Material Agreement - Form 8-K

Item 1.01

Entry into a Material Definitive Agreement.

On May 6, 2024, CareTrust REIT, Inc. (the "Company") and CTR Partnership, L.P. (the "Operating Partnership") entered into a new equity distribution agreement (the "Equity Distribution Agreement") with (i) BMO Capital Markets Corp., BofA Securities, Inc., KeyBanc Capital Markets Inc., J.P. Morgan Securities LLC, Raymond James & Associates, Inc., Robert W. Baird & Co. Incorporated and Wells Fargo Securities, LLC, each as sales agent and/or principal and/or forward seller (in any such capacity, each a "Sales Agent" and collectively, the "Sales Agents") and (ii) Bank of Montreal, Bank of America, N.A., JPMorgan Chase Bank, National Association, KeyBanc Capital Markets Inc., Raymond James & Associates, Inc., Robert W. Baird & Co. Incorporated and Wells Fargo Bank, National Association, each as a forward purchaser (in such capacity, each a "Forward Purchaser", and collectively, the "Forward Purchasers") relating to (a) the issuance and sale by the Company to or through the Sales Agents from time to time of shares of the Company's common stock, $0.01 par value per share ("Common Stock"), and (b) the sale by the Forward Sellers (as defined below), acting as agents for the Forward Purchasers or their affiliates, of shares of Common Stock (collectively, the "Shares"), with the Shares to be sold under the Equity Distribution Agreement having an aggregate gross offering price of up to $500,000,000 (the "2024 ATM Program"). The Sales Agents, when acting in their capacity as agents for the Forward Purchasers, are referred to herein individually as a "Forward Seller" and, collectively, as the "Forward Sellers."

Pursuant to the terms of the Equity Distribution Agreement, sales of the Shares under the 2024 ATM Program, if any, will be made through the Sales Agents acting as sales agent or the Forward Sellers acting as agents for the applicable Forward Purchasers, and will be made by means of ordinary brokers' transactions at market prices, in negotiated transactions or in transactions that are deemed to be an "at-the-market" offering as defined in Rule 415 under the Securities Act of 1933, as amended (the "Securities Act"), including sales made directly on the New York Stock Exchange, on any other existing trading market for the Common Stock or to or through a market maker, in block transactions or by any other method permitted by law. Each Sales Agent will receive a commission at a mutually agreed rate that will not exceed, but may be lower than, 2.0% of the sale price of all of the Common Stock sold through such Sales Agent under the Equity Distribution Agreement. The Company may also sell Shares to one or more of the Sales Agents as principal for its own account at a price agreed upon at the time of sale. If the Company sells Shares to any of the Sales Agents as principal, it will enter into a separate terms agreement with such Sales Agent.

The sale of any Shares made through a Forward Seller will be in connection with the relevant forward transaction entered into pursuant to a separate master forward sale agreement entered into by and among the Company and the relevant Forward Purchaser and a related supplemental confirmation to be entered into with the relevant Forward Purchaser. Each Forward Purchaser will receive a commission, in the form of a reduced initial forward sale price under the related forward sale agreement, at a mutually agreed rate that will not exceed 2.0% of the volume-weighted average price at which the affiliated Forward Seller sells borrowed shares of Common Stock during the forward hedge selling period applicable to a forward sale agreement. In connection with any forward sale agreement, the relevant Forward Purchaser will use commercially reasonable efforts to borrow from third parties and through its affiliated Forward Seller, sell a number of Shares equal to the number of shares of Common Stock specified in such forward sale agreement.

The offering of Shares under the 2024 ATM Program pursuant to the Equity Distribution Agreement will terminate upon the earlier of (i) the sale of the maximum aggregate amount of the Shares subject to the Equity Distribution Agreement, or (ii) termination of the Equity Distribution Agreement as provided for therein.

The Company intends to contribute the net proceeds (i) from the sale of Shares to or through Sales Agents and (ii) upon settlement of any forward sale agreement, in each case, to the Operating Partnership, which in turn intends to use the net proceeds for general corporate purposes, which may include, among other things, future acquisitions, debt repayment and working capital. The Operating Partnership may temporarily invest the net proceeds before use in interest-bearing short term investments that are consistent with the Company's ability to maintain its qualification as a real estate investment trust.

The Company will not initially receive any proceeds from any sale of Shares by a Forward Seller pursuant to a forward sale agreement. The Company expects to physically settle any forward sale agreement into which it enters (by the delivery of shares of the Common Stock) and receive proceeds from the sale of those shares of Common Stock upon one or more settlement dates under the forward sale agreement no later than the date specified in the applicable forward sale agreement. The Company may also elect to cash settle or net share settle all or a portion of its obligations under any forward sale agreement. If the Company elects to cash settle any forward sale agreement, it may not receive any proceeds, and may owe cash to the relevant Forward Purchaser in certain circumstances. If the Company elects to net share settle any forward sale agreement, it will not receive any proceeds, and it may owe shares of Common Stock to the relevant Forward Purchaser in certain circumstances. Any forward sale agreement is subject to early termination or settlement under certain circumstances.

The foregoing description of the Equity Distribution Agreement is qualified in its entirety by reference to the full text of the Equity Distribution Agreement (including the form of master forward sale agreement separately entered into with each Forward Purchaser and its affiliated Forward Seller included as Annex A), a copy of which is filed as Exhibit 1.1 to this Current Report on Form 8-K and is incorporated by reference herein.

The Shares sold under the 2024 ATM Program will be issued pursuant to the Company's shelf registration statement on Form S-3 (File No. 333-269998), filed by the Company with the Securities and Exchange Commission (the "SEC") on February 24, 2023 and the prospectus supplement filed by the Company with the SEC pursuant to Rule 424(b) under the Securities Act, on May 6, 2024. The Company is filing as Exhibit 5.1 to this Current Report on Form 8-K an opinion of DLA Piper LLP (US) regarding certain matters of Maryland law, including the validity of the Shares sold under the 2024 ATM Program.

In connection with the entry into the Equity Distribution Agreement, the Company's "at-the-market" equity offering program pursuant to the Company's prior equity distribution agreement, dated as of September 15, 2023 was terminated. As of its termination, shares of Common Stock having an aggregate offering price of approximately $0.9 million were not sold under such prior equity distribution agreement.

This Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of Shares in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.