Exhibit 10.2
PAIRING AGREEMENT
THIS AGREEMENT (the "Pairing Agreement") is dated as of the ____ day of
September, 1997 by and between Meditrust, a Massachusetts business trust
("Meditrust"), and Meditrust Acquisition Company, a Massachusetts business trust
("MAC").
R E C I T A L S
WHEREAS, the Boards of Trustees of Meditrust and MAC have proposed a series
of transactions pursuant to which: (i) Meditrust will transfer $43,588,907 to
MAC, (ii) Meditrust and MAC will pair the outstanding Meditrust shares of
beneficial interest without par value (the "Meditrust Shares") with the MAC
shares of beneficial interest without par value (the "MAC Shares") so that they
are transferable only in units (the "Paired Shares"), each of which shall
consist of one Meditrust Share and one MAC Share (the "Pairing") and (iii)
Meditrust will distribute to each holder of Meditrust Shares as a dividend one
MAC Share for each Meditrust Share held by such shareholder (the "Spin-Off");
and
WHEREAS, the by-laws of Meditrust and MAC each provide that, commencing on
the effective date of the Spin-Off, the Meditrust Shares and the MAC Shares are
not transferable, and shall not be transferred on the books of Meditrust or MAC,
as the case may be, except in combination with an equal number of shares of the
other company; and
WHEREAS, Meditrust and MAC wish to enter into this Pairing Agreement for
the purpose of further effectuating the Pairing, including the establishment of
the terms and conditions which will govern the issuance and the transfer of
Meditrust Shares and MAC Shares after the effective date of the Spin-Off.
C O V E N A N T S
1. Transfer of Shares. Commencing at the time the Spin-Off becomes
effective (the "Effective Time of the Pairing") and continuing until such time
as the Pairing shall have been terminated in the manner herein provided:
(a) No Meditrust Shares shall be transferable, and they shall not be
transferred on the books of Meditrust, unless (i) a simultaneous transfer
of the same number of MAC Shares is made by the same transferor to the same
transferee, or (ii) such transferor, to the extent the transferor does not
itself own MAC Shares, has previously arranged with MAC for the transfer to
the transferee, of the same number of MAC Shares, except that MAC may
transfer Meditrust Shares acquired by it from Meditrust to a person to whom
MAC simultaneously issues the same number of MAC Shares.
(b) No MAC Shares shall be transferable, and they shall not be
transferred on the books of MAC, unless (i) a simultaneous transfer of the
same number of Meditrust Shares is made by the same transferor to the same
transferee, or (ii) such transferor, to the extent the transferor does not
itself own Meditrust Shares, has previously arranged with Meditrust for the
transfer to the transferee, of the same number of Meditrust Shares, except
that Meditrust may transfer MAC Shares acquired by it from MAC to a person
to whom Meditrust simultaneously issues the same number of Meditrust
Shares.
(c) Each certificate evidencing ownership of Meditrust Shares issued
and not cancelled prior to the Effective Time of the Pairing shall be
deemed to evidence, in addition to the Meditrust Shares represented
thereby, the same number of MAC Shares, certificates for which shall be
deemed to be held in trust by Meditrust for the benefit of the holders of
the Meditrust Shares.
2. Issuance of Shares. Commencing at the Effective Time of the Pairing
and continuing until such time as the Pairing shall have been terminated in the
manner herein provided:
(a) Meditrust shall not issue or agree to issue any Meditrust Shares
to any person except MAC unless effective provision has been made for the
simultaneous issuance or transfer to the same person of the same number of
MAC Shares and for the pairing of such shares of Meditrust and MAC and
unless Meditrust and MAC have agreed on the manner and basis of allocating
the consideration to be received upon such issuance between Meditrust and
MAC or, if allocation of such consideration between them is not
practicable, on the payment by one company to the other of cash or other
consideration in lieu thereof. Any such allocation or payment shall be
based on the respective fair market values of the Meditrust Shares and the
MAC Shares.
(b) MAC shall not issue or agree to issue any MAC Shares to any
person except Meditrust unless effective provision has been made for the
simultaneous issuance or transfer to the same person of the same number of
Meditrust Shares and for the pairing of such shares of MAC and Meditrust
and unless MAC and Meditrust have agreed on the manner and basis of
allocating the consideration to be received upon such issuance between MAC
and Meditrust or, if allocation of such consideration between them is not
practicable, on the payment by one company to the other of cash or other
consideration in lieu thereof. Any such allocation or payment shall be
based on the respective fair market values of the Meditrust Shares and the
MAC Shares.
(c) Upon the exercise of any stock option or the conversion of any
other security convertible into Meditrust Shares granted or issued by
Meditrust prior to the Mergers (as such term is defined in that certain
Third Amended and Restated Agreement and Plan of Merger to which Meditrust
and MAC will be parties, to be dated as of April 13, 1997 (the "Merger
Agreement"), MAC agrees, upon request by management of Meditrust, that it
will simultaneously issue a number of MAC Shares to Meditrust or to
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the exercising optionee, or to the holder of such other security
convertible into Meditrust Shares, equal to the number of Meditrust Shares
issued by Meditrust pursuant to such exercise, and Meditrust agrees to pay
to MAC the fair market value of each MAC Share so issued at the date of
exercise of such option, notwithstanding the provisions of subsection (b)
of this Section 2.
(d) The fair market value of the MAC Shares as determined by Coopers
& Lybrand, LLP as of the Effective Time of the Pairing shall be used in all
calculations pursuant to this Section 2. The fair market value of each
Meditrust Share shall be determined by subtracting the fair market value of
one MAC Share from the average of the closing sale prices of a unit
consisting of one Meditrust Share and one MAC Share as reported on the New
York Stock Exchange during the ten trading days prior to any date of
determination of the fair market value of Meditrust Shares.
3. Registration.
(a) MAC agrees to cause the MAC Shares to be duly registered
and to maintain effective such registration with the Securities and Exchange
Commission (the "SEC") pursuant to Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(b) Meditrust agrees to maintain an effective registration statement
with the SEC pursuant to Section 12 of the Exchange Act.
4. Stock Dividends, Reclassifications, etc. Commencing at the Effective
Time of the Pairing and continuing until such time as the Pairing shall have
been terminated in the manner herein provided:
(a) Meditrust shall not declare or pay any stock dividend consisting
in whole or in part of Meditrust Shares, issue any rights or warrants to
purchase any Meditrust Shares, or subdivide, combine or otherwise
reclassify the Meditrust Shares, unless MAC simultaneously takes the same
or equivalent action with respect to the MAC Shares, to the end that the
outstanding Meditrust Shares and MAC Shares will at all times be
effectively "paired" on a one-for-one basis as contemplated herein.
(b) MAC shall not declare or pay any stock dividend consisting in
whole or in part of MAC Shares, issue any rights or warrants to purchase
any MAC Shares, or subdivide, combine or otherwise reclassify the MAC
Shares, unless Meditrust simultaneously takes the same or equivalent action
with respect to the Meditrust Shares, to the end that the outstanding MAC
Shares and the outstanding Meditrust Shares will at all times be
effectively "paired" on a one-for-one basis as contemplated herein.
5. Merger, Sale of Assets, etc. Commencing at the Effective Time of the
Pairing and continuing until such time as the Pairing shall have been terminated
in the manner provided
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herein, neither Meditrust nor MAC will be a party to any merger, consolidation,
sale of assets, liquidation or other form of reorganization pursuant to which
either the Meditrust Shares or the MAC Shares, as the case may be, are
converted, redeemed, exchanged or otherwise changed unless the other party
hereto (MAC or Meditrust, as the case may be) is also a party to such
transaction and the Meditrust Shares and the MAC Shares are treated
substantially identically in such transaction.
6. Repurchase of Shares. Commencing at the Effective Time of the Pairing
and continuing until such time as the Pairing shall have been terminated in the
manner provided herein, if at any time the direct or indirect ownership of the
Meditrust Shares or MAC Shares has or may become concentrated to an extent which
is not in conformity with the requirements of Section 856 of the Internal
Revenue Code of 1986, as amended, or similar provisions of successor statutes
(the "Code"), the Board of Trustees of Meditrust and/or MAC shall call for
purchase from such shareholders of such number of shares as may be necessary to
maintain or bring the direct or indirect ownership of the Meditrust Shares
and/or MAC Shares into conformity with the requirements of the Code and shall
refuse to register any transfer of Meditrust Shares and/or MAC Shares to any
person whose acquisition of such shares would result in Meditrust and/or MAC
being unable to conform to the requirements of the Code. The provisions of this
Section 6 shall apply to all outstanding Meditrust Shares and MAC Shares
notwithstanding any other provision of this Pairing Agreement.
7. Termination. This Pairing Agreement and the Pairing may not be
terminated except in the case of (i) a merger or other business combination
involving Meditrust and MAC in which Meditrust and MAC are not the surviving
corporations or (ii) a liquidation, dissolution or other termination of the
existence of MAC, in which case prior thereto the parties agree to cooperate to
effect a separation of the paired securities so as to permit the separate
issuance and transfer of the Meditrust Shares, and, in that connection,
appropriate provision shall be made to honor any outstanding commitments to
issue additional Meditrust Shares and MAC Shares.
8. Amendment. This Pairing Agreement may (other than Section 7) be
amended by action of the Board of Trustees of both Meditrust and MAC.
9. Trusts. The Declaration of Trust establishing Meditrust, dated
August 6, 1985, a copy of which, together with all amendments thereto (the
"Declaration"), is duly filed in the office of the Secretary of State of the
Commonwealth of Massachusetts, provides that the name "Meditrust" refers to the
trustees under the Declaration collectively as trustees, but not individually or
personally. No trustee, officer, director, shareholder, employee or agent of
Meditrust or its subsidiaries shall be held to any personal liability, jointly
or severally, for any obligation of, or claim against Meditrust or any of its
subsidiaries. All persons dealing with Meditrust, in any way, shall look only to
Meditrust's assets for recovery of any judgment or suit or the performance of
any obligation.
The Declaration of Trust establishing MAC, dated June 2, 1997, a copy of
which, together with all amendments thereto (the "MAC Declaration"), is duly
filed in the office of the
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Secretary of State of the Commonwealth of Massachusetts, provides that the name
"Meditrust Acquisition Company" refers to the trustees under the MAC Declaration
collectively as trustees, but not individually or personally. No trustee,
officer, director, shareholder, employee or agent of MAC or its subsidiaries
shall be held to any personal liability, jointly or severally, for any
obligation of, or claim against MAC or any of its subsidiaries. All persons
dealing with MAC, in any way, shall look only to MAC's assets for recovery of
any judgment or suit or the performance of any obligation.
IN WITNESS WHEREOF the parties hereto have set their hands and seals to
this Pairing Agreement as of the date first mentioned above.
MEDITRUST
By
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President
MEDITRUST ACQUISITION COMPANY
By
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President
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