As filed with the Securities and Exchange Commission
on November 12, 1997
Registration Nos. 333- and 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
JOINT REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MEDITRUST CORPORATION MEDITRUST OPERATING COMPANY
(Exact name of registrant as (Exact name of registrant as
specified in governing instruments) specified in governing instruments)
Delaware Delaware
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
95-3520818 95-3419438
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
197 First Avenue, Suite 300 197 First Avenue, Suite 100
Needham Heights, Massachusetts 02194 Needham Heights, Massachusetts 02194
(781) 433-6000 (781) 453-8062
(Address, including zip code, and (Address, including zip code, and
telephone number, including telephone number, including
area code, of registrant's area code, of registrant's
principal executive offices) principal executive offices)
------------------- -------------------
DAVID F. BENSON ABRAHAM D. GOSMAN
President Chairman and Chief Executive Officer
MEDITRUST CORPORATION MEDITRUST OPERATING COMPANY
197 First Avenue, Suite 300 197 First Avenue, Suite 100
Needham Heights, Massachusetts 02194 Needham Heights, Massachusetts 02194
(781) 433-6000 (781) 453-8062
(Name, address, including zip code, (Name, address, including zip code,
and telephone number, including and telephone number, including
area code, of agent for service) area code, of agent for service)
Copies of communications to:
MICHAEL J. BOHNEN, ESQUIRE
NUTTER, McCLENNEN & FISH, LLP
One International Place
Boston, MA 02110-2699
(617) 439-2000
Approximate date of commencement of proposed sale to public: From time to time
after the Joint Registration Statement becomes effective.
--------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
<PAGE>
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==========================================================================================================
Proposed Proposed
maximum maximum Amount of
Title of each class of securities Amount to offering price aggregate registration
to be registered be registered per unit offering price (1) fee(2)
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<S> <C> <C> <C> <C>
Meditrust Corporation Common Stock
(par value $.10) and Debt Securities $2,000,000,000 $606,060
and Warrants for Common Stock and Debt
Securities Issuable in Series (3)(4)....... (5) (5)
paired with
Meditrust Operating Company Common Stock
(par value $.10)...........................
and
Meditrust Operating Company Common Stock
(par value $.10) and Debt Securities and
Warrants for Common Stock and Debt
Securities Issuable in Series (3)(4).......
paired with
Meditrust Corporation Common Stock (par
value $.10)................................
===========================================================================================================
</TABLE>
(1) In no event will the aggregate maximum offering price of all securities
issued pursuant to this Registration Statement exceed $2,000,000,000, or if
any Debt Securities are issued with an original issue discount, such
greater amount as shall result in an aggregate offering price of
$2,000,000,000. Any securities registered hereunder may be sold separately
or as units with other securities registered hereunder.
(2) Determined pursuant to Rule 457(o) under the Securities Act of 1933, as
amended.
(3) There is also being registered an indeterminate number of Shares of Common
Stock as may be issued upon conversion of the Debt Securities or exercise
of the Securities Warrants registered hereby.
(4) There is also being registered hereunder an indeterminate number of Debt
Securities Warrants and Share Warrants representing rights to purchase Debt
Securities and Shares of Common Stock respectively, registered pursuant to
this Registration Statement.
(5) Not applicable pursuant to General Instructions II.D of Form S-3 under the
Securities Act of 1933, as amended.
The Registrants hereby amend this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrants shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED NOVEMBER __, 1997
PROSPECTUS
[LOGO OF THE MEDITRUST COMPANIES]
Shares of Paired Common Stock,
Debt Securities and/or Securities Warrants
--------------
The Meditrust Companies (the "Companies") are comprised of two companies,
Meditrust Corporation (the "REIT" or the "Corporation") and Meditrust Operating
Company (the "Operating Company"), each incorporated under the laws of Delaware.
The REIT is a real estate investment trust under the Internal Revenue Code of
1986, as amended. The shares of common stock of the Companies, comprised of
common stock of the REIT ("REIT Common Stock") and common stock of the Operating
Company ("Operating Common Stock"), are paired and traded as units consisting of
one share of each company, and are herein referred to as "Paired Common Stock."
The Companies may offer from time to time, in one or more series, debt
securities (the "Debt Securities"), warrants to purchase Debt Securities (the
"Debt Securities Warrants"), shares of Paired Common Stock, $.10 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 $2,000,000,000 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 Companies; (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
Companies 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
<PAGE>
"Plan of Distribution." The net proceeds to the Companies from such sale also
will be set forth in the Prospectus Supplement.
The Companies' shares are traded on the New York Stock Exchange (the
"NYSE") under the symbol "MT". On November 10, 1997, the closing sale price of
the shares on the New York Stock Exchange was $38.00.
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.
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The date of this Prospectus is November __, 1997.
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<PAGE>
AVAILABLE INFORMATION
The Companies are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith file reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission" or "SEC"). 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. The Companies file information electronically with the Commission, and
the Commission maintains a Web Site that contains reports, proxy and information
statements and other information regarding registrants (including the Companies)
that file electronically with the Commission. The address of the Commission's
Web Site is (http://www.sec.gov). Reports, proxy materials and other information
concerning the Companies can also be inspected at the offices of the New York
Stock Exchange, 20 Broad Street, Room 1102, New York, New York 10005.
The Companies have 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 1933, 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.
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<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated herein by reference:
The REIT and the Operating Company
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1. Joint Quarterly Report on Form 10-Q for the quarter ended September 30,
1997;
2. Joint Current Report on Form 8-K, event date November 5, 1997; and
Meditrust
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1. Annual Report on Form 10-K for the fiscal year ended December 31, 1996;
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1997;
3. Quarterly Report on Form 10-Q for the quarter ended June 30, 1997;
4. Current Reports on Form 8-K, event date January 31, 1997, event date
April 13, 1997 and event date July 30, 1997.
Santa Anita Realty Enterprises, Inc. and Santa Anita Operating Company
- ----------------------------------------------------------------------
1. Joint Annual Report on Form 10-K, as amended by amendments on Form
10-K/A, for the fiscal year ended December 31, 1996;
2. Joint Quarterly Report on Form 10-Q for the quarter ended March 31,
1997;
3. Joint Quarterly Report on Form 10-Q for the quarter ended June 30, 1997;
4. Joint Current Reports on Form 8-K, event date January 7, 1997, event
date April 13, 1997, and event date October 2, 1997.
5. The description of the REIT Common Stock and Operating Common Stock
which are contained or incorporated by reference in the Joint Registration
Statement on Form S-4 of Santa Anita Realty Enterprises, Inc. and Santa Anita
Operating Company (Nos. 333-34831, 333-34831-01), including any amendments
thereto.
All other documents filed by the Companies 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
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<PAGE>
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 Companies 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, with respect to the
REIT, to Michael S. Benjamin, Esq., Senior Vice President, Secretary and General
Counsel, Meditrust Corporation, 197 First Avenue, Suite 300, Needham Heights,
Massachusetts 02194, telephone (781) 433- 6000; and with respect to the
Operating Company, to Michael J. Bohnen, Secretary, Meditrust Operating Company,
197 First Avenue, Suite 100, Needham Heights, Massachusetts 02194, telephone
(781) 453-8062.
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<PAGE>
THE MEDITRUST COMPANIES
Recent Developments
On November 5, 1997, the REIT (formerly known as Santa Anita Realty
Enterprises, Inc., "Realty") merged with Meditrust, a Massachusetts business
trust, with the REIT as the surviving corporation, and the Operating Company
(formerly known as Santa Anita Operating Company ("Operating"), merged with
Meditrust Acquisition Company, a Massachusetts business trust ("MAC"), with the
Operating Company as the surviving corporation (collectively, the "Mergers").
Upon completion of the Mergers, the REIT changed its corporate name to
"Meditrust Corporation," the Operating Company changed its corporate name to
"Meditrust Operating Company", and the Companies have continued the operations
of Realty, Operating, Meditrust and MAC.
The REIT
The REIT is a self-administered real estate investment trust under the
Internal Revenue Code of 1986, as amended (the "Code"), which invests primarily
in the health care industry in locations throughout the United States and
through investments in other entities with similar facilities outside of the
United States. The REIT invests in high quality facilities that are managed by
experienced operators and achieves diversity in its property portfolio by sector
of the health care industry, geographic location, operator and form of
investment. The REIT's investments take the form of permanent mortgage loans,
sale/leaseback transactions and development projects. Generally, the REIT enters
into development projects where, upon completion of the facility, the REIT's
development funding is to be replaced by either a permanent mortgage loan or a
sale/leaseback transaction with the REIT.
The REIT's net increase in gross real estate investments totaled
$431,158,000 during 1996 as a result of the REIT's entering into sale/leaseback
transactions and making permanent mortgage loans and providing development
financing. Total gross investments were $2,286,160,000 at December 31, 1996 and
$2,671,419,000 at September 30, 1997.
As of September 30, 1997, the REIT had investments in 491 facilities,
consisting of 281 long-term care facilities, 26 rehabilitation hospitals, 151
retirement and assisted living facilities, 6 psychiatric, alcohol and substance
abuse facilities, 26 medical office buildings and 1 acute care hospital. The
properties are located in 41 different states and are operated by 38 health care
companies. Of the 38 different operators, 16 are publicly-traded companies
(i.e., Sun Healthcare Group, Inc., Emeritus Corporation, Horizon/CMS Healthcare
Corporation, Harborside Healthcare Corporation, OrNda Health Corp., Columbia/HCA
Healthcare Corporation, Integrated Health Services, Inc., Alternative Living
Services, Inc., HealthSouth Rehabilitation Corporation, The Multicare Companies,
Inc., Assisted Living Concepts, Inc., Mariner Health Group, Inc., Sterling
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<PAGE>
House Corporation, Karrington HealthCare Inc., Genesis Healthcare Ventures,
Inc., and Youth Services International, Inc.), and constitute approximately 50%
of the REIT's real estate investments.
The REIT's real estate investments are either owned by the REIT or
secured by a mortgage lien. As of September 30, 1997 permanent mortgage loans
constituted 45%, sale/leaseback transactions constituted 45.6%, and development
financing constituted 9.4% of the REIT's portfolio as measured by gross real
estate investments. The leases and mortgages provide for rental or interest
rates which generally range from 9% to 13% 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, 1996,
the aggregate amount of additional rent and interest was approximately
$11,409,000 million compared to $9,106,000 million for the year ended December
31, 1995.
In addition, the REIT 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 REIT and
the same operator or any affiliated operators. Leases and mortgage loans
generally are cross-defaulted with any other leases or mortgages between the
REIT and the same operator or any affiliated operators. With respect to
development mortgage loans, the REIT generally requires guaranteed maximum price
construction contracts, performance completion bonds or guarantees and cost
overrun guarantees. The REIT enters into a development mortgage loan when the
REIT will also be the permanent owner or mortgage lender. In making its
investment decisions, the REIT 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 REIT also owns an approximately 400 acre parcel of land in Arcadia,
California on which Santa Anita Park, a thoroughbred horse racing facility (the
"Race track") is located, a 50% interest in the operations of the Santa Anita
Fashion Park Mall, a 1.1 million square foot regional shopping mall and Santa
Anita Medical Plaza, a six story, 85,000 square foot medical office building.
Additionally, the REIT owns one neighborhood shopping center, and a 24-acre
undeveloped land parcel in Southern California. The REIT no longer intends to
hold the neighborhood shopping center and land parcel and is seeking buyers for
these properties.
-7-
<PAGE>
The REIT 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 REIT so complies, with limited exceptions, the REIT
will not be taxed under Federal income tax laws on that portion of its taxable
income that it distributes to its shareholders. The REIT 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 REIT may raise additional equity capital through the sale of
Shares, Debt Securities, Share Warrants or Debt Securities Warrants or through a
securitization transaction.
The REIT's principal executive offices are located at 197 First Avenue,
Suite 300, Needham Heights, Massachusetts 02194, and its telephone number is
(781) 433-6000.
The Operating Company
The Operating Company is engaged in thoroughbred horse racing. The
thoroughbred horse racing operation is conducted by Los Angeles Turf Club,
Incorporated ("LATC"), which leases the Race track from Realty. The Race track
is one of the premier thoroughbred horse racing venues in North America. The
Operating Company has conducted a winter live thoroughbred horse racing meet at
the Race track each year since 1934 (except for three years during World War
II). In addition, the Race track has been the site of a fall meet conducted by
Oak Tree Racing Association, which has leased the Race track from LATC since
1969. The Race track was the location of the 1986 and 1993 Breeders' Cup
Championships. The race meets held at the Race track in 1997 will offer 52
graded stakes races, the highest number offered by any racetrack in North
America.
The Race track's live races are simulcast to 16 satellite wagering
sites in Southern California, 15 sites in Northern California and 986 sites in
38 other states and 10 foreign countries. Approximately 77% of wagering at the
Race track's 1996 winter meet was through off-site wagering. The Operating
Company believes that it is well positioned to benefit from the continued
industry trend toward satellite wagering, which has been driven by technological
developments, legislative changes and customers' desire for convenience. As
described below, shares of Operating Common Stock are paired and trade together
with shares of REIT Common Stock as a single unit on the NYSE.
The Operating Company's principal executive offices are located at 197
First Avenue, Suite 100, Needham Heights, Massachusetts 02194, and its
telephone number is (781) 453-8062.
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<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
Meditrust and MAC
Year Ended December 31, Nine-month
----------------------- Period Ended
1992 1993 1994 1995 1996 September 30,1997
---- ---- ---- ---- ---- -----------------
Ratio 1.88 2.02 2.19 2.35 3.46 3.02
For the purpose of calculating the ratio of earnings to fixed charges
for the years ended December 31, 1992, 1993, 1994, 1995 and 1996 and for the
nine-month period ended September 30, 1997, 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 and other facilities.
DESCRIPTION OF CAPITAL STOCK
The Certificate of Incorporation of the REIT, as amended (the "REIT
Charter"), authorizes the REIT to issue up to 306,000,000 shares of capital
stock, consisting of (i) 270,000,000 shares of REIT Common Stock, (ii) 6,000,000
shares of REIT Preferred Stock and (iii) 30,000,000 shares of Series Common
Stock (collectively, the "REIT Capital Stock"). The REIT Charter grants the REIT
Board of Directors the power without further shareholder authorization to create
and authorize from time to time the issuance of REIT Preferred Stock and REIT
Series Common Stock in one or more series, and to determine the provisions
applicable to each series, including the number of shares, dividend rights,
dividend rate, conversion rights, voting rights, rights and terms of redemption
(including sinking fund provisions), redemption price or prices, and liquidation
preferences as are not prohibited by the REIT Charter or applicable law and as
are specified by the REIT Board of Directors in its
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<PAGE>
discretion. As of November 11, 1997, except for Junior Participating Preferred
Stock, see "Description of Paired Common Stock--Rights Agreement" below, the
REIT Board of Directors had not created or authorized any class or series of
REIT Preferred Stock or REIT Series Common Stock. Such REIT Preferred Stock and
REIT Series Common Stock may be subject to the Pairing Agreement described
below.
The Certificate of Incorporation of the Operating Company, as amended
(the "Operating Company Charter") currently authorizes the Operating Company to
issue up to 306,000,000 shares of capital stock, consisting of (i) 270,000,000
shares of Operating Common Stock, (ii) 6,000,000 shares of Operating Preferred
Stock and (iii) 30,000,000 shares of Operating Series Common Stock. The
Operating Company Charter grants the Operating Company Board of Directors the
power without further shareholder authorization to create and authorize from
time to time the issuance of Operating Preferred Stock and Operating Series
Common Stock in one or more series, and to determine the provisions applicable
to each series, including the number of shares, dividend rights, dividend rate,
conversion rights, voting rights, rights and terms of redemption (including
sinking fund provisions), redemption price or prices, and liquidation
preferences as are not prohibited by the Operating Company Charter or applicable
law and as are specified by the Operating Company Board of Directors in its
discretion. As of November 11, 1997, except for Junior Participating Preferred
Stock, see "Description of Paired Common Stock--Rights Agreement" below, the
Operating Company Board of Directors had not created or authorized any class or
series of Operating Preferred Stock or Operating Series Common Stock. Such
Operating Preferred Stock and Operating Series Common Stock may be subject to
the Pairing Agreement described below.
DESCRIPTION OF PAIRED COMMON STOCK
General
- -------
The Paired Common Stock is currently listed on the NYSE under the
symbol "MT". As of the close of business on November 5, 1997, there were
87,949,552 shares of REIT Common Stock outstanding and 86,644,145 shares of
Operating Common Stock outstanding.
Terms
- -----
Subject to provisions of law and the preferences of any series of
preferred stock or series common stock outstanding, holders of Paired Common
Stock are entitled to receive dividends at such times and in such amounts as may
be declared from time to time by the respective Board of Directors out of funds
legally available therefor. To maintain eligibility as a REIT, the Corporation
must in general distribute at least 95% of its "real estate investment trust
taxable income" before deduction of dividends paid (less any net long-term
capital gain and subject to certain other adjustments) to its shareholders.
Holders of Paired Common Stock are entitled to one vote for each share
held on every matter submitted to a vote of shareholders. Except as otherwise
provided by law or by the
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<PAGE>
REIT Charter or Operating Company Charter or by resolutions of the Board of
Directors providing for the issue of any series of preferred stock or series
common stock, the holders of the Paired Common Stock of each company have sole
voting power.
The Pairing
- -----------
Pursuant to a pairing agreement by and between the REIT and the
Operating Company, dated as of December 20, 1979, as amended (the "Pairing
Agreement"), the shares of REIT Common Stock and shares of Operating Common
Stock are transferable and tradeable only in combination as units, each unit
consisting of one share of REIT Common Stock and one share of Operating Common
Stock. These restrictions on the transfer of shares of REIT Common Stock and
Operating Common Stock are imposed by the Companies' By-Laws. The pairing is
evidenced by "back-to-back" stock certificates; that is, certificates evidencing
shares of Operating Common Stock are printed on the reverse side of certificates
evidencing shares of REIT Common Stock. The certificates bear a legend referring
to the restrictions on transfer imposed by the Companies' By-Laws. To permit
proper allocation of the consideration received in connection with the sale of
Paired Common Stock, the Pairing Agreement provides that the REIT and the
Operating Company shall, as decided from time to time but not less than once a
year, jointly make arrangements to determine the relative value of the stock of
each company.
Restrictions on Transfers
- -------------------------
Under the Code, the REIT may not own, directly or indirectly, after
application of the attribution rules of the Code, 10% or more of the outstanding
shares of Operating Common Stock, if the REIT is to qualify as a real estate
investment trust. Moreover, REIT Common Stock must be held by 100 or more
shareholders and 50% or more of the REIT Common Stock may not be held by or for
five or fewer individuals. The Companies' By-Laws provide that if a shareholder
obtained or obtains any ownership interest which is not in conformity with the
requirements of the Code pertaining to a real estate investment trust the Board
of Directors of the REIT or the Operating Company may call for the purchase from
such shareholder of such number of shares sufficient to reduce his holdings to
conform to the requirements of the Code. The purchase price for the shares
called for purchase shall be equal to the fair market value of such shares as
reflected in the closing price for such shares on the principal stock exchange
on which such shares are listed, or if such shares are not listed, then the last
bid quotation for shares of such stock as of the close of business on the date
fixed by the Board of Directors for such purchase. In addition, any transfer of
shares which would cause a shareholder to own, as determined under the
provisions of the Code, such an amount of the outstanding voting power or total
number of outstanding shares as would cause the REIT not to be in conformance
with the requirements of the Code shall be void ab initio; or, if such provision
is determined to be invalid, the transferee of such shares shall be deemed to
have acted as agent on behalf of the REIT or the Operating Company, as
applicable, in acquiring such shares and to hold such shares on behalf of the
REIT or Operating Company as applicable.
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<PAGE>
Rights Agreement
- ----------------
The REIT has distributed to each holder of REIT Common Stock, and has
authorized, with respect to each additional share of REIT Common Stock that
shall become outstanding between the date of such distribution and the earliest
of the Distribution Date, the Expiration Date (as such terms are hereinafter
defined) or the date, if any, on which Rights may be redeemed, the distribution
of one Right for each share of REIT Common Stock. Each Right entitles the
registered holder to purchase from the REIT, initially, one one-hundredth of a
share of Junior Participating Preferred Stock ("Junior Preferred Stock") at a
price of $100 (the "Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement among the REIT,
Operating Company and Boston EquiServe, as Rights Agent, dated as of June 15,
1989 (the "Rights Agreement").
Junior Preferred Stock purchasable upon exercise of the Rights will be
entitled to dividends of 100 times the dividends per share declared on REIT
Common Stock and, in the event of liquidation, will be entitled to a minimum
preferential liquidating distribution of $100 per share and an aggregate
liquidating distribution per share of 100 times the distribution made with
respect to each share of REIT Common Stock. Each share of the Junior Preferred
Stock is entitled to 100 votes on all matters submitted to a vote of
shareholders. The Junior Preferred Stock will vote together with REIT Common
Stock and in the event of any merger, consolidation or other transaction in
which REIT Common Stock is exchanged, each share of Junior Preferred Stock will
be entitled to receive 100 times the amount received per share of REIT Common
Stock.
Because of the voting, dividend and liquidation rights of the Junior
Preferred Stock, the value when issued of the one one-hundredth interest in a
share of Junior Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of REIT Common Stock.
Until the earlier to occur of (i) 10 business days following a public
announcement that an Acquiring Person has acquired beneficial ownership of 10%
or more of the REIT's general voting power other than pursuant to a Qualified
Offer (as defined below), the date of such public announcement being called the
"Stock Acquisition Date," or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors) following the commencement of,
or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 10% or more of the REIT's general voting power (the date of such
earlier occurrence being called the "Distribution Date"), the Rights will be
evidenced by the certificates representing REIT Common Stock and will be
transferred with and only with REIT Common Stock. The surrender for transfer of
any certificate for REIT Common Stock will also constitute the transfer of the
Rights associated with the REIT Common Stock represented by such certificate. As
soon as practicable, following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of REIT Common Stock as of
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the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on August 31, 1999 (the "Expiration Date"), unless the Expiration
Date is extended or unless the Rights are earlier redeemed or exchanged by the
REIT, as described below.
The Purchase Price payable, the number of shares or other securities
or property issuable upon exercise of the Rights, and the number of outstanding
Rights, are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, Junior Preferred Stock, (ii) upon the grant to holders of
REIT Common Stock or Junior Preferred Stock of certain rights or warrants to
subscribe for REIT Common Stock or Junior Preferred Stock at a price, or
securities convertible into REIT Common Stock or Junior Preferred Stock with a
conversion price, less than the then current per share market price, or (iii)
upon the distribution to holders of REIT Common Stock or Junior Preferred Stock
of evidences of indebtedness or assets (excluding regular periodic cash
dividends paid out of earnings or retained earnings or dividends payable in REIT
Common Stock) or of subscription rights or warrants (other than those referred
to above).
A Qualified Offer is a tender offer or exchange offer for all
outstanding REIT Common Stock which is determined by a majority of the
independent directors to be adequate and otherwise in the best interests of the
REIT and its shareholders.
If any person becomes an Acquiring Person other than by a purchase
pursuant to a Qualified Offer, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will not be entitled to the
benefit of such adjustment), will thereafter have the right to receive upon
exercise that number of shares of REIT Common Stock or REIT Common Stock
equivalents having a market value of two times the exercise price of the Right.
Such an adjustment will also be made in the event that (i) an Acquiring Person
merges with or otherwise consolidates or combines with the REIT in a transaction
in which the REIT is the surviving corporation, (ii) an Acquiring Person engages
in one or more self-dealing transactions specified in the Rights Agreement, or
(iii) during such time as there is an Acquiring Person, an event specified in
the Rights Agreement occurs which results in the Acquiring Person's ownership
interest in the REIT being increased by more than 1%.
In the event that, at any time after an Acquiring Person has become
such, the REIT is acquired in a merger or other business combination transaction
(other than a merger which follows a Qualified Offer at the same or a higher
price) or 50% or more of its consolidated assets or earning power are sold, each
holder of a Right (other than an Acquiring Person) will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the acquiring company
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which at the time of such transaction will have a market value of two times the
exercise price of the Right.
At any time after an Acquiring Person has become such, the Board of
Directors of the REIT may exchange the Rights (other than Rights owned by such
person or group), in whole or in part, at an exchange ratio of one share of REIT
Common Stock per Right (subject to adjustment).
The Rights Agreement provides that, during such time as the Pairing
Agreement shall remain in effect, Operating Company will issue, on a share for
share basis, Operating Common Stock or, as the case may be, Operating Junior
Preferred Stock to each person receiving REIT Common Stock or Junior Preferred
Stock upon exercise of or in exchange for one or more Rights.
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares will be issued and, in lieu thereof,
an adjustment in cash will be made based on the market price of REIT Common
Stock or Junior Preferred Stock, as the case may be, on the last trading day
prior to the date of exercise.
Up to and including the tenth business day after a Stock Acquisition
Date, the REIT Board of Directors may redeem the Rights in whole, but not in
part, at a price of $.001 per Right (the "Rights Redemption Price"). The
redemption of the Rights may be made effective at such time on such conditions
as the Board of Directors in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Rights
Redemption Price
The terms of the Rights may be amended by the REIT Board of Directors
without the consent of the holders of the Rights at any time prior to the
Distribution Date. Thereafter the Rights may be amended to make changes which do
not adversely affect the interests of the holders of the Rights, or which
shorten or lengthen time periods, subject to certain limitations set forth in
the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a REIT shareholder, including, without limitation, the right to vote
or to receive dividends.
Transfer Agent
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The transfer agent and registrar for the Paired Common Stock is State
Street Bank and Trust Company, Boston, Massachusetts, acting through its
servicing agent, Boston EquiServe.
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FEDERAL INCOME TAX CONSIDERATIONS
The following is a brief and general summary of the material federal
income tax considerations of an investment in the Corporation's and the
Operating Company's Securities to the extent those considerations relate to the
federal income taxation of the Corporation, the Operating Company and its U.S.
Stockholders (as defined below in "--Federal Income Taxation of Holders of
Paired Shares--Taxation of Taxable U.S. Stockholders"). To the extent such
considerations relate to the specific tax treatment of Securities other than the
Paired Common Stock (also referred to herein as "Paired Shares"), they will be
addressed in the applicable Prospectus Supplement. For the particular provisions
that govern the federal income tax treatment of the Corporation and its
stockholders, reference is made to Sections 856 through 860 of the Code and the
regulations thereunder. The following summary is qualified in its entirety by
such reference.
The statements in this discussion are based on current provisions of
the Code, Treasury Regulations, the legislative history of the Code, existing
administrative rulings and practices of the Internal Revenue Service (the
"IRS"), and judicial decisions. No assurance can be given that future
legislative, judicial, or administrative actions or decisions, which may be
retroactive in effect, will not affect the accuracy of any statements in this
Prospectus with respect to the transaction entered into or contemplated prior to
the effective date of such changes.
EACH INVESTOR IS ADVISED TO CONSULT HIS OR HER OWN TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OR HER OF AN INVESTMENT IN THE
COMPANIES' SECURITIES.
REIT Qualification of the Corporation
General
Prior to the consummation of the Mergers, Realty and Meditrust operated
in a manner intended to allow each of them to qualify as a REIT. The Corporation
intends to operate following the Mergers in a manner so that the Corporation
will continue to qualify as a REIT. If the Corporation failed to qualify as a
REIT in any taxable year, the Corporation would be subject to federal income
taxation as if it were a domestic corporation, and the Corporation's
stockholders would be taxed in the same manner as stockholders of ordinary
corporations. In this event, the Corporation could be subject to potentially
significant tax liabilities, and the amount of cash available for distribution
to stockholders would be reduced and possibly eliminated. Moreover, the
liabilities of the Corporation following the Mergers will include any unpaid
taxes of Meditrust, including taxes resulting if Meditrust failed to qualify as
REIT for periods prior to the Mergers, which also could reduce or eliminate cash
available for distribution to the Corporation's stockholders following the
Mergers. Unless
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entitled to relief under certain Code provisions, and subject to the discussion
below regarding Section 269B(a)(3) of the Code, the Corporation also would be
disqualified from re-electing REIT status for the four taxable years following
the year during which qualification was lost.
In the opinion of management, the Corporation has been organized and
operated in conformity with the requirements for qualification and taxation as a
REIT under the Code, and the Corporation's proposed method of operation will
enable it to continue to meet the requirements for qualification and taxation as
a REIT under the Code. Qualification and taxation as a REIT depends upon the
Corporation's having met and continuing to meet, through actual annual operating
results, the distribution levels, stock ownership, and other various
qualification tests imposed under the Code. Accordingly, no assurance can be
given that the actual results of the Corporation's operations for any particular
taxable year have satisfied or will satisfy such requirements.
To qualify for tax treatment as a REIT under the Code, the Corporation
must meet the following requirements, among others:
(1) At least 95% of the Corporation's gross income each taxable year
must be derived from:
(a) rents from real property;
(b) gain from the sale or disposition of real property that is
not held primarily for sale to customers in the ordinary course of business;
(c) interest on obligations secured by mortgages on real
property (with certain minor exceptions);
(d) dividends or other distributions from, or gains from the
sale of, shares of qualified REITs that are not held primarily for sale to
customers in the ordinary course of business;
(e) abatements and refunds of real property taxes;
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(f) income and gain derived from foreclosure property;
(g) most types of commitment fees related to either real
property or mortgage loans;
(h) gains from sales or dispositions of real estate assets
that are not "prohibited transactions" under the Code;
(i) dividends;
(j) interest on obligations other than those secured by
mortgages on properties; and
(k) gains from sales or dispositions of securities not held
primarily for sale to customers in the ordinary course of business.
In addition, at least 75% of the Corporation's gross income
each taxable year must be derived from items (a) through (h) above and from
income attributable to stock or debt instruments acquired with the proceeds from
the sale of stock or certain debt obligations ("new capital") of the Corporation
received during a one-year period beginning on the day such proceeds were
received ("qualified temporary investment income").
For purposes of these requirements, the term "rents from real
property" is defined in the Code to include charges for services customarily
furnished or rendered in connection with the rental of real property, whether or
not such charges are separately stated. The term "rents from real property" also
includes rent attributable to incidental personal property that is leased under,
or in connection with, a lease of real property, provided that the rent
attributable to such personal property for the taxable year does not exceed 15%
of the total rent for the taxable year attributable to both the real and
personal property leased under such lease. The term "rents from real property"
is also defined to exclude: (i) any amount received or accrued with respect to
real property, if the determination of such amount depends in whole or in part
on the income or profits derived by any person from the property (except that
any amount so received or accrued shall not be excluded from "rents from real
property" solely by reason of being determined on the basis of a fixed
percentage of receipts or sales); (ii) any amount received or accrued, directly
or indirectly, from any person or corporation if ownership of a 10% or greater
interest in the stock, assets or net profits of such person or corporation is
attributed to the Corporation; (iii) any amount received or accrued from
property that the Corporation manages or operates or for which the Corporation
furnishes services to the tenants, which would constitute unrelated trade or
business income if received by certain tax-exempt entities, either itself or
through another person who is not an "independent contractor" (as defined in the
Code) from whom the Corporation does not derive or receive income; and (iv) any
amount received or accrued from property with respect to which the Corporation
furnishes (whether or not through an independent contractor) services not
customarily rendered to tenants, other than a de minimis amount (defined in the
Code as 1% of all amounts received or accrued with respect to the property) in
properties of a similar class in the geographic market in which the property is
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located. The Corporation believes that any services furnished to tenants are
not, and will not be, of a type that would cause any rents to fail to qualify as
rents from real property, or, if so, that the amount of income derived from
those activities will not jeopardize the Corporation's REIT status.
If the Corporation should fail to satisfy the foregoing income
tests but otherwise satisfies the requirements for taxation as a REIT and if
such failure is held to be due to reasonable cause and not willful neglect and
if certain other requirements are met, then the Corporation would continue to
qualify as a REIT but would be subject to a 100% tax on the excessive
unqualified income reduced by an approximation of the expenses incurred in
earning that income.
(2) Less than 30% of the Corporation's gross income during any calendar
year beginning prior to the 1998 calendar year can be derived from the sale or
disposition of: (i) stock or securities held for less than one year; (ii)
property held primarily for sale to customers in the ordinary course of business
(other than foreclosure property); and (iii) real property (including interests
in mortgages on each property) held for less than four years (other than
foreclosure property and gains arising from involuntary conversions).
(3) At the end of each calendar quarter, at least 75% of the value of
the Corporation's total assets must consist of real estate assets (real
property, interests in real property, interests in mortgages on real property,
shares in qualified real estate investment trusts and stock or debt instruments
attributable to the temporary investment of new capital), cash and cash items
(including receivables) and government securities. With respect to securities
that are not included in the 75% asset class, the Corporation may not at the end
of any calendar quarter own either: (i) securities representing more than 10% of
the outstanding voting securities of any one issuer; or (ii) securities of any
one issuer having a value that is more than 5% of the value of the Corporation's
total assets. The Corporation's share of income earned or assets held by a
partnership in which the Corporation is a partner will be characterized by the
Corporation in the same manner as they are characterized by the partnership for
purposes of the assets and income requirements described in this paragraph (3)
and in paragraphs (1) and (2) above.
(4) The shares of the Corporation must be "transferable" and beneficial
ownership of them must be held by 100 or more persons during at least 335 days
of each taxable year (or a proportionate part of a short taxable year). More
than 50% of the outstanding stock may not be owned, directly or indirectly,
actually or constructively, by or for five or fewer "individuals" at any time
during the last half of any taxable year. For the purpose of such determination,
shares owned directly or indirectly by or for a corporation, partnership, estate
or trust are considered as being owned proportionately by its shareholders,
partners or beneficiaries; an individual is considered as owning shares directly
or indirectly owned by or for members of his family; and the holder of an option
to acquire shares is considered as owning such shares. In addition, because of
the lessor-lessee relationship between the Corporation and LATC, no person may
own, actually or constructively, 10% or more of the outstanding voting power or
total number of shares of stock of the two companies. The bylaws of Operating
Company and the Corporation preclude any transfer of shares which
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would cause the ownership of shares not to be in conformity with the above
requirements. Each year the Corporation must demand written statements from the
record holders of designated percentages of its shares disclosing the actual
owners of the shares and must maintain, within the Internal Revenue District in
which it is required to file its federal income tax return, permanent records
showing the information it has thus received as to the actual ownership of such
shares and a list of those persons failing or refusing to comply with such
demand.
(5) The Corporation must distribute to its shareholders dividends in an
amount at least equal to the sum of 95% of its "real estate investment trust
taxable income" before the deduction for dividends paid (i.e., taxable income
less any net capital gain and less any net income from foreclosure property or
from property held primarily for sale to customers, and subject to certain other
adjustments provided in the Code); plus (i) 95% of the excess of the net income
from foreclosure property over the tax imposed on such income by the Code; less
(ii) a portion of certain noncash items of the Corporation that are required to
be included in income, such as the amounts includable in gross income under
Section 467 of the Code (relating to certain payments for use of property or
services). The distribution requirement is reduced by the amount by which the
sum of such noncash items exceeds 5% of real estate investment trust taxable
income. Such undistributed amount remains subject to tax at the tax rate then
otherwise applicable to corporate taxpayers. Each year, the Corporation has, or
will be deemed to have, distributed at least 95% of its real estate investment
trust taxable income as adjusted.
For this purpose, certain dividends paid by the Corporation
after the close of the taxable year may be considered as having been paid during
the taxable year. However, if the Corporation does not actually distribute each
year at least the sum of: (i) 85% of its real estate investment trust taxable
income; (ii) 95% of its capital gain net income; and (iii) any undistributed
taxable income from prior periods, then the amount by which such sums exceed the
actual distributions during the taxable year will be subject to a 4% excise tax.
If a determination (by a court or by the Internal Revenue
Service) requires an adjustment to the Corporation's taxable income that results
in a failure to meet the percentage distribution requirements (e.g., a
determination that increases the amount of the Corporation's real estate
investment trust taxable income), the Corporation may, by following the
"deficiency dividend" procedure of the Code, cure the failure to meet the annual
percentage distribution requirement by distributing a dividend within 90 days
after the determination, even though this deficiency dividend is not distributed
to the shareholders in the same taxable year as that in which income was earned.
The Corporation will, however, be liable for interest based on the amount of the
deficiency dividend.
(6) The directors of the Corporation must have authority over the
management of the Corporation, the conduct of its affairs and, with certain
limitations, the management and disposition of the Corporation's property.
(7) The Corporation must have the calendar year as its annual
accounting period.
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(8) The Corporation must satisfy certain procedural requirements.
Paired Shares
Section 269B(a)(3) of the Code provides that if the shares of a REIT
and a non-REIT are paired, then the REIT and the non-REIT shall be treated as
one entity for purposes of determining whether either company qualifies as a
REIT. If Section 269B(a)(3) of the Code applied to the Corporation and the
Operating Company, then the Corporation would not be eligible to be taxed as a
REIT. Section 269B(a)(3) does not apply, however, if the shares of the REIT and
the non-REIT were paired on June 30, 1983 and the REIT was taxable as a REIT on
June 30, 1983. As a result of this "grandfathering" rule, Section 269B(a)(3) of
the Code does not apply to the Corporation and the Operating Company. By its
terms, this "grandfathering" rule will continue to apply to the Corporation
after the Merger. There are, however, no judicial or administrative authorities
interpreting this "grandfathering" rule in the context of a merger or otherwise,
and this interpretation, as well as the opinion of management regarding the
Corporation's qualification as a REIT, is based solely on the literal language
of the statute. There can be no assurance that the IRS will not seek to deny the
Corporation REIT status despite its grandfathered status. Recently, the staff of
the Joint Committee on Taxation announced its plans to look at the structure of
paired-share real estate investment trusts. Currently, there is no legislation
proposed adversely affecting the "grandfathering provisions" for paired-shared
REITs. There can be no assurance, however, that new legislation will not be
proposed or that any proposed legislation will not modify the "grandfathering
provisions." If for any reason the Corporation failed to qualify as a REIT in
1983, the benefit of the "grandfathering" rule would not be available to the
Corporation, in which case the Corporation would not qualify as a REIT for any
taxable year.
Potential Reallocation of Income
Due to the paired-share structure, the Corporation, the Operating
Company, and their respective subsidiary entities will be controlled by the same
interests. As a result, the IRS could, pursuant to Section 482 of the Code, seek
to distribute, apportion or allocate gross income, deductions, credits or
allowances between or among them if it determines that such distribution,
apportionment or allocation is necessary in order to prevent evasion of taxes or
to clearly reflect income. The Corporation and the Operating Company believe
that all material transactions between them have been negotiated and structured
with the intention of achieving an arm's-length result. It is believed that all
material transactions between the Corporation and the Operating Company, and
among them and/or their subsidiary entities, will be negotiated and structured
with the intention of achieving an arm's-length result. If true, the potential
application of Section 482 of the Code should not have a material effect on the
Corporation or the Operating Company. There can be no assurance, however, that
the IRS will not challenge the terms of such transactions, or that such
challenge would not be successful.
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Effects of Compliance with REIT Requirements
Operating income derived from health care related facilities or a
racetrack does not constitute qualifying income under the REIT requirements.
Accordingly, all of the Corporation's health care facilities have been leased to
lessees, and the Corporation will continue to lease such facilities after the
Mergers. Similarly, the Corporation has leased the Race track to the Operating
Company, and the Corporation will continue to lease the Race track for so long
as the Corporation owns the Race track. Rent derived from such leases will be
qualifying income under the REIT requirements, provided several requirements are
satisfied. Among other requirements, a lease may not have the effect of giving
the Corporation a share of the net income of the lessee, and the amount of
personal property leased under the lease must not exceed the 15% rent described
above. The Corporation also may not provide services, other than customary
services, except for a de minimis amount, to the lessee or their subtenants. In
addition, the leases must also qualify as "true" leases for federal income tax
purposes (as opposed to service contracts, joint ventures or other types of
arrangements). There are, however, no controlling Treasury Regulations,
published rulings, or judicial decisions that discuss whether leases similar to
the Corporation's leases constitute "true" leases. Therefore, there can be no
complete assurance that the IRS will not successfully assert a contrary
position.
Payments under a lease will not constitute qualifying income for
purposes of the REIT requirements if the Corporation owns, directly or
indirectly, 10% or more of the ownership interests in the relevant lessee.
Constructive ownership rules apply, such that, for instance, the Corporation is
deemed to own the assets of stockholders who own 10% or more in value of the
stock of the Corporation. The Charters are therefore designed to prevent a
stockholder of the Corporation from owning REIT stock or Operating Company stock
that would cause the Corporation to own, actually or constructively, 10% or more
of the ownership interests in a lessee (including the Operating Company). Thus,
the Corporation should never own, actually or constructively, 10% or more of a
lessee. However, because the relevant constructive ownership rules are broad and
it is not possible to monitor continually direct and indirect transfers of
Paired Shares, and because the charter provisions referred to above may not be
effective, no absolute assurance can be given that such transfers, or other
events of which the Corporation has no knowledge, will not cause the Corporation
to own constructively 10% or more of one or more lessees at some future date.
In addition to the considerations discussed above, the REIT
requirements will impose a number of other restrictions on the operations of the
Corporation. For example, net income from sales of property sold to customers in
the ordinary course of business (other than inventory acquired by reason of
certain foreclosures) is subject to a 100% tax unless eligible for a certain
safe harbor. Minimum distribution requirements also generally require the
Corporation to distribute each year at least 95% of its taxable income for the
year (excluding any net capital gain). In addition, certain asset tests limit
the Corporation's ability to acquire non-real estate assets.
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Federal Income Taxation of Operating Company; Non-Controlled
Subsidiaries
As a "C" corporation under the Code, the Operating Company will be
subject to U.S. federal income tax on its taxable income at corporate rates. Any
income, net of taxes, will be available for retention in Operating Company's
business or for distribution to shareholders as dividends. However, there is no
tax provision that requires Operating Company to distribute any of its after-tax
earnings and Operating Company does not expect to pay cash dividends in the
foreseeable future. As non-REIT subsidiaries, the corporate subsidiaries of the
Corporation that are not controlled by it will also be subject to federal income
tax in the same manner as the Operating Company.
State and Local Taxation
The Companies and their stockholders may be subject to state and local
taxes in various jurisdictions, including those in which it or they transact
business, own property, or reside. The state and local tax treatment of such
entities or persons may not conform to the federal income tax consequences
discussed above. Consequently, the Companies and their stockholders should
consult their own tax advisers regarding the effect of state and local tax laws
on the ownership of Paired Shares.
Federal Income Taxation of Holders of Paired Shares
Separate Taxation
Notwithstanding that Paired Shares may only be transferred as a unit,
holders of Paired Shares will be treated for U.S. federal income tax purposes as
holding equal numbers of shares of Corporation Common Stock and of Operating
Company Common Stock. The tax treatment of distributions to stockholders and of
any gain or loss upon sale or other disposition of the Paired Shares (as well as
the amount of gain or loss) must therefore be determined separately with respect
to each share of Corporation Common Stock and each share of Operating Company
Common Stock contained within each Paired Share. The tax basis and holding
period for each share of Corporation Common Stock and each share of Operating
Company Common Stock also must be determined separately. Upon a taxable sale of
a Paired Share, the amount realized should be allocated between the Corporation
Common Stock and the Operating Company Common Stock based on their then relative
values.
Taxation of Taxable U.S. Stockholders
As used herein, the term "U.S. Stockholder" means a holder of Paired
Shares that for U.S. federal income tax purposes is (i) a citizen or resident of
the United States, (ii) a corporation, partnership, or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof, (iii) an estate, the income of which is subject to U.S. federal income
taxation regardless of its source or (iv) a trust, if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States persons have the authority to control all
substantial decisions of the trust and (v) is not an entity that has a special
status under the Code (such as
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a tax-exempt organization or a dealer in securities).
As long as the Corporation qualifies as a REIT, distributions made to
the Corporation's taxable U.S. Stockholders out of current or accumulated
earnings and profits (and not designated as capital gain dividends) will be
taken into account by such U.S. Stockholders as ordinary income and will not be
eligible for the dividends received deduction generally available to
corporations. For purposes of determining whether distributions on Corporation
Common Stock are out of earnings and profits, earnings and profits will be
allocated first to any outstanding preferred stock of the Corporation and then
allocated to its Common Stock. Subject to the discussion below regarding changes
to the capital gains tax rates, distributions that are designated as capital
gain dividends will be taxed as capital gains (to the extent they do not exceed
the Corporation's actual net capital gain for the taxable year) without regard
to the period for which the stockholder has held his Corporation Common Stock.
However, corporate stockholders may be required to treat up to 20% of certain
capital gain dividends as ordinary income. Distributions in excess of current
and accumulated earnings and profits will not be taxable to a stockholder to the
extent that they do not exceed the adjusted basis of the stockholder's
Corporation Common Stock, but rather will reduce the adjusted basis of such
stock. To the extent that such distributions in excess of current and
accumulated earnings and profits exceed the adjusted basis of a stockholder's
Corporation Common Stock, such distributions will be included in income as
long-term capital gain (or, in the case of individuals, trusts and estates,
mid-term capital gain if the Corporation Common Stock has been held for more
than 12 months but not more than 18 months or in the case of all taxpayers
short-term capital gain if the Corporation Common Stock has been held for 12
months or less) assuming shares are a capital asset in the hands of the
stockholder. In addition, any distribution declared by the Corporation in
October, November or December of any year and payable to a stockholder of record
on a specified date in any such month shall be treated as both paid by the
Corporation and received by the stockholder on December 31 of such year,
provided that the distribution is actually paid by the Corporation during
January of the following calendar year.
Distributions from the Operating Company up to the amount of the
Operating Company's current or accumulated earnings and profits (less any
earnings and profits allocable to distributions on any preferred stock of the
Operating Company) will be taken into account by U.S. Stockholders as ordinary
income and generally will be eligible for the dividends-received deduction for
corporations (subject to certain limitations). Distributions in excess of the
Operating Company's current and accumulated earnings and profits will not be
taxable to a holder to the extent that they do not exceed the adjusted basis of
the holder's the Operating Company's Common Stock, but rather will reduce the
adjusted basis of such Operating Company Common Stock. To the extent that such
distributions exceed the adjusted basis of a holder's the Operating Company
Common Stock they will be included in income as long-term capital gain (or, in
the case of individuals, trusts and estates, mid-term capital gain if the
Operating Company Common Stock has been held for more than 12 months but not
more than 18 months or in the case of all taxpayers, short-term capital gain if
the Operating Company Common Stock has been held for 12 months or less) assuming
the shares are a capital asset in the hands of the stockholder.
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For taxable years beginning after December 31, 1997, the Corporation
may elect to retain and pay income tax on net long-term capital gains recognized
during the taxable year. If the Corporation so elects for a taxable year, its
stockholders would include in income as capital gain their proportionate share
of such of its long-term capital gains as the Corporation may designate. A
stockholder would be deemed to have paid its share of the tax paid by the
Corporation, which would be credited or refunded to the stockholder. The
stockholders' basis in its shares of Corporation Common Stock would be increased
by the amount of undistributed capital gains (less the capital gains tax paid by
the Corporation) included in the stockholder's capital gains. If the Corporation
so elects for a taxable year beginning before January 1, 1998, no such credit or
increase in basis is available to the Corporation's stockholders even though the
stockholders would still include in income as capital gain their proportionate
share of long-term capital gain designated by the Corporation.
Taxable distributions from the Corporation or the Operating Company and
gain or loss from the disposition of shares of Corporation Common Stock and
Operating Company Common Stock will not be treated as passive activity income
and, therefore, stockholders generally will not be able to apply any passive
activity losses (such as losses from certain types of limited partnerships in
which the stockholder is a limited partner) against such income. In addition,
taxable distributions from the Corporation or the Operating Company generally
will be treated as investment income for purposes of the investment interest
deduction limitations. Capital gain dividends, capital gains (other than
short-term capital gains) from the disposition of Paired Shares and actual or
deemed distributions from either company treated as such, including capital
gains (other than short-term capital gains) recognized on account of
distributions in excess of a stockholder's basis or any deemed capital gain
distributions to a Corporation stockholder on account of retained capital gains
of the Corporation, will be treated as investment income for purposes of the
investment interest deduction limitations only if and to the extent the
stockholder so elects, in which case such capital gains will be taxed at
ordinary income rates to the extent of the election. The Corporation and the
Operating Company will notify stockholders after the close of their taxable
years as to the portions of the distributions attributable to that year that
constitute ordinary income, return of capital, and (in the case of the
Corporation) capital gain. Stockholders may not include in their individual
income tax returns any net operating losses or capital losses of the Corporation
or of the Operating Company.
The Taxpayer Relief Act of 1997 (the "Relief Act") alters the taxation
of capital gain income. Under the Relief Act, individuals, trusts and estates
that hold certain investments for more than 18 months may be taxed at a maximum
long-term capital gain rate of 20% on the sale or exchange of those investments.
Individuals, trusts and estates that hold certain assets for more than 12 months
but not more than 18 months may be taxed at a maximum mid-term capital gain rate
of 28% on the sale or exchange of those investments. The Relief Act also
provides a maximum rate of 25% for "unrecaptured section 1250 gain" for
individuals, trusts and estates, special rules for "qualified 5-year gain," as
well as other changes to prior law. The Relief Act allows the IRS to prescribe
regulations on how the Relief Act's new capital gain rates will apply to sales
of capital assets by (or interests in) "pass-thru entities," which include REITs
such as the Corporation. To date regulations have not yet been prescribed, and
it remains unclear how the Relief Act's new rates will apply to
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capital gain dividends or undistributed capital gains, including, for example,
the extent, if any, to which capital gain dividends or undistributed capital
gains from the Corporation will be taxed to individuals, trusts and estates at
the new rates for mid-term capital gains and unrealized section 1250 recapture,
rather than the long-term capital gain rates. Investors are urged to consult
their own tax advisors with respect to the new rules contained in the Relief
Act. No change was made to the capital gains rate or holding period for
corporations under the Relief Act.
Taxation of Stockholders on the Disposition of Paired Shares
In general, and assuming the taxpayer has the same holding period for
the Corporation Common Stock and the Operating Company Common Stock, any gain or
loss realized upon a taxable disposition of Paired Shares by a stockholder who
is not a dealer in securities will be treated as long-term capital gain or loss
if the Paired Shares have been held for more than 12 months, (or, in the case of
individuals, trusts and estates, mid-term capital gain or loss if the Paired
Shares have been held for more than 12 months but not more than 18 months, and
long-term capital gain or loss if the Paired Shares have been held for more than
18 months) and otherwise as short-term capital gain or loss. In addition, any
loss upon a sale or exchange of Corporation Common Stock by a stockholder who
has held such stock for six months or less (after applying certain holding
period rules), will be treated as a long-term capital loss to the extent of
distributions from the Corporation or undistributed capital gains required to be
treated by such stockholder as long-term capital gain. All or a portion of any
loss realized upon a taxable disposition of Paired Shares may be disallowed if
other Paired Shares are purchased within 30 days before or after the
disposition.
Information Reporting Requirements and Backup Withholding
The Corporation and the Operating Company will each report to their
U.S. Stockholders and the IRS the amount of distributions paid during each
calendar year, and the amount of tax withheld, if any. Under the backup
withholding rules, a stockholder may be subject to backup withholding at the
rate of 31% with respect to distributions paid unless such holder (i) is a
corporation or comes within certain other exempt categories and, when required,
demonstrates this fact or (ii) provides a taxpayer identification number,
certifies as to no loss of exemption from backup withholding and otherwise
complies with the applicable requirements of the backup withholding rules. A
stockholder who does not provide the Corporation and the Operating Company with
his, her or its correct taxpayer identification number also may be subject to
penalties imposed by the IRS. Any amount paid as backup withholding will be
creditable against the stockholder's income tax liability. In addition, the
Corporation may be required to withhold a portion of capital gain distributions
to any stockholders who fail to certify their non-foreign status to the
Corporation.
Taxation of Tax-Exempt Stockholders
Tax-exempt entities, including qualified employee pension and profit
sharing trusts and individual retirement accounts ("Exempt Organizations"),
generally are exempt from federal income taxation. They are, however, subject to
taxation on their unrelated business
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taxable income ("UBTI"). While many investments in real estate generate UBTI,
amounts distributed by the Corporation to Exempt Organizations generally should
not constitute UBTI, nor should dividends paid by the Operating Company
generally constitute UBTI. However, if an Exempt Organization finances its
acquisition of Paired Shares with debt, a portion of its income from the
Corporation and the Operating Company will constitute UBTI pursuant to the
"debt-financed property" rules. Furthermore, social clubs, voluntary employee
benefit associations, supplemental unemployment benefit trusts, and qualified
group legal services plans that are exempt from taxation under paragraphs (7),
(9), (17), and (20), respectively, of section 501(c) of the Code are subject to
different UBTI rules, which generally will require them to characterize
distributions from the Corporation and the Operating Company as UBTI.
Investors are urged to consult their own tax advisors with respect to
the appropriateness of an investment in the Securities offered hereby and with
respect to the tax consequences arising under federal law and the laws of any
state, municipality or other taxing jurisdiction, including tax consequences
resulting from such investor's own tax characteristics. In particular, foreign
investors should consult their own tax advisors concerning the tax consequences
of an investment in the Corporation and Operating Company including the
possibility of U.S. income tax withholding on distributions.
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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
Companies; (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 Companies 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
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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
Corporation's status as a real estate investment trust, 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 obtains any ownership interest, directly or indirectly, in
REIT Capital Stock which is not in conformity with the requirements of the Code
pertaining to a real estate investment trust.
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 Companies; (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 Companies,
subject to the limitation that all adjustments by reason 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 Companies shall effect any capital
reorganization or reclassification of their respective Shares or shall
consolidate or merge with or into any trust or corporation (other than a
consolidation or merger in which the Companies are the surviving entities) 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 Companies may, at their option, make such reductions in the
conversion price, in addition to those set forth above, as the Boards of
Directors of the
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Companies deem 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 Boards of Directors 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 Companies 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 Companies 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
Corporation's status as a REIT at the option of the Corporation 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 Corporation may exercise
its redemption powers solely with respect to the securities of the security
holder or holders which pose a threat to the Corporation's REIT status and only
to the extent deemed necessary by the Corporation's Board of Directors to
preserve such status. (See "Redemption" under "Description of Shares".)
Dividends, Distributions and Acquisitions of Shares. The Indenture
provides that the Companies 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 Corporation 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 Companies with
respect to a series of the Debt Securities will be set forth in the Prospectus
Supplement relative thereto.
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Modification of the Indenture. Under the Indenture, with certain
exceptions, the rights and obligations of the Companies with respect to any
series of Debt Securities and the rights of Holders of such series may only be
modified by the Companies and the Trustee with the consent of the Holders 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
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 Companies 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
Companies 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 Companies; and (vi) any other Event of Default
provided with respect to the Debt Securities of that series.
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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.
The Companies will be required to furnish to the Trustee annually a
statement of certain officers of the Companies 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 Companies 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 Companies shall be the continuing entities, or the successor
entities (if other than the Companies) shall be entities organized and existing
under the laws of the United States or a state thereof or the District of
Columbia (although the Companies may, in turn, be owned by a foreign entity) and
such entities shall expressly assume by supplemental indenture all of the
obligations of the Companies under the Debt Securities of any series and the
Indenture, (ii) immediately after giving effect to such
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transactions no Default or Event of Default shall have occurred and be
continuing, and (iii) the Companies 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 Companies 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 Companies, even though the
Companies' 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 Companies
anticipate 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
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of the Debt Securities, the Companies, 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 Depository or its nominee, as the
case may be, as the registered owner of such Global Security. None of the
Companies, 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 Companies expect 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 Companies also expect 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 Companies within 90 days, the
Companies will issue each Debt Security in definitive form to the beneficial
owners thereof in exchange for such Global Security. In addition, the Companies
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.
DESCRIPTION OF SECURITIES WARRANTS
The Companies 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
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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 Companies 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 Companies 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 Companies
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.
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<PAGE>
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
Companies 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.
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
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<PAGE>
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 Companies may, but are 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
Companies and as such will be subject to any changes in the perceived
creditworthiness of the Companies.
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
Companies), 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 Companies 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.
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.
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<PAGE>
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 Companies with
or into any entities (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 Companies 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 Companies 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 Companies involved in the sale of
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<PAGE>
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 Companies 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 Companies' behalf may receive compensation from the Companies 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 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 Companies to indemnification by the Companies 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 Companies in the ordinary course of business.
LEGAL MATTERS
The validity of the Securities offered hereby will be passed upon for
the Companies by Nutter, McClennen & Fish, LLP. In addition, Nutter, McClennen &
Fish, LLP will pass upon certain Federal income tax matters relating to the
Companies. 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.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Michael J. Bohnen, a partner in the law firm Nutter, McClennen & Fish,
LLP, currently serves as Secretary of Operating Company. Nutter, McClennen &
Fish, LLP, serves as counsel to the Registrants, and has rendered a legal
opinion with respect to the validity of the Shares being offered pursuant to
this Registration Statement.
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<PAGE>
EXPERTS
The consolidated financial statements of Santa Anita Realty
Enterprises, Inc. and Santa Anita Operating Company (together, "The Santa Anita
Companies"), at December 31, 1995 and 1996 and for each of the three years in
the period ended December 31, 1996 incorporated in this Registration Statement
by reference to the Annual Report on Form 10-K of The Santa Anita Companies, as
amended by amendments on Form 10-K/A (the "Santa Anita Form 10-K") have been
audited by Ernst & Young LLP, independent accountants, as set forth in their
report thereon included therein and incorporated herein by reference. The
financial statements of Anita Associates at December 31, 1996, and the
consolidated financial statements of H-T Associates at December 31, 1996, both
incorporated by reference in this Registration Statement by reference to the
Santa Anita Form 10-K, have been audited by KPMG Peat Marwick LLP, independent
accountants, as set forth in their reports thereon included therein and
incorporated herein by reference. The report of KPMG Peat Marwick LLP on H-T
Associates, dated February 10, 1997, contains an explanatory paragraph that
states that the partnership's primary subsidiary is in technical default on its
notes payable at December 31, 1996. As such, those notes may be callable at the
lender's discretion. This technical default raises substantial doubt about the
Partnership's ability to continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty. See the financial statements of H-T Associates incorporated by
reference into the Santa Anita Form 10-K. Such financial statements are
incorporated herein in reliance upon such reports given upon the authority of
such firms as experts in accounting and auditing.
The consolidated financial statements and the related financial
statement schedules incorporated in this Registration Statement by reference
from Meditrust's Current Report on Form 8-K dated January 31, 1997 and Annual
Report on Form 10-K for the fiscal year ended December 31, 1996 have been
audited by Coopers & Lybrand L.L.P., independent accountants, as stated in their
reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
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<PAGE>
==========================================================
No dealer, salesperson or other person has been authorized
to give any information or to make any representations,
other than those herein, in connection with this offering
and, if given or made, such information or representations
must not be relied upon as having been authorized by the
Companies or any other person. This Prospectus does not
constitute an offer to sell, or solicitation of an offer to
buy, any of the Securities in any jurisdiction to any person
to whom it is unlawful to make such offer or solicitation in
such jurisdiction. The delivery of this Prospectus at any
time does not imply that the information in the Prospectus
is correct as of any time subsequent to its date.
--------------
TABLE OF CONTENTS
Page
----
Available Information................................. 3
Incorporation of Certain Documents by Reference....... 4
The Meditrust Companies............................... 6
Ratio of Earnings to Fixed Charges.................... 9
Use of Proceeds....................................... 9
Description of Capital Stock.......................... 9
Description of Paired Common Stock.................... 10
Federal Income Tax Considerations..................... 15
Description of Debt Securities........................ 27
Description of Securities Warrants.................... 33
Plan of Distribution.................................. 37
Legal Matters......................................... 38
Interests of Named Experts and Counsel................ 38
Experts............................................... 39
============================================================
MEDITRUST CORPORATION
MEDITRUST OPERATING COMPANY
PROSPECTUS
November __, 1997
============================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.*
Registration fee......................... $606,060
New York Stock Exchange fee.............. 25,000
Printing fees and expenses............... 100,000
Accounting fees and expenses............. 25,000
Blue sky fees and expenses
(including legal fees)................. 15,000
Trustee fees............................. 25,000
Miscellaneous............................ 3,940
Total.................................... $800,000
* Fees and expenses are estimated with the exception of the registration fee.
Item 15. Indemnification of Directors and Officers.
As permitted by Section 102 of the General Corporation Law of Delaware
(the "GCL"), both the REIT Charter and the Operating Company Charter eliminate
personal liability of its respective directors to such company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for: (i) any breach of the duty of loyalty to such company or its
stockholders; (ii) acts or omissions not in good faith or which involve
intentional misconduct or knowing violations of law; (iii) liability under
Section 174 of the GCL relating to certain unlawful dividends and stock
repurchases; or (iv) any transaction from which the director derived an improper
personal benefit.
As permitted by Section 145 of the GCL, both the REIT's By-laws and the
Operating Company's By-laws provide for indemnification of directors and
officers (and permit the respective Boards of Directors to provide for
indemnification of employees and agents) of such Registrant against all costs,
charges, expenses, liabilities and losses (including attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and other amounts paid in settlement)
actually and reasonably incurred by them in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, in which any such person was or is a party or
is threatened to be made a party, if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interest of such Registrant and, with respect to any criminal action or
proceeding, if such person had no reasonable cause to believe his conduct was
unlawful. In the case of an action or suit by or in the right of a
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<PAGE>
Registrant, such a person may be indemnified only for expenses (including
attorneys fees) and may not be indemnified in respect of any claim, issue or
matter as to which he has been adjudged liable for negligence or misconduct in
the performance of his duty to the respective Registrant, unless and only to the
extent the court in which such action or suit was brought determines that such
person is fairly and reasonably entitled to indemnity for such expenses as such
court may deem proper. In each case, indemnification of an officer or director
shall be made only upon specific authorization of a majority of disinterested
directors, by written opinion of independent legal counsel or by the
stockholders, unless the officer, or director has been successful on the merits
or otherwise in defense of any such action or suit, in which case he shall be
indemnified without such authorization. Both the REIT's By-laws and the
Operating Company's By-laws require such Registrant to pay the expenses incurred
by a director or officer in defending or investigating a threatened or pending
action, suit or proceeding in advance of the final disposition of such action,
suit or proceeding upon receipt by such Registrant of an undertaking by or on
behalf of such director or officer to repay such amount if it is ultimately
determined that he is not entitled to indemnification and permit such Registrant
to advance such expenses to other employees and agents of such Registrant upon
such terms and conditions as are specified by the respective Registrant's Board
of Directors. The advancement of expenses, as well as indemnification, pursuant
to each Registrant's Bylaws is not exclusive of any other rights which those
seeking indemnification or advancement of expenses from such Registrant may
have.
Individual indemnification agreements (the "Indemnification
Agreements") have been entered into by each of the REIT and the Operating
Company with certain of its respective directors and officers. The
Indemnification Agreements provide for indemnification to the fullest extent
permitted by law and provide contractual assurance to directors and officers
that indemnity and advancement of expenses will be available to them regardless
of any amendment or revocation of such Registrant's Bylaws.
Both the REIT's By-laws and the Operating Company's By-laws permit such
Registrant to purchase and maintain insurance on behalf of any director,
officer, employee or agent of such Registrant against liability asserted against
him or her in any such capacity, whether or not such Registrant would have the
power to indemnify him against such liability under the provisions of the
Bylaws. Both the REIT and the Operating Company maintain liability insurance
providing officers and directors with coverage with respect to certain
liabilities.
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<PAGE>
Item 16. Exhibits
The following is a list of exhibits filed as part of this Registration
Statement (numbering corresponds to numbering in Item 601 of Regulation S-K).
Exhibit Description
No. -----------
- -------
1.1 Form of Underwriting Agreement*
3.1 Certificate of Merger merging Meditrust with and into Santa Anita
Realty Enterprises, Inc. filed with the Secretary of State of Delaware
on November 5, 1997.
3.2 Certificate of Amendment of Certificate of Incorporation of Meditrust
Corporation filed with the Secretary of State of Delaware on November
5, 1997.
3.3 Certificate of Merger merging Meditrust Acquisition Company with and
into Santa Anita Operating Company filed with the Secretary of State
of Delaware on November 5, 1997.
3.4 Certificate of Amendment of Certificate of Incorporation of Meditrust
Operating Company filed with the Secretary of State of Delaware on
November 5, 1997.
4.1 Pairing Agreement by and between Meditrust Corporation (formerly known
as Santa Anita Realty Enterprises, Inc.) and Meditrust Operating
Company (formerly known as Santa Anita Operating Company), dated as of
December 20, 1979 (incorporated by reference to Exhibit 5 to Joint
Registration Statement on Form 8-A of Santa Anita Operating Company
filed February 5, 1980).
4.2 First Amendment to Pairing Agreement, by and between Meditrust
Corporation and Meditrust Operating Company, dated November 6, 1997
(incorporated by reference to Exhibit 4.4 to Joint Registration
Statement on Form S-8 of Meditrust Corporation and Meditrust Operating
Company filed November 7, 1997).
4.3 Rights Agreement, dated June 15, 1989, among Meditrust Corporation
(formerly known as Santa Anita Realty Enterprises, Inc.), Meditrust
Operating Company (formerly known as Santa Anita Operating Company),
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and Boston EquiServe, as Rights Agent (incorporated by reference to
Exhibit 2.1 to Joint Registration Statement on Form 8-A of Santa Anita
Realty Enterprises, Inc., filed June 19, 1989).
4.4 Appointment of Boston EquiServe as Rights Agreement, dated October 24,
1997 (incorporated by reference to Exhibit 4.6 to Joint Registration
Statement on Form S-8 of Meditrust Corporation and Meditrust Operating
Company, filed November 7, 1997).
4.5 Form of Indenture
4.6 Form of Convertible Debenture*
4.7 Form of Debt Security*
4.8 Form of Securities Warrant Agreement*
5 Opinion letter of Nutter, McClennen & Fish, LLP
8 Opinion letter of Nutter, McClennen & Fish, LLP regarding tax matters
12 Computation of Ratios of Earnings to Fixed Charges
23.1 Consents of Nutter, McClennen & Fish, LLP (included in Exhibits 5
and 8)
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Ernst & Young LLP
23.4 Consent of KPMG Peat Marwick LLP
23.5 Consent of KPMG Peat Marwick LLP
24.1 Power of Attorney (Meditrust Corporation)
24.2 Power of Attorney (Meditrust Operating Company)
25 Form T-1, Statement of Eligibility and Qualification
* To be filed by amendment or incorporated by reference if necessary in
connection with the offering of the Securities.
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<PAGE>
Item 17. Undertakings.
(a) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high and of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) herein do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
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<PAGE>
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
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<PAGE>
MEDITRUST CORPORATION SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Meditrust
Corporation certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this Joint
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Town of Needham, Commonwealth of Massachusetts, as of
November 12, 1997.
MEDITRUST CORPORATION
By: /s/ David F. Benson
---------------------------------------
Name: David F. Benson
Title: Director, President and Treasurer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints David F.
Benson and Michael S. Benjamin his or her true and lawful attorneys-in-fact and
agents, each acting alone, with full powers of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Joint Registration Statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, each
acting alone, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Joint
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Abraham D. Gosman Chairman of the Board November 12, 1997
- ------------------------------
Abraham D. Gosman
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/s/ David F. Benson Director, President
- ------------------------------ and Treasurer (Principal
David F. Benson Executive Officer) November 12, 1997
/s/ Laurie T. Gerber Chief Financial Officer
- ------------------------------- (Principal Financial and
Laurie T. Gerber Accounting Officer) November 12, 1997
/s/ Donald J. Amaral Director November 12, 1997
- -------------------------------
Donald J. Amaral
/s/ William C. Baker Director November 12, 1997
- -------------------------------
William C. Baker
/s/ Edward W. Brooke Director November 12, 1997
- -------------------------------
Edward W. Brooke
/s/ C. Gerald Goldsmith Director November 12, 1997
- -------------------------------
C. Gerald Goldsmith
/s/ J. Terrence Lanni Director November 12, 1997
- -------------------------------
J. Terrence Lanni
/s/ Phillip L. Lowe Director November 12, 1997
- -------------------------------
Phillip L. Lowe
/s/ Thomas J. Magovern Director November 12, 1997
- -------------------------------
Thomas J. Magovern
- -------------------------------- Director
Gerald Tsai, Jr.
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<PAGE>
MEDITRUST OPERATING COMPANY SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Meditrust
Operating Company certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Joint Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Town of Needham, Commonwealth of Massachusetts
as of November 12, 1997.
MEDITRUST OPERATING COMPANY
By: /s/ Abraham D. Gosman
----------------------------------------
Name: Abraham D. Gosman
Title: Chairman of the Board,
Chief Executive Officer and Treasurer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Michael J. Bohnen and Paul R. Eklund his or her true and lawful
attorneys-in-fact and agents, each acting alone, with full powers of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Joint Registration Statement, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, each acting alone, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Joint
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title
/s/ Abraham D. Gosman Chairman of the Board,
- ---------------------------- Chief Executive Officer
Abraham D. Gosman and Treasurer (Principal
Executive, Financial
and Accounting Officer) November 12, 1997
II-9
<PAGE>
/s/ Donald J. Amaral Director November 12, 1997
- -----------------------------------
Donald J. Amaral
/s/ David F. Benson Director November 12, 1997
- -----------------------------------
David F. Benson
/s/ Edward W. Brooke Director November 12, 1997
- -----------------------------------
Edward W. Brooke
/s/ James P. Conn Director November 12, 1997
- -----------------------------------
James P. Conn
/s/ John C. Cushman Director November 12, 1997
- -----------------------------------
John C. Cushman
/s/ C. Gerald Goldsmith Director November 12, 1997
- -----------------------------------
C. Gerald Goldsmith
/s/ Phillip L. Lowe Director November 12, 1997
- -----------------------------------
Phillip L. Lowe
/s/ Thomas J. Magovern Director November 12, 1997
- -----------------------------------
Thomas J. Magovern
- ------------------------------------ Director
Gerald Tsai, Jr.
II-10
CERTIFICATE OF MERGER
OF
MEDITRUST INTO SANTA ANITA REALTY ENTERPRISES, INC.
The undersigned corporation, organized and existing under and by virtue of
the General Corporation Law of the State of Delaware, does hereby certify:
1. That the name and state of organization of each of the constituent
entities of the merger is as follows:
Santa Anita Realty Enterprises, Inc. is a Delaware corporation.
Meditrust is a Massachusetts business trust.
2. That a Third Amended and Restated Agreement and Plan of Merger (the
"Merger Agreement") between the parties to the merger has been approved,
adopted, certified, executed and acknowledged by each of the constituent
entities in accordance with the requirements of Section 254(d) of the General
Corporation Law of the State of Delaware.
3. That the surviving corporation in the merger is Santa Anita Realty
Enterprises, Inc.
4. Upon the merger becoming effective, the Certificate of Incorporation of
the surviving corporation will be amended:
(i) to amend Article FIRST thereof to read as follows: "FIRST: Name.
The name of the Corporation is Meditrust Corporation."; and
(ii) to amend Article FOURTH thereof to read as follows:
FOURTH: Capitalization. SECTION 1. The total number of shares of all
classes of stock which the Corporation shall have authority to issue is
306,000,000, of which 270,000,000 shares of the par value of $.10 each are
to be of a class designated Common Stock, 6,000,000 shares of the par value
of $.10 each are to be of a class designated Preferred Stock and 30,000,000
shares of the par value of $.10 each are to be of a class designated Series
Common Stock.
SECTION 2. The shares of Preferred Stock may be issued from time to
time in one or more series. The Board of Directors of the Corporation is
hereby authorized to fix or alter the dividend rights, dividend rate,
conversion rights, voting rights, rights and terms of redemption (including
sinking fund provisions), the redemption price or prices, and the
liquidation preferences of any wholly unissued series of Preferred Stock
and the number of shares constituting any such series and the designation
thereof, or all or any of them.
<PAGE>
SECTION 3. The shares of Series Common Stock may be issued from time
to time in one or more series. The Board of Directors of the Corporation is
hereby authorized to fix or alter the dividend rights, dividend rate,
conversion rights, voting rights, rights and terms of redemption (including
sinking fund provisions), the redemption price or prices, and the
liquidation preferences of any wholly unissued series of Series Common
Stock and the number of shares constituting any such series and the
designation thereof, or all or any of them.
SECTION 4. (a) Each holder of Common Stock, as such, shall be entitled
to one vote for each share of Common Stock held of record by such holder on
all matters on which stockholders generally are entitled to vote.
(b) Except as otherwise required by law, holders of a series of
Preferred Stock or Series Common Stock, as such, shall be entitled only to
such voting rights, if any, as shall expressly be granted thereto by this
Certificate of Incorporation (including any Certificate of Designation
relating to such series).
(c) Subject to applicable law and the rights, if any, of the holders
of any outstanding series of Preferred Stock or Series Common Stock or any
class or series of stock having a preference over or the right to
participate with the Common Stock with respect to the payment of dividends,
dividends may be declared and paid on the Common Stock at such times and in
such amounts as the Board of Directors in its discretion shall determine.
(d) Upon the dissolution, liquidation or winding up of the
Corporation, subject to the rights, if any, of the holders of any
outstanding series of Preferred Stock or Series Common Stock or any class
or series of stock having a preference over or the right to participate
with the Common Stock with respect to the distribution of assets of the
Corporation upon such dissolution, liquidation or winding up of the
Corporation, the holders of the Common Stock, as such, shall be entitled to
receive the assets of the Corporation available for distribution to its
stockholders ratably in proportion to the number of shares held by them.
5. That the executed Merger Agreement is on file at the principal place
of business of the surviving corporation. The address of the principal place of
business of the surviving corporation is 197 First Avenue, Suite 300, Needham,
Massachusetts, 02194.
6. That a copy of the Merger Agreement will be furnished by the
surviving corporation on request and without cost to any stockholder of any
constituent corporation.
SANTA ANITA REALTY ENTERPRISES, INC.
Dated: 11/5/97 By: /s/ Brian L. Fleming
--------------------- ---------------------------------------
Its: Brian L. Fleming
Acting President
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
MEDITRUST CORPORATION
We, the undersigned, being the duly elected President and Secretary of
Meditrust Corporation (the "Company"), a corporation organized and existing
under the laws of the State of Delaware, do hereby certify:
FIRST, That at a meeting held on June 12, 1997, the Board of Directors
of the Company approved a proposed amendment of the Certificate of Incorporation
of the Company, declaring said amendment to be advisable and authorizing the
proposed amendment to be presented to the stockholders of the Company for their
consideration at the Special Meeting of Shareholders held on November 5, 1997.
The resolution setting forth the proposed amendment is as follows:
That the Company amend Article Eighth of its Certificate of
Incorporation by deleting such Article Eighth in its entirety.
SECOND, That at the Special Meeting of Shareholders held on November 5,
1997, and pursuant to notice duly given, the holders of a majority of the
outstanding shares of the Company's Common Stock voted in favor of the
amendment.
THIRD, That the above-referenced amendment was duly adopted in
accordance with the provisions of Section 242 of the Delaware General
Corporation Law, as amended.
<PAGE>
IN WITNESS WHEREOF, this Certificate of Amendment of Certificate of
Incorporation has been executed on behalf of Meditrust Corporation by its duly
authorized officers this 5th day of November, 1997.
Meditrust Corporation
By /s/ David F. Benson
-------------------------------
David F. Benson, its President
ATTEST:
/s/ Michael S. Benjamin
- ---------------------------------
Michael S. Benjamin
Secretary
-2-
CERTIFICATE OF MERGER
OF
MEDITRUST ACQUISITION COMPANY INTO
SANTA ANITA OPERATING COMPANY
The undersigned corporation, organized and existing under and by virtue of
the General Corporation Law of the State of Delaware, does hereby certify:
1. That the name and state of organization of each of the constituent
entities of the merger is as follows:
Santa Anita Operating Company is a Delaware corporation.
Meditrust Acquisition Company is a Massachusetts business trust.
2. That a Third Amended and Restated Agreement and Plan of Merger (the
"Merger Agreement") between the parties to the merger has been approved,
adopted, certified, executed and acknowledged by each of the constituent
entities in accordance with the requirements of Section 254(d) of the General
Corporation Law of the State of Delaware.
3. That the surviving corporation in the merger is Santa Anita Operating
Company.
4. Upon the merger becoming effective, the Certificate of Incorporation of
the surviving corporation will be amended:
(i) to amend Article FIRST thereof to read as follows: "FIRST: Name.
The name of the Corporation is Meditrust Operating Company."; and
(ii) to amend Article FOURTH thereof to read as follows:
FOURTH: Capitalization. SECTION 1. The total number of shares of all
classes of stock which the Corporation shall have authority to issue is
306,000,000, of which 270,000,000 shares of the par value of $.10 each are
to be of a class designated Common Stock, 6,000,000 shares of the par value
of $.10 each are to be of a class designated Preferred Stock and 30,000,000
shares of the par value of $.10 each are to be of a class designated Series
Common Stock.
SECTION 2. The shares of Preferred Stock may be issued from time to
time in one or more series. The Board of Directors of the Corporation is
hereby authorized to fix or alter the dividend rights, dividend rate,
conversion rights, voting rights, rights and terms of redemption (including
sinking fund provisions), the redemption price or prices, and the
liquidation preferences of any wholly unissued series of Preferred Stock
and the number of shares constituting any such series and the designation
thereof, or all or any of them.
<PAGE>
SECTION 3. The shares of Series Common Stock may be issued from time
to time in one or more series. The Board of Directors of the Corporation is
hereby authorized to fix or alter the dividend rights, dividend rate,
conversion rights, voting rights, rights and terms of redemption (including
sinking fund provisions), the redemption price or prices, and the
liquidation preferences of any wholly unissued series of Series Common
Stock and the number of shares constituting any such series and the
designation thereof, or all or any of them.
SECTION 4. (a) Each holder of Common Stock, as such, shall be entitled
to one vote for each share of Common Stock held of record by such holder on
all matters on which stockholders generally are entitled to vote.
(b) Except as otherwise required by law, holders of a series of
Preferred Stock or Series Common Stock, as such, shall be entitled only to
such voting rights, if any, as shall expressly be granted thereto by this
Certificate of Incorporation (including any Certificate of Designation
relating to such series).
(c) Subject to applicable law and the rights, if any, of the holders
of any outstanding series of Preferred Stock or Series Common Stock or any
class or series of stock having a preference over or the right to
participate with the Common Stock with respect to the payment of dividends,
dividends may be declared and paid on the Common Stock at such times and in
such amounts as the Board of Directors in its discretion shall determine.
(d) Upon the dissolution, liquidation or winding up of the
Corporation, subject to the rights, if any, of the holders of any
outstanding series of Preferred Stock or Series Common Stock or any class
or series of stock having a preference over or the right to participate
with the Common Stock with respect to the distribution of assets of the
Corporation upon such dissolution, liquidation or winding up of the
Corporation, the holders of the Common Stock, as such, shall be entitled to
receive the assets of the Corporation available for distribution to its
stockholders ratably in proportion to the number of shares held by them.
5. That the executed Merger Agreement is on file at the principal place of
business of the surviving corporation. The address of the principal place of
business of the surviving corporation is 197 First Avenue, Suite 100, Needham,
Massachusetts 02194.
6. That a copy of the Merger Agreement will be furnished by the surviving
corporation on request and without cost to any stockholder of any constituent
corporation.
SANTA ANITA OPERATING COMPANY
Dated: 11/5/97 By:/s/ William C. Baker
------------------- ------------------------------
Its: President
William C. Baker
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
MEDITRUST OPERATING COMPANY
We, the undersigned, being the duly elected Chief Executive Officer and
Secretary of Meditrust Operating Company (the "Company"), a corporation
organized and existing under the laws of the State of Delaware, do hereby
certify:
FIRST, That at a meeting held on June 12, 1997, the Board of Directors
of the Company approved a proposed amendment of the Certificate of Incorporation
of the Company, declaring said amendment to be advisable and authorizing the
proposed amendment to be presented to the stockholders of the Company for their
consideration at the Special Meeting of Shareholders held on November 5, 1997.
The resolution setting forth the proposed amendment is as follows:
That the Company amend Article Eighth of its Certificate of
Incorporation by deleting such Article Eighth in its entirety.
SECOND, That at the Special Meeting of Shareholders held on November 5,
1997, and pursuant to notice duly given, the holders of a majority of the
outstanding shares of the Company's Common Stock voted in favor of the
amendment.
THIRD, That the above-referenced amendment was duly adopted in
accordance with the provisions of Section 242 of the Delaware General
Corporation Law, as amended.
1
<PAGE>
IN WITNESS WHEREOF, this Certificate of Amendment of Certificate of
Incorporation has been executed on behalf of Meditrust Operating Company by its
duly authorized officers this 5th day of November, 1997.
Meditrust OPERATING COMPANY
By /s/ Abraham D. Gosman
------------------------------
Abraham D. Gosman
Chief Executive Officer
ATTEST:
/s/ Michael J. Bohnen
- ---------------------------
Michael J. Bohnen
Secretary
-2-
- --------------------------------------------------------------------------------
MEDITRUST CORPORATION
[OR MEDITRUST OPERATING COMPANY]
INDENTURE
Dated as of November 1, 1997
STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE
Providing for Issuance of Securities in Series
- --------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE
MEDITRUST
Trust Indenture
Act Section Indenture
- ---------------- ---------
ss.310(a)(1) 7.10
(a)(2) 7.10
(a)(3) Not Applicable
(a)(4) Not Applicable
(b) 7.08; 7.10; 13.02
(c) Not Applicable
ss.311(a) 7.11
(b) 7.11
(c) Not Applicable
ss.312(a) 2.12
(b) 13.03
(c) 13.03
ss.313(a) 7.06
(b)(1) Not Applicable
(b)(2) 7.06
(c) 7.06; 13.02
(d) 7.06
ss.314(a) 4.02; 13.02
(b) Not Applicable)
(c)(l) 13.04
(c)(2) 13.04
(c)(3) Not Applicable
(d) Not Applicable
(e) 13.05
(f) Not Applicable
ss.315(a) 7.01(b)
(b) 7.05; 13.02
(c) 7.01(a)
(d) 7.01(c)
(e) 6.10
ss.316(a)(last sentence) 13.06
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) Not Applicable
(b) 6.06
ss.317(a)(1) 6.07
(a)(2) 6.08
(b) 2.05
ss.318(a) 13.01
Note: This Cross-Reference Table shall not, for any purpose, be
deemed to be a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . 5
SECTION 1.03. Incorporation by Reference of Trust Indenture Act . . . . 5
SECTION 1.04. Rules of Construction . . . . . . . . . . . . . . . . . . 6
ARTICLE 2
THE SECURITIES
SECTION 2.01. Forms Generally . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.02. Amount Unlimited; Issuable in Series . . . . . . . . . . . 6
SECTION 2.03. Execution and Authentication. . . . . . . . . . . . . . . . 8
SECTION 2.04. Registrar and Agents. . . . . . . . . . . . . . . . . . . . 9
SECTION 2.05. Paying Agent to Hold Money in Trust . . . . . . . . . . . . 9
SECTION 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . . . 10
SECTION 2.07. Replacement Securities. . . . . . . . . . . . . . . . . . . 12
SECTION 2.08. Outstanding Securities. . . . . . . . . . . . . . . . . . . 12
SECTION 2.09. Temporary Securities. . . . . . . . . . . . . . . . . . . . 13
SECTION 2.10. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.11. Defaulted Interest. . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.12. Securityholder Lists. . . . . . . . . . . . . . . . . . . . 14
SECTION 2.13. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . 14
SECTION 2.14. CUSIP Number. . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.15. Provisions in Global Security . . . . . . . . . . . . . . . 15
ARTICLE 3
REDEMPTION
SECTION 3.01. Optional Redemption . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.02. Selection of Securities to be Redeemed. . . . . . . . . . . 17
SECTION 3.03. Notice of Redemption by the Company . . . . . . . . . . . . 17
SECTION 3.04. Effect of Notice of Redemption. . . . . . . . . . . . . . . 18
SECTION 3.05. Deposit of Redemption Price . . . . . . . . . . . . . . . . 18
SECTION 3.06. Securities Redeemed in Part . . . . . . . . . . . . . . . . 18
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of the Securities . . . . . . . . . . . . . . . . . 18
SECTION 4.02. SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.03. Waiver of Stay, Extension or Usury Laws . . . . . . . . . . 19
--i--
<PAGE>
SECTION 4.04. Notice of Default . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.05. Compliance Certificates . . . . . . . . . . . . . . . . . . 20
SECTION 4.06. Limitation on Dividends and Other Distributions . . . . . . 20
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. When Company may Merge, etc . . . . . . . . . . . . . . . . 20
SECTION 5.02. Successor Company or Trust Substituted. . . . . . . . . . . 21
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . 21
SECTION 6.02. Acceleration. . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 6.03. Other Remedies. . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 6.04. Waiver of Defaults and Events of Default. . . . . . . . . . 24
SECTION 6.05. Control by Majority . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.06. Rights of Holders to Receive Payment. . . . . . . . . . . . 24
SECTION 6.07. Collection Suit by Trustee. . . . . . . . . . . . . . . . . 24
SECTION 6.08. Trustee May File Proofs of Claim. . . . . . . . . . . . . . 25
SECTION 6.09. Priorities. . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 6.10. Undertaking for Costs . . . . . . . . . . . . . . . . . . . 26
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . 26
SECTION 7.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . 27
<PAGE>
SECTION 7.03. Individual Rights of Trustee. . . . . . . . . . . . . . . . 28
SECTION 7.04. Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . . 28
SECTION 7.05. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.06. Reports by Trustee to Holders . . . . . . . . . . . . . . . 29
SECTION 7.07. Compensation and Indemnity. . . . . . . . . . . . . . . . . 29
SECTION 7.08. Replacement of Trustee. . . . . . . . . . . . . . . . . . . 30
SECTION 7.09. Successor Trustee by Merger, etc. . . . . . . . . . . . . . 31
SECTION 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . . 31
SECTION 7.11. Preferential Collection of Claims Against Company . . . . . 33
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.01. Satisfaction, Discharge and Defeasance
of the Securities . . . . . . . . . . . . . . . . . . . . 32
SECTION 8.02. Satisfaction and Discharge of Indenture . . . . . . . . . 33
--ii--
<PAGE>
SECTION 8.03. Survival of Certain Obligations. . . . . . . . . . . . . . 33
SECTION 8.04. Application of Trust Money . . . . . . . . . . . . . . . . 33
SECTION 8.05. Paying Agent to Repay Monies Held. . . . . . . . . . . . . 34
SECTION 8.06. Return of Unclaimed Monies . . . . . . . . . . . . . . . . 34
SECTION 8.07. Reinstatement . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Holders . . . . 35
SECTION 9.02. Supplemental Indentures With Consent of Holders. . . . . . 36
SECTION 9.03. Compliance with Trust Indenture Act . . . . . . . . . . . . 37
SECTION 9.04. Revocation and Effect of Consents . . . . . . . . . . . . . 37
SECTION 9.05. Notation on or Exchange of Securities . . . . . . . . . . . 38
SECTION 9.06. Effect of Supplemental Indentures . . . . . . . . . . . . . 38
SECTION 9.07. Reference in Securities to Supplemental Indentures . . . . 38
ARTICLE 10
CONVERSION OF SECURITIES
SECTION 10.01. Right of Conversion; Exercise . . . . 39
SECTION 10.02. Issuance of Shares or other Securities on Conversion . . . 39
SECTION 10.03. No Adjustment for Interest or Dividends . . . . . . . . . 40
SECTION 10.04. Adjustment of Conversion Price. . . . . . . . . . . . . . . 40
SECTION 10.05. Notice of Adjustment of Conversion Price. . . . . . . . . . 43
SECTION 10.06. Notice of Certain Corporate Action . . . . . . . . . . . . 44
SECTION 10.07. Taxes on Conversions. . . . . . . . . . . . . . . . . . . . 45
SECTION 10.08. Fractional Shares . . . . . . . . . . . . . . . . . . . . . 46
SECTION 10.09. Cancellation of Converted Securities. . . . . . . . . . . . 46
SECTION 10.10. Provisions in Case of Consolidation,
Merger or Sale of Assets . . . . . . . . . . . . . . . . . 46
SECTION 10.11. Disclaimer by Trustee of Responsibility
for Certain Matters. . . . . . . . . . . . . . . . . . . . 47
SECTION 10.12. Covenant to Reserve Shares. . . . . . . . . . . . . . . . . 47
ARTICLE 11
SUBORDINATION; SENIORITY
SECTION 11.01. Securities Subordinated to Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 11.02. Company Not to Make Payments with Respect to
Securities in Certain Circumstances. . . . . . . . . . . . 48
--iii---
<PAGE>
SECTION 11.03. Subrogation of Securities . . . . . . . . . . . . . . . . . 51
SECTION 11.04. Authorization by Holders of Securities . . . . . . . . . . 52
SECTION 11.05. Notices to Trustee. . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.06. Trustee's Relation to Senior Indebtedness . . . . . . . . . 53
SECTION 11.07. No Impairment of Subordination. . . . . . . . . . . . . . . 53
SECTION 11.08. Article 11 Not to Prevent Events of Default . . . . . . . . 54
SECTION 11.09. Paying Agents other than the Trustee. . . . . . . . . . . . 54
SECTION 11.10. Securities Senior to Subordinated Indebtedness . . . . . . 54
ARTICLE 12
SINKING FUND
SECTION 12.01. Mandatory and Optional Sinking Fund Payments. . . . . . . . 54
SECTION 12.02. Satisfaction of Sinking Fund Payments with Securities . . . 55
SECTION 12.03. Redemption of Securities for Sinking Funds. . . . . . . . . 55
ARTICLE 13
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls. . . . . . . . . . . . . . . 56
SECTION 13.02. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 13.03. Communications by Holders with other Holders . . . . . . . 57
SECTION 13.04. Certificate and Opinion as to Condition Precedent . . . . 57
SECTION 13.05. Statements Required in Certificate and Opinion . . . . . . 58
SECTION 13.06. Rules by Trustee and Agents. . . . . . . . . . . . . . . . 58
SECTION 13.07. Record Date. . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 13.08. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 13.09. Governing Law. . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 13.10. No Adverse Interpretation of Other Agreements. . . . . . . 59
SECTION 13.11. No Recourse Against Others . . . . . . . . . . . . . . . . 59
SECTION 13.12. Successors . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 13.13. Multiple Counterparts. . . . . . . . . . . . . . . . . . . 59
SECTION 13.14. Table of Contents, Headings, etc . . . . . . . . . . . . . 59
SECTION 13.15. Severability . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 13.16. Trustee Dealings with the Company. . . . . . . . . . . . . 59
Signatures
--iv--
<PAGE>
INDENTURE dated as of November 1, 1997 between Meditrust Corporation
[or Meditrust Operating Company], a Delaware corporation ("Company"), and State
Street Bank and Trust Company, a Massachusetts trust company ("Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its securities (hereinafter called the
"Securities") evidencing its unsecured indebtedness, to be issued in one or more
fully registered series.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
To set forth or to provide for the establishment of the terms and
conditions upon which the Securities are and are to be authenticated, issued and
delivered, and in consideration of the premises and the purchase of Securities
by the Holders thereof, it is mutually covenanted and agreed as follows, for the
equal and proportionate benefit of all Holders of the Securities or of a series
thereof, as the case may be:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Affiliate" means any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. For
the purposes of this definition, "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with"), as used
with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities or by agreement
or otherwise.
"Agent" means any Registrar, Paying Agent, Conversion Agent, co-registrar
or agent for service of notices and demands.
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar Federal or
State law for the relief of debtors.
"Board of Trustees of the Company" means the Board of Trustees of the
Company or any committee of the Board authorized to act on behalf of the Board
of Trustees of the Company.
<PAGE>
"Board Resolution" means a resolution certified by the Secretary or an
Assistant Secretary of the Company to have been duly adopted by the Board of
Trustees of the Company and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" means any and all shares or other equivalents (however
designated) of common stock.
"Closing Price" means with respect to the shares of common stock of the
Company on any day, (i) the last reported sales price regular way or, in case no
such reported sale takes place on such day, the average of the reported closing
bid and asked prices regular way, in either case on the New York Stock Exchange,
or (ii) if the shares of common stock are not listed or admitted to trading on
the New York Stock Exchange, the last reported sales price regular way, or in
case no such reported sale takes place on such day, the average of the reported
closing bid and asked prices regular way, on the principal national securities
exchange on which the shares of common stock are listed or admitted to trading,
or (iii) if the shares of common stock are not listed or admitted to trading on
any national securities exchange, the average of the closing bid and asked
prices as furnished by any New York Stock Exchange member firm selected from
time to time by the Company for that purpose.
"Company" means the party named as such in this Indenture until a successor
replaces it pursuant to the Indenture and thereafter means the successor.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of execution of this Indenture is located at Boston,
Massachusetts.
"Custodian" means any receiver, trustee, liquidator or similar official
under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Depositary" means, with respect to the Securities of any series issued in
whole or in part in the form of a Global Security, the Person designated as
Depositary by the Company pursuant to Section 2.02 until a successor Depositary
shall have become such pursuant to the applicable procedures of this Indenture,
and thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one Depositary with
respect to the Securities of any such series, "Depositary" shall mean the
Depositary with respect to the Securities of that series.
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<PAGE>
"Dollar" or "$" means the lawful money of the United States of America.
"Global Security" means a Security in the form prescribed in Section 2.15
evidencing all or part of a Series of Securities, issued to the Depositary for
such Securities or its nominee, and registered in the name of such Depositary or
nominee.
"Holder" or "Securityholder" means the person in whose name a Security is
registered on the Registrar's books.
"Indebtedness," as applied to any Person, means, without duplication (i)
all indebtedness for borrowed money whether or not evidenced by a promissory
note, draft or similar instrument, (ii) that portion of obligations with respect
to leases that is properly classified as a liability on a balance sheet in
accordance with generally accepted accounting principles, (iii) notes payable
and drafts accepted representing extensions of credit, (iv) any balance owed for
all or any part of the deferred purchase price of property or services, which
purchase price is due more than six months from the date of incurrence of the
obligation in respect thereof (except any such balance that constitutes (a) a
trade payable or an accrued liability arising in the ordinary course of business
or (b) a trade draft or note payable issued in the ordinary course of business
in connection with the purchase of goods or services), if and to the extent such
debt would appear as a liability upon a balance sheet of such person prepared in
accordance with generally accepted accounting principles, and any deferral,
amendment, renewal, extension, supplement or refunding of any of the foregoing
indebtedness; provided, however, that, in computing the "Indebtedness" of any
Person, there shall be excluded any particular indebtedness if, upon or prior to
the maturity thereof and at the time of determination of such indebtedness,
there shall have been deposited with a depository in trust money (or evidences
of indebtedness if permitted by the instrument creating such indebtedness) the
necessary amount to pay, redeem or satisfy such indebtedness as it becomes due,
and the amount so deposited shall not be included in any computation of the
assets of such Person.
"Indenture" means this Indenture as originally executed or, if amended or
supplemented as provided in Article 9, as amended or supplemented from time to
time.
"Officer" means the Chief Executive Officer, the President, any Vice
President, the Treasurer, the Secretary or the Controller of the Company.
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<PAGE>
"Officers' Certificate" means a certificate signed by two Officers or by an
Officer and an Assistant Treasurer, Assistant Secretary or Assistant Controller
of the Company. See Sections 13.04 and 13.05.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee. See Sections 13.04 and 13.05.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Principal" of a Security means the principal of the Security plus, when
appropriate, the premium, if any, on the Security.
"Redemption Date" when used with respect to any Security to be redeemed,
means the date fixed for such redemption by the Company pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price fixed for such redemption pursuant to this Indenture as
specified in such Security.
"SEC" means the Securities and Exchange Commission.
"Senior Indebtedness" means the principal, premium, if any, and unpaid
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not a claim
for post-filing interest is allowed in such proceeding), fees, charges,
expenses, reimbursement and indemnification obligations, and all other amounts
payable under or in respect of Indebtedness of the Company for money borrowed
(including without limitation any Securities), whether any such Indebtedness
exists as of the date of this Indenture or shall hereafter be created, incurred,
assumed or guaranteed other than Subordinated Indebtedness.
"Subordinated Indebtedness" means the principal, premium, if any, and
interest on any Indebtedness of the Company which by its terms is expressly
subordinated in right of payment to the Senior Indebtedness.
"Subsidiary" means a corporation the majority of whose voting stock is
owned by the Company or a subsidiary of the Company. Voting Stock is Capital
Stock having voting power under ordinary circumstances to elect directors.
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<PAGE>
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.
77aaa-77bbbb) as amended by the Trust Indenture Reform Act of 1990 and as in
effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture until a successor
replaces it pursuant to this Indenture and thereafter means the successor.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.
"United States" means the United States of America.
SECTION 1.02 Other Definitions.
Term Defined in Section
---- ------------------
"Company Order" 2.03
"Conversion Agent" 2.04
"current market price" 10.04
"Event of Default" 6.01
"Legal Holiday" 13.08
"Paying Agent" 2.04
"Registrar" 2.04
"Rule 13e-3 Transaction" 10.06
"U.S. Government Obligations" 8.01
SECTION 1.03 Incorporation by Reference to Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the indenture securities.
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<PAGE>
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rules have the meanings
assigned to them therein.
SECTION 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with United States generally accepted accounting
principles in effect as of the time as to which such accounting principles
are to be applied;
(3) "or" is not exclusive; and
(4) words in the singular include the plural, and in the plural
include the singular.
ARTICLE 2
THE SECURITIES
SECTION 2.01 Forms Generally.
The Securities of each series shall be in substantially the form (including
any global form that is not inconsistent with this Indenture) either as shall be
established from time to time by or pursuant to a Board Resolution or in one or
more indentures supplemental hereto, in each case with such variations as are
required or permitted by this Indenture (including such other provisions as are
necessary to reflect the global form of any Security, and the designation of a
Depositary for such Global Security) and may have imprinted or otherwise
reproduced thereon such legend or legends, not inconsistent with the provisions
of this Indenture, as may be required to comply with any law or with any rules
of any securities exchange or to conform to general usage, all as may be
determined by the officers executing such Securities as evidenced by their
execution of the Securities.
SECTION 2.02 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate or one or more indentures supplemental hereto, prior to the issuance
of Securities of any series:
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<PAGE>
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from all other Securities);
(2) the limit, if any, upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under
this Indenture and such Officers' Certificate or indenture supplemental
hereto (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to this Indenture);
(3) the date or dates on which the principal of (and premium, if any,
on) the Securities of the series is payable;
(4) the rate or rates, if any, at which the Securities of the series
shall bear interest (or the method of determining such rate or rates), the
date or dates from which such interest shall accrue, date or dates on which
such interest shall be payable and the record date or dates for the
interest payable;
(5) the place or places where the principal of (and premium, if any)
and interest on Securities of the series shall be payable;
(6) the period or periods within which or the date or dates on which,
if any, the price or prices at which and the terms and conditions upon
which Securities of the series may be redeemed, in whole or in part, at the
option of the Company;
(7) the obligation, if any, of the Company to redeem, repay or
purchase Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Securityholder thereof and the period or
periods within which, the price or prices at which and the terms and
conditions upon which Securities of the series shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation;
(8) the terms pursuant to which Securities of any one series are or
may be converted into shares of common stock or Securities of another
series of the Company;
(9) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof;
(10) whether any Securities of the series are to be issued in whole or
in part in the form of one or more Global Securities and, if so, the
Depositary for such Global Security or Securities (which Depositary shall
be, if then required by applicable law or regulation, a clearing agency
registered
--7--
<PAGE>
under the Securities Exchange Act of 1934, as amended, and any other
applicable statute or regulation) and whether beneficial owners of
interests in such Global Security or Securities may exchange such interests
for Securities of such series and any authorized form and denomination of
such Securities and the circumstances under which any such exchanges may
occur (if other than in the manner provided in Section 2.06);
(11) the identity of each Paying Agent, Conversion Agent and Registrar
for the Securities of such series; and
(12) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to such
Board Resolution and set forth in such Officers' Certificate or in any such
indenture supplemental hereto.
If any of the terms of a series of Securities are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery to the Trustee
of the Officers' Certificate or supplemental indenture setting forth the terms
of the series.
SECTION 2.03 Execution and Authentication.
Two Officers shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be impressed, affixed, imprinted
or reproduced on the Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall
nevertheless be valid.
A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. Such signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall authenticate Securities for original issue upon written
order or orders of the Company signed by two Officers or by an Officer and an
Assistant Treasurer of the Company (a "Company Order").
The Trustee may appoint an authenticating agent to authenticate Securities.
An authenticating agent may authenticate Securities whenever the Trustee may do
so. Each reference in this Indenture
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<PAGE>
to authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.
The Securities may be issued in registered form without coupons. The
Securities shall be issuable only in denominations of $1,000 principal amount
and any integral multiple thereof.
Upon any endorsement by the Trustee of the Securities of any series
pursuant to the provisions of Section 2.15, the Trustee shall promptly inform
the Depositary with respect to the Securities of such series of such
endorsement.
SECTION 2.04 Registrar and Agents.
The Company shall maintain an office or agency where Securities of any
series may be presented for registration of transfer or for exchange
("Registrar"), an office or agency where Securities of any series may be
presented for payment ("Paying Agent"), an office or agency where Securities of
any series may be presented for conversion ("Conversion Agent") and an office or
agency where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Registrar shall keep a register
of the Securities of each series and of their transfer and exchange. The Company
may have one or more co-registrars, one or more additional Paying Agents and one
or more additional Conversion Agents. The Company or any Subsidiary may act as
Paying Agent and/or Conversion Agent. The term "Paying Agent" includes any
additional paying agent and the term "Conversion Agent" includes any additional
conversion agent.
The Company may change any Paying Agent, Registrar, Conversion Agent or
co-registrar on sixty (60) days' prior written notice to the Trustee. The
Company shall notify the Trustee in writing of the name and address of any such
Agent. If the Company fails to maintain a Registrar, Paying Agent, Conversion
Agent or agent for service of notices and demands, or fails to give the
foregoing notice, the Trustee shall act as such.
The Company and the Trustee initially appoint the Trustee as Registrar,
Paying Agent, Conversion Agent and agent for service of notices and demands.
SECTION 2.05 Paying Agent to Hold Money in Trust.
On or before 11:00 a.m., Eastern Standard or Daylight Savings Time, as
applicable, on each due date of the principal of, premium if any, and interest
on any Securities of any series, the Company shall deposit with each Paying
Agent a sum sufficient to pay such principal, premium, if any, and interest so
becoming due. The Company shall require each Paying Agent other than the Trustee
to agree in writing that it will hold in trust for the
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<PAGE>
benefit of Holders of Securities of any series and the Trustee all money held by
the Paying Agent for the payment of principal of, premium if any, or interest on
the Securities of such series and to notify the Trustee of any default by the
Company (or any other obligor on the Securities of such series) in making any
such payment. If the Company or a Subsidiary acts as Paying Agent, it shall on
or before each due date of the principal of, premium, if any, or interest on any
Securities of any series segregate the money and hold it as a separate trust
fund. The Company at any time may require a Paying Agent to pay all money held
by it to the Trustee and the Trustee may at any time during the continuance of
any payment default, upon written request to a Paying Agent, require such Paying
Agent to forthwith pay to the Trustee all sums so held in trust by such Paying
Agent. Upon doing so, the Paying Agent (other than the Company or a Subsidiary
thereof) shall have no further liability for the money.
SECTION 2.06 Transfer and Exchange.
When a Security of any series is presented to the Registrar or a
co-registrar with a request to register the transfer, the Registrar or
co-registrar shall register the transfer as requested and when Securities of any
series are presented to the Registrar or a co-registrar with a request to
exchange them for a like aggregate principal amount of Securities of such series
in other authorized denominations, the Registrar shall make the exchange as
requested, provided that every Security presented or surrendered for
registration or transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Registrar duly
executed by the Holder thereof or his attorney-in-fact duly authorized in
writing. To permit registrations of transfers and exchanges, the Company shall
issue and the Trustee or any authenticating agent shall authenticate Securities
of such series at the Registrar's or co-registrar's written request. No service
charge shall be made for any registration of transfer or exchange of Securities
but the Company, the Trustee and the Registrar or any co-registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto, but this provision shall not apply to any
exchange pursuant to Sections 2.09, 3.06, 9.05 or 10.02 not involving any
transfer.
The Registrar shall not be required (i) to issue, register the transfer of,
or exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of any selection of Securities of such series
for redemption under Section 3.02 and ending at the close of business on the day
of selection, (ii) to register the transfer or exchange of any Security of any
series so selected for redemption in whole or in part, except the unredeemed
portion of any Security being
--10--
<PAGE>
redeemed in part, or (iii) to register the transfer or exchange of any
Securities of any series during a period beginning at the opening of business 15
days before the day of any selection of Securities of such series for redemption
under Section 3.02 and ending at the close of business on the day interest is to
be paid on Securities of such series.
If at any time the Depositary for any Securities of a series issued in the
form of one or more Global Securities notifies the Company that it is unwilling
or unable to continue as Depositary for such Securities or if at any time the
Depositary for the Securities of such series shall no longer be eligible under
Section 2.02 of this Indenture, the Company shall appoint a successor Depositary
with respect to such Securities. If a successor Depositary for such Securities
is not appointed by the Company within ninety (90) days after the Company
receives such notice or becomes aware of such ineligibility or if the Company's
relationship with the Depositary is terminated and no successor Depositary has
been appointed, the Company's election to issue Global Securities pursuant to
Section 2.02 shall no longer be effective with respect to such Securities and
the Company will execute, and the Trustee, upon receipt of a Company Order for
the authentication and delivery of definitive Securities of such series, will
authenticate and deliver Securities of such series in definitive form, in
authorized denominations, in an aggregate principal amount equal to the
principal amount of the Global Security or Securities in exchange for such
Global Security or Securities.
The Company may at any time and in its sole discretion determine that the
Securities of any series issued in the form of one or more Global Securities
shall no longer be represented by such Global Security or Securities. The
Company shall notify the Depositary and the Trustee of the date and time of such
exchange in a Company Order. The Depositary shall surrender the Global
Securities to the Trustee as the Company's agent for such purpose as shall be
specified in the Company Order. The Company will execute, and the Trustee, upon
receipt of the Global Security from the Depository and a Company Order for the
authentication and delivery of definitive Securities of such series, will
authenticate and deliver, Securities of such series in definitive form, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Security or Securities in exchange for such
Global Security or Securities.
Unless and until a Global Security is exchanged in whole or in part for
Securities in definitive form in accordance with the provisions of this
Indenture, a Global Security may not be transferred, except as a whole, by the
Depositary
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<PAGE>
to a nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by such Depositary or any
such nominee to a successor of such Depositary or nominee. Unless otherwise
provided as contemplated by Section 2.02 of this Indenture, the Depositary may
not sell, assign, transfer or otherwise convey any common stock in a Global
Security evidencing all or part of the Securities of such series unless such
common stock is in an amount equal to an authorized denomination for Securities
of such series.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 2.02 of this Indenture, any Global Security shall be
exchangeable only as provided in this paragraph. If the owners of common stocks
in a Global Security of any series are entitled to exchange such interests for
Securities of such series, as may be specified in accordance with Section 2.02
of this Indenture, then without unnecessary delay upon receipt of notice
therefrom so specified as contemplated by Section 2.02 of this Indenture but in
any event not later than one business day prior to the earliest date on which
such interests may be so exchanged, the Company shall deliver to the Trustee
definitive Securities of such series, in authorized denominations, and in
aggregate principal amount equal to the principal amount of such Global
Security, executed by the Company. On or after the earliest date on which such
interests may be so exchanged, such Global Security shall be surrendered by the
Depositary as shall be specified in the Company Order with respect thereto to
the Trustee, as the Company's agent for such purpose, to be exchanged, in whole
or from time to time in part, for definitive Securities of such series, without
charge, and the Trustee shall authenticate and deliver, in exchange for each
portion of such Global Securities, a like aggregate principal amount of
definitive Securities of the same series in authorized denominations as the
portion of such Global Securities to be so exchanged; provided, however, that no
such exchanges may occur for a period of 15 days immediately preceding the
earliest date on which such interests may be so exchanged.
SECTION 2.07 Replacement Securities.
If a mutilated Security of any series is surrendered to the Trustee or if
the Holder of a Security of any series presents evidence to the satisfaction of
the Company and the Trustee that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security of such series if the requirements of the Trustee and the
Company are met. An indemnity bond may be required by the Company or the Trustee
that is sufficient in the judgment of the Company to protect the Company and is
sufficient in the judgment of the Trustee to protect the Trustee or any Agent
from any loss which it may suffer if a Security of such series is replaced. The
Company and the Trustee may charge the Holder in question for any expense in
replacing a Security.
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<PAGE>
SECTION 2.08 Outstanding Securities.
Securities of any series outstanding at any time are all Securities of such
series authenticated by the Trustee except for those cancelled by it, those
delivered to it for cancellation and those described in this Section 2.08 as not
outstanding.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company or a Subsidiary) holds on a
Redemption Date or maturity date money deposited with it by or on behalf of the
Company sufficient to pay the principal of and accrued interest on Securities of
any series payable on that date, then on and after that date such Securities
cease to be outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security (provided, however that Securities held by the
Company shall not be considered to be outstanding for purposes of any voting by
the Holders of any Securities).
SECTION 2.09 Temporary Securities.
Until definitive Securities of any series are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities of
such series. Temporary Securities of any series shall be substantially in the
form of definitive Securities of such series but may have non-material
variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities of any series in exchange for temporary
Securities of such series upon receipt of a Company Order. Until so exchanged,
temporary Securities of any series represent the same rights as definitive
Securities of such series. At the time of delivery of the temporary Securities
to the Trustee for authentication, the Company shall also provide to the Trustee
an Officer's Certificate to the effect that the temporary Securities of any
series meet the requirements of this Section 2.09.
SECTION 2.10 Cancellation.
The Company at any time may deliver Securities of any series to the Trustee
for cancellation. The Registrar, the Paying Agent and the Conversion Agent shall
forward to the Trustee any Securities surrendered to them for transfer,
exchange, payment or conversion. The Trustee shall cancel all Securities
surrendered for transfer, exchange, payment or conversion and destroy cancelled
Securities and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee
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<PAGE>
in writing prior to such destruction to deliver cancelled Securities to the
Company. Subject to Sections 2.07, 3.06 and the second paragraph of Section
10.02, the Company may not issue Securities to replace Securities that it has
previously paid or delivered to the Trustee for cancellation or that a
Securityholder has converted pursuant to Article 10 hereof.
SECTION 2.11 Defaulted Interest.
If the Company defaults in a payment of interest on Securities of any
series, it shall pay the defaulted interest to the Persons who are Holders of
the Securities of such series on a subsequent special record date. After the
deposit by the Company with the Trustee of money sufficient to pay such
defaulted interest, the Trustee shall fix the special record date and payment
date. Each such special record date shall be not less than 10 days prior to such
payment date. Each such payment date shall be not more than 60 days after the
deposit by the Company of money to pay the defaulted interest. At least 15 days
before the special record date, the Company shall mail to each Holder of a
Security of such series a notice that states the special record date, the
payment date, and the amount of defaulted interest to be paid. The Company may
pay defaulted interest in any other lawful manner if, after prior notice to the
Trustee, such payment shall be deemed operationally practicable by the Trustee.
SECTION 2.12 Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
current Holders of Securities of each series. If the Trustee is not the
Registrar, the Company or other obligor, if any, shall furnish to the Trustee at
least seven Business Days prior to each semiannual interest payment date and at
such other times as the Trustee may request in writing a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of current Holders of Securities of each series. The Trustee may destroy any
such list upon receipt of a replacement list. The Paying Agent will solicit from
each Securityholder a certification of social security number or taxpayer
identification number in accordance with its customary practice and as required
by law, unless the Paying Agent is in possession of such certification. Each
Paying Agent is authorized to impose back-up withholding with respect to
payments to be made to Securityholders to the extent required by law.
SECTION 2.13 Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the person in whose name a Security is registered as the owner of such
Security and neither the Company,
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<PAGE>
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
SECTION 2.14 CUSIP Number.
The Company may use a "CUSIP" number when issuing Securities of any series,
and if so, the Trustee may use the CUSIP number in notices of redemption or
exchange as a convenience to Holders of Securities of such series; provided that
any such notice may state that no representation is made as to the correctness
or accuracy of the CUSIP number printed in the notice or on the Securities, and
that reliance may be placed only on the other identification numbers printed on
the Securities.
SECTION 2.15 Provisions in Global Security.
(a) If Securities of a series are issuable in whole or in part as Global
Securities, as may be specified in accordance with Section 2.02 of this
Indenture, then any such Global Security shall represent such of the outstanding
Securities of such series as shall be specified therein and may also provide
that it represents the aggregate principal amount of outstanding Securities from
time to time endorsed thereon and that the aggregate principal amount of
outstanding Securities represented thereby may from time to time be reduced to
reflect exchanges. Global Securities may be permanent or temporary. Any
endorsement of a Global Security to reflect the amount, or any increase or
decrease in the principal amount, of outstanding Securities represented thereby
shall be made by the Trustee in such manner and upon instructions given by such
Person or Persons as shall be specified therein or in the Company Order to be
delivered to the Trustee and the Depositary pursuant to Section 2.03 or Section
2.09. Subject to the provisions of Section 2.03 and, if applicable, Section
2.09, the Depositary shall deliver and redeliver any permanent Global Security
in the manner and upon written instructions given by the Person or Persons
specified therein or in the applicable Company Order.
(b) Notwithstanding the other provisions of this Indenture, unless
otherwise specified in accordance with Section 2.02, payment of principal of
(and premium, if any) and interest, if any, on any permanent Global Securities
shall be made directly to the Depositary.
(c) Notwithstanding the provisions of Section 2.13 of this Indenture, the
Company, the Trustee and any agent of the Company or the Trustee shall treat the
owners of common stock of such Global Security as the Holders of such principal
amounts of outstanding Securities represented by a Global Security as shall be
specified in writing by the Depositary and delivered to the Company and the
Trustee with respect to such Global Security, but
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only for purposes of obtaining any consents or directions required to be given
by the Holders pursuant to this Indenture.
(d) Unless otherwise provided as contemplated by Section 2.02, a Global
Security of any series shall provide that, in addition to the provisions
established pursuant to Sections 2.01, 2.02 and 2.15(a) through (c), the
Depositary will not sell, assign, transfer or otherwise convey any common stock
in such Global Security unless such common stock is in an amount equal to an
authorized denomination for Securities of such series, and the Depository, by
accepting such Global Security, agrees to be bound by such provision. Any Global
Security shall also contain such other provisions as are necessary to reflect
the global form of such Security and the designation of a Depositary for such
Global Security.
ARTICLE 3
REDEMPTION
SECTION 3.01 Right of Redemption.
(a) The Company may, at its option, redeem Securities of any series as
permitted or required by the terms of such Securities, which redemption shall be
made in accordance with the terms of such Securities and this Article. In the
case of Securities subject to the provisions of Article X hereof, the Company
may also redeem the Securities of any Series, in whole or from time to time in
part, at any time in order to protect Meditrust Corporation's status as a real
estate investment trust ("REIT"), at the option of the Company at a redemption
price equal to 100% of the principal amount plus accrued interest to the date of
redemption. Notwithstanding any other provision of this Article 3, with respect
to redemptions to protect Meditrust Corporation's status as a REIT, the
Securities of any series will be immediately redeemable, at the option of and
upon notice by the Company to the extent deemed sufficient in the opinion of the
Board of Trustees of the Company to prevent the Holder of such Securities or any
other Person having an interest therein if the Securities were thereupon
converted from being deemed to own shares of common stock in excess of the
limits prescribed in Meditrust Corporation's Certificate of Incorporation, as
amended. The election of the Company to redeem any Securities pursuant to this
Section shall be evidenced by a Board Resolution. The Company shall, at least 60
days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date and, in the case of any redemption at the election of the Company of less
than all the Securities of any series, of the principal amount of Securities of
that series to be redeemed.
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(b) If the Company wants to redeem the Securities of any series pursuant to
the redemption provisions of the Securities of such series, it shall notify the
Trustee of the Redemption Date and the principal amount of Securities of such
series to be redeemed. The notice shall be in writing and accompanied by an
Officers' Certificate stating that the redemption complies with the provisions
of this Indenture and the provisions of the applicable Board Resolution, if any,
and in the Securities of such series.
The Company shall give each notice provided for in this Section 3.01 in
writing and at least 45 but not more than 60 days before the Redemption Date or
such other period as the Company and the Trustee may agree.
SECTION 3.02 Selection of Securities to be Redeemed.
If any part of a series of Securities is to be redeemed, the Trustee shall
select the Securities of such series to be redeemed pro rata or by lot. The
Trustee shall promptly notify the Company of the Securities of such series to be
so called for redemption. The Trustee shall make the selection from Securities
of such series outstanding and not previously called for redemption. The Trustee
may select for redemption portions of the principal of Securities that have
denominations larger than $1,000 principal amount. Securities and portions of
them that it selects shall be in principal amounts of $1,000 or multiples
thereof. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee's selection of Securities for redemption by any method authorized by
this Section 3.02 shall be conclusively deemed reasonable.
SECTION 3.03 Notice of Redemption by the Company.
At least 30 days but not more than 60 days before a Redemption Date with
respect to Securities of any series, the Company shall mail a notice of
redemption by first-class mail to each Holder of Securities of such series to be
redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent and the Conversion
Agent;
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(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) that interest on Securities called for redemption ceases to
accrue on and after the Redemption Date provided monies are on
deposit with the Paying Agent for payment of the Redemption Price
as provided in Section 3.05; and
(6) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after
the Redemption Date, upon surrender of such Security, a new
Security or Securities of the same series in principal amount
equal to the unredeemed portion thereof will be issued.
At the Company's written request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. If a CUSIP number
is listed in such notice or printed on the Security, the notice shall state that
no representation is made as to the correctness or accuracy of such CUSIP
number.
SECTION 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the applicable Redemption Date and at the applicable
Redemption Price. Upon surrender to the Paying Agent, such Securities shall be
paid at the Redemption Price, plus accrued interest to the Redemption Date
provided monies are on deposit with the Paying Agent for payment of the
Redemption Price as provided in Section 3.05
SECTION 3.05 Deposit of Redemption Price.
On or before 11:00 a.m., Eastern Standard or Daylight Savings Time, as
applicable, on the Redemption Date with respect to any series of Securities, the
Company shall deposit with the Paying Agent (or if the Company or a Subsidiary
is the Paying Agent, shall segregate and hold in trust or cause such Subsidiary
to segregate and hold in trust) in immediately available funds money sufficient
to pay the Redemption Price of and accrued interest on all Securities of such
series to be redeemed on that date. The Trustee or the Paying Agent shall return
to the Company any money so received and not required for that purpose.
SECTION 3.06 Securities Redeemed in Part.
Upon surrender of a Security of any series that is redeemed in part, the
Trustee shall authenticate for the Holder, at the expense of the Company, a new
Security of such series equal in
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principal amount to the unredeemed portion of the Security surrendered. If a
Global Security is so surrendered, such new Security so issued shall be a new
Global Security.
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of the Securities.
The Company shall pay the principal of, premium, if any, and interest on
the Securities of any series on the dates and in the manner provided in the
Securities of such series and this Indenture. An installment of principal,
premium, if any, or interest shall be considered paid on the date it is due if
the Trustee or Paying Agent (other than the Company or a Subsidiary) holds on
that date money designated for and sufficient to pay the installment. The
Company shall pay interest on overdue principal and premium, if any, at the rate
borne by the Security; it shall pay interest, including post-petition interest
in the event of a proceeding under the Bankruptcy Laws, on overdue installments
of interest at the same rate to the extent lawful.
SECTION 4.02 SEC Reports.
The Company shall file with the Trustee, promptly after it files them with
the SEC, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC may
by rules and regulations prescribe) which the Company is required to file with
the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended. The Company shall also comply with the other provisions of TIA ss.
314(a).
So long as any Securities of any series remain outstanding, the Company
shall cause its annual reports to shareholders (containing audited financial
statements) and any other financial reports furnished by it to shareholders to
be mailed to the current Holders at their addresses appearing in the register of
Securities of any series maintained by the Registrar.
SECTION 4.03 Waiver of Stay, Extension or Usury Laws.
The Company expressly waives (to the extent that it may lawfully do so) any
stay or extension law or any usury law or other law that would prohibit or
forgive the Company from paying all or any portion of the principal of (premium,
if any) or interest on Securities of any series as contemplated herein, wherever
enacted, now or at any time hereafter in force, or that may affect the covenants
or the performance of this Indenture.
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SECTION 4.04 Notice of Default.
The Company will, so long as any Securities of any series are outstanding,
deliver to the Trustee, within 10 days of becoming aware of any Default or Event
of Default in the performance of any covenant, agreement or condition in this
Indenture, an Officers' Certificate specifying such Default or Event of Default.
SECTION 4.05 Compliance Certificates.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company (which as of the date hereof is December 31), a
written statement signed by the President or a Vice President and by the
Treasurer, an Assistant Treasurer, the Controller or an Assistant Controller of
the Company, stating, as to each signer thereof, that
(1) a review of the activities of the Company during such year and of
performance under this Indenture has been made under his supervision, and
(2) to the best of his knowledge, based on such review, the Company
has kept, observed, performed and fulfilled in all material respects each
and every condition and covenant contained in this Indenture throughout
such year, or, if there has been a default in the fulfillment of any such
condition or covenant, specifying each such default known to him and the
nature and status thereof.
The Company will give the Trustee written notice of a change in the fiscal
year of the Company, within a reasonable time after such change is effected.
SECTION 4.06 Limitation on Dividends and Other Distributions.
The Company will not declare or pay any dividends or make any distribution
to holders of its Capital Stock (other than dividends or distributions payable
in Capital Stock of the Company), or purchase, redeem or otherwise acquire or
retire for value any of its Capital Stock or permit any Subsidiary to purchase,
redeem or otherwise acquire or retire for value any of the Company's Capital
Stock if at the time of such action an Event of Default has occurred and is
continuing or would exist immediately after giving effect to such action.
Notwithstanding the foregoing, the provisions of this Section 4.06 will not
prevent: (i) the payment of any dividend within 60 days after the date of
declaration when the payment would have complied with the foregoing provisions
on the date of declaration; or (ii) the retirement of any share of the Company's
Capital Stock by exchange for, or out of the proceeds of the
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substantially concurrent sale (other than to a Subsidiary) of, other shares of
its Capital Stock.
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01 When Company May Merge, etc.
The Company shall not consolidate with or merge into, or transfer all or
substantially all of its assets to, another Person in any transaction in which
the Company is not the continuing or surviving entity unless (i) the resulting,
surviving or transferee Person is a corporation or trust which assumes by
supplemental indenture all the obligations of the Company under the Securities
of each series and this Indenture; (ii) such corporation or trust is organized
and existing under the laws of the United States, a State thereof or the
District of Columbia although it in turn may be owned by a foreign entity; (iii)
immediately after giving effect to such transaction no Default or Event of
Default shall have happened and be continuing, and the Officers' Certificate
referred to in the following clause reflects that such Officers are not aware of
any such Default or Event of Default that shall have happened and be continuing,
and (iv) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture comply with this Indenture,
and thereafter all obligations of the Company shall terminate.
SECTION 5.02 Successor Company or Trust Substituted.
Upon any consolidation or merger, or any transfer of all or substantially
all of the assets of the Company in accordance with Section 5.01, the successor
corporation or trust formed by such consolidation or into which the Company is
merged or to which such transfer is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor corporation or trust has been named as
the Company herein.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.
An "Event of Default" occurs if, with respect to any series of Securities:
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(1) the Company defaults in the payment of interest on any Security of
such series when the same becomes due and payable and the default continues
for a period of 30 days;
(2) the Company defaults in the payment of the principal of (and
premium, if any, on) any Security of such series when the same becomes due
and payable at maturity, upon redemption or otherwise, and the default
continues for five Business Days;
(3) the Company fails to comply with any of its other agreements in
the Securities of such series or this Indenture and the default continues
for the period and after the notice specified in the last paragraph of this
Section 6.01;
(4) there shall be a default under any bond, debenture, note or other
evidence of Indebtedness or under any mortgage, indenture or other
instrument under which there may be issued or by which there may be secured
or evidenced any Indebtedness of the Company or any Subsidiary, whether any
such Indebtedness now exists or shall hereafter be created, if (a) either
(i) such event of default results from the failure to pay any such
Indebtedness at maturity or (ii) 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;
(5) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case or proceeding,
(B) consents to the entry of an order for relief against it in an
involuntary case or proceeding,
(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors; or
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case or
proceeding,
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(B) appoints a Custodian of the Company or for all or substantially
all of its property, or
(C) orders the liquidation of the Company,
and the order or decree remains unstayed and in effect for 90 days;
provided, however, that a default under this Section 6.01 is not an Event
of Default with respect to any series of Securities if a specified event is
either applicable to a particular series or it is specifically deleted or
modified in the supplemental indenture creating such series of Securities
or in the form of Security for such series.
A default under clause (3) is not an Event of Default with respect to any
series of Securities until the Trustee notifies the Company, or the Holders of a
majority in principal amount of the Securities of such series then outstanding
notify the Company and the Trustee in writing, of the default and the Company
does not cure the default within 60 days after receipt of such notice. The
notice must specify the default, demand that it be remedied and state that the
notice is a "Notice of Default." The Trustee shall give such notice to the
Company if directed to do so in writing by the Holders of a majority in
principal amount of the Securities of such series then outstanding. Such notice
by the Trustee shall not be deemed to be a certification by the Trustee as to
whether an Event of Default has occurred.
SECTION 6.02 Acceleration.
If an Event of Default occurs and is continuing with respect to any series
of Securities, the Trustee by notice to the Company, or the Holders of a
majority in principal amount of the Securities of such series then outstanding
by notice to the Company and the Trustee, may declare to be due and payable
immediately the principal amount of the Securities of such series plus accrued
interest to the date of acceleration. Upon any such declaration, such amount
shall be due and payable immediately, and upon payment of such amount all of the
Company's obligations with respect to the Securities of such series, other than
obligations under Section 7.07, shall terminate. The Holders of a majority in
principal amount of the outstanding Securities of such series by written notice
to the Trustee may rescind an acceleration and its consequences if (x) all
existing Events of Default with respect to the Securities of such series, other
than the non-payment of the principal of the Securities of such series, which
have become due solely by such declaration of acceleration, have been cured or
waived, (y) to the extent the payment of such interest is lawful, interest on
overdue installments of interest and overdue principal which has become
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due otherwise than by such declaration of acceleration, has been paid, and (z)
the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction.
SECTION 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal (and premium, if any) or interest on the Securities of such series or
to enforce the performance of any provision of the Securities of such series or
this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04 Waiver of Defaults and Events of Default.
Subject to Section 9.02, the Holders of a majority in principal amount of
the Securities of any series then outstanding, on behalf of the Holders of the
Securities of such series, by written notice to the Trustee may waive a Default
or Event of Default with respect to the Securities of such series and its
consequences. When a Default or Event of Default is waived with respect to the
Securities of any series, it is cured and ceases.
SECTION 6.05 Control by Majority.
The Holders of a majority in principal amount of the Securities of any
series then outstanding may direct in writing the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on it with respect to the Securities of such
series. The Trustee, however, may refuse to follow any direction that conflicts
with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of other Securityholders or that may involve the
Trustee in personal liability or for which the Trustee does not have adequate
indemnification pursuant to Section 7.01(e); provided, that, the Trustee may
take any other action deemed proper by the Trustee which is not inconsistent
with such direction.
SECTION 6.06 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security of any series to receive
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payment of principal of, premium, if any, and interest on such Security, on or
after the respective due dates expressed in such Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.
Notwithstanding any other provision of this Indenture, the right of any
Holder of any Security to convert such Security or to bring suit for the
enforcement of such right shall not be impaired or affected without the written
consent of the Holder.
SECTION 6.07 Collection Suit by Trustee.
If an Event of Default with respect to any series of Securities in payment
of interest or principal (and premium, if any) specified in Section 6.01(1) or
(2) occurs and is continuing, the Trustee may recover judgment in its own name
and as trustee of an express trust against the Company or any other obligor on
the Securities of such series for the whole amount of unpaid principal (and
premium, if any) and accrued interest remaining unpaid on the Securities of such
series, together with interest on overdue principal (and premium, if any) and to
the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate borne by the Securities of
such series and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.08 Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Holders of
Securities of any series allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Securities of any series), its creditors
or its property and shall be entitled and empowered to collect and receive any
monies or other property payable or deliverable on any such claims and to
distribute the same. Any Custodian in any such judicial proceeding is hereby
authorized by each Securityholder to make such payments to the Trustee, and in
the event that the Trustee shall consent to the making of such payments directly
to the Holders of Securities of any series, to pay to the Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan or reorganization, arrangement, adjustment or composition affecting the
Securities of any series or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Securityholder in any such
proceedings.
SECTION 6.09 Priorities.
If the Trustee collects any money pursuant to this Article 6 with respect
to the Securities of any series, it shall pay out the money in the following
order:
FIRST: to the Trustee for amounts due under Section 7.07; and
SECOND: to Holders of Securities of such series for amounts due and unpaid
on the Securities of such series for principal of (and premium, if any) and
interest, ratably, without preference or priority of any kind, according to
the amounts due and payable on the Securities of such series for principal
(and premium, if any) and interest, respectively.
The Trustee may fix a record date and payment date for any payment to
Holders of Securities of any series pursuant to this Section 6.09.
SECTION 6.10 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorney's fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.10
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.06 or a suit by Holders of more than 10% in principal amount of the Securities
of any series then outstanding.
ARTICLE 7
TRUSTEE
SECTION 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise its rights and powers vested in it by this Indenture and use the
same degree of care and skill in their
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exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others, and no implied
covenants or obligation shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. The Trustee, however, shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(2) the Trustee shall not be liable for any error in judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05; and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless, subject to the provisions of the TIA, it
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receives indemnity satisfactory to it against any loss, liability, expense or
fee except liabilities for its own negligent action, its own negligent failure
to act, or its own willful misconduct.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02 Rights of Trustee.
(1) The Trustee may rely on and shall be protected in acting or refraining
from acting upon any document believed by it to be genuine and to have been
signed or presented by the proper person. The Trustee need not investigate any
fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an opinion of Counsel, or both, which shall conform to
Section 13.05. The Trustee shall not be liable for any action it takes or omits
to take in good faith in reliance on such Officers' Certificate or Opinion of
Counsel.
(3) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.
(4) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(5) The Trustee may consult with counsel and the advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by the Trustee hereunder in
good faith and reliance thereon.
(6) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders of Securities of any series pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction.
SECTION 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities of any series and may otherwise deal with the Company or
its Affiliates with the same
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rights it would have if it were not Trustee. Any Agent may do the same with like
rights. The Trustee, however, is subject to Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities of any series, it shall not be accountable for the
Company's use of the proceeds from the Securities of any series, and it shall
not be responsible for any statement of the Company in the Indenture or any
statement in the Securities of any series other than its certificate of
authentication or in any document used in the sale of the Securities of any
series other than any statement in writing provided by the Trustee expressly for
use in such document.
SECTION 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee with respect to the Securities of any series, the Trustee
shall mail to each Holder of Securities of such series notice of the Default or
Event of Default within 90 days after it occurs. Except in the case of a default
in payment of principal of, premium, if any, or interest on any Security, the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of Holders of Securities of such series. Notwithstanding anything to
the contrary expressed in this Indenture, the Trustee shall not be deemed to
have knowledge of any Event of Default hereunder unless and until it shall have
actual knowledge thereof, or shall have received written notice thereof from the
Company at its principal corporate trust office in Providence, Rhode Island. The
Trustee shall not be deemed to have actual knowledge of an Event of Default
hereunder, except in the case of an Event of Default under Sections 6.01(1) or
6.01(2), until a Trust Officer receives written notice thereof from the Company
or any Securityholder that such an Event of Default has occurred.
SECTION 7.06 Reports by Trustee to Holders.
Within 60 days after each July 15 beginning with July 15, 1998, the
Trustee, if required by the provisions of TIA ss. 313(a), shall mail to each
Securityholder a brief report dated as of such July 15 that complies with TIA
ss. 313(a). The Trustee also shall comply with TIA ss. 313(b) and ss. 313(c).
A copy of each report at the time of its mailing to Securityholders shall
be filed with the SEC and each stock exchange on which the Securities of any
series are listed. The Company agrees to notify the Trustee in writing whenever
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the Securities of any series become listed or delisted on or from any stock
exchange.
SECTION 7.07 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust). The Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it. Such expenses may
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless against,
any loss or liability incurred by it in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the Securities or the
exercise or performance of any of its powers or duties hereunder. The Trustee
shall notify the Company promptly of any claim asserted against the Trustee for
which it may seek indemnity and the Company may elect by written notice to the
Trustee to assume the defense of any such claim at the Company's expense with
counsel reasonably satisfactory to the Trustee.
The Company need not reimburse the Trustee for any expense or indemnify it
against any loss or liability incurred by it through the Trustee's negligence,
bad faith or willful misconduct. The Company shall not be liable for any
settlement of any claim or action effected without the Company's consent.
SECTION 7.08 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign with respect to any series of Securities by so
notifying the Company. The Holders of a majority in principal amount of the
Securities of any series then outstanding may remove the Trustee with respect to
such series of Securities by so notifying the Trustee and may appoint a
successor Trustee with respect to such series of Securities with the Company's
written consent. The Company may remove the Trustee with respect to any series
of Securities (or, if clause (4) applies, with respect to all series) if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
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(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee otherwise becomes incapable of acting with respect to any
series of Securities.
If the Trustee resigns or is removed with respect to any series of
Securities or if a vacancy exists in the office of Trustee with respect to any
series of Securities for any reason, the Company shall promptly appoint a
successor Trustee with respect to such series.
If a successor Trustee with respect to any series of Securities does not
take office within 45 days after the retiring Trustee with respect to such
series resigns or is removed, the retiring Trustee, the Company or the Holders
of a majority in principal amount of the Securities of such series then
outstanding may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
with respect to any series of Securities to the retiring Trustee and to the
Company. Immediately after that, the retiring Trustee shall, upon payment of its
charges, transfer all property held by it as Trustee with respect to such series
to the successor Trustee, subject to the lien provided for in Section 7.07, the
resignation or removal of the retiring Trustee shall become effective with
respect to such series, and the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture with respect to such
series. Notwithstanding the replacement of the Trustee with respect to any
series of Securities pursuant to this Section 7.08, the Company's obligations
under Section 7.07 shall continue for the benefit of the retiring Trustee with
respect to expenses and liabilities incurred by it and compensation earned by it
prior to such replacement or otherwise with respect to the Securities of such
series or the Indenture. A successor Trustee with respect to any series of
Securities shall mail notice of its succession to each Holder of Securities of
such series.
SECTION 7.09 Successor Trustee by Merger, etc.
It the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust assets to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
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SECTION 7.10 Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ss. 310(a)(1). The Trustee shall have a combined capital and surplus of
at least $50,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA ss. 310(b), including the optional
provision permitted by the second sentence of TIA ss. 310(b)(9).
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
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ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.01 Satisfaction, Discharge and Defeasance of the Securities.
The Company shall be deemed to have paid and discharged the entire
indebtedness on the Securities of any series after the date of the deposit
referred to in paragraph (a) below, the provisions of this Indenture shall no
longer be in effect in respect of the Securities of such series, and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of such indebtedness; provided that the
following conditions shall have been satisfied:
(a) the Company has deposited or caused to be deposited with the
Trustee irrevocably as trust funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of all
Securities of such series, with reference to this Section 8.01, (i) money
or (ii) U.S. Government Obligations or (iii) a combination thereof,
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the Trustee, to pay and discharge the entire indebtedness on all the
Securities of such series for principal, premium, if any, and interest, if
any, to the maturity date of such series of Securities as such principal,
premium, if any, or interest becomes due and payable in accordance with the
terms of this Indenture and the Securities;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company in connection with all of the Securities of any
series, including all fees and expenses of the Trustee; and
(c) the Company has delivered to the Trustee an Officers' Certificate
stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of the entire indebtedness on the Securities and
the discharge of this Indenture and the termination of the Company's
obligations hereunder have been complied with.
"U.S. Government Obligations" means direct, non-callable obligations of, or
non-callable obligations guaranteed by, the United States of America for the
timely payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
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SECTION 8.02 Satisfaction and Discharge of Indenture.
In addition to its rights under Section 8.01, the Company may terminate all
of its obligations under this Indenture when:
(a) All of the Securities of such series theretofore authenticated and
delivered (other than (A) Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.07
hereof and (B) Securities for whose payment money has theretofore been
deposited with the Trustee or the Paying Agent in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 2.05 and Section 8.06
hereof) have been delivered to the Trustee for cancellation; and
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company in connection with the outstanding Securities,
including all fees and expenses of the Trustee.
SECTION 8.03 Survival of Certain Obligations.
Notwithstanding the satisfaction and discharge of this Indenture pursuant to
Section 8.01, the respective obligations of the Company specified in Sections
2.04, 2.05, 2.06, 2.07, 2.12, 4.01, 7.07, 8.05, 8.06, 8.07 and in Article 10
shall survive until the Securities are no longer outstanding, and thereafter, or
upon compliance with Section 8.02 the obligations of the Company in such
Sections 7.07 and 8.06 shall survive. Nothing contained in this Article Eight
shall abrogate any of the obligations or duties of the Trustee under this
Indenture.
SECTION 8.04 Application of Trust Money.
(a) Subject to the provisions of Section 8.06, all money and U.S. Government
Obligations deposited with the Trustee for the Securities of any series pursuant
to Section 8.01 or Section 8.02, and all money received by the Trustee in
respect of U.S. Government Obligations deposited with the Trustee for the
Securities of any series pursuant to Section 8.01 or Section 8.02 shall be held
in trust and reinvested by the Trustee in U.S. Government Obligations in
accordance with the Company's written instructions and applied by the Trustee in
accordance with the provisions of the Securities of such series and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent), to the Persons entitled
thereto, of the principal, premium, if any, and interest, if any, on the
Securities of such series; but such money need not be segregated from other
funds except to the extent required by law.
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<PAGE>
(b) The Trustee shall deliver or pay to the Company from time to time upon
the Company's written request any U.S. Government Obligations, or money held by
it as provided in Section 8.01 or Section 8.02 which, in the written opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are then in excess of
the amount thereof which then would have been required to be deposited for the
purpose for which such U.S. Government Obligations, or money were deposited or
received.
SECTION 8.05 Paying Agent to Repay Monies Held.
Upon the satisfaction and discharge of this Indenture with respect to the
Securities of any series, all monies then held by any Paying Agent for the
benefit of Securities of such series under the provisions of this Indenture
shall, upon written demand of the Company, be repaid to it or paid to the
Trustee, and thereupon such Paying Agent shall be released from all further
liability with respect to such monies.
SECTION 8.06 Return of Unclaimed Monies.
Any monies deposited with or paid to the Trustee or any Paying Agent for
the Securities of any series, or then held by the Company in trust, for the
payment of any principal, premium, if any, and interest, if any, on the
Securities of any series and not applied but remaining unclaimed by the Holders
of the Securities of such series for three years after the date upon which the
principal of and interest, if any, on the Securities of such series, as the case
may be, shall have become due and payable, shall, unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
law, be repaid to the Company by such Trustee or any Paying Agent on written
demand by the Company or (if then held by the Company) shall be discharged from
such trust; and the Holders of the Securities of such series entitled to receive
such payment shall thereafter look only to the Company for the payment thereof;
provided, however, that, before being required to make any such repayment, such
Trustee may, or shall at the written request of the Company, at the expense of
the Company, cause to be published once in an authorized newspaper in the same
city in which the place of payment with respect to the Securities of such series
shall be located and in an authorized newspaper in the City of New York, or mail
to each such Holder, a notice (in such form as may be deemed appropriate by such
Trustee) that said monies remain unclaimed and that, after a date named therein,
any unclaimed balance of said monies then remaining will be returned to the
Company.
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<PAGE>
SECTION 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations with respect to the Securities of any series in
accordance with Section 8.01 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this Indenture and the Securities of such series shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01 until such
time as the Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with Section 8.04; provided, however, that
if the Company has made any payment of interest on or principal of any
Securities of any series because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.01 Supplemental Indentures Without Consent of Holders.
The Company, when authorized by Board Resolution, and the Trustee at any
time and from time to time, may amend this Indenture or enter into one or more
indentures supplemental hereto, to be in a form satisfactory to the Trustee
without notice to or consent of any Securityholder for any of the following
purposes:
(1) to comply with Section 5.01; or
(2) to provide for uncertificated Securities in addition to or in place of
certificated Securities; or
(3) to add to the covenants of the Company, for the benefit of the Holders
of all or any series of Securities (and if such covenants are to be for the
benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series), or to
surrender any right or power herein conferred upon the Company; or
(4) to add any Events of Default (and if such Events of Default are to be
applicable to less than all series of Securities, stating that such Events
of Default are expressly being included solely to be applicable to such
series); or
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<PAGE>
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only
when there is no Security outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit
of such provision; or
(6) to establish the form or terms of Securities of any series as permitted
by Sections 2.01 and 2.02; or
(7) to cure any ambiguity, to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with any provision of
this Indenture, provided such other provisions shall not adversely affect
the interests of the Holders of Securities of any series in any material
respect.
SECTION 9.02 Supplemental Indentures With Consent of Holders.
With the written consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of each series at the time
outstanding affected by such supplemental indenture, the Company, when
authorized by Board Resolution, and the Trustee may amend this Indenture or from
time to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act of 1939
as in force at the date of the execution thereof) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture, except as otherwise permitted
by Section 9.01, or of modifying in any manner the rights of the Holders of the
Securities of each such series. Subject to Section 9.04, an amendment,
supplement or waiver, including a waiver pursuant to Section 6.04, may not,
without the consent of each Holder of Securities of any series affected:
(1) extend the fixed maturity of any Securities, or reduce the principal
amount thereof or premium, if any, or reduce the rate or extend the time of
payment of interest thereon, without the consent of the Holder of each
Security so affected;
(2) reduce the aforesaid percentage of Securities of each series, the
consent of the Holders of which is required for any such supplemental
indenture, without the consent of the Holders of all Securities then
outstanding affected thereby;
(3) waive (except, unless theretofore cured) a default in the payment of
the principal of (and premium, if any on), interest on or redemption
amounts with respect to any Security;
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<PAGE>
(4) make any Security payable in money other than that stated in the
Security;
(5) make any change in Sections 6.04, 6.06, 9.02 (this sentence) or 9.03;
or
(6) make any change that adversely affects any right to convert any
Security.
Upon the request of the Company, accompanied by a copy of a Board
Resolution certified by the Secretary or an Assistant Secretary of the Company
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent shall approve the substance
thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Company
shall mail a notice, setting forth in general terms the substance of such
supplemental indenture, to all Holders of Securities of each series so affected
as the names and addresses of such Holders shall appear on the registry books.
Any failure of the Company so to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such supplemental
indenture.
SECTION 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Securities shall
comply with the TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents.
Subject to this Indenture, each amendment, supplement or waiver evidencing
other action shall become effective in accordance with its terms. Until an
amendment, supplement or waiver becomes effective, a consent to it by a Holder
of a Security of any series is a continuing consent by the Holder even if
notation of the consent is not made on any Security. Any such Holder or
subsequent Holder, however, may revoke the consent as to its Security or portion
of a Security, if the Trustee receives the
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notice of revocation before the date the amendment, waiver or other action
becomes effective.
The Company shall fix a record date for the purpose of determining the
Holders entitled to consent to any amendment, supplement or waiver. If a record
date is fixed, then notwithstanding the provisions of the immediately preceding
paragraph, those persons who were Holders at such record date (or their duly
designated proxies) and only those persons, shall be entitled to consent to such
amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be Holders after such record date. No
consent shall be valid or effective for more than 90 days after such record date
unless consent from Holders of the principal amount of Securities of any series
then outstanding required hereunder for such amendment, supplement or waiver to
be effective shall have also been given and not revoked within such 90-day
period.
After an amendment, supplement or waiver becomes effective, it shall bind
every Securityholder, unless it makes a change described in any of clauses (1)
through (7) of Section 9.02. In that case the amendment, supplement or waiver
shall only bind the Holders of a Security or portion of a Security of the same
series.
SECTION 9.05 Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security of
any series, the Trustee may request the Holder of the Security of such series to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Security about the changed terms and return it to the Holder. Alternatively, if
the Company or the Trustee so determine, the Company in exchange for the
Security of such series shall issue and the Trustee shall authenticate a new
Security of such series that reflects the changed terms the cost and expense of
which will be borne by the Company.
SECTION 9.06 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities of any applicable series theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby.
SECTION 9.07 Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article
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may, and shall if required by the Trustee, bear a notation in form approved by
the Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Board of Trustees of the Company,
to any such supplemental indenture may be prepared and executed by the Company
and authenticated and delivered by the Trustee in exchange for Securities
outstanding of such series.
ARTICLE 10
CONVERSION OF SECURITIES
SECTION 10.01 Right of Conversion; Exercise.
Conversion of Securities of any series into shares of common stock of the
Company or Securities of another series as permitted by the terms of such
Securities shall be made initially at the conversion price specified in and in
accordance with the terms of such Securities and this Article. Notwithstanding
the foregoing, and in order to protect Meditrust Corporation's status as a REIT,
a Holder may not convert any Security, and any such Security shall not be
convertible by any Holder, if as a result of such conversion any person would
then be deemed to own, directly or indirectly, 9.9% or more of the outstanding
shares of common stock of Meditrust Corporation. For convenience, the conversion
of any portion of the principal of any Security or Securities into shares of
common stock or Securities of another series of the Company is hereinafter
sometimes referred to as the conversion of such Security or Securities.
SECTION 10.02. Issuance of Shares or other Securities on Conversion.
As promptly as practicable after the surrender, as herein provided, of any
Security or Securities of any series for conversion, the Company shall deliver
or cause to be delivered at its said office or agency, to or upon the written
order of the Holder of the Security or Securities so surrendered, certificates
representing the number of fully paid and nonassessable shares of common stock
or Securities of another series of the Company into which such Security or
Securities may be converted in accordance with the provisions of this Article
10. Such conversion shall be deemed to have been made as of the close of
business on the date that such Security or Securities shall have been
surrendered for conversion by receipt by the Trustee of the delivery thereof
with a written notice of conversion duly executed, so that the rights of the
Holder of such Security or Securities as a Securityholder shall cease at such
time and, subject to the following provisions of this paragraph, the person or
persons entitled to receive the shares of common stock or Securities of another
series upon conversion of such Security or Securities shall be treated for
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<PAGE>
all purposes as having become the record holder or holders of such shares of
common stock or Securities of another series at such time and such conversion
shall be at the conversion price in effect at such time; provided, however, that
with respect to shares of common stock no such surrender on any date when the
stock transfer books of the Company shall be closed shall be effective to
constitute the person or persons entitled to receive the shares of common stock
upon such conversion as the record holder or holders of such shares of common
stock on such date, but such surrender shall be effective to constitute the
person or persons entitled to receive such shares of common stock as the record
holder or holders thereof for all purposes at the close of business on the next
succeeding day on which such stock transfer books are open; such conversion
shall be at the conversion price in effect on the date that such Security or
Securities shall have been surrendered for conversion by receipt by the Trustee
of the delivery thereof, as if the stock transfer books of the Company had not
been closed. The Company shall give or cause to be given to the Trustee written
notice whenever the stock transfer books of the Company shall be closed.
Upon conversion of any Security of any series which is converted in part
only, the Company shall execute and the Trustee shall authenticate and deliver
to or on the order of the Holder thereof, at the expense of the Company, a new
Security or Securities of such series of authorized denominations in principal
amount equal to the unconverted portion of such Security.
SECTION 10.03 No Adjustment for Interest or Dividends.
Except as otherwise provided in any supplemental indenture relating to the
Securities of such series, no payment or adjustment in respect of interest on
the Securities of any series or dividends on the shares of common stock shall be
made upon the conversion of any such Security or Securities; provided, however,
that if a Security of any series or any portion thereof shall be converted
subsequent to any regular record date and on or prior to the next succeeding
interest payment date, the interest falling due on such interest payment date
shall be payable on such interest payment date notwithstanding such conversion,
and such interest (whether or not punctually paid or duly provided for) shall be
paid to the person in whose name such Security is registered at the close of
business on such regular record date and Securities surrendered for conversion
during the period from the close of business on any regular record date 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.
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<PAGE>
SECTION 10.04 Adjustment of Conversion Price.
(1) With respect to any series of Securities that is convertible into
shares of common stock of the Company, in case the Company shall pay or make a
dividend or other distribution on any class of Capital Stock of the Company in
shares of common stock, the conversion price for any such series of Securities
in effect at the opening of business on the day following the date fixed for the
determination of shareholders entitled to receive such dividend or other
distribution shall be reduced by multiplying such conversion price by a fraction
of which the numerator shall be the number of shares of common stock outstanding
at the close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such reduction to
become effective immediately after the opening of business on the day following
the date fixed for such determination.
(2) With respect to any series of Securities that is convertible into
shares of common stock of the Company, in case the Company shall issue rights or
warrants to all or substantially all holders of its shares of common stock
entitling them to subscribe for or purchase shares of common stock at a price
per share less than the current market price per share (determined as provided
in paragraph (6) of this Section) of the shares of common stock on the date
fixed for the determination of shareholders entitled to receive such rights or
warrants, the conversion price for any such series of Securities in effect at
the opening of business on the day following the date fixed for such
determination shall be reduced by multiplying such conversion price by a
fraction of which the numerator shall be the number of shares of common stock
outstanding at the close of business on the date fixed for such determination
plus the number of shares of common stock which the aggregate of the
subscription price of the total number of shares of common stock so offered for
subscription or purchase would purchase at such current market price and the
denominator shall be the number of shares of common stock outstanding at the
close of business on the date fixed for such determination plus the number of
shares of common stock so offered for subscription or purchase, such reduction
to become effective immediately after the opening of business on the day
following the date fixed for such determination. In the event that all of the
shares of common stock subject to such rights or warrants have not been issued
when such rights or warrants expire, then the conversion price shall promptly be
readjusted to the conversion price which would then be in effect had the
adjustment upon the issuance of such rights or warrants been made on the basis
of the actual number of shares of common stock issued upon the exercise of such
rights or warrants. For the purposes of this paragraph (2), the number of shares
of common stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of
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fractions of shares of common stock. The Company will not issue any rights or
warrants in respect of shares of common stock held in the treasury of the
Company.
(3) With respect to any series of Securities that is convertible into
shares of common stock of the Company, in case the outstanding shares of common
stock shall be subdivided into a greater number of shares, the conversion price
for any such series of Securities in effect at the opening of business on the
day following the day upon which such subdivision becomes effective shall be
proportionately reduced, and, conversely, in case outstanding shares of common
stock shall each be combined into a smaller number of shares, the conversion
price for any series of Securities in effect at the opening of business on the
day following the day upon which such combination becomes effective shall be
proportionately increased, such reduction or increase, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(4) With respect to any series of Securities that is convertible into
shares of common stock of the Company, in case the Company shall, by dividend or
otherwise, distribute to all or substantially all holders of shares of common
stock, evidences of indebtedness or assets (including securities, but excluding
(i) any rights or warrants referred to in paragraph (2) of this Section, (ii)
any dividend or distribution not prohibited by Section 4.06 hereof and (iii) any
dividend or distribution referred to in paragraph (1) of this Section), the
conversion price for any such series of Securities shall be adjusted so that the
same shall equal the price determined by multiplying the conversion price in
effect immediately prior to the close of business on the day fixed for the
determination of shareholders entitled to receive such distribution by a
fraction of which the numerator shall be the current market price per share
(determined as provided in paragraph (6) of this Section) of the shares of
common stock on the date fixed for such determination less the then fair market
value as determined by the Board of Trustees of the Company (whose determination
shall be conclusive and described in a resolution of the Board of Trustees of
the Company filed with the Trustee) of the portion of the assets or evidences of
indebtedness so distributed allocable to one share of common stock and the
denominator shall be such current market price per share of the shares of common
stock, such adjustment to become effective immediately prior to the opening of
business on the day following the date fixed for the determination of
shareholders entitled to receive such distribution.
(5) With respect to any series of Securities that is convertible into
shares of common stock of the Company, in case the shares of common stock shall
be changed into the same or a different number of shares of any class or classes
of stock,
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whether by capital reorganization, reclassification, or otherwise (other than a
subdivision or combination of shares or a stock dividend described in paragraph
(1) or paragraph (3) of this Section, or a consolidation, merger or sale of
assets described in Section 10.10), then and in each such event the Holders of
Securities of any series shall have the right thereafter to convert such
Securities into the kind and amount of shares of stock and other securities and
property receivable upon such reorganization, reclassification or other change,
by holders of the number of shares of common stock into which such Securities
might have been converted immediately prior to such reorganization,
reclassification or change.
(6) For the purpose of any computation under paragraphs (2) and (4) of this
Section, the current market price per share of common stock on any date shall be
deemed to be the average of the Closing Prices for the 15 consecutive Business
Days selected by the Company commencing not more than 30 and not less than 20
Business Days before the date in question.
(7) No adjustment in the conversion price for the Securities of any series
shall be required unless such adjustment (plus any adjustments not previously
made by reason of this paragraph (7)) would require an increase or decrease of
at least 1% in such price; provided, however, that any adjustments which by
reason of this paragraph (7) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this paragraph (7) shall be made to the nearest cent.
(8) The Company may, but shall not be required to, make such reductions in
the conversion price for the Securities of any series, in addition to those
required by paragraph (1), (2), (3) and (4) of this Section, as the Board of
Trustees of the Company considers to be advisable in order to avoid or diminish
any income tax to any holders of shares of common stock resulting from any
dividend or distribution of stock or issuance of rights or warrants to purchase
or subscribe for stock or from any event treated as such for income tax purposes
or for any other reasons. The Company's Board of Trustees shall have the power
to resolve any ambiguity or correct any error in the adjustments made pursuant
to this Section 10.04 and its actions in so doing shall be final and conclusive.
SECTION 10.05 Notice of Adjustment of Conversion Price.
Whenever the conversion price for the Securities of any series is adjusted
as herein provided:
(a) the Company shall compute the adjusted conversion price in
accordance with Section 10.04 and shall prepare an Officers' Certificate
setting forth the adjusted conversion
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price and showing the facts upon which such adjustment is based and the
computation thereof, and such certificate shall forthwith be filed at each
office or agency maintained for the purpose of conversion of Securities
pursuant to Section 2.04 and with the Trustee;
(b) a notice stating that the conversion price has been adjusted and
setting forth the adjusted conversion price shall as soon as practicable be
mailed by the Company to all Holders of Securities of such series at their
last addresses as they shall appear in the Registrar's books (the "Security
Register"); and
(c) if the conversion price is adjusted and the Company fails to file
an Officers' Certificate with the Trustee as provided by Section 10.05(a)
and the Trustee is acting as the Conversion Agent, the Trustee shall be
entitled to rely on the conversion price set forth in the Officers'
Certificate most recently received by the Trustee (or as set forth in this
Indenture if the conversion price shall not have been adjusted).
SECTION 10.06 Notice of Certain Corporate Action.
(1) In case:
(a) the Company shall authorize the granting to holders of its shares
of common stock of rights or warrants entitling them to subscribe for or
purchase any shares of Capital Stock of any class or of any other rights;
or
(b) of any reclassification of the shares of common stock of the
Company, or of any consolidation or merger to which the Company is a party
and for which approval of any shareholders of the Company is required, or
of the sale or transfer of all or substantially all of the assets of the
Company; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Securities of any series pursuant to Section 2.04
and shall cause to be mailed to all Holders of Securities of such series that
are convertible into shares of common stock at their last addresses as they
shall appear in the Security Register, at least 20 days (or 10 days in any case
specified in clause (a) or (b) above) prior to the applicable record date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend,
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distribution, rights or warrants, or, if a record is not to be taken, the date
as of which the Holders of shares of common stock of record to be entitled to
such dividend, distribution, rights or warrants are to be determined, or (y) the
date on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of shares of common stock of record
shall be entitled to exchange their shares of common stock for securities, cash
or other property deliverable upon such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up. Such notice shall also
state whether such transaction will result in any adjustment in the conversion
price applicable to the Securities of such series and, if so, shall state what
the adjusted conversion price will be and when it will become effective. Neither
the failure to give the notice required by this Section, nor any defect therein,
to any particular Holder shall affect the sufficiency of the notice or the
legality or validity of any such dividend, distribution, right, warrant,
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding-up, or the vote on any action authorizing such with
respect to the other holders.
(2) In case the Company or any Affiliate of the Company shall propose to
engage in a "Rule 13e-3 Transaction" as defined in the SEC's Rule 13e-3 under
the Securities Exchange Act of 1934, as amended, the Company shall, no later
than the date on which any information with respect to such Rule 13e-3
Transaction is first required to be given to the SEC or any other person
pursuant to such Rule 13e-3, cause to be mailed to all Holders at their last
addresses as they shall appear in the Security Register, a copy of all
information required to be given to the SEC or such other person pursuant to
such Rule 13e-3. The information required to be given under this paragraph shall
be in addition to and not in lieu of any other information required to be given
by the Company pursuant to this Section 10.06 or any other provision of the
Securities or this Indenture.
SECTION 10.07 Taxes on Conversions.
The Company will pay any and all stamp or similar taxes that may be payable
in respect of the issuance or delivery of shares of common stock or Securities
of another series on conversion of Securities pursuant hereto. The Company shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of shares of common stock or
Securities of another series in a name other than that of the Holder of the
Security or Securities to be converted, and no such issuance or delivery shall
be made unless and until the person requesting such issuance has paid to the
Company the amount of any such tax, or has established to the satisfaction of
the Company that such tax has been paid.
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SECTION 10.08 Fractional Shares.
No fractional shares or scrip representing fractional shares shall be
issued upon any conversion of Securities. If any such conversion would otherwise
require the issuance of a fractional share an amount equal to such fraction
multiplied by the current market price per share of common stock (determined as
provided in paragraph (6) of Section 10.04) on the day of conversion shall be
paid to the Holder in cash by the Company.
SECTION 10.09 Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to the Trustee
to be cancelled by or at the direction of the Trustee, which shall dispose of
the same as provided in Section 2.10.
SECTION 10.10 Provisions in Case of Consolidation, Merger or Sale of Assets.
(1) In case of any consolidation of the Company with, or merger of the
Company into, any other corporation or trust, or in case of any merger of
another corporation or trust into the Company (other than a consolidation or
merger which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of common stock of the Company), or in case
of any sale or transfer of all or substantially all of the assets of the
Company, the corporation or trust formed by such consolidation or resulting from
such merger or which acquires such assets, as the case may be, shall execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Security of any series then outstanding shall have the right thereafter,
during the period such Security shall be convertible as specified in Section
10.01 to convert such Security only into the kind and amount of securities, cash
and other property receivable upon such consolidation, merger, sale or transfer
by a holder of the number of shares of common stock of the Company into which
such Security might have been converted immediately prior to such consolidation,
merger, sale or transfer. Such supplemental indenture shall provide for
adjustments which, for events subsequent to the effective date of such
supplemental indenture, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Article. The above provisions of this
Section shall similarly apply to successive consolidations, mergers, sales or
transfers.
(2) The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any such supplemental indenture
relating either to the kind or amount of shares of stock or securities or
property receivable by Holders upon the conversion of their Securities after any
such reclassification, change, consolidation, merger, sale or conveyance or to
any adjustment to be made with respect thereto.
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SECTION 10.11 Disclaimer by Trustee of Responsibility for Certain Matters.
The Trustee shall not at any time be under any duty or responsibility to
any Holder of Securities of any series to determine whether any facts exist
which may require any adjustment of the conversion price for such series, or
with respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee shall not be
accountable with respect to the validity, value, kind or amount of any shares of
common stock, or of any securities or property, which may at any time be issued
or delivered upon the conversion of any Security; and it makes no representation
with respect thereto. Provided that the Conversion Agent has provided the
Company with any notice required hereunder, the Trustee shall not be responsible
for any failure of the Company to issue, transfer or deliver any stock
certificates or other securities or property upon the surrender of any Security
for the purpose of conversion or to comply with any of the covenants of the
Company contained in this Article.
SECTION 10.12 Covenant to Reserve Shares.
The Company covenants that it will at all times reserve and keep available,
free from preemptive rights, out of its authorized shares of common stock,
solely for the purpose of issuance upon conversion of any Securities as herein
provided, such number of shares of common stock as shall then be issuable upon
the conversion of any such Securities. The Company covenants that all shares of
common stock which shall be so issuable shall be, when issued, duly and validly
issued and fully paid and non-assessable. For purposes of this Section 10.12,
the number of shares of common stock which shall be deliverable upon the
conversion of any such Securities shall be computed as if at the time of
computation all such Securities were held by a single holder.
ARTICLE 11
SUBORDINATION; SENIORITY
SECTION 11.01 Securities Subordinated to Senior Indebtedness.
(a) Securities of any series which by their terms are subordinated and
junior in right of payment of the principal of, premium, if any, and interest on
such securities (all of the foregoing, a "Payment or Distribution") to the prior
payment in full of any Senior Indebtedness ("Subordinated Securities") whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed, shall comply with the provisions
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of this Article 11, and each Holder of the Subordinated Securities of such
series by its acceptance thereof likewise agrees. A Payment or Distribution
shall include any asset of any kind or character, and may consist of cash,
securities or other property, by set-off or otherwise, and shall include,
without limitation, any purchase, redemption or other acquisition of the
Subordinated Securities of the series or the making of any deposit of funds or
securities pursuant to this Indenture (including, without limitation, any
deposit pursuant to Article 8 hereof).
(b) The Senior Indebtedness of the Company shall continue to be Senior
Indebtedness and entitled to the benefit of these subordination provisions
irrespective of any amendment, modification or waiver of any term of any
instrument relating to refinancing of the Senior Indebtedness.
(c) All the provisions of this Indenture and the Subordinated Securities of
any series shall be subject to the provisions of this Article 11 so far as they
may be applicable thereto, except that nothing in this Article 11 shall apply to
claims for, or payments to, the Trustee under or pursuant to Section 7.07.
(d) No right of any holder of any Senior Indebtedness to enforce
subordination as herein provided shall at any time or in any way be affected or
impaired by any failure to act on the part of the Company, any Paying Agent, the
Holders of the Subordinated Securities of any series, the Trustee or the holders
of the Senior Indebtedness, or by any noncompliance by the Company, any Paying
Agent, the Holders of the Subordinated Securities of any series or the Trustee
with any of the terms, provisions and covenants of the Subordinated Securities
or this Indenture, regardless of any knowledge thereof that any such holder of
Senior Indebtedness may have or be otherwise charged with.
(e) In the event that the Subordinated Securities of any series are
declared due and payable before their expressed maturity because of the
occurrence of a default hereunder, (i) the Company will give prompt notice in
writing of such happening to the holders of Senior Indebtedness and (ii) all
Senior Indebtedness shall forthwith become immediately due and payable upon
demand, regardless of the expressed maturity thereof.
SECTION 11.02 Company Not to Make Payments with Respect to Subordinated
Securities in Certain Circumstances.
No Payment or Distribution shall be made by the Company on account of
principal of (or premium, if any) or interest on the Subordinated Securities of
any series, whether upon stated maturity, upon
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redemption or acceleration, or otherwise, or on account of the purchase or other
acquisition of Subordinated Securities of such series, whether upon stated
maturity, upon redemption or acceleration, or otherwise, if there shall have
occurred and be continuing a default with respect to any Senior Indebtedness
permitting the acceleration thereof or with respect to the payment of any Senior
Indebtedness and (a) such default is the subject of a judicial proceeding or (b)
notice of such default in writing or by telegram has been given to the Company
by any holder or holders of any Senior Indebtedness, unless and until the
Company shall have received written notice from such holder or holders that such
default or event of default shall have been cured or waived or shall have ceased
to exist.
Upon any acceleration of the principal of the Subordinated Securities of
any series or any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding up or liquidation or reorganization of
the Company, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash, or payment thereof
provided for to the satisfaction of the holders thereof, before any Payment or
Distribution is made on account of the redemption price or principal of (and
premium, if any) or interest on the Subordination Securities of such series; and
(subject to the power of a court of competent jurisdiction to make other
equitable provision, which shall have been determined by such court to give
effect to the rights conferred in this Article upon the Senior Indebtedness and
the holders thereof with respect to the Subordinated Securities of such series
or the Holders thereof or the Trustee, by a lawful plan of reorganization or
readjustment under applicable law) upon any such dissolution or winding up or
liquidation or reorganization, any Payment or Distribution by the Company or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders of the Subordinated Securities of
any series or the Trustee would be entitled except for the provisions of this
Article, shall be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such Payment or Distribution
directly to the holders of Senior Indebtedness of the Company or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all Senior Indebtedness in full in cash, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness, before any Payment or Distribution is made to the Holders of the
Subordinated Securities of such series or to the Trustee, except that the
Trustee will have a lien for the payment of its fees and expenses.
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In the event that, notwithstanding the foregoing, any Payment or
Distribution by the Company of any kind or character, whether in cash, property
or securities, prohibited by the foregoing, shall be received by the Trustee or
the Holders of the Subordinated Securities of any series before all Senior
Indebtedness is paid in full in cash, or provision is made for such payment to
the satisfaction of the holders thereof, and if such fact shall then have been
or thereafter be made known to a Trust Officer of the Trustee or, as the case
may be, such Holder, then and in such event such Payment or Distribution shall
be paid over or delivered to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, for application
to the payment of all Senior Indebtedness remaining unpaid to the extent
necessary to pay all Senior Indebtedness in full in cash, after giving effect to
any concurrent Payment or Distribution to or for the holders of such Senior
Indebtedness, and, until so delivered, the same shall be held in trust by any
Holder of a Security as the property of the holders of Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company into,
another Person or the liquidation or dissolution of the Company following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided in
Article Five shall not be deemed a dissolution, winding up, liquidation or
reorganization for the purposes of this Section if such other Person shall, as a
part of such consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article Five. Nothing in this Section shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 7.07.
The holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Holders of the Subordinated Securities
of any series, without incurring responsibility to the Holders of the
Subordinated Securities of such series and without impairing or releasing the
obligations of the Holders of the Subordinated Securities of such series
hereunder to the holders of Senior Indebtedness: (i) change the manner, place or
terms of payment or change or extend the time of payment of, or renew or alter,
Senior Indebtedness, or otherwise amend in any manner Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (iii) release any
Person liable in any manner for the collection of Senior Indebtedness; and/or
(iv) exercise or refrain from exercising any rights against the Company and any
other Person.
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SECTION 11.03 Subrogation of Subordinated Securities.
Subject to the payment in full in cash of all amounts then due (whether by
acceleration of the maturity thereof or otherwise) on account of all Senior
Indebtedness at the time outstanding, the Holders of the Subordinated Securities
of any series shall be subrogated to the rights of the holders of Senior
Indebtedness to receive Payments or Distributions of cash, property or
securities of the Company applicable to the Senior Indebtedness until the
principal of (and premium, if any) and interest on the Senior Indebtedness shall
be paid in full; and, for the purposes of such subrogation, no Payments or
Distributions to the holders of Senior Indebtedness to which the Holders of the
Subordinated Securities of any series or the Trustee would be entitled except
for the provisions of this Article, and no payments over pursuant to the
provisions of this Article to the holders of Senior Indebtedness by Holders of
the Subordinated Securities of any series or the Trustee, shall, as between the
Company, the Company's creditors other than holders of Senior Indebtedness, and
the Holders of the Subordinated Securities of such series, be deemed to be a
payment by the Company to or on account of the Senior Indebtedness. It is
understood that the provisions of this Article are and are intended solely for
the purpose of defining the relative rights of the Holders of the Subordinated
Securities of any series, on the one hand, and the holders of Senior
Indebtedness, on the other hand.
Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the Holders of the
Subordinated Securities of each series, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders of the Subordinated Securities
of any series the principal of (and premium, if any) and interest on the
Subordinated Securities of such series as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Holders of the Subordinated Securities series and
creditors of the Company other than the holders of Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or the Holder of any
Subordinated Security of any series from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee and the Holders of the Subordinated Securities of any
series shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which any dissolution, winding up, liquidation or
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reorganization proceedings are pending, or certificate of the receiver, trustee
in bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of the Subordinated
Securities of such series, for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article.
SECTION 11.04 Authorization by Holders of Subordinated Securities.
Each holder of a Subordinated Security of any series by its acceptance
thereof authorizes and directs the Trustee on its behalf to take such action as
may be necessary or appropriate to effectuate, as between the Holder of the
Security and the holders of Senior Indebtedness, the subordination provided in
this Article and appoints the Trustee its attorney-in-fact for any and all such
purposes including, without limitation, to execute, verify, deliver and file any
proofs of claim which any holder of Senior Indebtedness may at any time require
in order to prove and realize upon any rights or claims pertaining to the
Subordinated Securities and to effectuate the full benefit of the subordination
contained herein. Upon failure of the Trustee so to do, any such holder of
Senior Indebtedness shall be deemed to be irrevocably appointed the agent and
attorney-in-fact of the Holder to execute, verify, deliver and file any such
proofs of claim.
SECTION 11.05 Notices to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to it that would prohibit the making of any payment of moneys to or by the
Trustee in respect of the Subordinated Securities of any series pursuant to the
provisions of this Article. Notwithstanding the provisions of this Article or
any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment of moneys to or by the Trustee in respect of the Subordinated Securities
of any series pursuant to the provisions of this Article, unless and until a
Trust Officer of the Trustee shall have received at its Corporate Trust Office
written notice thereof from the Company or a holder or holders of Senior
Indebtedness or from any trustee or agent therefor; and, prior to the receipt of
any such written notice, the Trustee shall be entitled in all respects to assume
that no such facts exist; provided, however, that if a Trust Officer of the
Trustee shall not have received at least three Business Days prior to the date
upon which by the terms hereof any such moneys may become payable for any
purpose (including, without
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limitation, the payment of the principal of (premium, if any) or interest on any
Subordinated Security of any series) with respect to such moneys the notice
provided for in this Section, then, anything herein contained to the contrary
notwithstanding, the Trustee shall have the full power and authority to receive
such moneys and to apply the same to the purpose for which they were received
and shall not be affected by any notice to the contrary that may be received by
it within three Business Days prior to such date.
The Trustee shall be entitled to rely conclusively on the delivery to it of
a written notice by a Person representing itself to be a holder of Senior
Indebtedness (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior Indebtedness or a trustee or agent
on behalf of any such holder. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
SECTION 11.06 Trustee's Relation to Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article in respect of any Senior Indebtedness at any time held
by it, to the same extent as any other holder of Senior Indebtedness, and
nothing in Section 7.11 or elsewhere in this Indenture shall deprive the Trustee
of any of its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of Senior Indebtedness shall be read into this
Indenture against the Trustee. The Trustee shall not owe any fiduciary duty to
the holders of Senior Indebtedness and shall not be liable to any such holder if
it shall mistakenly pay over or distribute to Holders of the Subordinated
Securities of any series or the Company or any other Person money or assets to
which any holder of Senior Indebtedness shall be entitled by virtue of this
Article or otherwise.
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SECTION 11.07 No Impairment of Subordination.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company,
the Trustee or the Holder of any of the Subordinated Securities of any series or
by any act, or failure to act, in good faith, by any such holder of Senior
Indebtedness, or by any noncompliance by the Company, the Trustee or the Holder
of any of the Subordinated Securities of any series with the terms, provisions
and covenants of this Indenture, regardless of any knowledge thereof which any
such holder may have or otherwise be charged with.
SECTION 11.08 Article 11 Not To Prevent Events of Default.
The failure to make a payment on account of principal of (premium, if any)
or interest on the Subordinated Securities of any series by reason of any
provision in this Article 11 shall not be construed as preventing the occurrence
of an Event of Default with respect to such series under Section 6.01.
SECTION 11.09 Paying Agents other than the Trustee.
In any case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 11 shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article 11 in addition to or in place of the Trustee.
SECTION 11.10 Securities Senior to Subordinated Indebtedness.
The indebtedness represented by the Securities of any series will be senior
and prior in right of payment to all Subordinated Indebtedness, to the extent
and in the manner provided in such Subordinated Indebtedness.
ARTICLE 12
SINKING FUND
SECTION 12.01 Mandatory and Optional Sinking Fund Payments.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of any series, except as otherwise permitted or
required by any form of Security of a series issued pursuant to this Indenture.
The minimum amounts of any sinking fund payments provided for by the terms
of Securities of any series are herein referred to as "mandatory sinking fund
payments," and any payments in excess
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of those minimum amounts provided for by the terms of Securities of that series
are herein referred to as "optional sinking fund payments." If provided for by
the terms of the Securities of any series, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 12.02. Each sinking
fund payment shall be applied to the redemption of Securities of any series as
provided for by the terms of Securities of that series.
SECTION 12.02 Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of any series, as provided for by the
terms of that series (1) apply as a credit Securities of that series which have
been redeemed either at the election of the Company pursuant to the terms of
that series of Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, provided that no
Securities of such series have been previously so credited or (2) apply as a
credit Securities of that series which have been converted or exchanged into
shares of common stock or Securities of another series pursuant to the terms of
that series of Securities, provided that no series of Securities of such series
have been previously so credited. Such Securities shall be received and credited
for such purpose by the Trustee at the Redemption Price specified in such
Securities for redemption through operation of the sinking fund and the amount
of such sinking fund payment shall be reduced accordingly. If as a result of the
delivery or credit of Securities of any series in lieu of cash payments pursuant
to this Section, the principal amount of Securities of that series to be
redeemed in order to exhaust the aforesaid cash payment shall be less than
$100,000, the Trustee need not call Securities of that series for redemption,
except upon the request of the Company, and such cash payment shall be held by
the Trustee or a Paying Agent and applied to the next succeeding sinking fund
payment, provided, however, that the Trustee or such Paying Agent shall at the
request of the Company from time to time pay over and deliver to the Company any
cash payment so being held by the Trustee or such Paying Agent upon delivery by
the Company to the Trustee of Securities of that series purchased by the Company
having an unpaid principal amount equal to the cash payment requested to be
released to the Company.
SECTION 12.03 Redemption of Securities for Sinking Funds.
Not less than 60 days prior to each mandatory sinking fund payment date for
any series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the mandatory sinking fund payment for that
series
--56--
<PAGE>
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivery or credit of Securities pursuant to Section 12.02 hereof,
and the optional amount, if any, to be added in cash to the mandatory sinking
fund payment, and will also deliver to the Trustee any Securities to be so
credited and not theretofore delivered. If such Officers' Certificate shall
specify an optional amount to be added in cash to the mandatory sinking fund
payment, the Company shall thereupon be obligated to pay the amount therein
specified. Not less than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 3.02 hereof and cause notice of
the redemption thereof to be given in the name and at the expense of the Company
in the manner provided in Section 3.03 hereof.
ARTICLE 13
MISCELLANEOUS
SECTION 13.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provisions shall control.
SECTION 13.02 Notices.
Any notices or other communications required or permitted hereunder shall
be in writing, and shall be sufficiently given if made by hand delivery, or
first class mail, postage prepaid (except that any notice by the Trustee to the
Company of a default or an Event of Default under this Indenture shall be by
registered or certified mail, postage prepaid, return receipt requested), or by
a nationally-recognized overnight express courier service (which notices or
communications shall be deemed received the business day after the receipt
thereof by such service), addressed as follows:
if to the Company:
Meditrust Corporation or Meditrust Operating Company
197 First Avenue
Needham, MA 02194
Attention: President
if to the Trustee:
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Attention: Corporate Trust Department
--57--
<PAGE>
The Company or the Trustee by notice to the other may designate additional or
different addresses as shall be furnished in writing by either party. Any notice
or communication to the Company or the Trustee shall be deemed to have been
given or made as of the date so delivered if personally delivered, and five (5)
calendar days after mailing if sent by registered or certified mail (except that
a notice of change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be mailed to
the address of such Securityholder as it appears on the registration books of
the Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
In case by reason of the suspension of regular mail service, or by reason
of any other cause, it shall be impossible to mail any notice, as required by
this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
If the Company mails any notice or communication to Securityholders, it
shall mail a copy to the Trustee and all Agents at the same time.
SECTION 13.03 Communications by Holders with Other Holders.
Securityholders of any series may communicate pursuant to TIA ss. 312(b)
with other Securityholders of such series with respect to their rights under
this Indenture or the Securities of such series. The Company, the Trustee, the
Registrar and anyone else shall have the protection of TIA ss. 312(c).
SECTION 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements set forth
in Section 13.05) stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with; and
--58--
<PAGE>
(2) an Opinion of Counsel (which shall include the statements set forth in
Section 13.05) stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
SECTION 13.05 Statements Required in Certificate and Opinion.
Each Certificate and Opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion has read
such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person, such
covenant or condition has been complied with.
SECTION 13.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Registrar, Paying Agent or Conversion Agent may make
reasonable rules for its functions.
SECTION 13.07 Record Date.
Whenever the Company or the Trustee solicits an act of Securityholders of
any series, the Company or the Trustee may fix in advance of the solicitation of
such act a date as the record date for determining Securityholders of such
series entitled to perform said act. The record date shall be not more than 15
days prior to the date fixed for the solicitation of said act.
SECTION 13.08 Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banks or trust
companies in the city in which either the Trustee or the Company is located are
not required to be open. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.
--59--
<PAGE>
SECTION 13.09 Governing Law.
The laws of The Commonwealth of Massachusetts shall govern this Indenture
and the Securities without regard to principles of conflicts of law.
SECTION 13.10 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 13.11 No Recourse against Others.
No shareholder, trustee or officer, as such, past, present or future, of
the Company or of any successor corporation or trust shall have any liability
for any obligation of the Company under the Securities or the Indenture or for
any claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder of a Security of any series by accepting a Security waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
SECTION 13.12 Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
SECTION 13.13 Multiple Counterparts.
The parties may sign multiple counterparts of this Indenture. Each signed
counterpart shall be deemed an original, but all of them together represent the
same agreement.
SECTION 13.14 Table of Contents, Headings, etc.
The table of contents, cross-reference sheet and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
SECTION 13.15 Severability.
In case any provision in this Indenture or in the Securities of any series
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and a Holder shall have no claim therefor against any party
hereto.
SECTION 13.16 Trustee Dealings with the Company.
The Trustee, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or its Affiliates,
and may otherwise deal with the Company or its Affiliates as if it were not the
Trustee.
--60--
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
MEDITRUST CORPORATION
MEDITRUST OPERATING COMPANY
By:
---------------------------------
Its:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
---------------------------------
Authorized Officer
--61--
EXHIBIT 5
November 12, 1997
12742-17
Meditrust Corporation
197 First Avenue, Suite 300
Needham, MA 02194
Meditrust Operating Company
197 First Avenue, Suite 100
Needham, MA 02194
Gentlemen:
Reference is made to the Joint Registration Statement on Form S-3 (the
"Registration Statement"), which Meditrust Corporation, a Delaware corporation,
and Meditrust Operating Company, a Delaware corporation (together, the
"Companies"), have filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to any
combination of the Companies' shares of paired common stock, par value $.10 (the
"Shares"), debt securities (the "Debt Securities") which may be issued under an
Indenture (together with any supplement thereto, the "Indenture") between the
Companies and a national bank as trustee (the "Trustee"), warrants to purchase
Shares and warrants to purchase Debt Securities (collectively, the "Warrants"),
valued in the aggregate at a maximum of $2,000,000,000, to be offered on a
continuous or delayed basis pursuant to the provisions of Rule 415 under the
Securities Act, and an indeterminate number of Shares as may be issued upon any
conversion of the Debt Securities and/or exercise of the warrants to purchase
Shares (the "Conversion Shares").
We have acted as counsel for the Companies in connection with the
Registration Statement and are familiar with the proceedings taken and proposed
to be taken by the Companies in connection with the authorization, registration,
sale and issuance of the Shares, the Debt Securities and the Warrants. We have
examined the Certificates of Incorporation and By-laws of each of the Companies
and all amendments thereto, and certificates of public officials and such other
documents, records and materials as we have deemed necessary in connection with
this opinion letter. Based upon the foregoing, and in reliance upon information
from time to time furnished to us by the Companies' officers, directors and
agents, we are of the opinion that:
1. Upon the due authorization, execution and delivery of the Debt
Securities by the Companies or either or both of them, as the case may be, in
the manner referred to in the Registration Statement and assuming any requisite
authentication of the Debt Securities
<PAGE>
Meditrust
November 12, 1997
Page 2
by the Trustee and due qualification of the Indenture, if any, under the Trust
Indenture Act of 1939, as amended, and subject to the terms of the Debt
Securities being otherwise in compliance with then applicable law, the Debt
Securities will be duly issued and delivered by the Companies or either of them,
as the case may be, and will constitute the valid and legally binding
obligations of the Companies, or either or both of them, as the case may be,
enforceable in accordance with their terms, except as such enforceability may be
subject to or limited by bankruptcy, insolvency, reorganization or other laws of
general application relating to or affecting creditors' rights or by general
equitable principles.
2. The Shares, when issued in compliance with the terms described in the
Registration Statement, and the Conversion Shares, when issued from time to time
upon conversion of the Debt Securities and/or exercise of the Warrants to
purchase Shares and in compliance with the terms described in the Indenture, if
any, concerning conversion of Debt Securities, will be duly and validly issued,
fully paid and non-assessable.
3. The Warrants, when issued in compliance with the terms described in the
Registration Statement, will be duly issued and legally binding obligations of
the Companies or either or both of them, as the case may be, enforceable in
accordance with their terms, except as such enforceability may be subject to or
limited by bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting creditors' rights or by general equitable
principles.
We understand that this opinion letter is to be used in connection with the
Registration Statement as finally amended, and hereby consent to the filing of
this opinion letter with and as a part of the Registration Statement as so
amended, and to the reference to our firm in the Prospectus under the heading
"Legal Matters." It is understood that this opinion letter is to be used in
connection with the offer and sale of the Shares, the Debt Securities and/or the
Warrants only while the Registration Statement is effective as so amended and as
it may be amended from time to time as contemplated by Section 10(a)(3) of the
Securities Act.
Very truly yours,
Nutter, McClennen & Fish, LLP
MJB/PRE/NCH/nab
EXHIBIT 8
November 12, 1997
12742-17
Meditrust Corporation
197 First Avenue, Suite 300
Needham, MA 02194
Gentlemen:
You have requested our opinion regarding the federal income taxation of
shareholders of Meditrust Corporation, a Delaware corporation (the "REIT"), in
connection with the Joint Registration Statement on Form S-3 of the REIT and
Meditrust Operating Company, a Delaware corporation (together with the REIT, the
"Companies") with respect to the Companies' shelf registration of $2,000,000,000
in securities of the Companies, or either or both of them, as the case may be,
consisting of a combination of shares of paired common stock, debt securities
and warrants to be offered from time to time (the "Registration Statement"). The
facts, as we understand them, and upon which we rely in rendering the opinion
expressed herein, are set forth in the Registration Statement.
Based on such facts, we are of the opinion that the statements contained in
the Registration Statement under the caption "Federal Income Tax
Considerations," insofar as such statements constitute statements of federal
income tax law, are correct in all material respects. No opinion is expressed as
to any factual matter or as to any matter not set forth therein. Our opinion is
based on our interpretation of the statutes, regulations, decisions and
published administrative interpretations in effect on the date hereof, and we
can offer no assurance that such statutes, regulations, decisions and published
administrative interpretations will not be amended, revoked or modified in a
manner that would affect our opinion set forth herein. Further, any variation in
the facts from those set forth in the Registration Statement may affect the
conclusion stated herein.
We understand that this opinion letter is to be used in connection with the
Registration Statement, as finally amended, and hereby consent to the filing of
this opinion letter with and as a part of the Registration Statement as so
amended, and to the reference to our firm in the Prospectus under the heading
"Legal Matters." It is understood that this opinion letter is to be used in
connection with the offer and sale of the shares of paired common stock, debt
<PAGE>
Meditrust Corporation
November 12, 1996
Page 2
securities and/or warrants only while the Registration Statement is effective as
so amended and as it may be amended from time to time as contemplated by Section
10(a)(3) of the Securities Act.
Very truly yours,
Nutter, McClennen & Fish, LLP
KPF/NCH/pm
EXHIBIT 12
Computation of Ratios of Earnings to Fixed Charges for Meditrust and MAC
(dollars in thousands)
Nine Month
Year Ended December 31, Period Ended
------------------------------------------------- September 30,
1992 1993 1994 1995 1996 1997
-------- --------- -------- -------- --------- --------------
Net Income $51,358 $63,636 $80,460 $86,518 $157,976 $125,052
Interest
Expense 58,159 62,193 67,479 64,163 64,216 61,831
-------- -------- -------- -------- -------- --------
Total $109,517 $125,829 $147,939 $150,681 $222,192 $186,883
======== ======== ======== ======== ======== ========
Ratio 1.88 2.02 2.19 2.35 3.46 3.02
For purposes of calculating the ratio of earnings to fixed charges for the years
ended December 31, 1992, 1993, 1994, 1995, 1996 and the nine-month period ended
September 30, 1997, net income has been added to interest expense and that sum
has been divided by such interest expense.
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Joint Registration
Statement on Form S-3 dated November 12, 1997 of Meditrust Corporation, formerly
known as Santa Anita Realty Enterprises, Inc. and Meditrust Operating Company,
formerly known as Santa Anita Operating Company, of our reports dated January
16, 1997 on our audits of the consolidated financial statements and financial
statement schedules of Meditrust as of December 31, 1996 and 1995, and for the
years ended December 31, 1996, 1995 and 1994.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
November 12, 1997
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP
We consent to the incorporation by reference of our report dated April 14,
1997 accompanying the financial statement and schedules of:
(a) Santa Anita Companies
(b) Santa Anita Realty Enterprises, Inc., and
(c) Santa Anita Operating Company and Subsidiaries
appearing in the above-listed entities' Annual Report on Form 10-K, as amended
by amendments on Form 10-K/A, for the year ended December 31, 1996 in the joint
Registration Statement on Form S-3 and related Prospectus filed by Meditrust
Corporation (formerly known as "Santa Anita Realty Enterprises, Inc.") and
Meditrust Operating Company (formerly known as "Santa Anita Operating Company").
Ernst & Young LLP
Los Angeles, California
November 12, 1997
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
The Managing General Partner
H-T Associates:
We consent to incorporation by reference in the Joint Registration Statement on
Form S-3 and related prospectus of Meditrust Corporation and Meditrust Operating
Company of our report dated February 10, 1997, relating to the consolidated
balance sheets of H-T Associates and subsidiary (the "Partnership") as of
December 31, 1996 and 1995, and the related consolidated statements of
operations, partners' capital (deficit) and cash flows for each of the years in
the three-year period ended December 31, 1996, which report appears in the
December 31, 1996 Joint Annual Report on Form 10-K, as amended by amendments on
Form 10-K/A, of Santa Anita Realty Enterprises, Inc. and Santa Anita Operating
Company and to the reference to our firm under the heading "Experts" in the
Joint Registration Statement and related prospectus. Our report dated February
10, 1997, contains an explanatory paragraph that states that the Partnership's
primary subsidiary is in technical default on its notes payable at December 31,
1996. As such, those notes may be callable at the lender's discretion. This
technical default raises substantial doubt about the Partnership's ability to
continue as a going concern. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
KPMG Peat Marwick LLP
San Diego, California
November 11, 1997
EXHIBIT 23.5
CONSENT OF INDEPENDENT AUDITORS
The General Partner
Anita Associates:
We consent to incorporation by reference in the Joint Registration Statement on
Form S-3 and related prospectus of Meditrust Corporation and Meditrust
Operating Company of our report dated February 7, 1997, relating to the balance
sheets of Anita Associates as of December 31, 1996 and 1995, and the related
statements of income, partners' deficit and cash flows for each of the years in
the three-year period ended December 31, 1996, which report appears in the
December 31, 1996 Joint Annual Report on Form 10-K, as amended by amendments on
Form 10-K/A, of Santa Anita Realty Enterprises, Inc. and Santa Anita Operating
Company, and to the reference to our firm under the heading "Experts" in the
Joint Registration Statement and related prospectus.
KPMG Peat Marwick LLP
San Diego, California
November 11, 1997
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
---------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
Meditrust Corporation
Meditrust Operating Company
(Exact name of obligors as specified in their respective charters)
DELAWARE Meditrust Corporation: 95-3520818
DELAWARE Meditrust Operating Company: 95-3419438
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Meditrust Corporation: 197 First Avenue, Suite 300, Needham, MA 01294
Meditrust Operating Company: 197 First Avenue, Suite 100, Needham, MA 02194
(Address of principal executive offices) (Zip Code)
Indenture Securities
(Title of indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to which it
is subject.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston,
Massachusetts.
Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance
Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers. Trustee is
authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee or of its parent, State
Street Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
1. A copy of the articles of association of the trustee as now in effect.
A
copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission as
Exhibit 1 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the Registration
Statement of Morse Shoe, Inc. (File No. 22-17940) and is
incorporated herein by reference thereto.
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the articles of association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee to
commence business was necessary or issued is on file with the
Securities and Exchange Commission as Exhibit 2 to Amendment No.
1 to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by reference
thereto.
3. A copy of the authorization of the trustee to exercise corporate trust
powers, if such authorization is not contained in the documents
specified in paragraph (1) or (2), above.
A copy of the authorization of the trustee to exercise corporate
trust powers is on file with the Securities and Exchange
Commission as Exhibit 3 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with
the Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A copy of the by-laws of the trustee, as now in effect, is on file
with the Securities and Exchange Commission as Exhibit 4 to the
Statement of Eligibility and Qualification of Trustee (Form T-1)
filed with the Registration Statement of Eastern Edison Company
(File No. 33-37823) and is incorporated herein by reference
thereto.
5. A copy of each indenture referred to in Item 4. if the obligor is in
default.
Not applicable.
<PAGE>
6. The consents of United States institutional trustees required by
Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of the Act is
annexed hereto as Exhibit 6 and made a part hereof.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority is annexed hereto as Exhibit 7 and made a
part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 12th of November 1997.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Christopher J. Lembo
------------------------------------
Christopher J. Lembo
Assistant Vice President
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, as amended, in connection with the proposed issuance by Meditrust
Corporation and Meditrust Operating Company of its Indenture Securities, we
hereby consent that reports of examination by Federal, State, Territorial or
District authorities may be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Christopher J. Lembo
---------------------------------
Christopher J. Lembo
Assistant Vice President
Dated: November 12, 1997
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business June 30, 1997, published
in accordance with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act and in accordance with a
call made by the Commissioner of Banks under General Laws, Chapter 172, Section
22(a).
Thousands of
ASSETS Dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin........... 1,842,337
Interest-bearing balances.................................... 8,771,397
Securities...................................................... 10,596,119
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary.......................... 5,953,036
Loans and lease financing receivables:
Loans and leases, net of unearned income..................... 5,769,090
Allowance for loan and lease losses.......................... 74,031
Allocated transfer risk reserve.............................. 0
Loans and leases, net of unearned income and allowances...... 5,695,059
Assets held in trading accounts................................. 916,608
Premises and fixed assets....................................... 374,999
Other real estate owned......................................... 755
Investments in unconsolidated subsidiaries...................... 28,992
Customers' liability to this bank on acceptances outstanding.... 99,209
Intangible assets............................................... 229,412
Other assets.................................................... 1,589,526
-----------
Total assets.................................................... 36,097,449
LIABILITIES
Deposits:
In domestic offices.......................................... 11,082,135
Noninterest-bearing..................................... 8,932,019
Interest-bearing........................................ 2,150,116
In foreign offices and Edge subsidiary....................... 13,811,677
Noninterest-bearing..................................... 112,281
Interest-bearing........................................ 13,699,396
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary.......................... 6,785,263
Demand notes issued to the U.S. Treasury and
Trading Liabilities............................................ 755,676
Other borrowed money............................................ 716,013
Subordinated notes and debentures............................... 0
Bank's liability on acceptances executed and outstanding........ 99,605
Other liabilities .............................................. 841,566
Total liabilities .............................................. 34,091,935
----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus................... 0
Common stock .............................................. 29,931
Surplus .............................................. 437,183
Undivided profits and capital reserves/
Net unrealized holding gains (losses)......................... 1,542,695
Cumulative foreign currency translation adjustments............. (4,295)
Total equity capital............................................ 2,005,514
-----------
Total liabilities and equity capital............................ 36,097,449
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
