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Filed pursuant to Rule 424(b)(5)
Registration Nos. 33-56663
and 33-59215
THE INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
SUBJECT TO COMPLETION, DATED JULY 11, 1995
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JUNE 1, 1995
$100,000,000
[MEDITRUST LOGO]
% NOTES DUE JULY 15, 2000
-------------------
Interest on the Notes is payable on January 15 and July 15 of each year,
commencing January 15, 1996. The Notes may be redeemed at any time at the option
of the Company, in whole or in part, at a redemption price equal to the sum of
(i) the principal amount of the Notes being redeemed plus accrued interest
thereon to the redemption date and (ii) the Make-Whole Amount (as defined
herein), if any. The Notes are unsecured obligations of the Company and will
rank equally with all unsecured and unsubordinated indebtedness of the Company.
See "Description of Notes--Covenants". The Notes will be represented by a single
Global Security (as defined herein) registered in the name of the nominee of The
Depository Trust Company. Beneficial interests in the Global Security will be
shown on, and transfers thereof will be effected only through, records
maintained by DTC and its participants. Except as described in "Description of
Notes--Book-Entry System", Notes in definitive form will not be issued. The
Notes will be issued only in denominations of $1,000 and integral multiples
thereof. The Notes will trade in DTC's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the Notes will therefore
settle in immediately available funds. All payments of principal and interest
will be made by the Company in immediately available funds. See "Description of
Notes--Same-Day Settlement and Payment".
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
-------------------
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) COMPANY(1)(3)
------------------- ------------- ---------------
Per Note................................................ % % %
Total................................................... $ $ $
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<FN>
(1) Plus accrued interest, if any, from July , 1995.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting estimated expenses of $ payable by the Company.
-------------------
The Notes offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that the Notes
will be ready for delivery in book-entry form only through the facilities of DTC
in New York, New York on or about July , 1995, against payment therefor in
immediately available funds.
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
-------------------
The date of this Prospectus Supplement is July , 1995.
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[CHART GOES HERE]
SEE THE APPENDIX FOR A DESCRIPTION OF THE CHARTS AND GRAPHS THAT APPEAR ON
THIS PAGE.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the detailed
information appearing elsewhere in this Prospectus Supplement or the
accompanying Prospectus or incorporated herein or therein by reference.
THE COMPANY
Meditrust, founded in 1985, is the largest dedicated health care real
estate investment trust in the United States, based on its gross real estate
investments of $1.6 billion as of March 31, 1995.
As of March 31, 1995, the Company had investments in 282 facilities,
consisting of 238 long-term care facilities, 23 rehabilitation hospitals, six
psychiatric hospitals, six retirement living facilities, two alcohol and
substance abuse facilities, six medical office buildings and one acute care
hospital. The properties are located in 34 different states and are operated by
32 health care companies. Of the 32 different operators, seven are publicly
traded companies and constitute approximately 45% of the Company's gross real
estate investments.
The Company's real estate investments are either owned by the Company or
secured by a mortgage lien. As of March 31, 1995, permanent mortgage loans
constituted 54%, sale/leaseback transactions constituted 41%, and development
mortgage financing constituted 5% of the Company's portfolio as measured by
gross real estate investments.
THE OFFERING
Securities Offered....... $100,000,000 aggregate principal amount of % Notes due July 15, 2000.
Interest Payment Dates... January 15 and July 15, commencing January 15, 1996.
Maturity Date............ July 15, 2000.
Ranking.................. The Notes will be unsecured obligations of the Company and will rank
equally with the Company's other unsecured and unsubordinated indebtedness.
Optional Redemption...... The Notes are redeemable at any time at the option of the Company, in whole
or in part, at a redemption price equal to the sum of (i) the principal
amount of the Notes being redeemed plus accrued interest thereon to the
redemption date and (ii) the Make-Whole Amount, if any. See "Description of
Notes -- Optional Redemption".
Use of Proceeds.......... To repay outstanding indebtedness of the Company. See "Use of Proceeds".
Covenants................ The Company will not pledge or otherwise subject to any lien any assets of
the Company or its subsidiaries unless the Notes are secured by such pledge
or lien equally and ratably with all other obligations secured thereby so
long as such obligations shall be so secured; provided, however, that such
limitation will not apply to liens securing obligations which do not in the
aggregate at any one time outstanding exceed 10% of Consolidated Net
Tangible Assets of the Company and its consolidated subsidiaries and will
also not apply to certain other liens specified in the Indenture. The
Company will not incur any (a) Senior Debt unless the aggregate outstanding
principal amount of Senior Debt will not, at the time of such incurrence,
exceed the greater of (i) 150% of Capital Base or (ii) 225% of Tangible Net
Worth and (b) Non-Recourse Debt unless the aggregate outstanding principal
amount of Senior Debt and Non-Recourse Debt will not, at the time of such
incurrence, exceed 225% of Capital Base. For a more complete description of
the terms of and definitions used in the foregoing limitations, see
"Description of Notes -- Covenants".
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THE COMPANY
Meditrust, established in 1985, is the largest dedicated health care real
estate investment trust in the United States, based on its gross real estate
investments of $1.6 billion as of March 31, 1995. The Company invests in high
quality health care facilities that are managed by experienced operators and
attempts to achieve diversity in its property portfolio by sector of the health
care industry, geographic location, operator and form of investment.
As of March 31, 1995, the Company had investments in 282 facilities,
consisting of 238 long-term care facilities, 23 rehabilitation hospitals, six
psychiatric hospitals, six retirement living facilities, two alcohol and
substance abuse facilities, six medical office buildings and one acute care
hospital. The properties are located in 34 different states and are operated by
32 health care companies. Of the 32 different operators, seven are
publicly-traded companies (Sun Healthcare Group, Inc., Continental Medical
Systems, Inc., Geriatric and Medical Centers, Inc., OrNda Healthcorp.,
Integrated Health Services, Inc., Healthsouth Corporation and Mariner Health
Group, Inc.), and constitute approximately 45% of the Company's gross real
estate investments.
The Company's real estate investments are either owned by the Company or
secured by a mortgage lien. As of March 31, 1995, permanent mortgage loans
constituted 54%, sale/leaseback transactions constituted 41%, and development
mortgage financing constituted 5% of the Company's portfolio as measured by
gross real estate investments. The leases and mortgages provide for rental or
interest rates which generally range from 9.5% to 13.5% per annum of the
acquisition price or mortgage amount. The leases and mortgages generally provide
for an initial term of 10 years, with the leases having one or more five-year
renewal options. The leases and mortgages also provide for either additional
rent and interest, which are generally based upon a percentage of increased
revenues over specific base period revenues of the related properties, or fixed
increases in rent or interest payments.
In addition, the Company usually obtains guarantees from the parent
corporation, if any, of the operator or affiliates or individual principals of
the operator. Many obligations are backed by letters of credit, security
deposits or pledges of certificates of deposit which cover from three to twelve
months of lease or mortgage payments. In addition, the Company's permanent and
development mortgage loans and leases generally are cross-defaulted and where
appropriate cross-collateralized with other mortgage and development loans,
leases or other agreements between the Company and the same operator or any
affiliated operators. With respect to development mortgage loans, the Company
generally requires guaranteed maximum price construction contracts, performance
completion bonds or guarantees. The Company enters into a development mortgage
loan when the Company will also be the permanent owner or mortgage lender.
In making its investment decisions, the Company reviews, among other
criteria, the operational viability of the facility, the experience and
competency of the operator and the financial strength of the guarantor. From
time to time, the Company enters into transactions with related parties. As of
June 30, 1995, the Company had total commitments of $101 million, of which $37
million was funded, to companies in which Abraham D. Gosman, the Company's Chief
Executive Officer, has an ownership interest. The Company expects to enter into
additional transactions with related parties in the future. All of the terms and
conditions of such transactions are subject to approval by the Independent
Trustees of the Company. The Board of Trustees believes that the terms of the
transactions which the Company has entered into with related parties are not
less favorable to the Company than those prevailing at the time for comparable
transactions with unrelated persons.
The Company was organized to qualify, and intends to continue to operate,
as a real estate investment trust in accordance with Federal tax laws and
regulations. So long as the Company so complies, with limited exceptions, the
Company will not be taxed under Federal income tax laws on that portion of its
taxable income that it distributes to its shareholders. The Company has
distributed, and intends to continue to distribute, substantially all of its
real estate investment trust taxable income to shareholders.
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In order to meet its ongoing capital requirements for additional
investments, the Company may raise additional capital through the sale of
Shares, Debt Securities, Share Warrants or Debt Securities Warrants or may
borrow under its lines of credit. The Company currently has a $205 million
revolving credit facility, of which $75 million was outstanding as of June 30,
1995.
The Company is a self-administered real estate investment trust, with its
principal executive offices at 197 First Avenue, Needham Heights, Massachusetts
02194. Its telephone number is (617) 433-6000.
HEALTH CARE REFORM AND REGULATION
Many of the operators with which the Company does business rely on
government reimbursement, primarily Medicare and Medicaid, for a significant
portion of their operating revenues. During a recent session of the United
States Congress, there was active consideration of various proposals for
national health care reform, including the administration's proposal to cap
national health care spending and the future growth of Medicare and Medicaid
funding. No such legislation was passed during the 1994 session of Congress.
Such legislation may be reintroduced during current or future sessions of
Congress, although it is not possible to predict whether and when health care
reform legislation will be passed by Congress and, if passed, what features such
legislation will contain or the effect it may have on the nursing home, assisted
living care or rehabilitation care industries, the reimbursement levels
available to health care providers or on the health care industry in general.
From time to time, Medicaid, Medicare and other governmental payers have
reviewed the billing practices of many health care facilities operators
including certain of the operators with which the Company does business. It is
unclear what impact such reviews may have on these operators. The Company does
not believe, however, that any adverse findings against these operators would
materially affect the Company's financial position.
RECENT DEVELOPMENTS
During the first six months of 1995, the Company committed $243 million to
new real estate investments, of which $172 million was funded. Of these amounts,
$126 million was committed and $55 million was funded during the quarter ended
June 30, 1995.
During the first quarter of 1995, the Company entered into an agreement
which it expects to consummate during the week of July 17, 1995, providing for
the sale of $43,334,000 principal amount of 8.54% Series A Convertible Senior
Notes due May 1, 2000 and $51,666,000 principal amount of 8.56% Series B
Convertible Senior Notes due May 1, 2002 to certain institutional investors in a
private placement. These notes will be convertible into shares of beneficial
interest of the Company at $32.625 per share. The Company plans to use the net
proceeds from the sale of these notes to repay indebtedness.
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Notes
offered hereby, estimated to be $ , to repay indebtedness. The
indebtedness being repaid bears interest at rates ranging from 10.00% to 10.86%
per annum and matures between December 31, 1995 and December 31, 2001.
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MANAGEMENT
The Company's officers have significant experience in the health care field, and a
majority of them have been part of the Company's management team for over eight years. The
officers and trustees of the Company are:
NAME AGE OFFICE
---- --- ------
Abraham D. Gosman.......... 66 Chief Executive Officer; Trustee
David F. Benson............ 46 President; Trustee
Michael F. Bushee.......... 37 Chief Operating Officer
Michael S. Benjamin........ 37 Senior Vice President, Secretary and Corporate Counsel
Lisa P. McAlister.......... 31 Vice President and Treasurer
Stephen H. Press........... 58 Vice President
Keith E. Grant............. 54 Controller
Edward W. Brooke........... 75 Trustee; Partner, O'Connor & Hannan, Washington, DC
Hugh L. Carey.............. 76 Trustee; Executive Vice President, W.R. Grace & Co.
Robert Cataldo............. 70 Trustee; President, Sheldon Corporation, Lexington, MA
Philip L. Lowe............. 77 Trustee; Principal, Philip L. Lowe and Associates, Boston, MA
Thomas J. Magovern......... 53 Trustee; Principal, Nationwide Financial Corp., Far Hills, NJ
Gerald Tsai, Jr............ 66 Trustee; Chief Executive Officer, Delta Life Corp., Memphis, TN
Frederick W. Zuckerman..... 60 Trustee; Consultant; Retired Officer of Chrysler, RJR Nabisco
and IBM
CAPITALIZATION
The following table sets forth the consolidated capitalization of the Company (i) as of March 31, 1995 and
(ii) as adjusted to reflect the sale of the Notes offered hereby and the application of the net proceeds from this
Offering. See "Use of Proceeds". The capitalization table should be read in conjunction with the Company's financial
statements and related notes incorporated by reference in this Prospectus Supplement and the accompanying Prospectus.
MARCH 31, 1995
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ACTUAL AS ADJUSTED(1)
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(IN THOUSANDS)
Indebtedness and other liabilities:
Notes due July 15, 2000............................................. $ 0 $ 100,000
Other senior unsecured notes payable, net........................... 273,044 194,301
Senior mortgage notes payable, net.................................. 21,257 0
Bonds and mortgages payable, net.................................... 59,047 59,047
9% Convertible debentures, net...................................... 14,036 14,036
7% Convertible debentures, net...................................... 35,945 35,945
6 7/8% Convertible debentures, net.................................. 84,587 84,587
7 1/2% Convertible debentures, net.................................. 87,932 87,932
Bank notes payable, net............................................. 49,747 49,747
Deferred income..................................................... 12,704 12,704
Accrued expenses and other liabilities.............................. 48,866 48,866
Shareholders' equity:
Shares of beneficial interest without par value: unlimited
Shares authorized, 48,694,000 Shares issued and
outstanding at 3/31/95, 48,694,000 Shares as adjusted............. 1,027,162 1,027,162
---------- ----------
Total capitalization...................................... $1,714,327 $1,714,327
========== ==========
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<FN>
(1) Does not include the effect of the sale of $95 million Convertible Senior Notes expected to close during
the week of July 17, 1995.
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SELECTED FINANCIAL DATA
The following table presents selected financial information with respect to the Company for the five years ended
December 31, 1994 and the three-month periods ended March 31, 1994 and 1995. This financial information has been derived from
financial statements included in the Company's Annual Reports on Form 10-K and the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1995 and should be read in conjunction with those financial statements and accompanying footnotes.
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
--------------------------------------------------------- -----------------
1990 1991 1992 1993 1994 1994 1995
---- ---- ---- ---- ---- ---- ----
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
OPERATING DATA:
Revenues............................. $ 89,121 $112,910 $132,394 $150,375 $172,993 $40,995 $48,933
-------- -------- -------- -------- -------- ------- -------
Expenses:
Interest expense................... 43,494 56,886 58,159 62,193 67,479 16,415 18,474
Depreciation and amortization...... 10,821 13,185 14,032 16,277 17,171 4,422 4,343
General and administrative
expenses......................... 5,824 4,930 8,845 8,269 7,883 2,453 1,933
-------- -------- -------- -------- -------- ------- -------
Total expenses........................... 60,139 75,001 81,036 86,739 92,533 23,290 24,750
-------- -------- -------- -------- -------- ------- -------
Net income before extraordinary item..... 28,982 37,909 51,358 63,636 80,460 17,705 24,183
Loss on prepayment of debt............... -- 3,684 -- -- -- -- --
-------- -------- -------- -------- -------- ------- -------
Net Income............................... $ 28,982 $ 34,225 $ 51,358 $ 63,636 $ 80,460 $17,705 $24,183
======== ======== ======== ======== ======== ======= =======
OTHER DATA:
Shares of beneficial interest
(weighted average)................. 18,409 21,710 26,360 31,310 35,314 33,438 40,594
Cash flow from operating activities
available for distribution (1)..... $ 44,110 $ 53,950 $ 67,942 $ 84,831 $100,513 $23,050 $29,442
PER SHARE:
Net income before extraordinary
item............................... $1.57 $1.75 $1.95 $2.03 $2.28 $.53 $.60
Net income........................... 1.57 1.58 1.95 2.03 2.28 .53 .60
Dividends paid (2)................... 2.33 2.38 2.46 2.54 2.62 .6475 .6675
DECEMBER 31,
--------------------------------------------------------- MARCH 31,
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----------
BALANCE SHEET DATA:
Real estate investments, net................ $746,517 $842,518 $1,021,630 $1,214,308 $1,484,229 $1,591,156
Total assets................................ 821,741 928,254 1,094,941 1,310,401 1,595,130 1,714,327
Indebtedness................................ 512,010 463,695 606,585 658,245 765,752 625,595
Total liabilities........................... 548,378 500,736 663,458 724,606 824,983 687,165
Total shareholders' equity.................. 273,363 427,518 431,483 585,795 770,147 1,027,162
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<FN>
(1) Consists of net income plus depreciation, amortization of debt issuance costs, provision for losses, loss on prepayment of
debt, partnership distributions in excess of income, and deferred income received in cash net of amortization of deferred
income, and less gain on sale of real estate and mortgage prepayments.
(2) Dividends, used in this context, may include distributions in excess of current or accumulated net income.
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DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby (referred to in the accompanying Prospectus as the "Debt Securities")
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of Debt Securities set forth in the
Prospectus, to which description reference is hereby made. The following
statements relating to the Notes and the Indenture are summaries of provisions
contained therein and do not purport to be complete. Such statements are
qualified by reference to the provisions of the Notes and the Indenture,
including the definitions therein of certain terms. The Indenture is an exhibit
to the registration statement of which the Prospectus accompanying this
Prospectus Supplement is a part. Capitalized terms not otherwise defined herein
shall have the meanings given to them in the Prospectus.
GENERAL
The % Notes due July 15, 2000 (the "Notes") will be limited to
$100,000,000 aggregate principal amount and will mature on July 15, 2000. The
Notes may be redeemed at any time at the option of the Company, in whole or in
part, at a redemption price equal to the sum of (i) the principal amount of the
Notes being redeemed plus accrued interest thereon to the redemption date and
(ii) the Make-Whole Amount (as defined herein), if any. The Notes will be
unsecured and unsubordinated obligations of the Company and will rank equally
with other unsecured and unsubordinated indebtedness of the Company.
The Notes will only be issued in fully registered book-entry form without
coupons in denominations of $1,000 and integral multiples thereof, except under
the limited circumstances described below under "--Book-Entry System".
INTEREST
The Notes will bear interest at the rate set forth on the cover page of
this Prospectus Supplement from July , 1995, payable semi-annually on January
15 and July 15 of each year, beginning January 15, 1996 (each, an "Interest
Payment Date"), to the person in whose name a Note (or any predecessor Note) is
registered at the close of business on the January 1 or July 1, as the case may
be, next preceding such Interest Payment Date.
OPTIONAL REDEMPTION
The Notes may be redeemed at any time at the option of the Company, in
whole or in part, at a redemption price equal to the sum of (i) the principal
amount of the Notes being redeemed plus accrued interest thereon to the
redemption date and (ii) the Make-Whole Amount, if any, with respect to such
Notes (the "Redemption Price").
From and after notice has been given as provided in the Indenture, if funds
for the redemption of any Notes called for redemption shall have been made
available on such redemption date, such Notes will cease to bear interest on the
date fixed for such redemption specified in such notice and the only right of
the Holders of the Notes will be to receive payment of the Redemption Price.
Notice of any optional redemption of any Notes will be given to Holders at
their addresses, as shown in the Note Register, not more than 60 nor less than
30 days prior to the date fixed for redemption. The notice of redemption will
specify, among other items, the Redemption Price and the principal amount of the
Notes held by such Holder to be redeemed.
If less than all the Notes are to be redeemed at the option of the Company,
the Company will notify the Trustee at least 45 days prior to the redemption
date (or such shorter period as satisfactory to the Trustee) of the aggregate
principal amount of Notes to be redeemed and the redemption date. The Trustee
shall select, in such manner as it shall deem fair and appropriate, Notes to be
redeemed in whole or in part. Notes may be redeemed in part in the minimum
authorized denomination for Notes or in any integral multiple thereof.
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"Make-Whole Amount" means, in connection with any optional redemption or
accelerated payment of any Note, the excess, if any, of (i) the aggregate
present value as of the date of such redemption or accelerated payment of each
dollar of principal being redeemed or paid and the amount of interest (exclusive
of any interest accrued to the date of redemption or accelerated payment) that
would have been payable in respect of such dollar if such redemption or
accelerated payment had not been made, determined by discounting, on a
semiannual basis, such principal and interest at the Reinvestment Rate
(determined on the third Business Day preceding the date such notice of
redemption is given or declaration of acceleration is made) from the respective
dates on which such principal and interest would have been payable if such
redemption or accelerated payment had not been made, over (ii) the aggregate
principal amount of the Notes being redeemed or paid.
"Reinvestment Rate" means .25% (one-fourth of one percent) plus the
arithmetic mean of the yields under the respective headings "This Week" and
"Last Week" published in the Statistical Release under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the payment date of the
principal being redeemed or paid. If no maturity exactly corresponds to such
maturity, yields for the two published maturities most closely corresponding to
such maturity shall be calculated pursuant to the immediately preceding sentence
and the Reinvestment Rate shall be interpolated or extrapolated from such yields
on a straight-line basis, rounding in each of such relevant periods to the
nearest month. For the purposes of calculating the Reinvestment Rate, the most
recent Statistical Release published prior to the date of determination of the
Make-Whole Amount shall be used.
"Statistical Release" means the statistical release designated "H.15(519)"
or any successor publication which is published weekly by the Federal Reserve
System and which establishes yields on actively traded United States government
securities adjusted to constant maturities or, if such statistical release is
not published at the time of any determination under the Indenture, then such
other reasonably comparable index which shall be designated by the Company.
COVENANTS
The Debt Securities will not be secured by mortgage, pledge or other lien.
The Company will covenant in the Indenture not to pledge or otherwise subject to
any lien any property or assets of the Company or its subsidiaries unless the
Debt Securities are secured by such pledge or lien equally and ratably with all
other obligations secured thereby so long as such obligations shall be so
secured; provided, however, that such covenant will not apply to liens securing
obligations which do not in the aggregate at any one time outstanding exceed 10%
of Consolidated Net Tangible Assets (as defined below) of the Company and its
consolidated subsidiaries and in addition will not apply to:
(1) Any lien or charge on any property, tangible or intangible, real
or personal, existing at the time of acquisition or construction of such
property (including acquisition through merger or consolidation) or given
to secure the payment of all or any part of the purchase or construction
price thereof or to secure any indebtedness incurred prior to, at the time
of, or within one year after, the acquisition or completion of construction
thereof for the purpose of financing all or any part of the purchase or
construction price thereof;
(2) Any liens securing the performance of any contract or undertaking
of the Company not directly or indirectly in connection with the borrowing
of money, obtaining of advances or credit or the securing of debts, if made
and continuing in the ordinary course of business;
(3) Any lien in favor of the United States or any state thereof or the
District of Columbia, or any agency, department or other instrumentality
thereof, to secure progress, advance, or other payments pursuant to any
contract or provision of any statute;
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(4) Mechanics', materialmen's, carriers', or other like liens arising
in the ordinary course of business (including construction of facilities)
in respect of obligations which are not due or which are being contested in
good faith;
(5) Any lien arising by reason of deposits with, or the giving of any
form of security to, any governmental agency or any body created or
approved by law or governmental regulations, which is required by law or
governmental regulation as a condition to the transaction of any business,
or the exercise of any privilege, franchise or license;
(6) Any liens for taxes, assessments or governmental charges or levies
not yet delinquent, or liens for taxes, assessments or governmental charges
or levies already delinquent but the validity of which is being contested
in good faith;
(7) Liens (including judgment liens) arising in connection with legal
proceedings so long as such proceedings are being contested in good faith
and in the case of judgment liens, execution thereof is stayed;
(8) Liens relating to secured indebtedness of the Company outstanding
as of June 30, 1995; and
(9) Any extension, renewal or replacement (or successive extensions,
renewals or replacements), as a whole or in part, of any lien referred to
in the foregoing clauses (1) to (9) inclusive, provided, however, that the
amount of any and all obligations and indebtedness secured thereby shall
not exceed the amount thereof so secured immediately prior to the time of
such extension, renewal or replacement and that such extension, renewal or
replacement shall be limited to all or a part of the property which secured
the charge or lien so extended, renewed or replaced (plus improvements on
such property).
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) less (i) all
current liabilities and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expenses and other like intangibles of the Company
and its consolidated subsidiaries, all as set forth on the most recent balance
sheet of the Company and its consolidated subsidiaries prepared in accordance
with generally accepted accounting principles.
The Company also covenants in the Indenture that it will not create,
assume, incur, or otherwise become liable in respect of, any
(a) Senior Debt (as defined below) unless the aggregate outstanding
principal amount of Senior Debt of the Company will not, at the time of
such creation, assumption or incurrence and after giving effect thereto and
to any concurrent transactions, exceed the greater of (i) 150% of Capital
Base (as defined below), or (ii) 225% of Tangible Net Worth (as defined
below); and
(b) Non-Recourse Debt (as defined below) unless the aggregate
outstanding principal amount of Senior Debt and Non-Recourse Debt of the
Company will not, at the time of such creation, assumption or incurrence
and after giving effect thereto and to any concurrent transactions, exceed
225% of Capital Base.
For the purposes of this limitation as to borrowing money, "Senior Debt"
means all Debt other than Non-Recourse Debt and Subordinated Debt; "Debt", with
respect to any Person, means (i) its indebtedness, secured or unsecured, for
borrowed money; (ii) Liabilities secured by any existing lien on property owned
by such Person; (iii) Capital Lease Obligations, and the present value of all
payments due under any arrangement for retention of title (discounted at a rate
per annum equal to the average interest borne by all outstanding Debt Securities
determined on a weighted average basis and compounded semi-annually) if such
arrangement is in substance an installment purchase or an arrangement for the
retention of title for security purposes; and (iv) guarantees of obligations of
the character specified in the foregoing clauses (i), (ii) and (iii), to the
full extent of the liability of the guarantor (discounted to present value, as
provided in the foregoing clause (iii), in the case
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of guarantees of title retention arrangements); "Capital Lease" means at any
time any lease of property, real or personal, which, in accordance with
generally accepted accounting principles, would at such time be required to be
capitalized on a balance sheet of the lessee; "Capital Lease Obligation" means
at any time the amount of the liability in respect of a Capital Lease which, in
accordance with generally accepted accounting principles, would at such time be
required to be capitalized on a balance sheet of the lessee; "Person" means an
individual, partnership, corporation, joint venture, association, joint stock
company, trust, limited liability company, unincorporated organization, or a
government or agency or political subdivision thereof; "Non-Recourse Debt" with
respect to any Person, means any Debt secured by, and only by, property on or
with respect to which such Debt is incurred where the rights and remedies of the
holder of such Debt in the event of default do not extend to assets other than
the property constituting security therefor; "Subordinated Debt" means any
unsecured Debt of the Company which is issued or assumed pursuant to, or
evidenced by, an indenture or other instrument which contains provisions for the
subordination of such other Debt (to which appropriate reference shall be made
in the instruments evidencing such other Debt if not contained therein) to the
Debt Securities (and, at the option of the Company, if so provided, to other
Debt of the Company, either generally or as specifically designated); "Capital
Base" means, at any date, the sum of Tangible Net Worth and Subordinated Debt;
"Tangible Net Worth" means, at any date, the net book value (after deducting
related depreciation, obsolescence, amortization, valuation, and other proper
reserves) of the tangible assets of the Company at such date, minus the amount
of its Liabilities at such date; and "Liabilities" means, at any date, the items
shown as liabilities on the balance sheet of the Company, except any items of
deferred income, including capital gains.
DEFEASANCE
The provisions of Article 8 of the Indenture relating to defeasance and
covenant defeasance, which are described in the accompanying Prospectus, will
apply to the Notes.
BOOK-ENTRY SYSTEM
The Notes will be represented by a single global security (the "Global
Security") and registered in the name of DTC or its nominee. Upon the issuance
of the Global Security, DTC or its nominee will credit, on its book-entry
registration and transfer system, the respective principal amounts of the Notes
represented by the Global Security to the accounts designated by the
Underwriters. Ownership of beneficial interests in the Global Security will be
limited to institutions that have accounts with DTC or its nominee
("Participants") and to persons that may hold interests through Participants.
Ownership of beneficial interests in the Global Security will be shown only on,
and the transfer of those ownership interests will be effected only through,
records maintained by such Participants. The laws of some jurisdictions may
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and laws may impair the ability to
transfer beneficial interests in the Global Security.
Notwithstanding any provision of the Indenture or the Notes, the Global
Security may not be exchanged in whole or in part for Notes registered, and no
transfer of the Global Security in whole or in part may be registered, in the
name of any Person other than DTC or any nominee of DTC unless (i) DTC has
notified the Company that it is unwilling or unable to continue as depositary
for the Global Security or has ceased to be qualified to act as such as required
by the Indenture or (ii) there shall have occurred and be continuing an Event of
Default with respect to the Notes. The Notes issued in exchange for the Global
Security or any portion thereof will be registered in such names as DTC may
direct.
As long as DTC or its nominee is the registered holder and owner of the
Global Security, DTC or such nominee, as the case may be, will be considered the
sole owner and holder of the Notes for all purposes of such Notes and for all
purposes under the Indenture. Except in the limited circumstances referred to
above, owners of beneficial interests in the Global Security will not be
entitled to
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have the Notes registered in their names, will not receive or be entitled to
receive physical delivery of certificated Notes in definitive form and will not
be considered to be the owners or holders of any Notes under the Indenture or
the Notes. Payment of principal of, and interest and premium, if any, on the
Notes will be made to DTC or its nominee, as the case may be, as the registered
owner or holder of the Global Security.
Payments, transfers, exchanges and other matters relating to beneficial
interests in the Global Security may be subject to various policies and
procedures adopted by DTC from time to time. Neither the Company nor the Trustee
will have any responsibility or liability for any aspect of the records relating
to, or payments made on account of, beneficial ownership interests in the Global
Security for any Notes or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests or for any other aspect of the
relationship between DTC and its Participants or the relationship between such
Participants and the owners of beneficial interests in the Global Security
owning through such Participants.
The following is based on information furnished by DTC:
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended. DTC holds
securities that its Participants deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized
book-entry changes in Participants' accounts, thereby eliminating the need
for physical movement of securities certificates. Direct Participants
include securities brokers and dealers (including the Underwriters), banks,
trust companies, clearing corporations, and certain other organizations
("Direct Participants"). DTC is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc.
Access to the DTC system is also available to others such as securities
brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either
directly or indirectly. The rules applicable to DTC and its Participants
are on file with the Securities and Exchange Commission.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest will be made by the
Company in immediately available funds, so long as DTC continues to make its
Same-Day Funds Settlement System available to the Company.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearinghouse or next-day funds. In contrast, the Notes
will trade in DTC's Same-Day Funds Settlement System, and secondary market
trading activity in the Notes will therefore be required by DTC to settle in
immediately available funds. No assurance can be given as to the effect, if any,
of settlement in immediately available funds on trading activity in the Notes.
INFORMATION REGARDING THE TRUSTEE
The Trustee under the Indenture will be Fleet National Bank. The Trustee is
the administrative agent under one of the Company's revolving credit facilities
and the trustee with respect to the Company's 7% Convertible Debentures due
March 1, 1998, 6 7/8% Convertible Debentures due November 15, 1998 and 9%
Convertible Debentures due January 1, 2002.
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UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Company has agreed to sell to each of the Underwriters named
below, and each of the Underwriters has severally agreed to purchase, the
principal amount of the Notes set forth opposite its name below:
PRINCIPAL
AMOUNT OF
UNDERWRITER NOTES
----------- ---------
Goldman, Sachs & Co................................................. $
Merrill Lynch, Pierce, Fenner & Smith Incorporated.................. $
------------
Total.......................................................... $100,000,000
============
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Notes, if any are
taken.
The Underwriters propose to offer the Notes in part directly to the public
at the initial public offering price set forth on the cover page of this
Prospectus Supplement and in part to certain securities dealers at such price
less a concession of % of the principal amount of the Notes. The
Underwriters may allow, and such dealers may reallow, a concession not to exceed
% of the principal amount of the Notes to certain brokers and dealers.
After the Notes are released for sale to the public, the offering price and
other selling terms may from time to time be varied by the Underwriters.
The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Underwriters that the Underwriters intend to
make a market in the Notes but are not obligated to do so and may discontinue
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Notes.
Settlement for the Notes will be made in immediately available funds and
all secondary trading in the Notes will settle in immediately available funds.
See "Description of Notes -- Same-Day Settlement and Payment".
The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933.
VALIDITY OF NOTES
The validity of the Notes offered hereby will be passed upon for the
Company by Nutter, McClennen & Fish, Boston, Massachusetts and for the
Underwriters by Sullivan & Cromwell, New York, New York.
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PROSPECTUS
[MEDITRUST LOGO]
SHARES OF BENEFICIAL INTEREST,
DEBT SECURITIES AND/OR SECURITIES WARRANTS
------------------------
Meditrust, a Massachusetts business trust (together with its subsidiaries
unless the context otherwise requires, the "Company"), is a real estate
investment trust under the Internal Revenue Code of 1986, as amended, which may
offer from time to time, in one or more series, its debt securities (the "Debt
Securities"), warrants to purchase Debt Securities (the "Debt Securities
Warrants"), shares of beneficial interest, without par value (the "Shares"), and
warrants to purchase Shares (the "Share Warrants"). The Debt Securities Warrants
and the Share Warrants are collectively referred to herein as the "Securities
Warrants." The Debt Securities, Shares and Securities Warrants are collectively
referred to herein as the "Securities." The Securities will have an aggregate
offering price of $565,652,767.50 and will be offered in amounts, at prices and
on terms to be determined at the time of offering.
In the case of Debt Securities, the specific title, the aggregate principal
amount, the purchase price, the maturity, the rate and time of payment of any
interest, any redemption or sinking fund provisions, any conversion provisions
and any other specific term of the Debt Securities will be set forth in an
accompanying supplement to this Prospectus (the "Prospectus Supplement"). In the
case of Shares, the specific number of Shares and issuance price per Share will
be set forth in an accompanying Prospectus Supplement. In the case of Securities
Warrants, the duration, offering price, exercise price and detachability, if
applicable, will be set forth in an accompanying Prospectus Supplement. The
Prospectus Supplement will also disclose whether the Securities will be listed
on a national securities exchange and if they are not to be listed, the possible
effects thereof on their marketability.
The Securities may be sold: (i) directly by the Company; (ii) through
underwriting syndicates represented by one or more managing underwriters, or by
one or more underwriters without a syndicate; and (iii) through agents
designated from time to time. The names of any underwriters or agents of the
Company involved in the sale of the Securities in respect of which this
Prospectus is being delivered and any applicable commissions or discounts will
be set forth in an accompanying Prospectus Supplement. See "Plan of
Distribution." The net proceeds to the Company from such sale also will be set
forth in the Prospectus Supplement.
The Company's shares are traded on the New York Stock Exchange under the
symbol "MT." On May 31, 1995, the closing sale price of the shares on the New
York Stock Exchange was $31.875.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
------------------------
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
------------------------
THE DATE OF THIS PROSPECTUS IS JUNE 1, 1995.
15
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024 of the offices of
the Commission, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
or at the regional offices of the Commission located at Seven World Trade
Center, 13th Floor, New York, New York 10048 and Suite 1400, Northwestern Atrium
Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material can be obtained from the principal offices of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C. 20549, at prescribed
rates. Reports, proxy materials and other information concerning the Company can
also be inspected at the offices of the New York Stock Exchange, 20 Broad
Street, Room 1102, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1993, as amended (the "Securities Act").
This Prospectus and any accompanying Prospectus Supplement do not contain all
the information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission. For
further information, reference is made to the Registration Statement, copies of
which may be obtained upon payment of a fee prescribed by the Commission, or may
be examined free of charge at the principal office of the Commission in
Washington, D.C.
Statements made in this Prospectus and any accompanying Prospectus
Supplement as to the contents of any contract or other document referred to are
not necessarily complete, and reference is made to the copy of such contract or
other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Prospectus its
Annual Report on Form 10-K for the fiscal year ended December 31, 1994, its
Current Report on Form 8-K dated March 8, 1995 and its Quarterly Report on Form
10-Q for the fiscal quarter ended March 13, 1995, which shall be deemed to be a
part hereof. The discussion of Federal income tax treatment of the Company and
its shareholders which is contained in the Company's Current Report on Form 8-K
dated March 4, 1992, including any amendment or report filed for the purpose of
updating such discussion, is hereby incorporated by reference into this
Prospectus and shall be deemed to be a part hereof.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the termination of the offering of the Securities offered hereby shall
be deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing such documents. Any statement contained herein or
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in a subsequently filed
document, as the case may be, which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
(without exhibits) of any or all documents incorporated by reference into this
Prospectus. Requests for such copies should be directed to Lisa P. McAlister,
Vice President and Treasurer, Meditrust, 197 First Avenue, Needham Heights,
Massachusetts 02194, telephone (617) 433-6000.
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THE DECLARATION OF TRUST ESTABLISHING THE COMPANY, DATED AUGUST 6, 1985, AS
AMENDED (THE "DECLARATION"), A COPY OF WHICH 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; AND THAT NO TRUSTEE, OFFICER,
SHAREHOLDER, EMPLOYEE OR AGENT OF THE COMPANY SHALL BE HELD TO ANY PERSONAL
LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE
COMPANY. ALL PERSONS DEALING WITH THE COMPANY, IN ANY WAY, SHALL LOOK ONLY TO
THE ASSETS OF THE COMPANY FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY
OBLIGATION.
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THE COMPANY
Meditrust is the largest dedicated health care real estate investment trust
in the United States, based on its gross real estate investments of $1.66
billion as of March 31, 1995. The objective of the Company is to enable
shareholders to participate in the investment in health care related facilities
held primarily for the production of cash flows to be distributed to
shareholders. In meeting this objective, the Company invests in high quality
facilities that are managed by experienced operators and attempts to achieve
diversity in its property portfolio by sector of the health care industry,
geographic location, operator and form of investment.
As of March 31, 1995, the Company had investments in 282 facilities,
consisting of 238 long-term care facilities, 23 rehabilitation hospitals, six
psychiatric hospitals, six retirement living facilities, two alcohol and
substance abuse facilities, six medical office buildings and one acute care
hospital. The properties are located in 34 different states and are operated by
32 health care companies. Of the 32 different operators, seven are
publicly-traded companies (i.e., Sun Healthcare Group, Inc., Continental Medical
Systems, Inc., Geriatric and Medical Centers, Inc., OrNda Healthcorp.,
Integrated Health Services, Inc., NovaCare, Inc. and Mariner Health Group,
Inc.), and constitute approximately 45% of the Company's real estate
investments.
The Company's real estate investments are either owned by the Company or
secured by a mortgage lien. As of March 31, 1995 permanent mortgage loans
constituted 54%, sale/leaseback transactions constituted 41%, and development
mortgage financing constituted 5% of the Company's portfolio as measured by
gross real estate investments. The leases and mortgages provide for rental or
interest rates which generally range from 9.5% to 13.5% per annum of the
acquisition price or mortgage amount. The leases and mortgages generally provide
for an initial term of 10 years, with the leases having one or more five-year
renewal options. The leases and mortgages also provide for additional rent and
interest which are generally based upon a percentage of increased revenues over
specific base period revenues of the related properties. For the year ended
December 31, 1994, the aggregate amount of additional rent and interest was
approximately $8.2 million compared to $8.7 million for the year ended December
31, 1993.
In addition, the Company usually obtains guarantees from the parent
corporation, if any, of the operator or affiliates or individual principals of
the operator. Most obligations are backed by letters of credit, security
deposits or pledges of certificates of deposit which cover from three to twelve
months of lease or mortgage payments. In addition, permanent mortgage and
development mortgage loans generally are cross-collateralized with any other
mortgage and development loans, leases or other agreements between the Company
and the same operator or any affiliated operators. Leases and mortgage loans
generally are cross-defaulted with any other leases or mortgages between the
Company and the same operator or any affiliated operators. With respect to
development mortgage loans, the Company generally requires guaranteed maximum
price construction contracts, performance completion bonds or guarantees and
cost overrun guarantees. The Company enters into a development mortgage loan
when the Company will also be the permanent owner or mortgage lender. In making
its investment decisions, the Company reviews, among other criteria, the
operational viability of the facility, the experience and competency of the
operator and the financial strength of the guarantor.
The Company was organized to qualify, and intends to continue to operate,
as a real estate investment trust in accordance with Federal tax laws and
regulations. So long as the Company so complies, with limited exceptions, the
Company will not be taxed under Federal income tax laws on that portion of its
taxable income that it distributes to its shareholders. The Company has
distributed, and intends to continue to distribute, substantially all of its
real estate investment trust taxable income to shareholders.
In order to meet its ongoing capital requirements for additional
investments, the Company may raise additional equity capital through the sale of
Shares, Debt Securities, Share Warrants or Debt Securities Warrants or through a
securitization transaction.
The Company's principal executive offices are located at 197 First Avenue,
Needham Heights, Massachusetts 02194, and its telephone number is (617)
433-6000.
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RATIO OF EARNINGS TO FIXED CHARGES
YEAR ENDED DECEMBER 31, THREE-MONTH
-------------------------------------------------------- PERIOD ENDED
1990 1991 1992 1993 1994 MARCH 31,1995
---- ---- ---- ---- ---- -------------
Ratio................. 1.67 1.60 1.88 2.02 2.19 2.31
For the purpose of calculating the ratio of earnings to fixed charges for
the years ended December 31, 1990, 1991, 1992, 1993 and 1994 and for the
three-month period ended March 31, 1995, net income has been added to interest
expense and that sum has been divided by such interest expense.
USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement which accompanies
this Prospectus, the net proceeds from the sale of the Securities offered from
time to time hereby will be used for general business purposes, including the
repayment of bank lines of credit, if any, outstanding, and investments in
health care facilities. As of March 31, 1995, $50,000,000 was outstanding under
the Company's bank lines of credit. All currently outstanding loans under the
Company's bank lines of credit mature prior to July 1, 1997 and accrue interest
at the lenders' respective prime rates or the London Interbank Offering Rate
plus 1.00 to 1.50%. Pending such uses, the net proceeds will be invested in
short-term, interest-bearing, direct obligations issued or guaranteed by the
United States, certificates of deposit or accounts, or investment grade
commercial paper, consistent with the Company's qualification as a real estate
investment trust, the Company's Restated Declaration of Trust, as amended (the
"Declaration"), and the Company's agreements with its lenders.
DESCRIPTION OF SHARES
There is no limit on the number of Shares the Company is authorized to
issue. Shares may be issued by the Board of Trustees without any vote of the
shareholders. The outstanding Shares are of one class and without par value. The
following description is qualified in all respects by reference to the
Declaration and the By-laws of the Company, copies of which are incorporated by
reference as exhibits to the Registration Statement of which this Prospectus is
a part.
SHARES OF BENEFICIAL INTEREST. All Shares participate equally in dividends
and in net assets available for distribution to shareholders on liquidation or
termination of the Company, 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 Shares offered hereby will be validly issued, fully
paid and nonassessable by the Company upon issuance.
REDEMPTION. For the Company 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 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 Shares selected in
a manner deemed appropriate to maintain or bring the ownership of the 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 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 the Company of a number of Shares sufficient,
in the opinion of the Trustees, to maintain or bring the direct or indirect
ownership of Shares of such owner to a level of no more than 9.9% of the
outstanding Shares, and (ii) to refuse to transfer or issue Shares to any person
whose acquisition of such Shares would cause a beneficial holder to hold in
excess of 9.9% of the outstanding Shares. Further, any transfer of Shares that
would create a beneficial owner of more than 9.9% of the outstanding Shares
shall be deemed void and the intended transferee shall be deemed never to have
had an interest therein. The purchase price for any Shares so redeemed shall be
equal to the fair market value of the Shares reflected in the closing sales
price for the Shares, if then listed on a national securities exchange, or the
average of the closing sales price for the Shares if then listed on
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more than one national securities exchange, or if the Shares are not then listed
on a national securities exchange, the latest bid quotation for the 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 the Company. From and after
the date fixed for purchase by the Trustees, the holder of any Shares so called
for purchase shall cease to be entitled to distributions, voting rights and
other benefits with respect to such Shares, except the right to payment of the
purchase price for the 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 Shares, deprive
shareholders of opportunities to sell at a temporarily higher market price.
ADDITIONAL PROVISIONS. The Declaration provides that annual meetings of
shareholders 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 the
Company, a majority of the Trustees or a majority of the Independent Trustees
(defined in the Declaration) and shall be called upon the written request of the
holders of 10% or more of the outstanding Shares.
Whenever any action is to be taken by the shareholders, it shall, except as
otherwise clearly indicated in the Declaration of Trust, be authorized by
holders of a majority of the Shares then outstanding and entitled to vote
thereon. 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 Shares
representing a plurality of the 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 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
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 Declaration, no action taken by the shareholders at
any meeting shall in any way bind the Trustees.
The Shares have no preemptive, conversion, exchange, sinking fund or
appraisal rights.
The Declaration provides that shareholders of the Company shall not be
subject to any liability for the acts or obligations of the Company and that, as
far as is practicable, each written agreement of the Company is to contain a
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 liable
to the extent claims are not satisfied by the Company. However, the Declaration
provides that, upon payment of any such liability, the shareholder will be
entitled to reimbursement from the general assets of the Company. The Trustees
intend to conduct the operations of the Company, with the advice of counsel, in
such a way as to avoid, as far as is practicable, the ultimate liability of the
shareholders of the Company. For example, almost all of the real estate and all
of the mortgages included in the assets of the Company are held by corporate
subsidiaries. The Trustees do not intend to provide insurance covering such
risks to shareholders.
TRANSFER AGENT AND REGISTRAR. Fleet National Bank, Providence, Rhode
Island, acts as transfer agent and registrar of the Shares.
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DESCRIPTION OF DEBT SECURITIES
The Prospectus Supplement will describe certain terms of any Debt
Securities offered hereby, including (i) the title of such Debt Securities; (ii)
any limit on the aggregate principal amount of such Debt Securities and their
purchase price; (iii) the date or dates on which such Debt Securities will
mature; (iv) the rate or rates per annum (or manner in which interest is to be
determined) at which such Debt Securities will bear interest, if any, and the
date from which such interest, if any, will accrue; (v) the dates on which such
interest, if any, on such Debt Securities will be payable and the regular record
dates for such interest payment dates; (vi) any mandatory or optional sinking
fund or analogous provisions; (vii) additional provisions, if any, for the
defeasance of such Debt Securities; (viii) the date, if any, after which and the
price or prices at which such Debt Securities may, pursuant to any optional or
mandatory redemption or repayment provisions, be redeemed and the other detailed
terms and provisions of any such optional or mandatory redemption or repayment
provisions; (ix) whether such Debt Securities are to be issued in whole or in
part in registered form represented by one or more registered global securities
(a "Registered Global Security") and, if so, the identity of the depository for
such Registered Global Security or Securities; (x) certain applicable United
States Federal income tax consequences; (xi) any provisions relating to security
for payments due under such Debt Securities; (xii) any provisions relating to
the conversion or exchange of such Debt Securities into or for Shares or Debt
Securities of another series; (xiii) any provisions relating to the ranking of
such Debt Securities in right of payment as compared to other obligations of the
Company; (xiv) the denominations in which such Debt Securities are authorized to
be issued; (xv) the place or places where principal of, premium, if any, and
interest, if any, on such Debt Securities will be payable; (xvi) whether such
debt Securities are to be issued pursuant to an indenture of trust; and (xvii)
any other specific term of such Debt Securities, including any additional events
of default or covenants provided for with respect to such Debt Securities, and
any terms that may be required by or advisable under applicable laws or
regulations.
The Debt Securities may be issued in one or more series under an Indenture
to be executed by the Company and a trustee (the "Trustee"), a form of which is
included as an exhibit to the Registration Statement of which this Prospectus is
a part (the "Indenture"). The terms of the Debt Securities may include those
stated in the Indenture and those made a part of the Indenture (before any
supplements) by reference to the Trust Indenture Act of 1939, as amended.
The following is a summary of certain provisions of the Indenture and does
not purport to be complete and is qualified in its entirety by reference to the
detailed provisions of the Indenture, including the definitions of certain terms
therein to which reference is hereby made, for a complete statement of such
provisions. Wherever particular provisions or sections of the Indenture or terms
defined therein are referred to herein, such provisions or definitions are
incorporated herein by reference.
GENERAL. The Indenture does not limit the aggregate principal amount of
Debt Securities that may be issued thereunder and provides that Debt Securities
may be issued from time to time in one or more series.
CONVERSION RIGHTS. The terms, if any, on which Debt Securities of any
series may be converted into Shares or Debt Securities of another series will be
set forth in the Prospectus Supplement relating thereto. To protect the
Company's status as a real estate investment trust ("REIT"), the holders of Debt
Securities of any series ("Holders") may not convert any Debt Security, and such
Debt Security shall not be convertible by any Holder, if as a result of such
conversion any person would then be deemed to beneficially own, directly or
indirectly, 9.9% or more of the then outstanding Shares.
The conversion price will be subject to adjustment under certain
conditions, including (i) the payment of dividends (and other distributions) in
Shares on any class of shares of the Company; (ii) subdivisions, combinations
and reclassifications of Shares; (iii) the issuance to all or substantially all
holders of Shares of rights or warrants entitling them to subscribe for or
purchase Shares at a price per Share (or having a conversion price per Share)
less than the then current market price; and (iv) distributions to all or
substantially all holders of Shares or shares of any other class, or evidences
of indebtedness or assets (including securities, but excluding those rights,
warrants, dividends and distributions referred to above and dividends and
distributions not prohibited under the terms of the Indenture) of the Company,
subject to the limitation that all adjustments by reason
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of any of the foregoing would not be made until they result in a cumulative
change in the conversion price of at least 1%. In the event the Company shall
effect any capital reorganization or reclassification of its Shares or shall
consolidate or merge with or into any trust or corporation (other than a
consolidation or merger in which the Company is the surviving entity) or shall
sell or transfer substantially all its assets to any other trust or corporation,
the Holders shall, if entitled to convert such Debt Securities at any time after
such transaction, receive upon conversion thereof, in lieu of each Share into
which the Debt Securities of such series would have been convertible prior to
such transaction, the same kind and amount of stock and other securities, cash
or property as shall have been issuable or distributable in connection with such
transaction with respect to each Share.
A conversion price adjustment made according to the provisions of the Debt
Securities of any series (or the absence of provision for such an adjustment)
might result in a constructive distribution to the Holders of Debt Securities of
such series or holders of Shares that would be subject to taxation as a
dividend. The Company may, at its option, make such reductions in the conversion
price, in addition to those set forth above, as the Board of Trustees of the
Company deems advisable to avoid or diminish any income tax to holders of Shares
resulting from any dividend or distribution of Shares (or rights to acquire
Shares) or from any event treated as such for income tax purposes or for any
other reason. The Board of Trustees will also have the power to resolve any
ambiguity or correct any error in the provisions relating to the adjustment of
the conversion price of the Debt Securities of such series and its actions in so
doing shall be final and conclusive.
Fractional Shares will not be issued upon conversion, but, in lieu thereof,
the Company will pay a cash adjustment based upon market price.
The Holders of Debt Securities of any series at the close of business on an
interest payment record date shall be entitled to receive the interest payable
on such Debt Securities on the corresponding interest payment date
notwithstanding the conversion thereof. However, Debt Securities surrendered for
conversion during the period from the close of business on any record date for
the payment of interest to the opening of business on the corresponding interest
payment date must be accompanied by payment of an amount equal to the interest
payable on such interest payment date. Holders of Debt Securities of any series
who convert Debt Securities of such series on an interest payment date will
receive the interest payable by the Company on such date and need not include
payment in the amount of such interest upon surrender of such Debt Securities
for conversion. Except as aforesaid, no payment or adjustment is to be made on
conversion for interest accrued on the Debt Securities of any series or for
dividends on Shares.
OPTIONAL REDEMPTION. The Debt Securities of any series that are
convertible into Shares will be subject to redemption, in whole or from time to
time in part, at any time for certain reasons intended to protect the Company's
status as a REIT at the option of the Company on at least 30 days' prior notice
by mail at a redemption price equal to 100% of the principal amount, plus
interest accrued to the date of redemption. Except as otherwise set forth in the
accompanying Prospectus Supplement, the Company may exercise its redemption
powers solely with respect to the securities of the security holder or holders
which pose a threat to the Company's REIT status and only to the extent deemed
necessary by the Company's Board of Trustees to preserve such status. (See
"Redemption" under "Description of Shares".)
DIVIDENDS, DISTRIBUTIONS AND ACQUISITIONS OF SHARES OF BENEFICIAL
INTEREST. The Indenture provides that the Company will not (i) declare or pay
any dividend or make any distribution on its Shares or to holders of its Shares
(other than dividends or distributions payable in its Shares or other than as
the Company determines is necessary to maintain its status as a REIT) or (ii)
purchase, redeem or otherwise acquire or retire for value any of its Shares or
permit any subsidiary to do so, if at the time of such action an Event of
Default (as defined in the Indenture) has occurred and is continuing or would
exist immediately after giving effect to such action.
ADDITIONAL COVENANTS. Any additional covenants of the Company with respect
to a series of the Debt Securities will be set forth in the Prospectus
Supplement relative thereto.
MODIFICATION OF THE INDENTURE. Under the Indenture, with certain
exceptions, the rights and obligations of the Company with respect to any series
of Debt Securities and the rights of Holders of such series may only be modified
by the Company and the Trustee with the consent of the Holders
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of at least a majority in principal amount of the outstanding Debt Securities of
such series. However, without the consent of each Holder of any Debt Securities
affected, an amendment, waiver or supplement may not (i) reduce the principal
of, or rate of interest on, any Debt Securities; (ii) change the stated maturity
date of the principal of, or any installment of interest on, any Debt
Securities; (iii) waive a default in the payment of the principal amount of, or
the interest on, or any premium payable on redemption of, any Debt Securities;
(iv) change the currency for payment of the principal of, or premium or interest
on, any Debt Securities; (v) impair the right to institute suit for the
enforcement of any such payment when due; (vi) adversely affect any right to
convert any Debt Securities; (vii) reduce the amount of outstanding Debt
Securities necessary to consent to an amendment, supplement or waiver provided
for in the Indenture; or (viii) modify any provisions of the Indenture relating
to the modification and amendment of the Indenture or waivers of past defaults,
except as otherwise specified.
EVENTS OF DEFAULT, NOTICE AND WAIVER. Except as otherwise set forth in the
accompanying Prospectus Supplement, the following is a summary of certain
provisions of the Indenture relating to events of default, notice and waiver.
The following are Events of Default under the Indenture with respect to any
series of Debt Securities: (i) default in the payment of interest on the Debt
Securities of such series when due and payable, which continues for 30 days;
(ii) default in the payment of principal of (and premium, if any) on the Debt
Securities when due, at maturity, upon redemption or otherwise, which continues
for five Business Days; (iii) failure to perform any other covenant of the
Company contained in the Indenture or the Debt Securities of such series which
continues for 60 days after written notice as provided in the Indenture; (iv)
default under any bond, debenture or other Indebtedness (as defined in the
Indenture) of the Company or any subsidiary if (a) either (x) such event of
default results from the failure to pay any such Indebtedness at maturity or (y)
as a result of such event of default, the maturity of such Indebtedness has been
accelerated prior to its expressed maturity and such acceleration shall not be
rescinded or annulled or the accelerated amount paid within ten days after
notice to the Company of such acceleration, or such Indebtedness having been
discharged, and (b) the principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness in default for failure to pay
principal or interest thereon, or the maturity of which has been so accelerated,
aggregates $10,000,000 or more; (v) certain events of bankruptcy, insolvency or
reorganization relating to the Company; and (vi) any other Event of Default
provided with respect to the Debt Securities of that series.
If an Event of Default occurs and is continuing with respect to the Debt
Securities of any series, either the Trustee or the Holders of a majority in
aggregate principal amount of the outstanding Debt Securities of such series may
declare the Debt Securities due and payable immediately.
The Indenture provides that the Trustee will, within 90 days after the
occurrence of any Default or Event of Default with respect to the Debt
Securities of any series, give to the Holders of Debt Securities notice of all
uncured Defaults and Events of Default known to it, but the Trustee will be
protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interest of such Holders, except in the
case of a default in the payment of the principal of (or premium, if any) or
interest on any of the Debt Securities of such series.
The Indenture provides that the Holders of a majority in aggregate
principal amount of the Debt Securities of any series then outstanding may
direct the time, method and place of conducting any proceedings for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee with respect to the Debt Securities of such series. The right of a
Holder to institute a proceeding with respect to the Indenture is subject to
certain conditions precedent including notice and indemnity to the Trustee, but
the Holder has an absolute right to receipt of principal of (and premium, if
any) and interest on such Holder's Debt Securities on or after the respective
due dates expressed in the Debt Securities, and to institute suit for the
enforcement of any such payments.
The Holders of a majority in principal amount of the outstanding Debt
Securities of any series then outstanding may on behalf of the Holders of all
Debt Securities of such series waive certain past defaults, except a default in
payment of the principal of (or premium, if any) or interest on any Debt
Securities of such series or in respect of certain provisions of the Indenture
which cannot be modified or amended without the consent of the Holder of each
outstanding Debt Securities of such series affected thereby.
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The Company will be required to furnish to the Trustee annually a statement
of certain officers of the Company stating whether or not they know of any
Default or Events of Default (as defined in the Indenture) and, if they have
knowledge of a Default or Event of Default, a description of the efforts to
remedy the same.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE. The Indenture provides that the
Company may merge or consolidate with, or sell or convey all or substantially
all of its assets to, any other trust or corporation, provided that (i) either
the Company shall be the continuing entity, or the successor entity (if other
than the Company) shall be an entity organized and existing under the laws of
the United States or a state thereof or the District of Columbia (although it
may, in turn, be owned by a foreign entity) and such entity shall expressly
assume by supplemental indenture all of the obligations of the Company under the
Debt Securities of any series and the Indenture, (ii) immediately after giving
effect to such transactions no Default or Event of Default shall have occurred
and be continuing, and (iii) the Company shall have delivered to the Trustee an
Officers' Certificate and opinion of counsel, stating that the transaction and
supplemental indenture comply with the Indenture. The Indenture does not contain
any provision requiring the Company to repurchase the Debt Securities of any
series at the option of the Holders thereof in the event of a leveraged buyout,
recapitalization or similar restructuring of the Company, even though the
Company's creditworthiness and the market value of the Debt Securities may
decline significantly as a result of such transaction. The Indenture does not
protect Holders of the Debt Securities of any series against any decline in
credit quality, whether resulting from any such transaction or from any other
cause.
GLOBAL SECURITIES. The Debt Securities of a series may be issued in whole
or in part in global form (the "Global Securities"). The Global Securities will
be deposited with a depository (the "Depository"), or with a nominee for a
Depository, identified in the Prospectus Supplement. In such case, one or more
Global Securities will be issued in a denomination or aggregate denominations
equal to the portion of the aggregate principal amount of outstanding Debt
Securities of the series to be represented by such Global Security or
Securities. Unless and until it is exchanged in whole or in part for Debt
Securities in definitive form, a Global Security may not be transferred except
as a whole by the Depository for such Global Security to a nominee of such
Depository or by a nominee of such Depository to such Depository or another
nominee of such Depository or by such Depository or any such nominee to a
successor for such Depository or a nominee of such successor.
The specific material terms of the depository arrangement with respect to
any portion of a series of Debt Securities to be represented by a Global
Security will be described in the Prospectus Supplement. The Company anticipates
that the following provisions will apply to all depository arrangements.
Upon the issuance of a Global Security, the Depository for such Global
Security will credit, on its book entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of persons that have accounts with such Depository
("participants"). The accounts to be credited shall be designated by any
underwriters or agents participating in the distribution of such Debt
Securities. Ownership of beneficial interests in a Global Security will be
limited to participants or persons that may hold interests through participants.
Ownership of beneficial interests in such Global Security will be shown on, and
the transfer of that ownership will be effected only through records maintained
by the Depository for such Global Security (with respect to interests of
participants) or by participants or persons that hold through participants (with
respect to interests of persons other than participants). So long as the
Depository for a Global Security, or its nominee, is the registered owner of
such Global Security, such Depository or such nominee as the case may be, will
be considered the sole owner or Holder of the Debt Securities represented by
such Global Security for all purposes under the Indenture; provided, however,
that for purposes of obtaining any consents or directions required to be given
by the Holders of the Debt Securities, the Company, the Trustee and its agents
will treat a person as the holder of such principal amount of Debt Securities as
specified in a written statement of the Depository.
Principal, premium, if any, and interest payments, if any, on Debt
Securities represented by a Global Security registered in the name of a
Depository or its nominee will be made to such
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Depository or its nominee, as the case may be, as the registered owner of such
Global Security. None of the Company, the Trustee or any Paying Agent for such
Debt Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in such Global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company expects that the Depository for any Debt Securities represented
by a Global Security, upon receipt of any payment of principal, premium, if any,
or interest will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security as shown on the records of such Depository. The
Company also expects that payments by participants will be governed by standing
instructions and customary practices, as is now the case with the securities
held for the accounts of customers registered in "street names," and will be the
responsibility of such participants.
If the Depository for any Debt Securities represented by a Global Security
is at any time unwilling or unable to continue as Depository and a successor
Depository is not appointed by the Company within 90 days, the Company will
issue each Debt Security in definitive form to the beneficial owners thereof in
exchange for such Global Security. In addition, the Company may at any time and
in its sole discretion determine not to have any of the Debt Securities of a
series represented by one or more Global Securities and, in such event, will
issue Debt Securities of such series in definitive form in exchange for all of
the Global Security or Securities representing such Debt Securities.
The laws of some states require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in Debt Securities represented by
Global Securities.
GOVERNING LAW. The Indenture and the Debt Securities will be governed by
and construed in accordance with the laws of the Commonwealth of Massachusetts.
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DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities or Shares. Securities Warrants may be issued independently or
together with Debt Securities or Shares offered by any Prospectus Supplement and
may be attached to or separate from such Debt Securities or Shares. Each series
of Securities Warrants will be issued under a separate warrant agreement (a
"Securities Warrant Agreement") to be entered into between the Company and a
bank or trust company, as Securities Warrant agent, all as set forth in the
Prospectus Supplement relating to the particular issue of offered Securities
Warrants. The Securities Warrant agent will act solely as an agent of the
Company in connection with the Securities Warrant certificates relating to the
Securities Warrants and will not assume any obligation or relationship of agency
or trust for or with any holders of Securities Warrant certificates or
beneficial owners of Securities Warrants. The following summaries of certain
provisions of the Securities Warrant Agreement and Securities Warrants do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Securities Warrant Agreement and the
Securities Warrant certificates relating to each series of Security Warrants
which will be filed with the Commission and incorporated by reference as an
exhibit to the Registration Statement of which this Prospectus is a part at or
prior to the time of the issuance of such series of Security Warrants.
If Debt Securities Warrants are offered, the applicable Prospectus
Supplement will describe the terms of such Securities Warrants, including the
following where applicable: (i) the offering price, (ii) the denominations and
terms of the series of Debt Securities purchasable upon exercise of such
Securities Warrants, (iii) the designation and terms of any series of Debt
Securities with which such Securities Warrants are being offered and the number
of such Securities Warrants being offered with each such Debt Security, (iv) the
date, if any, on and after which such Securities Warrants and the related series
of Debt Securities will be transferable separately, (v) the principal amount of
the series of Debt Securities purchasable upon exercise of each such Securities
Warrant and the price at which such principal amount of Debt Securities of such
series may be purchased upon such exercise, (vi) the date on which the right to
exercise such Securities Warrants shall commence and the date (the "Expiration
Date") on which such right shall expire, (vii) whether the Securities Warrants
will be issued in registered or bearer form, (viii) any special United States
Federal income tax consequences, (ix) the terms, if any, on which the Company
may accelerate the Expiration Date and (x) any other terms of such Securities
Warrants.
In the case of Share Warrants, the applicable Prospectus Supplement will
describe the terms of such Securities Warrants, including the following where
applicable: (i) the offering price, (ii) the aggregate number of Shares
purchasable upon exercise of such Securities Warrants and the exercise price,
(iii) the designation and terms of the Securities with which such Securities
Warrants are being offered, if any, and the number of such Securities Warrants
being offered with each such Security, (iv) the date, if any, on and after which
such Securities Warrants and the related series of Debt Securities or Shares
will be transferable separately, (v) the date on which the right to exercise
such Securities Warrants shall commence and the Expiration Date, (vi) any
special United States Federal income tax consequences and (vii) any other terms
of such Securities Warrants.
Securities Warrant certificates may be exchanged for new Securities Warrant
certificates of different denominations, may (if in registered form) be
presented for registration of transfer, and may be exercised at the corporate
trust office of the Securities Warrant agent or any other office indicated in
the applicable Prospectus Supplement. Prior to the exercise of any Debt
Securities Warrants, holders of such Securities Warrants will not have any of
the rights of holders of the Debt Securities purchasable upon such exercise,
including the right to receive payments of principal of, premium, if any, or
interest, if any, on such Debt Securities or to enforce covenants in the
applicable indenture. Prior to the exercise of any Share Warrants, holders of
such Securities Warrants will not have any rights of holders of such Shares,
including the right to receive payments of dividends, if any, on such Shares, or
to exercise any applicable right to vote.
CERTAIN RISK CONSIDERATIONS. Any Securities Warrants issued by the Company
will involve a certain degree of risk, including risks arising from the
fluctuations in the price of the underlying securities and general risks
applicable to the stock market (or markets) on which the underlying securities
are traded.
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Prospective purchasers of the Securities Warrants should recognize that the
Securities Warrants may expire worthless and, thus, purchasers should be
prepared to sustain a total loss of the purchase price of their Securities
Warrants. This risk reflects the nature of a Securities Warrant as an asset
which, other factors held constant, tends to decline in value over time and
which may, depending on the price of the underlying securities, become worthless
when it expires. The trading price of a Securities Warrant at any time is
expected to increase as the price, or, if applicable, dividend rate on the
underlying securities increases. Conversely, the trading price of a Securities
Warrant is expected to decrease as the time remaining to expiration of the
Securities Warrant decreases and as the price or, if applicable, dividend rate
on the underlying securities, decreases. Assuming all other factors are held
constant, the more a Securities Warrant is "out of the money" (i.e., the more
the exercise price exceeds the price of the underlying securities and the
shorter its remaining term to expiration), the greater the risk that a purchaser
of the Securities Warrant will lose all or part of his or her investment. If the
price of the underlying securities does not rise before the Securities Warrant
expires to an extent sufficient to cover a purchaser's cost of the Securities
Warrant, the purchaser will lose all or part of his or her investment in such
Securities Warrant upon expiration.
In addition, prospective purchasers of the Securities Warrants should be
experienced with respect to options and option transactions and understand the
risks associated with options and
should reach an investment decision only after careful consideration, with their
financial advisers, of the suitability of the Securities Warrants in light of
their particular financial circumstances and the information discussed herein
and, if applicable, the Prospectus Supplement. Before purchasing, exercising or
selling any Securities Warrants, prospective purchasers and holders of
Securities Warrants should carefully consider, among other things, (i) the
trading price of the Securities Warrants, (ii) the price of the underlying
securities at such time, (iii) the time remaining to expiration and (iv) any
related transaction costs. Some of the factors referred to above are in turn
influenced by various political, economic and other factors that can affect the
trading prices of the underlying securities and should be carefully considered
prior to making any investment decisions.
Purchasers of the Securities Warrants should further consider that the
initial offering price of the Securities Warrants may be in excess of the price
that a purchaser of options might pay for a comparable option in a private, less
liquid transaction. In addition it is not possible to predict the price at which
the Securities Warrants will trade in the secondary market or whether any such
market will be liquid. The Company may, but is not obligated to, file an
application to list any Securities Warrants issued on a United States national
securities exchange. To the extent that any Securities Warrants are exercised,
the number of Securities Warrants outstanding will decrease, which may result in
a lessening of the liquidity of the Securities Warrants. Finally, the Securities
Warrants will constitute direct, unconditional and unsecured obligations of the
Company and as such will be subject to any changes in the perceived
creditworthiness of the Company.
EXERCISE OF SECURITIES WARRANTS. Each Securities Warrant will entitle the
holder thereof to purchase such principal amount of Debt Securities or number of
Shares, as the case may be, at such exercise price as shall in each case be set
forth in, or calculable from, the Prospectus Supplement relating to the offered
Securities Warrants. After the close of business on the Expiration Date (or such
later date to which such Expiration Date may be extended by the Company),
unexercised Securities Warrants will become void.
Securities Warrants may be exercised by delivering to the Securities
Warrant agent payment as provided in the applicable Prospectus Supplement of the
amount required to purchase the Debt Securities or Shares, as the case may be,
purchasable upon such exercise together with certain information set forth on
the reverse side of the Securities Warrant certificate. Securities Warrants will
be deemed to have been exercised upon receipt of payment of the exercise price,
subject to the receipt within five Business Days of the Securities Warrant
certificate evidencing such Securities Warrants. Upon receipt of such payment
and the Securities Warrant certificate properly completed and duly executed at
the corporate trust office of the Securities Warrant agent or any other office
indicated in the applicable Prospectus Supplement, the Company will, as soon as
practicable, issue and deliver the Debt Securities or Shares, as the case may
be, purchasable upon such exercise. If fewer than all of the Securities Warrants
represented by such Securities Warrant certificate are exercised, a new
Securities Warrant certificate will be issued for the remaining amount of
Securities Warrants.
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AMENDMENTS AND SUPPLEMENTS TO SECURITIES WARRANT AGREEMENT. The Securities
Warrant Agreements may be amended or supplemented without the consent of the
holders of the Securities Warrants issued thereunder, to effect changes that are
not inconsistent with the provisions of the Securities Warrants and that do not
adversely affect the interest of the holders of the Securities Warrants.
SHARE WARRANT ADJUSTMENTS. Unless otherwise indicated in the applicable
Prospectus Supplement, the exercise price of and the number of Shares covered by
a Share Warrant are subject to adjustment in certain events, including (i)
payment of a dividend on the Shares payable in Shares and Share splits,
combinations or reclassification of Shares, (ii) issuance to all holders of
Shares of rights or warrants to subscribe for or purchase Shares at less than
their current market price (as defined in the Securities Warrant Agreement for
such series of Share Warrants) and (iii) certain distributions of evidences of
indebtedness or assets (including securities but excluding cash, dividends or
distributions paid out of consolidated earnings or retained earnings or
dividends payable in Shares or of subscription rights and warrants excluding
those referred to above).
No adjustments in the exercise price of and the number of Shares covered by
a Share Warrant will be made for regular quarterly or other periodic or
recurring cash dividends or distributions or for cash dividends or distributions
to the extent paid from consolidated earnings or retained earnings. No
adjustment will be required unless such adjustment would require a change of at
least 1% in the exercise price then in effect. Except as stated above, the
exercise price of and the number of Shares covered by a Share Warrant will not
be adjusted for the issuance of Shares or any securities convertible into or
exchangeable for Shares or carrying the right or option to purchase or otherwise
acquire the foregoing in exchange for cash, other property or services.
In the event of any (i) consolidation or merger of the Company with or into
any entity (other than consolidation or a merger that does not result in any
reclassification, conversion, exchange or cancellation of outstanding Shares),
(ii) sale, transfer, lease or conveyance of all or substantially all of the
assets of the Company or (iii) reclassification, capital reorganization or
change of the Shares (other than solely a change in par value), then any holder
of a Share Warrant will be entitled, on or after the occurrence of any such
event, to receive on exercise of such Share Warrant the kind and amount of
Shares or other securities, cash or other property (or any combination thereof)
that the holder would have received had such holder exercised such holder's
Share Warrant immediately prior to the occurrence of such event. If the
consideration to be received upon exercise of the Share Warrant following any
such event consists of common stock (or its equivalent) of the surviving entity,
then from and after the occurrence of such event, the exercise price of such
Share Warrant will be subject to the same anti-dilution and other adjustments
described in the second preceding paragraph, applied as if such common stock
were Shares.
PLAN OF DISTRIBUTION
The Company may sell the Securities in any of three ways: (i) through
underwriting syndicates represented by one or more managing underwriters, or by
one or more underwriters without a syndicate; (ii) through agents designated
from time to time; and (iii) directly to investors. The names of any
underwriters or agents of the Company involved in the sale of the Securities in
respect of which this Prospectus is being delivered and any applicable
commissions or discounts will be set forth in the Prospectus Supplement. The net
proceeds to the Company from such sale will also be set forth in the Prospectus
Supplement.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices (which may be changed from time
to time), at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. The Prospectus Supplement
will describe the method of distribution of the Securities.
In connection with the sale of Securities, underwriters or agents acting on
the Company's behalf may receive compensation from the Company or from
purchasers of Securities for whom they may act as agents, in the form of
discounts, concessions or commissions. The underwriter, dealers and agents that
participate in the distribution of Securities may be deemed to be underwriters
under the Securities Act and any discounts or commissions received by them and
any profit on the resale of Securities by them may be deemed to be underwriting
discounts and commissions under the
14
28
Securities Act. Any such underwriter will be identified and any such
compensation will be described in the Prospectus Supplement.
Agents and underwriters may be entitled under agreements entered into with
the Company to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act, or to contribution with respect
to payments which the agents or underwriters may be required to make in respect
thereof. Agents and underwriters may engage in transactions with or perform
services for the Company in the ordinary course of business.
LEGAL MATTERS
The validity of the Securities offered hereby will be passed upon for the
Company by Nutter, McClennen & Fish. In addition, Nutter, McClennen & Fish will
pass upon certain Federal income tax matters relating to the Company. The name
of any legal counsel that passes on the validity of the Securities offered
hereby for any underwriter or agent will be set forth in the applicable
Prospectus Supplement.
EXPERTS
The consolidated balance sheets of the Company as of December 31, 1994 and
1993 and the related consolidated statements of income, changes in shareholders'
equity and cash flows for each of the three years in the period ended December
31, 1994, and the financial statement schedules incorporated by reference in
this Prospectus and elsewhere in the Registration Statement, have been audited
by Coopers & Lybrand L.L.P., independent accountants, as indicated in their
report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in accounting and auditing.
Any financial statements and schedules hereafter incorporated by reference in
the registration statement of which this Prospectus is a part that have been
audited and are the subject of a report by independent accountants will be so
incorporated by reference in reliance upon such reports and upon the authority
of such firms as experts in accounting and auditing to the extent covered by
consents filed with the Commission.
15
29
INSERT MAP
SEE THE APPENDIX FOR A DESCRIPTION OF THE CHARTS THAT APPEAR ON THIS PAGE
30
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
DESCRIBED IN THIS PROSPECTUS SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH
INFORMATION.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
----
Prospectus Summary................... S-3
The Company.......................... S-4
Health Care Reform and Regulation.... S-5
Recent Developments.................. S-5
Use of Proceeds...................... S-5
Management........................... S-6
Capitalization....................... S-6
Selected Financial Data.............. S-7
Description of Notes................. S-8
Underwriting......................... S-13
Validity of Notes.................... S-13
PROSPECTUS
Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
The Company.......................... 4
Ratio of Earnings to Fixed Charges... 5
Use of Proceeds...................... 5
Description of Shares................ 5
Description of Debt Securities....... 7
Description of Securities Warrants... 12
Plan of Distribution................. 14
Legal Matters........................ 15
Experts.............................. 15
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$100,000,000
[MEDITRUST LOGO]
% NOTES DUE
JULY 15, 2000
---------------
PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
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31
APPENDIX
Description of Charts contained in Meditrust Prospectus Supplement filed
pursuant to Rule 424(b)(5)
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Inside Front Cover
------------------
I. Bar chart showing Meditrust's gross real estate investments as of
December 31, 1986 through March 31, 1995.
II. Pie chart showing the percentage of Meditrust's total gross real estate
investments in certain of its operators as of March 31, 1995.
III. Bar chart showing per share annual distributions by Meditrust in 1986
through 1994.
Inside Back Cover
-----------------
I. Map of the United States showing number of healthcare facilities
owned by or mortgaged to Meditrust in each state as of March 31, 1995.
II. Pie chart showing percentages of Meditrust's gross real estate
investments as of March 31, 1995 in long-term care, rehabilitation,
alcohol and substance abuse and retirement living facilities,
psychiatric hospitals, and medical office buildings and an acute care
campus.