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 -2- 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 -3- 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 -4- 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 -------------------------------------------- President MEDITRUST ACQUISITION COMPANY By -------------------------------------------- President -5-