Exhibit 10.3
AGREEMENT AND PLAN OF DISTRIBUTION
AGREEMENT AND PLAN OF DISTRIBUTION, dated as of September __, 1997 by
and between MEDITRUST, a Massachusetts business trust ("Meditrust"), and
MEDITRUST ACQUISITION COMPANY, a Massachusetts business trust and wholly owned
subsidiary of Meditrust ("MAC").
RECITALS
WHEREAS, Meditrust, MAC, Santa Anita Realty Enterprises, Inc., a
Delaware corporation ("Realty"), and Santa Anita Operating Company, a Delaware
corporation ("Operating"), will enter into a Third Amended and Restated
Agreement and Plan of Merger, dated as of April 13, 1997 (the "Merger
Agreement"), providing for the merger of Meditrust with and into Realty and MAC
with and into Operating with Realty and Operating being the surviving
corporations (the "Mergers");
WHEREAS, the Boards of Trustees of Meditrust and MAC have proposed a
series of transactions whereby immediately prior to the record date for the
Special Meetings of Shareholders of Meditrust and MAC (the "Record Date"): (i)
Meditrust will transfer approximately $43,588,907 to MAC, (ii) Meditrust and
MAC will pair Meditrust's outstanding shares of beneficial interest without par
value (the "Meditrust Shares") with MAC's shares of beneficial interest without
par value (the "MAC Shares") so that they are transferable only in units, each
of which shall consist of one Meditrust Share and one MAC Share, 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 purpose of the Spin-Off is to make possible the Mergers by
creating two entities with a paired share structure to merge with and into
Realty and Operating which have such a paired share structure.
NOW, THEREFORE, in consideration of the premises, and of the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto hereby agree as follows:
ARTICLE I
Cash Contribution to MAC; Mechanics of Spin-Off
SECTION 1.1. Cash Contribution to MAC. Immediately prior to the Record
Date, Meditrust shall cause $43,588,907 in cash or other immediately available
funds to be transferred to MAC.
SECTION 1.2. Recapitalization of MAC.
(a) The authorized capital stock of MAC is unlimited and currently
there are 100 MAC Shares issued and outstanding, all of which are owned
beneficially and of record by Meditrust.
(b) Immediately prior to the Time of Distribution (as hereinafter
defined), Meditrust shall exchange the 100 MAC Shares owned by Meditrust for a
total number of MAC Shares equal to the total number of Meditrust Shares
outstanding as of the Record Date for the Spin-Off (as hereinafter defined).
SECTION 1.3. Mechanics of Spin-Offs. The Spin-Off shall be effected by
(i) the contribution of cash by Meditrust to MAC as set forth in Section 1.1 of
this Agreement and Plan of Distribution, (ii) the execution and delivery of the
Pairing Agreement by each of Meditrust and MAC and (iii) the declaration and
payment of a dividend by Meditrust to each holder of record of Meditrust Shares
(the "Meditrust Shareholders"), as of the close of the stock transfer books on
the record date designated by or pursuant to the authorization of the Board of
Trustees of Meditrust (the "Record Date for the Spin-Off"), of one MAC Share for
each Meditrust Share held by such holder, which MAC Shares shall be evidenced by
the certificates for the Meditrust Shares (the "Dividend").
SECTION 1.4. Timing of Spin-Off. As promptly as practicable after (and
in any event no later than 10 days after) the Board of Trustees of Meditrust has
formally declared the Dividend, Meditrust shall pay the Dividend, subject to the
satisfaction or waiver of the conditions set forth in Article V of this
Agreement and Plan of Distribution. The Spin-Off shall be effected (the "Time of
Distribution") at such time as the Board of Trustees of Meditrust shall have
determined that all conditions st forth in Article V shall have been satisfied
and in any event not later than the Record Date. Following such determination,
Meditrust shall promptly notify the Meditrust Shareholders that (A) the Dividend
has been declared and (B) each certificate representing Meditrust Shares has
been deemed to represent an equivalent number of MAC Shares. Promptly following
the Time of Distribution, Meditrust agrees to deliver to the holders of
Meditrust Shares a description of the MAC Shares. In addition, promptly upon the
declaration of the Dividend, Meditrust shall issue a press release describing
the Spin-Off, setting forth, among other things, the fact that the MAC Shares
will not trade separately from the Meditrust Shares and that MAC is a party to
the Merger Agreement and describing MAC's assets.
ARTICLE II
Ancillary Agreements and Documents
SECTION 2.1. Pairing Agreement. Prior to the Time of Distribution, each
of Meditrust and MAC shall execute and deliver an agreement providing that the
Meditrust Shares and the MAC Shares are transferable only in units, each of
which shall consist of one Meditrust Share and one MAC Share, substantially in
the form attached hereto as Exhibit A (the "Pairing Agreement").
SECTION 2.2. Description of MAC Shares. Promptly following the Time of
Distribution, Meditrust shall deliver to the Meditrust Shareholders a
description of the MAC Shares substantially in the form attached hereto as
Exhibit B (the "Description of Meditrust Acquisition Company Shares").
ARTICLE III
Representation and Warranties
SECTION 3.1. Representation and Warranties of Meditrust. Meditrust
hereby represents and warrants to MAC as follows:
(a) Organization, Standing and Power. Meditrust is a Massachusetts
business trust duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts and has all
requisite power and authority to own, lease and operate its properties
and to carry on its business as now being conducted.
(b) Authority. Meditrust has all requisite power and authority to
execute this Agreement and Plan of Distribution and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and Plan of Distribution and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary action on the part of Meditrust. This Agreement and Plan of
Distribution has been duly executed and delivered by Meditrust and
constitutes a legal, valid and binding obligation of Meditrust
enforceable against it in accordance with its terms.
(c) No Conflict. The execution, delivery and performance by Meditrust
of this Agreement and Plan of Distribution will not contravene,
violate, result in a breach of or constitute a default under (i) any
provision of applicable law or of the declaration of trust or by-laws
of Meditrust or other organizational document, (ii) any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable
to Meditrust or any of its properties or assets, or (iii) any material
contract, instrument or other agreement to which Meditrust is a party
or by which Meditrust or any of its properties is bound.
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(d) Approvals. No consent, approval, order, authorization of, or
registration, declaration or filing with, any third party or any
foreign, federal, state or local court, governmental authority or
regulatory body is required in connection with the making or
performance by Meditrust of this Agreement and Plan of Distribution,
except (i) filings with the Securities and Exchange Commission (the
"SEC") of (A) a registration statement on Form 10 with respect to the
MAC Shares and (B) a joint proxy statement/prospectus on Form S-4 with
respect to the Mergers, which shall contain information regarding MAC
of the nature and extent required by a registration statement on Form
S-1; and (ii) application for listing of the MAC shares on the New York
Stock Exchange.
SECTION 3.2. Representations and Warranties of MAC. MAC hereby
represents and warrants to Meditrust as follows:
(a) Organization, Standing and Power. MAC is a Massachusetts business
trust duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has all requisite power
and authority to own, lease and operate its properties and to carry on
its business as now being conducted.
(b) Authority. MAC has all requisite power and authority to execute
this Agreement and Plan of Distribution and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and Plan of Distribution and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary action on the part of MAC and the holders of MAC Shares. This
Agreement and Plan of Distribution has been duly executed and delivered
by MAC and constitutes a legal, valid and binding obligation of MAC
enforceable against it in accordance with its terms.
(c) No Conflict. The execution, delivery and performance by MAC of this
Agreement and Plan of Distribution will not contravene, violate, result
in a breach of or constitute a default under (i) any provision of
applicable law or of the declaration of trust or by-laws of MAC or
other charter or organizational documents, (ii) any judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to MAC
or any of its properties or (iii) any material contract, instrument or
other agreement to which MAC is a party or by which MAC or any of its
properties is bound.
(d) Approvals. No consent, approval, order, authorization of, or
registration, declaration or filing with any third party or any
foreign, federal, state or local court, governmental authority or
regulatory body is required in connection with the making or
performance by MAC of this Agreement and Plan of Distribution, except
(i) filings with the SEC of (A) a registration statement on Form 10
with respect to the MAC Shares and (B) a joint proxy
statement/prospectus on Form S-4 with respect to the Mergers, which
shall contain information regarding MAC of the nature and extent
required by a registration statement on Form S-1; and (ii) application
for listing of the MAC Shares on the New York Stock Exchange.
ARTICLE IV
Certain Covenants
SECTION 4.1. Transitional Services. Meditrust will provide such
transitional services as MAC shall reasonably request and MAC will reimburse
Meditrust for actual costs and expenses incurred in connection with the
provision of such services.
SECTION 4.2. Access to Information. After the Time of Distribution,
each of Meditrust and MAC shall provide the other and the other's
representatives with reasonable access during normal business hours and
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upon reasonable advance notice to all information within the possession or
control of the other insofar as such access is reasonably required for a
reasonable purpose.
ARTICLE V
Conditions
The obligations of Meditrust and MAC to consummate the Spin-Off shall
be subject to the fulfillment of each of the following conditions:
SECTION 5.1. Cash Contribution to MAC. The cash contribution by
Meditrust to MAC in accordance with Section 1.1 hereof shall have been completed
substantially as described therein.
SECTION 5.2. Pairing Agreement. The Pairing Agreement shall have been
executed and delivered by each of Meditrust and MAC.
SECTION 5.3. Conditions to Merger Satisfied. The conditions set forth
in Section 7.1.6 of the Merger Agreement shall have been satisfied.
SECTION 5.4. Registration of MAC Shares. A registration statement on
Form 10 shall have been filed by MAC with the SEC pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act") for the issuance of the
MAC Shares and shall have become effective under the Exchange Act and shall not
be the subject of any stop order or proceeding by the SEC seeking a stop order.
SECTION 5.5. Quotation on NYSE. The MAC Shares to be issued in the
Spin-Off shall have been listed on the New York Stock Exchange, subject to
official notice of issuance.
SECTION 5.6. Regulatory Approvals. All authorizations, consents, orders
or approvals of, or declarations or filings with, or expirations of waiting
periods imposed by, any governmental authority necessary for the consummation of
the transactions contemplated by this Agreement and Plan of Distribution shall
have been obtained or filed or shall have occurred.
SECTION 5.7. No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Spin-Off shall be in effect (each party agreeing to use all
reasonable efforts to have any such order reversed or injunction lifted).
ARTICLE VI
Termination, Amendment and Waiver
SECTION 6.1. Termination. Notwithstanding anything to the contrary in
this Agreement and Plan of Distribution, this Agreement and Plan of Distribution
may be terminated and the transactions contemplated hereby abandoned at any time
prior to the Time of Distribution by mutual written consent of Meditrust and MAC
in the event the Merger Agreement is terminated by any party thereto in
accordance with the terms thereof.
SECTION 6.2. Amendments and Waivers. This Agreement and Plan of
Distribution may not be amended, nor may compliance with any term or provision
of this Agreement and Plan of Distribution be waived, except by an instrument in
writing signed on behalf of each of the parties hereto.
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ARTICLE VII
General Provisions
SECTION 7.1. Counterparts. This Agreement and Plan of Distribution may
be executed in separate counterparts, each such counterpart being deemed to be
an original instrument and which counterparts shall together constitute the same
agreement.
SECTION 7.2. Governing Law. This Agreement and Plan of Distribution
shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts, without reference to its conflicts of law
principles.
SECTION 7.3. Notices. Any notice hereunder shall be in writing and
shall be deemed given or delivered two (2) days after it has been mailed by
registered or certified mail, postage prepaid, or one (1) day after being sent
by a recognized national courier service, in each case addressed as follows:
If to Meditrust:
197 First Avenue
Needham Heights, MA 02194
Attention: Michael S. Benjamin, Esq.
with a copy (which shall not constitute notice) to:
Nutter, McClennen & Fish, LLP
One International Place
Boston, MA 02110
Attention: Michael J. Bohnen, Esq.
If to MAC:
197 First Avenue
Needham Heights, MA 02194
Attention: Michael S. Benjamin, Esq.
with a copy (which shall not constitute notice) to:
Nutter, McClennen & Fish, LLP
One International Place
Boston, MA 02110
Attention: Michael J. Bohnen, Esq.
except that either party may from time to time by written notice to the other,
designate another address which shall thereupon become his effective address for
the purposes of this Section.
SECTION 7.4. Captions. All Article, Section and paragraph captions
herein are for convenience of reference only, do not constitute part of this
Agreement and Plan of Distribution and shall not be deemed to limit or otherwise
affect any of the provisions hereof.
SECTION 7.5. Interpretation. When a reference is made in this Agreement
and Plan of Distribution to a Section, Schedule or Exhibit, such reference shall
be to a Section, Schedule or Exhibit of this Agreement and Plan of Distribution
unless otherwise indicated. The headings contained in this Agreement and Plan of
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Distribution are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement and Plan of Distribution.
SECTION 7.6. 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 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 undersigned have hereunto set their hands under
seal as of the day and year first above written.
MEDITRUST
By:
---------------------------------
Name:
Title:
MEDITRUST ACQUISITION COMPANY
By:
---------------------------------
Name:
Title:
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Exhibit A
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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EXHIBIT B
DESCRIPTION OF MEDITRUST ACQUISITION COMPANY SHARES
There is no limit on the number of MAC Shares which MAC is authorized to
issue. MAC Shares may be issued by the Board of Trustees without any vote of the
shareholders. The MAC Shares are without par value. On the date hereof, the
outstanding MAC Shares are of one class. The following description is qualified
in all respects by reference to the MAC Declaration and the MAC By-laws.
Redemption. For MAC to qualify as a real estate investment trust under the
Internal Revenue Code of 1986, as amended (the "Code"), in any taxable year, not
more than 50% of its outstanding shares may be owned by five or fewer
individuals and MAC Shares must be owned by 100 or more persons during at least
335 days of a taxable year of 12 months or during a proportionate part of a
shorter taxable year. In order to meet these requirements, the Trustees have the
power to redeem or prohibit the transfer of a sufficient number of MAC Shares
selected in a manner deemed appropriate to maintain or bring the ownership of
the MAC Shares into conformity with such requirements. In connection with the
foregoing, if the Trustees shall, at any time and in good faith, be of the
opinion that direct or indirect ownership of at least 9.9% or more of the MAC
Shares has or may become concentrated in the hands of one beneficial owner, the
Trustees shall have the power (i) by lot or other means deemed equitable by them
to call for the purchase from any shareholder of MAC of a number of MAC Shares
sufficient, in the opinion of the Trustees, to maintain or bring the direct or
indirect ownership of MAC Shares of such owner to a level of no more than 9.9%
of the outstanding MAC Shares, and (ii) to refuse to transfer or issue MAC
Shares to any person whose acquisition of such MAC Shares would cause a
beneficial holder to hold in excess of 9.9% of the outstanding MAC Shares.
Further, any transfer of MAC Shares that would create a beneficial owner of more
than 9.9% of the outstanding MAC Shares shall be deemed void and the intended
transferee shall be deemed never to have had an interest therein. The purchase
price for any MAC Shares so redeemed shall be equal to the fair market value of
the MAC Shares reflected in the closing sales price for the MAC Shares, if then
listed on a national securities exchange, or the average of the closing sales
price for the MAC Shares if then listed on more than one national securities
exchange, or if the MAC Shares are not then listed on a national securities
exchange, the latest bid quotation for the MAC Shares if then traded over-the-
counter, on the last business day immediately preceding the day on which notices
of such acquisition are sent by MAC. From and after the date fixed for purchase
by the Trustee, the holder of any MAC Shares so called for purchase shall cease
to be entitled to distributions, voting rights and other benefits with respect
to such MAC Shares, except the right to payment of the purchase price for the
MAC Shares.
The foregoing provisions may have the effect of discouraging unilateral
tender offers or other takeover proposals which certain shareholders might deem
in their interest or in which they might receive a substantial premium. The
provisions could also have the effect of insulating current management against
the possibility of removal and could, by possibly reducing temporary
fluctuations in market price caused by accumulations of MAC Shares, deprive
shareholders of opportunities to sell at a temporarily higher market price.
Additional Provisions. The MAC Declaration provides that annual meetings of
shareholder are to be held within six months after the end of each fiscal year
and special meetings of the shareholders may be called by the President of MAC,
a majority of the Trustees or a majority of the Independent Trustees (defined in
the MAC Declaration) and shall be called upon the written request of the holders
of 10% or more of the outstanding MAC Shares.
Whenever any action is to be taken by the shareholders, it shall, except as
otherwise clearly indicated in the MAC Declaration or By-Laws, be authorized by
holders of a majority of the MAC Shares present in person or represented by
proxy and entitled to vote thereon, provided that such majority shall be at
least a majority of the number of MAC Shares that constitute a quorum.
Notwithstanding the foregoing, at all elections of Trustees, voting by
shareholders shall be conducted under the non-cumulative method and the election
of Trustees shall be by the affirmative vote of the holders of the MAC Shares
representing a plurality of the MAC Shares then outstanding which are present in
person or by proxy at a meeting in which a quorum is present.
Whenever shareholders are required or permitted to take any action (unless
a vote at a meeting is specifically required, as with respect to termination or
amendment of the MAC Declaration), such action may be taken without a meeting by
written consents setting forth the action so taken, signed by the holders of a
majority (or such higher percentage as may be specified) of the outstanding MAC
Shares that would be entitled to vote thereon at a meeting.
Except with respect to matters on which a shareholders' vote is
specifically required by the MAC Declaration, no action taken by the
shareholders at any meeting shall in any way bind the Trustees.
The MAC Shares have no preemptive or appraisal rights.
The MAC Declaration provides that shareholders of MAC shall not be subject
to any liability for the acts or obligations of MAC and that, as far as is
practicable, each written agreement of MAC is to contain provision to that
effect. No personal liability will attach to the shareholders for claims under
any contract containing such a provision in writing where adequate notice is
given of such provision, except possibly in a few jurisdictions. With respect to
all types of claims in such jurisdictions and with respect to tort claims,
contract claims where the shareholder liability is not disavowed as described
above, claims for taxes and certain statutory liabilities in other
jurisdictions, a shareholder may be held personally
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liable to the extent claims are not satisfied by MAC. However, the MAC
Declaration provides that, upon payment of any such liability, the shareholder
will be entitled to reimbursement from the general assets of MAC. The Trustees
intend to conduct the operations of MAC, with the advice of counsel, in such a
way as to avoid, as far as is practicable, the ultimate liability of the
shareholders of MAC. The Trustees do not intend to provide insurance covering
such risks to shareholders.
All MAC Shares participate equally in dividends and in net assets available
for distribution to holders of MAC Shares on liquidation or termination of MAC,
have one vote per share on all matters submitted to a vote of the shareholders
and do not have cumulative voting rights in the election of Trustees. The MAC
Shares have no conversion, exchange or sinking fund rights.
Paired Share Structure. MAC Shares are transferable and tradeable only in
combination as a unit with shares of Meditrust, each unit consisting of one
share of Meditrust and one MAC Share. These restrictions are imposed by the MAC
By-Laws. The MAC Shares are evidenced by the certificates for the related
Meditrust shares.
Transfer Agent and Registrar. Boston Equiserve, Canton, Massachusetts, acts
as transfer agent and registrar of the MAC Shares.
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