FINAL
AMENDMENT
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TO
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PURCHASE AGREEMENT
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THIS AMENDMENT to that certain Purchase Agreement (the "Purchase
Agreement"), dated as of February 26, 1998, by and among Meditrust Corporation
(the "REIT"), Meditrust Operating Company (the "OPCO") (the REIT and the OPCO,
each a "Company" and together the "Companies"), Merrill Lynch International
("MLI"), and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as agent acting
for the account of MLI ("Merrill Lynch" and, collectively with MLI, the "Merrill
Lynch Parties"), as amended by that certain Amendment Agreement dated as of July
16, 1998 by and among the Companies and the Merrill Lynch Parties, as amended
("Amendment Agreement No. 1"), that certain Amendment Agreement dated as of July
31, 1998 by and among the Companies and the Merrill Lynch Parties, as amended
("Amendment Agreement No. 2"), and that certain Amendment Agreement dated as of
September 11, 1998 by and among the Companies and the Merrill Lynch Parties
("Amendment Agreement No. 3," and, collectively with Amendment No. 1 and
Amendment No. 2, the "Amendment Agreements"), is made as of this 11th day of
November, 1998, by and among the Companies, MLI and Merrill Lynch, as agent
acting for the account of MLI and as owner of the Purchase Shares (as defined in
the Purchase Agreement) and assignee of the Purchase Agreement.
W I T N E S S E T H
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WHEREAS, prior to the date hereof, the Companies and the Merrill Lynch
Parties have entered into the Purchase Agreement, the Amendment Agreements and
that certain Purchase Price Adjustment Mechanism Agreement, dated as of February
26, 1998, as amended and restated as of February 26, 1998 by entering into a
Secured Purchase Price Adjustment Mechanism Agreement (the "Secured Adjustment
Agreement") and an Unsecured Purchase Price Adjustment Mechanism Agreement (the
"Unsecured Adjustment Agreement" and, together with the Secured Adjustment
Agreement, the "Restated Adjustment Agreements") by and among the Companies and
the Merrill Lynch Parties, (the "Adjustment Agreements," collectively with the
Purchase Agreement, each as modified by the Amendment Agreements, the "Forward
Equity Transaction Documents");
WHEREAS, the parties hereto desire to enter into a Settlement Agreement
as of the date hereof (the "Settlement Agreement") and, in connection with the
Settlement Agreement, to amend the Forward Equity Transaction Documents by
entering into this Amendment and the Restated Adjustment Agreements.
NOW, THEREFORE, in consideration of the mutual undertakings set forth
herein, the parties, intending to be legally bound, agree as follows:
1. Amendment Agreements. Each of the Amendment Agreements is hereby
rescinded in its entirety, and shall be of no further force or effect. However,
the intent of the foregoing is not to affect any actions taken prior to the date
hereof pursuant to any of the Amendment Agreements. Further, the parties hereto
expressly reserve their rights with respect to any actions taken under the
Forward Equity Transaction Documents prior to the date hereof, except that the
parties agree that the Registration Statement declared effective on October 8,
1998 shall constitute a Resale Registration Statement as contemplated by the
Purchase Agreement. The parties hereto acknowledge and agree that this Amendment
shall constitute the only legally binding instrument on the parties that amends
or modifies the Purchase Agreement dated as of February 26, 1998.
2. Assignment of Shares from Merrill Lynch to MLI. The Companies hereby
authorize and consent to the assignment from Merrill Lynch to MLI of those
Shares sold by MLI to Merrill Lynch pursuant to that certain Sale and Assignment
Agreement dated as of October 23, 1998.
3. Resale of the Shares. Section 5.2 of the Purchase Agreement is hereby
deleted in its entirety and shall be replaced with the following:
Resale. The Merrill Lynch Parties acknowledge and agree that in
connection with any transfer of any Shares they will provide to the
transfer agent prompt notice of any Shares sold pursuant to a Prospectus
Supplement (as defined in Section 7) or otherwise transferred in compliance
with applicable federal and state securities laws. The Merrill Lynch
Parties acknowledge that there may occasionally be times when, subject to
the provisions of Section 7.2(a), the Companies (i) must suspend the right
of the Merrill Lynch Parties to effect sales of the Shares through the use
of a Prospectus Supplement until such time as a Prospectus Supplement has
been filed by the Companies with the Commission, or an amendment to the
Registration Statement has been filed by the Companies and declared
effective by the Commission, or until such time as the Companies have filed
an appropriate report with the Commission pursuant to the Exchange Act, or
(ii) shall have failed (whether or not such failure is due to regulatory
review) to take all actions required of the Companies under the Forward
Equity Transaction Documents to enable the Merrill Lynch Parties to
publicly sell the Shares including, without limitation, the failure of the
Company to (X) maintain an effective registration statement covering such
Shares, (Y) provide the Merrill Lynch Parties with a deliverable Prospectus
and Prospectus Supplement, or (Z) provide the appropriate Resale Closing
Documents (each, a "Black-out Period"). The Companies agree that following
the termination of the Merrill Lynch Parties' Standstill pursuant to the
terms of the Settlement Agreement, the number of days in all Black-out
Periods taken together, whether or not consecutive, shall not exceed 20
calendar days (a "Black-out Measurement Period") (counting only the days
following the termination of the
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Merrill Lynch Parties' Standstill). In the event that the number of days in
all Black-out Periods taken together, whether or not consecutive, exceeds
the Black-out Measurement Period then the Companies shall immediately
comply with the provisions of Section 7 and the Merrill Lynch Parties may
effect sales of the Shares unless the Companies shall have delivered (i) a
written notice to the Merrill Lynch Parties requesting a 20-day extension
prior to the end of the Black-out Measurement Period and (ii) $25 million
in cash (a "Black-out Period Extension Fee") to the Merrill Lynch Parties
on or prior to the end of the third Business Day immediately following the
expiration of such Black-out Measurement Period in accordance with
instructions provided by the Merrill Lynch Parties to the Companies
promptly following the request for such extension and the Companies
acknowledge that continuation of the Black-out Period beyond the Black-out
Measurement Period shall entitle the Merrill Lynch Parties to a claim for
such Black-out Period Extension Fee; provided, however, that in the event
that a Black-out Period is in effect at the end of a Black-out Measurement
Period, and the continuation of such Black-out Period is only the result of
(i) the Companies waiting for the Commission to (A) provide verbal or
written comments to a filing with the Commission, or (B) declare any filing
effective after the Companies have completed such filing, then the
Companies, in lieu of paying the Black-out Extension Fee may elect to
deliver Paired Shares to the collateral account of MLI pursuant to and in
accordance with Section 5 of each of the Restated Adjustment Agreements at
the greater of (i) the rate of 200% instead of 150% on the Interim
Settlement Amount in Interim Settlement Shares (as provided in Section 5(a)
of such Restated Adjustment Agreement, and each as defined in such
Agreement) or (ii) that number of Interim Settlement Shares such that such
number of Interim Settlement Shares plus any Interim Settlement Shares and
Adjustment Shares then held by the Merrill Lynch Parties valued at the
Closing Price on such date will equal at least 120% of the Reference Amount
(as provided in Section 5(a) of such Restated Adjustment Agreement) until
the Companies shall have taken all actions required of the Companies under
the Forward Equity Transaction Documents to enable the Merrill Lynch
Parties to publicly sell the Shares, and the Spread (as defined in Section
1(ah) of such Restated Adjustment Agreement) for such period shall increase
to 400 basis points until the circumstances described in clauses (A) and
(B) have ended. In the event that the Companies make the election in the
immediately preceding sentence, then the Black-out Measurement Period, for
purposes of this Amendment, shall be deemed to be extended until the
circumstances described in clauses (A) and (B) above have ended. Upon
payment of any Black-out Period Extension Fee and effective as of the day
immediately following the last day of the previous Black-out Measurement
Period, the then applicable Black-out Measurement Period shall be increased
by 20 calendar days (counting only the days following the termination of
the Merrill Lynch Parties' Standstill). Each subsequent extension of the
Black-out
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Period Measurement Period shall be subject to the foregoing requirements.
Any Black-out Period Extension Fee paid shall reduce the Reference Amount
under the Unsecured Adjustment Agreement in accordance with the provisions
of Section 3.3 of the Unsecured Adjustment Agreement. Subject to the
foregoing and compliance with Section 7.2(a) hereof, the Merrill Lynch
Parties hereby covenant that during a Black-out Period they will not effect
sales of any Shares pursuant to said Resale Prospectus during the period
commencing at the time at which the Companies give the Merrill Lynch
Parties written notice (which such notice shall have been given by the
Companies as promptly as practicable) of the suspension of the use of said
Resale Prospectus and ending at the time the Companies give the Merrill
Lynch Parties written notice that the Merrill Lynch Parties may thereafter
effect sales pursuant to said Resale Prospectus. The Merrill Lynch Parties
further covenant to notify the Companies promptly of the sale of all of the
Shares.
4. Registration of the Shares. The Companies have filed with the Commission
(a) Post-Effective Amendment No. 2 to the Companies' Joint Registration
Statement on Form S-3 (File Nos. 333-40055 and 333-40055-1) (the "Registration
Statement") and (b) a Prospectus Supplement under Rule 424(b) of the Securities
Act to the Prospectus dated September 29, 1998 contained in the Registration
Statement covering the sale of up to 11,000,000 Shares (the "Initial Prospectus
Supplement"). Based on verbal advice from the Commission to the parties, the
Registration Statement, as amended, was declared effective by the Commission as
of October 8, 1998. The parties hereby acknowledge and agree that the
Registration Statement constitutes a Resale Registration Statement and the
Merrill Lynch Parties agree to not assert in any legal proceeding with the
Companies that the Registration Statement does not constitute a Resale
Registration Statement. In connection with the foregoing, Section 7 of the
Purchase Agreement is hereby amended as follows:
(a) The term "Resale Registration Statement" as used in the Purchase
Agreement (other than Section 7.5) shall mean the Registration Statement and any
amendments and supplements to such registration statement, including all
post-effective amendments thereto, and all exhibits and all material
incorporated by reference into such registration statement. The term "Resale
Prospectus" as used in the Purchase Agreement (other than Section 7.5) shall
mean the Initial Prospectus Supplement or any subsequent Prospectus Supplement
(as defined below).
(b) Section 7.1(a) of the Purchase Agreement is hereby amended by (i)
deleting the phrase "prepare and file with the Commission a Resale Registration
Statement (as defined below) covering the resale by the Merrill Lynch Parties,
from time to time, of a number of shares equal to the number of Purchase Shares
in any of the manners specified in the Restated Adjustment Agreements (the
"Initial Resale registration Statement") and use its best efforts to obtain
effectiveness of the Initial Resale Registration Statement by the fifth Business
Day (as defined in the Restated Adjustment Agreements) following the Conversion
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Date)" and inserting the following in place of such phrase:
prepare and file with the Commission such additional Prospectus
Supplement or Prospectus Supplements under Rule 424(b) of the
Securities Act to the Prospectus contained in the Registration
Statement (including the Initial Prospectus Supplement, each, a
"Prospectus Supplement") covering the sale by the Merrill Lynch
Parties, from time to time, of such number of Shares that are not
covered by the Initial Prospectus Supplement, in any of the manners
specified in the Adjustment Agreements.
(c) Section 7.1(e) of the Purchase Agreement is hereby deleted in its
entirety and shall be replaced with the following:
in order to facilitate the public sale or other disposition of all or
any of the Shares by the Merrill Lynch Parties, furnish to the Merrill
Lynch Parties with respect to the Shares registered under any Resale
Registration Statement, in connection with any such public sale or
other disposition, an opinion of counsel to the Companies covering the
matters set forth on Exhibits B-1 and B-2 hereto and such other
documents as the Merrill Lynch Parties may reasonably request
(including a comfort letter from the Companies' independent certified
public accountants and a certificate of bring down of representations
and warranties in connection with sale of Shares under the Resale
Registration Statement) (collectively, the "Resale Closing Documents")
(i) upon the termination of the Merrill Lynch Parties' Standstill (or
if there is a Black-out Period immediately following such termination
then upon the termination of such Black-out Period), (ii) quarterly
beginning with the Companies' filing of a Joint Quarterly Report on
Form 10-Q after the termination of the Merrill Lynch Parties'
Standstill (or as soon as practicable thereafter if such quarterly
filing is made during a Black-out Period), or (iii) in the event the
public sale or other disposition of the Shares is effected through an
underwritten offering or a block trade, as of the date of the closing
of any sale of such Shares or date of pricing with respect to the sale
of such Shares, as applicable upon prior notice from the Merrill Lynch
Parties to the Companies as to which date applies; provided, however,
that the Companies shall not be required to deliver any Resale Closing
Documents in the event that the aggregate offering price of any Shares
offered in an underwritten offering or a block trade is less than
$20,000,000, unless as of the date of any such underwritten offering
or block sale, the Companies have not made any previous delivery of
Resale Closing Documents to the Merrill Lynch Parties in connection
with any other public sale or other disposition of the Shares.
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(d) Section 7.2(g) is hereby deleted in its entirety.
5. All references to the "Adjustment Agreement" shall be deemed a reference
to the Restated Adjustment Agreements collectively.
6. General Provisions.
(a) Notices. All notices, consents and other communications required
hereunder shall be delivered in the manner set forth in the Purchase Agreement.
(b) Changes. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the parties hereto.
(c) Severability. In case any provision contained in this Amendment
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
(d) Governing Law; Jurisdiction. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York without regard to
the conflicts of law principles thereof.
(e) Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
(f) Conflicts with Other Agreements. In the event any conflict between
the provisions of this Amendment and the Purchase Agreement, the terms and
provisions of this Amendment shall govern.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized representatives as of the date and year first
above written.
MEDITRUST CORPORATION
By: /s/ Michael Benjamin
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Name: Michael S. Benjamin, Esq.
Title: Senior Vice President
MEDITRUST OPERATING COMPANY
By: /s/ William Baker
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Name: William C. Baker
Title: President
MERRILL LYNCH INTERNATIONAL
By: /s/ John O'Dowd
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Name: John O'Dowd
Title: Vice President
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By: /s/ Onu Odim
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Name: Onu Odim
Title: Managing Director
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