Agreement and Plan of Merger (2019)Full Document 

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EXECUTION VERSION

AGREEMENT AND PLAN OF MERGER

by and among

OMEGA HEALTHCARE INVESTORS, INC.,

OHI HEALTHCARE PROPERTIES LIMITED PARTNERSHIP,

MEDEQUITIES REALTY TRUST, INC.,

MEDEQUITIES OP GP, LLC

and

MEDEQUITIES REALTY OPERATING PARTNERSHIP, LP

dated as of

January 2, 2019

Table of Contents

Page
ARTICLE I AGREEMENT – THE MERGER 2
Section 1.1 The Merger 2
Section 1.2 Closing 3
Section 1.3 Effective Time 3
Section 1.4 Governing Documents 3
Section 1.5 Directors and Officers of the Surviving Entity 3
Section 1.6 Tax Consequences 3
Section 1.7 Contribution to Parent Operating Partnership 3
Section 1.8 Subsequent Actions 3
ARTICLE II TREATMENT OF SECURITIES 4
Section 2.1 Treatment of Capital Stock 4
Section 2.2 Payment for Securities 6
Section 2.3 Dissenter’s Rights 8
Section 2.4 Treatment of Company Equity Awards 8
Section 2.5 Interest; Withholding 9
Section 2.6 No Fractional Shares 9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPany PARTIES 9
Section 3.1 Organization and Qualification; Subsidiaries 10
Section 3.2 Organizational Documents 10
Section 3.3 Capital Structure 11
Section 3.4 Authority 12
Section 3.5 No Conflict; Required Filings and Consents 13
Section 3.6 Permits; Compliance with Law 14
Section 3.7 SEC Documents; Financial Statements 15
Section 3.8 Absence of Certain Changes or Events 17
Section 3.9 No Undisclosed Material Liabilities 17
Section 3.10 Off Balance Sheet Arrangements 17
Section 3.11 No Default 17
Section 3.12 Litigation 18
Section 3.13 Taxes 18
Section 3.14 Pension and Benefit Plans; Employees 21
Section 3.15 Labor and Employment Matters 24
Section 3.16 Intellectual Property 25
Section 3.17 Environmental Matters 26
Section 3.18 Properties 27
Section 3.19 Material Contracts 31
Section 3.20 Health Care Compliance 34
Section 3.21 Insurance 34
Section 3.22 Opinion of Company Financial Advisor 35
Section 3.23 Vote Required 35
Section 3.24 Brokers 35

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Table of Contents

(continued)

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Section 3.25 Investment Company Act 35
Section 3.26 Takeover Statutes 35
Section 3.27 Related Party Transactions 35
Section 3.28 No Other Representations and Warranties 35
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PARENT PARTIES 36
Section 4.1 Organization and Qualification; Subsidiaries 36
Section 4.2 Organizational Documents 37
Section 4.3 Capital Structure 37
Section 4.4 Authority 38
Section 4.5 No Conflict; Required Filings and Consents 39
Section 4.6 Permits; Compliance with Law 40
Section 4.7 SEC Documents; Financial Statements 41
Section 4.8 Absence of Certain Changes or Events 42
Section 4.9 No Undisclosed Material Liabilities 42
Section 4.10 No Default 42
Section 4.11 Litigation 43
Section 4.12 Taxes 43
Section 4.13 Pension and Benefit Plans; Employees 44
Section 4.14 Environmental Matters 45
Section 4.15 Properties 46
Section 4.16 Vote Required 47
Section 4.17 Brokers 47
Section 4.18 Investment Company Act 47
Section 4.19 Takeover Statutes 48
Section 4.20 Related Party Transactions 48
Section 4.21 Sufficient Funds 48
Section 4.22 No Other Representations and Warranties 48
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER 49
Section 5.1 Conduct of Business by the Company Parties Pending the Closing 49
Section 5.2 Conduct of Business by the Parent Parties Pending the Closing 56
Section 5.3 Company Acquisition Proposals 58
Section 5.4 Form S-4 and Proxy Statement 63
ARTICLE VI ADDITIONAL AGREEMENTS 65
Section 6.1 Access; Confidentiality; Notice of Certain Events 65
Section 6.2 Consents and Approvals 66
Section 6.3 Publicity 68
Section 6.4 Directors’ and Officers’ Insurance and Indemnification 68
Section 6.5 Takeover Statutes 70
Section 6.6 Rule 16b-3 71
Section 6.7 Control of Operations 71

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Table of Contents

(continued)

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Section 6.8 Security Holder Litigation 71
Section 6.9 Director Resignations 71
Section 6.10 Tax Matters 71
Section 6.11 Dividends 72
Section 6.12 Voting of Shares 73
Section 6.13 Employee Benefits 73
Section 6.14 Company Indebtedness 75
Section 6.15 NYSE Listing 75
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER 75
Section 7.1 Conditions to Each Party’s Obligations to Effect the Merger 75
Section 7.2 Conditions to Obligations of the Parent Parties 76
Section 7.3 Conditions to Obligations of the Company Parties 77
ARTICLE VIII TERMINATION 78
Section 8.1 Termination 78
Section 8.2 Effect of Termination 80
ARTICLE IX MISCELLANEOUS 82
Section 9.1 Amendment and Modification; Waiver 82
Section 9.2 Non-Survival of Representations and Warranties 82
Section 9.3 Expenses 82
Section 9.4 Notices 82
Section 9.5 Certain Definitions 83
Section 9.6 Terms Defined Elsewhere 94
Section 9.7 Interpretation 96
Section 9.8 Counterparts 97
Section 9.9 Entire Agreement; Third-Party Beneficiaries 97
Section 9.10 Severability 97
Section 9.11 Governing Law; Jurisdiction 97
Section 9.12 Waiver of Jury Trial 98
Section 9.13 Assignment 98
Section 9.14 Enforcement; Remedies 99

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AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (hereinafter referred to as this “Agreement”), dated as of January 2, 2019, is by and among Omega Healthcare Investors, Inc., a Maryland corporation (“Parent”), OHI Healthcare Properties Limited Partnership, a Delaware limited partnership (the “Parent Operating Partnership” and, together with Parent, the “Parent Parties”), MedEquities Realty Trust, Inc., a Maryland corporation (the “Company”), MedEquities OP GP, LLC, a Delaware limited liability company and the sole general partner of the Company Operating Partnership (the “Company General Partner”), and MedEquities Realty Operating Partnership, LP, a Delaware limited partnership (the “Company Operating Partnership” and, collectively with the Company and the Company General Partner, the “Company Parties”). All capitalized terms used in this Agreement shall have the meaning ascribed to such terms in Section 9.5 or as otherwise defined elsewhere in this Agreement unless the context clearly provides otherwise. Parent, the Parent Operating Partnership, the Company, the Company General Partner and the Company Operating Partnership are each individually referred to herein as a “Party” and collectively as the “Parties.”

Recitals

WHEREAS, the Company is a Maryland corporation operating as a “real estate investment trust” (“REIT”) for U.S. Federal income tax purposes;

WHEREAS, Parent is a Maryland corporation operating as a REIT for U.S. Federal income tax purposes;

WHEREAS, the Parties wish to effect a business combination through a merger of the Company with and into Parent, with Parent being the surviving entity (the “Merger”), and each share of common stock, $0.01 par value per share, of the Company (the “Company Common Stock” or “Company Shares”), issued and outstanding immediately prior to the Merger 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 (as amended, the “MGCL”);

WHEREAS, the board of directors of the Company (the “Company Board of Directors” or the “Company Board”) has (i) authorized, adopted and approved the execution, delivery and performance of this Agreement, the Merger and the other Transactions and declared that this Agreement, the Merger and the other Transactions are advisable and in the best interests of the Company, (ii) directed that the Merger be submitted for consideration at a meeting of the stockholders of the Company, and (iii) resolved to recommend that the stockholders of the Company approve the Merger (the “Company Board Recommendation”) (except to the extent that the Company Board shall have made a Company Adverse Recommendation Change in accordance with Section 5.3);

WHEREAS, the board of directors of Parent (the “Parent Board of Directors” or the “Parent Board”) has approved this Agreement, the Merger, the issuance of the shares of Parent Common Stock in connection with the Merger as described herein (the “Share Issuance”) and the other Transactions, and has further determined and declared that the Merger, the Share Issuance and the other Transactions are advisable and in the best interests of Parent;

WHEREAS, Parent, as the sole general partner of the Parent Operating Partnership, has approved this Agreement and the other Transactions, and further has deemed it advisable and in the best interests of the Parent Operating Partnership to enter into this Agreement and to consummate the other Transactions;

WHEREAS, the Company, as the sole member of the Company General Partner, which is the sole general partner of the Company Operating Partnership, has approved this Agreement and the other Transactions, and further has deemed it advisable and in the best interests of the Company Operating Partnership to enter into this Agreement and to consummate the other Transactions;

WHEREAS, for U.S. Federal income tax purposes, it is intended that the Merger shall qualify as a “reorganization” under, and 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; and

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