AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
Exhibit 2.2
This Amendment No. 1 (this “Amendment”) to the Agreement and Plan of Merger (the “Agreement”)
dated as of October 22, 2005 by and among Skilled Healthcare Group, Inc., a Delaware corporation
(the “Company”), SHG Holding Solutions, Inc., a Delaware corporation (“Buyer”), Heritage Partners
Management Company, LLP (the “Agent”), and Heritage Fund II, L.P., a Delaware limited partnership
and Heritage Investors II, L.L.C., a Delaware limited liability company (collectively, the
“Warrantholders”), solely with respect to Sections 1.7, 1.9, 1.11 and Article 6 relating to the
Warrants, is entered into effective as of December ___, 2005 by and among Buyer, Company and Agent.
Capitalized terms used herein and not otherwise defined shall have the respective meanings given
to them in the Agreement.
Introduction
WHEREAS, in connection with the Closing, Agent has distributed to all Securityholders a letter
of transmittal in the form of Exhibit A hereto that includes a substitute Form W-9 containing a
certification of non-foreign status (the “Non-Foreign Certification”);
WHEREAS, the parties wish to facilitate withholding on distributions to Securityholders who
have not provided a Non-Foreign Certification; and
WHEREAS, Buyer, Company and Agent, acting in accordance with Sections 8.3 and 8.16 of the
Agreement, wish to amend the Agreement as set forth below;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Amendment to Section 1.10(f). Section 1.10(f) of the Agreement is hereby amended by adding
the following new sentences after the first sentence thereof:
“Without limiting the generality of the foregoing, Agent shall not distribute any
amounts or payments to any Securityholder who has not previously submitted an
executed Non-Foreign Certification unless Agent shall have first remitted 10% of the
amount to be distributed to such Securityholder, including 10% of such
Securityholder’s pro rata portion of the General Escrow Fund and the Tax Escrow Fund
(the “Specified Amount”), to the Surviving Corporation to enable the Surviving
Corporation to make withholding tax payments to the applicable tax or other
authorities (such obligation of Agent under this sentence being referred to herein
as the “Agent’s Foreign Person Obligation”). As soon as practicable, but in no
event later than three days following receipt by the Surviving Corporation of the
Specified Amount from Agent, the Surviving Corporation shall apply such Specified
Amount to make the required withholding tax payments to the applicable tax or other
authorities in satisfaction of any requirements to withhold and pay any such amounts
pursuant to Section 1445 of the Code (such obligation
of Surviving Corporation being referred to herein as the “Surviving Corporation’s
Withholding Obligation”).”
2. Indemnification. The following new Section 6.5 is hereby added to the Agreement (and the
section previously numbered 6.5 is hereby renumbered as Section 6.6):
“6.5 Indemnification for Foreign Person Withholding.
(a) From and after the Closing, Agent, on behalf of the Securityholders, shall
indemnify Buyer and Surviving Corporation and hold them harmless against and in
respect of any and all Losses of Buyer and Surviving Corporation that arise or
result from any obligation of Buyer pursuant to Section 1445 of the Code (and the
Treasury Regulations issued thereunder) to withhold and remit any portion of the
Closing Merger Consideration payable to or for the benefit of any Securityholder who
has not, on or before the Closing Date submitted to Buyer an executed Non-Foreign
Certification; provided, however, that Agent shall have no such obligation to
indemnify Buyer and Surviving Corporation if such Losses result from Surviving
Corporation’s failure to comply with Surviving Corporation’s Withholding Obligation.
Notwithstanding anything to the contrary contained in this Agreement, (i) the
indemnification obligation contained in this Section 6.5(a) shall survive the
Closing and (ii) in addition to Agent’s direct indemnification obligation (on behalf
of the Securityholders) to Buyer and Surviving Corporation under this Section
6.5(a), the cash retained by the Escrow Agent pursuant to the Escrow Agreement shall
be available to indemnify Buyer and Surviving Corporation for any Losses to which
they are entitled to indemnification under this Section 6.5(a) without regard to the
limitations contained in Section 6.2 or the procedures contained in Section 6.4(b).
(b) From and after the Closing, Buyer and the Surviving Corporation shall
indemnify the Securityholders and hold them harmless against and in respect of any
and all Losses of the Securityholders which arise or result from any failure by the
Surviving Corporation to comply with Surviving Corporation’s Withholding Obligation.
Notwithstanding anything to the contrary contained in this Agreement, the
indemnification obligation contained in this Section 6.5(b) shall survive the
Closing and not be subject to the procedures contained in Section 6.4(b).
(c) After the Closing, (i) Agent shall promptly provide to Buyer and Surviving
Corporation copies of any Non-Foreign Certifications received by Agent from
Securityholders after the Closing Date and (ii) Buyer and Surviving Corporation
shall promptly provide to Agent any correspondence, filings, tax returns or other
documents or reports relating to Buyer’s and Surviving Corporation’s payment to any
taxing authority of any Specified Amounts.”
3. Miscellaneous. This Amendment may be executed in one or more counterparts and may be
delivered via facsimile, each of which shall be deemed an original and all of which taken together
shall constitute one and the same Amendment. Except to the extent specifically
-2-
amended hereby, the Agreement shall be unaffected hereby and shall remain in full force and
effect. Each of the parties hereto hereby acknowledges, confirms and ratifies its respective
obligations under the Agreement. The parties hereto acknowledge and confirm that for all purposes
of the Agreement, the term “Agreement” shall mean the Agreement as amended by and through the date
of this Amendment and as further amended and from time to time hereafter.
[ The remainder of this page is intentionally left blank. ]
-3-
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be executed as a sealed
instrument as of the date first above written.
| BUYER: | COMPANY: | |||||
| SHG HOLDING SOLUTIONS, INC. | SKILLED HEALTHCARE GROUP, INC. | |||||
By
|
By | |||||
| (title) | (title) | |||||
| AGENT: | ||||||
| HERITAGE PARTNERS MANAGEMENT COMPANY, LLP | ||||||
By |
||||||
| (title) | ||||||
