iStar Inc. (OTCMKTS:SFICP) Files An 8-K Entry into a Material Definitive Agreement

obligations of iStar and SAFE REIT, respectively, relating to iStar’s ownership of the Investor Units and SAFE Common Stock.

The Stockholder’s Agreement provides that with respect to any matter presented for a vote or written consent of the holders of SAFE Common Stock after the date on which the Investor Units are exchanged for SAFE Common Stock (the “Exchange Date”), iStar will vote all “Excess Shares” in the same proportions as the votes cast or consents delivered by holders of SAFE Common Stock other than iStar. “Excess Shares” means the number of shares of SAFE Common Stock, including, without limitation, shares issued in exchange for Investor Units (“Exchange Shares”) owned by iStar from time to time that exceed 41.9% of the outstanding SAFE Common Stock at such time, including the Exchange Shares. These voting limitations will remain in effect until the first date on which iStar’s aggregate ownership of SAFE Common Stock is less than 41.9% of the outstanding SAFE Common Stock.

The Stockholder’s Agreement also provides that, notwithstanding the voting limitations described above, for three years, iStar will cast all of its voting power in favor of three individuals who are independent of each of iStar and SAFE within the meaning of the listing rulesof the New York Stock Exchange to serve as directors of SAFE REIT. iStar has also agreed to certain standstill provisions for a term of two years.

The Stockholder’s Agreement restricts iStar’s ability to transfer Exchange Shares for one year after the Exchange Date. In addition, for a period of two years, iStar will not transfer shares of SAFE Common Stock representing more than 20% of the outstanding SAFE Common Stock in one transaction or a series of related transactions to any person or group, other than transfers of SAFE Common Stock to a widely distributed public offering, unless the non-iStar holders of SAFE Common Stock are afforded the opportunity to participate in the transaction at the same price per security and in the same proportion as their SAFE Common Stock represents of the outstanding fully diluted equity of SAFE.

The Stockholder’s Agreement provides that iStar will have certain rights (but not the obligation) to maintain its percentage ownership interest of SAFE Common Stock by purchasing additional SAFE Common Stock when SAFE issues additional shares from time to time, subject to certain exceptions. Any shares purchased by iStar to such rights will be subject to the voting power limitations set forth in the agreement.

Amended and Restated Management Agreement

In connection with the transactions described above, SFTY Manager LLC (a wholly-owned subsidiary of iStar) and SAFE amended and restated the Management Agreement, dated as of June27, 2017, between them (as amended and restated, the “Amended and Restated Management Agreement”). The Amended and Restated Management Agreement, dated January2, 2019, provides for a base management fee that will increase incrementally as SAFE’s Total Equity (as defined in the agreement) increases, as follows:

The management fee will be payable in cash or SAFE Common Stock, at SAFE’s election (as determined by SAFE’s independent directors). SAFE Common Stock issued to pay the management fee will be valued at the greater of $20.00 or a recent volume weighted average market price.

The Amended and Restated Management Agreement will have an initial term through June30, 2022 during which the agreement is non-terminable, except for certain cause events. After the initial term, the agreement will be automatically renewed for additional one year terms, unless 2/3 of SAFE REIT’s independent directors decline to renew the agreement because they have determined that the manager’s long-term performance is unsatisfactory to the point of material detriment to SAFE. SAFE will be obligated to pay the manager a termination fee equal to three times the annual management fee paid in respect of the last completed fiscal year prior to the termination if, by the time of such termination, SAFE has raised Total Equity of at least $820.0 million since inception, including from iStar.

In addition, beginning with the seventh annual renewal term after the initial term and in connection with each annual renewal thereafter, SAFE may decline to renew the management agreement if 2/3 of SAFE REIT’s independent directors determine that the management fee is unfair and the manager does not accept a different fee, or the parties are unable, after good faith negotiations, to agree on a new fee. The termination fee will be payable upon such termination provided that the total equity condition described above has been satisfied.

Additional Agreements

In connection with iStar’s purchase of the Investor Units, iStar and SAFE REIT Have entered into an Amended and Restated Registration Rights Agreement, dated January2, 2019, which requires SAFE to, among other things, use commercially reasonable efforts to file with the Securities and Exchange Commission within six months after the purchase of the Investor Units a shelf registration statement providing for resale of all shares of SAFE Common Stock held by iStar. The agreement also provides iStar with certain demand registration rights. The agreement amends and restates the Registration Rights Agreement, dated as of June27, 2017, between iStar and SAFE REIT.

SAFE REIT has entered into voting agreements with each of SFTY Venture LLC and SFTY VII-B, LLC to which they have agreed to vote their shares of SAFE Common Stock to approve the issuance of SAFE Common Stock upon the exchange of Investor Units and the grant of the preemptive rights described above to iStar at the stockholder meeting called for

such purpose. The voting agreements expire on June30, 2019. SFTY VII-B, LLC is an affiliate of Lubert-Adler, L.P. Dean Adler, a principal of Lubert-Adler, L.P. is a director of SAFE REIT. SFTY Venture LLC owns 2,125,000 shares of SAFE Common Stock and SFTY VII-B, LLC owns 750,000 shares of SAFE Common Stock at the date of this Report.

The preceding descriptions of certain transaction documents are qualified in their entirety by reference to the full text of the Investor Unit Purchase Agreement, the Partnership Unit Designation of Investor Units, the Stockholder’s Agreement, the Amended and Restated Management Agreement, the Amended and Restated Registration Rights Agreement and the Voting Agreements, copies of which are attached as Exhibits 1.1, 4.1, 10.1, 10.2, 10.3, 10.4 and 10.5 to this Current Report on Form8-K and are incorporated by reference.

ITEM 9.01 Financial Statements and Exhibits

(a) Exhibits.

ISTAR INC. Exhibit
EX-1.1 2 a18-42227_1ex1d1.htm EX-1.1 Exhibit 1.1   Execution Version   INVESTOR UNIT PURCHASE AGREEMENT   INVESTOR UNIT PURCHASE AGREEMENT (this “Agreement”) made as of January 2,…
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