Company Equity Awards in each case in accordance with the terms and conditions of the Company Equity Incentive Plans and award agreements applicable to such Company Equity Awards as of the date of this
Agreement and (C) the creation of new wholly owned Company Subsidiaries organized to conduct or continue activities otherwise permitted by this Agreement (including the other provisions of this Section 6.1(b));
(v) except for (A) transactions among Company and one or more wholly owned Company Subsidiaries or among one or more wholly owned Company
Subsidiaries, (B) issuances of shares of Company Common Stock upon the exercise of any Company Option and issuances of shares of Company Common Stock upon the vesting or scheduled delivery of shares pursuant to, Company Equity Awards, in each
case in accordance with the terms and conditions of the Company Equity Incentive Plans and award agreements applicable to such Company Equity Awards as of the date of this Agreement, or (C) as otherwise contemplated in
Section 6.1(b)(vi), issue, sell, pledge, dispose, encumber or grant any shares of Companys or any of the Company Subsidiaries capital stock, or any options, warrants, convertible securities or other rights of any kind to
acquire any shares of Companys or any of the Companys Subsidiaries capital stock or other equity interests;
(vi)
acquire or agree to acquire (including by merger, consolidation or acquisition of stock or assets) any real property, personal property (other than acquisitions of personal property amounting to less than $1,000,000 in the aggregate), corporation,
partnership, limited liability company, other business organization or any division or material amount of assets thereof, except (A) acquisitions by Company or any wholly owned Company Subsidiary of or from an existing wholly owned Company
Subsidiary and (B) the prospective acquisitions listed on Section 6.1 of the Company Disclosure Letter, subject to the aggregate amount set forth thereon;
(vii) sell, mortgage, pledge, lease, license, assign, transfer, dispose of or encumber, or effect a deed in lieu of foreclosure with respect
to, any real property, personal property (other than sales or dispositions of personal property amounting to less than $1,000,000 in the aggregate), intangible property, Company Intellectual Property or interest in any corporation, partnership,
limited liability company or other business organization, except (A) transfers by Company, or any wholly-owned Company Subsidiary, with, to or from any existing wholly-owned Company Subsidiary,(B) the pending dispositions set forth on
Section 6.1 of the Company Disclosure Letter and (C) non-exclusive licenses of Intellectual Property granted in the ordinary course of business consistent with past practice;
(viii) incur, create, assume, refinance, replace or prepay any Indebtedness for borrowed money or issue or amend the terms of any debt
securities of Company or any of the Company Subsidiaries, or assume, guarantee or endorse, or otherwise become responsible (whether directly, contingently or otherwise) for the Indebtedness of any other Person (other than a wholly owned Company
Subsidiary), except (A) Indebtedness in an aggregate principal amount not to exceed $20,000,000 at any time outstanding incurred under Companys existing revolving
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credit facility for (1) working capital purposes in the ordinary course of business consistent with past practice, (2) payment of dividends permitted by Section 6.1(b)(iii)
and Section 7.12, (3) Tenant Improvements at any of the Company Properties in the ordinary course of business consistent with past practice, (4) any development or redevelopment activities of the Company as set forth on
Section 6.1 of the Company Disclosure Letter and (5) in connection with funding any transactions permitted by this Section 6.1(b) and (B) Indebtedness of any wholly owned Company Subsidiary to the Company or to
another wholly owned Company Subsidiary;
(ix) make any loans, advances or capital contributions to, or investments in, any other Person
(including to any of its officers, directors, Affiliates, agents or consultants), make any change in its existing borrowing or lending arrangements for or on behalf of such Persons, or enter into any keep well or similar agreement to
maintain the financial condition of another entity, other than (A) by Company or a wholly owned Company Subsidiary to Company or a wholly owned Company Subsidiary, (B) capital contributions, loans, advances or investments required to be
made under any Company Leases or ground leases pursuant to which any third party is a lessee or sublessee on any Company Property or any existing joint venture arrangements to which Company or a Company Subsidiary is a party as of the date of this
Agreement, and (C) investments permitted pursuant to Section 6.1(b)(vi);
(x) enter into, renew, modify, amend or
terminate, or waive, release, compromise or assign any rights or claims under, any (A) Company Material Contract (or any contract that, if existing as of the date hereof, would be a Company Material Contract), or (B) Company Related Party
Agreement, in each case other than (1) any termination or renewal in accordance with the terms of any such contract that occurs automatically without any action (other than notice of renewal) by Company or any Company Subsidiary, (2) the
entry into any modification or amendment of, or waiver or consent under, any Indebtedness to which Company or any Company Subsidiary is a party as required or necessitated by this Agreement or the transactions contemplated hereby; provided,
that any such modification, amendment, waiver or consent does not increase the principal amount thereunder or otherwise materially adversely affect Company, any Company Subsidiary, Parent or any Parent Subsidiary, (3) in connection with any
Tenant Improvements at any of the Company Properties in the ordinary course of business consistent with past practice, (4) in connection with the development or redevelopment activities of Company and the Company Subsidiaries set forth on
Section 6.1 of the Company Disclosure Letter, or (5) as otherwise expressly permitted by other sections of this Section 6.1(b);
(xi) enter into, renew, modify, amend or terminate, or waive, release, compromise or assign any rights or claims under, any Material Company
Lease (or any lease for real property that, if existing as of the date hereof, would be a Material Company Lease), except for (A) any termination, modification or renewal in accordance with the terms of any such lease that occurs automatically
without any action (other than notice of renewal) by Company or any Company Subsidiary or (B) as set forth in Section 6.1(b) of the Company Disclosure Letter; provided that solely for references to Material Company Lease in this
Section 6.1(b)(xi), the threshold amounts in clauses (A) and (B) of the definition of Material Company Lease shall be deemed to be 10,000 square feet and $500,000 respectively;
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(xii) make any payment, direct or indirect, of any liability of Company or any Company
Subsidiary before the same comes due in accordance with its terms, other than (A) in the ordinary course of business consistent with past practice or (B) in connection with dispositions of Company Properties or refinancings of any
Indebtedness otherwise expressly permitted by other sections of this Section 6.1(b);
(xiii) waive, release, assign, settle or
compromise any claim or Action, other than waivers, releases, assignments, settlements or compromises that (A) with respect to the payment of monetary damages, involve only the payment of monetary damages (excluding any portion of such payment
payable under an existing property-level insurance policy) (1) equal to or less than the amounts specifically reserved with respect thereto on the most recent balance sheet of Company included in the Company SEC Documents filed and publicly
available prior to the date of this Agreement (but only in connection with the specific Action or claim to which the reserved amount relates) or (2) that do not exceed $500,000 individually or $2,500,000 in the aggregate, (B) do not
involve the imposition of injunctive relief against Company or any Company Subsidiary or the Surviving Entity, (C) do not provide for any admission of material liability by Company or any Company Subsidiary, excluding in each case any such
matter relating to Taxes (which, for the avoidance of doubt, shall be covered by Section 6.1(b)(xviii)) and any matter relating to the condemnation proceedings set forth on Section 4.17(e) of the Company Disclosure Letter,
and (D) are with respect to any Action involving any present, former or purported holder or group of holders of Company Common Stock in accordance with Section 7.8(c);
(xiv) except as required by applicable Law or any Company Benefit Plans, or as set forth on Section 6.1 of the Company Disclosure
Letter, (A) hire or terminate (without cause) any director or employee at the level of vice president or above of Company or any Company Subsidiary or promote or appoint any Person to a position of director or vice president or above of Company
or any Company Subsidiary (other than to replace any officer that departs after the date of this Agreement), (B) materially increase in any manner (or accelerate the vesting, payment or funding of) the amount, rate or terms of compensation or
benefits of any officer or director of Company or any Company Subsidiary or, other than in the ordinary course of business and consistent with past practice, any other employee or individual service provider of Company or any Company Subsidiary,
(C) enter into, adopt, materially amend or terminate any Company Benefit Plan, (D) amend or waive any of its rights under, or accelerate the vesting, payment or exercisability under, any provision of any of the Company Equity Incentive
Plans or any provision of any contract evidencing any Company Equity Award or otherwise modify any of the terms of any outstanding Company Equity Award, or (E) enter into any contract with any labor union or similar organization, including a
collective bargaining agreement;
(xv) fail to maintain all financial books and records in all material respects in accordance with GAAP
(or any binding interpretation thereof) or make any material change to its methods of accounting in effect at January 1, 2021, except as required by a change in GAAP (or any binding interpretation thereof) or in applicable Law, or make any
change with respect to accounting policies, principles or practices unless required by GAAP, the SEC or the Financial Accounting Standards Board or any similar organization;
(xvi) enter into any new line of business or form or enter into any new funds or joint ventures;
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(xvii) fail to duly and timely file all material reports and other material documents
required to be filed with any Governmental Authority, subject to extensions permitted by Law;
(xviii) enter into or modify in a manner
adverse to Company or Parent any Company Tax Protection Agreement, or make, change or rescind any material election relating to Taxes, change a material method of Tax accounting, amend any material Tax Return, settle or compromise any material
federal, state, local or foreign Tax liability, audit, claim or assessment, enter into any material closing agreement related to Taxes, or knowingly surrender any right to claim any material Tax refund, except, in each case, (A) to the extent
required by Law or (B) to the extent necessary (1) to preserve Companys qualification as a REIT under the Code or (2) to qualify or preserve the status of any Company Subsidiary as a disregarded entity or partnership for United
States federal income tax purposes or as a Qualified REIT Subsidiary or a Taxable REIT Subsidiary under the applicable provisions of Section 856 of the Code, as the case may be;
(xix) take any action that would, or fail to take any action, the failure of which to be taken would, reasonably be expected to cause
(A) Company to fail to qualify as a REIT or (B) any Company Subsidiary to cease to be treated as any of (1) a partnership or disregarded entity for federal income tax purposes or (2) a Qualified REIT Subsidiary or a Taxable REIT
Subsidiary under the applicable provisions of Section 856 of the Code, as the case may be;
(xx) adopt a plan of merger, complete or
partial liquidation or resolutions providing for or authorizing such merger, liquidation or a dissolution, consolidation, recapitalization or bankruptcy reorganization, except in connection with any transaction permitted by
Section 6.1(b)(vi) or 6.1(b)(vii) in a manner that would not reasonably be expected to be materially adverse to Company or to prevent or impair the ability of Company to consummate the Merger;
(xxi) except (A) pursuant to Companys budgeted items set forth on Section 6.1 of the Company Disclosure Letter,
(B) in connection with any Tenant Improvements at any of the Company Properties in the ordinary course of business consistent with past practice, (C) in connection with the development or redevelopment activities of Company and the Company
Subsidiaries set forth on Section 6.1 of the Company Disclosure Letter, and (D) capital expenditures in the ordinary course of business consistent with past practice necessary to repair and/or prevent damage to any of the Company
Properties or as is reasonably necessary in the event of an emergency situation, after prior notice to Parent (provided, that if the nature of such emergency renders prior notice to Parent impracticable, Company shall provide notice to Parent
and promptly as practicable after making such capital expenditure), make or commit to make any capital expenditures in excess of $250,000 individually, or $1,000,000 in the aggregate;
(xxii) amend or modify the compensation terms or any other obligations of Company contained in any engagement letter with Companys
financial advisor in connection with the Merger in a manner materially adverse to Company, any Company Subsidiary, the Surviving Entity or Parent or engage other financial advisors in connection with the transactions contemplated by this Agreement;
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(xxiii) except to the extent permitted by Section 7.3, take any action that
would, or would reasonably be expected to, prevent or delay the consummation of the transactions contemplated by this Agreement; or
(xxiv) authorize, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
(c) Notwithstanding anything to the contrary set forth in this Agreement, (i) subject to Section 7.12, nothing in this
Agreement shall prohibit Company from taking any action, at any time or from time to time, that in the reasonable judgment of the Company Board, upon advice of counsel to Company, is reasonably necessary for Company to avoid or to continue to avoid
incurring entity-level income or excise Taxes under the Code or to maintain its qualification as a REIT under the Code for any period or portion thereof ending on or prior to the Effective Time, including making dividend or other distribution
payments to stockholders of Company in accordance with this Agreement, or to qualify or preserve the status of any Company Subsidiary as a disregarded entity or partnership for U.S. federal income tax purposes or as a Qualified REIT Subsidiary or a
Taxable REIT Subsidiary under the applicable provisions of Section 856 of the Code, and (ii) Companys obligations under this Section 6.1 to act or refrain from acting, or to cause Company Subsidiaries to act or refrain
from acting, will, with respect to any joint venture and its subsidiaries, be subject to (A) express requirements under the Organizational Documents of such entity and its subsidiaries, and (B) the scope of Companys or Company
Subsidiaries power and authority to bind such entity and its subsidiaries.
Section 6.2 Conduct of Business by
Parent.
(a) Parent covenants and agrees that, during the Interim Period, except (v) to the extent required by applicable Law or
the regulations or requirements of any stock exchange or regulatory organization applicable to the Parent or any Parent Subsidiary, (w) to the extent action is reasonably taken (or reasonably omitted) in response to COVID-19 or COVID-19
Measures, provided that such action (or omission) is reasonably consistent with Parents and Parent Subsidiaries actions taken (or omitted) prior to the date hereof in response to COVID-19 or COVID-19 Measures and discussed in advance
with Company, (x) as may be consented to in advance in writing by Company (which consent shall not be unreasonably withheld, delayed or conditioned), (y) as may be expressly required or expressly permitted pursuant to this Agreement, or
(z) as set forth in Section 6.2 of the Parent Disclosure Letter, Parent shall, and shall cause each of the Parent Subsidiaries to, (i) conduct its business in all material respects in the ordinary course and in a manner
consistent with past practice, and (ii) use its commercially reasonable efforts to (A) maintain its material assets and properties in their current condition (normal wear and tear and damage caused by casualty or by any reason outside of
Parents or any Parent Subsidiarys control excepted), (B) preserve intact in all material respects its current business organization, goodwill, ongoing businesses and significant relationships with third parties, (C) keep
available the services of its present officers, (D) maintain all Parent Insurance Policies and (E) maintain the status of Parent as a REIT.
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(b) Without limiting the foregoing, Parent covenants and agrees that, during the Interim
Period, except (w) to the extent required by applicable Law or the regulations or requirements of any stock exchange or regulatory organization applicable to the Company or any Company Subsidiary, (x) as may be consented to in writing by
Company (which consent shall not in any case be unreasonably withheld, delayed or conditioned (it being understood that with respect to items requiring consent pursuant to clause (xi) below (regarding certain Parent Leases) if, within two
(2) Business Days after Parent provides notice requesting Companys consent pursuant to this Section 6.1(b), Company has not either affirmatively provided or withheld consent or reasonably requested additional information from
Parent with respect to such request, Parent may provide a second notice requesting such consent, which notice shall specifically state that it is a second notice under this Section 6.2(b), and to the extent no response is received from
Company within one (1) Business Days after Parent delivers such second notice, Companys consent shall be deemed given)), (y) as may be expressly required or expressly permitted by this Agreement, or (z) as set forth in
Section 6.2 of the Parent Disclosure Letter, Parent shall not, and shall not cause or permit any Parent Subsidiary to, do any of the following:
(i) amend (A) the Parent Declaration of Trust or the Parent Bylaws (other than any amendment necessary to effect the Merger and the other
transactions contemplated hereby), (B) such comparable Organizational Documents of any Parent Subsidiary if such amendment would be materially adverse to Parent or Company or (C) exempt or waive the share ownership limit or create or
increase an Excepted Holder Limit (as defined in the Parent Declaration of Trust) under the Parent Declaration of Trust;
(ii) split,
combine, reclassify or subdivide any shares of stock or other equity securities or ownership interests of Parent or any Parent Subsidiary (other than any wholly owned Parent Subsidiary);
(iii) declare, set aside or pay any dividend on or make any other distributions (whether in cash, stock, property or otherwise) with respect
to shares of capital stock of Parent or any Parent Subsidiary or other equity securities or ownership interests in Parent or any Parent Subsidiary, except for (A) the declaration and payment by Parent of regular dividends, aggregated and paid
quarterly in accordance with past practice at a quarterly rate not to exceed $0.18 per Parent Common Share, (B) the declaration and payment of dividends in accordance with Section 7.12, (C) the declaration and payment of
dividends or other distributions to Parent by any directly or indirectly wholly owned Parent Subsidiary, and (D) distributions by any Parent Subsidiary that is not wholly owned, directly or indirectly, by Parent, in accordance with the
requirements of the Organizational Documents of such Parent Subsidiary; provided, that, notwithstanding the restriction on dividends and other distributions in this Section 6.2(b)(iii) and Section 7.12, Parent and any
Parent Subsidiary shall be permitted to make Permitted REIT Dividends;
(iv) redeem, repurchase or otherwise acquire, directly or
indirectly, any shares of its beneficial interests or other equity interests of Parent or a Parent Subsidiary, other than (A) pursuant to Article VIII of the Parent Declaration of Trust, (B) the acquisition by Parent of Parent Common
Shares in connection with the forfeiture or surrender of Parent Common Shares by holders of Parent options in order to pay the exercise price of the Parent option in connection with the exercise of such Parent option, (C) the forfeiture or
withholding of Parent Common Shares to satisfy withholding Tax obligations with respect to outstanding awards granted pursuant to the Parent Equity Incentive Plans and issuances under the Parent DRIP and Parents 2008 Employee Share Purchase
Plan, in each case in accordance with the terms and conditions applicable to such
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equity awards as of the date of this Agreement, (D) redemption of Parent OP Units and exchanges of LTIP and AO LTIP units for Parent OP Units in accordance with the Parent LP Agreement and
the applicable award agreement, and (E) the creation of new wholly owned Parent Subsidiaries organized to conduct or continue activities otherwise permitted by this Agreement (including the other provisions of this Section 6.2(b));
(v) except for (A) transactions among Parent and one or more wholly owned Parent Subsidiaries or among one or more wholly owned
Parent Subsidiaries, (B) issuances of Parent Common Shares upon the exercise or settlement of any Parent option and issuances of equity or equity-based awards under the Parent Equity Incentive Plans, Parents 2008 Employee Share Purchase
Plan or the Parent DRIP, (C) redemptions of Parent OP Units for Parent Common Shares and exchanges of LTIP or AO LTIP units for Parent OP Units in accordance with the Parent LP Agreement and applicable award agreement, (D) pursuant to
Parents at the market equity offering program for cash, not to exceed the amounts and on the terms set forth on Section 6.2 of the Parent Disclosure Letter, or (E) as otherwise contemplated in
Section 6.2(b)(vi), issue, sell, pledge, dispose, encumber or grant any shares of Parents or any of the Parent Subsidiaries capital stock, or any options, warrants, convertible securities or other rights of any kind to
acquire any shares of Parents or any of the Parent Subsidiaries capital stock or other equity interests;
(vi) acquire or
agree to acquire (including by merger, consolidation or acquisition of stock or assets) any real property, personal property (other than personal property amounting to less than $1,000,000 in the aggregate), corporation, partnership, limited
liability company, other business organization or any division or material amount of assets thereof, except (A) acquisitions by Parent or any wholly owned Parent Subsidiary of or from an existing wholly owned Parent Subsidiary, and (B) the
prospective acquisitions listed on Section 6.2 of the Parent Disclosure Letter, subject to the aggregate amount set forth thereon;
(vii) sell, mortgage, pledge, lease, license, assign, transfer, dispose of or encumber, or effect a deed in lieu of foreclosure with respect
to, any real property, personal property (other than sales or dispositions of personal property amounting to less than $1,000,000 in the aggregate), intangible property, Parent Intellectual Property or interest in any corporation, partnership,
limited liability company or other business organization, except (A) transfers by Parent, or any wholly-owned Parent Subsidiary, with, to or from any existing wholly-owned Parent Subsidiary, (B) the pending dispositions set forth on
Section 6.2 of the Parent Disclosure Letter, (C) any other sales, transfers or dispositions of any property or assets, including deeds in lieu of foreclosure, at a total value less than $10,000,000 in the aggregate (less any
indebtedness paid off, assumed or for which Parent or a Parent Subsidiary is no longer a primary obligor thereunder) in the ordinary course of business consistent with past practice and that would not, or would not reasonably be expected, to
prevent, materially alter or materially delay the ability of Parent to consummate the Merger, and (D) non-exclusive licenses of Intellectual Property granted in the ordinary course of business consistent with past practice;
(viii) incur, create, assume, refinance, replace or prepay any Indebtedness for borrowed money or issue or amend the terms of any debt
securities of Parent or any of the Parent Subsidiaries, or assume, guarantee or endorse, or otherwise become responsible (whether directly, contingently or otherwise) for the Indebtedness of any other Person (other than a wholly owned Parent
Subsidiary), except (A) Indebtedness in an aggregate principal amount not to exceed
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$20,000,000 at any time outstanding incurred under Parents existing revolving credit facility for (1) working capital purposes in the ordinary course of business consistent with past
practice, (2) payment of dividends permitted by Section 6.2(b)(iii) and Section 7.12, (3) Tenant Improvements at any of the Parent Properties in the ordinary course of business consistent with past practice,
(4) any development or redevelopment activities of Parent as set forth on Section 6.2 of the Parent Disclosure Letter, and (5) in connection with funding any transactions permitted by this Section 6.2(b) and
(B) Indebtedness of any wholly owned Parent Subsidiary to Parent or to another wholly owned Parent Subsidiary;
(ix) make any loans,
advances or capital contributions to, or investments in, any other Person (including to any of its officers, trustees, Affiliates, agents or consultants), make any change in its existing borrowing or lending arrangements for or on behalf of such
Persons, or enter into any keep well or similar agreement to maintain the financial condition of another entity, other than (A) by Parent or a wholly owned Parent Subsidiary to Parent or a wholly owned Parent Subsidiary,
(B) capital contributions, loans, advances or investments required to be made under any Parent Leases or ground leases pursuant to which any third party is a lessee or sublessee on any Parent Property or any existing joint venture arrangements
to which Parent or a Parent Subsidiary is a party as of the date of this Agreement and (C) investments permitted pursuant to Section 6.2(b)(vi);
(x) enter into, renew, modify, amend or terminate, or waive, release, compromise or assign any rights or claims under, any Parent Material
Contract (or any contract that, if existing as of the date hereof, would be a Parent Material Contract), other than (A) any termination or renewal in accordance with the terms of any such contract that occurs automatically without any action
(other than notice of renewal) by Parent or any Parent Subsidiary, (B) the entry into any modification or amendment of, or waiver or consent under, any Indebtedness to which Parent or any Parent Subsidiary is a party as required or necessitated
by this Agreement or the transactions contemplated hereby; provided, that any such modification, amendment, waiver or consent does not increase the principal amount thereunder or otherwise materially adversely affect Parent, any Parent
Subsidiary or Company or any Company Subsidiary, (C) in connection with any Tenant Improvements at any of the Parent Properties in the ordinary course of business consistent with past practice, (D) in connection with the development or
redevelopment activities of Parent and the Parent Subsidiaries set forth on Section 6.2 of the Parent Disclosure Letter, or (E) as otherwise expressly permitted by other sections of this Section 6.2(b);
(xi) enter into, renew, modify, amend or terminate, or waive, release, compromise or assign any rights or claims under, any Material Parent
Lease, except for (A) any termination, modification or renewal in accordance with the terms of any such lease that occurs automatically without any action (other than notice of renewal) by Parent or any Parent Subsidiary or (B) as set
forth in Section 6.2(b) of the Parent Disclosure Letter; provided that solely for references to Material Parent Lease in this Section 6.2(b)(xi), the threshold amounts in clauses (A) and (B) of the definition of
Material Parent Lease shall be deemed to be 10,000 square feet and $500,000 respectively;
(xii) make
any payment, direct or indirect, of any liability of Parent or any Parent Subsidiary before the same comes due in accordance with its terms, other than (A) in the ordinary course of business consistent with past practice or (B) in
connection with dispositions of Parent Properties or refinancings of any Indebtedness otherwise expressly permitted by other sections of this Section 6.2(b);
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(xiii) waive, release, assign, settle or compromise any claim or Action, other than
waivers, releases, assignments, settlements or compromises that (A) with respect to the payment of monetary damages, involve only the payment of monetary damages (excluding any portion of such payment payable under an existing property-level
insurance policy) (1) equal to or less than the amounts specifically reserved with respect thereto on the most recent balance sheet of Parent included in the Parent SEC Documents filed and publicly available prior to the date of this Agreement
(but only in connection with the specific Action or claim to which the reserved amount relates) or (2) that do not exceed $500,000 individually or $2,500,000 in the aggregate, (B) do not involve the imposition of injunctive relief against
Parent or any Parent Subsidiary or the Surviving Entity, (C) do not provide for any admission of material liability by Parent or any of the Parent Subsidiaries, excluding in each case any such matter relating to Taxes (which, for the avoidance
of doubt, shall be covered by Section 6.2(b)(xviii)) and any matter relating to the condemnation proceedings set forth on Section 5.17(e) of the Parent Disclosure Letter, and (D) are with respect to any Action involving
any present, former or purported holder or group of holders of Parent Common Shares or Parent OP Units in accordance with Section 7.8(c);
(xiv) except as required by applicable Law or any Parent Benefit Plans, or as set forth on Section 6.2 of the Parent Disclosure
Letter, (A) hire or terminate (without cause) any employee at the level of vice president or above of Parent or any Parent Subsidiary or promote or appoint any Person to a position of vice president or above of Parent or any Parent Subsidiary
(other than to replace any officer that departs after the date of this Agreement), (B) materially increase in any manner (or accelerate the vesting, payment or funding of) the amount, rate or terms of compensation or benefits of any employee at
the level of vice president or above of Parent or any Parent Subsidiary, (C) enter into, adopt, materially amend or terminate any Parent Benefit Plan, (D) amend or waive any of its rights under, or accelerate the vesting, payment or
exercisability under, any provision of any of the Parent Equity Incentive Plans or any provision of any contract evidencing any Parent option or equity or equity-based awards under the Parent Equity Incentive Plans or otherwise modify any of the
terms of any such outstanding award, or (E) enter into any contract with any labor union or similar organization, including a collective bargaining agreement;
(xv) fail to maintain all financial books and records in all material respects in accordance with GAAP (or any binding interpretation thereof)
or make any material change to its methods of accounting in effect at January 1, 2021, except as required by a change in GAAP (or any binding interpretation thereof) or in applicable Law, or make any change, with respect to accounting policies,
principles or practices, unless required by GAAP, the SEC or the Financial Accounting Standards Board or any similar organization;
(xvi)
enter into any new line of business or form or enter into any new funds or joint ventures;
(xvii) fail to duly and timely file all
material reports and other material documents required to be filed with any Governmental Authority, subject to extensions permitted by Law;
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(xviii) enter into or modify in a manner adverse to Company or Parent any Parent Tax
Protection Agreement, or make, change or rescind any material election relating to Taxes, change a material method of Tax accounting, amend any material Tax Return, settle or compromise any material federal, state, local or foreign Tax liability,
audit, claim or assessment, enter into any material closing agreement related to Taxes, or knowingly surrender any right to claim any material Tax refund, except, in each case, (A) to the extent required by Law or (B) to the extent
necessary (1) to preserve Parents qualification as a REIT under the Code or (2) to qualify or preserve the status of any Parent Subsidiary as a disregarded entity or partnership for United States federal income tax purposes or as a
Qualified REIT Subsidiary or a Taxable REIT Subsidiary under the applicable provisions of Section 856 of the Code, as the case may be;
(xix) take any action that would, or fail to take any action, the failure of which to be taken would, reasonably be expected to cause
(A) Parent to fail to qualify as a REIT or (B) any Parent Subsidiary to cease to be treated as any of (1) a partnership or disregarded entity for federal income tax purposes or (2) a Qualified REIT Subsidiary or a Taxable REIT
Subsidiary under the applicable provisions of Section 856 of the Code, as the case may be;
(xx) adopt a plan of merger, complete or
partial liquidation or resolutions providing for or authorizing such merger, liquidation or a dissolution, consolidation, recapitalization or bankruptcy reorganization, except in connection with any transaction permitted by
Section 6.2(b)(vi) or 6.2(b)(vii) in a manner that would not reasonably be expected to be materially adverse to Parent or to prevent or impair the ability of Parent to consummate the Merger;
(xxi) except (A) pursuant to Parents budgeted items set forth on Section 6.2 of the Parent Disclosure Letter,
(B) in connection with any Tenant Improvements at any of the Parent Properties in the ordinary course of business consistent with past practice, (C) in connection with the development or redevelopment activities of Parent and the Parent
Subsidiaries set forth on Section 6.2 of the Parent Disclosure Letter, and (D) capital expenditures in the ordinary course of business consistent with past practice necessary to repair and/or prevent damage to any of the Parent
Properties or as is reasonably necessary in the event of an emergency situation, after prior notice to Company (provided, that if the nature of such emergency renders prior notice to Company impracticable, Parent shall provide notice to
Company and promptly as practicable after making such capital expenditure), make or commit to make any capital expenditures in excess of $250,000 individually, or $1,000,000 in the aggregate;
(xxii) amend or modify the compensation terms or any other obligations of Parent contained in any engagement letter with Parents
financial advisors in connection with the Merger in a manner materially adverse to Parent, any Parent Subsidiary or Company or engage other financial advisors in connection with the transactions contemplated by this Agreement;
(xxiii) except to the extent permitted by Section 7.4, take any action that would, or would reasonably be expected to, prevent or
delay the consummation of the transactions contemplated by this Agreement; or
(xxiv) authorize, or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing.
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(c) Notwithstanding anything to the contrary set forth in this Agreement, (i) subject
to Section 7.12, nothing in this Agreement shall prohibit Parent from taking any action, at any time or from time to time, that in the reasonable judgment of the Parent Board, upon advice of counsel to Parent, is reasonably necessary for
Parent to avoid or to continue to avoid incurring entity-level income or excise Taxes under the Code or to maintain its qualification as a REIT under the Code for any period or portion thereof ending on or prior to the Effective Time, including
making dividend or other distribution payments to shareholders of Parent in accordance with this Agreement, or to qualify or preserve the status of any Parent Subsidiary as a disregarded entity or partnership for U.S. federal income tax purposes or
as a Qualified REIT Subsidiary or a Taxable REIT Subsidiary under the applicable provisions of Section 856 of the Code and (ii) Parents obligations under this Section 6.2 to act or refrain from acting, or to cause Parent
Subsidiaries to act or refrain from acting, will, with respect to any joint venture and its subsidiaries, be subject to (A) express requirements under the Organizational Documents of such entity and its subsidiaries, and (B) the scope of
Parent or Parent Subsidiaries power and authority to bind such entity and its subsidiaries.
Section 6.3 No Control
of Other Partys Business. Nothing contained in this Agreement shall give Company, directly or indirectly, the right to control or direct Parents or any Parent Subsidiarys operations prior to the Effective Time, and nothing
contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct Company or any Company Subsidiarys operations prior to the Effective Time. Prior to the Effective Time, each of Company and Parent shall
exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries respective operations.
ARTICLE 7
ADDITIONAL
COVENANTS
Section 7.1 Preparation of the Form S-4, the Joint Proxy Statement; Stockholders Meetings.
(a) As promptly as reasonably practicable (but in any event no more than forty-five (45) days) following the date of this Agreement,
(i) Company and Parent shall jointly prepare and cause to be filed with the SEC the Joint Proxy Statement in preliminary form and (ii) Parent shall prepare and cause to be filed with the SEC the Form S-4 with respect to the Parent Common
Shares issuable in the Merger, which will include the Joint Proxy Statement with respect to the Company Stockholder Meeting and Parent Shareholder Meeting. Each of Company and Parent, as applicable, shall use its reasonable best efforts to
(A) have the Joint Proxy Statement cleared and the Form S-4 declared effective under the Securities Act as promptly as practicable after such filing, (B) ensure that the Form S-4 complies in all material respects with the applicable
provisions of the Exchange Act and Securities Act, (C) mail or deliver the Joint Proxy Statement to its shareholders as promptly as practicable after the Form S-4 is declared effective and (D) keep the Form S-4 effective for so long as is
necessary to complete the Merger. Each of Company and Parent shall furnish all information required to be disclosed in the Form S-4 and Joint Proxy Statement or as may reasonably be requested concerning itself, its Affiliates and its shareholders to
the other, including all information necessary for the preparation of pro forma financial statements, and provide such other assistance as may be reasonably requested in connection with
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the preparation, filing and distribution of the Form S-4 and Joint Proxy Statement. Each of Company and Parent shall promptly notify the other upon the receipt of any comments from the SEC or any
request from the SEC for amendments or supplements to the Form S-4 or the Joint Proxy Statement, and shall, as promptly as practicable after receipt thereof, provide the other with copies of all correspondence between it and its Representatives, on
one hand, and the SEC, on the other hand, and all written comments with respect to the Joint Proxy Statement or the Form S-4 received from the SEC and advise the other Party of any oral comments with respect to the Joint Proxy Statement or the Form
S-4 received from the SEC. Each of Company and Parent shall use its reasonable best efforts to respond as promptly as practicable to any comments from the SEC with respect to the Joint Proxy Statement, and Parent shall use its reasonable best
efforts to respond as promptly as practicable to any comments from the SEC with respect to the Form S-4. Notwithstanding the foregoing, prior to filing the Form S-4 (or any amendment or supplement thereto) or mailing the Joint Proxy Statement (or
any amendment or supplement thereto) or responding to any comments of the SEC with respect thereto, each of Company and Parent shall cooperate and provide the other a reasonable opportunity to review and comment on such document or response
(including the proposed final version of such document or response). Parent shall advise Company, promptly after it receives notice thereof, of the time of effectiveness of the Form S-4, the issuance of any stop order relating thereto or the
suspension of the qualification of the Parent Common Shares issuable in connection with the Merger for offering or sale in any jurisdiction, and Parent shall use its reasonable best efforts to have any such stop order or suspension lifted, reversed
or otherwise terminated. Parent shall also take any other action required to be taken under the Securities Act, the Exchange Act, NYSE rules and regulations, any applicable foreign or state securities or blue sky Laws and the rules and
regulations thereunder in connection with the issuance of the Parent Common Shares in the Merger, and Company shall furnish all information concerning Company and the holders of Company Common Stock as may be reasonably requested in connection with
any such actions.
(b) If, at any time prior to the receipt of the Company Stockholder Approval or the Parent Shareholder Approval, any
information relating to Company or Parent, or any of their respective Affiliates, should be discovered by Company or Parent which, in the reasonable judgment of Company or Parent, should be set forth in an amendment of, or a supplement to, any of
the Form S-4 or the Joint Proxy Statement, so that any of such documents would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading, the Party that discovers such information shall promptly notify the other Parties hereto, and Company and Parent shall cooperate in the prompt filing with the SEC of any necessary amendment of, or supplement to, the
Form S-4/Joint Proxy Statement and, to the extent required by Law, in disseminating the information contained in such amendment or supplement to stockholders of Company and the shareholders of Parent. Nothing in this Section 7.1(b) shall
limit the obligations of any Party under Section 7.1(a). For purposes of Section 4.14, Section 5.14 and this Section 7.1, any information concerning or related to Company, its Affiliates or the Company
Stockholder Meeting will be deemed to have been provided by Company, and any information concerning or related to Parent, Merger Sub or their Affiliates or the Parent Shareholder Meeting will be deemed to have been provided by Parent.
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(c) As promptly as practicable following the date upon which the Form S-4 becomes effective
under the Securities Act, Company shall, in accordance with applicable Law and the Company Charter and the Company Bylaws, establish a record date for, duly call, give notice of, convene and hold the Company Stockholder Meeting and shall use its
reasonable best efforts to cause the Joint Proxy Statement to be mailed to the stockholders of Company entitled to vote at the Company Stockholder Meeting and to hold the Company Stockholder Meeting. Company shall, through the Company Board,
recommend to its stockholders that they provide the Company Stockholder Approval, include such recommendation in the Joint Proxy Statement and solicit and use its reasonable best efforts to obtain the Company Stockholder Approval, except to the
extent that the Company Board shall have made a Company Adverse Recommendation Change as permitted by Section 7.3(b). Notwithstanding the foregoing provisions of this Section 7.1(c), if, on a date for which the Company
Stockholder Meeting is scheduled, Company has not received proxies representing a sufficient number of shares of Company Common Stock to obtain the Company Stockholder Approval, whether or not a quorum is present, Company shall have the right to
make one or more successive postponements or adjournments of the Company Stockholder Meeting solely for the purpose of and for the times reasonably necessary to solicit additional proxies and votes in favor of the Merger and the other transactions
contemplated hereby; provided, that the Company Stockholder Meeting is not postponed or adjourned to a date that is more than thirty (30) days after the date for which the Company Stockholder Meeting was originally scheduled (excluding
any postponements or adjournments required by applicable Law).
(d) As promptly as practicable following the date upon which the Form S-4
is declared effective under the Securities Act, Parent shall, in accordance with applicable Law and the Parent Declaration of Trust and Parent Bylaws, establish a record date for, duly call, give notice of, convene and hold the Parent Shareholder
Meeting and shall use its reasonable best efforts to cause the Joint Proxy Statement to be mailed to the shareholders of Parent entitled to vote at the Parent Shareholder Meeting and to hold the Parent Shareholder Meeting and to hold the Parent
Shareholder Meeting. Parent shall, through the Parent Board, recommend to its shareholders that they provide the Parent Shareholder Approval, include such recommendation in the Joint Proxy Statement, and solicit and use its reasonable best efforts
to obtain the Parent Shareholder Approval, except to the extent that the Parent Board shall have made a Parent Adverse Recommendation Change as permitted by Section 7.4(b). Notwithstanding the foregoing provisions of this
Section 7.1(d), if, on a date for which the Parent Shareholder Meeting is scheduled, Parent has not received proxies representing a sufficient number of Parent Common Shares to obtain the Parent Shareholder Approval, whether or not a
quorum is present, Parent shall have the right to make one or more successive postponements or adjournments of the Parent Shareholder Meeting solely for the purpose of and for the times reasonably necessary to solicit additional proxies and votes in
favor of the Merger and the other transactions contemplated hereby; provided, that the Parent Shareholder Meeting is not postponed or adjourned to a date that is more than thirty (30) days after the date for which the Parent Shareholder
Meeting was originally scheduled (excluding any postponements or adjournments required by applicable Law).
(e) Each of Parent and Company
shall cooperate and use their reasonable best efforts to cause the Parent Shareholder Meeting and the Company Stockholder Meeting to be held on the same date and as soon as reasonably practicable after the date of this Agreement.
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(f) Notwithstanding anything to the contrary in this Agreement, Parent, in its sole
discretion, may submit a proposal at the Parent Shareholder Meeting for approval to amend the Parent Declaration of Trust to increase the authorized number of shares of Parent; it being understood that the consummation of the Merger shall not be
conditioned on approval of such proposal (if submitted), including that no issuance otherwise permitted under Section 6.2(b)(v) shall require approval of such proposal at the Parent Shareholder Meeting.
Section 7.2 Access to Information; Confidentiality.
(a) During the Interim Period, to the extent permitted by applicable Law and contracts, upon reasonable advanced notice and at the reasonable
request of the other Party, and subject to the reasonable restrictions imposed from time to time upon advice of counsel, each of Company and Parent, solely for the purposes of furthering the Merger and the other transactions contemplated hereby or
integration planning relating thereto, shall, and shall cause each of Company Subsidiaries and the Parent Subsidiaries, respectively, to, afford to the Representatives of such other Party reasonable access during normal business hours to all of
their respective properties (provided that no invasive testing may be conducted), offices, books, contracts, personnel and records; provided that all such access shall be coordinated through the other Party or its Representatives in accordance with
such procedures as they may reasonably jointly establish. and, during such period, each of Company and Parent shall, and shall cause each of the Company Subsidiaries and the Parent Subsidiaries, respectively, to, furnish reasonably promptly to the
other Party (i) a copy of each report, schedule, registration statement and other document filed by it during such period pursuant to the requirements of federal or state securities Laws, and (ii) all other information (financial or
otherwise) concerning its business, properties and personnel as such other Party may reasonably request, subject in appropriate cases to appropriate confidentiality agreements to limit disclosure to outside lawyers and consultants; provided
that any access to properties and personnel shall be subject to reasonable requirements established by the providing Party with respect to COVID-19 or COVID-19 Measures. No representation or warranty as to the accuracy of information provided
pursuant to this Section 7.2 is made and the Parties may not rely on the accuracy of such information except to the extent expressly set forth in the representations and warranties included in Article 4 or Article 5, and no
investigation under this Section 7.2(a) or otherwise shall affect any of the representations and warranties of Company or of Parent respectively, contained in this Agreement or any condition to the obligations of the Parties under this
Agreement. Notwithstanding the foregoing, neither Company nor Parent shall be required by this Section 7.2(a) to provide the other Party or the Representatives of such other Party with access to or to disclose information (A) that
is subject to the terms of a confidentiality agreement with a third party entered into prior to the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice,
(B) the disclosure of which would violate any Law applicable to such Party or any of its Representatives or (C) that is subject to any attorney-client, attorney work product or other legal privilege or would cause a risk of loss of
privilege to the disclosing Party. The Parties will cooperate in good faith to make appropriate substitute disclosure arrangements under circumstances in which the restrictions of the preceding sentence apply. Each of Company and Parent will use its
reasonable best efforts to minimize any disruption to the businesses of the other Party that may result from the requests for access, data and information hereunder. Except as otherwise provided in this Agreement, prior to the Effective Time, each
of Parent and Company shall not, and shall cause their respective
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Representatives and Affiliates not to, contact or otherwise communicate with parties with which the other Party has a business relationship (including tenants/subtenants) regarding the business
of such other Party or this Agreement and the transactions contemplated hereby without the prior written consent of such other Party (provided, that, for the avoidance of doubt, nothing in this Section 7.2(a) shall be deemed to
restrict Parent or Company and their respective Representatives and Affiliates from contacting such parties in pursuing the business of Parent and Company respectively operating in the ordinary course).
(b) Each of Company and Parent will hold, and will cause its respective Representatives and Affiliates to hold, any nonpublic information,
including any information exchanged pursuant to this Section 7.2, in confidence to the extent required by and in accordance with, and will otherwise comply with, the terms of the Confidentiality Agreement, which shall remain in full
force and effect pursuant to the terms thereof notwithstanding the execution and delivery of this Agreement or the termination thereof.
Section 7.3 No Solicitation; Company Acquisition Proposals.
(a) Except as expressly permitted by this Section 7.3, Company shall not, and shall cause the Company Subsidiaries not to, and
shall not authorize or permit any Representatives of Company or any of the Company Subsidiaries to, and shall instruct and use its reasonable best efforts to cause such Representatives not to, directly or indirectly, (i) solicit, initiate or
knowingly encourage or facilitate any inquiry, proposal or offer with respect to, or the announcement, making or completion of, any Company Acquisition Proposal, or any inquiry, proposal or offer that would reasonably be expected to lead to any
Company Acquisition Proposal or any other effort or attempt to make or implement a Company Acquisition Proposal, (ii) enter into, continue or otherwise participate or engage in any negotiations regarding, or furnish to any Person other than
Parent or its Representatives any non-public information or data in connection with, any Company Acquisition Proposal, or any inquiry, proposal or offer that would reasonably be expected to lead to an Acquisition Proposal (other than to state that
the terms of this Agreement prohibit such discussions), (iii) approve, recommend, publicly declare advisable or enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, share
exchange agreement, consolidation agreement, option agreement, joint venture agreement, partnership agreement or other agreement in each case related to a Company Acquisition Proposal (other than a Company Acceptable Confidentiality Agreement) or
requiring or having the effect of requiring Company to abandon, terminate or violate its obligations hereunder or fail to consummate the Merger (each, a Company Alternative Acquisition Agreement), or (iv) agree to or propose
publicly to do any of the foregoing. Company shall, and shall cause each of the Company Subsidiaries and shall use its commercially reasonable efforts to cause the Representatives of Company and the Company Subsidiaries to, (A) immediately
cease and cause to be terminated all existing discussions, negotiations and communications with any Person and its Representatives (other than Parent or any of its Representatives) conducted heretofore with respect to any Company Acquisition
Proposal, (B) request the prompt return or destruction, to the extent required by any confidentiality agreement, of all confidential information previously furnished to any such Person and its Representatives, (C) terminate the access of
any such Person (other than Parent, the Parent Subsidiaries and any of their respective Representatives) to any data room hosted by Company, the Company Subsidiaries or any of their respective Representatives relating to any Company
Acquisition Proposal, and (D) not terminate, waive, amend, release or
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modify, any provision of any confidentiality, standstill (including any standstill provisions contained in any confidentiality or other agreement) or any similar agreement with respect to a
Company Acquisition Proposal to which it or any of its Affiliates, including the Company Subsidiaries, or Representatives is a party, or any Takeover Statute, or otherwise fail to enforce any of the foregoing. Notwithstanding the foregoing (but
subject to this Section 7.3(a)), if, at any time following the date of this Agreement and prior to obtaining the Company Stockholder Approval, (1) Company receives an unsolicited bona fide Company Acquisition Proposal, (2) such
Company Acquisition Proposal was not the result of a violation of this Section 7.3(a), (3) the Company Board determines in good faith (after consultation with Companys outside counsel and financial advisor) that such Company
Acquisition Proposal constitutes or would reasonably be likely lead to a Company Superior Proposal, and (4) the Company Board determines in good faith (after consultation with Companys outside counsel) that the failure to do so would be
inconsistent with its duties under applicable Law, then, subject to compliance with the other terms of this Section 7.3, Company may (and may authorize the Company Subsidiaries and its and their Representatives to) (x) furnish
non-public information with respect to Company and the Company Subsidiaries to the Person making such Company Acquisition Proposal (and such Persons Representatives) pursuant to a Company Acceptable Confidentiality Agreement; provided,
that any non-public information provided to any Person given such access shall have previously been provided to Parent or shall be provided (to the extent permitted by applicable Law) to Parent prior to or concurrently with the time it is provided
to such Person and (y) participate in negotiations with the Person making such Company Acquisition Proposal (and such Persons Representatives) regarding such Company Acquisition Proposal. Notwithstanding anything to the contrary in this
Agreement, Company and its Representatives may contact in writing any Person submitting a Company Acquisition Proposal after the date of this Agreement (that was not the result of a violation of this Section 7.3(a)) solely to clarify the
terms of a Company Acquisition Proposal for the sole purpose of the Company Board informing itself about such Company Acquisition Proposal, provided that Company shall have previously complied with the provisions of Section 7.3(f)
with respect to providing Parent with the information specified therein and shall have previously provided Parent with a copy of any such written request for clarification at least twenty-four (24) hours prior to the time that Company contacts
the Person from whom Company received the unsolicited Company Acquisition Proposal. Company agrees that in the event any Representative of Company or any Company Subsidiary takes any action which, if taken by Company, would constitute a material
violation of this Section 7.3(a), then Company shall be deemed to be in violation of this Section 7.3(a) for all purposes of this Agreement. Neither the Company nor any Company Subsidiaries shall enter into any agreement with
any Person subsequent to the date of this Agreement that prohibits such Person from providing information to Parent in accordance with this Section 7.3.
(b) Except as provided in Sections 7.3(c) and (d), the Company Board (i) shall not withdraw, withhold, modify or qualify in
any manner adverse to Parent or Merger Sub (or publicly propose to withdraw, withhold, modify or qualify in any manner adverse to Parent or Merger Sub) the approval, recommendation or declaration of advisability by the Company Board of this
Agreement, the Merger or any of the other transactions contemplated hereby, and (ii) shall not adopt, approve, or publicly recommend, endorse or otherwise declare advisable the approval of any Company Acquisition Proposal, (each such action set
forth in this Section 7.3(b) being referred to herein as a Company Adverse Recommendation Change).
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(c) Notwithstanding anything in this Agreement to the contrary, in circumstances not
involving a Company Acquisition Proposal, subject to compliance with Section 7.3(e), at any time prior to obtaining the Company Stockholder Approval the Company Board may make a Company Adverse Recommendation Change if, and only if,
after the date of this Agreement, the Company Board determines in good faith (after consultation with Companys outside counsel) that (i) a Company Intervening Event has occurred or arisen and (ii) the failure to do so would be
inconsistent with its duties under applicable Law.
(d) Notwithstanding anything in this Agreement to the contrary, subject to compliance
with Section 7.3(e), at any time prior to obtaining the Company Stockholder Approval, the Company Board may make a Company Adverse Recommendation Change in circumstances involving a Company Acquisition Proposal and in the event that the
Company Board determines such Company Acquisition Proposal to be a Company Superior Proposal, in accordance with this Section 7.3, terminate this Agreement pursuant to Section 9.1(d)(iii) (a Company Superior Proposal
Termination), if and only if (i) Company receives an unsolicited, written Company Acquisition Proposal that the Company Board believes in good faith to be bona fide and that is not withdrawn, (ii) such Company Acquisition
Proposal was not the result of a violation of Section 7.3(a), (iii) the Company Board determines in good faith (after consultation with Companys outside counsel and financial advisor) that such Company Acquisition Proposal
constitutes a Company Superior Proposal, and (iv) the Company Board determines in good faith (after consultation with Companys outside counsel) that the failure to do so would be inconsistent with its duties under applicable Law.
(e) Prior to effecting a Company Superior Proposal Termination in accordance with Section 7.3(d) or a Company Adverse
Recommendation Change in accordance with Section 7.3(c), (i) Company shall notify Parent in writing, at least four (4) Business Days prior to taking such action (the Company Notice Period), of its intention
to effect such Company Superior Proposal Termination or Company Adverse Recommendation Change (which notice shall include (x) in circumstances involving or relating to a Company Acquisition Proposal, the terms and conditions of, and attach a
complete copy of, such Company Superior Proposal and the identity of the Person making such proposal, and (y) in circumstances not involving or relating to a Company Acquisition Proposal, specifying in reasonable detail the reasons therefor),
(ii) during the Company Notice Period, Company shall, and shall cause its Representatives to, negotiate with Parent in good faith (to the extent Parent wishes to negotiate) to make such adjustments or modifications to the terms and conditions
of this Agreement (x) such that, in circumstances involving or relating to a Company Acquisition Proposal, the Company Superior Proposal ceases to be a Company Superior Proposal, and (y) in circumstances not involving or relating to a
Company Acquisition Proposal, as may be proposed by Parent, and (iii) at the end of the Company Notice Period, the Company Board must determine in good faith that, (x) after consultation with Companys outside counsel and financial
advisor, in circumstances involving or relating to a Company Acquisition Proposal, such Company Superior Proposal continues to constitute a Company Superior Proposal (taking into account any adjustment or modification to the terms and conditions of
this Agreement proposed by Parent), and that, after consultation with Companys outside counsel, the failure to effect such Company Superior Proposal Termination be inconsistent with its duties under applicable Law, and (y) after
consultation with Companys outside counsel, in circumstances not involving or relating to a Company Acquisition Proposal, the failure to effect
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such Company Adverse Recommendation Change be inconsistent with its duties under applicable Law; provided, however, that in circumstances involving or relating to a Company Acquisition
Proposal, any amendment to the financial terms (including without limitation any change to the purchase price or form of consideration) or any other amendment of any such Company Superior Proposal or in circumstances involving or relating to a
Company Intervening Event, any change to the conditions constituting such Company Intervening Event (other than an amendment or change that only has a de minimis effect), in either case during the Company Notice Period shall require a new
written notice and Company Notice Period, and Company shall be required to comply again with the requirements of this Section 7.3(e) with respect to such new written notice, except that the new Company Notice Period shall be three
(3) Business Days instead of four (4) Business Days, and provided further that, for purposes of this Section 7.3(e), if Company delivers written notice prior to 8:00 a.m. New York City time on a Business Day, such Business Day
shall be included as one (1) Business Day in such four (4) or three (3) Business Day period, as applicable. Company shall be required to comply with the obligations under the foregoing Section 7.3(e) with respect to each
Company Acquisition Proposal it receives or any Company Intervening Event the Company Board identifies.
(f) In addition to the obligations
of Company set forth in Sections 7.3(a) and (e), Company shall promptly (but in no event later than twenty-four (24) hours) notify Parent in writing in the event that after the date hereof Company or any of the Company
Subsidiaries or Representatives receives (i) any Company Acquisition Proposal or (ii) any request for non-public information from any Person that informs Company or any of the Company Subsidiaries or Representatives that it is considering
making, or has made, a Company Acquisition Proposal, or any inquiry from any Person seeking to have or continue discussions or negotiations with Company relating to a possible Company Acquisition Proposal. Such notice shall include the terms and
conditions of such Company Acquisition Proposal or request and the identity of the Person making any such Company Acquisition Proposal or request (including a copy thereof if in writing and any related documentation or correspondence that
supplements or amends such Company Acquisition Proposal in any respect (other than a de minimis respect), including proposed agreements, or a summary of the terms and conditions if such Company Acquisition Proposal or request was not made in
writing, including requests or other communications made orally or supplementally). Company shall keep Parent informed of the status and terms of developments, discussions and negotiations concerning any such Company Acquisition Proposal or request
(including after the occurrence of any amendment, modification or supplement thereto) on a reasonably current basis, including by providing a copy of all documentation or correspondence that supplements or amends such Company Acquisition Proposal in
any respect (including proposed agreements) and any changes in its intentions as previously notified (in each case, other than amendments or changes that only have a de minimis effect). Without limiting any of the foregoing, Company shall
within one (1) Business Day notify Parent orally and in writing if Company determines to begin providing non-public information or to engage in negotiations concerning a Company Acquisition Proposal pursuant to Section 7.3(a) and
shall in no event begin providing such information or engaging in such discussions or negotiations prior to providing such notice.
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(g) Nothing contained in this Section 7.3 shall prohibit Company or the Company
Board through its Representatives, directly or indirectly, from (i) issuing a stop, look and listen communication pursuant to Rule 14d-9(f) under the Exchange Act pending disclosure of its position thereunder or taking and
disclosing to its stockholders a position contemplated by Rule 14e-2(a), or making a statement contemplated by Rule 14d-9 under the Exchange Act or Item 1012(a) of Regulation M-A under the Exchange Act, or (ii) making any disclosure to the
stockholders of Company if, in the good faith judgment of the Company Board (after consultation with Companys outside counsel), failure to so disclose would be inconsistent with its duties under applicable Law; provided, that in no
event shall this Section 7.3(g) affect the obligations of Company specified in Section 7.3(b) and Company shall not withdraw, modify or change the Company Board Recommendation in a manner adverse to Parent unless specifically
permitted pursuant to the terms of Section 7.3(c) or (d); and provided, further, that any communication that addresses the approval, recommendation or declaration of advisability by the Company Board with respect to
this Agreement or a Company Acquisition Proposal shall be deemed to be a Company Adverse Recommendation Change, unless the Company Board in connection with such communication publicly states that its recommendation with respect to this Agreement and
the transactions contemplated hereby has not changed or refers to the prior recommendation of the Company Board, without disclosing any Company Adverse Recommendation Change.
(h) For purposes of this Agreement:
(i) Company Acquisition Proposal means any proposal, offer, or inquiry from any Person (other than Parent or any Parent
Subsidiaries) or group (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) relating to any direct or indirect acquisition or purchase, in one transaction or a series of transactions, including any merger,
reorganization, recapitalization, restructuring, share exchange, consolidation, tender offer, exchange offer, stock acquisition, asset acquisition, business combination, liquidation, dissolution, joint venture, sale, lease, exchange, license,
transfer or disposition or similar transaction, (A) of assets or businesses of Company and the Company Subsidiaries that generate 15% or more of the net revenues or net income or that represent 15% or more of the consolidated total assets
(based on book value) of Company and the Company Subsidiaries, taken as a whole, immediately prior to such transaction or (B) of 15% or more of any class of capital stock, other equity security or voting power of Company or any resulting parent
company of Company, including any tender offer or exchange offer in which any Person or group (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) seeks to acquire beneficial ownership (as such term is defined in
Rule 13d-3 promulgated under the Exchange Act) or the right to acquire beneficial ownership of 15% or more of the outstanding shares of any class of voting securities of Company, in each case other than the transactions contemplated by this
Agreement.
(ii) Company Superior Proposal means any bona fide Company Acquisition Proposal that did not result from a
breach or violation of this Section 7.3 made after the date hereof (with all percentages included in the definition of Company Acquisition Proposal increased to 50%), taking into account all legal, financial, regulatory,
financing and any other aspects of the proposal and the Person making the proposal, that (A) if consummated, would be more favorable to the stockholders of Company from a financial point of view than the transactions contemplated by this
Agreement (including any adjustment to the terms and conditions thereof proposed in writing by Parent in response to any such Company Acquisition Proposal or otherwise) and (B) if accepted, is reasonably likely to be completed on the terms
proposed on a timely basis.
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(iii) References in this Section 7.3 to (a) the Company Board shall mean
the board of directors of Company or a duly authorized committee thereof, and (b) outside counsel shall mean, as applicable, outside counsel to Company or the Company Board or a duly authorized committee thereof.
(iv) Company shall not submit to the vote of its stockholders any Company Acquisition Proposal other than the Merger prior to the termination
of this Agreement in accordance with its terms.
Section 7.4 No Solicitation; Parent Acquisition Proposals.
(a) Except as expressly permitted by this Section 7.4, Parent shall not, and shall cause the Parent Subsidiaries not to, and shall
not authorize or permit any Representatives of Parent or any of the Parent Subsidiaries to, and shall instruct and use its reasonable best efforts to cause such Representatives not to, directly or indirectly, (i) solicit, initiate or knowingly
encourage or facilitate any inquiry, proposal or offer with respect to, or the announcement, making or completion of, any Parent Acquisition Proposal, or any inquiry, proposal or offer that would reasonably be expected to lead to any Parent
Acquisition Proposal or any other effort or attempt to make or implement a Parent Acquisition Proposal, (ii) enter into, continue or otherwise participate or engage in any negotiations regarding, or furnish to any Person other than Parent or
its Representatives any non-public information or data in connection with, any Parent Acquisition Proposal, or any inquiry, proposal or offer that would reasonably be expected to lead to a Parent Acquisition Proposal (other than to state that the
terms of this Agreement prohibit such discussions), (iii) approve, recommend, publicly declare advisable or enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, share
exchange agreement, consolidation agreement, option agreement, joint venture agreement, partnership agreement or other agreement in each case related to a Parent Acquisition Proposal (other than a Parent Acceptable Confidentiality Agreement) or
requiring or having the effect of requiring Parent to abandon, terminate or violate its obligations hereunder or fail to consummate the Merger (each, a Parent Alternative Acquisition Agreement), or (iv) agree to or propose
publicly to do any of the foregoing. Parent shall, and shall cause each of the Parent Subsidiaries and shall use its commercially reasonable efforts to cause the Representatives of Parent and the Parent Subsidiaries to, (A) immediately cease
and cause to be terminated all existing discussions, negotiations and communications with any Person and its Representatives (other than Company or any of its Representatives) conducted heretofore with respect to any Parent Acquisition Proposal,
(B) request the prompt return or destruction, to the extent required by any confidentiality agreement, of all confidential information previously furnished to any such Person and its Representatives, (C) terminate the access of any such
Person (other than Company, the Company Subsidiaries and any of their respective Representatives) to any data room hosted by Parent, the Parent Subsidiaries or any of their respective Representatives relating to any Parent Acquisition
Proposal, and (D) not terminate, waive, amend, release or modify any provision of any confidentiality, standstill (including any standstill provisions contained in any confidentiality or other agreement) or any similar agreement with respect to
a Parent Acquisition Proposal to which it or any of its Affiliates, including the Parent Subsidiaries, or Representatives is a party, or any Takeover Statute, or otherwise fail to enforce any of the foregoing. Notwithstanding the foregoing but
subject to this Section 7.4(a), if, at any time following the date of this Agreement and prior to obtaining the Parent Shareholder Approval, (1) Parent receives an unsolicited bona fide Parent
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Acquisition Proposal, (2) such Parent Acquisition Proposal was not the result of a violation of this Section 7.4(a), (3) the Parent Board determines in good faith (after
consultation with Parents outside counsel and financial advisor) that such Parent Acquisition Proposal constitutes or would reasonably be likely lead to a Parent Superior Proposal, and (4) the Parent Board determines in good faith (after
consultation with Parents outside counsel) that the failure to do so would be inconsistent with its duties under applicable Law, then, subject to compliance with the other terms of this Section 7.4, Parent may (and may authorize
the Parent Subsidiaries and its and their Representatives to) (x) furnish non-public information with respect to Parent and the Parent Subsidiaries to the Person making such Parent Acquisition Proposal (and such Persons Representatives)
pursuant to a Parent Acceptable Confidentiality Agreement; provided, that any non-public information provided to any Person given such access shall have previously been provided to Company or shall be provided (to the extent permitted by
applicable Law) to Company prior to or concurrently with the time it is provided to such Person and (y) participate in negotiations with the Person making such Parent Acquisition Proposal (and such Persons Representatives) regarding such
Parent Acquisition Proposal. Notwithstanding anything to the contrary in this Agreement, Parent and its Representatives may contact in writing any Person submitting a Parent Acquisition Proposal after the date of this Agreement (that was not the
result of a violation of this Section 7.4(a)) solely to clarify the terms of a Parent Acquisition Proposal for the sole purpose of the Parent Board informing itself about such Parent Acquisition Proposal, provided that Parent
shall have previously complied with the provisions of Section 7.4(f) with respect to providing Company with the information specified therein and shall have previously provided Parent with a copy of any such written request for
clarification at least twenty-four (24) hours prior to the time that Parent contacts the Person from whom Parent received the unsolicited Parent Acquisition Proposal. Parent agrees that in the event any Representative of the Parent or any
Parent Subsidiary takes any action which, if taken by Parent, would constitute a material violation of this Section 7.4(a), then Parent shall be deemed to be in violation of this Section 7.4(a) for all purposes of this
Agreement. Neither Parent nor any Parent Subsidiary shall enter into any agreement with any Person subsequent to the date of this Agreement that prohibits such Person from providing information to Parent in accordance with this
Section 7.3.
(b) Except as provided in Sections 7.4(c) and (d), the Parent Board (i) shall not withdraw,
withhold, modify or qualify in any manner adverse to Company (or publicly propose to withdraw, withhold, modify or qualify in any manner adverse to Company) the approval, recommendation or declaration of advisability by the Parent Board of this
Agreement, the Merger or any of the other transactions contemplated hereby, and (ii) shall not adopt, approve, or publicly recommend, endorse or otherwise declare advisable the approval of any Parent Acquisition Proposal (each such action set
forth in this Section 7.4(b) being referred to herein as a Parent Adverse Recommendation Change).
(c)
Notwithstanding anything in this Agreement to the contrary, in circumstances not involving a Parent Acquisition Proposal, subject to compliance with Section 7.4(e), at any time prior to obtaining the Parent Shareholder Approval the
Parent Board may, make a Parent Adverse Recommendation Change if, and only if, after the date of this Agreement, the Parent Board determines in good faith (after consultation with Parents outside counsel) that (i) a Parent Intervening
Event has occurred or arisen and (ii) the failure to do so would be inconsistent with its duties under applicable Law.
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(d) Notwithstanding anything in this Agreement to the contrary, subject to compliance with
Section 7.4(e), at any time prior to obtaining the Parent Shareholder Approval the Parent Board may make a Parent Adverse Recommendation Change in circumstances involving a Parent Acquisition Proposal and in the event that the Parent
Board determines such Company Acquisition Proposal to be a Parent Superior Proposal, in accordance with this Section 7.4, terminate this Agreement pursuant to Section 9.1(c)(iii) (a Parent Superior Proposal
Termination), if and only if (i) Parent receives an unsolicited, written Parent Acquisition Proposal that the Parent Board believes in good faith to be bona fide and that is not withdrawn, (ii) such Parent Acquisition Proposal
was not the result of a violation of Section 7.4(a), (iii) the Parent Board determines in good faith (after consultation with Parents outside counsel and financial advisor) that such Parent Acquisition Proposal constitutes a
Parent Superior Proposal, and (iv) the Parent Board determines in good faith (after consultation with Parents outside counsel) that the failure to do so would be inconsistent with its duties under applicable Law.
(e) Prior to effecting a Parent Superior Proposal Termination in accordance with Section 7.4(a) or a Parent Adverse Recommendation
Change in accordance with Section 7.4(d), (i) Parent shall notify Company in writing, at least four (4) Business Days prior to taking such action (the Parent Notice Period), of its intention to effect such
Parent Superior Proposal Termination or Parent Adverse Recommendation Change (which notice shall include (x) in circumstances involving or relating to a Parent Acquisition Proposal, the terms and conditions of, and attach a complete copy of,
such Parent Superior Proposal and the identity of the Person making such proposal, and (y) in circumstances not involving or relating to a Parent Acquisition Proposal, specifying in reasonable detail the reasons therefor), (ii) during the
Parent Notice Period, Parent shall, and shall cause its Representatives to, negotiate with Company in good faith (to the extent Company wishes to negotiate) to make such adjustments or modifications to the terms and conditions of this Agreement
(x) such that, in circumstances involving or relating to a Parent Acquisition Proposal, the Parent Superior Proposal ceases to be a Parent Superior Proposal, and (y) in circumstances not involving or relating to a Parent Acquisition
Proposal, as may be proposed by Company, and (iii) at the end of the Parent Notice Period, the Parent Board must determine in good faith that, (x) after consultation with Parents outside counsel and financial advisor, in
circumstances involving or relating to a Parent Acquisition Proposal, such Parent Superior Proposal continues to constitute a Parent Superior Proposal (taking into account any adjustment or modification to the terms and conditions of this Agreement
proposed by Company), and that, after consultation with Parents outside counsel, the failure to effect such Parent Superior Proposal Termination would be inconsistent with its duties under applicable Law, and (y) after consultation with
Parents outside counsel, in circumstances not involving or relating to a Parent Acquisition Proposal, the failure to effect such Parent Adverse Recommendation Change would be inconsistent with its duties under applicable Law; provided,
however, that in circumstances involving or relating to a Parent Acquisition Proposal, any amendment to the financial terms (including without limitation any change to the purchase price or form of consideration) or any other amendment of any such
Parent Superior Proposal or in circumstances involving or relating to a Parent Intervening Event, any change to the condition constituting such Parent Intervening Event (other than an amendment or change that only has a de minimis effect), in
either case, during the Parent Notice Period shall require a new written notice and Parent Notice Period, and Parent shall be required to comply again with the requirements of this Section 7.4(e) with respect to such new written notice,
except that the new Parent Notice Period shall be three (3) Business Days instead of four (4)
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Business Days, and provided further that, for purposes of this Section 7.4(e), if Parent delivers written notice prior to 8:00 a.m. New York City time on a Business Day, such Business
Day shall be included as one (1) Business Day in such four (4) or two (2) Business Day period, as applicable. Parent shall be required to comply with the obligations under the foregoing Section 7.4(e) with respect to each
Parent Acquisition Proposal it receives or any Parent Intervening Event the Parent Board identifies.
(f) In addition to the obligations of
Parent set forth in Sections 7.4(a) and (e), Parent shall promptly (but in no event later than twenty-four (24) hours) notify Company in writing in the event that after the date hereof Parent or any of the Parent Subsidiaries
or Representatives receives (i) any Parent Acquisition Proposal or (ii) any request for non-public information from any Person that informs Parent or any of the Parent Subsidiaries or Representatives that it is considering making, or has
made, a Parent Acquisition Proposal, or any inquiry from any Person seeking to have or continue discussions or negotiations with Parent relating to a possible Parent Acquisition Proposal. Such notice shall include the terms and conditions of such
Parent Acquisition Proposal or request and the identity of the Person making any such Parent Acquisition Proposal or request (including a copy thereof if in writing and any related documentation or correspondence that supplements or amends such
Parent Acquisition Proposal in any respect (other than a de minimis respect), including proposed agreements), or a summary of the terms and conditions if such Parent Acquisition Proposal or request was not made in writing, including requests
or other communications made orally or supplementally. Parent shall keep Company informed of the status and terms of developments, discussions and negotiations concerning any such Company Acquisition Proposal or request (including after the
occurrence of any amendment, modification or supplement thereto) on a reasonably current basis, including by providing a copy of all documentation or correspondence that supplements or amends such Company Acquisition Proposal in any respect
(including proposed agreements) and any changes in its intentions as previously notified (in each case, other than amendments or changes that only have a de minimis effect). Without limiting any of the foregoing, Parent shall within one
(1) Business Day notify Company orally and in writing if Parent determines to begin providing non-public information or to engage in negotiations concerning a Parent Acquisition Proposal pursuant to Section 7.4(a) and shall in no
event begin providing such information or engaging in such discussions or negotiations prior to providing such notice.
(g) Nothing
contained in this Section 7.4 shall prohibit Parent or the Parent Board through its Representatives, directly or indirectly, from (i) issuing a stop, look and listen communication pursuant to Rule 14d-9(f) under the
Exchange Act pending disclosure of its position thereunder or taking and disclosing to its shareholders a position contemplated by Rule 14e-2(a), or making a statement contemplated by Rule 14d-9 under the Exchange Act or Item 1012(a) of
Regulation M-A under the Exchange Act, or (ii) making any disclosure to the shareholders of Parent if, in the good faith judgment of the Parent Board (after consultation with Parents outside counsel), failure to so disclose would be
inconsistent with its duties under applicable Law; provided, that in no event shall this Section 7.4(g) affect the obligations of Parent specified in Section 7.4(b) and Parent shall not withdraw, modify or change the
Parent Board Recommendation in a manner adverse to Company unless specifically permitted pursuant to the terms of Section 7.4(c) or (d); and provided, further, that any communication that addresses the approval,
recommendation or declaration of advisability by the Parent Board with respect to this
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Agreement or a Parent Acquisition Proposal shall be deemed to be a Parent Adverse Recommendation Change, unless the Parent Board in connection with such communication publicly states that its
recommendation with respect to this Agreement and the transactions contemplated hereby has not changed or refers to the prior recommendation of Parent Board, without disclosing any Parent Adverse Recommendation Change.
(h) For purposes of this Agreement:
(i) Parent Acquisition Proposal means any proposal, offer, or inquiry from any Person (other than Company or any Company
Subsidiary) or group (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) relating to any direct or indirect acquisition or purchase, in one transaction or a series of transactions, including any merger,
reorganization, recapitalization, restructuring, share exchange, consolidation, tender offer, exchange offer, stock acquisition, asset acquisition, business combination, liquidation, dissolution, joint venture, sale, lease, exchange, license,
transfer or disposition or similar transaction, (A) of assets or businesses of Parent and the Parent Subsidiaries that generate 15% or more of the net revenues or net income or that represent 15% or more of the consolidated total assets (based
on book value) of Parent and the Parent Subsidiaries, taken as a whole, immediately prior to such transaction or (B) of 15% or more of any class of capital stock, other equity security or voting power of Parent or any resulting parent company
of Parent, including any tender offer or exchange offer in which any Person or group (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) seeks to acquire beneficial ownership (as such term is defined in Rule 13d-3
promulgated under the Exchange Act) or the right to acquire beneficial ownership of 15% or more of the outstanding shares of any class of voting securities of Parent, in each case other than the transactions contemplated by this Agreement.
(ii) Parent Superior Proposal means any bona fide Parent Acquisition Proposal that did not result from a breach or
violation of this Section 7.4 made after the date hereof (with all percentages included in the definition of Parent Acquisition Proposal increased to 50%), taking into account all legal, financial, regulatory, financing and
any other aspects of the proposal and the Person making the proposal, that (A) if consummated, would be more favorable to the shareholders of Parent from a financial point of view than the transactions contemplated by this Agreement (including
any adjustment to the terms and conditions thereof proposed in writing by Company in response to any such Parent Acquisition Proposal or otherwise) and (B) if accepted, is reasonably likely to be completed on the terms proposed on a timely
basis.
(iii) References in this Section 7.4 to (a) the Parent Board shall mean the board of trustees of Parent or a duly
authorized committee thereof, and (b) outside counsel shall mean, as applicable, outside counsel to Parent or the Parent Board or a duly authorized committee thereof.
(iv) Parent shall not submit to the vote of its stockholders any Parent Acquisition Proposal other than the Merger prior to the termination of
this Agreement in accordance with its terms.
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Section 7.5 Public Announcements. Except with respect to any Company
Adverse Recommendation Change, any Parent Adverse Recommendation Change or any action taken by Company or the Company Board, or by Parent or the Parent Board, pursuant to, and in accordance with Section 7.3 or Section 7.4,
respectively, so long as this Agreement is in effect, the Parties hereto shall consult with each other, and, to the extent reasonably practicable, provide meaningful opportunity for review and give due consideration to reasonable comment by the
other Party, before issuing any press releases or otherwise making any public statements with respect to this Agreement or any of the transactions contemplated by this Agreement; provided, that a Party may issue such press release or make
such public statement as may be required by applicable Law, Order or the applicable rules of any stock exchange or that are consistent with the final form of joint press release announcing the Merger and the investor presentation given to investors
on the date of announcement of the Merger. The Parties have agreed upon the form of a joint press release announcing the Merger and the execution of this Agreement, and shall make such joint press release no later than one (1) Business Day
following the date on which this Agreement is signed.
Section 7.6 Indemnification; Directors and Officers
Insurance.
(a) Without limiting any additional rights that any present or former manager, director, officer, trustee, agent, or
fiduciary may have under any indemnification agreement or under the Company Charter, the Company Bylaws, Parent Declaration of Trust or Parent Bylaws or, if applicable, comparable Organizational Documents of any Company Subsidiary or Parent
Subsidiary, from and after the Effective Time until the sixth (6th) anniversary of the Closing Date, Parent and the Surviving Entity shall: (i) indemnify and hold harmless each person who is at the date hereof, was previously, or during
the period from the date hereof through the date of the Effective Time, serving as a manager, director, officer, trustee, member or fiduciary, in each case to the extent such persons are otherwise entitled to indemnification pursuant to the terms of
the Organizational Documents of Company and the Company Subsidiaries as in effect on the date hereof, of Company, or any of the Company Subsidiaries or Parent or any of the Parent Subsidiaries and acting in such capacity (collectively, the
Indemnified Parties) to the fullest extent authorized or permitted by applicable Law as now or hereafter in effect, in connection with any Claim and any losses, claims, damages, liabilities, costs, Claim Expenses, judgments,
fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of any thereof) relating to or resulting from such Claim; and (ii) promptly pay on behalf of
or advance to each of the Indemnified Parties, in each case to the extent such persons are otherwise entitled to payment or advancement of expenses pursuant to the terms of the Organizational Documents of Company and the Company Subsidiaries as in
effect on the date hereof, any Claim Expenses incurred in defending, serving as a witness with respect to or otherwise participating with respect to any Claim in advance of the final disposition of such Claim, including payment on behalf of or
advancement to the Indemnified Party of any Claim Expenses incurred by such Indemnified Party in connection with enforcing any rights with respect to such indemnification and/or advancement, in each case without the requirement of any bond or other
security, but subject to (A) Parents and the Surviving Entitys receipt of an undertaking by or on behalf of such Indemnified Party to repay such Claim Expenses if it is determined by a court of competent jurisdiction in a final,
nonappealable judgment that such Indemnified Party is not entitled to be indemnified and (B) a good faith affirmation by such Indemnified Party of such Indemnified Partys compliance with the standard of conduct required herein;
provided, that neither Parent nor the Surviving Entity shall be liable for any amounts paid in settlement effected without its prior written consent, as applicable, and shall not be obligated to pay the fees and
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expenses of more than one counsel (selected by a plurality of the applicable Indemnified Parties) for all Indemnified Parties in any jurisdiction with respect to any single Claim except to the
extent the Indemnified Party is advised by counsel that such Indemnified Party has conflicting interests with one or more other Indemnified Parties in the outcome of such action (in which event such Indemnified Party shall be entitled to engage
separate counsel, the fees and expenses for which the Surviving Entity shall be liable). The indemnification and advancement obligations of the Surviving Entity pursuant to this Section 7.6(a) shall extend to acts or omissions occurring
at or before the Effective Time and any Claim relating thereto (including with respect to any acts or omissions occurring in connection with the approval of this Agreement, the Merger and the consummation of the other transactions contemplated by
this Agreement, including the consideration and approval thereof and the process undertaken in connection therewith and any Claim relating thereto), and all rights to indemnification and advancement conferred hereunder shall continue as to a person
who has ceased to be a director, officer, trustee, employee, agent, member or fiduciary of Company or Parent or any of the Company Subsidiaries or Parent Subsidiaries after the date hereof and shall inure to the benefit of such persons heirs,
executors and personal and legal representatives. As used in this Section 7.6(a), (I) the term Claim means any threatened, asserted, pending or completed Action, suit or proceeding or inquiry or investigation,
whether instituted by any Party hereto, any Governmental Authority or any other Person, that any Indemnified Party in good faith believes might lead to the institution of any Action, suit or proceeding, whether civil, criminal, administrative,
investigative or other, including any arbitration or other alternative dispute resolution mechanism, arising out of or pertaining to (x) matters that relate to such Indemnified Partys duties or service as a manager, director, officer,
trustee, employee, agent, member or fiduciary of Company or Parent or any of the Company Subsidiaries or Parent Subsidiaries or, to the extent such person is or was serving at the request or for the benefit of Company or Parent or any of the Company
Subsidiaries or Parent Subsidiaries, any other entity or any Benefit Plan maintained by any of the foregoing at or prior to the Effective Time, and (y) this Agreement or any of the transactions contemplated hereby, including the Merger; and
(II) the term Claim Expenses means reasonable attorneys fees and all other reasonable costs, expenses and obligations (including experts fees, travel expenses, court costs, retainers, transcript fees, duplicating,
printing and binding costs, as well as telecommunications, postage and courier charges) paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to investigate, defend,
be a witness in or participate in, any Claim for which indemnification is authorized pursuant to this Section 7.6(a), including any Action relating to a claim for indemnification or advancement brought by an Indemnified Party. The
Surviving Entity shall not settle, compromise or consent to the entry of any judgment in any actual or threatened Claim in respect of which indemnification has been sought by an Indemnified Party hereunder unless such settlement, compromise or
judgment includes an unconditional release of such Indemnified Party from all liability arising out of such Claim, or such Indemnified Party otherwise consents thereto.
(b) Without limiting the foregoing, the Surviving Entity agrees that all rights to indemnification and exculpation from liabilities for acts or
omissions occurring at or prior to the Effective Time now existing in favor of the current or former managers, directors, trustees, officers, agents, members or fiduciaries or other Indemnified Parties as provided in the Organizational Documents and
the indemnification agreements of Company shall survive the Merger and shall continue in full force and effect in accordance with their terms. For a period of
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six (6) years following the Effective Time, the Organizational Documents of the Surviving Entity and of any applicable Subsidiary shall contain provisions no less favorable with respect to
indemnification and limitations on liability of directors and officers than are set forth in the Organizational Documents of Company or any applicable Company Subsidiary, which provisions shall not be amended, repealed or otherwise modified for a
period of six (6) years following the Effective Time in any manner that would affect adversely the rights of the applicable Indemnified Parties thereunder, unless such modification shall be required by applicable Law and then only to the
minimum extent required by applicable Law.
(c) For a period of six (6) years after the Effective Time, the Surviving Entity shall
maintain in effect Companys current directors and officers liability insurance covering each Person covered, on the date of this Agreement, by Companys directors and officers liability insurance policy for acts or
omissions occurring prior to and through the Effective Time; provided, that in lieu of such obligation, (i) the Surviving Entity may substitute therefor policies of an insurance company with the same or better rating as Companys
current insurance carrier the material terms of which, including coverage and amount, are no less favorable in any material respect to such directors and officers than Companys existing policies as of the date hereof or (ii) at
Companys election, Company may obtain extended reporting period coverage under Companys existing insurance programs (to be effective as of the Effective Time) or purchase a tail policy for a period of six (6) years from
the Effective Time for a cost not in excess of the Maximum Amount (as defined below); and provided, further, that in no event shall the Surviving Entity be required to pay annual premiums for insurance under this
Section 7.6(c) in excess of 300% of the most recent annual premiums paid by Company prior to the date of this Agreement for such purpose (the Maximum Amount), it being understood that if the annual premiums of such
insurance coverage exceed such amount, the Surviving Entity shall nevertheless be obligated to provide such coverage as may be obtained for such Maximum Amount.
(d) If the Surviving Entity or its successors or assigns (i) consolidates with or merges with or into any other Person and shall not be
the continuing or surviving corporation, partnership or other entity of such consolidation or merger or (ii) liquidates, dissolves or winds-up, or transfers or conveys all or substantially all of its properties and assets to any Person, then,
and in each such case, proper provision shall be made so that the successors and assigns of the Surviving Entity shall assume the obligations set forth in this Section 7.6.
(e) The Surviving Entity shall pay all reasonable expenses, including reasonable attorneys fees, that may be incurred by any Indemnified
Party in enforcing the indemnity and other obligations provided in this Section 7.6; provided, that such Indemnified Party provides an undertaking to repay such expenses if it is determined by a final and non-appealable judgment
of a court of competent jurisdiction that such Person is not legally entitled to indemnification under Law.
(f) The provisions of this
Section 7.6 are intended to be for the express benefit of, and shall be enforceable by, each Indemnified Party (who are intended third party beneficiaries of this Section 7.6), his or her heirs and his or her personal
representatives, shall be binding on all successors and assigns of Parent, Company and the Surviving Entity and shall not be amended in a manner that is adverse to the Indemnified Party (including his or her successors, assigns and heirs) without
the prior written consent of the Indemnified Party (including such successors, assigns and heirs) affected thereby. The exculpation and indemnification provided for by this Section 7.6 shall not be deemed to be exclusive of any other
rights to which an Indemnified Party is entitled, whether pursuant to applicable Law, contract or otherwise.
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Section 7.7 Appropriate Action; Consents; Filings.
(a) Upon the terms and subject to the conditions set forth in this Agreement, each of Company and Parent shall and shall cause the Company
Subsidiaries and the Parent Subsidiaries, respectively, and their respective Affiliates, 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 Party
in doing, all things necessary, proper or advisable under applicable Law or pursuant to any contract or agreement to consummate and make effective, as promptly as practicable, the Merger and the other transactions contemplated by this Agreement,
including (i) the taking of all actions necessary to cause the conditions to Closing set forth in Article 8 to be satisfied, (ii) the obtaining of all necessary or advisable actions or nonactions, waivers, consents and approvals
from Governmental Authorities or other Persons necessary in connection with the consummation of the Merger and the other transactions contemplated by this Agreement and the making of all necessary or advisable registrations and filings (including
filings with Governmental Authorities, if any) and the taking of all reasonable steps as may be necessary or advisable to obtain an approval or waiver from, or to avoid an action or proceeding by, any Governmental Authority or other Persons
necessary in connection with the consummation of the Merger and the other transactions contemplated by this Agreement, (iii) subject to Section 7.8(c), the defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the Merger or the other transactions contemplated by this Agreement, including seeking to have any stay or temporary restraining order entered by any court or other Governmental
Authority vacated or reversed, and (iv) the execution and delivery of any additional instruments necessary or advisable to consummate the Merger and the other transactions contemplated by this Agreement and to fully carry out the purposes of
this Agreement.
(b) In connection with and without limiting the foregoing Section 7.7(a) or Sections 7.16 or
7.17, each of Parent and Company shall (or shall cause the Parent Subsidiaries or the Company Subsidiaries, respectively, to) use its reasonable best efforts to give any notices to third parties, and each of Parent and Company shall use, and
cause each of their respective Affiliates to use, its reasonable best efforts to obtain any third party consents not covered by Section 7.7(a) that are necessary, proper or advisable to consummate the Merger and the other transactions
contemplated by this Agreement. Each of the Parties hereto will and shall cause their respective Affiliates to, furnish to the other such necessary information and reasonable assistance as the other may reasonably request in connection with the
preparation of any required applications, notices, registrations and requests as may be required or advisable to be filed with any Governmental Authority and will cooperate in responding to any inquiry from a Governmental Authority, including
promptly informing the other party of such inquiry, consulting in advance before making any presentations or submissions to a Governmental Authority, and supplying each other with copies of all material correspondence, filings or communications
between either Party and any Governmental Authority with respect to this Agreement. To the extent reasonably practicable and permitted, the Parties or their Representatives shall have the right to review in advance and each of the Parties will
consult the others on, all the information relating to the other and each of their Affiliates that appears in any filing made with, or written materials submitted to,
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any Governmental Authority in connection with the Merger and the other transactions contemplated by this Agreement, except that confidential competitively sensitive business information may be
redacted from such exchanges. The Parties may, as they deem advisable and necessary, designate any sensitive materials provided to the other under this Section 7.7 as outside counsel only. Such materials and the information
contained therein shall be given only to outside counsel of the recipient and will not be disclosed by such outside counsel to employees, officers, directors or trustees of the recipient without the advance written consent of the Party providing
such materials. To the extent reasonably practicable, neither Company nor Parent shall, nor shall they permit their respective Representatives to, participate independently in any meeting or engage in any substantive conversation with any
Governmental Authority in respect of any filing, investigation or other inquiry without giving the other Party prior notice of such meeting or conversation and, to the extent permitted by applicable Law, without giving the other party the
opportunity to attend or participate (whether by telephone or in person) in any such meeting with such Governmental Authority.
Section 7.8 Notification of Certain Matters; Transaction Litigation.
(a) Company and its Representatives shall give prompt notice to Parent, and Parent and its Representatives shall give prompt notice to Company,
of any notice or other communication received by such Party from any Governmental Authority in connection with this Agreement, the Merger or the other transactions contemplated by this Agreement, or from any Person alleging that the consent of such
Person is or may be required in connection with the Merger or the other transactions contemplated by this Agreement.
(b) Company and its
Representatives shall give prompt notice to Parent, and Parent and its Representatives shall give prompt notice to Company, if (i) any representation or warranty made by it contained in this Agreement becomes untrue or inaccurate such that it
would be reasonable to expect that the applicable closing conditions would be incapable of being satisfied by the Outside Date or (ii) it fails to comply with or satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, that no such notification shall affect the representations, warranties, covenants or agreements of the Parties or the conditions to the obligations of the Parties under this
Agreement. Without limiting the foregoing, Company and its Representatives shall give prompt notice to Parent, and Parent and its Representatives shall give prompt notice to Company, if, to the Knowledge of such Party, the occurrence of any state of
facts, change, development, event or condition would cause, or would reasonably be expected to cause, any of the conditions to Closing set forth herein not to be satisfied or satisfaction to be materially delayed. Notwithstanding anything to the
contrary in this Agreement, the failure by Company, Parent or their respective Representatives to provide such prompt notice under this Section 7.8(b) shall not constitute a breach of covenant for purposes of Section 8.2(b)
or Section 8.3(b) or Section 9.3(b)(i)(A) or Section 9.3(c)(i)(A).
(c) Company and its Representatives
shall give prompt notice to Parent, and Parent and its Representatives shall give prompt notice to Company, of any Action commenced or, to such Partys Knowledge, threatened against, relating to or involving such Party or any Company Subsidiary
or Parent Subsidiary, respectively, that relates to this Agreement, the Merger or the other transactions contemplated by this Agreement. Company and its Representatives shall give Parent the opportunity to reasonably participate in the defense and
settlement of any litigation
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against Company and/or its directors relating to this Agreement and the transactions contemplated hereby, and no such settlement shall be agreed without Parents prior written consent (which
consent shall not be unreasonably withheld, conditioned or delayed). Parent and its Representatives shall give Company the opportunity to reasonably participate in the defense and settlement of any litigation against Parent and/or its trustees
relating to this Agreement and the transactions contemplated hereby, and no such settlement shall be agreed without Companys prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed).
Section 7.9 Listing. As promptly as reasonably practicable following the date of this Agreement, Parent and its
Representatives shall prepare and cause to be filed with the NYSE an application for listing of additional shares pursuant to which the Parent Common Shares to be issued in the Merger will be listed on the NYSE (the Listing).
Parent shall use its reasonable best efforts to have the Listing accepted by the NYSE as promptly as practicable after its submission such that the Parent Common Shares to be issued in the Merger will be listed immediately following the Effective
Time. Company shall furnish all information concerning itself and its Affiliates and provide such other assistance as may be reasonably requested by Parent in connection with the preparation and filing of the application for listing of additional
shares. Prior to filing the listing application (or any amendment or supplement thereto) or responding to any comments of the NYSE with respect thereto, Parent shall provide Company with a reasonable opportunity to review and comment on such
document or response.
Section 7.10 Section 16 Matters. Prior to the Effective Time, Company and Parent shall, as
applicable, take all such steps to cause any dispositions of Company Common Stock (including derivative securities with respect to Company Common Stock) or acquisitions of Parent Common Shares resulting from the transactions contemplated by this
Agreement by each individual who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to Company to be exempt under Rule 16b-3 promulgated under the Exchange Act. Upon request, Company shall promptly
furnish Parent with all requisite information for Parent to take the actions contemplated by this Section 7.10.
Section 7.11 Certain Tax Matters. Each of Parent and Company shall use their respective reasonable best efforts to cause
the Merger to qualify as a reorganization within the meaning of Section 368(a) of the Code. None of Parent or Company shall take any action, or fail to take any action, that would reasonably be expected to cause the Merger to fail to qualify as
a reorganization within the meaning of Section 368(a) of the Code. All Parties shall treat the Merger as a tax-free reorganization under Section 368(a) of the Code and no Party shall take any position for tax
purposes inconsistent therewith, except to the extent otherwise required pursuant to a determination within the meaning of Section 1313(a) of the Code.
Section 7.12 Dividends.
(a) It is agreed that (i) the Parties shall take such actions as are necessary to ensure that the timing of any regular quarterly dividend
paid to common stockholders or shareholders by either Company or Parent prior to the Closing will be coordinated so that, if either the holders of Company Common Stock or the holders of Parent Common Shares receive a distribution for a particular
calendar quarter prior to the Closing Date, then the holders of Parent Common Shares and the holders of Company Common Stock, respectively, shall also receive a
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distribution for such calendar quarter prior to the Closing Date and (ii) the Parties will coordinate such that any such quarterly distribution by Company and Parent shall have the same
record date and the same payment date, which shall be consistent with Parents historical record dates and payment dates unless otherwise agreed between the Parties, in order to ensure that the common stockholders of Company and the common
shareholders of Parent receive the same number of such dividends prior to the Effective Time (provided that the amount of any such quarterly dividend declared by Company shall be consistent with Section 6.1(b)(ii) and the amount of any
such quarterly dividend declared by Parent shall be consistent with Section 6.2(b)(ii)).
(b) If Company or any Company
Subsidiary, in consultation with Parent, determines that it is necessary to declare a Permitted REIT Dividend, Company shall notify Parent at least twenty (20) days prior to the anticipated Closing Date. Notwithstanding anything to the contrary
contained herein, in the event Company declares a Permitted REIT Dividend other than a Permitted REIT Dividend necessitated by action or actions requested by Parent pursuant to Section 7.17, the Exchange Ratio will be ratably adjusted to
the extent necessary or appropriate to reflect fully the effect of such change resulting from the Permitted REIT Dividend. The record date and payment date for any Permitted REIT Dividend payable by Company or any Company Subsidiary shall be the
close of business on the last Business Day prior to the Closing Date.
(c) If Parent or any Parent Subsidiary, in consultation with
Company, determines that it is necessary to declare a Permitted REIT Dividend, Parent shall notify Company at least twenty (20) days prior to the anticipated Closing Date. Notwithstanding anything to the contrary contained herein, in the event
Parent declares a Permitted REIT Dividend, the Exchange Ratio will be ratably adjusted to the extent necessary or appropriate to reflect fully the effect of such change resulting from the Permitted REIT Dividend. The record date and payment date for
any Permitted REIT Dividend payable by Parent or any Parent Subsidiary shall be the close of business on the last Business Day prior to the Closing Date.
Section 7.13 Voting of Shares. Parent shall vote all shares of Company Common Stock beneficially owned by it or any of the
Parent Subsidiaries as of the record date for the Company Stockholder Meeting and entitled to be voted, if any, in favor of the approval of this Agreement and approval of the Merger. Company shall vote all Parent Common Shares beneficially owned by
it or any of the Company Subsidiaries as of the record date for the Parent Shareholder Meeting, if any, in favor of the approval of this Agreement and the issuance of Parent Common Shares in connection with the Merger.
Section 7.14 Takeover Statutes. The Parties shall use their respective reasonable best efforts (a) to take all action
necessary so that no Takeover Statute is or becomes applicable to the Merger or any of the other transactions contemplated by this Agreement and shall take all necessary steps to exempt (or ensure the continued exemption of) the Merger and the other
transactions contemplated hereby from any applicable Takeover Statute now or hereafter in effect and (b) if any such Takeover Statute is or becomes applicable to any of the foregoing, to take all action necessary so that the Merger and the
other transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to eliminate or minimize the effect of such Takeover Statute on the Merger and the other
transactions contemplated by this Agreement, including, if necessary, challenging the validity or applicability of any such Takeover Statute.
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Section 7.15 Tax Representation Letters.
(a) Company shall (i) use its reasonable best efforts to obtain the opinion of counsel referred to in Section 8.2(e) and
Section 8.3(f), (ii) deliver to Goodwin Procter LLP, counsel to Company, and Hogan Lovells US LLP, counsel to Parent, or other counsel described in Section 8.2(e) and Section 8.3(e), respectively, a tax
representation letter, dated as of the Closing Date, signed by an officer of Company, and in form and substance reasonably satisfactory to Goodwin Procter LLP or other counsel described in Section 8.2(e) and to Parent (it being agreed
and understood that an officers certificate substantially similar to the draft officers certificate provided to Parent prior to the date of this Agreement is and will be in form and substance reasonably satisfactory to Goodwin Procter
LLP and to Parent subject to reasonable changes to take into account changes in fact or law), containing representations of Company for purposes of rendering the opinions described in Section 8.2(e) and Section 8.3(e), and
(iii) deliver to Hogan Lovells US LLP, counsel to Parent, and Goodwin Procter LLP, counsel to Company, or other counsel described in Section 8.2(f) and Section 8.3(f), respectively, tax representation letters, dated as
of the effective date of the Form S-4 and the Closing Date, respectively, and signed by an officer of Company, in form and substance reasonably acceptable to such counsel, containing representations of Company as shall be necessary or appropriate to
enable Hogan Lovells US LLP to render an opinion on the effective date of the Form S-4 and on the Closing Date, as described in Section 8.2(f), respectively, and Goodwin Procter LLP to render an opinion on the effective date of the Form
S-4 and on the Closing Date, as described in Section 8.3(f), respectively.
(b) Parent shall (i) use its reasonable best
efforts to obtain the opinions of counsel referred to in Section 8.2(f) and Section 8.3(e), (ii) deliver to Hogan Lovells US LLP, counsel to Parent, or other counsel described in Section 8.3(e), tax
representation letters, dated as of the Closing Date, signed by an officer of Company, and in form and substance reasonably satisfactory to Hogan Lovells US LLP or other counsel described in Section 8.2(f) and to Company (it being agreed
and understood that an officers certificate substantially similar to the draft officers certificate provided to Parent prior to the date of this Agreement is and will be in form and substance reasonably satisfactory to Hogan Lovells US
LLP and to Company subject to reasonable changes to take into account changes in fact or law), containing representations of Parent for purposes of rendering the opinion described in Section 8.3(e), and (iii) deliver to Hogan
Lovells US LLP, counsel to Parent, and Goodwin Procter LLP, counsel to Company, or other counsel described in Section 8.2(f) and Section 8.3(f), respectively, tax representation letters, dated as of the effective date of the
Form S-4 and the Closing Date, respectively, and signed by an officer of Parent, in form and substance reasonably acceptable to such counsel, containing representations of Company as shall be necessary or appropriate to enable Hogan Lovells US LLP
to render an opinion on the effective date of the Form S-4 and on the Closing Date, as described in Section 8.2(f), respectively, and Goodwin Procter LLP to render an opinion on the effective date of the Form S-4 and on the Closing Date,
as described in Section 8.3(f), respectively.
Section 7.16 Financing Cooperation.
(a) Company shall, and shall cause the Company Subsidiaries to, and shall cause its and their Representatives to, provide all cooperation
reasonably requested by Parent in connection with financing arrangements (including assumptions, guarantees, amendments, supplements, modifications, refinancings, replacements, repayments, terminations or
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prepayments of existing financing arrangements, as well as any cooperation in relation to matters that are customary in connection with a concurrent or subsequent offering of Parents debt
securities) as Parent may reasonably determine necessary or advisable in connection with the completion of the Merger or the other transactions contemplated hereby; provided that Parent shall control all decisions with respect to such financing
arrangements. Such cooperation by Company and the Company Subsidiaries shall include (i) causing the Companys senior management teams to participate in a reasonable number of meetings, presentations, drafting sessions, due diligence
sessions, road shows and sessions with rating agencies in connection with such financing arrangements, (ii) providing reasonable and timely assistance with the preparation of materials for presentations, offering memoranda,
prospectuses, bank books, ratings agency presentations and similar documents required in connection with such financing arrangements, (iii) as promptly as reasonably practical, furnishing Parent and any of its financing sources with
(A) audited consolidated balance sheets and related audited consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the three most recently completed fiscal years of Company ended at
least sixty (60) days prior to the Closing Date, in each case, prepared in accordance with GAAP applied on a basis consistent with that of the most recent fiscal year and (B) unaudited consolidated balance sheets and related condensed
consolidated statements of operations, comprehensive income, changes in equity and cash flows (in each case, subject to normal year-end adjustments and absence of footnotes) for Company for each subsequent fiscal quarter ended at least forty
(40) days prior to the Closing Date (other than the fourth fiscal quarter of any fiscal year), in each case, prepared in accordance with GAAP and reviewed by Companys independent public accountants, and (C) any other information
regarding Company and its Subsidiaries that Parent may reasonably request in connection with the arrangement or execution of such financing arrangements, including information necessary for the preparation of pro forma financial statements,
(iv) securing the customary cooperation of the independent accountants of the Company, including by requesting that such independent accountants provide customary authorization letters, comfort letters (including negative assurance
comfort) and accountants consent letters as may be requested by Parent, (v) cooperating with Parent and Parents counsel so that Parent or Parents counsel is able to deliver legal opinions required to be delivered in connection
with Parents financing arrangements, and (vi) to the extent requested in writing at least fifteen (15) Business Days prior to the Closing, delivering at least five (5) Business Days prior to the Closing all documentation and
other information with respect to Company and the Company Subsidiaries that are required by regulatory authorities under applicable know-your-customer and anti-money laundering rules and regulations, including the USA PATRIOT Act.
Notwithstanding the foregoing, the Company and its Subsidiaries and their respective Representatives shall not be required to enter into any letter, certificate, document, agreement or instrument (other than customary authorization and
representation letters) the effectiveness of which is not expressly conditioned on the occurrence of and nothing in this Section 7.16(a) shall require (x) such cooperation to the extent it would disrupt unreasonably the
business or operations of the Company or any Company Subsidiary or require any of them to take any actions that would be reasonably expected to violate applicable Law, contract or Organizational Documents, (y) the board of directors or similar
governing body of the Company or any Company Subsidiary to adopt resolutions approving any letter, certificate, document, agreement or instrument (other than customary authorization and representation letters to the extent necessary) that will be
effective prior to the Closing or (z) Company or any Company Subsidiary to incur any liability prior to the Closing for which it has not otherwise received prior reimbursement or is not otherwise indemnified by or on behalf of Parent. It is
understood and agreed that a failure to consummate a financing of the type described in the first sentence of this Section 7.16(a) shall not, in and of itself, constitute a failure by Company to satisfy its obligations under this
Section 7.16(a).
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(b) Company shall, and shall cause the Company Subsidiaries to, use reasonable best efforts
to, as soon as reasonably practicable after (and not prior to) the receipt of a written request from Parent to do so, on the terms and conditions specified by Parent and in compliance with all applicable terms and conditions of the applicable
Company Debt Agreement, seek any amendment to or waiver or consent under any of the Company Debt Agreements or pursue any approach chosen by Parent to the assumption, defeasance, satisfaction and discharge, constructive satisfaction and discharge,
refinancing, repayment, repurchase, redemption, termination, amendment, guarantee, purchase, unwinding or other treatment of, the Company Debt Agreements and the indebtedness incurred pursuant thereto, in each case, subject to the occurrence of the
Closing (any such transaction, a Debt Transaction). Company shall use reasonable best efforts to, and shall cause the Company Subsidiaries to use reasonable best efforts to, cause its and their respective Representatives to
provide cooperation and assistance reasonably requested by Parent in connection with the Debt Transactions (including taking all corporate action reasonably necessary to authorize the execution and delivery of any documentation necessary or
desirable in connection with such Debt Transaction (collectively, the Debt Transaction Documents) to be entered into prior to Closing and delivering all officers certificates and legal opinions required to be delivered in
connection therewith); provided, that the effectiveness of any such Debt Transaction Documents or, in the case of a notice of prepayment or redemption, such prepayment or redemption, shall be expressly conditioned on the Closing unless otherwise
mutually agreed by the Parties.
(c) All material non-public or otherwise confidential information regarding Company obtained by Parent or
any of their respective Representatives pursuant to this Section 7.16 shall be kept confidential in accordance with the Confidentiality Agreement; provided that Company agrees that Parent may (i) share non-public or otherwise
confidential information with the rating agencies and actual or potential financing sources if the recipients of such information agree to customary confidentiality arrangements, including customary click through confidentiality
agreements and confidentiality provisions contained in customary bank books and offering memoranda. Parent shall indemnify, defend and hold harmless Company and its Affiliates, and its and their respective pre-Closing Representatives, from and
against any liability, obligation or loss suffered or incurred by them in connection with any cooperation provided under this Section 7.16 and any information utilized in connection therewith, except in the event such liabilities,
obligations or losses arose out of or result from (i) information furnished in writing by or on behalf of Company, its Subsidiaries or its or their respective Affiliates or Representatives for use in connection with the debt financing,
(ii) the bad faith, gross negligence or willful misconduct by Company, any of its Subsidiaries or any of its or their respective Affiliates or Representatives or (iii) the material breach by Company or its Subsidiaries of its or their
obligations under this Agreement (clauses (i) through (iii) collectively, the Indemnity Exceptions). Parent shall, promptly upon request by Company, reimburse Company and its Subsidiaries and Representatives for all
reasonable, documented and invoiced out-of-pocket costs actually incurred by Company or its Subsidiaries in connection with any cooperation provided
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under this Section 7.16 (including reasonable, documented out-of-pocket auditors and attorneys fees and expenses, but excluding the costs of Companys preparation of
its annual quarterly and financial statements and any other information or data and excluding costs arising out of or resulting from the Indemnity Exceptions). Company shall, and shall cause its Subsidiaries to deliver all notices and take all other
actions to facilitate the termination at the Effective Time of all financing commitments and other indebtedness of Company or its Subsidiaries to be paid off, discharged and terminated on the Closing Date as specifically requested by Parent in
writing (the Payoff Indebtedness), the repayment in full on the Closing Date of all obligations in respect of the indebtedness thereunder, and the release on the Closing Date of any Liens securing such indebtedness and guarantees
in connection therewith. In furtherance and not in limitation of the foregoing, Company and its Subsidiaries shall use reasonable best efforts to deliver to Parent (i) at least ten (10) Business Days prior to the Closing Date (or such
short period as agreed by Parent), a draft payoff letter (the Payoff Letters) with respect to the Payoff Indebtedness to be paid off, discharged and terminated on the Closing Date and (ii) at least one (1) Business Day
prior to the Closing Date, an executed payoff letter with respect to Companys credit facility (the Payoff Letters) and such other indebtedness (including mortgages) of Company or its Subsidiaries to be paid off, discharged
and terminated on the Closing Date, in each case in form and substance reasonably satisfactory to Parent and customary for transactions of this type, from the Persons (or the applicable agent on behalf of the Persons) to whom such indebtedness is
owed, which Payoff Letters together with any related release documentation shall, among other things, (x) include the payoff amount (including customary per diem) and (y) provide that Liens (and guarantees), if any, granted in connection
with such Payoff Indebtedness relating to the assets, rights and properties of Company and its Subsidiaries securing or relating to such indebtedness, shall, upon the payment of the amount set forth in the applicable Payoff Letter at or prior to the
Effective Time, be released and terminated.
Section 7.17 Other Transactions. Company shall use reasonable best efforts
to provide such cooperation and assistance as Parent may reasonably request to (a) convert or cause the conversion of one or more wholly-owned Company Subsidiaries that are organized as corporations into limited liability companies (including
through corporate reorganization if conversion is not available under applicable state Law), on the basis of Organizational Documents as reasonably requested by Parent, (b) sell or cause to be sold stock, partnership interests, limited
liability company interests or other equity interests owned, directly or indirectly, by Company in one or more wholly-owned Company Subsidiaries at a price and on such other terms as designated by Parent, (c) exercise any right of Company or a
Company Subsidiary to terminate or cause to be terminated any contract to which Company or a wholly-owned Company Subsidiary is a party and (d) sell or cause to be sold any of the assets of Company or one or more wholly-owned Company
Subsidiaries at a price and on such other terms as designated by Parent (any action or transaction described in clause (a) through (d), a Parent-Approved Transaction); provided, that (i) neither Company nor any of the
Company Subsidiaries shall be required to take any action in contravention of (A) any Organizational Document of Company or any of the Company Subsidiaries, (B) any Company Material Contract, or (C) applicable Law, (ii) any such
conversions, exercises of any rights of termination or other terminations, sales or transactions, including the consummation of any Parent-Approved Transaction or other obligations of Company or its Subsidiaries to incur any liabilities with respect
thereto, shall be contingent upon all of the conditions set forth in Article 8 having been satisfied (or, with respect to Section 8.2, waived) and
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receipt by Company of a written notice from Parent stating that Parent and Merger Sub are prepared to proceed immediately with the Closing, together with an irrevocable acknowledgement and
agreement in a written notice delivered to Company one Business Day prior to the election to effect any Parent-Approved Transaction in accordance with this Section 7.17, that all closing conditions set forth in clauses (a),
(b), (c), and (d) of Section 8.2 shall be deemed to have been satisfied or waived as of the date of such notice and any other evidence reasonably requested by Company that the Closing will occur (it
being understood that in any event the transactions described in clauses (a), (b), (c) and (d) will be deemed to have occurred prior to the Closing), (iii) such actions (or the inability to complete such actions) shall not affect or
modify in any respect the obligations of Parent or Merger Sub under this Agreement, including the amount of or timing of payment of the Merger Consideration or the obligation to complete the Merger in accordance with the terms of this Agreement and
(iv) neither Company nor any of the Company Subsidiaries shall be required to take any such action that could adversely affect the classification as a REIT prior to the Effective Time of Company or any Company Subsidiary that is classified as a
REIT or could subject Company or any such Subsidiary to any prohibited transactions Taxes or other material Taxes under Code Sections 857(b), 860(c) or 4981(or other material entity-level Taxes) or would be reasonably likely to prevent
counsel from delivering any of the opinions described in Sections 8.2(e), 8.2(f), 8.3(e) or 8.3(f). Such actions or transactions shall be undertaken in the manner (including in the order) specified by Parent. Without
limiting the foregoing, none of the representations, warranties or covenants of Company or any of the Company Subsidiaries shall be deemed to apply to, or be deemed to be breached or violated by, the transactions or cooperation contemplated by this
Section 7.17. Company shall not be deemed to have made a Company Adverse Recommendation Change or entered into or agreed to enter a Company Alternative Acquisition Agreement as a result of providing any cooperation or taking any actions
to the extent requested by Parent in connection with a Parent-Approved Transaction. The consummation of any Parent-Approved Transaction shall not constitute consummation of a Company Acquisition Proposal for purposes of
Section 9.3(b)(i)(C), nor shall any Company Acquisition Proposal made in respect of a Parent-Approved Transaction constitute a Company Acquisition Proposal for purposes of Section 9.3(b)(i)(C). Parent shall, promptly upon
request by Company, reimburse Company for all reasonable, documented and invoiced out-of-pocket costs actually incurred by Company or the Company Subsidiaries in connection with performing their obligations under this Section 7.17.
Section 7.18 Resignations. Unless otherwise specified by Parent prior to the Closing Date, Company shall cause to be
delivered to Parent resignations executed by each director of Company and each officer of the Company or any Company Subsidiary in office as of immediately prior to the Effective Time and effective upon the Effective Time.
Section 7.19 Employee Matters.
(a) For a period of twelve (12) months following the Effective Time (or if earlier, the date of the applicable employees termination
of employment), Parent shall provide, or shall cause to be provided, to each employee of Company and Company Subsidiaries as of immediately prior to the Effective Time who continues to be employed by Parent or the Parent Subsidiaries following the
Effective Time (the Continuing Employee) the following, except as otherwise agreed by the such Continuing Employee: (i) base salary (or base wages) at least equal to the base salary (or base wages) provided to such Continuing
Employee by Company or any
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Company Subsidiary as of immediately prior to the Effective Time, (ii) with respect to the 2022 calendar year, if applicable, target annual cash bonus opportunity at least equal to the
target annual cash bonus opportunity provided to such Continuing Employee as of immediately prior to the Effective Time (which opportunity shall exclude, for the avoidance of doubt, any target annual bonus settled in equity or equity-based incentive
arrangements), and (iii) retirement and health and welfare benefits that are substantially similar, in the aggregate, to those retirement and health and welfare benefits that are either, at Parents discretion, (A) provided to such
Continuing Employee by Company or any Company Subsidiary as of immediately prior to the Effective Time or (B) provided to similarly-situated employees of Parent or Parent Subsidiaries, in each case, excluding defined benefit pension,
nonqualified retirement, severance, post-retirement medical or welfare, equity or equity-based incentive, retention, change in control or similar plans, agreements, programs, policies, practices or other arrangements. For the avoidance of doubt,
nothing in this Agreement shall require Parent or any Parent Subsidiary to employ any Person, nor shall it alter the at-will employment status of any Company Employee.
(b) Solely to the extent Parent Benefit Plans (exclusive of Company and Company Subsidiaries) provide benefits to any Continuing Employee on or
following the Effective Time, Parent shall use commercially reasonable efforts to (i) cause any pre-existing conditions or limitations and eligibility waiting periods under any group health plans of Parent or its Affiliates to be waived with
respect to the Continuing Employees and their eligible dependents, (ii) give each Continuing Employee credit for the plan year in which the Effective Time occurs towards applicable deductibles and annual out-of-pocket limits for medical
expenses incurred prior to the Effective Time for which payment has been made and (iii) give each Continuing Employee service credit for such Continuing Employees employment with Company and Company Subsidiaries for purposes of
eligibility to participate, vesting, and solely for severance or vacation accrual, benefit accrual under each applicable Parent Benefit Plan, as if such service had been performed with Parent, except for any plan maintained by Parent or any Parent
Subsidiary under which similarly-situated employees of Parent and Parent Subsidiaries do not receive credit for prior service or that is grandfathered or frozen, either with respect to level of benefits or participation, or to the extent it would
result in a duplication of benefits or retroactive application.
(c) Unless otherwise requested by Parent not less than five
(5) Business Days before the Closing Date, Company shall adopt board resolutions and take any corporate action as is necessary to terminate each Company Benefit Plan that is a Tax-qualified defined contribution plan with a cash or deferred
arrangement under Section 401(k) of the Code (the Company Qualified DC Plan), effective as of the day prior to the Closing Date but contingent on the occurrence of the Closing. The form and substance of such resolutions and
any other actions taken in connection with the foregoing termination shall be subject to the reasonable prior review and approval of Parent (which shall not be unreasonably withheld). Upon the distribution of the assets in the accounts under the
Company Qualified DC Plan to the participants, Parent shall permit such participants who are then actively employed by Parent or Parent Subsidiaries to make rollover contributions of eligible rollover distributions (within the meaning of
Section 401(a)(31) of the Code), in the form of cash, from the Company Qualified DC Plan to the applicable Tax-qualified defined contribution plans of Parent or Parent Subsidiaries.
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(d) Prior to the Effective Time, neither Company nor any Company Subsidiary shall
communicate with Continuing Employees regarding post-Effective Time employment matters, post-Effective Time employee benefits and compensation matters or other compensation or benefits matters related to or impacted by any of the transactions
contemplated by this Agreement (whether alone or in combination with additional events), including the matters described in this Section 7.19 and Section 7.20, without the prior written approval of Parent, which shall not be
unreasonably withheld.
(e) Parent hereby acknowledges that the consummation of the Merger or the other transactions contemplated hereby
constitutes a change of control, a change in control or a sale event (or a term of similar import) for purposes of any Company Benefit Plan set forth on Section 7.19(e) of the Company Disclosure Letter
that contains a definition of change of control, a change in control or a sale event (or a term of similar import), as applicable.
(f) Annual cash incentive bonuses for calendar year 2021 shall be treated as set forth in Section 7.19(f) of the Company Disclosure
Letter.
(g) Parent shall cause the Surviving Entity and the Parent OP to honor in accordance with their terms all severance and separation
pay plans, agreements and arrangements, and all written employment, severance, retention, incentive, change in control and termination agreements (including any change in control provisions therein) applicable to employees of Company and in effect
immediately prior to the Effective Time, as set forth in Section 7.19(g) of the Company Disclosure Letter.
(h) The provisions
of this Section 7.19 are solely for the benefit of the Parties. No current or former director, employee or other individual service provider or any other person shall be a third-party beneficiary of this Agreement, and nothing herein
shall be construed as an amendment to any Parent Benefit Plan, Company Benefit Plan or any other Benefit Plan for any purpose. Without limiting the generality of the foregoing in this Section 7.19, nothing contained in this Agreement
shall otherwise obligate Parent, Company or any of their respective Affiliates to (i) maintain any particular Benefit Plan or (ii) retain the employment or services of any current or former director, trustee, employee or other individual
service provider.
Section 7.20 Company Equity Awards.
(a) Prior to the Effective Time, the Company shall pass resolutions, provide any notices, obtain any consents (including consent of holders of
Company RSUs), make any amendments to the Company Equity Incentive Plans or Company Equity Awards, and take all such other actions that may be necessary (under the Company Equity Incentive Plans, applicable Laws and otherwise) (i) to effectuate
the provisions of Section 3.1(c) and to ensure that, from and after the Effective Time, holders of Company Equity Awards shall have no rights with respect thereto other than those specifically provided in Section 3.1(c) and
(ii) to terminate the Company Director Plan, effective as of the Effective Time.
(b) At the Effective Time, Parent shall assume all
obligations in respect of each Company Equity Incentive Plan (other than the Company Director Plan). Parent shall take all corporate action necessary to reserve for issuance a number of authorized but unissued Parent Common Shares for issuance of
and/or for delivery upon settlement of Company Equity Awards assumed and converted into rights with respect to Parent Common Shares in accordance with Section 3.1(c) (the Assumed Awards). Effective as of the Effective Time, Parent
shall file a registration statement on Form S-8 (or any successor or other appropriate form) with respect to the shares of Parent Common Shares subject to such Assumed Awards.
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Section 7.21 Delisting; Deregistration. Prior to the Effective Time,
Company shall cooperate with Parent and use its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done all things, necessary, proper or advisable on its part under applicable Law and the rules and policies
of the NYSE to enable the delisting of the Company Common Stock from the NYSE and the deregistration of Company Common Stock under the Exchange Act as promptly as practicable after the Effective Time.
Section 7.22 Merger Sub; Parent Subsidiaries; Company Subsidiaries. Parent shall cause each of Merger Sub and any other
applicable Parent Subsidiary to comply with and perform all of its obligations under or relating to this Agreement, including in the case of Merger Sub to consummate the Merger on the terms and conditions set forth in this Agreement. Company
shall cause each of the Company Subsidiaries to comply with and perform all of its obligations under or relating to this Agreement.
ARTICLE 8
CONDITIONS
Section 8.1 Conditions to Each Partys Obligation to Effect the Merger. The respective obligations of the
Parties to this Agreement to effect the Merger and to consummate the other transactions contemplated by this Agreement are subject to the satisfaction or, to the extent permitted by Law, waiver by each of the Parties at or prior to the Effective
Time of the following conditions:
(a) Stockholder Approvals. Each of the Company Stockholder Approval and the Parent Shareholder
Approval shall have been obtained.
(b) Registration Statement. The Form S-4 shall have become effective in accordance with the
provisions of the Securities Act. No stop order suspending the effectiveness of the Form S-4 shall have been issued by the SEC and remain in effect and no proceeding to that effect shall have been commenced or threatened by the SEC and not
withdrawn.
(c) No Injunctions or Restraints. No temporary restraining order, preliminary or permanent injunction or other judgment,
order or decree issued by any Governmental Authority of competent jurisdiction prohibiting consummation of the Merger or any other transaction contemplated hereby shall be in effect, and no Law shall have been enacted, entered, promulgated or
enforced by any Governmental Authority after the date of this Agreement that, in any case, makes illegal the consummation of the Merger.
(d) Listing. The Parent Common Shares to be issued in the Merger shall have been approved for listing on the NYSE, subject to official
notice of issuance.
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Section 8.2 Conditions to Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to effect the Merger and to consummate the other transactions contemplated by this Agreement are subject to the satisfaction or (to the extent permitted by Law) waiver by Parent, at or prior to the Effective
Time, of the following additional conditions:
(a) Representations and Warranties. (i) The representations and warranties set
forth in Sections 4.1(a) and (b) (Organization and Qualification; Subsidiaries), Section 4.3 (Capital Structure) (except Section 4.3(a)), Section 4.4 (Authority), Section 4.20
(Opinion of Financial Advisor), Section 4.21 (Approval Required), Section 4.22 (Brokers), and Section 4.23 (Investment Company Act) shall be true and correct in all material respects as of the date of this
Agreement and as of the Effective Time, as though made as of the Effective Time, (ii) the representations and warranties set forth in Section 4.3(a) (Capital Structure) shall be true and correct in all but de minimis respects
as of the date of this Agreement and as of the Effective Time, as though made as of the Effective Time, and (iii) each of the other representations and warranties of Company contained in this Agreement shall be true and correct as of the date
of this Agreement and as of the Effective Time, as though made as of the Effective Time, except (A) in each case, representations and warranties that are made as of a specific date shall be true and correct only on and as of such date, and
(B) in the case of clause (iii) where the failure of such representations or warranties to be true and correct (without giving effect to any materiality or Company Material Adverse Effect qualifications set forth therein) does not have,
and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(b) Performance of
Covenants and Obligations of Company. Company shall have performed in all material respects all obligations, and complied in all material respects with all agreements and covenants, required to be performed by it under this Agreement on or prior
to the Effective Time.
(c) Material Adverse Change. On the Closing Date, there shall not exist any event, change, or occurrence
arising after the date of this Agreement that, individually, or in the aggregate, constitutes, or would reasonably be expected to constitute, a Company Material Adverse Effect.
(d) Delivery of Certificates. Company shall have delivered to Parent a certificate, dated the date of the Closing and signed by its
chief executive officer and chief financial officer on behalf of Company, certifying to the effect that the conditions set forth in Section 8.2(a), Section 8.2(b) and Section 8.2(c) have been satisfied.
(e) Opinion Relating to REIT Qualification. Parent shall have received the written opinion of Goodwin Procter LLP (or other counsel
reasonably satisfactory to Parent including Hogan Lovells US LLP), dated as of the Closing Date, in substantially the form attached hereto as Exhibit B, to the effect that for all taxable periods commencing with its taxable year ended
December 31, 2003 and ending with its taxable year that ends with the Merger, Company has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code (which opinion shall be based upon
the representation letter described in Section 7.15 and shall be subject to customary assumptions, exceptions, limitations and qualifications).
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(f) Section 368 Opinion. Parent shall have received the written opinion of its
counsel, Hogan Lovells US LLP (or other counsel reasonably satisfactory to Company including Goodwin Procter LLP), dated as of the effective date of the Form S-4, satisfying the requirements of Item 601 of Regulation S-K under the Securities
Act, and as of the Closing Date, in substantially the form and substance as set forth in Exhibit C, respectively, to the effect that, on the basis of facts, representations and assumptions set forth in such opinion, the Merger will qualify as
a reorganization within the meaning of Section 368(a) of the Code. In rendering such opinion, counsel may rely upon the representation letters described in Section 7.15. The condition set forth in this Section 8.2(f)
shall not be waivable after receipt of the Parent Shareholder Approval, unless further shareholder approval is obtained with appropriate disclosure.
Section 8.3 Conditions to Obligations of Company. The obligations of Company to effect the Merger and to consummate the
other transactions contemplated by this Agreement are subject to the satisfaction or (to the extent permitted by Law) waiver by Company at or prior to the Effective Time, of the following additional conditions:
(a) Representations and Warranties. (i) The representations and warranties set forth in Sections 5.1(a) and
(b) (Organization and Qualification; Subsidiaries), Section 5.3 (Capital Structure) (except Section 5.3(a)), Section 5.4 (Authority), Section 5.20 (Opinion of Financial Advisor),
Section 5.21 (Approval Required), Section 5.22 (Brokers) and Section 5.23 (Investment Company Act) shall be true and correct in all material respects as of the date of this Agreement and as of the Effective Time, as
though made as of the Effective Time, (ii) the representations and warranties set forth in Section 5.3(a) (Capital Structure) shall be true and correct in all but de minimis respects as of the date of this Agreement and as of
the Effective Time, as though made as of the Effective Time, and (iii) each of the other representations and warranties of Parent contained in this Agreement shall be true and correct as of the date of this Agreement and as of the Effective
Time, as though made as of the Effective Time, except (A) in each case, representations and warranties that are made as of a specific date shall be true and correct only on and as of such date, and (B) in the case of clause
(iii) where the failure of such representations or warranties to be true and correct (without giving effect to any materiality or Parent Material Adverse Effect qualifications set forth therein) does not have, and would not
reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(b) Performance of Covenants or
Obligations of Parent. Parent shall have performed in all material respects all obligations, and complied in all material respects with all agreements and covenants, required to be performed by it under this Agreement on or prior to the
Effective Time.
(c) Material Adverse Change. On the Closing Date, there shall not exist any event, change or occurrence arising
after the date of this Agreement that, individually or in the aggregate, constitutes, or would reasonably be expected to constitute, a Parent Material Adverse Effect.
(d) Delivery of Certificates. Parent shall have delivered to Company a certificate, dated the date of the Closing and signed by its
chief executive officer and chief financial officer on behalf of Parent certifying to the effect that the conditions set forth in Section 8.3(a), Section 8.3(b) and Section 8.3(c) have been satisfied.
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(e) Opinion Relating to REIT Qualification. Company shall have received the written
opinion of Hogan Lovells US LLP (or other counsel reasonably satisfactory to Company), dated as of the Closing Date in substantially the form attached hereto as Exhibit D, to the effect that for all taxable periods commencing with its
taxable year ended December 31, 2004, Parent has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code, and that its past, current and intended future organization and operation
will permit Parent to continue to qualify for taxation as a REIT under the Code for its taxable year which includes the Effective Time and thereafter (which opinion shall be based upon the representation letters described in Section 7.15
and shall be subject to customary assumptions, limitations and qualifications).
(f) Section 368 Opinion. Company shall have
received the written opinion of its counsel, Goodwin Procter LLP (or other counsel reasonably satisfactory to Parent), dated as of the effective date of the Form S-4, satisfying the requirements of Item 601 of Regulations S-K under the
Securities Act, and as of the Closing Date, in substantially the form and substance as set forth in Exhibit E, respectively, to the effect that, on the basis of facts, representations and assumptions set forth in such opinion, the Merger
will qualify as a reorganization within the meaning of Section 368(a) of the Code. In rendering such opinion, counsel may rely upon the representation letters described in Section 7.15. The condition set forth in this
Section 8.3(f) shall not be waivable after receipt of the Company Stockholder Approval, unless further stockholder approval is obtained with appropriate disclosure.
ARTICLE 9
TERMINATION,
FEES AND EXPENSES, AMENDMENT AND WAIVER
Section 9.1 Termination. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time, notwithstanding approval thereof by the shareholders of Parent or the stockholders of Company (except as otherwise specified in this Section 9.1):
(a) by mutual written consent of each of Parent and Company;
(b) by either Parent or Company:
(i) if the Merger shall not have been consummated on or before March 31, 2022 (the Outside Date); provided,
that the right to terminate this Agreement pursuant to this Section 9.1(b)(i) shall not be available to any Party if the failure of such Party to comply with any provision of this Agreement shall have been the cause of, or resulted in,
the failure of the Merger to be consummated by the Outside Date; or
(ii) if any Governmental Authority of competent jurisdiction shall
have issued an Order or taken any other action permanently restraining or otherwise prohibiting the Merger, and such Order or other action shall have become final and non-appealable; provided, that the right to terminate this Agreement under
this Section 9.1(b)(ii) shall not be available to a Party if the issuance of such final, non-appealable Order was primarily due to the failure of such Party to comply with any provision of this Agreement; or
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(iii) if the Company Stockholder Approval shall not have been obtained at the Company
Stockholder Meeting duly convened therefor or at any adjournment or postponement thereof at which a vote on the approval of this Agreement was taken; provided, that the right to terminate this Agreement under this
Section 9.1(b)(iii) shall not be available to Company where a failure to obtain the Company Stockholder Approval was primarily caused by any action or failure to act of Company that constitutes a material breach any of its obligations
under Section 7.1 or 7.3; or
(iv) if the Parent Shareholder Approval shall not have been obtained at the Parent
Shareholder Meeting duly convened therefor or at any adjournment or postponement thereof at which a vote on the approval of this Agreement was taken; provided, that the right to terminate this Agreement under this
Section 9.1(b)(iv) shall not be available to Parent where a failure to obtain the Parent Shareholder Approval was primarily caused by any action or failure to act of Parent that constitutes a material breach of any of its obligations
under Section 7.1 or 7.4.
(c) by Parent:
(i) if Company shall have breached, violated or failed to perform any of its representations, warranties, covenants or agreements set forth in
this Agreement, which breach, violation or failure to perform, either individually or in the aggregate, if occurring or continuing on the Closing Date (A) would result in the failure of any of the conditions set forth in Section 8.1
or 8.2 (a Company Terminating Breach) and (B) is not cured or cannot be cured or waived prior to the earlier of (i) forty-five (45) days following notice to Company from Parent of such breach or failure and
(ii) the date that is three (3) Business Days prior to the Outside Date; provided, that Parent shall not have the right to terminate this Agreement pursuant to this Section 9.1(c)(i) if a Parent Terminating Breach shall
have occurred and be continuing at the time Parent delivers notice of its election to terminate this Agreement pursuant to this Section 9.1(c)(i); or
(ii) prior to obtaining the Company Stockholder Approval, if Company or the Company Board or any committee thereof (A) shall have
effected a Company Adverse Recommendation Change (provided, that Parents right to terminate this Agreement pursuant to this Section 9.1(c)(ii)(A) in respect of a Company Adverse Recommendation Change will expire thirty
(30) days after the last date upon which Parent receives notice from Company that the Company Board or a committee thereof has made such Company Adverse Recommendation Change), (B) after public announcement by any Person of a Company
Acquisition Proposal or an intention (whether or not conditional) made publicly to make a Company Acquisition Proposal, fails to recommend against such Company Acquisition Proposal and to publicly reaffirm the Company Board Recommendation within ten
(10) Business Days of being requested to do so by Parent, (C) fails to include the Company Board Recommendation in the Joint Proxy Statement, (D) approves, adopts, publicly endorses or recommends, or enters into or allows Company or
any of Company Subsidiary to enter into a definitive agreement for, any Company Acquisition Proposal (other than a Company Acceptable Confidentiality Agreement), or (E) shall have materially violated (or shall be deemed pursuant to the last
sentence of Section 7.3(a) to have violated) any of its obligations under Section 7.3 (other than any immaterial or inadvertent violations thereof not intended to result in a Company Alternative Acquisition Agreement); or
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(iii) prior to obtaining the Parent Shareholder Approval, if the Parent Board determines to
enter into a Parent Alternative Acquisition Agreement with respect to a Parent Superior Proposal in accordance with Section 7.4(d); provided, however, that this Agreement may not be so terminated unless substantially
concurrently with the occurrence of such termination the payment required by Section 9.3(c)(i)(C) is made in full to Company and the Parent Alternative Acquisition Agreement is entered into with respect to such Parent Superior Proposal,
and in the event that such Parent Alternative Acquisition Agreement is not substantially concurrently entered into and such payment is not concurrently made, such termination shall be null and void.
(d) by Company:
(i) if Parent
shall have breached, violated or failed to perform any of its representations, warranties, covenants or agreements set forth in this Agreement, which breach, violation or failure to perform, either individually or in the aggregate, if occurring or
continuing on the Closing Date (A) would result in the failure of any of the conditions set forth in Section 8.1 or 8.3 (a Parent Terminating Breach) and (B) is not cured or cannot be cured or waived
prior to the earlier of (i) forty-five (45) days following notice to Parent from Company of such breach or failure and (ii) the date that is three (3) Business Days prior to the Outside Date; provided, that Company shall
not have the right to terminate this Agreement pursuant to this Section 9.1(d)(i) if a Company Terminating Breach shall have occurred and be continuing at the time Company delivers notice of its election to terminate this Agreement
pursuant to this Section 9.1(d)(i); or
(ii) prior to obtaining the Parent Shareholder Approval, if Parent or the Parent Board
or any committee thereof (A) shall have effected a Parent Adverse Recommendation Change (provided, that Companys right to terminate this Agreement pursuant to this Section 9.1(d)(ii)(A) in respect of a Parent Adverse
Recommendation Change will expire thirty (30) days after the last date upon which Company receives notice from Parent that the Parent Board or a committee thereof has made such Parent Adverse Recommendation Change), (B) after public
announcement by any Person of a Parent Acquisition Proposal or an intention (whether or not conditional) made publicly to make a Parent Acquisition Proposal, fails to recommend against such Parent Acquisition Proposal and to publicly reaffirm the
Parent Board Recommendation within ten (10) Business Days of being requested to do so by Company, (C) fails to include the Parent Board Recommendation in the Joint Proxy Statement, (D) approves, adopts, publicly endorses or
recommends, or enters into or allows Parent or any Parent Subsidiary to enter into a definitive agreement for, any Parent Acquisition Proposal (other than a Parent Acceptable Confidentiality Agreement), or (E) shall have materially violated (or
shall be deemed pursuant to the last sentence of Section 7.4(a) to have violated) any of its obligations under Section 7.4 (other than any immaterial or inadvertent violations thereof not intended to result in a Parent
Alternative Acquisition Agreement); or
(iii) prior to obtaining the Company Stockholder Approval, if the Company Board determines to
enter into a Company Alternative Acquisition Agreement with respect to a Company Superior Proposal in accordance with Section 7.3(d); provided, however, that this Agreement may not be so terminated unless substantially
concurrently with the occurrence of such termination the payment required by Section 9.3(b)(i)(C) is made in full to Parent and the Company Alternative Acquisition Agreement is entered into with respect to such Company Superior Proposal,
and in the event that such Company Alternative Acquisition Agreement is not substantially concurrently entered into and such payment is not concurrently made, such termination shall be null and void.
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Section 9.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 9.1, written notice thereof shall be given to the other Party, specifying the provisions hereof pursuant to which such termination is made and describing the basis therefor in reasonable detail, and, this
Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of Parent or Company, except that the Confidentiality Agreement and the provisions of Section 7.2(b) (Confidentiality),
Section 7.5 (Public Announcements), this Section 9.2, Section 9.3 (Fees and Expenses), Section 9.4 (Amendment), and Article 10 (General Provisions), and the definition of all defined terms
appearing in such sections, shall survive the termination hereof; provided, that no such termination shall relieve any party hereto from any liability or damages resulting from any fraud in connection with this Agreement or any willful and
material breach of any of its covenants or agreements set forth in this Agreement prior to such termination of this Agreement. For purposes of the foregoing, willful and material breach shall mean an intentional and willful
material breach, or an intentional and willful material failure to perform, in each case that is the consequence of an act or omission by a Person with the actual knowledge that the taking of such act or failure to take such act would or would
reasonably be likely to cause a breach of this Agreement. If this Agreement is terminated as provided herein, all filings, applications and other submissions made pursuant to this Agreement, to the extent practicable, shall be withdrawn from the
Governmental Authority or other Person to which they were made.
Section 9.3 Fees and Expenses.
(a) Except as otherwise provided in this Section 9.3, all fees and expenses incurred in connection with this Agreement, the Merger
and the other transactions contemplated hereby shall be paid by the party incurring such fees or expenses, whether or not the Merger is consummated.
(b) In the event that:
(i)
(A) (I)(x) this Agreement is terminated by Company or Parent pursuant to Section 9.1(b)(i) or by Parent pursuant to
Section 9.1(c)(i), and after the date hereof and (in the case of termination pursuant to Section 9.1(c)(i)) prior to the breach giving rise to such right of termination, a Company Acquisition Proposal (with, for all purposes
of this Section 9.3(b)(i), all percentages included in the definition of Company Acquisition Proposal increased to 50%) has been announced, disclosed, or otherwise communicated or made known (whether or not publicly) to the
Company Board or made known publicly to Companys stockholders, or any Person shall have publicly announced an intention (whether or not conditional) to make such a Company Acquisition Proposal, or (y) this Agreement is terminated by
Company or Parent pursuant to Section 9.1(b)(iii), and prior to the Company Stockholder Meeting, a Company Acquisition Proposal has been publicly announced, disclosed, or otherwise communicated or made known to the Company Board or to
Companys stockholders or any Person shall have publicly announced, disclosed or otherwise communicated or made known an intention (whether or not
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conditional) to make such a Company Acquisition Proposal, and in each such case in this clause (y), such Company Acquisition Proposal or intention has not been irrevocably withdrawn publicly, and
(II) within twelve (12) months after the date of such termination referred to in this Section 9.3(b)(i), a transaction in respect of a Company Acquisition Proposal is consummated or Company enters into a definitive agreement in
respect of a Company Acquisition Proposal that is later consummated;
(B) this Agreement is terminated by Parent pursuant to
Sections 9.1(c)(ii); or
(C) this Agreement is terminated by Company pursuant to Section 9.1(d)(iii);
then, in any such event, Company shall pay to Parent the Company Termination Fee, less any amount of Parent Expense Base Amount previously paid by Company; or
(ii) this Agreement is terminated by Parent or Company pursuant to Section 9.1(b)(iii) or by Parent pursuant to
Section 9.1(c)(i), then in any such event, Company shall pay to Parent an amount equal to the Parent Expense Base Amount;
it being understood
that in no event shall Company be required to pay the Company Termination Fee or Parent Expense Base Amount on more than one occasion. Subject to Section 9.3(f) and(g), payment of the Company Termination Fee or Parent Expense Base
Amount, as applicable, shall be made by wire transfer of same day funds to the account or accounts designated by Parent (i) at the time of consummation of any transaction contemplated by a Company Acquisition Proposal, in the case of a Company
Termination Fee payable pursuant to Section 9.3(b)(i)(A), (ii) as promptly as reasonably practicable after termination (and, in any event, within two (2) Business Days thereof), in the case of a Company Termination Fee payable
pursuant to Section 9.3(b)(i)(B), (iii) at the time of termination, in the case of a Company Termination Fee payable pursuant to Section 9.3(b)(i)(C) and as a condition to the effectiveness of such termination, as set
forth in Section 9.1(d)(iii), and (iv) as promptly as reasonably practicable after termination (and, in any event, within two (2) Business Days after receipt of documentation evidencing the Parent Expense Base Amount), in the
case of the Parent Expense Base Amount payable pursuant to Section 9.3(b)(ii). Notwithstanding anything in this Agreement to the contrary, except in the case of fraud or willful and material breach as expressly set forth in
Section 9.2 and except as set forth in the provisos at the end of this sentence, in the event that the Company Termination Fee or Parent Expense Base Amount becomes payable, then payment to Parent of the Company Termination Fee or Parent
Expense Base Amount shall be Parents sole and exclusive remedy as liquidated damages for any and all losses or damages of any nature against Company, the Company Subsidiaries and each of their respective former, current and future directors,
officers, employees, agents, general and limited partners, managers, members, stockholders, Affiliates and assignees and each former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder,
Affiliate or assignee of any of the foregoing (collectively, the Company Parties) in respect of this Agreement, any agreement executed in connection herewith, and the transactions contemplated hereby and thereby, including for any
loss or damage suffered as a result of the termination of this Agreement, the failure of the Merger to be consummated or for a breach or failure to perform hereunder (whether intentionally, unintentionally, or otherwise) or otherwise,
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and upon payment of such Company Termination Fee or Parent Expense Base Amount no Company Party shall have any further liability or obligation relating to or arising out of this Agreement or the
transactions contemplated hereby and thereby; provided, however, that the existence of the circumstances which could require the Company Termination Fee to become subsequently payable by Company pursuant to
Section 9.3(b)(i)(A) shall not relieve Company of its obligations to pay the amounts pursuant to Section 9.3(b)(ii) in accordance with such Sections, and the payment by Company pursuant to Section 9.3(b)(ii) shall
not relieve Company of any subsequent obligation to pay the Company Termination Fee pursuant to Section 9.3(b)(i)(A); and provided, further that, in the event that Company previously has made a payment pursuant to
Section 9.3(b)(ii), the amount of such payment actually made to Parent shall be credited against any Company Termination Fee subsequently payable by Company pursuant to Section 9.3(b)(i)(A).
(c) In the event that:
(i) (A)
(I)(x) this Agreement is terminated by Parent or Company pursuant to Section 9.1(b)(i) or by Company pursuant to Section 9.1(d)(i), and after the date hereof and (in the case of termination pursuant to
Section 9.1(d)(i)) prior to the breach giving rise to such right of termination, a Parent Acquisition Proposal (with, for all purposes of this Section 9.3(c)(i), all percentages included in the definition of Parent
Acquisition Proposal increased to 50%) has been announced, disclosed, or otherwise communicated or made known (whether or not publicly) to the Parent Board or made known publicly to Parents shareholders or any Person shall have publicly
announced an intention (whether or not conditional) to make such a Company Acquisition Proposal, or (y) this Agreement is terminated by Parent or Company pursuant to Section 9.1(b)(iv), and prior to the Parent Shareholder Meeting, a
Parent Acquisition Proposal has been publicly announced, disclosed or otherwise communicated or made known to the Parent Board or to Parents shareholders, or any Person shall have publicly announced, disclosed or otherwise communicated or made
known an intention (whether or not conditional) to make such a Parent Acquisition Proposal, and in each such case in this clause (y), such Parent Acquisition Proposal or intention has not been irrevocably withdrawn publicly, and (II) within twelve
(12) months after the date of such termination referred to in this Section 9.3(c)(i), a transaction in respect of a Parent Acquisition Proposal is consummated or Parent enters into a definitive agreement in respect of a Parent
Acquisition Proposal that is later consummated; or
(B) this Agreement is terminated by Company pursuant to
Section 9.1(d)(ii); or
(C) this Agreement is terminated by Parent pursuant to Section 9.1(c)(iii);
then, in any such event, Parent shall pay to Company the Parent Termination Fee, less any amount of Company Expense Base Amount previously paid by Parent; or
(ii) this Agreement is terminated by Parent or Company pursuant to Section 9.1(b)(iv) or by Company pursuant to
Section 9.1(d)(i), then in any such event, Parent shall pay to Company an amount equal to the Company Expense Base Amount; provided, that Company and Parent shall share equally all Expenses related to the printing and filing of the Form
S-4 and the printing, filing and distribution of the Joint Proxy Statement, other than attorneys and accountants fees;
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it being understood that in no event shall Parent be required to pay the Parent Termination Fee or the
Company Expense Base Amount on more than one occasion. Subject to Section 9.3(d)and(e), payment of the Parent Termination Fee or Company Expense Base Amount, as applicable, shall be made by wire transfer of same day funds to the
account or accounts designated by Parent (i) at the time of consummation of any transaction contemplated by a Parent Acquisition Proposal, in the case of a Parent Termination Fee payable pursuant to Section 9.3(c)(i)(A),
(ii) as promptly as reasonably practicable after termination (and, in any event, within two (2) Business Days thereof), in the case of a Parent Termination Fee payable pursuant to Section 9.3(c)(i)(B), and (iii) at the
time of termination, in the case of a Parent Termination Fee payable pursuant to Section 9.3(c)(i)(C) and as a condition to the effectiveness of such termination, as set forth in Section 9.1(c)(iii), and (iv) as promptly
as reasonably practicable after termination (and, in any event, within two (2) Business Days after receipt of documentation evidencing the Company Expense Base Amount), in the case of the payment of the Company Expense Base Amount payable
pursuant to Section 9.3(c)(ii). Notwithstanding anything in this Agreement to the contrary, except in the case of fraud or willful and material breach as expressly set forth in Section 9.2 and except as set forth in the
provisos at the end of this sentence, in the event that the Parent Termination Fee or Company Expense Base Amount becomes payable, then payment to Company of the Parent Termination Fee or Company Expense Base Amount, shall be Companys sole and
exclusive remedy as liquidated damages for any and all losses or damages of any nature against Parent, the Parent Subsidiaries and each of their respective former, current and future directors, trustees, officers, employees, agents, general and
limited partners, managers, members, shareholders, stockholders, Affiliates and assignees and each former, current or future director, trustee, officer, employee, agent, general or limited partner, manager, member, shareholder, stockholder,
Affiliate or assignee of any of the foregoing (collectively, the Parent Parties) in respect of this Agreement, any agreement executed in connection herewith, and the transactions contemplated hereby and thereby, including for any
loss or damage suffered as a result of the termination of this Agreement, the failure of the Merger to be consummated or for a breach or failure to perform hereunder (whether intentionally, unintentionally, or otherwise) or otherwise, and upon
payment of such Parent Termination Fee or Parent Expense Base Amount no Parent Party shall have any further liability or obligation relating to or arising out of this Agreement or the transactions contemplated hereby and thereby; provided, however,
that the existence of the circumstances which could require the Parent Termination Fee to become subsequently payable by Parent pursuant to Section 9.3(c)(i)(A) shall not relieve Parent of its obligation to pay the Company Expense Base
Amount pursuant to Section 9.3(c)(ii) in accordance with such Section, and the payment by Parent pursuant to Section 9.3(c)(ii), shall not relieve Parent of any subsequent obligation to pay the Parent Termination Fee pursuant
to Section 9.3(c)(i)(A); and, provided further, that in the event that Parent previously has made a payment pursuant to Section 9.3(c)(ii), the amount of such payment actually made to Company shall be credited against
any Parent Termination Fee subsequently payable by Parent pursuant to Section 9.3(c)(i)(A).
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(d) Each of Company and Parent acknowledges that the agreements contained in this
Section 9.3 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, the other party would not enter into this Agreement. If Company fails promptly to pay any amounts due pursuant to
Section 9.3(b), and, in order to obtain such payment, Parent commences a suit that results in a judgment against Company for the amounts set forth in Section 9.3(b), Company shall pay to Parent its reasonable costs and
expenses (including reasonable attorneys fees and expenses) in connection with such suit, together with interest on the amounts set forth in Sections 9.3(b), from the date of termination of this Agreement at a rate per annum equal to
the prime rate as published in the Wall Street Journal in effect on the date such payment was required to be made (the Prime Rate). If Parent fails promptly to pay any amounts due pursuant to Section 9.3(c),
and, in order to obtain such payment, Company commences a suit that results in a judgment against Parent for the amounts set forth in Section 9.3(c), Parent shall pay to Company its reasonable costs and expenses (including reasonable
attorneys fees and expenses) in connection with such suit, together with interest on the amounts set forth in Section 9.3(c), from the date of termination of this Agreement at a rate per annum equal to the Prime Rate.
(e) The Parent Termination Fee shall be an amount equal to the lesser of (i) $70,000,000 (the Parent Base
Amount) and (ii) the maximum amount, if any, that can be paid to Company without causing Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code (the REIT Requirements) for such
year determined as if (a) the payment of such amount did not constitute Qualifying Income, and (b) Company has 0.5% of its gross income from unknown sources during such year which was not Qualifying Income (in addition to any known or
anticipated income of Company which was not Qualifying Income), in each case as determined by independent accountants engaged by Company. Notwithstanding the foregoing, in the event Company receives Tax Guidance providing that Companys receipt
of the Parent Base Amount should either constitute Qualifying Income or should be excluded from gross income within the meaning of the REIT Requirements, the Parent Termination Fee shall be an amount equal to the Parent Base Amount and Parent shall,
upon receiving notice that Company has received the Tax Guidance, pay to Company the unpaid Parent Base Amount within five (5) Business Days. In the event that Company is not able to receive the full Parent Base Amount due to the above
limitations, Parent shall place the unpaid amount in escrow (the Parent Termination Fee Escrow) by wire transfer within three (3) days of the date when the Parent Termination Fee would otherwise be due but for the above
limitations and shall not release any portion thereof to Company unless and until Company receives either one or a combination of the following once or more often: (i) subject to Companys prior delivery to Parent of the Company Tax
Accrual Opinion (as defined below) with respect to such escrow, a letter from Companys independent accountants indicating the maximum amount that can be paid at that time to Company without causing Company to fail to meet the REIT Requirements
(calculated as described above) or (ii) the Tax Guidance, in either of which events Parent shall pay to Company the lesser of the unpaid Parent Base Amount or the maximum amount stated in the letter referred to in (i) above within five
(5) Business Days after Parent has been notified thereof. The obligation of Parent to pay any unpaid portion of the Parent Termination Fee shall terminate on the December 31 following the date which is three (3) years from the date
the Parent Termination Fee first becomes payable under Section 9.3(c). Amounts remaining in escrow after the obligation of Parent to pay the Parent Termination Fee terminates shall be released to Parent. The Company Tax Accrual
Opinion means an opinion of nationally recognized federal income tax counsel experienced in REIT Tax matters based on then applicable law and complying with the requirements of Treasury Regulations Section 1.856-7(c)(2) to the effect
that the deposit into the Parent Termination Fee Escrow or the Company Expense Reimbursement Escrow, as applicable, should not cause Company to recognize income for U.S. federal income tax purposes for any Company taxable year in excess of the
amount released from such escrow to Company in such taxable year.
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(f) The Company Expense Reimbursement shall be an amount equal to the
lesser of (i) the Company Expense Reimbursement Base Amount and (ii) the maximum amount, if any, that can be paid to Company without causing it to fail to meet the REIT Requirements for such year determined as if (a) the payment of
such amount did not constitute Qualifying Income, and (b) Company has 0.5% of its gross income of income from unknown sources during such year which was not Qualifying Income (in addition to any known or anticipated income of Company which was
not Qualifying Income), in each case as determined by independent accountants to Company. Notwithstanding the foregoing, in the event Company receives Tax Guidance providing that Companys receipt of the Company Expense Reimbursement Base
Amount should either constitute Qualifying Income or should be excluded from gross income within the meaning of the REIT Requirements, the Company Expense Reimbursement shall be an amount equal to the Company Expense Reimbursement Base Amount and
Parent shall, upon receiving notice that Company has received the Tax Guidance, pay to Company the unpaid Company Expense Reimbursement Base Amount within five (5) Business Days. In the event that Company is not able to receive the full Company
Expense Reimbursement Base Amount due to the above limitations, Parent shall place the unpaid amount in escrow (the Company Expense Reimbursement Escrow) by wire transfer within three (3) days of the Company Expense
Reimbursement first becomes payable under Section 9.3(c) and shall not release any portion thereof to Company unless and until Company receives either one or a combination of the following once or more often: (i) subject to
Companys prior delivery of the Company Tax Accrual Opinion with respect to such escrow, a letter from Companys independent accountants indicating the maximum amount that can be paid at that time to Company without causing Company to fail
to meet the REIT Requirements (calculated as described above) or (ii) the Tax Guidance, in either of which events Parent shall pay to Company the lesser of the unpaid Company Expense Reimbursement Base Amount or the maximum amount stated in the
letter referred to in (i) above within five (5) Business Days after Parent has been notified thereof. The obligation of Parent to pay any unpaid portion of the Company Expense Reimbursement shall terminate on the December 31 following
the date which is three (3) years from the date the Company Expense Reimbursement first becomes payable under Section 9.3(c). Amounts remaining in escrow after the obligation of Parent to pay the Company Expense Reimbursement
terminates shall be released to Parent.
(g) The Company Termination Fee shall be an amount equal to the lesser of
(i) $107,000,000 (the Company Base Amount) and (ii) the maximum amount, if any, that can be paid to Parent without causing Parent to fail to meet the REIT Requirements for such year determined as if (a) the payment
of such amount did not constitute Qualifying Income, and (b) Parent has 0.5% of its gross income from unknown sources during such year which was not Qualifying Income (in addition to any known or anticipated income of Parent which was not
Qualifying Income), in each case as determined by independent accountants engaged by Parent. Notwithstanding the foregoing, in the event Parent receives Tax Guidance providing that Parents receipt of the Company Base Amount would either
constitute Qualifying Income or would be excluded from gross income within the meaning of the REIT Requirements, the Company Termination Fee shall be an amount equal to the Company Base Amount and Company shall, upon
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receiving notice that Parent has received the Tax Guidance, pay to Parent the unpaid Company Base Amount within five (5) Business Days. In the event that Parent is not able to receive the
full Company Base Amount due to the above limitations, Company shall place the unpaid amount in escrow (the Company Termination Fee Escrow) by wire transfer within three (3) days of the date when the Company Termination Fee
would otherwise be due but for the above limitations and shall not release any portion thereof to Parent unless and until Parent receives either one or a combination of the following once or more often: (i) subject to Parents prior
delivery to the Company of the Parent Tax Accrual Opinion (as defined below) with respect to such escrow, a letter from Parents independent accountants indicating the maximum amount that can be paid at that time to Parent without causing
Parent to fail to meet the REIT Requirements (calculated as described above) or (ii) the Tax Guidance, in either of which events Company shall pay to Parent the lesser of the unpaid Company Base Amount or the maximum amount stated in the letter
referred to in (i) above within five (5) Business Days after Company has been notified thereof. The obligation of Company to pay any unpaid portion of the Company Termination Fee shall terminate on the December 31 following the date
which is three (3) years from the date the Company Termination Fee first becomes payable under Section 9.3(b). Amounts remaining in escrow after the obligation of Company to pay the Company Termination Fee terminates shall be
released to Company. The Parent Tax Accrual Opinion means an opinion of nationally recognized federal income tax counsel experienced in REIT Tax matters based on then applicable law and complying with the requirements of Treasury
Regulations Section 1.856-7(c)(2) it is more likely than not that to the effect that the deposit into the Company Termination Fees Escrow or the Parent Expense Reimbursement Escrow, as applicable, would not cause Parent to recognize income for
U.S. federal income tax purposes for any Parent taxable year in excess of the amount released from such escrow to Parent in such taxable year.
(h) The Parent Expense Reimbursement shall be an amount equal to the lesser of (i) the Parent Expense Reimbursement
Base Amount and (ii) the maximum amount, if any, that can be paid to Parent without causing it to fail to meet the REIT Requirements for such year determined as if (a) the payment of such amount did not constitute Qualifying Income, and
(b) Parent has 0.5% of its gross income of income from unknown sources during such year which was not Qualifying Income (in addition to any known or anticipated income of Parent which was not Qualifying Income), in each case as determined by
independent accountants to Parent. Notwithstanding the foregoing, in the event Parent receives Tax Guidance providing that Parents receipt of the Parent Expense Reimbursement Base Amount should either constitute Qualifying Income or should be
excluded from gross income within the meaning of the REIT Requirements, the Parent Expense Reimbursement shall be an amount equal to the Parent Expense Reimbursement Base Amount and Company shall, upon receiving notice that Parent has received the
Tax Guidance, pay to Parent the unpaid Parent Expense Reimbursement Base Amount within five (5) Business Days. In the event that Parent is not able to receive the full Parent Expense Reimbursement Base Amount due to the above limitations,
Company shall place the unpaid amount in escrow (the Parent Expense Reimbursement Escrow) by wire transfer within three (3) days of the Parent Expense Reimbursement first becomes payable under Section 9.3(b) and
shall not release any portion thereof to Parent unless and until Parent receives either one or a combination of the following once or more often: (i) subject to Parents prior delivery of the Parent Tax Accrual Opinion with respect to such
escrow, a letter from Parents independent accountants indicating the maximum amount that can be paid at that time to Parent without causing Parent to
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fail to meet the REIT Requirements (calculated as described above) or (ii) the Tax Guidance, in either of which events Company shall pay to Parent the lesser of the unpaid Parent Expense
Reimbursement Base Amount or the maximum amount stated in the letter referred to in (i) above within five (5) Business Days after Company has been notified thereof. The obligation of Company to pay any unpaid portion of the Parent Expense
Reimbursement shall terminate on the December 31 following the date which is three (3) years from the date the Parent Expense Reimbursement first becomes payable under Section 9.3(b). Amounts remaining in escrow after the
obligation of Company to pay the Parent Expense Reimbursement terminates shall be released to Company.
Section 9.4
Amendment. Subject to compliance with applicable Law, this Agreement may be amended by mutual agreement of the Parties hereto by action taken or authorized by the Company Board and the Parent Board, respectively, at any time before or after
receipt of the Company Stockholder Approval or the Parent Shareholder Approval and prior to the Effective Time; provided, that after the Company Stockholder Approval or the Parent Shareholder Approval has been obtained, there shall not be
(a) any amendment of this Agreement that changes the amount or the form of the consideration to be delivered under this Agreement to the holders of Company Common Stock, or which by applicable Law or, in the case of Parent, in accordance with
the rules of NYSE requires the further approval of the stockholders of Company or shareholders of Parent without such further approval of such stockholders or shareholders, or (b) any amendment or change not permitted under applicable Law. This
Agreement may not be amended except by an instrument in writing signed by each of the Parties hereto.
Section 9.5 Transfer
Taxes. Parent and Company shall cooperate in the preparation, execution and filing of all returns, questionnaires, applications or other documents regarding any real property transfer or gains, sales, use, transfer, value added, stock transfer
or stamp taxes, any transfer, recording, registration and other fees and any similar Taxes that become payable in connection with the transactions contemplated by this Agreement (together with any related interests, penalties or additions to Tax,
Transfer Taxes), and shall cooperate in attempting to minimize the amount of Transfer Taxes. From and after the Effective Time, the Surviving Entity shall pay or cause to be paid, without deduction or withholding from any
consideration or amounts payable to holders of Company Common Stock, all Transfer Taxes.
ARTICLE 10
GENERAL PROVISIONS
Section 10.1 Nonsurvival of Representations and Warranties and Certain Covenants. None of the representations and
warranties in this Agreement or in any instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such representations and warranties, shall survive the Effective Time. The covenants to be performed prior to
or at the Closing shall terminate at the Closing. This Section 10.1 shall not limit any covenant or agreement of the Parties that by its terms contemplates performance after the Effective Time.
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Section 10.2 Notices. All notices, requests, claims, consents, demands
and other communications under this Agreement shall be in writing and shall be deemed given on the date of actual delivery if delivered personally, sent by overnight courier (providing proof of delivery) to the Parties or sent by facsimile or email
of a pdf attachment (providing confirmation of transmission) at the following addresses or facsimile numbers (or at such other address or facsimile number for a Party as shall be specified by like notice); provided that any notice, request or
consent under Section 6.1 shall also be delivered to the individuals listed on Section 6.1 of the Parent Disclosure Letter and any notice, request or consent under Section 6.2 shall also be delivered to the individuals listed
on Section 6.2 of the Company Disclosure Letter:
Retail Properties of America, Inc.
2021 Spring Road, Suite 200
Oak Brook, IL 60523
Attn: Steven P. Grimes, Chief Executive Officer
email: *****
with a copy (which shall not constitute notice) to:
Goodwin Procter LLP
100 Northern Avenue
Boston, MA 02210
Attn: Gilbert G. Menna
Blake Liggio
email: gmenna@goodwinlaw.com
BLiggio@goodwinlaw.com
Fax: (617)-649-1496
Kite Realty Group Trust
30 S. Meridian Street, Suite 1100
Indianapolis, IN 46204
Attn: John A. Kite, Chairman and Chief Executive Officer
Heath R. Fear, Executive Vice President and Chief Financial
Officer
email: *****
*****
Fax: (317) 713-2764
with a copy (which shall not constitute notice) to:
Hogan Lovells US LLP
555 13th Street
NW Washington, DC 20004
Attn: David Bonser
Paul Manca
email: david.bonser@hoganlovells.com
paul.manca@hoganlovells.com
Fax: (202) 637-5910
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Section 10.3 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced under any present or future Law or public policy in any jurisdiction, as to that jurisdiction, (a) such term or other provision shall be fully separable, (b) this Agreement shall
be construed and enforced as if such invalid, illegal or unenforceable provision had never comprised a part hereof, (c) all other conditions and provisions of this Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable term or other provision or by its severance herefrom so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party, and
(d) such terms or other provision shall not affect the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced in any jurisdiction, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that
transactions contemplated by this Agreement be consummated as originally contemplated to the fullest extent possible.
Section 10.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and
all of which together shall be deemed one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered (by telecopy, electronic delivery or otherwise) to the other Parties.
Signatures to this Agreement transmitted by facsimile transmission, by electronic mail in portable document form (pdf), or by any other electronic means intended to preserve the original graphic and pictorial
appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.
Section 10.5 Entire Agreement. This Agreement (including the Exhibits, the Company Disclosure Letter and the Parent
Disclosure Letter) and the Confidentiality Agreement constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, between the Parties with respect to the subject matter of this Agreement.
Section 10.6 No Third-Party Beneficiaries. This Agreement is not intended to and shall not confer any rights or remedies
upon any person other than the Parties and their respective successors and permitted assigns, except for the provisions of Article 3 (which, from and after the Effective Time, shall be for the benefit of holders of shares of Company Common
Stock immediately prior to the Effective Time) and Section 7.6 (which, from and after the Effective Time shall be for the benefit of the Indemnified Parties). The representations and warranties in this Agreement are the product of
negotiations among the Parties and are for the sole benefit of the Parties. Any inaccuracies in such representations and warranties are subject to waiver by the Parties in accordance with Section 10.7 without notice or liability to any
other person. The representations and warranties in this Agreement may represent an allocation among the parties hereto of risks associated with particular matters regardless of the knowledge of any of the parties hereto. Accordingly, persons other
than the parties hereto may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.
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Section 10.7 Extension; Waiver. At any time prior to the Effective Time,
the Parties may (a) extend the time for the performance of any of the obligations or other acts of the other Parties, (b) waive any inaccuracies in the representations and warranties of the other Party contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) subject to the requirements of applicable Law, waive compliance with any of the agreements or conditions contained in this Agreement. Any agreement on the part of a Party to any such
extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such Party. The failure of any Party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver
of those rights.
Section 10.8 Governing Law. This Agreement and all claims or causes of actions (whether at Law, in
contract or in tort) that may be based upon, arise out of or be related to this Agreement or the negotiation, execution or performance of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Maryland
without giving effect to its conflicts of laws principles (whether the State of Maryland or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Maryland.
Section 10.9 Consent to Jurisdiction. Each Party irrevocably agrees (a) to submit itself to the exclusive jurisdiction
and forum of the Circuit Court for Baltimore City (Maryland) or, if that court does not have jurisdiction, to the United Stated District Court for the State of Maryland, Northern Division (the Maryland Courts) for the purpose of
any Action (whether based on contract, tort or otherwise), directly or indirectly, arising out of or relating to this Agreement or the transactions contemplated by this Agreement or the actions of the parties hereto in the negotiation,
administration, performance and enforcement of this Agreement, (b) to request and/or consent to the assignment of any dispute arising out of this Agreement or the transactions contemplated by this Agreement or the actions of the Parties in the
negotiation, administration, performance and enforcement of this Agreement to the Business and Technology Case Management Program of the Circuit Court for Baltimore City (Maryland), (c) that it will not attempt to deny or defeat such
jurisdiction or forum by motion or other request for leave from any such court, (d) that it will not bring any Action relating to this Agreement or the transactions contemplated by this Agreement or the actions of the parties hereto in the
negotiation, administration, performance and enforcement of this Agreement in any court other than the Maryland Courts, and (e) that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by Law. Each of the Parties agrees, that service of process may be made within or outside the State of Maryland, and agree that service of process on such Party at the address referred to in
Section 10.2 (or such other address as may be specified in accordance with Section 10.2) by prepaid certified mail with a proof of mailing receipt validated by the United States Postal Service constituting evidence of valid
service shall be deemed effective service of process. Service made pursuant to the foregoing sentence shall have the same legal force and effect as if served upon such Party personally within the State of Maryland.
Section 10.10 Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall
be assigned or delegated, in whole or in part, by operation of Law or otherwise, by any of the Parties without the prior written consent of the other Parties, and any attempt to make any such assignment without such consent shall be null and void.
Subject
to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective
successors and permitted assigns.
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Section 10.11 Specific Performance. The Parties agree that irreparable
damage would occur if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, and that monetary damages, even if available, would not be an adequate remedy therefor. It is
accordingly agreed that, prior to the termination of this Agreement pursuant to Article 9, each Party shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement, in addition to any other remedy to which such Party is entitled at Law or in equity.
Section 10.12 Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY (A) CERTIFIES THAT
NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 10.12.
Section 10.13 Authorship. The Parties agree that the terms and language of this Agreement are the result of negotiations
between the Parties and their respective advisors and, as a result, there shall be no presumption that any ambiguities in this Agreement shall be resolved against any Party. Any controversy over construction of this Agreement shall be decided
without regard to events of authorship or negotiation.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their respective
duly authorized officers, all as of the date first written above.
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KITE REALTY GROUP TRUST
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By:
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/s/ John A. Kite
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Name: John A. Kite
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Title: Chairman and Chief Executive Officer
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KRG OAK, LLC
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By:
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/s/ John A. Kite
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Name: John A. Kite
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Title: President
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RETAIL PROPERTIES OF AMERICA, INC.
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By:
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/s/ Steven P. Grimes
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Name: Steven P. Grimes
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Title: Chief Executive Officer
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[Signature Page to the Agreement and Plan of Merger]
Exhibit 3.1
AMENDMENT NO. 3 TO
SIXTH AMENDED
AND RESTATED BYLAWS
OF
RETAIL
PROPERTIES OF AMERICA, INC.
The Sixth Amended and Restated Bylaws of Retail Properties of America, Inc. is hereby amended by adding the following new
Article XII:
ARTICLE XII
EXCLUSIVE FORUM FOR CERTAIN LITIGATION
Unless the Company consents in writing to the selection of an alternative forum, the Circuit Court for Baltimore City,
Maryland, Business and Technology Case Management Program, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, shall be the sole and exclusive forum for (a) any derivative action or
proceeding brought on behalf of the Company, other than actions arising under federal securities laws, (b) any Internal Corporate Claim, as such term is defined in the MGCL, or any successor provision thereof, including, without limitation,
(i) any action asserting a claim of breach of any duty owed by any current or former director or officer or other employee of the Company to the Company or to the stockholders of the Company or (ii) any other action asserting a claim
against the Company or any current or former director or officer or other employee of the Company arising pursuant to any provision of the MGCL, the Articles or these Bylaws, or (iv) any action asserting a claim against the Company or any
current or former director or officer or other employee of the Company that is governed by the internal affairs doctrine.
None of the foregoing actions, claims or proceedings may be brought in any court sitting outside the State of Maryland unless
the Company consents in writing to such court.
Unless the Company consents in writing to the selection of an alternative
forum, 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.
As the Company would be irreparably harmed by any action filed in violation of this Article XII and
could not be adequately compensated by monetary damages alone, the Company shall be entitled to specific performance of this Article XII and to temporary, preliminary and permanent injunctive relief to specifically enforce the terms of this Article
XII and to prevent any breaches thereof.
Except as herein amended, the provisions of the Bylaws shall remain in full force and effect.
Adopted and effective as of July 17, 2021.
Exhibit 99.1
Kite Realty Group Trust and Retail Properties of America, Inc.
Announce $7.5 Billion Strategic Merger
Expected to be Immediately Accretive to Earnings per Share While Improving Balance Sheet
Strengthens High-Quality Open-Air Shopping Center Portfolio
Expands Presence in Strategic Markets
Provides Future Value Creation Opportunities
Creates a Top 5 Shopping Center REIT by Total Enterprise Value
Indianapolis, IN & Chicago, IL (July 19, 2021) - Kite Realty Group Trust (NYSE: KRG) and Retail Properties of America, Inc.
(NYSE: RPAI) today announced that they have entered into a definitive merger agreement under which RPAI would merge into a subsidiary of KRG, with KRG continuing as the surviving public company. The strategic transaction joins together two
high-quality portfolios with complementary geographic footprints creating a top five shopping center REIT by enterprise value. The combined company is expected to have an equity market capitalization of approximately $4.6 billion and a total
enterprise value of approximately $7.5 billion upon the closing of the transaction assuming a KRG share price of $20.83, which was the closing price on July 16, 2021. This immediately accretive transaction, paired with a strong balance
sheet and significant value creation opportunities, is expected to provide a runway to increase long-term value for shareholders.
Under the terms of the
merger agreement, each RPAI common share will be converted into 0.6230 newly issued KRG common shares in a 100% stock-for-stock transaction. Based on the closing share
price for KRG on July 16, 2021, this represents a 13% premium to RPAIs closing stock price on July 16, 2021. On a pro forma basis, following the closing of the transaction, KRG shareholders are expected to own approximately 40% of
the combined companys equity and RPAI shareholders are expected to own approximately 60%. KRG anticipates assuming all RPAI debt and has obtained a financing commitment to provide a $1.1 billion term loan bridge facility in the event
certain debt consents cannot be obtained prior to the closing of the transaction. The parties expect the transaction to close during the fourth quarter of 2021 subject to customary closing conditions, including the approval of both KRG and RPAI
shareholders. The transaction was unanimously approved by the Board of Trustees of KRG and the Board of Directors of RPAI.
The merger will create an
operating portfolio of 185 open-air shopping centers comprised of approximately 32 million square feet of owned gross leasable area. These properties are primarily located in Warmer and
Cheaper metro markets in the United States with 70% of centers by annualized base rent (ABR) having a grocery component. The combined company is expected to benefit from increased scale and density in strategic markets, deeper
tenant relationships given the broader mix of open-air retail types, an appropriately sized development pipeline and a strong balance sheet.
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This merger marks a momentous day for KRG and our shareholders, said John A. Kite, Chairman and
CEO of Kite Realty Group. The combination of our firms brings together two high-quality, complementary portfolios. The combined company will have durable cash flows, operational upside and external value creation opportunities. The financial
benefits of the transaction include immediate earnings accretion, while maintaining a strong balance sheet. This merger further demonstrates our conviction in open-air retail centers as essential shopping
destinations and last mile fulfillment centers. We are energized about the future of this combined company.
After many years of curating both
of our portfolios, combining them into one company will allow us to generate the best results for both sets of shareholders over the long term, said Steven P. Grimes, CEO of RPAI. Our increased scale will benefit the business both
operationally and financially, allowing us to take advantage of reduced cost of capital as well as pursue future value creation opportunities by partnering KRGs development expertise with our embedded development pipeline. We are excited to
present this transaction to our shareholders, who will be the beneficiaries of the near-term and future benefits of the combined company.
Summary of Strategic Benefits
The merger of KRG and RPAI
is expected to create a number of operational and financial benefits, including:
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Positive Financial Impacts and Immediate Accretion
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Provides immediate accretion to earnings per share upon realizing cash expense synergies of $27 -
$29 million.
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Larger scale will reduce cost of capital, thereby driving higher net income to shareholders.
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Significantly increases shareholder liquidity allowing larger investor base to hold more meaningful positions in
the combined entity.
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Enhances Portfolio Quality and Diversification
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Retail ABR per square foot of $19.29.
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Broader mix of open-air retail types allowing for deeper and more diverse
tenant relationships.
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70% of ABR is located in centers with a grocery component.
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Diverse combined tenant base with no single tenant representing more than 2.4% of total ABR.
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Significant Presence in Strategic Markets
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Maintains sector-leading exposure to Warmer and Cheaper markets.
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Substantial portfolio concentration, with approximately 40% of ABR in growth states of Texas and Florida.
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Bolsters presence in Dallas, Atlanta, Houston and Austin.
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Meaningful presence in other strategic gateway markets such as Washington, D.C., New York, and Seattle.
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Generates Significant Value Creation Opportunities
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Presents near-term, organic growth opportunities through lease-up of
vacancies caused by the pandemic.
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Active development and redevelopment projects expected to deliver additional Net Operating Income.
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KRGs extensive development expertise in a variety of property types provides additional potential value
creation for both active and future development projects.
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Appropriately sized and measured development pipeline will offer potential additional value creation
opportunities.
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Strengthens Balance Sheet
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Combined balance sheet poised to capture future growth opportunities.
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Net debt plus preferred to EBITDA ratio anticipated to be 6.0x inclusive of expected G&A synergies.
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No material debt maturities until 2023, with an appropriate maturity ladder going forward.
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Creates a Top 5 Shopping Center REIT
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Combined company will have an estimated $7.5 billion total enterprise value upon the closing of the
transaction assuming a KRG share price of $20.83, which was the closing price on July 16, 2021.
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Combination of operating best practices expected to drive Net Operating Income improvements.
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Deepens tenant relationships and increased optionality to a broader mix of
open-air retail formats.
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Leadership and Organization
The combined company will continue to be operated at the high standards previously established at both KRG and RPAI. The number of trustees on KRGs board
will be expanded to thirteen with four members of the existing Board of Directors of RPAI to be appointed to KRGs board. John Kite will continue to serve as Chairman of the Board of Trustees of the combined company. William Bindley will
continue to serve as Lead Independent Trustee.
The KRG management team will lead the combined company, with John Kite as Chief Executive Officer, Thomas
McGowan as President and Chief Operating Officer and Heath Fear as Chief Financial Officer. The approach to integration will draw from the best practices of both companies to ensure continuity for tenants, employees and other stakeholders.
Upon completion of the merger, the companys headquarters will remain in Indianapolis, Indiana. The company will retain the Kite Realty Group name and
trademarks and will continue to trade under the NYSE symbol KRG.
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Dividend Policy
KRG intends to maintain its current dividend policy post-closing. Given the current dividend levels and conversion ratio, RPAI shareholders will experience a
dividend increase of approximately 50% from current levels (based on current annualized distribution amount).
The timing of the pre-closing dividends of KRG and RPAI will be coordinated such that, if one set of shareholders receives their dividend for a particular quarter prior to the closing of the merger, the other set of shareholders will
also receive their dividend for such quarter prior to the closing of the merger.
Advisors
BofA Securities is acting as lead financial advisor to KRG, with KeyBanc Capital Markets also acting as financial advisor to KRG. Hogan Lovells US LLP is
acting as legal advisor to KRG. Citigroup Global Markets Inc. is acting as exclusive financial advisor and Goodwin Procter LLP is acting as legal advisor to RPAI.
Merger Call
The companies will conduct a joint
conference call to discuss the merger transaction on Monday, July 19, 2021, at 8:00 a.m. Eastern Time. A live webcast of the conference call will be available on KRGs corporate website at www.kiterealty.com and RPAIs
corporate website at www.rpai.com. The dial-in numbers are (844) 309-0605 for domestic callers and (574) 990-9933 for
international callers (Conference ID: 7994881). In addition, a webcast replay link will be available on both corporate websites.
About Kite
Realty Group Trust
Kite Realty Group Trust is a full-service, vertically integrated real estate investment trust (REIT) that provides communities
with convenient and beneficial shopping experiences. We connect consumers to retailers in desirable markets through our portfolio of neighborhood, community, and lifestyle centers. Using operational, development, and redevelopment expertise, we
continuously optimize our portfolio to maximize value and return to our shareholders. For more information, please visit our website at kiterealty.com.
Connect with KRG: LinkedIn | Twitter | Instagram | Facebook
About Retail Properties of America
Retail
Properties of America, Inc. is a REIT that owns and operates high quality, strategically located open-air shopping centers, including properties with a mixed-use
component. As of March 31, 2021, RPAI owned 102 retail operating properties in the United States representing 19.9 million square feet. RPAI is publicly traded on the New York Stock Exchange under the symbol RPAI. Additional information
about RPAI is available at www.rpai.com.
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Forward Looking Statements
This release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities
Act), and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the proposed transaction between KRG and RPAI, including statements regarding the anticipated benefits of the transaction, the anticipated timing of
the transaction and the markets of each company. These forward-looking statements generally are identified by the words believe, project, expect, anticipate, estimate, intend,
strategy, future, opportunity, plan, may, should, will, would, will be, will continue, will likely result and similar
expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties.
Currently, one of the most significant factors that could cause actual future events and results of KRG, RPAI and the combined company to differ materially
from the forward-looking statements is the potential adverse effect of the current pandemic of the novel coronavirus (COVID-19 pandemic), including possible resurgences and mutations, on the
financial condition, results of operations, cash flows and performance of KRG and RPAI and their tenants, the real estate market and the global economy and financial markets. The effects of the COVID-19
pandemic have caused and may continue to cause many of KRGs and RPAIs tenants to close stores, reduce hours or significantly limit service, making it difficult for them to meet their obligations, and therefore has and will continue to
impact KRG and RPAI significantly for the foreseeable future.
Many additional factors could cause actual future events and results to differ materially
from the forward-looking statements, including but not limited to: (i) the possibility that KRG shareholders and/or RPAI stockholders do not approve the proposed transaction or that other conditions to the closing of the proposed transaction
are not satisfied or waived at all or on the anticipated timeline; (ii) failure to realize the anticipated benefits of the proposed transaction, including as a result of delay in completing the proposed transaction; (iii) the risk that
RPAIs business will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; (iv) unexpected costs or liabilities relating to the proposed transaction; (v) potential
litigation relating to the proposed transaction that could be instituted against KRG or RPAI or their respective trustees, directors or officers and the resulting expense or delay; (vi) the risk that disruptions caused by or relating to the
proposed transaction will harm KRGs or RPAIs business, including current plans and operations; (vii) the ability of KRG or RPAI to retain and hire key personnel; (viii) potential adverse reactions by tenants or other business
partners or changes to business relationships, including joint ventures, resulting from the announcement or completion of the proposed transaction; (ix) risks relating to the market value of the KRG common shares to be issued in the proposed
transaction; (x) risks associated with third party contracts containing consent and/or other provisions that may be triggered by the proposed transaction; (xi) the impact of public health crises, such as pandemics (including the COVID-19 pandemic) and epidemics and any related company or government policies and actions intended to protect the health and safety of individuals or government policies or actions intended to maintain the
functioning of national or global economies and markets; (xii) general economic and market developments and conditions; (xiii) restrictions during the pendency of the proposed transaction or
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thereafter that may impact KRGs or RPAIs ability to pursue certain business opportunities or strategic transactions; (xiv) either companys ability to maintain its status as
a real estate investment trust for U.S. federal income tax purposes; and (xv) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement relating to the proposed transaction. The
foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect the businesses of KRG and RPAI described in the Risk Factors section of their respective
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed by either of them from time to time with the SEC. These filings identify and
address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Investors are cautioned to interpret many of the risks identified in the
Risk Factors section of these filings as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. Forward-looking statements speak only as of the date they
are made. Readers are cautioned not to put undue reliance on forward-looking statements, and KRG and RPAI assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future
events or otherwise. Neither KRG nor RPAI gives any assurance that either KRG or RPAI will achieve its expectations.
Additional Information about
the Proposed Transaction and Where to Find It
This communication relates to a proposed transaction between KRG and RPAI. In connection with the
proposed transaction, KRG will file a registration statement on Form S-4 with the Securities and Exchange Commission (the SEC), which will include a document that serves as a joint proxy
statement/prospectus of KRG and RPAI. A joint proxy statement/prospectus will be sent to all KRG shareholders and all RPAI stockholders. Each party also will file other documents regarding the proposed transaction with the SEC. BEFORE MAKING ANY
VOTING DECISION, INVESTORS AND SECURITY HOLDERS OF KRG AND INVESTORS AND SECURITY HOLDERS OF RPAI ARE URGED TO READ THE REGISTRATION STATEMENT, JOINT PROXY STATEMENT/PROSPECTUS AND ALL OTHER RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED WITH THE
SEC IN CONNECTION WITH THE PROPOSED TRANSACTION AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors, KRG shareholders and RPAI stockholders may obtain free copies of the joint proxy statement/prospectus (when available) and other documents that are
filed or will be filed with the SEC by KRG or RPAI through the website maintained by the SEC at www.sec.gov. The documents filed by KRG with the SEC also may be obtained free of charge at KRGs investor relations website at
http://ir.kiterealty.com/ or upon written request to Investor Relations, Kite Realty Group Trust, 30 S. Meridian Street, Suite 1100, Indianapolis, IN 46204. The documents filed by RPAI with the SEC also may be obtained free of charge at RPAIs
website at www.rpai.com under the heading Invest or upon written request to Investor Relations, Retail Properties of America, Inc., 2021 Spring Road, Suite 200, Oak Brook, IL 60523, or IR@rpai.com.
6
Participants in the Solicitation
KRG and RPAI and their respective trustees, directors and executive officers may be deemed to be participants in the solicitation of proxies from KRGs
shareholders and RPAIs stockholders in connection with the proposed transaction. Information about KRGs trustees and executive officers and their ownership of KRGs common shares and units of limited partnership interest of Kite
Realty Group, L.P. is set forth in KRGs proxy statement for its Annual Meeting of Shareholders on Schedule 14A filed with the SEC on March 31, 2021. Information about RPAIs directors and executive officers and their ownership of
RPAIs common stock is set forth in RPAIs proxy statement for its Annual Meeting of Stockholders on Schedule 14A filed with the SEC on March 31, 2021. To the extent that holdings of KRGs or RPAIs securities have changed
since the amounts reported in KRGs or RPAIs proxy statement, such changes have been or will be reflected on Statements of Changes in Beneficial Ownership on Form 4 filed with the SEC. Additional information regarding the interests of
those persons and other persons who may be deemed participants in the proposed transaction may be obtained by reading the joint proxy statement/prospectus regarding the proposed transaction when it becomes available. You may obtain free copies of
these documents as described in the preceding paragraph.
No Offer or Solicitation
This communication is not intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any vote of approval, 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 made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
7
Kite Realty Group Investor Contact
Jason Colton, SVP, Capital Markets & Investor Relations
317.713.2762
jcolton@kiterealty.com
Kite Realty Group Media Contact
Bryan McCarthy, SVP,
Marketing & Communications
317.713.5692
bmccarthy@kiterealty.com
RPAI Investor Contact
Michael Gaiden, SVP Finance
630.634.4233
gaiden@rpai.com
8
Exhibit 99.2 KITE REALTY GROUP + RPAI STRATEGIC MERGER Investor
Presentation © 2021 Kite Realty Group | kiterealty.com © 2021 Kite Realty Group | kiterealty.comExhibit 99.2 KITE REALTY GROUP + RPAI STRATEGIC MERGER Investor Presentation © 2021 Kite Realty Group | kiterealty.com © 2021 Kite
Realty Group | kiterealty.com
KITE REALTY GROUP SAFE HARBOR Forward Looking Statements This
communication contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, with
respect to the proposed transaction between Kite Realty Group Trust (“KRG”) and Retail Properties of America, Inc. (“RPAI”), including statements regarding the anticipated benefits of the transaction, the anticipated timing
of the transaction and the markets of each company. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,”
“intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,”
“will likely result” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks
and uncertainties. Currently, one of the most significant factors that could cause actual future events and results of KRG, RPAI and the combined company to differ materially from the forward-looking statements is the potential adverse effect of the
current pandemic of the novel coronavirus (“COVID-19 pandemic”), including possible resurgences and mutations, on the financial condition, results of operations, cash flows and performance of KRG and RPAI and their tenants, the real
estate market and the global economy and financial markets. The effects of the COVID-19 pandemic have caused and may continue to cause many of KRG’s and RPAI’s tenants to close stores, reduce hours or significantly limit service, making
it difficult for them to meet their obligations, and therefore has and will continue to impact KRG and RPAI significantly for the foreseeable future. Many additional factors could cause actual future events and results to differ materially from the
forward-looking statements, including but not limited to: (i) the possibility that KRG shareholders and/or RPAI stockholders do not approve the proposed transaction or that other conditions to the closing of the proposed transaction are not
satisfied or waived at all or on the anticipated timeline; (ii) failure to realize the anticipated benefits of the proposed transaction, including as a result of delay in completing the proposed transaction; (iii) the risk that RPAI’s business
will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; (iv) unexpected costs or liabilities relating to the proposed transaction; (v) potential litigation relating to the proposed
transaction that could be instituted against KRG or RPAI or their respective trustees, directors or officers and the resulting expense or delay; (vi) the risk that disruptions caused by or relating to the proposed transaction will harm KRG’s
or RPAI’s business, including current plans and operations; (vii) the ability of KRG or RPAI to retain and hire key personnel; (viii) potential adverse reactions by tenants or other business partners or changes to business relationships,
including joint ventures, resulting from the announcement or completion of the proposed transaction; (ix) risks relating to the market value of the KRG common shares to be issued in the proposed transaction; (x) risks associated with third party
contracts containing consent and/or other provisions that may be triggered by the proposed transaction; (xi) the impact of public health crises, such as pandemics (including the COVID-19 pandemic) and epidemics and any related company or government
policies and actions intended to protect the health and safety of individuals or government policies or actions intended to maintain the functioning of national or global economies and markets; (xii) general economic and market developments and
conditions; (xiii) restrictions during the pendency of the proposed transaction or thereafter that may impact KRG’s or RPAI’s ability to pursue certain business opportunities or strategic transactions; (xiv) either company’s
ability to maintain its status as a real estate investment trust for U.S. federal income tax purposes; and (xv) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement relating to
the proposed transaction. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect the businesses of KRG and RPAI described in the “Risk
Factors” section of their respective Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed by either of them from time to time with the SEC. These filings identify and address other important risks and
uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Investors are cautioned to interpret many of the risks identified in the “Risk Factors” section of
these filings as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. Forward- looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on
forward-looking statements, and KRG and RPAI assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. Neither KRG nor RPAI gives any assurance
that either KRG or RPAI will achieve its expectations. Additional Information about the Proposed Transaction and Where to Find It This communication relates to a proposed transaction between KRG and RPAI. In connection with the proposed transaction,
KRG will file a registration statement on Form S-4 with the Securities and Exchange Commission (the “SEC”), which will include a document that serves as a joint proxy statement/prospectus of KRG and RPAI. A joint proxy
statement/prospectus will be sent to all KRG shareholders and all RPAI stockholders. Each party also will file other documents regarding the proposed transaction with the SEC. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND SECURITY HOLDERS OF KRG
AND INVESTORS AND SECURITY HOLDERS OF RPAI ARE URGED TO READ THE REGISTRATION STATEMENT, JOINT PROXY STATEMENT/PROSPECTUS AND ALL OTHER RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION AS THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors, KRG shareholders and RPAI stockholders may obtain free copies of the joint proxy statement/prospectus (when available) and other documents
that are filed or will be filed with the SEC by KRG or RPAI through the website maintained by the SEC at www.sec.gov. The documents filed by KRG with the SEC also may be obtained free of charge at KRG’s investor relations website at
http://ir.kiterealty.com/ or upon written request to Investor Relations, Kite Realty Group Trust, 30 S. Meridian Street, Suite 1100, Indianapolis, IN 46204. The documents filed by RPAI with the SEC also may be obtained free of charge at RPAI’s
website at www.rpai.com under the heading Invest or upon written request to Investor Relations, Retail Properties of America, Inc., 2021 Spring Road, Suite 200, Oak Brook, IL 60523, or IR@rpai.com. Participants in the Solicitation KRG and RPAI and
their respective trustees, directors and executive officers may be deemed to be participants in the solicitation of proxies from KRG’s shareholders and RPAI’s stockholders in connection with the proposed transaction. Information about
KRG’s trustees and executive officers and their ownership of KRG’s common shares and units of limited partnership interest of Kite Realty Group, L.P. is set forth in KRG’s proxy statement for its Annual Meeting of Shareholders on
Schedule 14A filed with the SEC on March 31, 2021. Information about RPAI’s directors and executive officers and their ownership of RPAI’s common stock is set forth in RPAI’s proxy statement for its Annual Meeting of Stockholders
on Schedule 14A filed with the SEC on March 31, 2021. To the extent that holdings of KRG’s or RPAI’s securities have changed since the amounts reported in KRG’s or RPAI’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. Additional information regarding the interests of those persons and other persons who may be deemed participants in the proposed transaction may be obtained by
reading the joint proxy statement/prospectus regarding the proposed transaction when it becomes available. You may obtain free copies of these documents as described in the preceding paragraph. No Offer or Solicitation This communication is not
intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote of approval, 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 made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act. © 2021 Kite Realty Group | kiterealty.com 2KITE REALTY GROUP SAFE HARBOR Forward Looking Statements This communication contains certain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the proposed transaction between Kite Realty Group Trust (“KRG”) and
Retail Properties of America, Inc. (“RPAI”), including statements regarding the anticipated benefits of the transaction, the anticipated timing of the transaction and the markets of each company. These forward-looking statements
generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,”
“opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result” and similar expressions.
Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Currently, one of the most significant
factors that could cause actual future events and results of KRG, RPAI and the combined company to differ materially from the forward-looking statements is the potential adverse effect of the current pandemic of the novel coronavirus
(“COVID-19 pandemic”), including possible resurgences and mutations, on the financial condition, results of operations, cash flows and performance of KRG and RPAI and their tenants, the real estate market and the global economy and
financial markets. The effects of the COVID-19 pandemic have caused and may continue to cause many of KRG’s and RPAI’s tenants to close stores, reduce hours or significantly limit service, making it difficult for them to meet their
obligations, and therefore has and will continue to impact KRG and RPAI significantly for the foreseeable future. Many additional factors could cause actual future events and results to differ materially from the forward-looking statements,
including but not limited to: (i) the possibility that KRG shareholders and/or RPAI stockholders do not approve the proposed transaction or that other conditions to the closing of the proposed transaction are not satisfied or waived at all or on the
anticipated timeline; (ii) failure to realize the anticipated benefits of the proposed transaction, including as a result of delay in completing the proposed transaction; (iii) the risk that RPAI’s business will not be integrated successfully
or that such integration may be more difficult, time-consuming or costly than expected; (iv) unexpected costs or liabilities relating to the proposed transaction; (v) potential litigation relating to the proposed transaction that could be instituted
against KRG or RPAI or their respective trustees, directors or officers and the resulting expense or delay; (vi) the risk that disruptions caused by or relating to the proposed transaction will harm KRG’s or RPAI’s business, including
current plans and operations; (vii) the ability of KRG or RPAI to retain and hire key personnel; (viii) potential adverse reactions by tenants or other business partners or changes to business relationships, including joint ventures, resulting from
the announcement or completion of the proposed transaction; (ix) risks relating to the market value of the KRG common shares to be issued in the proposed transaction; (x) risks associated with third party contracts containing consent and/or other
provisions that may be triggered by the proposed transaction; (xi) the impact of public health crises, such as pandemics (including the COVID-19 pandemic) and epidemics and any related company or government policies and actions intended to protect
the health and safety of individuals or government policies or actions intended to maintain the functioning of national or global economies and markets; (xii) general economic and market developments and conditions; (xiii) restrictions during the
pendency of the proposed transaction or thereafter that may impact KRG’s or RPAI’s ability to pursue certain business opportunities or strategic transactions; (xiv) either company’s ability to maintain its status as a real estate
investment trust for U.S. federal income tax purposes; and (xv) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement relating to the proposed transaction. The foregoing list of
factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect the businesses of KRG and RPAI described in the “Risk Factors” section of their respective Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and other documents filed by either of them from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements. Investors are cautioned to interpret many of the risks identified in the “Risk Factors” section of these filings as being heightened as a result of the ongoing and
numerous adverse impacts of the COVID-19 pandemic. Forward- looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and KRG and RPAI assume no obligation and do not
intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. Neither KRG nor RPAI gives any assurance that either KRG or RPAI will achieve its expectations. Additional Information
about the Proposed Transaction and Where to Find It This communication relates to a proposed transaction between KRG and RPAI. In connection with the proposed transaction, KRG will file a registration statement on Form S-4 with the Securities and
Exchange Commission (the “SEC”), which will include a document that serves as a joint proxy statement/prospectus of KRG and RPAI. A joint proxy statement/prospectus will be sent to all KRG shareholders and all RPAI stockholders. Each
party also will file other documents regarding the proposed transaction with the SEC. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND SECURITY HOLDERS OF KRG AND INVESTORS AND SECURITY HOLDERS OF RPAI ARE URGED TO READ THE REGISTRATION STATEMENT,
JOINT PROXY STATEMENT/PROSPECTUS AND ALL OTHER RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. Investors, KRG shareholders and RPAI stockholders may obtain free copies of the joint proxy statement/prospectus (when available) and other documents that are filed or will be filed with the SEC by KRG or RPAI through the website
maintained by the SEC at www.sec.gov. The documents filed by KRG with the SEC also may be obtained free of charge at KRG’s investor relations website at http://ir.kiterealty.com/ or upon written request to Investor Relations, Kite Realty Group
Trust, 30 S. Meridian Street, Suite 1100, Indianapolis, IN 46204. The documents filed by RPAI with the SEC also may be obtained free of charge at RPAI’s website at www.rpai.com under the heading Invest or upon written request to Investor
Relations, Retail Properties of America, Inc., 2021 Spring Road, Suite 200, Oak Brook, IL 60523, or IR@rpai.com. Participants in the Solicitation KRG and RPAI and their respective trustees, directors and executive officers may be deemed to be
participants in the solicitation of proxies from KRG’s shareholders and RPAI’s stockholders in connection with the proposed transaction. Information about KRG’s trustees and executive officers and their ownership of KRG’s
common shares and units of limited partnership interest of Kite Realty Group, L.P. is set forth in KRG’s proxy statement for its Annual Meeting of Shareholders on Schedule 14A filed with the SEC on March 31, 2021. Information about
RPAI’s directors and executive officers and their ownership of RPAI’s common stock is set forth in RPAI’s proxy statement for its Annual Meeting of Stockholders on Schedule 14A filed with the SEC on March 31, 2021. To the extent
that holdings of KRG’s or RPAI’s securities have changed since the amounts reported in KRG’s or RPAI’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. Additional information regarding the interests of those persons and other persons who may be deemed participants in the proposed transaction may be obtained by reading the joint proxy statement/prospectus regarding the proposed
transaction when it becomes available. You may obtain free copies of these documents as described in the preceding paragraph. No Offer or Solicitation This communication is not intended to and shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote of approval, 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 made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act. © 2021 Kite
Realty Group | kiterealty.com 2
KITE REALTY GROUP TRANSACTION OVERVIEW DETAILS • Kite Realty Group
Trust (“KRG”) is merging with Retail Properties of America (“RPAI”) in a strategic combination 1 to form a $7.5B shopping center REIT - 100% stock-for-stock transaction - Each share of RPAI common stock will be converted into
0.6230 KRG common shares - Valuation represents a 13% premium to RPAI’s closing stock price on July 16, 2021 - KRG anticipates assuming all RPAI outstanding debt • Pro forma ownership of approximately 40% KRG shareholders / 60% RPAI
shareholders MANAGEMENT & GOVERNANCE • Combined company will retain the Kite Realty Group name and continue to trade on the NYSE under the symbol KRG • KRG management team to lead the combined company and will remain headquartered in
Indianapolis • KRG board will be expanded to 13 trustees, with the addition of 4 new members from the existing RPAI Board FINANCIAL IMPACT • Transaction expected to be immediately accretive to earnings per share upon realizing expected
synergies • Expected synergies will reduce (Net Debt + Preferred) / EBITDA and strengthen the balance sheet • KRG intends to maintain its current dividend policy post-transaction - Cash dividend enhancement to RPAI common shareholders of
~50% (based on current annualized distribution amounts) TIMING • Expected closing in Q4 2021, subject to customary closing conditions, including KRG and RPAI shareholder approvals 1. Pro forma combined total enterprise value, assuming a KRG
stock price of $20.83, which was the closing price on July 16, 2021. © 2021 Kite Realty Group | kiterealty.com 3
KITE REALTY GROUP STRATEGIC RATIONALE • Transaction is expected to
be immediately accretive to earnings per share upon realizing expected synergies • KRG’s scalable platform along with overlap in portfolio composition is expected to provide substantial POSITIVE G&A and operating synergies FINANCIAL
IMPACTS - Expected annual cash expense synergies of $27M – $29M & IMMEDIATE ACCRETION • Larger scale expected to improve access to various types of capital, thereby reducing cost of capital • Significantly increases shareholder
liquidity, allowing for a larger investor base 1 • Increases retail ABR to $19.29 PSF from $18.53 PSF • 70% of ABR is located in centers with a grocery component • Substantial portfolio concentration, with approximately 40% of ABR
in growth states of Texas and Florida ENHANCES PORTFOLIO • Bolsters presence in Dallas, Atlanta, Houston, and Austin QUALITY & • Meaningful presence in other strategic gateway markets, including Washington, D.C. , New York, and
INCREASES PRESENCE IN Seattle 2 STRATEGIC MARKETS • Maintains sector-leading exposure to Warmer & Cheaper markets of approximately 60% of ABR 3 • Percentage of ABR in Coastal and Sun Belt markets of 87% of ABR 1. KRG ABR PSF and
leased rate definitions excludes rent and square footage from ground leases. RPAI metrics have been adjusted to conform to the KRG definition. 2. Warmer and Cheaper states include AL, AZ, CO, FL, GA, KY, LA, NC, NM, NV, OK, SC, TN, TX and UT. 3.
Coastal and Sun Belt states include AL, AZ, CA, CT, DE, FL, GA, KY, LA, MA, MD, ME, NC, NJ, NM, NV, NY, OK, OR, RI, SC, TN, TX, VA and WA. © 2021 Kite Realty Group | kiterealty.com 4KITE REALTY GROUP STRATEGIC RATIONALE • Transaction is
expected to be immediately accretive to earnings per share upon realizing expected synergies • KRG’s scalable platform along with overlap in portfolio composition is expected to provide substantial POSITIVE G&A and operating
synergies FINANCIAL IMPACTS - Expected annual cash expense synergies of $27M – $29M & IMMEDIATE ACCRETION • Larger scale expected to improve access to various types of capital, thereby reducing cost of capital • Significantly
increases shareholder liquidity, allowing for a larger investor base 1 • Increases retail ABR to $19.29 PSF from $18.53 PSF • 70% of ABR is located in centers with a grocery component • Substantial portfolio concentration, with
approximately 40% of ABR in growth states of Texas and Florida ENHANCES PORTFOLIO • Bolsters presence in Dallas, Atlanta, Houston, and Austin QUALITY & • Meaningful presence in other strategic gateway markets, including Washington,
D.C. , New York, and INCREASES PRESENCE IN Seattle 2 STRATEGIC MARKETS • Maintains sector-leading exposure to Warmer & Cheaper markets of approximately 60% of ABR 3 • Percentage of ABR in Coastal and Sun Belt markets of 87% of ABR 1.
KRG ABR PSF and leased rate definitions excludes rent and square footage from ground leases. RPAI metrics have been adjusted to conform to the KRG definition. 2. Warmer and Cheaper states include AL, AZ, CO, FL, GA, KY, LA, NC, NM, NV, OK, SC, TN,
TX and UT. 3. Coastal and Sun Belt states include AL, AZ, CA, CT, DE, FL, GA, KY, LA, MA, MD, ME, NC, NJ, NM, NV, NY, OK, OR, RI, SC, TN, TX, VA and WA. © 2021 Kite Realty Group | kiterealty.com 4
KITE REALTY GROUP STRATEGIC RATIONALE (CONT’D) • Presents
near-term organic growth opportunities through lease-up of vacancies caused by the pandemic • Combined active development / redevelopment projects provide opportunity for significant cash flow growth over the next few years GENERATES
SIGNIFICANT • KRG’s extensive development expertise in a variety of real estate types provides additional potential value VALUE CREATION creation for both active and future development projects OPPORTUNITIES • Appropriately sized
and measured future development pipeline offers additional growth opportunities • Combined balance sheet poised to capture future growth opportunities - Pro forma leverage of 6.0x (Net Debt + Preferred) / EBITDA (pro forma for expected G&A
synergies) STRENGTHENS BALANCE 1 • No material debt maturities until 2023, with an appropriate maturity ladder going forward SHEET • Weighted average interest rate and term of 3.78% and 4.6 years, respectively 2 • Creates a top 5
shopping center REIT with a pro forma $7.5B total enterprise value CREATES • Combination of operating best practices expected to drive NOI improvements TOP 5 SHOPPING • Deepens tenant relationships and increases optionality to a broader
mix of open-air retail formats CENTER REIT 1. Pro forma for assumption of RPAI debt. 2. Pro forma combined total enterprise value, assuming a KRG stock price of $20.83, which was the closing price on July 16, 2021. © 2021 Kite Realty Group |
kiterealty.com 5KITE REALTY GROUP STRATEGIC RATIONALE (CONT’D) • Presents near-term organic growth opportunities through lease-up of vacancies caused by the pandemic • Combined active development / redevelopment projects provide
opportunity for significant cash flow growth over the next few years GENERATES SIGNIFICANT • KRG’s extensive development expertise in a variety of real estate types provides additional potential value VALUE CREATION creation for both
active and future development projects OPPORTUNITIES • Appropriately sized and measured future development pipeline offers additional growth opportunities • Combined balance sheet poised to capture future growth opportunities - Pro forma
leverage of 6.0x (Net Debt + Preferred) / EBITDA (pro forma for expected G&A synergies) STRENGTHENS BALANCE 1 • No material debt maturities until 2023, with an appropriate maturity ladder going forward SHEET • Weighted average
interest rate and term of 3.78% and 4.6 years, respectively 2 • Creates a top 5 shopping center REIT with a pro forma $7.5B total enterprise value CREATES • Combination of operating best practices expected to drive NOI improvements TOP 5
SHOPPING • Deepens tenant relationships and increases optionality to a broader mix of open-air retail formats CENTER REIT 1. Pro forma for assumption of RPAI debt. 2. Pro forma combined total enterprise value, assuming a KRG stock price of
$20.83, which was the closing price on July 16, 2021. © 2021 Kite Realty Group | kiterealty.com 5
KITE REALTY GROUP OPTIMIZED REAL ESTATE PORTFOLIOS • Both firms
have generated shareholder value through recycling capital while creating exceptional portfolios of open-air retail centers ⁻ RPAI has sold over $3B and reinvested approximately $2B since its IPO, resulting in a refined portfolio and strong
financial position ⁻ KRG has continuously evolved since IPO, resulting in a high-quality portfolio, focused market strategy and strong balance sheet KRG PATH RPAI PATH IPO 2015 TODAY IPO 2016 TODAY # of Operating Retail Properties 30 110 83
252 156 102 Total Owned GLA (SF) 3M 15M 12M 34M 26M 20M 1 ABR PSF $10.57 $15.22 $18.53 $14.39 $16.89 $19.76 2 Warmer & Cheaper (% of ABR) 52% 76% 51% 52% 78% 46% Top Region (% of ABR) South 52% South 63% South 62% South 51% South 62% South 62%
Top State (% of ABR) TX 27% FL 28% FL 27% TX 24% TX 30% TX 34% Top MSA (% of ABR) Indianapolis 20% Indianapolis 9% Las Vegas 11% N/A Dallas 20% Dallas 23% 3 (Net Debt + Preferred)/EBITDA 13.2x 7.0x 6.6x 7.0x 6.0x 6.0x Note: Based on public filings
from IPO documents, YE 2004, 2012, 2015, 2016 and 1Q’2021 supplemental disclosures. 1. KRG ABR PSF and leased rate definitions excludes rent and square footage from ground leases. RPAI metrics have been adjusted to conform to the KRG
definition. 2. Warmer and Cheaper states include AL, AZ, CO, FL, GA, KY, LA, NC, NM, NV, OK, SC, TN, TX and UT. st 3. Based on results through March 31, 2021 and assumes KRG’s ground lease portfolio was sold at the beginning of the 1 quarter.
© 2021 Kite Realty Group | kiterealty.com 6KITE REALTY GROUP OPTIMIZED REAL ESTATE PORTFOLIOS • Both firms have generated shareholder value through recycling capital while creating exceptional portfolios of open-air retail centers ⁻
RPAI has sold over $3B and reinvested approximately $2B since its IPO, resulting in a refined portfolio and strong financial position ⁻ KRG has continuously evolved since IPO, resulting in a high-quality portfolio, focused market strategy and
strong balance sheet KRG PATH RPAI PATH IPO 2015 TODAY IPO 2016 TODAY # of Operating Retail Properties 30 110 83 252 156 102 Total Owned GLA (SF) 3M 15M 12M 34M 26M 20M 1 ABR PSF $10.57 $15.22 $18.53 $14.39 $16.89 $19.76 2 Warmer & Cheaper (% of
ABR) 52% 76% 51% 52% 78% 46% Top Region (% of ABR) South 52% South 63% South 62% South 51% South 62% South 62% Top State (% of ABR) TX 27% FL 28% FL 27% TX 24% TX 30% TX 34% Top MSA (% of ABR) Indianapolis 20% Indianapolis 9% Las Vegas 11% N/A
Dallas 20% Dallas 23% 3 (Net Debt + Preferred)/EBITDA 13.2x 7.0x 6.6x 7.0x 6.0x 6.0x Note: Based on public filings from IPO documents, YE 2004, 2012, 2015, 2016 and 1Q’2021 supplemental disclosures. 1. KRG ABR PSF and leased rate definitions
excludes rent and square footage from ground leases. RPAI metrics have been adjusted to conform to the KRG definition. 2. Warmer and Cheaper states include AL, AZ, CO, FL, GA, KY, LA, NC, NM, NV, OK, SC, TN, TX and UT. st 3. Based on results through
March 31, 2021 and assumes KRG’s ground lease portfolio was sold at the beginning of the 1 quarter. © 2021 Kite Realty Group | kiterealty.com 6
KITE REALTY GROUP WELL-POSITIONED FOR FUTURE GROWTH • Combination
creates a Top 5 owner of open-air real estate that is well-positioned for future growth KRG RPAI PRO FORMA # of Operating Properties 83 102 185 Total Owned GLA 12M 20M 32M 1 ABR PSF $18.53 $19.76 $19.29 1 Leased % 90.5% 92.3% 91.6% 2 % Exposure to
Centers with a Grocer Component 75% 67% 70% 3 % Warmer and Cheaper Markets by ABR 78% 46% 58% 4 % Coastal and Sun Belt Markets by ABR 84% 89% 87% 5 Equity Value ($B) $1.8 $2.8 $4.6 5 Enterprise Value ($B) $3.0 $4.5 $7.5 6 (Net Debt + Preferred) /
EBITDA 6.6x 6.0x 6.0x 1. KRG ABR PSF and leased rate definitions excludes rent and square footage from ground leases. RPAI metrics have been adjusted to conform to the KRG definition. 2. RPAI metric excludes two single-user retail centers. 3. Warmer
and Cheaper states include AL, AZ, CO, FL, GA, KY, LA, NC, NM, NV, OK, SC, TN, TX and UT. 4. Coastal and Sun Belt states include AL, AZ, CA, CT, DE, FL, GA, KY, LA, MA, MD, ME, NC, NJ, NM, NV, NY, OK, OR, RI, SC, TN, TX, VA and WA. 5. KRG and RPAI
values based on closing prices on July 16, 2001. Pro forma combined total equity value and enterprise value assumes a KRG stock price of $20.83, which was the closing price on July 16, 2021. st 6. Based on results through March 31, 2021 and assumes
KRG’s ground lease portfolio was sold at the beginning of the 1 quarter. © 2021 Kite Realty Group | kiterealty.com 7KITE REALTY GROUP WELL-POSITIONED FOR FUTURE GROWTH • Combination creates a Top 5 owner of open-air real estate that
is well-positioned for future growth KRG RPAI PRO FORMA # of Operating Properties 83 102 185 Total Owned GLA 12M 20M 32M 1 ABR PSF $18.53 $19.76 $19.29 1 Leased % 90.5% 92.3% 91.6% 2 % Exposure to Centers with a Grocer Component 75% 67% 70% 3 %
Warmer and Cheaper Markets by ABR 78% 46% 58% 4 % Coastal and Sun Belt Markets by ABR 84% 89% 87% 5 Equity Value ($B) $1.8 $2.8 $4.6 5 Enterprise Value ($B) $3.0 $4.5 $7.5 6 (Net Debt + Preferred) / EBITDA 6.6x 6.0x 6.0x 1. KRG ABR PSF and leased
rate definitions excludes rent and square footage from ground leases. RPAI metrics have been adjusted to conform to the KRG definition. 2. RPAI metric excludes two single-user retail centers. 3. Warmer and Cheaper states include AL, AZ, CO, FL, GA,
KY, LA, NC, NM, NV, OK, SC, TN, TX and UT. 4. Coastal and Sun Belt states include AL, AZ, CA, CT, DE, FL, GA, KY, LA, MA, MD, ME, NC, NJ, NM, NV, NY, OK, OR, RI, SC, TN, TX, VA and WA. 5. KRG and RPAI values based on closing prices on July 16, 2001.
Pro forma combined total equity value and enterprise value assumes a KRG stock price of $20.83, which was the closing price on July 16, 2021. st 6. Based on results through March 31, 2021 and assumes KRG’s ground lease portfolio was sold at
the beginning of the 1 quarter. © 2021 Kite Realty Group | kiterealty.com 7
KITE REALTY GROUP INCREASES PRESENCE IN STRATEGIC MARKETS ABR
Concentration 1 58% Warmer and Cheaper Markets Seattle – 4% Strategic Gateway Markets KRG 23%
llllllllllllllllllllllllllll
lllllllllllllllllllll
lllllllllllllllllllll (DC, Seattle and NYC)
llllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllll
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llllllllllllllllllllllllllll lllllll
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lllllllllllllllllllllllllll RPAI
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llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllll New York – 9%
llllllllllllll
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Washington, DC /
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
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lllllllllllllllllllll Baltimore – 10% Las Vegas – 4%
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lllllllllllllllllllll lllllll
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llllllllllllll lllllllllllllllllllll
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llllllllllllll llllllllllllll Phoenix –
2%llllllllllllllllllllllllllll Raleigh / Durham – 3%
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllll
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llllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllll lllllll
llllllllllllllllllllllllllll
2llllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllll
TOP 5 STATES
(ABR)lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
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lllllllllllllllllllll Charlotte – 2%
llllllllllllllllllllllllllll lllllll
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lllllllllllllllllllll Texas 27%
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llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
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lllllllllllllllllllll Atlanta – 4%
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llllllllllllllllllllllllllll Florida 10%
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llllllllllllll
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llllllllllllll
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llllllllllllllllllllllllllll New
Yorkllllllllllllllllllllllllllll
7%llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
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lllllllllllllllllllll Orlando / Daytona – 2%
llllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
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Maryland 6% lllllll llllllllllllllllllllllllllll
llllllllllllll
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llllllllllllllllllllllllllllllllllllllllll
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lllllllllllllllllllll Dallas / Fort Worth –
17%lllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllll Houston – 4% Virginia 5% lllllllllllllllllllll
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lllllllllllllllllllll Naples –
2%llllllllllllllllllllllllllll
llllllllllllll
llllllllllllllllllllllllllll
lllllllllllllllllllll 1. Warmer and Cheaper states include AL, AZ, CO, FL, GA, KY, LA, NC, NM, NV, OK, SC, TN, TX, and UT. © 2021 Kite
Realty Group | kiterealty.com Miami / Fort Lauderdale – 3% 2. As of March 31, 2021. 8KITE REALTY GROUP INCREASES PRESENCE IN STRATEGIC MARKETS ABR Concentration 1 58% Warmer and Cheaper Markets Seattle – 4% Strategic Gateway Markets KRG
23% llllllllllllllllllllllllllll
lllllllllllllllllllll
lllllllllllllllllllll (DC, Seattle and NYC)
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lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
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llllllllllllll llllllllllllllllllllll
lllllllllllllllllllllllllll RPAI
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lllllll
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lllllll llllllllllllll
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llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllll New York – 9%
llllllllllllll
llllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllll
lllllllllllllllllllll
llllllllllllllllllllllllllll lllllll
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lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
Washington, DC /
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllll
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llllllllllllll
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lllllllllllllllllllll Baltimore – 10% Las Vegas – 4%
llllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllll lllllll
llllllllllllllllllllllllllll
llllllllllllll lllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllll llllllllllllll
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lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllll
llllllllllllll
llllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
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lllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllll lllllll
lllllll llllllllllllllllllllllllllll
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lllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllll
lllllllllllllllllllll
llllllllllllllllllllllllllll
llllllllllllll llllllllllllll Phoenix –
2%llllllllllllllllllllllllllll Raleigh / Durham – 3%
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllll lllllll
llllllllllllllllllllllllllll
2llllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllll
TOP 5 STATES
(ABR)lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllll
lllllllllllllllllllll Charlotte – 2%
llllllllllllllllllllllllllll lllllll
llllllllllllllllllllllllllll
lllllllllllllllllllll
llllllllllllllllllllllllllll
lllllllllllllllllllll Texas 27%
lllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllll Atlanta – 4%
lllllllllllllllllllll
llllllllllllllllllllllllllll
lllllllllllllllllllll
llllllllllllllllllllllllllll
lllllllllllllllllllll
llllllllllllllllllllllllllll Florida 10%
lllllllllllllllllllll
llllllllllllllllllllllllllll
llllllllllllll
llllllllllllllllllllllllllll
llllllllllllll
llllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllll New
Yorkllllllllllllllllllllllllllll
7%llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllll lllllll
lllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllll Orlando / Daytona – 2%
llllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllll
Maryland 6% lllllll llllllllllllllllllllllllllll
llllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllll
lllllllllllllllllllll Dallas / Fort Worth –
17%lllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllllllllllllllllllllllllllllllllllllllllllllll
llllllllllllll Houston – 4% Virginia 5% lllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllllllllllllll
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llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllll Naples –
2%llllllllllllllllllllllllllll
llllllllllllll
llllllllllllllllllllllllllll
lllllllllllllllllllll 1. Warmer and Cheaper states include AL, AZ, CO, FL, GA, KY, LA, NC, NM, NV, OK, SC, TN, TX, and UT. © 2021 Kite
Realty Group | kiterealty.com Miami / Fort Lauderdale – 3% 2. As of March 31, 2021. 8
KITE REALTY GROUP MERGER CREATES TOP 5 SHOPPING CENTER REIT BY
VALUE… TOP 5 SHOPPING CENTER REITs $20.5 $15.2 $13.1 $11.6 $7.5 $5.9 $5.2 $3.7 $3.7 $3.6 $3.5 $1.9 $1.4 $1.0 $1.0 KIM + WRI REG FRT BRX KRG + PECO SITC AKR UE ROIC AAT RPT UBA CDR WSR RPAI Note: Market data as of July 16, 2021. Source of peer
data is FactSet. © 2021 Kite Realty Group | kiterealty.com 9 TOTAL ENTERPRISE VALUE ($, B)KITE REALTY GROUP MERGER CREATES TOP 5 SHOPPING CENTER REIT BY VALUE… TOP 5 SHOPPING CENTER REITs $20.5 $15.2 $13.1 $11.6 $7.5 $5.9 $5.2 $3.7 $3.7
$3.6 $3.5 $1.9 $1.4 $1.0 $1.0 KIM + WRI REG FRT BRX KRG + PECO SITC AKR UE ROIC AAT RPT UBA CDR WSR RPAI Note: Market data as of July 16, 2021. Source of peer data is FactSet. © 2021 Kite Realty Group | kiterealty.com 9 TOTAL ENTERPRISE VALUE
($, B)
KITE REALTY GROUP …AND A LEADING SHOPPING CENTER REIT BY KEY
METRICS 1 $29.95 ABR PSF (NET DEBT + PREFERRED) / EBITDA 7.6x 7.1x $22.97 6.5x $19.29 $18.79 6.0x 5.9x $15.05 #3 #2 FRT REG KRG + RPAI KIM + WRI BRX REG KRG + RPAI BRX FRT KIM + WRI 3 2 CENTERS WITH A GROCERY COMPONENT AVERAGE HHI (3-MILE) 80% $104K
79% $96K $95K 75% $86K 70% 70% #3 $75K #4 FRT REG KRG + RPAI KIM + WRI BRX REG KIM + WRI FRT KRG + RPAI BRX 5 4 COASTAL AND SUN BELT EXPOSURE WARMER AND CHEAPER EXPOSURE 58% 89% 87% 86% 45% 42% 82% 37% #1 #2 68% 4% KRG + RPAI KIM + WRI BRX REG FRT
REG KRG + RPAI FRT KIM + WRI BRX Note: Comparison to only top 5 shopping center REITs by total enterprise value. Source of all company data is from supplemental disclosures from 1Q 2021. 1. KRG ABR PSF and leased rate definitions excludes rent and
square footage from ground leases. RPAI metrics have been adjusted to conform to the KRG definition. 2. 3-Mile average household income demographics are weighted value and sourced from Green Street as of December 31, 2020, except KRG’s
weighted by 1Q 2021 NOI and sourced from PopStats. 3. Based on ABR with the exception of FRT, which is based on GLA. RPAI ABR as of today calculated excluding single-user retail. © 2021 Kite Realty Group | kiterealty.com 4. Based on ABR with
the exception of FRT, which is based on GLA. Warmer and Cheaper states include AL, AZ, CO, FL, GA, KY, LA, NC, NM, NV, OK, SC, TN, TX and UT. 5. Based on ABR with the exception of FRT, which is based on GLA. Coastal and Sun Belt states include AL,
AZ, CA, CT, DE, FL, GA, KY, LA, MA, MD, ME, NC, NJ, NM, NV, NY, OK, OR, RI, SC, TN, TX , VA and WA. 10KITE REALTY GROUP …AND A LEADING SHOPPING CENTER REIT BY KEY METRICS 1 $29.95 ABR PSF (NET DEBT + PREFERRED) / EBITDA 7.6x 7.1x $22.97 6.5x
$19.29 $18.79 6.0x 5.9x $15.05 #3 #2 FRT REG KRG + RPAI KIM + WRI BRX REG KRG + RPAI BRX FRT KIM + WRI 3 2 CENTERS WITH A GROCERY COMPONENT AVERAGE HHI (3-MILE) 80% $104K 79% $96K $95K 75% $86K 70% 70% #3 $75K #4 FRT REG KRG + RPAI KIM + WRI BRX REG
KIM + WRI FRT KRG + RPAI BRX 5 4 COASTAL AND SUN BELT EXPOSURE WARMER AND CHEAPER EXPOSURE 58% 89% 87% 86% 45% 42% 82% 37% #1 #2 68% 4% KRG + RPAI KIM + WRI BRX REG FRT REG KRG + RPAI FRT KIM + WRI BRX Note: Comparison to only top 5 shopping center
REITs by total enterprise value. Source of all company data is from supplemental disclosures from 1Q 2021. 1. KRG ABR PSF and leased rate definitions excludes rent and square footage from ground leases. RPAI metrics have been adjusted to conform to
the KRG definition. 2. 3-Mile average household income demographics are weighted value and sourced from Green Street as of December 31, 2020, except KRG’s weighted by 1Q 2021 NOI and sourced from PopStats. 3. Based on ABR with the exception of
FRT, which is based on GLA. RPAI ABR as of today calculated excluding single-user retail. © 2021 Kite Realty Group | kiterealty.com 4. Based on ABR with the exception of FRT, which is based on GLA. Warmer and Cheaper states include AL, AZ, CO,
FL, GA, KY, LA, NC, NM, NV, OK, SC, TN, TX and UT. 5. Based on ABR with the exception of FRT, which is based on GLA. Coastal and Sun Belt states include AL, AZ, CA, CT, DE, FL, GA, KY, LA, MA, MD, ME, NC, NJ, NM, NV, NY, OK, OR, RI, SC, TN, TX , VA
and WA. 10
KITE REALTY GROUP DIVERSIFIED ASSET MIX CREATES NEW GROWTH
OPPORTUNITIES WHILE MAINTAINING DURABLE CASH FLOW • Combination increases property types, expanding offerings to retailers • Maintains grocer-anchored core, which provides ongoing, durable cash flows to the combined company •
Majority of ABR coming from community and neighborhood centers COMMUNITY CENTERS POWER CENTERS MIXED-USE CENTERS Grocery Grocery Grocery ABR % ABR % ABR % 46% 83% 19% 48% 16% 56% Component % Component % Component % NEIGHBORHOOD CENTERS LIFESTYLE
CENTERS Grocery Grocery ABR % ABR % 11% 89% 6% 57% Component % Component % © 2021 Kite Realty Group | kiterealty.com Note: Percentages are based on pro forma for the combined company as of March 30, 2021. Remaining 2% of portfolio are
unanchored or single-tenant assets. 11
KITE REALTY GROUP STRONG MIX OF ESSENTIAL AND EXPERIENTIAL DIVERSE
TENANT BASE % of ABR 30% ESSENTIAL RETAIL CREDIT TOP 15 TENANTS BY ABR % OF ABR 1 RATING Grocery / Drug 13% 1 The TJX Companies, Inc. A2.4% Office Supply / Electronics 6% Medical 3% 2 Best Buy Co., Inc. BBB+ 2.0% Pet Stores 3% 3 Ross Stores, Inc.
BBB+ 1.8% Hardware / Auto 3% 4 PetSmart, Inc. B1.8% Banks 2% 5 Gap, Inc. BB- 1.5% RESTAURANTS 17% 6 Michael Stores, Inc. B1.5% Quick Service Restaurants 9% 7 Bed Bath & Beyond, Inc. B+ 1.4% Full Service Restaurants 8% 8 Albertsons Companies,
Inc. BB 1.4% OTHER RETAIL / SERVICES 53% 9 Dick’s Sporting Goods, Inc. NR 1.3% Soft Goods 17% Discount Retailers 13% 10 Lowe’s Companies, Inc. BBB+ 1.1% Personal Service 8% 11 Ahold USA, Inc. NR 1.1% Professional Service 5% 12 The Kroger
Co. BBB 1.0% Fitness 3% 13 Petco Animal Supplies, Inc. B1.0% Theatres / Entertainment 3% 14 Publix Super Markets, Inc. NR 1.0% Sporting Goods 3% 15 Total Wine & More NR 0.9% Other Non-Essential 1% 21.2% TOTAL 100% TOTAL Note: Pro forma for
combined company as of March 31, 2021. © 2021 Kite Realty Group | kiterealty.com 1. Credit rating from S&P as of July 9, 2021. 12KITE REALTY GROUP STRONG MIX OF ESSENTIAL AND EXPERIENTIAL DIVERSE TENANT BASE % of ABR 30% ESSENTIAL RETAIL
CREDIT TOP 15 TENANTS BY ABR % OF ABR 1 RATING Grocery / Drug 13% 1 The TJX Companies, Inc. A2.4% Office Supply / Electronics 6% Medical 3% 2 Best Buy Co., Inc. BBB+ 2.0% Pet Stores 3% 3 Ross Stores, Inc. BBB+ 1.8% Hardware / Auto 3% 4 PetSmart,
Inc. B1.8% Banks 2% 5 Gap, Inc. BB- 1.5% RESTAURANTS 17% 6 Michael Stores, Inc. B1.5% Quick Service Restaurants 9% 7 Bed Bath & Beyond, Inc. B+ 1.4% Full Service Restaurants 8% 8 Albertsons Companies, Inc. BB 1.4% OTHER RETAIL / SERVICES 53% 9
Dick’s Sporting Goods, Inc. NR 1.3% Soft Goods 17% Discount Retailers 13% 10 Lowe’s Companies, Inc. BBB+ 1.1% Personal Service 8% 11 Ahold USA, Inc. NR 1.1% Professional Service 5% 12 The Kroger Co. BBB 1.0% Fitness 3% 13 Petco Animal
Supplies, Inc. B1.0% Theatres / Entertainment 3% 14 Publix Super Markets, Inc. NR 1.0% Sporting Goods 3% 15 Total Wine & More NR 0.9% Other Non-Essential 1% 21.2% TOTAL 100% TOTAL Note: Pro forma for combined company as of March 31, 2021. ©
2021 Kite Realty Group | kiterealty.com 1. Credit rating from S&P as of July 9, 2021. 12
KITE REALTY GROUP VALUE CREATION: ACTIVE DEVELOPMENTS • Total
active developments are right-sized for the combined company and should provide strong NOI growth prospects • Development pipeline poised to deliver additional value creation in the future TOTAL MULTI- EST. EQUITY TOTAL FAMILY STABILIZE
REQUIREMEN REMAINING EST. RETURN 1 2 PROJECT MSA OWNERSHIP % GLA UNITS DATE T SPEND ON PROJECT Washington, DC / MF = 90% 67 378 Q3 2022 $130.0 $45.7 6.0% - 7.0% One Loudoun Downtown – Pad G & H Baltimore Commercial = 100% Washington, DC /
MF = Air Rights Sale Circle East 82 370 Q4 2022 43.0 15.2 7.0% - 8.0% Baltimore Commercial = 100% Washington, DC / 100% 58 n/a Q2 2022 10.2 7.4 10.0% - 11.0% The Shoppes at Quarterfield Baltimore Southlake Town Square – Pad Dallas 100% 4 n/a
Q2 2021 2.3 0.1 12.0% - 15.0% Development Glendale Town Center Apartments Indianapolis 12% 207 267 Q2 2022 1.2 0.7 7.0% - 8.0% Eddy Street Commons – Phase III South Bend 100% 69 n/a Q1 2022 7.5 5.2 8.5% - 9.5% Glendale Town Center Retail
Indianapolis 100% 54 n/a Q1 2022 3.9 3.7 27.0% - 28.0% TOTALS / AVERAGE 541 1,015 $198.1 $78.0 7.0% - 8.0% ($ in M; GLA in ‘000s) Note: Based on active developments listed in 1Q 2021 supplemental reporting materials. 1. Commercial GLA only. 2.
Projected ROI for developments is an estimate of the expected stabilized annual operating cash flows to be generated divided by the estimated project costs. © 2021 Kite Realty Group | kiterealty.com 13KITE REALTY GROUP VALUE CREATION: ACTIVE
DEVELOPMENTS • Total active developments are right-sized for the combined company and should provide strong NOI growth prospects • Development pipeline poised to deliver additional value creation in the future TOTAL MULTI- EST. EQUITY
TOTAL FAMILY STABILIZE REQUIREMEN REMAINING EST. RETURN 1 2 PROJECT MSA OWNERSHIP % GLA UNITS DATE T SPEND ON PROJECT Washington, DC / MF = 90% 67 378 Q3 2022 $130.0 $45.7 6.0% - 7.0% One Loudoun Downtown – Pad G & H Baltimore Commercial =
100% Washington, DC / MF = Air Rights Sale Circle East 82 370 Q4 2022 43.0 15.2 7.0% - 8.0% Baltimore Commercial = 100% Washington, DC / 100% 58 n/a Q2 2022 10.2 7.4 10.0% - 11.0% The Shoppes at Quarterfield Baltimore Southlake Town Square –
Pad Dallas 100% 4 n/a Q2 2021 2.3 0.1 12.0% - 15.0% Development Glendale Town Center Apartments Indianapolis 12% 207 267 Q2 2022 1.2 0.7 7.0% - 8.0% Eddy Street Commons – Phase III South Bend 100% 69 n/a Q1 2022 7.5 5.2 8.5% - 9.5% Glendale
Town Center Retail Indianapolis 100% 54 n/a Q1 2022 3.9 3.7 27.0% - 28.0% TOTALS / AVERAGE 541 1,015 $198.1 $78.0 7.0% - 8.0% ($ in M; GLA in ‘000s) Note: Based on active developments listed in 1Q 2021 supplemental reporting materials. 1.
Commercial GLA only. 2. Projected ROI for developments is an estimate of the expected stabilized annual operating cash flows to be generated divided by the estimated project costs. © 2021 Kite Realty Group | kiterealty.com 13
14 CIRCLE EAST EDDY STREET COMMONS AT NOTRE DAME: PHASE III ACTIVE MSA:
WASHINGTON, DC / BALTIMORE MSA: SOUTH BEND, IN DEVELOPMENTS © 2021 Kite Realty Group | kiterealty.com GLENDALE TOWN CENTER ONE LOUDOUN DOWNTOWN MSA: INDIANAPOLIS, IN MSA: WASHINGTON, DC / BALTIMORE14 CIRCLE EAST EDDY STREET COMMONS AT NOTRE
DAME: PHASE III ACTIVE MSA: WASHINGTON, DC / BALTIMORE MSA: SOUTH BEND, IN DEVELOPMENTS © 2021 Kite Realty Group | kiterealty.com GLENDALE TOWN CENTER ONE LOUDOUN DOWNTOWN MSA: INDIANAPOLIS, IN MSA: WASHINGTON, DC / BALTIMORE
KITE REALTY GROUP 1 PRUDENT PRO FORMA BALANCE SHEET COMPOSITION TOTAL
CAPITALIZATION EXCHANGEABLE • The combined company will have a strong capital NOTES 2% structure with increased liquidity and an investment grade 3% MORTGAGE rating DEBT • Well-laddered debt maturity schedule with a weighted average
maturity profile of 4.6 years • Pro forma (Net Debt + Preferred) / EBITDA reduced to 3 6.0x from KRG’s current 6.6x 62% • Improved scale and diversification positions company to 2 COMMON become consistent unsecured bond issuer,
lowering debt EQUITY 33% costs UNSECURED DEBT • Plan to maintain conservative financial and credit policies, including in relation to development pipeline 1. Assumes assumption of all outstanding RPAI debt. 2. Common equity calculated by using
223M shares and units of combined company and KRG stock price as of July 16, 2021. 3. Based on results through March 31, 2021 and assumes KRG’s ground lease portfolio was sold at the beginning of the first quarter. © 2021 Kite Realty
Group | kiterealty.com 15KITE REALTY GROUP 1 PRUDENT PRO FORMA BALANCE SHEET COMPOSITION TOTAL CAPITALIZATION EXCHANGEABLE • The combined company will have a strong capital NOTES 2% structure with increased liquidity and an investment grade 3%
MORTGAGE rating DEBT • Well-laddered debt maturity schedule with a weighted average maturity profile of 4.6 years • Pro forma (Net Debt + Preferred) / EBITDA reduced to 3 6.0x from KRG’s current 6.6x 62% • Improved scale and
diversification positions company to 2 COMMON become consistent unsecured bond issuer, lowering debt EQUITY 33% costs UNSECURED DEBT • Plan to maintain conservative financial and credit policies, including in relation to development pipeline
1. Assumes assumption of all outstanding RPAI debt. 2. Common equity calculated by using 223M shares and units of combined company and KRG stock price as of July 16, 2021. 3. Based on results through March 31, 2021 and assumes KRG’s ground
lease portfolio was sold at the beginning of the first quarter. © 2021 Kite Realty Group | kiterealty.com 15
KITE REALTY GROUP PRO FORMA WELL-STAGGERED MATURITY LADDER Weighted
Average Maturity 4.6 years Debt Type 91% Unsecured / 9% Secured 1 Weighted Average Interest Rate 3.78% Rate Type 94% Fixed / 6% Floating $700 $600 15% of Total Debt $500 150 Outstanding 12 $400 200 10 175 $300 95 250 430 120 400 $200 400 $100 193
150 75 24 100 100 9 24 12 $- 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Mortgage Debt Senior Notes Term Loans Exchangeable Notes JV Debt Note: Pro forma for combined company, assuming assumption of all outstanding debt of RPAI. Assumes
KRG’s 2022 maturities are retired using cash on hand. Dollar figures in millions. 1. Fixed rate debt includes floating rate debt that is swapped to a fixed rate. Includes $155M of KRG debt swapped from a blended fixed rate of 4.52% to a
blended floating rate of LIBOR + 3.70%, subsequent to March 31, 2021. © 2021 Kite Realty Group | kiterealty.com 16KITE REALTY GROUP PRO FORMA WELL-STAGGERED MATURITY LADDER Weighted Average Maturity 4.6 years Debt Type 91% Unsecured / 9%
Secured 1 Weighted Average Interest Rate 3.78% Rate Type 94% Fixed / 6% Floating $700 $600 15% of Total Debt $500 150 Outstanding 12 $400 200 10 175 $300 95 250 430 120 400 $200 400 $100 193 150 75 24 100 100 9 24 12 $- 2021 2022 2023 2024 2025 2026
2027 2028 2029 2030 2031 Mortgage Debt Senior Notes Term Loans Exchangeable Notes JV Debt Note: Pro forma for combined company, assuming assumption of all outstanding debt of RPAI. Assumes KRG’s 2022 maturities are retired using cash on hand.
Dollar figures in millions. 1. Fixed rate debt includes floating rate debt that is swapped to a fixed rate. Includes $155M of KRG debt swapped from a blended fixed rate of 4.52% to a blended floating rate of LIBOR + 3.70%, subsequent to March 31,
2021. © 2021 Kite Realty Group | kiterealty.com 16
KITE REALTY GROUP TRANSACTION CREATES A VIRTUOUS CIRCLE OF BENEFITS TOP
5 ENHANCED SHOPPING PORTFOLIO CENTER REIT QUALITY Pro forma total enterprise Entry into strategic markets value results in $7.5B and bolstered presence in company existing markets STRONGER POSITIVE BALANCE SHEET FINANCIAL IMPACT Lower pro forma
leverage with Immediately accretive to limited near-term maturities earnings / share plus reduced cost of capital VALUE CREATION OPPORTUNITIES Near-term organic growth through lease-up and robust development pipeline © 2021 Kite Realty Group |
kiterealty.com 17KITE REALTY GROUP TRANSACTION CREATES A VIRTUOUS CIRCLE OF BENEFITS TOP 5 ENHANCED SHOPPING PORTFOLIO CENTER REIT QUALITY Pro forma total enterprise Entry into strategic markets value results in $7.5B and bolstered presence in
company existing markets STRONGER POSITIVE BALANCE SHEET FINANCIAL IMPACT Lower pro forma leverage with Immediately accretive to limited near-term maturities earnings / share plus reduced cost of capital VALUE CREATION OPPORTUNITIES Near-term
organic growth through lease-up and robust development pipeline © 2021 Kite Realty Group | kiterealty.com 17
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