FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this "First
Amendment"), dated as of March 16, 1998, by and among Meditrust Corporation, a
Delaware corporation ("Reitco"), Meditrust Operating Company, a Delaware
corporation ("Opco") and Cobblestone Holdings, Inc., a Delaware corporation (the
"Company").
WHEREAS, Reitco, Opco and the Company entered into that
certain Agreement and Plan of Merger on January 11, 1998 (the "Merger
Agreement") pursuant to which the parties hereto have agreed to the merger of
the Company with and into Reitco (the "Merger"); and
WHEREAS, in contemplation of the Closing of the Merger,
Reitco, Opco and the Company desire to amend certain provisions of the Merger
Agreement.
NOW THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto agree as follows:
(a) Defined Terms Capitalized terms used herein and not
otherwise defined herein shall have the meanings set forth in the Merger
Agreement.
(b) Registration Statement. Section 6.12 of the Merger
Agreement is deleted and replaced with the following:
"6.12 Registration Statement.
(a) Definitions. For purposes of this Agreement, the
following terms shall have the meanings listed below:
"Holders" means all holders of Registrable Securities,
including transferees and assigns.
"Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement and all other amendments and
supplements to the prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such prospectus.
"Registrable Securities" means the Paired Shares issued
pursuant to the this Agreement excluding (A) Paired Shares that have been
disposed of pursuant to a Registration Statement relating to the sale thereof
that has become effective under the Securities Act, or (B) Paired Shares that
have become eligible to be sold pursuant to Rule 144 of the Securities Act,
provided that all such Paired Shares referred to in this clause (B) have become
immediately salable within the volume restrictions imposed by Rule 144 or as
otherwise permitted by either of such Rules. Registrable Securities shall also
include any Paired Shares or other securities (or Paired Shares underlying such
other securities) that may be received by the Holders (x) as a result of a stock
dividend on or stock split of Registrable Securities or (y) on account of
Registrable Securities in a recapitalization of or other transaction involving
Reitco and/or Opco.
"Registration Statement" means any registration statement of
Reitco and Opco under the Securities Act that covers the resale by Holders of
any of the Registrable Securities pursuant to the provisions of this Agreement,
including the related Prospectus, all amendments and supplements to such
registration statement (including post-effective amendments), all exhibits and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
(b) Filing of the Registration Statement. On or
before Xxxxx 00, 0000, Xxxxxx and Opco will file with the SEC a Registration
Statement pursuant to Rule 415 under the Securities Act (a "Shelf Registration
Statement") on Form S-3 relating to the resale by each of the Holders of their
Registrable Securities and will use their best efforts to cause such Shelf
Registration Statement to be declared effective by the SEC. Except during a
Black-Out period permitted by Section 6.12(c), Reitco and Opco agree to use
their best efforts to keep the Shelf Registration Statement (or any amendment
thereof or replacement or successor thereto) continuously effective until one
(1) year from the Closing Date.
(c) Registration Procedures. In connection with the
Reitco's and Opco's registration obligations pursuant to Section 6.12(b), Reitco
and Opco will as expeditiously as possible, and in each case to the extent
applicable:
(i) Prepare and file with the SEC such
amendments and post- effective amendments to the Shelf Registration Statement as
may be necessary to keep such Registration Statement continuously effective for
one (1) year following the Closing Date; cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended methods
of disposition by the sellers thereof set forth in such Registration Statement
as so amended or in such Prospectus as so supplemented.
(ii) Notify the selling Holders promptly,
and (if requested by any such person) confirm such notice in writing, (A) when a
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (B) of any request by the SEC or
any other federal or state governmental authority for amendments or supplements
to the Shelf Registration Statement or related Prospectus or for additional
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information, (C) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(D) of the receipt by Reitco and Opco of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, and (E) of the occurrence of any
event which makes any statement made in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or which requires the making of any
changes in a Registration Statement, Prospectus or any such document so that, in
the case of the Registration Statement, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and, in the
case of the Prospectus, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(iii) Use best efforts to obtain the
withdrawal of any order suspending the effectiveness of a Registration
Statement, or the lifting of any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction within the United States, at the earliest possible moment.
(iv) Furnish to each selling Holder, if
requested in writing, without charge, at least one conformed copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements (but excluding schedules, all documents incorporated or
deemed incorporated therein by reference and all exhibits, unless requested in
writing by such holder or counsel).
(v) Deliver to each selling Holder without
charge as many copies of the Prospectus or Prospectuses relating to such
Registrable Securities (including each preliminary prospectus) and any amendment
or supplement thereto as such persons may reasonably, request; and Reitco and
Opco hereby consent to the use of such Prospectus or each amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus or
any amendment or supplement thereto.
(vi) To register or qualify or cooperate
with the selling Holders and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or blue sky laws of all jurisdictions within the United States; use
best efforts to keep such registration or qualification (or exemption therefrom)
effective during the period the applicable Registration Statement is required to
be kept effective and do any and all other acts or things necessary or advisable
to enable the disposition in each such jurisdiction of the Registrable
Securities covered by the applicable Registration Statement; provided, however,
that Reitco and
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Opco will not be required to (i) qualify to do business in any jurisdiction in
which they are not then so qualified or (ii) take any action that would subject
them to service of process generally in any such jurisdiction in which they are
not then so subject.
(vii) Cooperate with the selling Holders to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold.
(viii) Upon the occurrence of any event
contemplated by Section 6.12(c)(iii)(E) hereof or upon the written request of a
Holder to correct or supplement the Prospectus with respect to such Holder's
name and/or number of Registrable Securities, prepare a supplement or
post-effective amendment to each Registration Statement or a supplement to the
related Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Securities being sold thereunder, such Prospectus will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Upon receipt of written notice from Reitco and Opco of (i) the
occurrence of any event of the kind described in Section 6.12(c)(ii)(B),
6.12(c)(ii)(C), 6.12(c)(ii)(D) or 6.12(c)(ii)(E), or (ii) the suspension, by
Reitco or Opco, in their sole discretion for any reason whatsoever, of the right
of Holders to resell Registrable Securities pursuant to any Registration
Statement ("Suspension Notice"), each Holder must discontinue disposition of
such Registrable Securities covered by such Registration Statement or Prospectus
(a "Black-Out") until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 6.12(c)(viii), or until it is advised
in writing (the "Advice") by Reitco and Opco that the use of the applicable
Prospectus may be resumed, and such Holder has received copies of any additional
or supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus. During a permitted Black-Out period, Reitco and
Opco shall not be required to take any of the actions specified in Section
6.12(c)(i), (ii), (iii), (iv), (v), (vi) or (viii) except to the extent required
for Reitco and Opco to comply with the proviso to the immediately following
sentence. There shall be no limitation with regard to the number of Suspension
Notices Reitco and Opco are entitled to give hereunder; provided, however, that
during the one year period immediately following the Closing Date, (x) in no
event shall the aggregate number of days the Holders are subject to Black-Out
exceed ninety (90); (y) no one Black-Out period shall exceed thirty (30)
consecutive days and (z) no Black-Out will occur during the Blackout Period (as
such term is defined in the Shareholders Agreement), unless "force majeure"
prevents the filing with the SEC of the supplemented or amended Prospectus
contemplated by Section 6.12(c) (viii). If the La Quinta Agreement (as defined
in the Shareholders Agreement) terminates for any reason, the Blackout Period
(as defined in the Shareholders Agreement) shall be deemed terminated. For
purposes of this Section, the term "force majeure" shall mean the failure of
XXXXX to be operational or the inability of the SEC to accept filings. After the
one year anniversary of the Closing Date, Reitco and Opco may deliver a
Suspension Notice to each Holder instructing such Holder thereafter to
discontinue disposition of Registrable Securities
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pursuant to any Registration Statement. Upon their delivery of such Suspension
Notice, Reitco's and Opco's obligations under this Section 6.12(c) shall
terminate. A Suspension Notice shall be deemed delivered to a Holder if
delivered to the holder of record of such Holder's Registrable Securities at the
address of such holder of record specified in Reitco's and Opco's stockholder
register.
(d) Registration Expenses. All fees and expenses
incident to the performance of or compliance with this Section 6.12 by Reitco
and Opco will be borne by Reitco and Opco whether or not any of the Registration
Statements become effective. Such fees and expenses will include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses for compliance with securities or "blue sky" laws), (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities in a form eligible for deposit with The
Depository Trust Company and of printing prospectuses), (iii) messenger,
telephone and delivery expenses incurred by Reitco and Opco, (iv) fees and
disbursements of counsel for Reitco and Opco incurred by Reitco and Opco, (v)
fees and disbursements of all independent certified public accountants incurred
by Reitco and Opco, (vi) Securities Act liability insurance if Reitco or Opco so
desires such insurance, and (vii) fees and expenses of all other persons
retained by Reitco or Opco. In addition, Reitco and Opco will pay their internal
expenses, the expense of any annual audit, the fees and expenses incurred in
connection with the listing of the securities to be registered on any securities
exchange on which similar securities issued by Reitco and Opco are then listed
and the fees and expenses of any person, including special experts, retained by
Reitco or Opco. The Holders shall be responsible for any taxes of any kind
(including, without limitation, transfer taxes) with respect to any disposition,
sale or transfer of Registrable Securities, for any legal, accounting and other
expenses incurred by them in connection with any Registration Statement and for
all commissions and other compensation of broker-dealers in connection with any
disposition or sale of Registrable Securities.
(e) Indemnification.
(i) Indemnification by Reitco and Opco.
Reitco and Opco will, without limitation as to time, indemnify and hold
harmless, to the fullest extent permitted by law, each Holder, the officers,
directors and agents and employees of each of them, each person who controls
such a Holder (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the officers, directors, agents and employees of any
such controlling person, from and against all losses, claims, damages,
liabilities, costs (including without limitation the reasonable costs of
investigation and attorneys' fees) and expenses (collectively, "Losses"), as
incurred, arising out of or based upon any untrue or alleged untrue statement of
a material fact contained in any Registration Statement, Prospectus or in any
amendment or supplement thereto or based upon any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances under
which they were made, except insofar as the same are based solely upon
information furnished in writing to Reitco and Opco by or on behalf
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of such Holder expressly for use therein; provided, however, that Reitco and
Opco will not be liable to any Holder to the extent that any such Losses arise
out of or are based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Registration Statement or Prospectus if
either (A) (i) having been provided with the Prospectus, such Holder failed to
send or deliver a copy of the Prospectus with or prior to the delivery of
written confirmation of the sale by such Holder of a Registrable Security to the
person asserting the claim from which such Losses arise, but only if such Holder
was required to so send or deliver a copy of the Prospectus and (ii) the
Prospectus would have completely corrected such untrue statement or alleged
untrue statement or such omission or alleged omission; or (B) such untrue
statement or alleged untrue statement, omission or alleged omission is
completely corrected in an amendment or supplement to the Prospectus previously
furnished to such Holder by or on behalf of Reitco and Opco, and such Holder
thereafter fails to deliver such Prospectus as so amended or supplemented prior
to or concurrently with the sale of a Registrable Security to the person
asserting the claim from which such Losses arise, but only if such Holder was
required to so send or deliver a copy of the Prospectus. The parties hereto
expressly agree that, for purposes of this Section 6.12(e), each Holder shall be
deemed to have furnished in writing for use in each Registration Statement and
Prospectus the following information: (i) such Holder's name, (ii) the number of
Registrable Securities offered by such Holder pursuant to such Registration
Statement or Prospectus and (iii) the number of Paired Shares to be beneficially
owned by such Holder if all such Registrable Securities were to be sold pursuant
to such Registration Statement or Prospectus.
(ii) Conduct of Indemnification Proceedings.
If any person shall become entitled to indemnity under this Section 6.12(e) (an
"indemnified party"), such indemnified party shall give prompt notice to the
party from which such indemnity is sought (the "indemnifying party") of any
claim or of the commencement of any action or proceeding with respect to which
such indemnified party seeks indemnification or contribution pursuant hereto;
provided, however, that the failure to so notify the indemnifying party will not
relieve the indemnifying party from any obligation or liability except to the
extent that the indemnifying party has been prejudiced materially by such
failure. All fees and expenses (including any fees and expenses incurred in
connection with investigating or preparing to defend such action or proceeding)
will be paid to the indemnified party, as incurred, within fifteen (15) calendar
days of written notice thereof to the indemnifying party (provided such
indemnified party agrees in writing promptly to reimburse the indemnifying party
if it is ultimately determined that an indemnified party is not entitled to
indemnification hereunder). The indemnifying party will not consent to entry of
any judgment or enter into any settlement or otherwise seek to terminate any
action or proceeding in which any indemnified party is or could be a party and
as to which indemnification or contribution could be sought by such indemnified
party under this Section 6.12(e), unless such judgment, settlement or other
termination includes as an unconditional term thereof the giving by the claimant
or plaintiff to such indemnified party of a release, in form and substance
reasonably satisfactory to the indemnified party, from all liability in respect
of such claim or litigation for which such indemnified party would be entitled
to indemnification hereunder. The indemnifying party shall not be liable under
this Section 6.12(e) for any
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indemnity obligation with respect to a third party claim if the indemnified
party admits in writing any liability with respect to, or settles, compromises
or discharges, such third party claim without the indemnifying party's prior
written consent, which consent shall not be unreasonably withheld.
(iii) Contribution. If the indemnification
provided for in this Section 6.12(e) is unavailable to an indemnified party
under Section 6.12(e)(i) hereof in respect of any Losses or is insufficient to
hold such indemnified party harmless, then each applicable indemnifying party,
in lieu of indemnifying such indemnified party, will, severally but not jointly,
contribute to the amount paid or payable by such indemnified party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the indemnifying party or indemnifying parties, on the one hand, and
such indemnified party, on the other hand, in connection with the actions,
statements or omissions that resulted in such Losses as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
or indemnifying parties, on the one hand, and such indemnified party, on the
other hand, will be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been taken
or made by, or related to information supplied by, such indemnifying party or
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses will
be deemed to include any reasonable legal or other fees or expenses incurred by
such party in connection with any action or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6.12(e)(iii) were determined
by pro rata allocation or by any other method of allocation that does not take
into account the equitable considerations referred to in the immediately
preceding paragraph. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The indemnity, contribution and expense reimbursement
obligations of Reitco and Opco hereunder will be in addition to any liability
Reitco or Opco may otherwise have hereunder or otherwise. The provisions of this
Section 6.12(e) will survive so long as Registrable Securities remain
outstanding, notwithstanding any transfer of the Registrable Securities by any
Holder thereof or any termination of this Agreement.
(f) Rule 144. Reitco and Opco shall comply with the
public information requirements of Rule 144(c) under the Securities Act for a
period of at least two (2) years following the Closing Date.
(g) Stockholder Disclosure. Prior to the Closing, the
Company shall deliver to each such stockholder written disclosure stating that
the Paired Shares to be received by the Holders in the Merger will not be
registered under the Securities Act and, unless
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so registered, may not be offered or resold except pursuant to an exemption from
such registration requirements.
(h) Legend. Each certificate issued to a Holder
representing Paired Shares received in the Merger shall bear the following
legend:
"These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold, offered for sale,
pledged or hypothecated in the absence of a registration statement in effect
with respect to the securities under the Securities Act or an exemption from the
registration requirement of the Securities Act."
(i) Third Party Beneficiaries; Amendments; Remedies.
The Holders are express third party beneficiaries of this Section 6.12 and with
respect to this Section 6.12 are entitled to all of the rights and remedies
against Reitco and Opco as if they were parties hereto. The provisions of this
Section 6.12 may not be amended, modified or supplemented without the prior
written consent of Reitco and Opco, and Holders holding in excess of 50% of the
Registrable Securities. In the event of a breach by Reitco and Opco of their
obligations under this Section 6.12, each Holder, in addition to being entitled
to exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Section 6.12. Reitco
and Opco agree that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by them of any provision of this Agreement
and hereby further agree that, in the event of any action for specific
performance in respect of such breach, they will waive the defense that a remedy
at law would be adequate."
3. Annual Report. Reitco and Opco agree that they will prepare
and file with the SEC their Annual Report on Form 10-K for the year ended
December 31, 1997 not later than March 31, 1998. Reitco and Opco will not file
such Form 10-K with the SEC prior to March 30, 1998 unless prior to such date
they are advised by the staff of the SEC that either (i) the Shelf Registration
Statement as described in Section 6.12(b) will be fully reviewed by the staff of
the SEC or (ii) such Shelf Registration Statement will not be reviewed by the
staff of the SEC.
4. Closing Conditions.
(a) Section 7.1(d) of the Merger Agreement is deleted
and replaced with the following:
"(d) Registration Statement. A Shelf
Registration Statement as described in Section 6.12(b) (i) has been filed with
the SEC and (ii) has been declared effective by the SEC and remains effective
under the Securities Act."
(b) Notwithstanding Sections 7.1(c) and Section
7.2(b), the parties hereto agree to effect the Merger and the other transactions
contemplated by the Merger Agreement even if (i) consents and approvals with
respect to the agreements described in Section 4.4 of the Company Disclosure
Schedule have not been obtained and (ii) the Company has not
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eliminated all minority interests in all non wholly-owned Subsidiaries of the
Company. The Merger Agreement is deemed amended in each place necessary to give
effect to this Section 4(b).
(c) Notwithstanding Section 4(b) hereof, the parties
expressly agree that the respective obligations of Reitco and Opco to consummate
the Merger are subject to the satisfaction (or waiver by Reitco and Opco) of the
conditions set forth in that certain letter agreement among the Company, Reitco
and Opco dated Xxxxx 00, 0000.
(x) Section 7.2(g) of the Merger Agreement is deleted
and replaced with the following:
(g) Shareholders Agreement. The stockholder
identified in Section 3.7 of the Shareholders Agreement shall have become a
party to the Shareholders Agreement, as amended, subject to all the terms and
conditions of a "Shareholder" thereunder."
5. Closing Date. The parties agree that the Merger shall be
consummated on the earliest date on which all of the conditions set forth in
Article VII of the Merger Agreement, as modified by Section 4(b) hereof, and all
the conditions set forth in Section 4(c) hereof are satisfied or waived, and
that such date shall be the Closing Date. It is the parties expectation that the
Closing Date will be April 1, 1998, unless the SEC staff notifies Reitco and
Opco that it is reviewing the Shelf Registration Statement to be filed pursuant
to Section 6.12(b).
6. Entire Agreement; No Third Party Beneficiaries; Rights of
Ownership. Section 9.7 of the Merger Agreement is deleted and replaced with the
following:
9.7 Entire Agreement; No Third Party Beneficiaries;
Rights of Ownership. This Agreement and the Confidentiality Agreement (including
the exhibits hereto and the documents and the instruments referred to herein and
therein): (a) constitute the entire agreement and supersede all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof, and (b) except as provided in Article III; Section 6.9,
Section 6.10 and Section 6.12 with respect to the obligations of the Company,
the Surviving Corporation, Reitco or Opco thereunder, are not intended to confer
upon any Person other than the parties hereto any rights or remedies hereunder."
7. Counterparts. This First Amendment may be executed in two
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
8. Governing Law. This First Amendment shall be governed and
construed in accordance with the laws of the State of Delaware without giving
effect to the principles of conflicts of law thereof.
(Signature Page(s) to Follow)
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IN WITNESS WHEREOF, the Company, Reitco and Opco have caused
this First Amendment to Agreement and Plan of Merger to be signed by their
respective officers thereunto duly authorized as of the date first written
above.
COBBLESTONE HOLDINGS, INC.
By:
-----------------------------
Name:
Title:
MEDITRUST CORPORATION
By:
-----------------------------
Name:
Title:
MEDITRUST OPERATING COMPANY
By:
-----------------------------
Name:
Title:
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