Print Page      Close Window     

SEC Filings

DEFM14A
FOREST CITY REALTY TRUST, INC. filed this Form DEFM14A on 10/12/2018
Entire Document
 


Table of Contents
 

prohibiting the solicitation of acquisition proposals, other than as a result of an isolated action by a director without the knowledge or consent of the Company and the Company takes appropriate actions to remedy such breach and Parent or the merger and other transactions contemplated by the merger agreement are not adversely affected in any material respect (a “no-shop breach”).

Termination Fee

A termination payment of $261 million will be payable by the Company to Parent if the merger agreement is terminated:

 

   

by (1) either the Company or Parent pursuant to an outside date termination or no vote termination, (2) Parent pursuant to a Company breach termination or a no-shop breach and in either case, prior to such termination the Company has received a bona fide acquisition proposal or a bona fide acquisition proposal has been publicly disclosed and not withdrawn and within 12 months of the termination of the merger agreement the Company enters into a definitive agreement with respect to, or consummates, any acquisition proposal (treating the references to “15%” in the definition of “acquisition proposal” as references to “50%”);

 

   

by Parent pursuant to a change of recommendation termination; or

 

   

by the Company pursuant to a superior proposal termination.

In the event the merger agreement is terminated by Parent or the Company pursuant to a no vote termination or by Parent pursuant to a no-shop breach, the Company must reimburse Parent for its reasonable and documented out-of-pocket expenses incurred in connection with the preparation, negotiation, execution and performance of the merger agreement, the merger and the other transactions contemplated by the merger agreement up to a maximum amount of $70 million, which reimbursement will reduce, on a dollar-for-dollar basis, any termination payment subsequently payable by the Company to Parent.

In the event that the merger agreement is terminated by Parent pursuant to an outside date termination and, at the time of such termination, the Company would have been entitled to terminate the merger agreement pursuant to a Parent breach termination or a financing failure termination, or is terminated by the Company pursuant to a Parent breach termination or a financing failure termination, a termination payment of $488 million will be payable by Parent to the Company or, if directed by the Company, to Forest City TRS, LLC. The Investors have provided the Company with the limited guaranty in favor of the Company guaranteeing the payment of such termination payment if such amount becomes payable under the merger agreement.

Any payments made to the Company or Parent as described above will be made by wire transfer of immediately available funds to an account designated in writing by the other party. In no event will the Company be required to pay the termination payment on more than one occasion.

Specific Performance

The Company, Parent and Merger Sub have agreed that, except where the merger agreement is terminated in accordance with the terms set forth above, each party is entitled to seek an injunction or injunctions to prevent breaches or threatened breaches of the merger agreement and to specifically enforce the terms and provisions of the merger agreement and any other agreement or instrument executed in connection therewith.

The Company, however, is only entitled to specific performance to cause Parent to draw down the full proceeds of the equity commitment and to cause Parent to consummate the merger if, and only if, (A) all conditions precedent to Parent’s obligation to close have been or will have been satisfied at the time when the closing would be required to occur pursuant to the merger agreement, (B) Parent fails to complete the closing in accordance with the timing requirements of the merger agreement, (C) the debt financing has been funded or will be funded if the equity financing is funded at the closing and (D) the Company has irrevocably confirmed to Parent that it is prepared to close the merger and the other transactions contemplated by the merger agreement.

 

-118-