MCS Steel Non-Voting DR MSTUF

Termination Fee

[retiredcf]

Is it safe to assume that we are not on the hook for the $53 million termination fee if we simply vote down the takeover offer? Presumably, this would not be one of the "specified circumstances". GLTA


The Acquisition Agreement provides for, among other things, customary representations and warranties, board support and non-solicitation covenants from Milestone, inclusive of appropriate "fiduciary out" provisions that allow Milestone to accept a superior proposal in certain circumstances and a four business day "right to match period" in favour of Starwood. The Acquisition Agreement also provides for the payment of a termination fee of US$53 million to Starwood and a reverse termination fee of US$100 million to Milestone if the Transaction is terminated in certain specified circumstances. The REIT's recourse for a breach of the Acquisition Agreement by Starwood (including a failure by Starwood to close) will be limited to collection of the reverse termination fee.