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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 10, 1998
MEDITRUST CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-08131 95-3520818
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
197 First Avenue, Suite 300
Needham, MA 02194
(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 433-6000
MEDITRUST OPERATING COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 1-08132 96-3419438
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
197 First Avenue, Suite 100
Needham, MA 02194
(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 453-8062
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Item 5. Other Events
In connection with the offering by Meditrust Corporation (the
"Corporation") of up to 8,050,000 depositary shares (the "Depositary Shares"),
each representing 1/10th of a share of 9% Series A Cumulative Redeemable
Preferred Stock (the "Preferred Stock"), $.10 par value per share, of Meditrust
Corporation, the Corporation hereby files the following Exhibits: (i) the
Underwriting Agreement; (ii) Certificate of Designation for Preferred Stock;
(iii) Form of Certificate evidencing the Preferred Stock; and (iv) Form of
Deposit Agreement for Depositary Shares, including form of Depositary Receipt.
Item 7. Financial Statement and Exhibits.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
See the index to Exhibits attached hereto.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: June 16, 1998 MEDITRUST CORPORATION
By: /s/ Michael S. Benjamin
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(Signature)
Name: Michael S. Benjamin
Title: Senior Vice President,
Secretary and
Corporate Counsel
MEDITRUST OPERATING COMPANY
By: /s/ Michael Bohnen
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(Signature)
Name: Michael J. Bohnen
Title: Secretary
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Exhibit No. Description
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1.1 Underwriting Agreement
4.1 Certificate of Designation for Preferred Stock
4.2 Form of Certificate Evidencing Shares of Preferred Stock
4.3 Form of Deposit Agreement for Depositary Shares, including form
of Depositary Receipt
7,000,000 Depositary Shares
MEDITRUST CORPORATION
(a Delaware Corporation)
Each Representing 1/10th of a Share of
9% Series A Cumulative Redeemable Preferred Stock
UNDERWRITING AGREEMENT
June 10, 1998
MORGAN STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
BT ALEX. BROWN INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
Meditrust Corporation, a Delaware corporation (the "Company"), confirms its
agreement with Morgan Stanley & Co. Incorporated ("Morgan Stanley") and each of
the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters"), which term shall also include any underwriters substituted as
hereinafter provided in Section 8 hereof), for whom Morgan Stanley, PaineWebber
Incorporated, Prudential Securities Incorporated, Smith Barney Inc., BT Alex.
Brown Incorporated and Donaldson, Lufkin & Jenrette Securities Corporation are
acting as representatives (in such capacity, the "Representatives"), with
respect to the sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of depositary shares (the
"Depositary Shares"), each representing a 1/10th interest in a share of the
Company's 9% Series A Cumulative Redeemable Preferred Stock, par value $.10 per
share (the "Series A Preferred Stock"), set forth in said Schedule A, and with
respect to the grant by the Company to the Underwriters, acting severally and
not jointly, of the option described in Section 2(b) hereof to purchase all or
any part of 1,050,000 additional Depositary Shares to cover over-allotments, if
any. The aforesaid 7,000,000 Depositary Shares (the "Initial Securities") to be
purchased by the Underwriters and all or any part of the 1,050,000
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Depositary Shares subject to the option described in Section 2(b) hereof (the
"Option Securities") are hereinafter called, collectively, the "Securities."
Shares of Series A Preferred Stock to be evidenced by such Depositary Shares are
sometimes hereinafter called the "Underlying Preferred Shares."
The Underlying Preferred Shares will be issued by the Company and will be
deposited against delivery of depositary receipts (the "Depositary Receipts") to
be issued pursuant to a Deposit Agreement (the "Deposit Agreement") among the
Company, State Street Bank and Trust Company, as depositary (the "Depositary"),
and the holders from time to time of the Depositary Receipts issued thereunder.
Each Depositary Receipt will represent one or more Depositary Shares. The terms
of the Underlying Preferred Shares will be set forth in a certificate of
designations (the "Certificate of Designations") to be filed by the Company with
the Secretary of State of the State of Delaware (the "Secretary of State").
The Company and Meditrust Operating Company, a Delaware corporation (the
"OC" and, together with the Company, "The Meditrust Companies"), have entered
into an Agreement and Plan of Merger dated as of January 3, 1997 (as the same
may have been or may hereafter be amended or supplemented from time to time, the
"La Quinta Merger Agreement"), with La Quinta Inns, Inc., a Texas corporation
("La Quinta"), pursuant to which La Quinta will merge with and into the Company
with the Company being the surviving corporation (the "La Quinta Merger"). In
addition, the Company and the OC entered into an Agreement and Plan of Merger
dated as of January 11, 1998, as amended, the "Cobblestone Merger Agreement"
and, together with the La Quinta Merger Agreement, the "Merger Agreements"),
with Cobblestone Holdings, Inc., a Delaware corporation ("Cobblestone"),
pursuant to which Cobblestone was merged with and into the Company on May 29,
1998 with the Company as the surviving corporation (the "Cobblestone Merger"
and, together with the La Quinta Merger, the "Mergers").
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Company and the OC have filed with the Securities and Exchange
Commission (the "Commission") a joint registration statement on Form S-3 (Nos.
333-40055 and 333-40055-1) for the registration of, among other things, the
Securities and the Underlying Preferred Shares under the Securities Act of 1933,
as amended (the "1933 Act"), and the Company and the OC have filed such
amendments thereto as may have been required prior to the date hereof. Promptly
after execution and delivery of this Agreement, the Company will either (i)
prepare and file a prospectus supplement and prospectus in accordance with the
provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b) of
Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has
elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare
and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule
434 and Rule 424(b) or (iii) if the Company has elected to rely upon Rule 415
("Rule 415") of the 1933 Act Regulations, prepare and file a prospectus
supplement and prospectus in accordance with the provisions of Rule 415 and
424(b). The information, if any, included in the prospectus and prospectus
supplement referred to in clause (i) of the preceding sentence or in such Term
Sheet, as the case may be, that was omitted from such registration statement at
the time it became
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effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus, together with any
related prospectus supplement, used before such registration statement became
effective, and any prospectus, together with any related prospectus supplement,
that omitted, if and as applicable, the Rule 430A Information or the Rule 434
Information or that was captioned "Subject to Completion" (or that bore a
similar caption) and that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called, together with the
documents incorporated or deemed to be incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, a "preliminary prospectus."
Such registration statement, as amended (if applicable), including the exhibits
thereto, schedules thereto, if any, and the documents incorporated or deemed to
be incorporated by reference therein pursuant to Item 12 of Form S-3 under the
1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, if and as applicable, is herein called
the "Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term the "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final
prospectus and final prospectus supplement relating to the Securities, including
the documents incorporated or deemed to be incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first furnished
to the Underwriters for use in connection with the offering of the Securities,
are herein called, collectively, the "Prospectus." If Rule 434 is relied on, the
term "Prospectus" shall refer to, collectively, the Term Sheet, the preliminary
prospectus supplement dated June 2, 1998 and the prospectus dated June 2, 1998,
including the documents incorporated or deemed to be incorporated by reference
therein pursuant to Item 12 of S-3, and all references in this Agreement to the
date of the Prospectus shall mean the date of the Term Sheet. If Rule 434 is not
relied on, all references in this Agreement (including Exhibit A hereto) to the
date of the Prospectus shall mean the date of the prospectus supplement included
in the Prospectus. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy thereof filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included," "described," "set forth" or
"stated" (or other references of like import) in the Registration Statement, the
Prospectus or any preliminary prospectus shall be deemed to mean and include all
such financial statements and schedules and other information which is
incorporated or deemed to be incorporated by reference in the Registration
Statement, the Prospectus or such preliminary prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement, the Prospectus or any preliminary prospectus shall be
deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), which is incorporated or
deemed to be incorporated by reference in the Registration Statement, the
Prospectus or such preliminary prospectus, as the case may be. All references in
this agreement to "subsidiaries" of the Company shall include Cobblestone and
its subsidiaries and, for purposes of the representations and warranties of the
Company made herein, Cobblestone and its
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subsidiaries shall be deemed to have been subsidiaries of the Company for all
periods and at all dates prior to the consummation of the Cobblestone Merger.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter as of the date hereof, as of the Closing Time
(as defined below) and as of each Date of Delivery (as defined below), if any
(the date hereof, the Closing Time and each Date of Delivery, if any, being
hereinafter called, individually, a "Representation Date"), and agrees with each
Underwriter, as follows:
(1) Compliance with Registration Requirements. The Company and the OC
meet the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement and any
post-effective amendments thereto have become effective under the 1933 Act
and no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under
the 1933 Act and no proceedings for that purpose have been instituted or
are pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with. In addition, the indenture or
indentures, as the case may be, filed or incorporated by reference as
exhibits to the Registration Statement have been duly qualified under the
Trust Indenture Act of 1939, as amended (the "1939 Act").
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became or
become effective, at the time, if any, subsequent to the effective date of
the Registration Statement that the Company and the OC filed their most
recent combined Annual Report on Form 10-K or any amendment thereto with
the Commission, and at each Representation Date, the Registration
Statement, any Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and the 1939
Act and the rules and regulations of the Commission under the 1939 Act (the
"1939 Act Regulations") and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. At the date of the Prospectus, at the Closing Time and at each
Date of Delivery (if any), the Prospectus and any amendments and
supplements thereto did not and will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. If the Company elects to rely upon Rule 434 of
the 1933 Act Regulations, the Company will comply with the requirements of
Rule 434. Notwithstanding the foregoing, the representations and warranties
in this subsection (1) shall not apply to statements in or omissions from
the Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through Morgan Stanley expressly for use in the Registration
Statement or the Prospectus.
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Each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act and the 1933 Act
Regulations and each preliminary prospectus and Prospectus delivered to the
Underwriters for use in connection with the offering of Securities will, at
the time of such delivery, be identical to any electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(2) Incorporated Documents. The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the Prospectus,
at the time they were or hereafter are filed with the Commission, complied
and will comply in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission thereunder (the "1934
Act Regulations") and, when read together with the other information in the
Prospectus, at the date of the Prospectus, at the Closing Time and at each
Date of Delivery (if any), did not and will not include an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(3) Independent Accountants. The accountants who certified the
financial statements and any supporting schedules thereto included in the
Registration Statement and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(4) Financial Statements. (a) The consolidated financial statements of
the Company, the consolidated financial statements of the OC and the
combined consolidated financial statements of The Meditrust Companies
included in the Registration Statement and the Prospectus, together with
the related schedules and notes, present fairly the financial position of
the Company and its consolidated subsidiaries, the financial position of
the OC and its consolidated subsidiaries, and the combined consolidated
financial position of the Company and the OC and their respective
consolidated subsidiaries at the dates indicated and their consolidated or
combined consolidated, as the case may be, statements of income or
operations, as the case may be, stockholders' equity and cash flows for the
periods specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods involved. The supporting
schedules, if any, to such financial statements included in the
Registration Statement and the Prospectus present fairly in accordance with
GAAP the information required to be stated therein. The selected pro forma
and historical financial data and the summary pro forma and historical
financial information, if any, of the Company and The Meditrust Companies
and, if applicable, the OC included in the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements or the unaudited pro forma
financial statements, as the case may be, included in the Registration
Statement and the Prospectus. In addition, the pro forma financial
statements and the related notes thereto included in the Registration
Statement and the Prospectus present fairly the information shown therein,
have been
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prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly compiled
on the bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate to
give effect to the transactions and circumstances referred to therein.
(b) To the knowledge of the Company after due inquiry, the financial
statements of all entities other than the Company and the OC included in the
Registration Statement and the Prospectus, together with the related schedules
and notes, present fairly the respective financial positions of such entities
and their consolidated subsidiaries, if any, at the dates indicated and their
respective statements of operations, stockholders' or partners' equity (as the
case may be) and cash flows for the periods specified, each on a consolidated,
separate or combined basis, as the case may be. To the knowledge of the Company
after due inquiry, such financial statements have been prepared in conformity
with GAAP applied on a consistent basis throughout the periods involved. To the
knowledge of the Company after due inquiry, the supporting schedules, if any, to
such financial statements included in the Registration Statement and the
Prospectus present fairly in accordance with GAAP the information required to be
stated therein. To the knowledge of the Company after due inquiry, the selected
pro forma and historical financial data, if any, and the summary pro forma and
historical financial data, if any, of each such other entity included in the
Prospectus presents fairly the information shown therein and have been compiled
on a basis consistent with that of the unaudited pro forma financial statements,
if any, or audited historical financial statements of such entity, as the case
may be, included, if applicable, in the Registration Statement and the
Prospectus.
(5) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of (i) the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Company Material Adverse Effect"), (ii) the
OC and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (an "OC Material Adverse
Effect"), or (iii) to the knowledge of the Company after due inquiry, La
Quinta and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a "La Quinta Material Adverse
Effect"), (B) there have been no transactions entered into (i) by the
Company or any of its subsidiaries, other than those arising in the
ordinary course of business, which are material with respect to the Company
and its subsidiaries considered as one enterprise, (ii) by the OC or any of
its subsidiaries, other than those arising in the ordinary course of
business, which are material with respect to the OC and its subsidiaries
considered as one enterprise, or (iii) to the knowledge of the Company
after due inquiry, by La Quinta or any of its subsidiaries, other than
those arising in the ordinary course of business, which are material with
respect to La Quinta and its subsidiaries considered as one enterprise, and
(C) except for (i) regular distributions on the Company's common stock, par
value $.10 per share (the "Company Common Stock"), or on the OC's common
stock, par value $.10 per share (the "OC Common Stock" and, together with
the Company Common Stock, the "Common Stock"), in amounts per share that
are consistent with past practice, (ii) regular distributions on the
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8.5 million outstanding shares of Company Series Common Stock (as
defined below) or the 8.5 million outstanding shares of OC Series Common
Stock (as defined below) in the amounts required pursuant to their
respective certificates of designations as in effect on the date hereof or
(iii) any dividends paid on the Common Stock or the Series Common Stock (as
defined below) following the La Quinta Merger in order to distribute
earnings and profits (as defined for federal income tax purposes) inherited
by the Company from La Quinta as a result of the consummation of the La
Quinta Merger as contemplated by the Prospectus, there has been no dividend
or distribution of any kind declared, paid or made by the Company or the OC
on any class of its capital stock. As used herein, the term "Material
Adverse Effect" means a Company Material Adverse Effect or an OC Material
Adverse Effect, and statements to the effect that there has not been or
will not be a Material Adverse Effect or that certain events or
circumstances will not cause or result in a Material Adverse Effect and
other similar statements, mean that there has not or will not be, or such
event or circumstance will not cause, as the case may be, either a Company
Material Adverse Effect or an OC Material Adverse Effect or both. As used
herein, "Company Series Common Stock" means the series common stock, par
value $.10 per share, of the Company, "OC Series Common Stock" means the
series common stock, par value $.10 per share, of the OC, and "Series
Common Stock" means the Company Series Common Stock and the OC Series
Common Stock.
(6) Good Standing of the Company. The Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has power and authority to own,
lease and operate its properties and to conduct its business as described
in the Prospectus and to enter into and perform its obligations under, and
as contemplated under, this Agreement, the Certificate of Designations, the
Deposit Agreement and the La Quinta Merger Agreement. The Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership, leasing or operation of property or the
conduct of business, except where the failure to so qualify or be in good
standing would not result in a Material Adverse Effect. All of the
jurisdictions in which either the Company or the OC is qualified as a
foreign corporation to transact business are set forth in Schedule C
hereto.
(7) Good Standing of the OC. The OC has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Delaware and has power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and
to enter into and to perform its obligations under, and as contemplated
under, the La Quinta Merger Agreement. The OC is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership, leasing or operation of property or the conduct of business,
except where the failure to so qualify or be in good standing would not
result in a Material Adverse Effect.
(8) Good Standing of Subsidiaries. Each "significant subsidiary" (as
such term is defined in Rule 1-02 of Regulation S-X promulgated under the
1933 Act) of the Company and each such "significant subsidiary" of the OC
(collectively, the "Subsidiaries" and individually, a "Subsidiary",
provided that Cobblestone Golf Group,
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Inc., a Delaware corporation, shall be deemed a "Subsidiary" whether or not
it is such a "significant subsidiary"), if any, has been duly organized and
is validly existing as a corporation, limited partnership or limited
liability company, as the case may be, in good standing under the laws of
the jurisdiction of its organization, has power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation, limited
partnership or limited liability company, as the case may be, to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership, leasing or
operation of property or the conduct of business, except where the failure
to so qualify or be in good standing would not result in a Material Adverse
Effect. Each of the partnership agreements, limited liability company
agreements or other similar instruments or agreements of each Subsidiary,
if any, which is a partnership or limited liability company has been duly
authorized, executed and delivered by the Company, the OC or one of their
respective subsidiaries, as the case may be, and constitutes a valid and
binding agreement of the Company, the OC or such subsidiary, as the case
may be, enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles. Except as otherwise stated in
the Registration Statement and the Prospectus, (A) all of the issued and
outstanding capital stock of each Subsidiary that is a corporation has been
duly authorized and validly issued and is fully paid and non-assessable and
is owned by the Company or the OC, as the case may be, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity, (B) all of the issued and outstanding
limited liability company interests of each Subsidiary that is a limited
liability company have been duly authorized and validly issued (under
applicable law and the limited liability company agreement of such
Subsidiary), are fully paid and nonassessable and are owned by the Company
or the OC, as the case may be, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity, and (C) all of the issued and outstanding limited and general
partnership interests of each Subsidiary, if any, that is a partnership
have been duly authorized (if applicable) and validly issued (under
applicable law and the limited partnership agreement of such Subsidiary)
and are owned by the Company or the OC, as the case may be, directly or
through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity. All of the issued and
outstanding shares of capital stock of each Subsidiary of the Company that
is a corporation are and, at all times since the date on which such
Subsidiary was organized, have been owned by the Company, directly or
through wholly-owned subsidiaries. None of the outstanding shares of
capital stock, limited liability company interests or limited or general
partnership interests, as the case may be, of any Subsidiary was issued in
violation of preemptive or other similar rights of any securityholder of
such Subsidiary. On a pro forma combined basis and after giving effect to
the Cobblestone Merger and appropriate intercompany eliminations in
accordance with generally accepted accounting principles, the pro forma
consolidated revenue, net income, funds from operations (as defined in the
Prospectus) and assets of the Company and the Subsidiaries of the Company
were equal to at least 85% of the pro forma consolidated revenue, net
income, funds from operations and assets of the Company as of and for the
year ended December 31, 1997. Schedule C
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hereto contains a true, correct and complete list of all of the
Subsidiaries, their respective jurisdictions of incorporation and the
respective jurisdictions in which the Subsidiaries are qualified as foreign
corporations, limited liability companies or partnerships, as the case may
be, to transact business.
(9) La Quinta and Cobblestone Representations. To the knowledge of the
Company after due inquiry, all of the representations and warranties of La
Quinta set forth in the La Quinta Merger Agreement (including all schedules
thereto) are, and all of the representations and warranties of Cobblestone
set forth in the Cobblestone Merger Agreement (including all schedules
thereto) were at the time the Cobblestone Merger was consummated, true,
complete and correct.
(10) Capitalization. (a) The authorized, issued and outstanding capital
stock of the Company is as set forth in the column entitled "Corporation
Historical" under the caption "Capitalization" in the Prospectus and in the
line items under such caption (except for subsequent issuances, if any, as
contemplated under this Agreement or pursuant to reservations, agreements
or employee benefit plans described in the Prospectus or pursuant to the
exercise of convertible securities or options described in the Prospectus).
The shares of issued and outstanding capital stock of the Company and the
OC have been duly authorized and validly issued and are fully paid and
non-assessable, and none of such shares of capital stock was issued in
violation of preemptive or other similar rights of any securityholder of
the Company or the OC.
(11) Authorization of this Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(12) Authorization of Underlying Preferred Shares. The Underlying
Preferred Shares have been duly authorized by the Company and, when issued
and delivered by the Company as contemplated by this Agreement, will be
validly issued, fully paid and non-assessable and the issuance of the
Underlying Preferred Shares is not subject to preemptive or other similar
rights of any securityholder of the Company; and the Certificate of
Designations will have been duly filed with the Secretary of State prior to
the Closing Time and, if required in connection with the issuance of any
Option Securities, an appropriate amendment to the Certificate of
Designations will have been filed with the Secretary of State prior to each
Date of Delivery.
(13) Authorization of Deposit Agreement. The Deposit Agreement has been
duly authorized by the Company and, at the Closing Time and each Date of
Delivery (if any), will have been duly executed and delivered by the
Company and will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles.
(14) Depositary Shares. The deposit of the Underlying Preferred Shares
by the Company in accordance with the Deposit Agreement has been duly
authorized by the Company and, at the Closing Time and each Date of
Delivery (if any), the Underlying
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Preferred Shares represented by the Depositary Shares to be issued at the
Closing Time or on such Date of Delivery, as the case may be, will have
been deposited by the Company in accordance with the Deposit Agreement and
each Security will represent a 1/10th interest in an Underlying Preferred
Share.
(15) Depositary Receipts. The Depositary Receipts, when issued by the
Depositary pursuant to the Deposit Agreement, will entitle the holders
thereof to the rights specified therein and in the Deposit Agreement,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles.
(16) Description of the Securities. The Securities, the Underlying
Preferred Shares, the Depositary Receipts and the Deposit Agreement conform
and will conform in all material respects to the respective statements
relating thereto contained in the Prospectus and will be in substantially
the respective forms filed or incorporated by reference, as the case may
be, as exhibits to the Registration Statement.
(17) Absence of Defaults and Conflicts. Neither the Company, the OC nor
any of their respective subsidiaries is in violation of its charter or
by-laws, partnership agreement, limited liability company agreement or
other similar organizational documents or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which it is a party or by
which it or any of them may be bound, or to which any of their respective
properties or assets is subject (collectively, "Agreements and
Instruments"), except for such defaults that would not result in a Material
Adverse Effect. The execution, delivery and performance of this Agreement,
the Certificate of Designations, the Deposit Agreement and the La Quinta
Merger Agreement and the consummation of the transactions contemplated
herein and therein (including the issuance and sale of the Securities, the
issuance of the Underlying Preferred Shares and the Depositary Receipts,
the use of the proceeds from the sale of the Securities as described under
the caption "Use of Proceeds" in the Prospectus and the consummation of the
La Quinta Merger) and compliance by the parties thereto with their
respective obligations hereunder and thereunder have been duly authorized
by all necessary corporate or other action on the part of the Company and
the OC and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of,
or default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any assets,
properties or operations of the Company, the OC or any of their respective
subsidiaries pursuant to, any Agreements and Instruments (except for such
conflicts, breaches, defaults, events or liens, charges or encumbrances
that would not result in a Material Adverse Effect) nor will such action
result in any violation of the provisions of the (a) partnership agreement,
limited liability company agreement or other similar organizational
documents of any subsidiary of the Company or the OC or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company, the OC or any if their respective
subsidiaries or any of the respective assets,
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properties or operations of the Company, the OC or any of their respective
subsidiaries, except where any such violation of any applicable law,
statute, rule or regulation would not, individually or in the aggregate,
have a Material Adverse Effect or (b) the charter or by-laws of the
Company, or the OC. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company, the OC or any of their respective
subsidiaries, except for repayments required pursuant to Section 2.1.11 of
the $50,000,000 Revolving Credit Agreement dated October 23, 1997 by and
between the Company and Via Banque and Section 2.1.14 of the $315,000,000
Revolving Credit Agreement dated September 15, 1997 by and between the
Company and Fleet National Bank, as agent, and Morgan Guaranty Trust
Company of New York and First Union National Bank of North Carolina, as
co-agents for the several lending institutions named therein (collectively,
the "Credit Agreements").
(18) Absence of Labor Disputes. No labor dispute with the employees of
the Company, the OC or any of their respective subsidiaries exists or, to
the knowledge of the Company, is imminent, and the Company is not aware of
any existing or imminent labor disturbance by employees of its, the OC's or
any of their respective subsidiaries' principal tenants which, in any such
case, may reasonably be expected to result in a Material Adverse Effect.
(19) Absence of Proceedings. Except as described in the Prospectus,
there is not pending or threatened any action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or to the knowledge of the Company
threatened, against or affecting the Company, the OC or any of their
respective subsidiaries, which in any such case is required to be disclosed
in the Registration Statement or the Prospectus (other than as disclosed
therein), or which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially and
adversely affect the assets, properties or operations of the Company and
its subsidiaries considered as one enterprise or of the OC and its
subsidiaries considered as one enterprise, or the consummation of the
transactions contemplated under this Agreement, the Certificate of
Designations, the Deposit Agreement or the La Quinta Merger Agreement or
the performance by the Company or the OC of their respective obligations
hereunder or thereunder. The aggregate of all pending legal or governmental
proceedings to which the Company, the OC or any of their respective
subsidiaries is a party or of which any of their respective assets,
properties or operations is the subject, in any such case which are not
described in the Registration Statement and the Prospectus, including
ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(20) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference or deemed to be incorporated by
reference therein or to be filed as exhibits thereto which have not been so
described and filed as required.
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(21) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree
of, any court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by the Company of its obligations
under this Agreement, the Certificate of Designations or the Deposit
Agreement or in connection with the transactions contemplated hereby or
thereby except such as have been already obtained or as may be required
under state securities laws and except for the filing of the Certificate of
Designations with the Secretary of State. No filings with, or
authorization, approval, consent, license, order, registration,
qualification or decree of any court or governmental authority or agency,
domestic or foreign, is necessary or required for the performance by the
Company or the OC of their respective obligations under the La Quinta
Merger Agreement or in connection with the transactions contemplated
thereby, except such as has been obtained and except for (a) the filing
with the Commission of such reports under the 1934 Act as may be required
in connection with the La Quinta Merger Agreement and the transactions
contemplated thereby; (b) the filing of Articles of Merger with the Texas
Secretary of State in connection with the La Quinta Merger and the filing
of appropriate documents with the relevant authorities of other states in
which The Meditrust Companies are qualified to do business and such filings
with governmental entities to satisfy the applicable requirements of state
securities or blue sky laws; (c) the filing of a certificate of merger with
the Secretary of State of Delaware; (d) such filings with and approvals of
the New York Stock Exchange to permit the paired Common Stock to be issued
in the La Quinta Merger to be listed or quoted for trading thereon; (e)
such other filings and consents as may be required under any environmental
law pertaining to any notification, disclosure or required approval
necessitated by the La Quinta Merger or the transactions contemplated by
the La Quinta Merger Agreement; and (f) such consents, approvals, orders,
authorizations, registrations, declarations or filings if the failure to
make or obtain any thereof would not, individually or in the aggregate,
have a Material Adverse Effect.
(22) Possession of Licenses and Permits. The Company, the OC and their
respective subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them, except where
the failure to possess any such Governmental Licenses would not, singly or
in the aggregate, result in a Material Adverse Effect. The Company, the OC
and their respective subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to comply would not, singly or in the aggregate, result in a Material
Adverse Effect. All of the Governmental Licenses of the Company, the OC and
their respective subsidiaries are valid and in full force and effect,
except where the invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect would not result
in a Material Adverse Effect. Neither the Company, the OC nor any of their
respective subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
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(23) Title to Property. The Company, the OC and their respective
subsidiaries have good and marketable title to all real property and
improvements owned by any of them, in each case free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind, except (A) as otherwise stated in the
Registration Statement and the Prospectus or (B) those which do not, singly
or in the aggregate, materially affect the value of such property and do
not materially interfere with the use made and proposed to be made of such
property by the Company, the OC or any of their respective subsidiaries
considered as one enterprise. All of the leases and subleases material to
the business of the Company and its subsidiaries considered as one
enterprise or the OC and its subsidiaries considered as one enterprise and
under which the Company, the OC or any of their respective subsidiaries
holds properties described in the Prospectus are in full force and effect,
and neither the Company, the OC nor any of their respective subsidiaries
has received any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company, the OC or any of
their respective subsidiaries under any of the leases or subleases
mentioned above or affecting or questioning the rights of the Company, the
OC or any of their respective subsidiaries of the continued possession of
the leased or subleased premises under any such lease or sublease.
(24) Investment Company Act. The Company is not, and upon the issuance
and sale of the Securities and the Underlying Preferred Shares as herein
contemplated and the application of the net proceeds therefrom as described
in the Prospectus will not be, an "investment company" within the meaning
of the Investment Company Act of 1940, as amended (the "1940 Act").
(25) Environmental Laws. Except as otherwise stated in the Registration
Statement and the Prospectus and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company,
the OC nor any of their respective subsidiaries is in violation of any
federal, state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to the release
or threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company,
the OC and their respective subsidiaries have all permits, authorizations
and approvals required under any applicable Environmental Laws and are each
in compliance with their requirements, (C) there are no pending or
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigations or proceedings relating to any Environmental Law against the
Company, the OC or any of their respective subsidiaries and (D) there are
no events or circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental
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body or agency, against or affecting the Company, the OC or any of
their respective subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(26) Compliance with Cuba Act. If applicable, the Company has complied
with, and is and will be in compliance with, the provisions of that certain
Florida act relating to disclosure of doing business with Cuba, codified as
Section 517.075 of the Florida statutes, and the rules and regulations
thereunder or is exempt therefrom.
(27) REIT Qualification. Each of the Company and Meditrust, a
Massachusetts business trust ("Meditrust") which merged with and into the
Company with the Company as the surviving corporation (the "Santa Anita
Merger"), was organized, and the Company is organized, in conformity with
the requirements for qualification and taxation as a "real estate
investment trust" under the Internal Revenue Code of 1986, as amended, and
the rules and regulations thereunder (collectively, the "Code"); the
Company at all times has met and continues to meet, and Meditrust at all
times through the time of the Santa Anita Merger met, all of the
requirements of the Code for qualification and taxation as a "real estate
investment trust"; Meditrust's operations, assets and income enabled it to
meet the requirements for qualification as a "real estate investment trust"
under the Code; the Company's operations, assets and income have enabled it
to meet, and its proposed operations, assets and income will enable it to
meet, the requirements for qualification as a "real estate investment
trust" under the Code; and the Company is qualified as a "real estate
investment trust" under the Code and will be so qualified after
consummation of the transactions contemplated by the Prospectus and for the
taxable year in which the sale of the Securities occurs; and each
subsidiary of the Company either qualifies as a partnership for federal,
state and local income tax purposes, or as a "qualified REIT subsidiary"
within the meaning of Section 856(i) of the Code, or qualifies to be
disregarded as an entity separate from the Company or one of its
subsidiaries for federal, state and local income tax purposes. As used in
this paragraph, the term "Company" means and includes Santa Anita Realty
Enterprises, Inc., a Delaware corporation ("Realty").
(28) Mergers. The La Quinta Merger Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the
Company and the OC, enforceable in accordance with its terms, and, to the
knowledge of the Company after due inquiry, the La Quinta Merger Agreement
has been duly authorized, executed and delivered by, and is a valid and
binding agreement of La Quinta, enforceable in accordance with its terms,
except as enforcement thereof may be subject to or limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles.
The Company reasonably believes that the conditions to the La Quinta Merger
set forth in the La Quinta Merger Agreement will be satisfied, and that the
La Quinta Merger will be consummated on the terms and by the date, and as
otherwise contemplated by, the Prospectus and the La Quinta Merger
Agreement. Neither the consummation of the La Quinta Merger, nor the
failure to consummate any of the La Quinta Merger, will have a Material
Adverse Effect. On May 29, 1998, Cobblestone was merged with and into the
Company pursuant to the Cobblestone Merger Agreement, with
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the Company as the surviving corporation. The Company has received an
opinion from Cravath, Swaine & Moore that the Cobblestone Merger qualified
as a tax free reorganization under Section 368 of the Code and has
delivered a true, correct and complete copy thereof to the Underwriters.
(29) Continuing Directors. The issuance, sale and public offering of
the Securities and the Underlying Preferred Shares have been approved by a
majority of all of the "Continuing Directors" (as defined in Article Ninth
of the Company's charter).
(30) Listing. An application for the listing of the Securities on the
New York Stock Exchange (the "NYSE") has been filed.
(31) Tax Treatment of Mergers. Assuming that the La Quinta Merger is
consummated in accordance with the terms of the La Quinta Merger Agreement,
the La Quinta Merger will qualify as a tax-free reorganization under
Section 368 of the Code. The Santa Anita Merger and the Cobblestone Merger
each qualified as a tax-free reorganization under Section 368 or Section
351 of the Code.
(32) Ranking of Series A Preferred Stock. The Series A Preferred Stock
will rank, with respect to the payment of dividends and the distribution of
assets upon liquidation, dissolution or winding up of the Company, senior
to the Common Stock, senior to the Company's Series A Non-Voting
Convertible Common Stock (the "Series A Stock") and senior to the Company's
authorized but unissued Junior Participating Preferred Stock (the "Junior
Participating Preferred Stock").
(33) Private Letter Ruling. The Company has received two private letter
rulings from the Internal Revenue Service (the "IRS"), dated October 16,
1979 and January 11, 1980 (the "Private Letter Rulings"), which generally
provide that rents received by the Company from the OC or the OC's wholly
owned subsidiaries will qualify as rent from real property within the
meaning of Sections 856a(c)(2)(C), 856(c)(3)(A) and 856(d)(1) of the Code,
notwithstanding the Company's paired-share structure; the Company has at
all times operated in accordance with the Private Letter Rulings; and the
IRS has not revoked or modified the Private Letter Rulings. As used in this
paragraph, the term "Company" means and includes Realty.
(34) Section 141 of the Delaware General Corporation Law. The Company,
by resolution adopted by a majority of the whole board of directors of the
Company, has elected to be governed by Section 141(c)(2) of the General
Corporation Law of the State of Delaware and such resolution is in full
force and effect.
(35) The Company acknowledges and agrees that the payment received by
the Company for the Securities issued and sold to the Underwriters pursuant
to this Agreement shall also constitute payment for the Underlying
Preferred Shares represented by such Securities, and that the Board of
Directors of the Company or a duly authorized committee thereof has, or
prior to the Closing Time will have, adopted resolutions to the foregoing
effect.
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(c) Officers' Certificates. Any certificate signed by any officer of the
Company the OC, or any of their respective subsidiaries and delivered to the
Representatives, any Underwriter or to counsel for the Underwriters in
connection with the offering of the Securities shall be deemed a representation
and warranty by the Company to each Underwriter as to the matters covered
thereby on the date of such certificate and, unless subsequently amended or
supplemented, at each Representation Date subsequent thereto.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, severally and not jointly and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price per Security set forth in Schedule B, the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter, plus any
additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 8 hereof. The
Securities shall have the terms specified in Schedule B.
(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional 1,050,000 Depositary Shares at the
price per Depositary Share set forth in Schedule B. The option hereby granted
may be exercised in whole or in part from time to time only for the purpose of
covering over-allotments, if any, which may be made in connection with the
offering and distribution of the Initial Securities. If the Representatives, on
behalf of the Underwriters, elect to exercise such option, the Representatives
shall so notify the Company in writing not later than 30 days after the date of
this Agreement, which notice shall set forth the number of Option Securities as
to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Securities. Any such time and
date of delivery (a "Date of Delivery") shall be determined by the
Representatives, but shall not be later than ten full business days after the
exercise of said option, nor in any event prior to the Closing Time. If the
option is exercised as to all or any portion of the Option Securities, each of
the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Securities set forth in Schedule A opposite the name of
such Underwriter bears to the total number of Initial Securities, subject in
each case to such adjustments as the Representatives in their discretion shall
make to eliminate any sales or purchases of fractional Depositary Share.
(c) Payment. Payment of the purchase price for, and delivery of, the
Securities shall be made at the offices of Brown & Wood LLP, 555 California
Street, San Francisco, California 94104, or at such other place as shall be
agreed upon by the Representatives and the Company, at 9:00 A.M. (New York City
time) on the fifth business day after the date of this Agreement (unless
postponed in accordance with the provisions of Section 8 hereof), or such other
time not later than ten business days after such date as shall be agreed upon by
the Representatives and the Company (such time and date of payment and delivery
being herein called "Closing Time").
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In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of the
Securities to be purchased by them and against delivery to the Depositary of the
Underlying Preferred Shares represented by such Securities. It is understood
that each Underwriter has authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has severally
agreed to purchase. Morgan Stanley, individually and not as representative of
the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Initial Securities and the Option Securities, if any, to
be purchased by any Underwriter whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(e) Denominations; Registration. The Depositary Receipts evidencing the
Initial Securities and the Option Securities, if any, shall be in such
denominations and registered in such names as the Representatives may request in
writing at least one full business day prior to the Closing Time or the relevant
Date of Delivery, as the case may be. The Company will make the Depositary
Receipts evidencing the Initial Securities and the Option Securities, if any,
available for examination and packaging by the Representatives in The City of
New York not later than 9:00 A.M. (Eastern time) on the business day prior to
the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule
430A, Rule 434 and/or Rule 415 of the 1933 Act Regulations, if and as
applicable, and will notify the Representatives immediately, and confirm the
notice in writing, of (i) the effectiveness of any Rule 462(b) Registration
Statement or any post-effective amendment to the Registration Statement or the
filing of any amendment to the Registration Statement or any supplement or
amendment to the Prospectus, (ii) the receipt of any comments from the
Commission, (iii) any request by the Commission for any amendment to the
Registration Statement or any amendment
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or supplement to the Prospectus or for additional information, and (iv) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
Securities or the Underlying Preferred Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will make every reasonable effort to prevent the
issuance of any such stop order or other order and, if any such stop order or
other order is issued, to obtain the lifting thereof at the earliest possible
moment. The Company will promptly effect the filings necessary pursuant to Rule
424 and will take such steps as it deems necessary to ascertain promptly whether
the Prospectus transmitted for filing under Rule 424 was received for filing by
the Commission and, in the event that it was not, it will promptly file the
Prospectus.
(b) Filing of Amendments. The Company will give the Representatives notice
of its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b) of the 1933 Act Regulations), any Term
Sheet or any amendment, supplement or revision to either the prospectus included
in the Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, will
furnish the Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or counsel
for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or upon
request will deliver to the Representatives and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Representatives, without
charge, a conformed copy of the Registration Statement as originally filed and
of each amendment thereto (without exhibits) for each of the Underwriters.
Copies of the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to any electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company will deliver to each Underwriter,
without charge, as many copies of each preliminary prospectus as such
Underwriter may reasonably request, and the Company hereby consents to the use
of such copies for purposes permitted by the 1933 Act. The Company will furnish
to each Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the Prospectus as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to any electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply with
the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Registration Statement and the
Prospectus. If at any time when the Prospectus is required
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by the 1933 Act or the 1934 Act to be delivered in connection with sales of the
Securities, any event shall have occurred or condition shall exist as a result
of which it is necessary, in the opinion of counsel for the Underwriters or
counsel for the Company, to amend the Registration Statement in order that the
Registration Statement will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or to amend or supplement the
Prospectus in order that the Prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances existing at
the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of either such counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations or the 1934 Act or the
1934 Act Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company will
furnish to the Underwriters, without charge, such number of copies of such
amendment or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities and the Underlying
Preferred Shares for offering and sale under the applicable securities laws of
such states and other jurisdictions (domestic or foreign) as the Representatives
may designate and to maintain such qualifications in effect for a period of not
less than one year from the date of this Agreement; provided, however, that the
Company shall not be obligated to file any general consent to service of process
or to qualify as a corporation or as a dealer in securities in any jurisdiction
in which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Securities or any Underlying Preferred Shares
have been so qualified, the Company will file such statements and reports as may
be required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the date of this Agreement.
(g) Earnings Statement. The Company will timely file and will cause the OC
to file such reports pursuant to the 1934 Act as are necessary in order to make
generally available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated by, the
last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities and the Underlying Preferred Shares in the
manner specified in the Prospectus under "Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect the listing of
the Securities on the NYSE.
(j) Restriction on Sale of Securities. The Company agrees that, without the
prior written consent of Morgan Stanley, it will not, during the period
beginning on the date of this Agreement through and including the date which is
30 days after the date of this Agreement, (a) offer, issue, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
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option or contract to sell, grant any option, right or warrant to purchase, lend
or otherwise transfer or dispose of, directly or indirectly, any shares of
Series A Preferred Stock, any shares of any other class or series of capital
stock of the Company which is substantially similar to the Series A Preferred
Stock or any depositary shares or depositary receipts representing or evidencing
any of the foregoing (other than the Securities to be sold to the Underwriters
pursuant to this Agreement and the Underlying Preferred Shares) or (b) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of any shares of Series A
Preferred Stock, any shares of any other class or series of capital stock of the
Company which is substantially similar to the Series A Preferred Stock or any
depositary shares or depositary receipts representing or evidencing any of the
foregoing, whether any such transaction described in clause (a) or (b) of this
sentence is to be settled by delivery of Series A Preferred Stock, other
securities, in cash, or otherwise.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(l) Filings by the OC. If any amendment or supplement to the Registration
Statement or the Prospectus that the Company is required to prepare, execute,
file or deliver, as the case may be, pursuant to this Agreement or in connection
with the transactions contemplated hereby requires the consent of, or must be
prepared, executed, filed or delivered by, the OC, or if performance by the
Company of any of its obligations under or consummation of any of the
transactions contemplated by this Agreement requires any action by the OC, the
Company will cause such document to be prepared, executed, filed or delivered,
or such action to be taken, as the case may be, by the OC as and when required
pursuant to this Agreement.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement and
the Deposit Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and, if applicable, delivery to the Underwriters of this Agreement, the Deposit
Agreement and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities or the
Underlying Preferred Shares, (iii) the preparation, issuance and delivery of the
Securities, the Underlying Preferred Shares, the certificates evidencing the
Underlying Preferred Shares and the Depositary Receipts, including any transfer
taxes and any stamp or other duties payable upon the sale, issuance or delivery
of the Securities, Underlying Preferred Shares or the Depositary Receipts, (iv)
the fees and disbursements of the Company's counsel, accountants and other
advisors or agents (including transfer agents and registrars) and the fees and
disbursements of each firm of accountants referred to in Section 5(f), 5(g) and
5(k)(v), (v) the fees and expenses of the Depositary, including the fees and
disbursements of counsel for the Depositary in connection with this Agreement,
the Deposit Agreement, the Depositary Receipts and the Depositary Shares, (vi)
the qualification of the Securities and the Underlying Preferred Shares under
state securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation,
printing and delivery of the Blue Sky Survey and any Legal
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Investment Survey, and any amendment thereto, (vii) the printing and delivery to
the Underwriters of copies of each preliminary prospectus, any Term Sheet, the
Prospectus and any amendments or supplements thereto, (viii) the fees charged by
nationally recognized statistical rating organizations for the rating of the
Securities or the Underlying Preferred Shares, (ix) the fees and expenses
incurred with respect to the listing of the Securities on the NYSE, and (x) the
filing fees incident to, and the reasonable fees and disbursements of counsel to
the Underwriters in connection with, the review, if any, by the NASD of the
terms of the sale of the Securities.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
7(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Securities pursuant to this
Agreement are subject to the accuracy of the representations and warranties of
the Company contained in Section 1 hereof or in certificates of any officer of
the Company, the OC or any of their respective subsidiaries delivered pursuant
to the provisions hereof, to the performance by the Company of its covenants and
other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective under the
1933 Act and no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act and no proceedings for that
purpose shall have been initiated or be pending or threatened by the Commission,
and any request on the part of the Commission for additional information shall
have been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus supplement and, if required pursuant to Rule 424, the
related base prospectus containing information relating to the description of
the Securities and the Underlying Preferred Shares, the specific method of
distribution and similar matters shall have been filed with the Commission in
accordance with Rule 424(b)(1), (2), (3), (4) or (5), as applicable or, if the
Company has elected to rely upon Rule 434 of the 1933 Act Regulations, a Term
Sheet including the Rule 434 Information shall have been filed with the
Commission in accordance with Rule 424(b)(7).
(b) Opinion of Counsel for Company. At Closing Time, the Representatives
shall have received the favorable opinion, dated as of Closing Time, of Nutter,
McClennen & Fish, LLP, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters, to the effect set
forth in Exhibit A hereto and to such further effect as counsel to the
Underwriters may reasonably request. In giving such opinion, such counsel may
rely, as to all matters governed by the laws of jurisdictions other than the
federal law of the United States, the laws of the Commonwealth of Massachusetts,
the General Corporation Law of the State of Delaware, and the laws of the State
of Delaware with respect to limited partnerships and limited liability
companies, upon the opinions of counsel satisfactory to the Representatives.
(c) Opinion of Counsel Relating to the La Quinta Merger. At Closing Time,
the Representatives shall have received a letter from Goodwin, Procter & Hoar,
together with signed
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or reproduced copies of such letter for each of the Underwriters, to the effect
that the Underwriters may rely on the opinion, dated May 18, 1998, of Goodwin,
Procter & Hoar to the effect that, assuming the La Quinta merger is consummated
in accordance with the terms of the La Quinta Merger Agreement, the La Quinta
Merger will qualify as a tax free reorganization under Section 368 of the Code.
(d) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Brown & Wood LLP, counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters, with
respect to the incorporation of the Company, the validity of the Deposit
Agreement and the Underlying Preferred Shares, with respect to the Depository
Receipts, with respect to the Registration Statement, the Prospectus and any
amendments or supplements thereto, with respect to the matters set forth in the
penultimate paragraph of Exhibit A hereto, and with respect to such other
matters as the Representatives may reasonably request, and such counsel shall
have received such documents and information as they may reasonably request to
enable them to pass upon such matters. In giving such opinion, such counsel may
rely, as to all matters governed by the laws of jurisdictions other than the law
of the State of New York, the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representatives.
(e) Officers' Certificate. At Closing Time, there shall not have been,
since the date of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of (A) the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, (B) the
OC and its subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, or (C) La Quinta and its subsidiaries
considered as one enterprise, and the Representatives shall have received a
certificate of the President or a Vice President of the Company and of the chief
financial officer or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material adverse
change with respect to the Company and its subsidiaries considered as one
enterprise, or the OC and its subsidiaries considered as one enterprise, (ii) to
the knowledge of such officers after due inquiry, there has been no such
material adverse change with respect to La Quinta and its subsidiaries
considered as one enterprise, (iii) the representations and warranties in
Section 1 are true and correct with the same force and effect as though
expressly made at and as of the Closing Time, (iv) the Company has complied with
all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time, and (v) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been initiated or threatened by the Commission.
(f) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from each accounting firm
named in the Prospectus under the caption "Experts" or whose audit report on any
financial statements is included or incorporated by reference in the
Registration Statement or the Prospectus (collectively, the "Accounting Firms"
and, individually, an "Accounting Firm"), a letter dated such date, in form and
substance satisfactory to the Representatives, together with signed or
reproduced copies of such letter for each of the other Underwriters, containing
statements and information of the type
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ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements (including, without limitation, pro form
financial statements) and certain financial information contained in the
Registration Statement and the Prospectus. Without limitation to the foregoing,
Coopers & Lybrand L.L.P. shall deliver such a letter with respect to the
financial statements (including pro forma financial statements) and other
financial data of the Corporation, the OC and The Meditrust Companies, KPMG Peat
Marwick LLP shall deliver such a letter with respect to the financial statements
and other financial data of La Quinta and Ernst & Young LLP shall deliver such a
letter with respect to the financial statements and other financial data of
Cobblestone.
(g) Bring-down Comfort Letter. At Closing Time, the Representatives shall
have received from each Accounting Firm a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (f) of this Section 5, except that the specified date
referred to shall be a date not more than three business days prior to the
Closing Time.
(h) Ratings. At the date of this Agreement and at all times thereafter
through the Closing Time, the Securities and the Underlying Preferred Shares
shall be rated at least Ba2 by Moody's Investor's Service Inc. ("Moody's") and
at least BB+ by Standard & Poor's Corporation ("S&P"), and the Company shall
have delivered to the Representatives a letter, dated as of the Closing Time,
from each such rating agency, or other evidence satisfactory to the
Representatives, confirming that the Securities and the Underlying Preferred
Shares have such ratings. Since the time of execution and delivery of this
Agreement, there shall not have occurred a downgrading in the rating assigned to
the Securities, the Underlying Preferred Shares or any of the Company's other
securities by any "nationally recognized statistical rating organization," as
defined by the Commission for purposes of Rule 436(g)(2) of the 1933 Act
Regulations, and no such rating organization shall have publicly announced that
it has under surveillance or review its rating of the Securities, the Underlying
Preferred Shares or any of the Company's other securities.
(i) Approval of Listing. At Closing Time, the Securities shall have been
approved for listing on the NYSE, subject only to official notice of issuance.
(j) No Objection. If the Registration Statement or this Agreement has been
filed with the NASD for review, the NASD shall not have raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements and, prior to the date of this Agreement, the Representatives shall
have received a letter from the NASD to such effect.
(k) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company, the OC or any subsidiary of the Company or the OC hereunder
shall be true and correct as of each Date of Delivery and, at the relevant Date
of Delivery, the Representatives shall have received:
(i) Officer's Certificate. A certificate, dated such Date of Delivery,
of the President or a Vice President of the Company and of the chief
financial or chief
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accounting officer of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(e) hereof remains
true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of Nutter,
McClennan & Fish, LLP, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and the related Underlying Preferred Shares and
otherwise to the same effect as the opinion required by Section 5(b)
hereof.
(iii) Opinion of Counsel Regarding the La Quinta Merger. The letter of
Goodwin, Procter & Hoar, dated such Date of Delivery, to the same
effect as the letter required by Section 5(c) hereof.
(iv) Opinion of Counsel for Underwriters. The favorable opinion of
Brown & Wood LLP, counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities and the related Underlying
Preferred Shares to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(d)
hereof.
(v) Bring-down Comfort Letter. A letter from each of the Accounting
Firms referred to in Section 5(f), each in form and substance
satisfactory to the Representatives and dated such Date of Delivery,
substantially in the same form and substance as the respective letters
furnished to the Representatives pursuant to Section 5(g) hereof,
except that the "specified date" in the letters furnished pursuant to
this paragraph shall be a date not more than five days prior to such
Date of Delivery.
It shall be a further condition to the obligations of the several
Underwriters to purchase and pay for the Option Securities to be purchased on
any Date of Delivery that, (A) at the date of this Agreement and at all times
thereafter through such Date of Delivery, the Securities and the Underlying
Preferred Shares shall be rated at least Ba2 by Moody's and at least BB+ by S&P,
and the Company shall have delivered to the Representatives, on such Date of
Delivery, a letter or other evidence satisfactory to the Representatives
confirming that the Securities and the Underlying Preferred Shares have such
ratings; (B) since the time of execution and delivery of this Agreement, there
shall not have occurred a downgrading in the rating assigned to the Securities,
the Underlying Preferred Shares or any of the Company's other securities by any
"nationally recognized statistical rating organization," as defined by the
Commission for purposes of Rule 436(g)(2) of the 1933 Act Regulations, and no
such rating organization shall have publicly announced that it has under
surveillance or review its rating of the Securities, the Underlying Preferred
Shares or any of the Company's other securities; and (C) the conditions set
forth in Sections 5(l), 5(m) and 5(n) shall have been satisfied as of such Date
of Delivery.
(l) Waivers. At the Closing Time, the Representatives shall have received
(i) a waiver signed by La Quinta to the effect that La Quinta consents to the
declaration and payment of dividends on the Series A Preferred Stock and that
such declaration and payment shall not
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constitute a breach of the La Quinta Merger Agreement and (ii) a waiver or
consent signed by the requisite financial institutions parties to each of the
Credit Agreements to the effect that such financial institutions consent to the
filing of the certificates of designation for the Series A Preferred Stock and
for the Series A Non-Voting Convertible Common Stock of the Company and the OC,
and all such waivers and consents shall be in form and substance satisfactory to
the Representatives and in full force and effect at the Closing Time and at each
Date of Delivery, if any.
(m) Certificate of Designations. At Closing Time and each Date of Delivery,
if any, the Representatives shall have received evidence, in form and substance
satisfactory to them, that the Certificate of Designations and any necessary or
appropriate amendments or supplements thereto shall have been duly filed with
the Secretary of State.
(n) Additional Documents. At Closing Time and at each Date of Delivery, if
any, counsel for the Underwriters shall have been furnished with such documents
and opinions as they may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities and the Underlying Preferred Shares as
herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities and the Underlying Preferred Shares as
herein contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
(o) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters to purchase the relevant Option Securities, may be
terminated by the Representatives by notice to the Company at any time at or
prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1 and 6 shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any
and all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein.
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(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same
extent as the foregoing indemnity from the Company to such Underwriter, but only
with reference to information relating to such Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to Section 6(a) or 6(b), such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Morgan Stanley, in the case of parties indemnified
pursuant to Section 6(a), and by the Company, in the case of parties indemnified
pursuant to Section 6(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in Section 6(a) or 6(b)
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or
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liabilities referred to therein, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
or (ii) if the allocation provided by clause 6(d)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 6(d)(i) above but also the relative
fault of the Company on the one hand and of the Underwriters on the other hand
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other hand in connection with the offering of the
Securities shall be deemed to be in the same respective proportions as the net
proceeds from the offering of the Securities (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate public offering price of the
Securities as set forth in such table. The relative fault of the Company on the
one hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 6 are several in proportion
to the respective number of Securities they have purchased hereunder, and not
joint.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 6 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 6(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 6 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any indemnified party
at law or in equity.
(f) The indemnity and contribution provisions contained in this Section 6
and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person
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controlling any Underwriter or by or on behalf of the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Securities.
SECTION 7. Termination.
(a) General. The Representatives may terminate this Agreement, by notice to
the Company, at any time at or prior to the Closing Time if (i) there has been,
since the time of execution of this Agreement or since the respective dates as
of which information is given in the Prospectus, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of (A) the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, (B) The
Meditrust Companies and their respective subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (C) La
Quinta and its subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business, (ii) there has occurred any material adverse
change in the financial markets in the United States or any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representatives, impracticable to
market the Securities or to enforce contracts for the sale of the Securities, or
(iii) trading in any securities of the Company has been suspended or limited by
the Commission or the New York Stock Exchange, or if trading generally on the
New York Stock Exchange or the American Stock Exchange or in the Nasdaq National
Market has been suspended or limited, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the NASD or any other
governmental authority, or (iv) a banking moratorium has been declared by either
Federal or New York authorities, or (v) since the time of execution and delivery
of this Agreement, there has occurred a downgrading in the rating assigned to
the Securities, the Underlying Preferred Shares or any of the Company's other
securities by any nationally recognized statistical rating organization, or such
securities rating organization has publicly announced that it has under
surveillance or review its rating of the Securities, the Underlying Preferred
Shares or any of the Company's other securities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section
7, such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1 and
6 shall survive such termination and remain in full force and effect.
SECTION 8. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Time or any Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), then the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
28
<PAGE>
(a) if the number of Defaulted Securities does not exceed 10% of the number
of Securities to be purchased on such date pursuant to this Agreement, the
non-defaulting Underwriters shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations under this Agreement bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date pursuant to this Agreement, this
Agreement or, with respect to any Date of Delivery which occurs after the
Closing Time, the obligations of the Underwriters to purchase and of the Company
to sell the Option Securities to be purchased and sold on such Date of Delivery
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company, except that, in the case of any such termination of this
Agreement, the provisions of Sections 1, 4 and 6 hereof shall survive such
termination and, in the case of any termination of the obligations of the
Underwriters to purchase and of the Company to sell Option Securities on any
Date of Delivery which occurs after the Closing Time, all of the provisions of
this Agreement shall survive such termination.
No action taken pursuant to this Section 8 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligations of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company shall have the
right to postpone the Closing Time or the relevant Date of Delivery, as the case
may be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or the Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 8.
SECTION 9. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to the Underwriters shall be
directed to them c/o Morgan Stanley & Co. Incorporated, 1585 Broadway, New York,
New York 10036, Attention: Michael Fusco; and notices to the Company shall be
directed to it at Meditrust Corporation, 197 First Avenue, Needham Heights,
Massachusetts 02194-9127, attention of David F. Benson, President, with a copy
to Nutter, McClennen & Fish, LLP, One International Place, Boston Massachusetts
02110-2699, Attention: Michael J. Bohnen, Esquire.
SECTION 10. Parties. This Agreement shall each inure to the benefit of and
be binding upon the Company, the Underwriters and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters
and the Company and their respective successors and the controlling persons and
officers and directors referred to in Section 6 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties hereto and their respective successors, and
said controlling persons and officers and directors and their heirs and
29
<PAGE>
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 11. GOVERNING LAW AND TIME. THIS UNDERWRITING AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
UNLESS OTHERWISE EXPRESSLY STATED, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 12. Effect of Headings. The Article and Section headings herein are
for convenience only and shall not affect the construction hereof.
30
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this Agreement, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
MEDITRUST CORPORATION
By: /s/ David F. Benson
-----------------------
Name: David F. Benson
Title: President
CONFIRMED AND ACCEPTED,
as of the date first above written:
MORGAN STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
BT ALEX. BROWN INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: MORGAN STANLEY & CO. INCORPORATED
By: /s/ Michael Fusco
-------------------
Name: Michael Fusco
Title: Vice President
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
31
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Name of Underwriter Securities
------------------- ----------
<S> <C>
Morgan Stanley & Co. Incorporated 1,253,000
PaineWebber Incorporated 1,253,000
Prudential Securities Incorporated 1,253,000
Smith Barney Inc. 1,253,000
BT Alex. Brown Incorporated 416,500
Donaldson, Lufkin & Jenrette Securities Corporation 416,500
CIBC Oppenheimer Corp. 70,000
EVEREN Securities, Inc. 70,000
Raymond James & Associates, Inc. 70,000
Tucker Anthony Incorporated 70,000
Advest, Inc. 35,000
Cowen & Company 35,000
Craige Incorporated 35,000
Crowell, Weedon & Co. 35,000
Dain Rauscher Incorporated 35,000
Davenport & Company LLC 35,000
Fahnestock & Co. Inc. 35,000
Fidelity Capital Markets - a division of National Financial Services Corporation 35,000
First Albany Corporation 35,000
Gibraltar Securities Co. 35,000
Interstate/Johnson Lane Corporation 35,000
Janney Montgomery Scott Inc. 35,000
J.C. Bradford & Co. 35,000
J.J.B. Hilliard, W.L. Lyons, Inc. 35,000
Legg Mason Wood Walker, Incorporated 35,000
McDonald & Company Securities, Inc. 35,000
McGinn, Smith & Co., Inc. 35,000
Morgan Keegan & Company, Inc. 35,000
The Ohio Company 35,000
Piper Jaffray Inc. 35,000
The Robinson-Humphrey Company, LLC 35,000
Roney & Co., L.L.C. 35,000
Scott & Stringfellow, Inc. 35,000
Stifel, Nicolaus & Company, Incorporated 35,000
Sutro & Stringfellow, Inc. 35,000
---------
Total 7,000,000
=========
</TABLE>
Sch A-1
<PAGE>
SCHEDULE B
1. The initial public offering price for the Securities shall be $25 per
Depositary Share, plus accrued dividends from June 17, 1998.
2. The purchase price for the Securities to be paid by the several
Underwriters shall be $24.2125 per Depositary Share, being an amount equal to
the initial public offering price set forth above less $.7875 per Depositary
Share, plus, in the case of any Securities purchased by the Underwriters on a
Date of Delivery which is after the Closing Time, accrued dividends from June
17, 1998.
3. The Underlying Preferred Shares and the Securities shall have the
following terms:
Underlying Preferred Shares
- ---------------------------
Dividend rate (or formula) per share: 9% of the liquidation preference per annum
(equivalent to $22.50 per share per annum)
Dividend payment dates: March 31, June 30, September 30 and December 31,
commencing September 30, 1998.
Liquidation preference per share: $250
Redemption provisions: as set forth in the preliminary prospectus supplement
dated June 2, 1998
Sinking fund requirements: None
Conversion provisions: None, except to the extent that the Underlying Preferred
Shares may be convertible into Excess Stock (as defined in the Prospectus) if
Article Thirteenth (as defined in the Prospectus) is added to the certificate
of incorporation of the Company as contemplated by the Prospectus.
Depositary Shares
- -----------------
Dividend rate (or formula) per share: $2.25 per Depositary Share per annum
Dividend payment dates: March 31, June 30, September 30 and December 31,
commencing September 30, 1998.
Liquidation preference per depositary share: $25
Redemption provisions: as set forth in the preliminary prospectus supplement
dated June 2, 1998
Sinking fund requirements: None
Conversion provisions: None, except to the extent that the Underlying Preferred
Shares may be convertible into Excess Stock (as defined in the Prospectus) if
Article Thirteenth (as defined in the Prospectus) is added to the certificate
of incorporation of the Company as contemplated by the Prospectus.
Sch B-1
<PAGE>
SCHEDULE C
Jurisdictions in Which the Company is Qualified
as a Foreign Corporation to Transact Business
- ---------------------------------------------
Florida*
Massachusetts*
New Jersey
Ohio
Jurisdictions in Which the OC is Qualified
as a Foreign Corporation to Transact Business
- ---------------------------------------------
California
Subsidiaries and Jurisdictions in Which the Subsidiaries are
Organized and Qualified to Transact Business as Foreign Entities
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
Jurisdiction of
Name of Subsidiary Organization Jurisdictions Where Qualified
------------------ ------------ -----------------------------
<S> <C> <C> <C>
Meditrust Company LLC Delaware Alabama Missouri
Arizona New Hampshire
Arkansas New Jersey
California New York
Colorado Nevada
Florida North Carolina
Kansas Oregon
Kentucky Rhode Island
Idaho South Carolina
Illinois Tennessee
Indiana Texas
Ohio Utah
Pennsylvania Virginia
Maryland Washington
Massachusetts West Virginia
Michigan Wisconsin
Mississippi Wyoming
</TABLE>
- -----------------
* Indicates a jurisdiction in which the Company is not in good standing as
of the date of this Agreement, but will be in good standing as of the
Closing Date and any Option Closing Date, except for the State of Florida.
Sch C-1
<PAGE>
<TABLE>
<CAPTION>
Jurisdiction of
Name of Subsidiary Organization Jurisdictions Where Qualified
------------------ --------------- -----------------------------
<S> <C> <C> <C>
Meditrust Mortgage Investments, Inc. Delaware Washington Massachusetts
Arizona California
Tennessee Texas
Connecticut
Cobblestone Golf Group, Inc. Delaware California Florida
Georgia Texas
MOC Golf Company Delaware None
Los Angeles Turf Club, Incorporated California None
</TABLE>
Sch C-2
<PAGE>
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(1) Each of the Company and the OC has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware.
(2) Each of the Company and the OC has power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus.
(3) The Company has power and authority and to enter into and perform its
obligations under the Underwriting Agreement, the Certificate of Designations,
the Deposit Agreement and each of the Company and the OC has power and authority
to enter into and to perform its obligations under the La Quinta Merger
Agreement.
(4) Each of the Company and the OC is duly qualified as a foreign
corporation to transact business and is in good standing in each of the
jurisdictions listed opposite its name in Schedule C to the Underwriting
Agreement.
(5) Each Subsidiary has been duly organized and is validly existing as a
corporation or limited liability company, as the case may be, in good standing
under the laws of the jurisdiction of its organization, has power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation or
limited liability company, as the case may be, to transact business and is in
good standing in each of the jurisdictions listed opposite its name in Schedule
C to the Underwriting Agreement. Each of the limited liability company
agreements or other similar instruments or agreements of each Subsidiary which
is a limited liability company has been duly authorized, executed and delivered
by the Company, the OC or one of their respective subsidiaries, as the case may
be, and constitutes a valid and binding agreement of the Company, the OC or such
subsidiary, as the case may be, enforceable in accordance with its terms, except
as enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles. Except as otherwise stated in the
Registration Statement and the Prospectus, (A) all of the issued and outstanding
capital stock of each Subsidiary that is a corporation has been duly authorized
and validly issued and is fully paid and non-assessable and, to the best of our
knowledge, is owned by the Company or the OC, as the case may be, directly or
through subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity, and (B) all of the issued and outstanding
limited liability company interests of each Subsidiary that is a limited
liability company have been duly authorized and validly issued (under applicable
law and the limited liability company agreement of such Subsidiary), are fully
paid and nonassessable and, to the best of our knowledge, are owned by the
Company or the OC, as the case may be, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity. To our knowledge, all of the issued and outstanding shares of capital
stock of each Subsidiary of the Company that is a corporation are and, at all
times since the date on which
A-1
<PAGE>
such Subsidiary was organized or became a Subsidiary, have been owned by the
Company, directly or through wholly-owned Subsidiaries. None of the outstanding
shares of capital stock or limited liability company interests, as the case may
be, of any Subsidiary was issued in violation of preemptive or other similar
rights of any securityholder of such Subsidiary arising by operation of law,
under the charter or by-laws, limited liability company agreement or other
organizational documents of such Subsidiary or, to our knowledge, otherwise.
(6) The authorized capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization." All of the issued and outstanding
shares of capital stock of the Company have been duly authorized and validly
issued by the Company and are fully paid and non-assessable, and none of such
shares was issued in violation of any preemptive rights of any securityholder of
the Company arising by operation of law, under the charter or by-laws of the
Company or, to our knowledge, otherwise.
(7) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(8) The Underlying Preferred Shares have been duly authorized by the
Company and, when issued and delivered by the Company as contemplated by the
Underwriting Agreement against payment of the consideration for the Depository
Shares representing such Underlying Preferred Shares as specified in the
Underwriting Agreement, will be validly issued, fully paid and non-assessable
and the issuance of the Underlying Preferred Shares is not subject to preemptive
or other similar rights of any securityholder of the Company arising by
operation of law, under the charter or by-laws of the Company or, to our
knowledge, otherwise. The form of certificate used to evidence the Series A
Preferred Stock is in due and proper form and complies with all applicable
statutory requirements and with any applicable requirements of the certificate
of incorporation or by-laws of the Company.
(9) The Deposit Agreement has been duly authorized, executed and delivered
by the Company and (assuming the due authorization, execution and delivery
thereof by the Depositary) constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
enforcement of creditors' rights generally or by general equitable principles.
(10) The deposit of the Underlying Preferred Shares by the Company in
accordance with the Deposit Agreement has been duly authorized by the Company.
(11) Assuming the Deposit Agreement has been duly authorized, executed and
delivered by the Depositary, and further assuming the due execution, issuance
and delivery of the Depositary Receipts evidencing the Securities by the
Depositary pursuant to the Deposit Agreement against the deposit of duly
authorized and validly issued, fully paid and nonassessable Underlying Preferred
Shares, the Depositary Receipts will entitle the holders thereof to the rights
specified therein and in the Deposit Agreement, except as enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting enforcement of creditors' rights generally
or by general equitable principles.
A-2
<PAGE>
(12) The information in the prospectus supplement dated June 10, 1998
relating to the Securities under "Certain Recent Developments" (fifth paragraph
only), Description of the Series A Preferred Stock and Depositary Shares,"
"Restrictions on Ownership and Transfer," "Certain Federal Income Tax
Considerations" and in the first seven paragraphs under the caption "Unaudited
Pro Forma Financial Statements," and the information in the related prospectus
dated June 10, 1998 under the captions "Risk Factors--Tax Risks Related to Real
Estate Investment Trusts," "Risk Factors--ERISA Plans may be Affected by Certain
Ownership of REIT Securities," "Risk Factors--Risks Related to Restrictions on
Dividends and Distributions; Risks Relating to Restrictive Debt Covenants and
Compliance with Debt Instruments," "Risk Factors--Restrictions on Transfer of
Capital Stock; Repurchase of Capital Stock," "The Meditrust Companies--Recent
Developments" (the second paragraph only), "Description of Capital Stock,"
"Description of Paired Common Stock," "Description of Preferred Stock,"
"Description of Depositary Shares," "Description of Series Common Stock," and
"Federal Income Tax Considerations," in each case to the extent that it
constitutes matters of law, summaries of legal matters or legal proceedings,
summaries of the Company's or the OC's certificate of incorporation (including,
without limitation, the Certificate of Designations) or bylaws, summaries of the
Depositary Receipts, Depositary Shares, Deposit Agreement, Series A Preferred
Stock, the Merger Agreements, or other instruments or agreements, or legal
conclusions, has been reviewed by us and is correct in all material respects.
(13) Since the commencement of its taxable year ended December 31, 1992,
through its taxable year ended December 31, 1997, the Company has been organized
and operated in conformity with the requirements for qualification and taxation
as a real estate investment trust as set forth in Sections 856 through 860 of
the Code and the regulations thereunder. The Company's organization and proposed
method of operation as set forth in the Officer's Certificate attached hereto as
Exhibit A will enable it to continue to meet the requirements for qualification
and taxation as a real estate investment trust under the Code. As used in this
paragraph, the term "Company" means and includes Santa Anita Realty Enterprises,
Inc., a Delaware corporation ("Realty").
(14) Since the commencement of its taxable year ended December 31, 1989
through the effective time of the Santa Anita Merger, Meditrust, a Massachusetts
business trust, was organized and operated in conformity with the requirements
for qualification as a real estate investment trust set forth in Sections 856
through 860 of the Code and the regulations thereunder.
(15) To the best of our knowledge, neither the Company, the OC nor any of
their respective Subsidiaries is in violation of its charter or by-laws, limited
liability company agreement or other similar organizational documents and no
default by the Company, the OC or any of their respective Subsidiaries exists in
the due performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument that is described or
referred to in the Registration Statement or the Prospectus or filed or
incorporated by reference as an exhibit to the Registration Statement.
(16) The execution, delivery and performance of the Underwriting Agreement,
the Certificate of Designations, the Deposit Agreement and the La Quinta Merger
Agreement and
A-3
<PAGE>
the consummation of the transactions contemplated therein (including the
issuance and sale of the Securities, the issuance of the Underlying Preferred
Shares and the Depositary Receipts, the use of the proceeds from the sale of the
Securities as described under the caption "Use of Proceeds" in the Prospectus
and the consummation of the La Quinta Merger) and compliance by the Company and
the OC with their respective obligations thereunder have been duly authorized by
all necessary corporate action on the part of the Company and the OC and do not
and will not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment Event
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, the OC or any of their
respective Subsidiaries pursuant to, the contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other agreement or
instrument, known to us, to which the Company, the OC or any of their respective
Subsidiaries is a party or by which any of them may be bound, or to which any of
the assets, properties or operations of the Company, the OC or any of their
respective Subsidiaries is subject, except for such conflicts, breaches,
defaults, events or liens, charges or encumbrances that would not result in a
Material Adverse Effect, nor will such action result in any violation of the
provisions of the charter or by-laws, limited liability company agreement or
other similar organizational documents of the Company, the OC or any of their
respective Subsidiaries or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company, the OC or any of their respective Subsidiaries or any of their assets,
properties or operations.
(17) To the best of our knowledge (without having performed any docket
searches) and other than as set forth in the Prospectus, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation to which the
Company, the OC or any of their respective subsidiaries is a party or to which
the assets, properties or operations of the Company, the OC or any of their
respective subsidiaries is subject, before or by any court or governmental
agency or body, domestic or foreign, which might reasonably be expected to
result in a Material Adverse Effect or which might reasonably be expected to
materially and adversely affect the assets, properties or operations of the
Company and its subsidiaries taken as a whole or the OC and its subsidiaries
taken as a whole or the consummation of the transactions contemplated by the
Underwriting Agreement, the Certificate of Designations, the Deposit Agreement,
the La Quinta Merger Agreement or the performance by the Company or the OC of
their respective obligations thereunder.
(18) The Registration Statement has been declared effective under the 1933
Act. To the best of our knowledge, any required filing of the Prospectus
pursuant to Rule 424(b) has been made in the manner and within the time period
required by Rule 424(b). To the best of our knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued under the 1933
Act and no proceedings for that purpose have been initiated or are pending or
threatened by the Commission.
(19) The Registration Statement and the Prospectus, excluding the documents
incorporated or deemed to be incorporated by reference therein, and each
amendment or supplement to the Registration Statement or Prospectus, excluding
the documents incorporated or deemed to be incorporated by reference therein, as
of their respective effective or issue dates (other than the financial
statements and supporting schedules included therein or omitted
A-4
<PAGE>
therefrom and any trustee's statement of eligibility on Form T-1 (a "Form T-1"),
as to which we express no opinion) complied as to form in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations.
(20) The documents incorporated or deemed to be incorporated by reference
in the Prospectus (other than the financial statements and supporting schedules
included therein or omitted therefrom, as to which we express no opinion), when
they were filed with the Commission, complied as to form in all material
respects with the requirements of the 1934 Act and the 1934 Act Regulations.
(21) To our knowledge, no filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, is necessary or required
for the performance by the Company of its obligations under the Underwriting
Agreement, the Certificate of Designations or the Deposit Agreement, or in
connection with the transactions contemplated thereby, other than (i) the filing
of the Certificate of Designation or, if applicable, an amendment thereto with
the Secretary of State (which filing has been duly made in accordance with the
provisions of the DGCL), (ii) as required under the 1933 Act, the 1933 Act
Regulations, the 1934 Act, the 1934 Act Regulations, the 1939 Act and the 1939
Act Regulations, which have been made or obtained, as the case may be, and (iii)
such as may be required under state securities or blue sky laws.
(22) The Company is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(23) The La Quinta Merger Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company and the OC,
enforceable in accordance with its terms, except as enforcement thereof may be
subject to or limited by bankruptcy, insolvency, reorganization, moratorium, or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles. To our knowledge, no filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or foreign,
is necessary or required for the consummation of the La Quinta Merger, except
for those listed in Section 1(a)(21) of the Underwriting Agreement. On May 29,
1998, Cobblestone merged with and into the Company, with the Company as the
surviving corporation.
(24) The issuance, sale and public offering of the Securities and the
Underlying Preferred Shares have been approved by a majority of all of the
"Continuing Directors" (as defined in Article Ninth of the Company's charter).
(25) An application for the listing of the Securities on the NYSE has been
filed.
(26) The Santa Anita Merger qualified as a tax-free reorganization under
Section 368 of the Code.
(27) The Series A Preferred Stock will rank, with respect to the payment of
dividends and the distribution of assets upon liquidation, dissolution or
winding up of the Company, senior to the Common Stock, senior to the Series A
Stock and senior to the Junior Participating Preferred Stock.
A-5
<PAGE>
As used in this opinion the term "Subsidiary" shall mean (a) with respect
to the OC, (i) MOC Golf Company, a Delaware corporation, and (ii) the Los
Angeles Turf Club, Incorporated, a Delaware corporation, and (b) with respect to
the Company, (i) Meditrust Mortgage Investments, a Delaware corporation, (ii)
Cobblestone Golf Group, Inc., a Delaware corporation, and (iii) Meditrust
Company LLC, a Delaware limited liability company.
In addition, we have discussed with your representatives and officers and
representatives of and the accountants for the Company the contents of the
Registration Statement and Prospectus and any amendment or supplement thereto
and related matters and although we are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and Prospectus and any amendment or
supplement thereto (except for those referred to in paragraph 12 above), on the
basis of the foregoing (relying as to materiality to a large extent as to
matters of fact on representations of officers or other representatives of the
Company) no facts have come to our attention which lead us to believe that the
Registration Statement or any further amendment thereto made by the Company
prior to the date hereof (other than the financial statements, related schedules
and other financial and statistical data therein and any Form T-1, as to which
we express no opinion), at the time the Registration Statement or any such
amendment became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus, as amended or
supplemented if applicable (other than the financial statements, related
schedules and other financial and statistical data therein, as to which we
express no opinion), as of its date or as of the date of this opinion, contained
or contains an untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and we do not
know of any contracts or other documents of a character required to be filed as
an exhibit to the Registration Statement or required to be incorporated by
reference into the Prospectus or required to be described in the Registration
Statement or the Prospectus which are not filed or incorporated by reference or
described as required.
Such opinion shall not state that it is to be governed or qualified by, or
that it is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
A-6
MEDITRUST CORPORATION
CERTIFICATE OF THE POWERS, DESIGNATIONS,
PREFERENCES AND RIGHTS OF THE
9% SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK
PAR VALUE $.10 PER SHARE
LIQUIDATION VALUE $250 PER SHARE
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
The undersigned, the President of Meditrust Corporation, a Delaware
corporation, DOES HEREBY CERTIFY that the following resolutions have been duly
adopted by a duly authorized committee of the board of directors of the
Corporation:
RESOLVED, that pursuant to the authority expressly granted to and vested in
the board of directors of Meditrust Corporation, a Delaware corporation (the
"Corporation"), by the provisions of the Corporation's Restated Certificate of
Incorporation (as the same may be further amended, supplemented or restated from
time to time and including the Certificate of Designation (as defined below) and
any other certificates of designation forming a part thereof, the "Certificate
of Incorporation"), which authority has been delegated by the board of directors
to this duly authorized committee (the "Preferred Stock Committee") of the board
of directors, this Preferred Stock Committee hereby authorizes the issuance of a
series (this "Series") of the preferred stock, par value $.10 per share (the
"Preferred Stock"), of the Corporation, and hereby fixes the powers,
designations, preferences and relative, participating, optional or other special
rights, and the qualifications or restrictions, of the shares of this Series (in
addition to the powers, preferences and relative, participating, optional or
other special rights, and the qualifications or restrictions thereof, set forth
in the Certificate of Incorporation which are applicable to this Series of
Preferred Stock) as follows:
I.
(a) Title. The Series of Preferred Stock is hereby designated as the "9%
Series A Cumulative Redeemable Preferred Stock" (the "Series A Preferred
Stock").
(b) Number. The number of authorized shares of Series A Preferred Stock
shall be 805,000.
(c) Ranking. In respect of rights to the payment of dividends and the
distribution of assets in the event of any liquidation, dissolution or winding
up of the Corporation, the Series A Preferred Stock shall rank (i) senior to the
Corporation's common stock, par value $.10 per share (the "Common Stock"),
senior to the Corporation's Series A Non-Voting Convertible Common Stock, par
value $.10 per share (the "Series A Common Stock"), senior to the Corporation's
Junior Participating Preferred Stock, par value $.10 per share (the "Junior
Preferred Stock"), and senior to any other class or series of capital stock of
the Corporation other than capital stock referred to in clauses (ii) and (iii)
of this sentence, (ii) on a parity with any class or series of capital stock of
the Corporation the terms of which
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specifically provide that such class or series of capital stock ranks on a
parity with the Series A Preferred Stock in respect of rights to the payment of
dividends and the distribution of assets in the event of any liquidation,
dissolution or winding up of the Corporation, and (iii) junior to any class or
series of capital stock of the Corporation the terms of which specifically
provide that such class or series of capital stock ranks senior to the Series A
Preferred Stock in respect of rights to the payment of dividends and the
distribution of assets in the event of any liquidation, dissolution or winding
up of the Corporation. The term "capital stock" does not include convertible
debt securities.
Without limitation to the provisions of the preceding paragraph, the Series
A Preferred Stock shall rank, in respect of rights to the payment of dividends
and the distribution of assets in the event of any liquidation, dissolution or
winding up of the Corporation, (a) senior to any shares of Excess Stock (as
defined below) issued upon conversion of any capital stock referred to in clause
(i) of the preceding paragraph, (b) on a parity with any shares of Excess Stock
issued upon conversion of any capital stock referred to in clause (ii) of the
preceding paragraph and (c) junior to any shares of Excess Stock issued upon
conversion of any capital stock referred to in clause (iii) of the preceding
paragraph.
(d) Dividends.
(i) Subject to the preferential rights of the holders of any class or
series of capital stock of the Corporation ranking prior to the Series A
Preferred Stock as to dividends, the holders of the then outstanding shares of
Series A Preferred Stock shall be entitled to receive, when, as and if declared
by the board of directors of the Corporation or any duly authorized committee
thereof (collectively, the "Board of Directors"), out of funds legally available
for the payment of dividends, cumulative cash dividends at the rate of 9% per
annum of the $250.00 per share liquidation preference of the Series A Preferred
Stock (equivalent to an annual rate of $22.50 per share). Such dividends shall
accrue daily, shall accrue and be cumulative from June 17, 1998 (the "Original
Issue Date") and shall be payable quarterly in arrears in cash on March 31, June
30, September 30 and December 31 (each, a "Dividend Payment Date") of each year,
commencing September 30, 1998; provided that if any Dividend Payment Date is not
a Business Day (as hereinafter defined), then the dividend which would otherwise
have been payable on such Dividend Payment Date may be paid on the next
succeeding Business Day with the same force and effect as if paid on such
Dividend Payment Date and no interest or additional dividends or other sum shall
accrue on the amount so payable for the period from and after such Dividend
Payment Date to such next succeeding Business Date. The period from and
including the Original Issue Date to but excluding the first Dividend Payment
Date, and each subsequent period from and including a Dividend Payment Date to
but excluding the next succeeding Dividend Payment Date, is hereinafter called a
"Dividend Period". Dividends shall be payable to holders of record as they
appear in the stock transfer books of the Corporation at the close of business
on the applicable record date (each, a "Record Date"), which shall be the 15th
day of the calendar month in which the applicable Dividend Payment Date falls or
such other date
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designated by the Board of Directors of the Corporation for the payment of
dividends that is not more than 30 nor less than ten days prior to such Dividend
Payment Date. The amount of any dividend payable for any Dividend Period, or
portion thereof, shall be computed on the basis of a 360-day year consisting of
twelve 30-day months, it being understood that the amount of the dividend
payable per share of Series A Preferred Stock for each full Dividend Period
shall be computed by dividing the annual dividend rate of $22.50 per share by
four (it being further understood that the dividend payable on September 30,
1998 shall be for more than a full Dividend Period). The dividends payable on
any Dividend Payment Date or any other date shall include dividends accrued to
but excluding such Dividend Payment Date or other date, as the case may be.
"Business Day" shall mean any day, other than a Saturday or Sunday, that is
not a day on which banking institutions in The City of New York are authorized
or required by law, regulation or executive order to close. All references
herein to "accrued and unpaid" dividends on the Series A Preferred Stock (and
all references of like import) shall include, unless otherwise expressly stated
or the context otherwise requires, accumulated dividends, if any, on the Series
A Preferred Stock; and all references herein to "accrued and unpaid" dividends
on any other class or series of capital stock of the Corporation shall include,
if (and only if) such class or series of capital stock provides for cumulative
dividends and unless otherwise expressly stated or the context otherwise
requires, accumulated dividends, if any, thereon.
(ii) If any shares of Series A Preferred Stock are outstanding, no full
dividends will be declared or paid or set apart for payment on any capital stock
of the Corporation of any other class or series ranking, as to dividends, on a
parity with or junior to the Series A Preferred Stock for any period unless full
cumulative dividends have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for such payment
on the Series A Preferred Stock for all past Dividend Periods (including,
without limitation, any Dividend Period terminating on the date upon which the
dividends on such other capital stock are declared or paid or set apart for
payment, as the case may be). When dividends are not paid in full (or a sum
sufficient for such full payment is not set apart therefor) upon the Series A
Preferred Stock and the shares of any other class or series of capital stock of
the Corporation ranking on a parity as to dividends with the Series A Preferred
Stock, all dividends declared upon the Series A Preferred Stock and any other
class or series of capital stock of the Corporation ranking on a parity as to
dividends with the Series A Preferred Stock shall be declared pro rata so that
the amount of dividends declared per share of Series A Preferred Stock and such
other class or series of capital stock of the Corporation shall in all cases
bear to each other the same ratio that accrued and unpaid dividends per share on
the shares of Series A Preferred Stock and such other class or series of capital
stock of the Corporation bear to each other.
Except as provided in the immediately preceding paragraph, unless full
cumulative dividends on the Series A Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on
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the Series A Preferred Stock for all past Dividend Periods (including, without
limitation, any Dividend Period terminating on the applicable Subject Date (as
defined below)), (A) no dividends (other than in shares of, or options, warrants
or rights to subscribe for or purchase shares of, Common Stock or any other
class or series of capital stock of the Corporation ranking junior to the Series
A Preferred Stock as to dividends and as to the distribution of assets upon
liquidation, dissolution and winding up of the Corporation) shall be declared or
paid or set apart for payment or other distribution declared or made upon the
Common Stock of the Corporation or any other class or series of capital stock of
the Corporation ranking junior to or on a parity with the Series A Preferred
Stock as to dividends or as to the distribution of assets upon liquidation,
dissolution or winding up of the Corporation, nor shall any shares of Common
Stock of the Corporation or shares of any other class or series of capital stock
of the Corporation ranking junior to or on a parity with the Series A Preferred
Stock as to dividends or as to the distribution of assets upon liquidation,
dissolution or winding up of the Corporation be redeemed, purchased or otherwise
acquired for any consideration (or any monies paid to or made available for a
sinking fund for the redemption of any such shares of junior or parity stock) by
the Corporation (except by conversion into or exchange for shares of any other
class or series of capital stock of the Corporation ranking junior to the Series
A Preferred Stock as to dividends and as to the distribution of assets upon
liquidation, dissolution and winding up of the Corporation, except for the
purchase of capital stock of the Corporation pursuant to Section 7.5 of the
Corporation's by-laws (so long as such purchase is made in accordance with the
terms of such Section 7.5), and except for, if the Amendments (as hereinafter
defined) to the Certificate of Incorporation become effective in accordance with
the DGCL as contemplated by Section I(j) hereof, the purchase or conversion of
Excess Stock (as hereinafter defined) in accordance with the provisions of
Article Thirteenth (as hereinafter defined). As used in this paragraph, the term
"Subject Date" means any date on which any dividends shall be declared or paid
or set apart for payment or other distribution declared or made upon the Common
Stock of the Corporation or any other class or series of capital stock of the
Corporation ranking junior to or on a parity with the Series A Preferred Stock
as to dividends or as to the distribution of assets upon liquidation,
dissolution or winding up of the Corporation or on which any shares of Common
Stock of the Corporation or any shares of any other class or series of capital
stock of the Corporation ranking junior to or on a parity with the Series A
Preferred Stock as to dividends or as to the distribution of assets upon
liquidation, dissolution or winding up of the Corporation shall be redeemed,
purchased or otherwise acquired for any consideration (or any moneys paid to or
made available for a sinking fund for the redemption of any such shares of
junior or parity stock) by the Corporation.
(iii) No dividends on the Series A Preferred Stock shall be declared by
the Board of Directors or paid or set apart for payment by the Corporation at
such time as any agreement of the Corporation, including any agreement relating
to its indebtedness, prohibits such declaration, payment or setting apart for
payment or provides that such declaration, payment or setting apart for payment
would constitute a breach thereof or a default thereunder, or if such
declaration or payment shall be restricted or prohibited by law.
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<PAGE>
Anything in the Certificate of Designation to the contrary notwithstanding,
dividends on the Series A Preferred Stock will accrue and be cumulative from the
Original Issue Date whether or not the Corporation has earnings, whether or not
there are funds legally available for the payment of such dividends and whether
or not such dividends are declared.
(iv) No interest, or sum of money in lieu of interest, shall be payable
in respect of any dividend payment or payments on the Series A Preferred Stock
which may be in arrears, and holders of the Series A Preferred Stock will not be
entitled to any dividends (within the meaning of the Code), whether payable in
cash, securities or other property, in excess of the full cumulative dividends
described herein.
(v) Any dividend payment made on the Series A Preferred Stock shall
first be credited against the earliest accrued but unpaid dividend due with
respect to such shares.
(vi) If, for any taxable year, the Corporation elects to designate as
"capital gain dividends" (as defined in Section 857 of the Internal Revenue Code
of 1986, as amended (the "Code")), any portion (the "Capital Gains Amount") of
the dividends (within the meaning of the Code) paid or made available for the
year to holders of all classes and series of the Corporation's capital stock
(the "Total Dividends"), then the portion of the Capital Gains Amount that shall
be allocable to the holders of the Series A Preferred Stock shall be an amount
equal to (A) the total Capital Gains Amount multiplied by (B) a fraction (1) the
numerator of which is equal to the total dividends (within the meaning of the
Code), paid or made available to the holders of the Series A Preferred Stock for
that year and (2) the denominator of which is the Total Dividends for that year.
(e) Liquidation Preference.
(i) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, then, before any distribution or payment shall be
made to the holders of any Common Stock of the Corporation or shares of any
other class or series of capital stock of the Corporation ranking junior to the
Series A Preferred Stock with respect to the distribution of assets upon
liquidation, dissolution or winding up of the Corporation, but subject to the
preferential rights of the holders of shares of any class or series of capital
stock of the Corporation ranking prior to the Series A Preferred Stock with
respect to such distribution of assets upon liquidation, dissolution or winding
up, the holders of the shares of Series A Preferred Stock then outstanding shall
be entitled to receive and to be paid out of the assets of the Corporation
legally available for distribution to its stockholders liquidating distributions
in cash or property at its fair market value as determined by the Board of
Directors in the amount of $250.00 per share, plus an amount equal to all
accrued and unpaid dividends thereon to the date of payment.
(ii) After payment to the holders of the Series A Preferred Stock of
the full amount of the liquidating distributions (including accrued and unpaid
dividends) to which
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<PAGE>
they are entitled, the holders of Series A Preferred Stock, as such, shall have
no right or claim to any of the remaining assets of the Corporation.
(iii) If, upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation legally available
therefor are insufficient to pay the full amount of liquidating distributions on
all outstanding shares of Series A Preferred Stock and the full amount of the
liquidating distributions payable on all outstanding shares of any other classes
or series of capital stock of the Corporation ranking on a parity with the
Series A Preferred Stock with respect to the distribution of assets upon
liquidation, dissolution or winding up of the Corporation, then the holders of
the Series A Preferred Stock and all such other classes or series of capital
stock will share ratably in any such distribution of assets in proportion to the
full liquidating distributions (including, if applicable, accrued and unpaid
dividends) to which they would otherwise respectively be entitled.
(iv) If liquidating distributions shall have been made in full to all
holders of Series A Preferred Stock, the remaining assets of the Corporation
shall be distributed among the holders of any other classes or series of capital
stock of the Corporation ranking junior to the Series A Preferred Stock as to
the distribution of assets upon liquidation, dissolution or winding up,
according to their respective rights and preferences.
(v) For purposes of this Section I(e), neither the consolidation or
merger of the Corporation with or into any other corporation, trust or other
entity, nor the sale, lease or conveyance of all or substantially all of the
property or business of the Corporation, shall be deemed to constitute a
liquidation, dissolution or winding up of the Corporation.
(f) Redemption.
(i) The Series A Preferred Stock is not redeemable prior to June 17,
2003. However, the Company is entitled, irrespective of any provision of this
Certificate of Designation to the contrary, pursuant to Section 7.5 of its
by-laws, to call for purchase and purchase from the holders thereof shares of
Series A Preferred Stock on the terms and subject to the conditions set forth in
such Section 7.5.
(ii) On and after June 17, 2003, the Corporation may, at its option,
upon not less than 30 nor more than 60 days' prior written notice to the holders
of record of the Series A Preferred Stock, redeem the Series A Preferred Stock,
in whole or from time to time in part, for a cash redemption price equal to
$250.00 per share, together with (except as provided in Section I(g)(vi) below)
all accrued and unpaid dividends to the date fixed for redemption (the
"Redemption Price"). Any date fixed for the redemption of shares of Series A
Preferred Stock is hereinafter called a "Redemption Date".
(iii) The Redemption Price of the Series A Preferred Stock (other than
the portion thereof consisting of accrued and unpaid dividends) shall be payable
solely out of the
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proceeds received by the Corporation from the sale of other capital stock of the
Corporation and not from any other source. For purposes of the preceding
sentence, the term "capital stock" means any equity securities (including Common
Stock of the Corporation, series common stock, par value $.10 per share ("Series
Common Stock"), of the Corporation, and any other series of Preferred Stock of
the Corporation), shares, interest, participations or other ownership interests
(however designated), depositary shares representing interests in any of the
foregoing, and any rights (other than debt securities convertible into or
exchangeable for equity securities) or options to purchase any of the foregoing.
(g) Procedures for Redemption; Limitations on Redemption.
(i) If fewer than all of the outstanding shares of Series A Preferred
Stock are to be redeemed at the option of the Corporation, the number of shares
to be redeemed will be determined by the Corporation and such shares may be
redeemed pro rata from the holders of record of such shares in proportion to the
number of such shares held by such holders (with adjustments to avoid redemption
of fractional shares or, if fractional shares are outstanding, with such
additional adjustments as the Corporation may elect in order to effect the
redemption of fractional shares) or by lot or any other equitable manner
determined by the Corporation (a) that will not give the Corporation the right
to purchase shares of Series A Preferred Stock pursuant to Section 7.5 of its
by-laws and (b) if the Amendments to the Certificate of Incorporation become
effective in accordance with the DGCL as contemplated by Section I(j) hereof,
that will not result in the conversion of any Series A Preferred Stock into
Excess Stock.
(ii) Notice of redemption will be given by publication in The Wall
Street Journal or, if such newspaper is not then being published, another
newspaper of general circulation in The City of New York, such publication to be
made once a week for two successive weeks commencing not less than 30 nor more
than 60 days prior to the Redemption Date. Notice of any redemption will also be
mailed by or on behalf of the Corporation, first class postage prepaid, not less
than 30 nor more than 60 days prior to the applicable Redemption Date, addressed
to each holder of record of the Series A Preferred Stock to be redeemed at the
address set forth in the share transfer records of the Corporation. In addition
to any information required by law or by the applicable rules of any exchange
upon which Series A Preferred Stock may be listed or admitted to trading, such
notice shall state: (1) the Redemption Date; (2) the Redemption Price; (3) the
number of shares of Series A Preferred Stock to be redeemed; (4) the place or
places (which shall include a place in the Borough of Manhattan, The City of New
York) where certificates for such shares are to be surrendered for payment of
the Redemption Price; and (5) that dividends on the shares of Series A Preferred
Stock to be redeemed will cease to accrue on such Redemption Date. If fewer than
all of the outstanding shares of Series A Preferred Stock are to be redeemed,
the notice mailed to each holder of shares to be redeemed shall also specify the
number of Series A Preferred Stock to be redeemed from such holder. No failure
to give or defect in such notice or defect in the mailing thereof shall affect
the validity of the proceedings for the
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redemption of any shares of Series A Preferred Stock except as to the holder to
whom notice was defective or not given.
(iii) If notice has been published and mailed in accordance with
Section I(g)(ii) above and provided that on or before the Redemption Date
specified in such notice all funds necessary for such redemption have been
irrevocably set aside by the Corporation, separate and apart from its other
funds, in trust for the benefit of the holders of the Series A Preferred Stock
so called for redemption, so as to be, and to continue to be, available
therefor, then, from and after the Redemption Date, dividends on the shares of
Series A Preferred Stock so called for redemption shall cease to accrue, such
shares shall no longer be deemed to be outstanding, and all rights of the
holders thereof as holders of such shares (except the right to receive the
Redemption Price) shall terminate. In the event any Redemption Date shall not be
a Business Day, then payment of the Redemption Price need not be made on such
Redemption Date but may be made on the next succeeding Business Day with the
same force and effect as if made on such Redemption Date and no interest,
additional dividends or other sum shall accrue on the amount payable for the
period from and after such Redemption Date to such next succeeding Business
Date.
(iv) Upon surrender, in accordance with such notice, of the
certificates for any shares of Series A Preferred Stock to be so redeemed
(properly endorsed or assigned for transfer, if the Corporation shall so require
and the notice shall so state), such shares of Series A Preferred Stock shall be
redeemed by the Corporation at the Redemption Price. In case fewer than all the
shares of Series A Preferred Stock represented by any such certificate are
redeemed, a new certificate or certificates shall be issued representing the
unredeemed shares of Series A Preferred Stock without cost to the holder
thereof.
(v) Any deposit of monies with a bank or trust company for the purpose
of redeeming Series A Preferred Stock shall be irrevocable and such monies shall
be held in trust for the benefit of the holders of Series A Preferred Stock
entitled thereto, except that (1) the Corporation shall be entitled to receive
from such bank or trust company the interest or other earnings, if any, earned
on the monies so deposited in trust; and (2) any balance of the monies so
deposited by the Corporation and unclaimed by the holders of the Series A
Preferred Stock entitled thereto at the expiration of two years from the
applicable Redemption Date shall be repaid, together with any interest or other
earnings earned thereon, to the Corporation and, after any such repayment, the
holders of the shares entitled to the funds so repaid to the Corporation shall
look only to the Corporation for payment without interest or other earnings
thereon.
(vi) Anything in this Certificate of Designation to the contrary
notwithstanding, the holders of record of shares of Series A Preferred Stock at
the close of business on a Record Date will be entitled to receive the dividend
payable with respect to such shares on the corresponding Dividend Payment Date
notwithstanding the redemption of such shares after such Record Date and on or
prior to such Dividend Payment Date or the Corporation's default in the payment
of the dividend due on such Dividend Payment Date, in
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which case the amount payable upon redemption of such shares (including
fractional shares) of Series A Preferred Stock will not include such dividend
(and the full amount of the dividend payable for the applicable Dividend Period
shall instead be paid on such Dividend Payment Date to the holders of record on
such Record Date as aforesaid). Except as provided in this Section I(g)(vi) and
except to the extent that accrued and unpaid dividends are payable as part of
the Redemption Price pursuant to Section I(f)(ii), the Corporation will make no
payment or allowance for unpaid dividends, regardless of whether or not in
arrears, on shares of Series A Preferred Stock or Depositary Shares called for
redemption.
(vii) Unless full cumulative dividends on all outstanding shares of
Series A Preferred Stock shall have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
payment for all past Dividend Periods (including, without limitation, any
Dividend Period terminating on the date of the redemption of shares of Series A
Preferred Stock referred to below), no shares of Series A Preferred Stock shall
be redeemed unless all outstanding shares of Series A Preferred Stock are
simultaneously redeemed; provided, however, that the foregoing shall not prevent
(a) the purchase or acquisition of Series A Preferred Stock pursuant to Section
7.5 of the by-laws of the Corporation (so long as such purchase is made in
accordance with the terms of such Section 7.5) or pursuant to a purchase or
exchange offer made on the same terms to the holders of all outstanding shares
of Series A Preferred Stock or (b) if the Amendments to the Certificate of
Incorporation become effective in accordance with the DGCL as contemplated by
Section I(j) hereof, the purchase or conversion of Excess Stock of the
Corporation in accordance with the provisions of Article Thirteenth. In
addition, unless full cumulative dividends on all outstanding shares of Series A
Preferred Stock have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for all past
Dividend Periods (including, without limitation, any Dividend Period terminating
on the date of the direct or indirect purchase or other acquisition of shares of
Series A Preferred Stock by the Corporation referred to below), the Corporation
shall not purchase or otherwise acquire, directly or indirectly, any shares of
Series A Preferred Stock (except by conversion into or exchange for capital
stock of the Corporation ranking junior to the Series A Preferred Stock as to
the payment of dividends and with respect to the distribution of assets upon
liquidation, dissolution and winding up of the Corporation); provided, however,
that the foregoing shall not prevent (a) the purchase or acquisition of Series A
Preferred Stock pursuant to Section 7.5 of the by-laws of the Corporation (so
long as such purchase is made in accordance with the terms of such Section 7.5)
or pursuant to a purchase or exchange offer made on the same terms to holders of
all outstanding shares of Series A Preferred Stock or (b) if the Amendments to
the Certificate of Incorporation become effective in accordance with the DGCL as
contemplated by Section I(j) hereof, the purchase or conversion of Excess Stock
of the Corporation in accordance with the provisions of Article Thirteenth.
(h) Voting Rights. Except as required by law and as set forth below in this
Section I(h), the holders of the Series A Preferred Stock shall not have any
voting rights.
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(i) Whenever dividends on any shares of Series A Preferred Stock shall
be in arrears for six or more Dividend Periods, whether or not such Dividend
Periods are consecutive, the number of directors then constituting the board of
directors of the Corporation shall be automatically increased by two (if not
already increased by two by reason of the election of directors by the holders
of any other class or series of capital stock of the Corporation upon which like
voting rights have been conferred and are exercisable and with which the Series
A Preferred Stock is entitled to vote as a class with respect to the election of
such two directors) and the holders of shares of Series A Preferred Stock
(voting separately as a class with all other classes or series of capital stock
of the Corporation upon which like voting rights have been conferred and are
exercisable and which are entitled to vote as a class with the Series A
Preferred Stock in the election of such two directors) will be entitled to vote
for the election of such two directors of the Corporation at a special meeting
called by an officer of the Corporation at the request of the holders of record
of at least 10% of the outstanding shares of Series A Preferred Stock or by the
holders of any other class or series of capital stock of the Corporation upon
which like voting rights have been conferred and are exercisable and which is
entitled to vote as a class with the Series A Preferred Stock in the election of
such two directors (unless such request is received less than 90 days before the
date fixed for the next annual or special meeting of stockholders, in which case
the vote for such two directors shall be held at the earlier of the next such
annual or special meeting of stockholders), and at each subsequent annual
meeting of stockholders until all dividends accumulated on the Series A
Preferred Stock for all past Dividend Periods and the then current Dividend
Period shall have been fully paid or declared and a sum sufficient for the
payment thereof set aside for payment, whereupon the right of the holders of
Series A Preferred Stock to elect such two directors shall cease and (unless
there are one or more other classes or series of capital stock of the
Corporation upon which like voting rights have been conferred and are
exercisable) the term of office of such directors previously so elected shall
terminate and the authorized number of directors of the Corporation shall
thereupon return to the number of authorized directors otherwise in effect, but
subject always to the same provisions for the reinstatement and divestment of
the right to elect such two additional directors in the case of any such future
dividend arrearage.
In the case of any such request for a special meeting (unless such request
is received less than 90 days before the date fixed for the next annual or
special meeting of stockholders), such meeting shall be held on the earliest
practicable date at the place designated by the holders of capital stock
requesting such meeting or, if none, at a place designated by the Secretary of
the Corporation, upon notice similar to that required for an annual meeting of
stockholders. If such special meeting is not called by an officer of the
Corporation within 30 days after such request, then the holders of record of at
least 10% of the outstanding shares of Series A Preferred Stock may designate in
writing a holder of Series A Preferred Stock to call such meeting at the expense
of the Corporation, and such meeting may be called by the holder so designated
upon notice similar to that required for annual meetings of stockholders and
shall be held at the place designated by the holder calling such meeting. The
holders of Series A Preferred Stock shall have access to the stock
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transfer records of the Corporation for the purpose of causing a meeting of
stockholders to be called pursuant to the provisions of this paragraph.
The procedures in this Section I(h) for the calling of meetings and the
election of directors shall, to the extent permitted by law, supersede anything
inconsistent contained in the by-laws of the Corporation.
So long as any Series A Preferred Stock are outstanding, the number of
directors constituting the entire Board of Directors of the Corporation shall at
all times be such so that the exercise, by the holders of the Series A Preferred
Stock and the holders of any other classes or series of capital stock of the
Corporation upon which like voting rights have been conferred, of the right to
elect directors under the circumstances provided above will not contravene any
provision of the Corporation's Certificate of Incorporation or by-laws
restricting the number of directors which may constitute the entire board of
directors of the Corporation.
If at any time when the voting rights conferred upon the Series A Preferred
Stock pursuant to this Section I(h)(i) are exercisable any vacancy in the office
of a director elected pursuant to this Section I(h)(i) shall occur, then such
vacancy may be filled only by the remaining such director or by vote of the
holders of record of the outstanding Series A Preferred Stock and any other
classes or series of capital stock of the Corporation upon which like voting
rights have been conferred and are exercisable and which are entitled to vote as
a class with the Series A Preferred Stock in the election of directors pursuant
to this Section I(h)(i).
(ii) So long as any shares of Series A Preferred Stock remain
outstanding, the Corporation shall not, without the affirmative vote or consent
of the holders of at least two-thirds of the shares of Series A Preferred Stock
outstanding at the time, given in person or by proxy (with the Series A
Preferred Stock voting separately as a class), (A) authorize or create, or
increase the authorized or issued amount of, any class or series of capital
stock of the Corporation ranking prior to the Series A Preferred Stock with
respect to the payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up of the Corporation or reclassify any
authorized capital stock of the Corporation into such shares, or create,
authorize or issue any obligation or security convertible into, exchangeable or
exercisable for, or evidencing the right to purchase, any such shares, or (B)
amend, alter or repeal the provisions of the Certificate of Incorporation
(including, without limitation, the certificate of powers, designations,
preferences and rights of the Series A Preferred Stock (the "Certificate of
Designation")), whether by merger or consolidation (an "Event") or otherwise, so
as to materially and adversely affect any right, preference, privilege or voting
power of the Series A Preferred Stock or the holders thereof; provided, however,
with respect to the occurrence of any of the Events set forth in (B) above, so
long as the Series A Preferred Stock remains outstanding or is converted into
like securities of the surviving entity, in each case with the terms thereof
materially unchanged, taking into account that upon the occurrence of such an
Event the Corporation may not be the surviving entity, the
-11-
<PAGE>
occurrence of any such Event shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting power of the Series A
Preferred Stock or the holders thereof; and provided, further, that the
Amendments to the Certificate of Incorporation shall not be deemed, with respect
to the Series A Preferred Stock, to be an amendment, alteration or repeal which
materially and adversely affects such rights, preferences, privileges or voting
powers; and provided, further, that any amendment to the Certificate of
Incorporation to authorize any increase in the amount of the authorized Excess
Stock, Preferred Stock or Series Common Stock or the creation or issuance of any
other series of Preferred Stock or any shares or series of Excess Stock or
Series Common Stock, or any increase in the amount of authorized or outstanding
shares of Series A Preferred Stock or any other series of Preferred Stock or any
shares or series of Excess Stock or Series Common Stock, in each case ranking on
a parity with or junior to the Series A Preferred Stock with respect to payment
of dividends and the distribution of assets upon liquidation, dissolution or
winding up of the Corporation, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers. For purposes of
this paragraph, the filing in accordance with applicable law of a certificate of
designations setting forth the designations, preferences and relative,
participating, optional or other special rights of a class or series of capital
stock of the Corporation shall be deemed an amendment to the Certificate of
Incorporation.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding Series A Preferred Stock shall have been redeemed
or called for redemption and sufficient funds shall have been deposited in trust
in accordance with the terms of Section I(g)(v) hereof to effect such
redemption.
(iii) On each matter submitted to a vote of the holders of Series A
Preferred Stock, including any action by written consent, in accordance with
this Section I(h) or as otherwise required by law, each whole share of Series A
Preferred Stock shall be entitled to ten votes, each of which ten votes may be
directed separately by the holder thereof (or by any proxy or proxies of such
holder). With respect to each whole share of Series A Preferred Stock, the
holder thereof may designate up to ten proxies, with each such proxy having the
right to vote a whole number of votes (totaling ten per share of Series A
Preferred Stock). In the event that fractional shares of Series A Preferred
Stock are issued, then each such fractional share shall be entitled to a
proportionate number of votes and, if any such fractional share is entitled to
more than one vote, such votes may be directed separately and proxies may be
designated as in the case of whole shares of Series A Preferred Stock.
(i) Conversion. The Series A Preferred Stock is not convertible into or
exchangeable for any other property or securities of the Corporation, except
that, if the Amendments to the Certificate of Incorporation become effective in
accordance with the DGCL as contemplated by Section I(j) hereof, the Series A
Preferred Stock shall be convertible into Excess Stock on the terms and subject
to the conditions set forth in Article Thirteenth.
-12-
<PAGE>
(j) Restrictions on Ownership and Transfer. In the event that the
Corporation shall purchase any shares of Series A Preferred Stock pursuant to
Section 7.5 of its by-laws, then the purchase price paid by the Corporation for
any such shares of Series A Preferred Stock shall be the price specified in its
by-laws plus accrued and unpaid dividends on such shares to the date of
purchase.
As set forth in the Joint Proxy Statement/Prospectus dated May 18, 1998
(the "Proxy Statement") of The Meditrust Companies and La Quinta Inns, Inc., the
Corporation is soliciting the vote of its stockholders in favor of amendments
(the "Amendments") to its Certificate of Incorporation which would (i) add a new
Article Thirteenth to such Certificate of Incorporation in the form set forth as
Annex E to the Proxy Statement ("Article Thirteenth") and (ii) authorize a new
class of capital stock of the Corporation to be known as Excess Stock ("Excess
Stock"). If the Amendments are approved and become effective in accordance with
the DGCL, then, from and after the date on which the Amendments shall have
become effective in accordance with the DGCL, the Series A Preferred Stock shall
be subject to all of the terms and provisions of Article Thirteenth and, without
limitation to the foregoing, shall be convertible into Excess Stock on the terms
and subject to the conditions, and shall be subject to the limitations on
ownership and transfer, set forth in Article Thirteenth.
(k) Fractional Shares. Series A Preferred Stock may be issued in fractional
shares equal to 1/10th of a whole share of Series A Preferred Stock and any
integral multiple of 1/10th of a whole share of Series A Preferred Stock.
(l) Office or Agency in New York City. The Corporation will at all times
maintain an office or agency in the Borough of Manhattan, The City of New York,
where shares of Series A Preferred Stock may be surrendered for payment
(including upon redemption or repurchase, if any), registration of transfer or
exchange.
If any shares of Series A Preferred Stock are purchased by the Corporation
in accordance with Section 7.5 of its by-laws or if the Amendments shall have
become effective as contemplated by this Section I(j) and thereafter any shares
of Series A Preferred Stock are converted into Excess Stock and, in either such
case, if fewer than all the shares of Series A Preferred Stock evidenced by any
stock certificate are so purchased or converted, a new certificate or
certificates shall be issued representing the remaining shares of Series A
Preferred Stock evidenced by such certificate without cost to the holder
thereof.
II.
The Series A Preferred Stock shall have no preemptive rights.
III.
If any power, preference or relative, participating, optional and other
special right of the Series A Preferred Stock, or qualification or restriction
thereof, set forth in the
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<PAGE>
Certificate of Designation is invalid, unlawful or incapable of being enforced
by reason of any rule of law or public policy, then, to the extent permitted by
law, all other powers, preferences and relative, participating, optional and
other special rights of the Series A Preferred Stock and qualifications and
restrictions thereof set forth in the Certificate of Designation which can be
given effect without the invalid, unlawful or unenforceable powers, preferences
or relative, participating, optional or other special rights of the Series A
Preferred Stock or the qualifications or restriction thereof shall remain in
full force and effect and shall not be deemed dependent upon any other such
powers, preferences or relative, participating, optional or other special right
of the Series A Preferred Stock or qualifications or restrictions thereof unless
so expressed herein.
-14-
<PAGE>
IN WITNESS WHEREOF, Meditrust Corporation, has caused this
Certificate of Designation to be executed and sealed by its duly authorized
officers on June 11, 1998.
MEDITRUST CORPORATION
By: /s/ David F. Benson
-----------------------------
David F. Benson
President and Treasurer
[CORPORATE SEAL]
Attest:
/s/ Michael S. Benjamin
- -----------------------------------------------------
Michael S. Benjamin
Senior Vice President, Secretary and General Counsel
-15-
TEMPORARY CERTIFICATE--EXCHANGEABLE FOR DEFINITIVE
ENGRAVED CERTIFICATE WHEN READY FOR DELIVERY
NUMBER MEDITRUST CORPORATION SHARES
T INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFICATE IS TRANSFERABLE IN BOSTON, MA OR NEW YORK, NY
PREFERRED STOCK SEE REVERSE FOR
CERTAIN DEFINITIONS
CUSIP 58501T 50 4
- --------------------------------------------------------------------------------
THIS CERTIFIES THAT
is the record holder of
- --------------------------------------------------------------------------------
FULLY PAID AND NON-ASSESSABLE SHARES OF 9% SERIES A CUMULATIVE REDEEMABLE
PREFERRED STOCK OF THE PAR VALUE OF $.10 PER SHARE OF
MEDITRUST CORPORATION
transferable on the books of the Corporation by the holder hereof in person
or by duly authorized attorney upon surrender of this Certificate properly
endorsed or assigned. Transfers of fractions of whole shares are permitted. This
Certificate is not valid until countersigned by the Transfer Agent and
registered by the Registrar. Witness the facsimile Seal of the Corporation and
the facsimile signatures of its duly authorized officers.
Dated
MEDITRUST CORPORATION
CORPORATE
SEAL
1979
DELAWARE
/s/ Michael S. Benjamin /s/ David F. Benson
SECRETARY PRESIDENT
COUNTERSIGNED AND REGISTERED:
STATE STREET BANK AND TRUST COMPANY
TRANSFER AGENT AND REGISTRAR
BY
AUTHORIZED SIGNATURE
COUNTERSIGNED AND REGISTERED AS TO THE STOCK OF MEDITRUST CORPORATION
AMERICAN BANK NOTE COMPANY.
THESE SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFER
DESCRIBED ON THE REVERSE HEREOF
<PAGE>
THE SHARES OF MEDITRUST CORPORATION REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE BY-LAW RESTRICTIONS WHICH PROHIBIT ANY PERSON FROM ACQUIRING OR
MAINTAINING ANY OWNERSHIP INTEREST IN THE STOCK OF THE TWO COMPANIES WHICH IS
INCONSISTENT WITH THE REQUIREMENTS OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, PERTAINING TO REAL ESTATE INVESTMENT TRUSTS, AND THE HOLDER OF THIS
CERTIFICATE BY HIS ACCEPTANCE HEREOF CONSENTS TO BE BOUND BY SUCH RESTRICTIONS.
MEDITRUST CORPORATION WILL FURNISH WITHOUT CHARGE, TO EACH STOCKHOLDER
WHO SO REQUESTS, A COPY OF THE BY-LAW PROVISIONS REFERENCED ABOVE AND THE
POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING OPTIONAL OR OTHER
SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS. ANY SUCH REQUEST
MAY BE ADDRESSED TO THE SECRETARY OF THE CORPORATION OR TO THE TRANSFER AGENT
NAMED ON THE FACE HEREOF.
-----------------------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C>
TEN COM -- as tenants in common UNIF GIFT MIN ACT -- ______________Custodian ______________
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act ________________________
in common (State)
UNIF TRF MIN ACT -- _________ Custodian (until age ______)
(Cust)
_____________ under Uniform Transfers
(Minor)
to Minors Act ________________________
(State)
</TABLE>
Additional abbreviations may also be used through not in the above list.
------------------------
For Value Received, _____________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
|------------------------------------|
| |
| |
|------------------------------------|
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________preferred shares
of Meditrust Corporation represented by the within certificate, and do hereby
irrevocably constitute and appoint
________________________________________________________________________Attorney
to transfer the said stock on the books of the within named company with full
power of substitution in the premises.
Dated____________________________
Signature(s) of Stockholder(s)
_______________________________________________
Signature(s) Guaranteed: _______________________________________________________
The signature(s) should be guaranteed by an eligible
guarantor institution (Banks, Stockbrokers, Savings and
Loan Associations and Credit Unions with membership in
an approved signature guarantee Medallion Program),
pursuant to S.E.C. Rule 17Ad-15.
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND
WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFI-
CATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGE-
MENT OR ANY CHANGE WHATEVER.
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT dated as of June 17, 1998 among MEDITRUST CORPORATION, a
Delaware corporation (the "Company"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company, as Depositary, and all holders from time to time of
Receipts (as hereinafter defined) issued hereunder.
WITNESSETH:
WHEREAS, it is desired to provide, as hereinafter set forth in this Deposit
Agreement, for the deposit of shares of the Company's Preferred Stock (as
hereinafter defined) with the Depositary (as hereinafter defined) for the
purposes set forth in this Deposit Agreement and for the issuance hereunder of
the Receipts (as hereinafter defined) evidencing Depositary Shares (as
hereinafter defined) representing fractional interests in the shares of
Preferred Stock deposited; and
WHEREAS, the Receipts are to be substantially in the form of Exhibit A
annexed to this Deposit Agreement, with appropriate insertions, modifications
and omissions, as hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the premises contained herein, it is
agreed by and among the parties hereto as follows:
ARTICLE I
DEFINITIONS
Section 1.1 The following definitions shall apply to the respective terms
(in the singular and plural forms of such terms) used in this Deposit Agreement
and the Receipts:
"Amendments" shall have the meaning set forth in Section 2.10 hereof.
"Article Thirteenth" shall have the meaning set forth in Section 2.10
hereof.
"Certificate of Designation" shall mean the Certificate of Powers,
Designations, Preferences and Rights of the 9% Series A Cumulative Redeemable
Preferred Stock of the Company, setting forth the terms of the Preferred Stock,
filed Secretary of State of the State of Delaware, including any certificate
subsequently filed with the Secretary of State of the State of Delaware in
accordance with the DGCL and setting forth a statement that a specified decrease
in the number of shares of Preferred Stock has been authorized by the Company.
"Certificate of Incorporation" shall mean the restated certificate of
incorporation, as the same may be further amended or restated from time to time,
of the Company, including all certificates of designation filed as part of such
certificate of incorporation.
<PAGE>
"Company" shall mean Meditrust Corporation, a Delaware corporation, and its
successors.
"Corporate Office" shall mean the corporate office of the Depositary at
which at any particular time its business in respect of matters governed by this
Deposit Agreement shall be administered, which at the date of this Deposit
Agreement is located at the office of the Depositary's service agent, Boston
EquiServe Limited Partnership, 150 Royall Street, Canton, Massachusetts 02021.
"DGCL" means the General Corporation Law of the State of Delaware, as in
effect from time to time, or any successor thereto.
"Deposit Agreement" shall mean this agreement, as the same may be amended,
modified or supplemented from time to time.
"Depositary" shall mean State Street Bank and Trust Company, a
Massachusetts trust company having its principal office in the United States and
having a combined capital and surplus of at least $50,000,000, and any successor
as depositary hereunder, which successor shall also have its principal office in
the United States and a combined capital and surplus of at least $50,000,000.
"Depositary Share" shall mean a fractional interest of 1/10th of a share of
Preferred Stock deposited with the Depositary hereunder and the same
proportionate interest in any and all other property received by the Depositary
in respect of such share of Preferred Stock and held under this Deposit
Agreement, all as evidenced by the Receipts issued hereunder; provided that if
any deposited Preferred Stock is converted into Excess Stock as contemplated by
Section 2.10 hereof, the term "Depositary Share" shall mean, in the case of the
Depositary Shares representing such Excess Stock, a fractional interest of
1/10th of a share of such Excess Stock and, subject to the provisions of Article
Thirteenth, the same proportionate interest in any and all other property
received by the Depositary in respect of such share of such Excess Stock and
held under this Deposit Agreement. Subject to the terms of this Deposit
Agreement, each owner of a Depositary Share representing deposited Preferred
Stock is entitled, proportionately with all other owners of Depositary Shares
representing deposited Preferred Stock, to all rights, preferences and
privileges of the Preferred Stock represented by such Depositary Shares, and
each owner of a Depositary Share representing Excess Stock issued upon
conversion of deposited Preferred Stock is entitled, proportionately with all
other owners of Depositary Shares representing Excess Stock issued upon
conversion of deposited Preferred Stock, to all rights, preferences and
privileges of the Excess Stock represented by such Depositary Share, in each
case including the dividend, voting, distribution, redemption and liquidation
rights contained in the Certificate of Designation and any other rights,
preferences and privileges contained in the Certificate of Incorporation.
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<PAGE>
"Depositary's Agent" shall mean an agent appointed by the Depositary as
provided, and for the purposes specified, in Section 7.5.
"Excess Stock" shall have the meaning set forth in Section 2.10 hereof.
"New York Office" shall mean the office maintained by the Depositary in the
Borough of Manhattan, The City of New York for the execution and delivery,
transfer, surrender and exchange, split-up, combination and redemption of
Receipts (and payment of amounts due upon such redemption), purchase of Receipts
as contemplated by Section 2.10 hereof (and payment of amounts due upon such
purchase), payment and distribution of all other monies and property payable or
distributable in respect of Receipts, and deposit and withdrawal of Preferred
Stock and of Excess Stock issued upon conversion of deposited Preferred Stock,
which office at the date of this Deposit Agreement is located at Securities
Transfer and Reporting Services, 55 Broadway, New York, New York 10006.
"Preferred Stock" shall mean the Company's 9% Series A Cumulative
Redeemable Preferred Stock, $.10 par value per share.
"Prohibited Owner" shall have the meaning set forth in the definition of
such term in Article Thirteenth as if the reference in such definition to
"Equity Securities" also included a reference to Receipts and Depositary Shares.
"Proxy Statement" shall have the meaning set forth in Section 2.10.
"Receipt" shall mean a depositary receipt issued hereunder to evidence one
or more Depositary Shares, whether in definitive or temporary form,
substantially in the form (subject to Section 2.1) set forth as Exhibit A
hereto.
"record date" shall mean the date fixed pursuant to Section 4.4.
"record holder" or "holder" as applied to a Receipt shall mean the person
in whose name such Receipt is registered on the books maintained by the
Depositary for such purpose.
"Registrar" shall mean State Street Bank and Trust Company or any bank or
trust company appointed to register ownership and transfers of Receipts, the
Preferred Stock or any Excess Stock issued on conversion of Preferred Stock, as
the case may be, as herein provided.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Transfer Agent" shall mean State Street Bank and Trust Company or any bank
or trust company appointed to transfer the Receipts, the Preferred Stock or any
Excess Stock issued on conversion of Preferred Stock, as the case may be, as
herein provided.
-3-
<PAGE>
"Trustee" shall have the meaning set forth in Article Thirteenth.
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF PREFERRED STOCK,
EXECUTION AND DELIVERY, TRANSFER,
SURRENDER AND REDEMPTION OF RECEIPTS
Section 2.1 Form and Transferability of Receipts. Definitive Receipts shall
be engraved or printed or lithographed with steel-engraved borders and
underlying tint and shall be substantially in the form set forth in Exhibit A
annexed to this Deposit Agreement, with appropriate insertions, modifications
and omissions, as hereinafter provided; provided that, if Receipts are initially
issued in temporary form and, prior to the availability of Receipts in
definitive form, the Certificate of Incorporation is amended by the Amendments,
then the third paragraph of the legend appearing on the face of the form of
Receipt set forth as Exhibit A hereto and Sections 11 and 19 of such form of
Receipt may be appropriately modified to reflect that the Amendments have become
effective. Pending the preparation of definitive Receipts, the Depositary, upon
the written order of the Company delivered in compliance with Section 2.2, shall
execute and deliver temporary Receipts which may be printed, lithographed,
typewritten, word-processed, mimeographed or otherwise reproduced, substantially
of the tenor of the definitive Receipts in lieu of which they are issued and
with such appropriate insertions, omissions, substitutions and other variations
as the persons executing such Receipts may determine, as evidenced by their
execution of such Receipts. If temporary Receipts are issued, the Company and
the Depositary will cause definitive Receipts to be prepared without
unreasonable delay. After the preparation of definitive Receipts, the temporary
Receipts shall be exchangeable for definitive Receipts upon surrender of the
temporary Receipts at the Corporate Office, the New York Office and such
additional offices, if any, as the Depositary may designate, without charge to
the holder. Upon surrender for cancellation of any one or more temporary
Receipts, the Depositary shall execute and deliver in exchange therefor
definitive Receipts representing the same number of Depositary Shares as
represented by the surrendered temporary Receipt or Receipts. Such exchange
shall be made at the Company's expense and without any charge therefor. Until so
exchanged, the temporary Receipts shall in all respects be entitled to the same
benefits under this Deposit Agreement, and with respect to the Preferred Stock
deposited or the Excess Stock issued upon conversion of deposited Preferred
Stock, as the case may be, as definitive Receipts.
Receipts shall be executed by the Depositary by the manual signature of a
duly authorized signatory of the Depositary, provided that such signature may be
a facsimile if a Registrar (other than the Depositary) shall have been appointed
and such Receipts are countersigned by manual signature of a duly authorized
signatory of the Registrar. No Receipt shall be entitled to any benefits under
this Deposit Agreement or be valid or obligatory for any purpose unless it shall
have been executed as provided in the preceding
-4-
<PAGE>
sentence. The Depositary shall record on its books each Receipt executed as
provided above and delivered as hereinafter provided.
Except as the Depositary may otherwise determine, Receipts shall be in
denominations of any number of whole Depositary Shares. All Receipts shall be
dated the date of their issuance.
Receipts may be endorsed with or have incorporated in the text thereof such
legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary or required to comply
with any applicable law or regulation or with the rules and regulations of any
securities exchange upon which the Preferred Stock, the Depositary Shares or the
Receipts may be listed or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular
Receipts are subject or, in the case of Receipts evidencing Depositary Shares
representing Excess Stock, which are contemplated by Section 2.10.
Title to any Receipt (and to the Depositary Shares evidenced by such
Receipt) that is properly endorsed or accompanied by a properly executed
instrument of transfer or endorsement shall be transferable by delivery with the
same effect as in the case of a negotiable instrument; provided, however, that
until a Receipt shall be transferred on the books of the Depositary as provided
in Section 2.4, the Depositary may, notwithstanding any notice to the contrary,
treat the record holder thereof at such time as the absolute owner thereof for
the purpose of determining the person entitled to distribution of dividends or
other distributions or to any notice provided for in this Deposit Agreement and
for all other purposes.
Section 2.2 Deposit of Preferred Stock; Execution and Delivery of Receipts
in Respect Thereof. Concurrently with the execution of this Deposit Agreement,
the Company is delivering to the Depositary a certificate or certificates,
registered in the name of the Depositary and evidencing 700,000 shares of
Preferred Stock, properly endorsed or accompanied, if required by the
Depositary, by a duly executed instrument of transfer or endorsement, in form
satisfactory to the Depositary. In the event that the over-allotment option
granted to the underwriters pursuant to the Underwriting Agreement dated June
10, 1998 between the Corporation, Morgan Stanley & Co. Incorporated and the
other underwriters named therein is exercised in whole or in part and the
issuance of the Depositary Shares issuable upon exercise of such option occurs
after the date of this Agreement, the Company shall, on or prior to the date of
delivery of such Depositary Shares, deliver to the Depositary a certificate or
certificates, registered in the name of the Depositary and evidencing the shares
of Preferred Stock represented by such Depositary Shares (which shall not exceed
105.000 shares of Preferred Stock in the aggregate), properly endorsed or
accompanied, if required by the Depositary, by a duly executed instrument of
transfer or endorsement, in form satisfactory to the Depositary. Concurrently
with each delivery of certificates, the Company is delivering or shall deliver,
as the case may be, to the Depositary (i) all such certifications as may be
required by the Depositary in accordance with the provisions of this Deposit
Agreement and
-5-
<PAGE>
(ii) a written order of the Company directing the Depositary to execute and
deliver to, or upon the written or oral order of, the person or persons stated
in such order a Receipt or Receipts for the Depositary Shares representing such
deposited Preferred Stock. The Depositary acknowledges receipt of the deposited
Preferred Stock delivered on the date of this Deposit Agreement and shall be
deemed to acknowledge receipt of any deposited Preferred Stock delivered after
the date of this Deposit Agreement in connection with any exercise of such
over-allotment option, together in each case with all related documentation, and
agrees to hold such deposited Preferred Stock in an account to be established by
the Depositary at the Corporate Office or at such other office as the Depositary
shall determine. The Company hereby appoints the Depositary as the Registrar,
Transfer Agent and paying agent for the Preferred Stock and any Excess Stock
issued upon conversion of Preferred Stock in Boston, Massachusetts and the
Borough of Manhattan, The City of New York, and the Depositary hereby accepts
such appointment and, as such, will reflect changes in the number of shares
(including any fractional shares) of deposited Preferred Stock held by it and of
deposited Excess Stock issued upon conversion of deposited Preferred Stock and
held by it or any Depositary's Agent (including, following notice from the
Company (which the Company agrees that it will deliver to the Depositary as
promptly as practicable), any such changes resulting from the conversion of
deposited Preferred Stock into Excess Stock or of Excess Stock into Preferred
Stock) by notation, book-entry or other appropriate method.
If required by the Depositary, Preferred Stock or Excess Stock issued on
conversion of Preferred Stock presented for deposit by the Company at any time,
whether or not the register of stockholders of the Company is closed, shall also
be accompanied by an agreement or assignment, or other instrument satisfactory
to the Depositary, that will provide for the prompt transfer to the Depositary
or its nominee of any dividend or right to subscribe for additional Preferred
Stock or Excess Stock, as the case may be, or to receive other property that any
person in whose name the Preferred Stock or Excess Stock, as the case may be, is
or has been registered may thereafter receive upon or in respect of such
deposited Preferred Stock or Excess Stock, as the case may be, or in lieu
thereof such agreement of indemnity or other agreements as shall be satisfactory
to the Depositary.
Upon receipt by the Depositary of a certificate or certificates for
Preferred Stock deposited hereunder, together with the other documents specified
above, and upon registering such Preferred Stock in the name of the Depositary,
the Depositary, subject to the terms and conditions of this Deposit Agreement,
shall execute and deliver to, or upon the order of, the person or persons named
in the order delivered to the Depositary referred to in the first paragraph of
this Section 2.2, a Receipt or Receipts for the number of whole Depositary
Shares representing the Preferred Stock so deposited and registered in such name
or names as may be requested by such person or persons. The Depositary shall
execute and deliver such Receipt or Receipts at the New York Office or, if
requested by the person requesting such delivery, at the Corporate Office,
except that, at the request, risk and expense of any person requesting such
delivery, such delivery may be made at such other place as may be designated by
such person.
-6-
<PAGE>
Other than in the case of splits, combinations or other reclassifications
affecting the Preferred Stock, or in the case of dividends or other
distributions of Preferred Stock, if any, there shall be deposited hereunder not
more than the number of shares constituting the Preferred Stock as set forth in
the Certificate of Designation, as such may be amended from time to time.
The Company shall deliver to the Depositary from time to time such
quantities of Receipts as the Depositary may request to enable the Depositary to
perform its obligations under this Deposit Agreement.
In the event that, as contemplated by Section 2.10 hereof, any deposited
Preferred Stock is converted into Excess Stock, the Company will, unless
otherwise required by law or Article Thirteenth, designate the Depositary as the
Trustee for such Excess Stock and the certificates evidencing such Excess Stock
shall be deposited with the Depositary hereunder. If the Trustee for such Excess
Stock is not the Depositary, then the Company shall cause such Trustee to
execute and deliver to the Depositary a written instrument wherein such Trustee
shall state that it is holding such Excess Stock for the Depositary as a
Depositary's Agent. Any such Excess Stock, whether held by the Depositary or
another Trustee, shall be deemed to have been deposited under this Deposit
Agreement.
Section 2.3 Optional Redemption of Preferred Stock for Cash. Whenever the
Company shall elect to redeem deposited shares of Preferred Stock for cash in
accordance with the provisions of the Certificate of Designation, it shall
(unless otherwise agreed in writing with the Depositary) give the Depositary not
less than 60 days' prior written notice of the date of such proposed redemption
and of the number of such shares of Preferred Stock held by the Depositary to be
redeemed and the applicable redemption price, as set forth in the Certificate of
Designation, including the amount, if any, of accrued and unpaid dividends
(including, without limitation, accumulated dividends, if any, for prior
dividend periods) to the date of such redemption. The Depositary shall mail,
first-class postage prepaid, notice furnished by the Company of the redemption
of the Preferred Stock and the proposed simultaneous redemption of the
Depositary Shares representing the Preferred Stock to be redeemed, not less than
30 and not more than 60 days prior to the date fixed for redemption of such
Preferred Stock and Depositary Shares (the "cash redemption date"), to the
holders of record at the close of business on the record date fixed for such
notice pursuant to Section 4.4 hereof of the Receipts evidencing the Depositary
Shares to be so redeemed, at the addresses of such holders as the same appear on
the records of the Depositary, but neither failure to mail any such notice to
one or more such holders nor any defect in any such notice shall affect the
validity of the proceedings for redemption except as to any holder to whom
notice was defective or not given. The Company shall provide the Depositary with
such notice, and each such notice shall state: (i) the cash redemption date;
(ii) the cash redemption price; (iii) the number of shares of deposited
Preferred Stock and Depositary Shares to be redeemed; (iv) the place or places
(which shall include the Borough of Manhattan, The City of New York) where
Receipts evidencing Depositary Shares to be redeemed are to be surrendered for
payment of the cash redemption price; (v) that dividends on the shares of
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Preferred Stock represented by the Depositary Shares to be redeemed will cease
to accrue on such cash redemption date, and (vi) if fewer than all the
Depositary Shares evidenced by Receipts held by any holder are to be redeemed,
the number of such Depositary Shares held by such holder to be so redeemed. If
fewer than all the outstanding Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed shall be selected pro rata (as nearly as may be
practicable without creating fractional Depositary Shares) or by lot or by any
other equitable method determined by the Company (a) that will not give the
Company the right to purchase Receipts, Depositary Shares or shares of Preferred
Stock represented by such Depositary Shares pursuant to the provisions of
Section 7.5 of the Company's by-laws and (b) if the Amendments to the
Certificate of Incorporation become effective in accordance with the DGCL, that
will not result in the conversion of any Preferred Stock into Excess Stock. The
Company shall also cause notice of redemption to be published in the Wall Street
Journal or, if such newspaper is not then being published, any other daily
newspaper of general circulation in The City of New York at least once a week
for two successive weeks commencing not less than 30 nor more than 60 days prior
to the cash redemption date.
In the event that notice of redemption has been made as described in the
immediately preceding paragraph and the Company shall then have paid in full to
the Depositary the cash redemption price (determined pursuant to the Certificate
of Designation) of the Preferred Stock deposited with the Depositary to be
redeemed (including any accrued and unpaid dividends (including, without
limitation, accumulated dividends, if any, for prior dividend periods) to the
date of redemption), the Depositary shall redeem, as of the same redemption date
as the Preferred Stock being so redeemed, the number of Depositary Shares
representing such Preferred Stock so called for redemption by the Company and
from and after the cash redemption date (unless the Company shall have failed to
redeem the shares of Preferred Stock to be redeemed by it as set forth in the
Company's notice provided for in the preceding paragraph and to pay all amounts
due upon such redemption) all dividends in respect of the shares of Preferred
Stock called for redemption shall cease to accrue, the Depositary Shares called
for redemption shall be deemed no longer to be outstanding and all rights of the
holders of Receipts evidencing such Depositary Shares (except the right to
receive the cash redemption price together with accrued and unpaid dividends
thereon (including, without limitation, accumulated dividends, if any, for prior
dividend periods) and any money or other property to which holders of such
Receipts were entitled upon such redemption) shall, to the extent of such
Depositary Shares, cease and terminate. Upon surrender in accordance with said
notice of the Receipts evidencing such Depositary Shares representing such
Preferred Stock so called for redemption (properly endorsed or assigned for
transfer, if the Depositary shall so require), such Depositary Shares shall be
redeemed at a cash redemption price per Depositary Share of $25, plus 1/10th of
the accrued and unpaid dividends (including, without limitation, accumulated
dividends, if any, for prior dividend periods), if any, payable on one share of
Preferred Stock upon such redemption, plus 1/10th of any other money and other
property payable in respect of one such share of Preferred Stock upon such
redemption. The foregoing shall be further subject to the terms and conditions
of the Certificate of Designation.
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Anything herein to the contrary notwithstanding, the holders of record of
Receipts evidencing Depositary Shares representing Preferred Stock at the close
of business on a record date for the payment of dividends on the Preferred Stock
will be entitled to receive the dividend payable with respect to the Preferred
Stock represented by the Depositary Shares evidenced by such Receipts on the
corresponding dividend payment date for the Preferred Stock notwithstanding the
redemption of such Preferred Stock or Depositary Shares after such record date
and on or prior to such dividend payment date or the Company's default in the
payment of the dividend due on such dividend payment date, in which case the
amount payable upon redemption of such Depositary Shares will not include any
amount in respect of such dividend (and the full amount of the dividend payable
for the applicable dividend period shall instead be paid on such dividend
payment date to the holders of record of such Receipts on such record date as
aforesaid).
If fewer than all of the Depositary Shares evidenced by a Receipt are
called for redemption, the Depositary will deliver to the holder of such Receipt
upon its surrender to the Depositary, together with payment of the cash
redemption price for and all other amounts payable in respect of the Depositary
Shares called for redemption, a new Receipt evidencing the Depositary Shares
evidenced by such prior Receipt and not called for redemption.
If the Amendments to the Certificate of Incorporation become effective in
accordance with the DGCL and, thereafter, any deposited Preferred Stock is
converted into Excess Stock and any such Excess Stock is to be redeemed in
connection with the redemption of deposited Preferred Stock, then, subject to
the other provisions of this Deposit Agreement, the provisions of this Section
2.3 shall apply, mutatis mutandis, to the redemption of such Excess Stock.
Section 2.4 Registration of Transfer of Receipts. The Company hereby
appoints the Depositary as the Registrar, Transfer Agent and paying agent for
the Receipts in Boston, Massachusetts and the Borough of Manhattan, The City of
New York and the Depositary hereby accepts such appointment and, as such, shall
register on its books from time to time transfers of Receipts upon any surrender
thereof by the holder in person or by a duly authorized attorney, properly
endorsed or accompanied by a properly executed instrument of transfer or
endorsement. No service charge will be made for any registration of transfer or
exchange of Receipts, but the Company or the Depositary may require payment of
any transfer tax or similar governmental charge payable in connection therewith.
Upon such surrender, the Depositary shall execute a new Receipt or Receipts and
deliver the same to or upon the order of the person entitled thereto evidencing
the same aggregate number of Depositary Shares evidenced by the Receipt or
Receipts surrendered.
Section 2.5 Combinations and Split-ups of Receipts. Upon surrender of a
Receipt or Receipts at the Corporate Office, the New York Office or such other
office as the Depositary may designate for the purpose of effecting a split-up
or combination of Receipts, subject to the terms and conditions of this Deposit
Agreement, the Depositary shall execute and deliver a new Receipt or Receipts in
the authorized denominations requested evidencing
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the same aggregate number of Depositary Shares evidenced by the Receipt or
Receipts surrendered.
Section 2.6 Surrender of Receipts and Withdrawal of Preferred Stock. Any
holder of a Receipt or Receipts evidencing Depositary Shares representing
deposited Preferred Stock may withdraw any or all of the deposited Preferred
Stock represented by the Depositary Shares evidenced by such Receipt or Receipts
and all money and other property, if any, represented by such Depositary Shares
by surrendering such Receipt or Receipts at the Corporate Office, the New York
Office or at such other office as the Depositary may designate for such
withdrawals, provided that a holder of a Receipt or Receipts may not withdraw
such Preferred Stock (or money and other property, if any, represented thereby)
which has previously been called for redemption. After such surrender, without
unreasonable delay, the Depositary shall deliver to such holder, or to the
person or persons designated by such holder as hereinafter provided, the number
of whole or fractional shares of such Preferred Stock and all such money and
other property, if any, represented by the Depositary Shares evidenced by the
Receipt or Receipts so surrendered for withdrawal, but, except as provided below
in this Section 2.5, holders of such whole or fractional shares of Preferred
Stock will not thereafter be entitled to deposit such Preferred Stock hereunder
or to receive Depositary Shares therefor. If the Receipt or Receipts delivered
by the holder to the Depositary in connection with such withdrawal shall
evidence a number of Depositary Shares in excess of the number of Depositary
Shares representing the number of whole or fractional shares of deposited
Preferred Stock to be withdrawn, the Depositary shall at the same time, in
addition to such number of whole or fractional shares of Preferred Stock and
such money and other property, if any, to be withdrawn, deliver to such holder
or (subject to Section 2.4) upon his order, a new Receipt or Receipts evidencing
such excess number of Depositary Shares. Delivery of such Preferred Stock and
such money and other property being withdrawn may be made by the delivery of
such certificates, documents of title and other instruments as the Depositary
may deem appropriate, which, if required by the Depositary, shall be properly
endorsed or accompanied by proper instruments of transfer.
If the deposited Preferred Stock and the money and other property being
withdrawn are to be delivered to a person or persons other than the record
holder of the Receipt or Receipts being surrendered for withdrawal of Preferred
Stock, such holder shall execute and deliver to the Depositary a written order
so directing the Depositary and the Depositary may require that the Receipt or
Receipts surrendered by such holder for withdrawal of such shares of Preferred
Stock be properly endorsed in blank or accompanied by a properly executed
instrument of transfer or endorsement in blank.
The Depositary shall deliver the deposited Preferred Stock and the money
and other property, if any, represented by the Depositary Shares evidenced by
Receipts surrendered for withdrawal at the New York Office or, if requested by
the holder surrendering such Receipt or Receipts, at the Corporate Office,
except that, at the request, risk and expense of the holder surrendering such
Receipt or Receipts and for the account of the holder thereof, such delivery may
be made at such other place as may be designated by such holder.
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If the Amendments become effective in accordance with the DGCL and,
thereafter, any deposited Preferred Stock is converted into Excess Stock, then,
subject to the other provisions of this Deposit Agreement, the foregoing
provisions of this Section 2.6 shall apply, mutatis mutandis, to the withdrawal
of such Excess Stock. Anything herein to the contrary notwithstanding, in the
event that any Excess Stock is withdrawn and such Excess Stock thereafter is
converted back into Preferred Stock pursuant to Article Thirteenth, then such
Preferred Stock may be subsequently deposited under this Deposit Agreement.
Section 2.7 Limitations on Execution and Delivery, Transfer, Split-up,
Combination, Surrender and Exchange of Receipts. As a condition precedent to the
execution and delivery, transfer, split-up, combination, surrender or exchange
of any Receipt, the Depositary, any of the Depositary's Agents or the Company
may require any or all of the following: (i) payment to it of a sum sufficient
for the payment (or, in the event that the Depositary or the Company shall have
made such payment, the reimbursement to it) of any transfer tax or similar
governmental charge payable with respect thereto (including any such tax or
charge with respect to the Preferred Stock or Excess Stock being deposited or
withdrawn); (ii) production of proof satisfactory to it as to the identity and
genuineness of any signature (or the authority of any signature); and (iii)
compliance with such reasonable regulations, if any, as the Depositary or the
Company may establish consistent with the provisions of this Deposit Agreement
or as may be required by any securities exchange upon which the deposited
Preferred Stock, the Depositary Shares or the Receipts may be included for
quotation or listed.
The deposit of Preferred Stock or Excess Stock may be refused, the delivery
of Receipts against Preferred Stock or Excess Stock may be suspended, the
transfer of Receipts may be refused, and the transfer, split-up, combination,
surrender or exchange of outstanding Receipts may be suspended (i) during any
period when the register of stockholders of the Company is closed or (ii) if any
such action is deemed reasonably necessary or advisable by the Depositary, any
of the Depositary's Agents or the Company at any time or from time to time
because of any requirement of law or of any government or governmental body or
commission, or under any provision of this Deposit Agreement.
Section 2.8 Lost Receipts, etc. In case any Receipt shall be mutilated or
destroyed or lost or stolen, the Depositary in its discretion may execute and
deliver a Receipt of like form and tenor in exchange and substitution for such
mutilated Receipt or in lieu of and in substitution for such destroyed, lost or
stolen Receipt, provided that the holder thereof provides the Depositary with
(i) evidence reasonably satisfactory to the Depositary of such destruction, loss
or theft of such Receipt, of the authenticity thereof and of his ownership
thereof and (ii) reasonable indemnification satisfactory to the Depositary and
the Company.
Section 2.9 Cancellation and Destruction of Surrendered Receipts. All
Receipts surrendered to the Depositary or any Depositary's Agent shall be
cancelled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy such Receipts so cancelled.
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Section 2.10 Restrictions on Transfer; Excess Stock. As set forth in the
Joint Proxy Statement/Prospectus dated May 18, 1998 (the "Proxy Statement") of
The Meditrust Companies and La Quinta Inns, Inc., the Company is soliciting the
vote of its stockholders in favor of amendments the (the "Amendments") to its
Certificate of Incorporation which would (i) add a new Article Thirteenth to
such Certificate of Incorporation in the form set forth as Annex E to the Proxy
Statement ("Article Thirteenth") and (ii) authorize a new class of capital stock
of the Company to be known as Excess Stock ("Excess Stock"). The Receipts and
the Depositary Shares represented thereby are subject to the provisions of
Section 7.5 of the Company's by-laws and, if the Amendments are approved and
become effective in accordance with the DGCL, then, from and after the date on
which the Amendments shall have become effective in accordance with the DGCL,
the Receipts and the Depositary Shares represented thereby shall also be subject
to the provisions of Article Thirteenth and (i) for purposes of applying Section
7.5 of the Company's by-laws and, if the Amendments become effective as
aforesaid, Article Thirteenth, each holder of any Receipts will be deemed to be
the owner of the number of shares (including fractional shares) of Preferred
Stock represented by the Depositary Shares evidenced by such Receipts and (ii)
except as otherwise expressly stated in this Deposit Agreement, Section 7.5 of
the Company's by-laws and, if the Amendments become effective as aforesaid,
Article Thirteenth shall apply to such holder and such Receipts and Depositary
Shares as if (A) such holder owned the shares (including fractional shares) of
Preferred Stock represented by such Depositary Shares directly, (B) such
Receipts evidenced such shares (including fractional shares) of Preferred Stock
and (C) each such Depositary Share was a fractional share of Preferred Stock,
mutatis mutandis.
If the Amendments become effective as described in the first paragraph of
this Section 2.10, then the deposited Preferred Stock represented by the
Depositary Shares evidenced by any Receipt may be converted into Excess Stock
upon the terms and conditions set forth in Article Thirteenth and, upon any such
conversion of deposited Preferred Stock into Excess Stock, the Depositary Shares
which previously represented such shares of Preferred Stock shall be deemed to
represent such shares of Excess Stock and the Prohibited Owner of such
Depositary Shares shall submit the Receipts evidencing such Depositary Shares to
the Company for registration in the name of the applicable Trustee; provided
that if fewer than all of the shares of Preferred Stock represented by the
Depositary Shares evidenced by a Receipt are converted into Excess Stock, the
Depositary will deliver to the holder of such Receipt, upon submission of such
Receipt to the Depositary as aforesaid, a new Receipt evidencing the Depositary
Shares representing the shares of Preferred Stock which have not been converted
into Excess Stock. In the event of the conversion of any deposited Preferred
Stock into Excess Stock, the Company and the Depositary shall take such actions
as may be necessary or appropriate so that the Receipts evidencing Depositary
Shares representing such Excess Stock are appropriately and conspicuously marked
to indicate that they evidence Depositary Shares representing Excess Stock and
not Depositary Shares representing Preferred Stock, it being the intention of
the parties hereto that no Receipt shall evidence both Depositary Shares
representing Preferred Stock and Depositary Shares representing Excess Stock,
and that all Receipts evidencing Depositary Shares representing Excess Stock
shall be registered in the name of the applicable Trustee. In the event that any
shares of
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deposited Preferred Stock are converted into Excess Stock as aforesaid, the
Company will promptly provide the Depositary with the names and addresses of the
Prohibited Owners of the Depositary Shares representing such shares of Excess
Stock and the Depositary will make appropriate notations in its stock transfer
books.
If, pursuant to Section 7.5 of its by-laws, the Company purchases any
shares of Preferred Stock represented by Depositary Shares, the Company will,
prior to such purchase, provide the Depositary with the names of the specific
holders of the Receipts evidencing such Depositary Shares and, on or prior to
the day of purchase, the Company will pay to the Depositary an amount equal to
the purchase price of such shares of Preferred Stock, together with accrued and
unpaid dividends thereon (including, without limitation, accumulated dividends,
if any, for prior dividend periods) to the date of purchase, and the Depositary
will apply such monies to purchase such Depositary Shares from the holders
identified by the Company as aforesaid against surrender of such Depositary
Receipts. Anything in the Company's by-laws to the contrary notwithstanding, the
purchase price for each Depositary Share purchased by the Company pursuant to
this Section 2.10 shall be equal to 1/10th of the purchase price payable under
Section 7.5 of the Company's by-laws per share of Preferred Stock to be
purchased as aforesaid, plus 1/10th of the accrued and unpaid dividends
(including, without limitation, accumulated dividends, if any, for prior
dividend periods) on one share of such Preferred Stock to the date of purchase,
plus 1/10th of any other money or other property payable in respect of one share
of such Preferred Stock.
If the Amendments become effective as described in the first paragraph of
this Section 2.10 and, thereafter, any shares of Preferred Stock deposited
hereunder are converted into Excess Stock and any Prohibited Owner shall be
entitled to receive any monies, securities or other property from the applicable
Trustee pursuant to Section 13.2(f) or 13.2(i) of Article Thirteenth, or if any
dividend or other distribution of monies, securities or other property shall be
paid or made upon such Excess Stock then, unless Article Thirteenth provides
that such monies, securities or other property shall be held by the applicable
Trustee for the benefit of, or distributed or paid to, the applicable
Beneficiary (as defined in Article Thirteenth), the Company will cause such
monies, securities or other property to be paid or distributed, as the case may
be, to the Depositary and, prior to the date of payment or distribution of such
monies, securities or other property, the Company will provide the Depositary
with the names of the Prohibited Owners of the Depositary Shares representing
such Excess Stock and the Depositary will pay or distribute, as the case may be,
such monies, securities and property to such Prohibited Owners, with the amount
payable or distributable in respect of each such Depositary Share being equal to
1/10th of the amount payable or distributable per share of Excess Stock.
In the event that any Preferred Stock deposited hereunder is converted into
Excess Stock and, thereafter, such Excess Stock is, pursuant to Article
Thirteenth, converted back into Preferred Stock, then the Depositary Shares
which were previously deemed to represent such Excess Stock shall thereafter
automatically be deemed to represent such Preferred Stock and such Depositary
Shares and the Receipts evidencing such Depositary Shares shall be
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restored to their previous status under this Deposit Agreement. In such case,
the Company and the Depositary shall cause the Trustee to submit the Receipts
evidencing the Depositary Shares representing the Excess Stock which is being
converted back into Preferred Stock to the Depositary and, upon the conversion
of such Excess Stock into Preferred Stock, the Depositary shall issue new
Receipts evidencing Depositary Shares representing such Preferred Stock, such
Receipts to be registered in the name of the persons entitled thereto pursuant
to Article Thirteenth, and shall deliver such Receipts in accordance with the
provisions of Article Thirteenth and as directed by the Company.
If fewer than all of the Depositary Shares evidenced by a Receipt are
purchased by the Company pursuant to Section 7.5 of its by-laws or, if the
Amendments become effective as described in the first paragraph of this Section
2.10, by the Company or a Permitted Transferee (as defined in Article
Thirteenth) pursuant to Article Thirteenth, the Depositary will deliver to the
holder of such Receipt upon its surrender to the Depositary, a new Receipt
evidencing the Depositary Shares evidenced by such prior Receipt and not so
purchased by the Company or such Permitted Transferee, as the case may be. The
Depositary and the Company will cooperate in good faith to carry out the terms
of this Section 2.10, subject to the other terms and provisions of this Deposit
Agreement.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY
Section 3.1 Filing Proofs, Certificates and Other Information. Any person
presenting Preferred Stock for deposit or any holder of a Receipt may be
required from time to time to file such proof of residence or other information,
to execute such certificates and to make such representations and warranties as
the Depositary or the Company may reasonably deem necessary or proper. The
Depositary or the Company may withhold or delay the delivery of any Receipt, the
transfer, redemption or exchange of any Receipt, the withdrawal of the deposited
Preferred Stock or Excess Stock represented by the Depositary Shares evidenced
by any Receipt, the distribution of any dividend or other distribution or the
sale of any rights or of the proceeds thereof, until such proof or other
information is filed, such certificates are executed or such representations and
warranties are made.
Section 3.2 Payment of Fees and Expenses. Holders of Receipts shall be
obligated to make payments to the Depositary of certain fees and expenses, as
provided in Section 5.7, or to provide evidence reasonably satisfactory to the
Depositary that such fees and expenses have been paid. Until such payment is
made, transfer of any Receipt or any withdrawal of the Preferred Stock or Excess
Stock or money or other property, if any, represented by the Depositary Shares
evidenced by such Receipt may be refused, any dividend or other distribution on
such Preferred Stock or Excess Stock may be withheld, and any part or all of the
Preferred Stock or Excess Stock or other property represented by the Depositary
Shares evidenced by such Receipt may be sold for the account of the holder
thereof (after attempting by reasonable means to notify such holder a reasonable
number of days prior to such sale).
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Any dividend or other distribution so withheld and the proceeds of any such sale
may be applied to any payment of such fees or expenses, the holder of such
Receipt remaining liable for any deficiency.
Section 3.3 Representations and Warranties as to Preferred Stock. In the
case of the initial deposit of the Preferred Stock hereunder, the Company and,
in the case of subsequent deposits thereof, each person so depositing Preferred
Stock under this Deposit Agreement shall be deemed thereby to represent and
warrant that such Preferred Stock and each certificate therefor are valid and
that the person making such deposit is duly authorized to do so. The Company
hereby further represents and warrants that such Preferred Stock, when issued,
will be validly issued, fully paid and nonassessable and any Excess Stock issued
upon conversion of such Preferred Stock, when issued, will be validly issued,
fully paid and non-assessable. Such representations and warranties shall survive
the deposit of the Preferred Stock and the issuance of Receipts.
Section 3.4 Representation and Warranty as to Receipts and Depositary
Shares. The Company hereby represents and warrants that the Receipts, when
issued, will evidence legal and valid interests in the Depositary Shares and
each Depositary Share will represent a legal and valid 1/10th fractional
interest in a deposited share of Preferred Stock or, in the event that the
Amendments shall become effective in accordance with applicable law and any
deposited Preferred Stock is converted into Excess Stock, a legal and valid
1/10th fractional interest in a share of deposited Excess Stock. Such
representation and warranty shall survive the deposit of the Preferred Stock and
the issuance of Receipts and any conversion of deposited Preferred Stock into
Excess Stock.
ARTICLE IV
THE PREFERRED STOCK; NOTICES
Section 4.1 Cash Distributions. Whenever the Depositary shall receive any
cash dividend or other cash distribution on the deposited Preferred Stock or
deposited Excess Stock, the Depositary shall, subject to Section 3.2 and the
last sentence of this Section 4.1, (i) distribute to record holders of Receipts
evidencing Depositary Shares representing deposited Preferred Stock on the
record date fixed pursuant to Section 4.4 such amounts of such sums as are, as
nearly as practicable, in proportion to the respective numbers of such
Depositary Shares evidenced by the Receipts held by such holders and (ii)
distribute to record holders of Receipts evidencing Depositary Shares
representing deposited Excess Stock on the record date fixed pursuant to Section
4.4 such amounts of such sums as are, as nearly as practicable, in proportion to
the respective numbers of such Depositary Shares held by such holders (subject
to the obligation, if any, of the applicable Trustee to distribute certain such
cash dividends or other cash distributions to the applicable Prohibited Owners
as contemplated by Article Thirteenth); provided, however, that in case the
Company or the Depositary shall be required by law to withhold and shall
withhold from any cash dividend or other cash distribution in respect of the
Preferred Stock or Excess Stock represented by the
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Depositary Shares which are evidenced by the Receipts held by any holder or
owned by any Prohibited Owner an amount on account of taxes, the amount made
available for distribution or distributed in respect of Depositary Shares
evidenced by such Receipts shall be reduced accordingly. The Depositary shall
distribute or make available for distribution, as the case may be, only such
amount, however, as can be distributed without attributing to any holder of
Receipts a fraction of one cent, and any balance not so distributable shall be
held by the Depositary (without liability for interest thereon) and shall be
added to and be treated as part of the next sum received by the Depositary for
distribution to record holders of Receipts evidencing Depositary Shares
representing Preferred Stock then outstanding or to record holders of Receipts
evidencing Depositary Shares representing Excess Stock then outstanding, as the
case may be. Notwithstanding the foregoing, (i) if less than all of the
outstanding Depositary Shares are to be redeemed as contemplated by Section 2.3
hereof and the Depositary Shares to be so redeemed are not selected pro rata,
then only the holders of the Receipts evidencing the Depositary Shares selected
for redemption will be entitled to receive the cash redemption price therefor or
any other amounts payable upon such redemption; and (ii) if any Depositary
Shares are purchased by the Company pursuant to Section 7.5 of its by-laws as
contemplated by Section 2.10 hereof, then only the holders of the Receipts
evidencing such Depositary Shares shall be entitled to receive the purchase
price therefor or any other amounts payable upon such purchase; and (iii) in the
event that the Amendments shall become effective in accordance with applicable
law and, thereafter, any deposited Preferred Stock is converted into Excess
Stock then (A) any monies payable under Section 13.2(i) of Article Thirteenth
upon a sale or other disposition of such Excess Stock shall be payable only to
the Prohibited Owner of the Depositary Shares representing such Excess Stock and
as otherwise provided by Article Thirteenth, (B) the Depositary Shares
representing Excess Stock shall not represent a fractional interest in or be
entitled to share in or receive any monies, securities or other property
(including any rights, preferences or privileges referred to in Section 4.3)
payable, distributable or offered in respect of the deposited Preferred Stock
and (C) the Depositary Shares representing deposited Preferred Stock shall not
represent a fractional interest in or be entitled to share in or receive any
monies, securities or other property (including any rights, preferences or
privileges referred to in Section 4.3) payable, distributable or offered in
respect of Excess Stock.
Section 4.2 Distributions Other Than Cash. Whenever the Depositary shall
receive any distribution other than cash on the deposited Preferred Stock or
deposited Excess Stock, the Depositary shall, subject to Section 3.2 and the
last sentence of Section 4.1, (i) distribute to record holders of Receipts
evidencing Depositary Shares representing deposited Preferred Stock on the
record date fixed pursuant to Section 4.4 such amounts of the securities or
property received by the Depositary in respect of the deposited Preferred Stock
as are, as nearly as practicable, in proportion to the respective numbers of
such Depositary Shares evidenced by the Receipts
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held by such holders and (ii) distribute to record holders of Receipts
evidencing Depositary Shares representing deposited Excess Stock on the record
date fixed pursuant to Section 4.4 such amounts of the securities or property
received by the Depositary in respect of the deposited Excess Stock as are, as
nearly as practicable, in proportion to the respective number of such Depositary
Shares, evidenced by the Receipts held by such holders (subject to the
obligation, if any, of the applicable Trustee to distribute certain such
securities or property to the applicable Prohibited Owners as contemplated by
Article Thirteenth), in each case in any manner that the Depositary and the
Company may deem equitable and practicable for accomplishing such distribution.
If, in the opinion of the Depositary after consultation with the Company, such
distribution cannot be made proportionately among such record holders of
Receipts evidencing Depositary Shares representing Preferred Stock or among
record holders of Receipts evidencing Depositary Shares representing Excess
Stock, as the case may be, or if for any other reason (including any requirement
that the Company or the Depositary withhold an amount on account of taxes) the
Depositary deems, after consultation with the Company, such distribution not to
be feasible, the Depositary may, with the approval of the Company, adopt such
method as it deems equitable and practicable for the purpose of effecting such
distribution, including the sale (at public or private sale) of the securities
or property thus received or any part thereof, at such place or places and upon
such terms as it may deem proper. The net proceeds of any such sale shall,
subject to Section 3.2, be distributed or made available for distribution, as
the case may be, by the Depositary to record holders of the applicable Receipts
as provided by Section 4.1 in the case of a distribution received in cash. The
Company shall not make any distribution of such securities or property unless
the Company shall have provided to the Depositary an opinion of counsel stating
that such securities or property have been registered under the Securities Act
or do not need to be registered.
Section 4.3 Subscription Rights, Preferences or Privileges. If the Company
shall at any time offer or cause to be offered to the persons in whose names
deposited Preferred Stock or deposited Excess Stock is registered on the books
of the Company any rights, preferences or privileges to subscribe for or to
purchase any securities or any rights, preferences or privileges of any other
nature, such rights, preferences or privileges shall in each such instance be
made available by the Depositary, subject to the last sentence of Section 4.1,
(i) to the record holders of Receipts evidencing Depositary Shares representing
such Preferred Stock and (ii) to the record holders of Receipts evidencing
Depositary Shares representing such Excess Stock (subject to the obligation, if
any, of the applicable Trustee to make available certain such rights,
preferences or privileges to the applicable Prohibited Owners as contemplated by
Article Thirteenth), in each case in such manner as the Company shall instruct
(including by the issue to such record holders of warrants representing such
rights, preferences or privileges); provided, however, that (a) if at the time
of issue or offer of any such rights, preferences or privileges the Company
determines upon advice of its legal counsel that it is not lawful or feasible to
make such rights, preferences or privileges available to the holders of Receipts
(by the issue of warrants or otherwise) or (b) if and to the extent instructed
by holders of Receipts who do not desire to exercise such rights, preferences or
privileges, the Depositary shall then, if applicable laws or the terms of such
rights, preferences or privileges so permit, sell such rights, preferences or
privileges of such holders at public or private sale, at such place or places
and upon such terms as it may deem proper. The net proceeds of any such sale
shall, subject to Section 3.2, be distributed by the Depositary to the record
holders of Receipts entitled thereto as provided by Section 4.1 in the case of a
distribution received in cash. The Company shall not make any distribution of
such
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rights, preferences or privileges unless the Company shall have provided to the
Depositary an opinion of counsel stating that such rights, preferences or
privileges have been registered under the Securities Act or do not need to be
registered.
If registration under the Securities Act of the securities to which any
rights, preferences or privileges relate is required in order for holders of
Receipts or, if applicable, any Prohibited Owners or Beneficiary to be offered
or sold the securities to which such rights, preferences or privileges relate,
the Company agrees that it will promptly file a registration statement pursuant
to the Securities Act with respect to such rights, preferences or privileges and
securities and use its best efforts and take all steps available to it to cause
such registration statement to become effective as promptly as practicable and,
in any event, sufficiently in advance of the expiration of such rights,
preferences or privileges to enable such persons to exercise such rights,
preferences or privileges. In no event shall the Depositary make available to
the holders of Receipts or, if applicable, any Prohibited Owners or Beneficiary
any right, preference or privilege to subscribe for or to purchase any
securities unless and until such a registration statement shall have become
effective and the Company shall have provided to the Depositary an opinion of
legal counsel to such effect or unless the offering and sale of such securities
to such persons are exempt from registration under the provisions of the
Securities Act and the Company shall have provided to the Depositary an opinion
of counsel to such effect.
If any other action under the law of any jurisdiction or any governmental
or administrative authorization, consent or permit is required in order for such
rights, preferences or privileges or related securities or any securities or
property referred to in Section 4.2 to be made available to holders of Receipts
or, if applicable, any Prohibited Owners or Beneficiary, the Company agrees to
take such action or obtain such authorization, consent or permit prior to the
distribution of such rights, preferences or privileges or such securities or
property referred to in Section 4.2, as the case may be, and further agrees, in
the case of any such related securities, to use its best efforts to take such
action or obtain such authorization, consent or permit as promptly as
practicable and, in any event, sufficiently in advance of the expiration of such
rights, preferences or privileges to enable such holders to exercise such
rights, preferences or privileges.
Section 4.4 Notice of Dividends; Fixing of Record Date for Holders of
Receipts. Whenever any cash dividend or other cash distribution shall become
payable, any distribution other than cash shall be made, or any rights,
preferences or privileges shall at any time be offered with respect to the
deposited Preferred Stock or Excess Stock issued upon conversion of deposited
Preferred Stock, or whenever the Depositary shall receive notice of (i) any
meeting at which holders of such Preferred Stock or such Excess Stock are
entitled to vote or of which holders of such Preferred Stock or such Excess
Stock are entitled to notice or (ii) any election on the part of the Company to
redeem any such shares of Preferred Stock or Excess Stock, the Depositary shall
in each such instance fix a record date (which shall be the same date as the
record date fixed by the Company with respect to the Preferred Stock or Excess
Stock, as the case may be) for the determination of the holders of Receipts who
shall
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be entitled (x) to receive such dividend, distribution, rights, preferences or
privileges or the net proceeds of the sale thereof, or (y) to give instructions
for the exercise of voting rights at any such meeting or to receive notice of
such meeting or redemption.
Section 4.5 Voting Rights. Upon receipt of notice of any meeting at which
the holders of deposited Preferred Stock or deposited Excess Stock issued upon
conversion of deposited Preferred Stock are entitled to vote, the Depositary, as
soon as practicable thereafter, shall mail to the record holders of Receipts a
notice, which shall be provided by the Company and which shall contain (i) such
information as is contained in such notice of meeting, (ii) a statement that the
holders of Receipts at the close of business on a specified record date fixed
pursuant to Section 4.4 will be entitled, subject to any applicable provision of
law, to instruct the Depositary as to the exercise of the voting rights
pertaining to the Preferred Stock or such Excess Stock, as the case may be,
represented by their respective Depositary Shares and (iii) a brief statement as
to the manner in which such instructions may be given. Upon the written request
of a holder of a Receipt on such record date (which shall be the same as the
record date for the Preferred Stock and the Excess Stock), the Depositary shall
vote or cause to be voted the Preferred Stock or Excess Stock, as the case may
be, represented by the Depositary Shares evidenced by such Receipt in accordance
with the instructions set forth in such request. Each share of Preferred Stock
and Excess Stock is entitled to ten votes and, accordingly, each Depositary
Share is entitled to one vote. The Company hereby agrees to take all reasonable
action that may be deemed necessary by the Depositary in order to enable the
Depositary to vote such Preferred Stock or such Excess Stock, as the case may
be, or cause such Preferred Stock or such Excess Stock, as the case may be, to
be voted. In the absence of specific instructions from the holder of a Receipt,
the Depositary will abstain from voting to the extent of the Preferred Stock or
Excess Stock, as the case may be, represented by the Depositary Shares evidenced
by such Receipt. The Depositary shall not be required to exercise discretion in
voting any Preferred Stock or Excess Stock represented by the Depositary Shares
evidenced by such Receipt.
Section 4.6 Changes Affecting Preferred Stock and Reclassifications,
Recapitalization, etc. Upon any change in the liquidation preference, or upon
any split-up, combination or any other reclassification of Preferred Stock, or
upon any recapitalization, reorganization, merger or consolidation affecting the
Company or to which it is a party or sale of all or substantially all of the
Company's assets, the Depositary shall, upon the instructions of the Company,
(i) make such adjustments in (a) the fraction of an interest represented by one
Depositary Share in one share of Preferred Stock and (b) the ratio of the
redemption price or, for purposes of Section 2.10 hereof, purchase price per
Depositary Share to the redemption price or purchase price, as the case may be,
of a share of Preferred Stock, in each case as may be required to fully reflect
the effects of such change in liquidation preference, split-up, combination or
other reclassification of Preferred Stock, or of such recapitalization,
reorganization, merger, consolidation or sale and (ii) treat any shares of stock
or other securities or property (including cash) that shall be received by the
Depositary in exchange for or upon conversion of or in respect of the Preferred
Stock as new deposited property under this Deposit Agreement, and Receipts then
outstanding shall
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thenceforth represent the proportionate interests of holders thereof in the new
deposited property so received in exchange for or upon conversion or in respect
of such Preferred Stock. In any such case the Depositary may, in its discretion,
with the approval of the Company, execute and deliver additional Receipts, or
may call for the surrender of all outstanding Receipts to be exchanged for new
Receipts specifically describing such new deposited property. Anything to the
contrary herein notwithstanding, holders of Receipts shall have the right from
and after the effective date of any such change in liquidation preference,
split-up, combination or other reclassification of the Preferred Stock or any
such recapitalization, reorganization, merger or consolidation or sale of all or
substantially all the assets of the Company, to surrender such Receipts to the
Depositary with instructions to convert, exchange or surrender the Preferred
Stock represented thereby only into or for, as the case may be, the kind and
amount of shares of stock and other securities and property and cash into which
the deposited Preferred Stock evidenced by such Receipts might have been
converted or for which such Preferred Stock might have been exchanged or
surrendered immediately prior to the effective date of such transaction. The
Company shall cause effective provision to be made in the charter or other
governing instruments of the resulting, surviving or transferee entity (if other
than the Company) for protection of such rights as may be applicable upon
exchange of the deposited Preferred Stock for securities or property or cash of
the surviving entity in connection with the transactions set forth above. The
Company shall cause any such surviving entity (if other than the Company)
expressly to assume the obligations of the Company hereunder, by written
instrument or agreement executed and delivered on or prior to the effective date
of such transaction.
In the event that the Amendments become effective in accordance with
applicable law and, thereafter, any Excess Stock is issued upon conversion of
deposited Preferred Stock, then the terms and provisions of the preceding
paragraph of this Section 4.6 shall also be applicable to such Excess Stock as
if each reference therein to Preferred Stock were a reference to Excess Stock,
mutatis mutandis, and, without limitation to the foregoing, if any adjustment of
the nature referred to in clause (i) of the first sentence of such paragraph is
made in respect of the Preferred Stock or the Depositary Shares representing
Preferred Stock, the same adjustments shall be made in respect of the Excess
Stock and the Depositary Shares representing the Excess Stock.
Section 4.7 Inspection of Reports. The Depositary shall make available for
inspection by holders of Receipts at the Corporate Office, the New York Office
and at such other places as it may from time to time deem advisable during
normal business hours any reports and communications received from the Company
that are both received by the Depositary as the holder of deposited Preferred
Stock and made generally available to the holders of the Preferred Stock or that
are both received by the Depositary (or a Depositary's Agent) as the holder of
deposited Excess Stock issued upon conversion of deposited Preferred Stock and
made generally available to holders of such Excess Stock. In addition, the
Depositary shall transmit certain notices and reports to the holders of Receipts
as provided in Section 5.5.
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Section 4.8 List of Holders of Receipts. Promptly upon request from time to
time by the Company, the Depositary shall furnish to the Company a list, as of a
recent date specified by the Company, of the names, addresses and holdings of
Depositary Shares of all persons in whose names Receipts are registered on the
books of the Depositary. Promptly upon request from time to time by the
Depositary, the Company shall furnish to the Depositary a list, as of a recent
date specified by the Depositary, of the names and addresses of all Prohibited
Owners and their respective ownership interests in Depositary Shares
representing Excess Stock.
Section 4.9 Tax and Regulatory Compliance. The Depositary shall be
responsible for (i) preparation and mailing of Internal Revenue Service Forms
1099 for all open and closed accounts, (ii) foreign tax withholding, (iii)
back-up withholding (or any withholding as may be required at the then
applicable rate) on dividends paid and other distributions made to eligible
holders of Receipts, (iv) mailing Internal Revenue Service Forms W-9 to new
holders of Receipts without a certified taxpayer identification number, (v)
processing certified Internal Revenue Service Forms W-9, (vi) preparation and
filing of state information returns and (vii) escheatment services.
Section 4.10 Withholding. Notwithstanding any other provision of this
Deposit Agreement, in the event that the Depositary determines that any
distribution in property is subject to any tax which the Depositary is obligated
by law to withhold, the Depositary may dispose of all or a portion of such
property in such amounts and in such manner as the Depositary deems necessary
and practicable to pay such taxes, by public or private sale, and the Depositary
shall distribute the net proceeds of any such sale or the balance of any such
property after deduction of such taxes to the holders of Receipts entitled
thereto in proportion to the number of Depositary Shares held by them
respectively.
ARTICLE V
THE DEPOSITARY AND THE COMPANY
Section 5.1 Maintenance of Offices, Agencies and Transfer Books by the
Depositary and the Registrar. The Depositary shall maintain (i) at the New York
Office facilities for the execution and delivery, transfer, surrender and
exchange, split-up, combination and redemption of Receipts (and payment of
amounts due upon such redemption) and purchase of Receipts as contemplated by
Section 2.10 hereof (and payment of amounts due upon such purchase) and for
other payments and distributions in respect of the Depositary Shares and the
Receipts, and deposit and withdrawal of Preferred Stock and Excess Stock issued
upon conversion of deposited Preferred Stock and (ii) at the Corporate Office
and at the offices of the Depositary's Agents, if any, facilities for the
execution and delivery, transfer, surrender and exchange, split-up, combination
and redemption of Receipts (and payment of amounts due upon such redemption) and
purchase of Receipts as contemplated by Section 2.10 hereof (and payment of
amounts due upon such purchase) and for other payments and distributions in
respect of the Depositary Shares and the Receipts and
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deposit and withdrawal of Preferred Stock and Excess Stock issued upon
conversion of deposited Preferred Stock, all in accordance with the provisions
of this Deposit Agreement. Without limitation to the foregoing provisions of
this Section 5.1, the Company shall at all times maintain a paying agent,
Transfer Agent and Registrar for the Receipts and the Preferred Stock and Excess
Stock issued upon conversion of deposited Preferred Stock in the Borough of
Manhattan, The City of New York.
The Depositary shall keep books at the Corporate Office for the
registration and transfer of Receipts, which books at all reasonable times shall
be open for inspection by the record holders of Receipts. The Depositary may
close such books, at any time or from time to time, when deemed expedient by it
in connection with the performance of its duties hereunder.
If the Receipts or the Depositary Shares evidenced thereby or the Preferred
Stock represented by such Depositary Shares shall be listed on the New York
Stock Exchange, Inc. or any other stock exchange, the Depositary shall, with the
approval of the Company, appoint a Registrar (acceptable to the Company) for
registration of such Receipts or Depositary Shares in accordance with the
requirements of such exchange. Such Registrar (which may be the Depositary if so
permitted by the requirements of such exchange) may be removed and a substitute
Registrar appointed by the Depositary upon the request or with the approval of
the Company. If the Receipts, such Depositary Shares or such Preferred Stock are
listed on one or more other stock exchanges, the Depositary will, at the request
and expense of the Company, arrange such facilities for the delivery, transfer,
surrender, redemption, purchase and exchange of such Receipts, such Depositary
Shares or such Preferred Stock as may be required by law or applicable stock
exchange regulations.
Section 5.2 Prevention or Delay in Performance by the Depositary, the
Depositary's Agents, the Registrar or the Company. Neither the Depositary, any
Depositary's Agent, any Registrar nor the Company shall incur any liability to
any holder of any Receipt, if by reason of any provision of any present or
future law or regulation thereunder of the United States of America or of any
other governmental authority or, in the case of the Depositary, any Depositary's
Agent or any Registrar, by reason of any provision, present or future, of the
Certificate of Incorporation (including the Certificate of Designation) or, in
the case of the Company, the Depositary, any Depositary's Agent or any
Registrar, by reason of any act of God or war or other circumstance beyond the
control of the relevant party, the Depositary, any Depositary's Agent, any
Registrar or the Company shall be prevented or forbidden from doing or
performing any act or thing that the terms of this Deposit Agreement provide
shall be done or performed; nor shall the Depositary, any Depositary's Agent,
any Registrar or the Company incur any liability to any holder of a Receipt by
reason of any nonperformance or delay, caused as aforesaid, in the performance
of any act or thing that the terms of this Deposit Agreement provide shall or
may be done or performed, or by reason of any exercise of, or failure to
exercise, any discretion provided for in this Deposit Agreement.
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Section 5.3 Obligations of the Depositary, the Depositary's Agents, the
Registrar and the Company. Neither the Depositary, any Depositary's Agent, any
Registrar nor the Company assumes any obligation or shall be subject to any
liability under this Deposit Agreement or any Receipt to holders of Receipts
other than from acts or omissions arising out of conduct constituting bad faith,
negligence or willful misconduct in the performance of such duties as are
specifically set forth in this Deposit Agreement.
Neither the Depositary, any Depositary's Agent, any Registrar nor the
Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding with respect to the deposited Preferred Stock,
deposited Excess Stock, Depositary Shares or Receipts that in its reasonable
opinion may involve it in expense or liability, unless indemnity reasonably
satisfactory to it against all expense and liability be furnished as often as
may be reasonably required.
Neither the Depositary, any Depositary's Agent, any Registrar nor the
Company shall be liable for any action or any failure to act by it in reliance
upon the written advice of legal counsel or accountants, or information provided
by any person presenting Preferred Stock for deposit, any holder of a Receipt or
any other person believed by it in good faith to be competent to give such
information. The Depositary, any Depositary's Agent, any Registrar and the
Company may each rely and shall each be protected in acting upon any written
notice, request, direction or other document believed by it in good faith to be
genuine and to have been signed or presented by the proper party or parties.
In the event the Depositary shall receive conflicting claims, requests or
instructions from any holders of Receipts or Prohibited Owners, on the one hand,
and the Company, on the other hand, the Depositary shall be entitled to act on
such claims, requests or instructions received from the Company and shall be
entitled to the full indemnification set forth in Section 5.6 hereof in
connection with any action so taken.
The Depositary shall not be responsible for any failure to carry out any
instruction to vote any of the deposited Preferred Stock or any deposited Excess
Stock or for the manner or effect of any such vote made, as long as any such
action or non-action is in good faith and does not result from negligence or
willful misconduct of the Depositary. The Depositary undertakes, and any
Registrar shall be required to undertake, to perform such duties and only such
duties as are specifically set forth in this Deposit Agreement, and no implied
covenants or obligations shall be read into this Agreement against the
Depositary or any Registrar.
The Depositary, its parent, affiliates, or subsidiaries, any Depositary's
Agent, and any Registrar may own, buy, sell or deal in any class of securities
of the Company and its affiliates and in Receipts or Depositary Shares or become
pecuniarily interested in any transaction in which the Company or its affiliates
may be interested or contract with or lend money to or otherwise act as fully or
as freely as if it were not the Depositary or the Depositary's Agent hereunder.
The Depositary may also act as transfer agent or registrar of
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any of the securities of the Company and its affiliates or act in any other
capacity for the Company or its affiliates.
It is intended that neither the Depositary nor any Depositary's Agent shall
be deemed to be an "issuer" of the securities under the federal securities laws
or applicable state securities laws, it being expressly understood and agreed
that the Depositary and any Depositary's Agent are acting only in a ministerial
capacity as Depositary for the deposited Preferred Stock and any deposited
Excess Stock; provided, however, that the Depositary agrees to comply with all
information reporting and withholding requirements applicable to it under law or
this Deposit Agreement in its capacity as Depositary.
Neither the Depositary (or its officers, directors, employees or agents)
nor any Depositary's Agent makes any representation or has any responsibility as
to the validity of the registration statement pursuant to which the Depositary
Shares are registered under the Securities Act, the deposited Preferred Stock,
any deposited Excess Stock, the Depositary Shares, the Receipts (except its
signature or countersignature thereon) or any instruments referred to herein or
therein, or as to the correctness of any statement made herein or therein;
provided, however, that the Depositary is responsible for its representations in
this Deposit Agreement and for the validity of any action taken or required to
be taken by the Depositary in connection with this Deposit Agreement.
The Company agrees that it will register the deposited Preferred Stock, any
Excess Stock issued upon conversion of deposited Preferred Stock and the
Depositary Shares in accordance with the applicable securities laws.
Section 5.4 Resignation and Removal of the Depositary; Appointment of
Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by notice of its election to do so delivered to the Company, such
resignation to take effect upon the appointment of a successor depositary and
its acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by notice of such
removal delivered to the Depositary, such removal to take effect upon the
appointment of a successor depositary and its acceptance of such appointment as
hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall, within 60 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor depositary,
which shall be a bank or trust company having its principal office in the United
States of America and having a combined capital and surplus of at least
$50,000,000. If a successor depositary shall not have been appointed in 60 days,
the resigning Depositary may petition a court of competent jurisdiction to
appoint a successor depositary. Every successor depositary shall execute and
deliver to its predecessor and to the Company an instrument in writing accepting
its appointment hereunder and pursuant to which it shall agree to become the
depositary under this Agreement, and
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thereupon such successor depositary, without any further act or deed, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor and for all purposes shall be the Depositary under this Deposit
Agreement, and such predecessor, upon payment of all sums due it and on the
written request of the Company, shall promptly execute and deliver an instrument
transferring to such successor all rights and powers of such predecessor
hereunder, shall duly assign, transfer and deliver all rights, title and
interest in the deposited Preferred Stock, any deposited Excess Stock issued
upon conversion of deposited Preferred Stock and any moneys or property held
hereunder to such successor and shall deliver to such successor a list of the
record holders of all outstanding Receipts and any list of the names and
addresses of Prohibited Owners of Depositary Shares representing Excess Stock
that may be in the possession of the predecessor. Any successor depositary shall
promptly mail notice of its appointment to the record holders of Receipts and
any Prohibited Owners whose names and addresses have been furnished to such
successor Depositary.
Any corporation, association or other entity into or with which the
Depositary may be merged, consolidated or converted shall be the successor of
such Depositary without the execution or filing of any document or any further
act. Such successor depositary may execute the Receipts either in the name of
the predecessor depositary or in the name of the successor depositary.
Section 5.5 Notices, Reports and Documents. The Company agrees that it will
deliver to the Depositary, and the Depositary will, promptly after receipt
thereof, transmit to the record holders of Receipts, in each case at the
addresses recorded in the Depositary's books, copies of all notices and reports
(including financial statements) required by law, by the rules of any national
securities exchange upon which the Preferred Stock, the Depositary Shares or the
Receipts are included for quotation or listed or by the Certificate of
Incorporation, the Company's by-laws or the Certificate of Designation to be
furnished by the Company to holders of the deposited Preferred Stock and Excess
Stock issued upon conversion of deposited Preferred Stock and, if requested by
the holder of any Receipt or any Prohibited Owner of Depositary Shares, a copy
of this Deposit Agreement, the form of Receipt, the Certificate of Designation
and the form of Preferred Stock certificate. Such transmission will be at the
Company's expense and the Company will provide the Depositary with such number
of copies of such documents as the Depositary may reasonably request. In
addition, the Depositary will transmit to the record holders of Receipts and the
Prohibited Owners at the Company's expense such other documents as may be
requested by the Company.
Section 5.6 Indemnification by the Company. The Company agrees to indemnify
the Depositary, any Depositary's Agent and any Registrar against, and hold each
of them harmless from, any liability, costs and expenses (including reasonable
attorneys' fees) that may arise out of, or in connection with, its acting as
Depositary, Depositary's Agent or Registrar, respectively, under this Deposit
Agreement and the Receipts, except for any liability arising out of the willful
misconduct, negligence or bad faith on the part of any such
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person or persons. The obligations of the Company set forth in this Section 5.6
shall survive any succession of any Depositary, Registrar or Depositary's Agent
or termination of this Deposit Agreement.
Section 5.7 Fees, Charges and Expenses. No charges or expenses of the
Depositary or any Depositary's Agent hereunder shall be payable by any person,
except as provided in this Section 5.7. The Company shall pay all transfer and
other taxes and governmental charges arising solely from the existence of this
Deposit Agreement. The Company shall also pay all fees and expenses of the
Depositary in connection with the deposit of the Preferred Stock, any Excess
Stock issued upon conversion of Preferred Stock and any Preferred Stock issued
upon conversion of Excess Stock and the initial issuance of the Depositary
Shares evidenced by the Receipts, any redemption of the Preferred Stock or
Excess Stock issued upon conversion of Preferred Stock at the option of the
Company, any purchase of Preferred Stock or Excess Stock issued upon conversion
of Preferred Stock by the Company or a Permitted Transferee as contemplated by
Section 2.10 hereof or Article Thirteenth, all withdrawals of the Preferred
Stock or Excess Stock issued upon conversion of Preferred Stock by holders of
Depositary Shares, and in connection with all other services provided, and all
other duties performed, by the Depositary under this Agreement. If a holder of
Receipts requests the Depositary to perform duties not required under this
Deposit Agreement, the Depositary shall notify the holder of the cost of the
performance of such duties prior to the performance thereof. Such holder will be
liable for the charges and expenses related to such performance. All other fees
and expenses of the Depositary and any Depositary's Agent hereunder and of any
Registrar (including, in each case, fees and expenses of counsel) incident to
the performance of their respective obligations hereunder will be promptly paid
as agreed between the Depositary and the Company from time to time. The amount
of the fees and expenses of the Depositary, any Depositary's Agent and any
Registrar which are payable by the Company pursuant to this Section 5.7 shall be
as agreed upon by the Company and the Depositary, such Depositary's Agent or
such Registrar, as the case may be, from time to time. The Depositary shall
present its statement for fees and expenses to the Company every month or at
such other intervals as the Company and the Depositary may agree.
ARTICLE VI
AMENDMENT AND TERMINATION
Section 6.1 Amendment. The Receipts and any provision of this Deposit
Agreement (including any provision of the form of Receipt attached as Exhibit A
hereto) may at any time and from time to time be amended by agreement between
the Company and the Depositary in any respect that they may deem necessary or
desirable; provided, however, that no such amendment which (i) shall materially
and adversely alter the rights of the holders of Receipts or (ii) would be
materially and adversely inconsistent with the rights granted to the holders of
the Preferred Stock
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<PAGE>
pursuant to the Certificate of Designation or to the rights granted to the
holders of Excess Stock issued upon conversion of Preferred Stock pursuant to
the Certificate of Incorporation shall be effective unless such amendment shall
have been approved by the holders of Receipts evidencing at least two-thirds of
the Depositary Shares then outstanding. In no event shall any amendment impair
the right, subject to the provisions of Section 2.6, Section 2.7 and Article III
hereof, of any holder of any Depositary Shares to surrender the Receipt
evidencing such Depositary Shares with instructions to the Depositary to deliver
to the holder the deposited Preferred Stock or any deposited Excess Stock issued
upon conversion of deposited Preferred Stock, as the case may be, together in
each case with all money and other property, if any, represented thereby, except
in order to comply with mandatory provisions of applicable law. Every holder of
an outstanding Receipt at the time any such amendment becomes effective shall be
deemed, by continuing to hold such Receipt, to consent and agree to such
amendment and to be bound by this Deposit Agreement as amended thereby.
Section 6.2 Termination. This Deposit Agreement may be terminated by the
Company upon not less than 30 days' prior written notice to the Depositary if
(i) such termination is necessary to preserve the Company's status as a real
estate investment trust under the Internal Revenue Code of 1986, as amended (or
any successor thereto) or (ii) the holders of Receipts evidencing at least a
majority of the outstanding Depositary Shares consent to such termination,
whereupon the Depositary shall deliver or make available to each holder of a
Receipt, upon surrender of the Receipt held by such holder (but subject to the
provisions, if applicable, of Section 2.10 hereof), such number of whole or
fractional shares of deposited Preferred Stock or, if applicable, Excess Stock
issued upon conversion of deposited Preferred Stock as are represented by the
Depositary Shares evidenced by such Receipt, together with any cash or other
property held by the Depositary in respect of such Receipt. In the event that
this Deposit Agreement is terminated pursuant to clause (i) of the immediately
preceding sentence, the Company hereby agrees to use its best efforts to list
the Preferred Stock issued upon surrender of the Receipts evidencing the
Depositary Shares represented thereby on a national securities exchange. This
Deposit Agreement will automatically terminate if (i) all outstanding Depositary
Shares shall have been redeemed pursuant to Section 2.3 or (ii) there shall have
been made a final distribution in respect of the deposited Preferred Stock and,
if applicable, deposited Excess Stock issued upon conversion of deposited
Preferred Stock in connection with any liquidation, dissolution or winding up of
the Company and such distribution shall have been distributed to the holders of
Receipts entitled thereto.
Upon the termination of this Deposit Agreement, the Company shall be
discharged from all obligations under this Deposit Agreement except for its
obligations to the Depositary, any Depositary's Agent and any Registrar under
Section 5.6 and Section 5.7.
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ARTICLE VII
MISCELLANEOUS
Section 7.1 Counterparts. This Deposit Agreement may be executed in any
number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed an original, but all such counterparts taken together shall constitute
one and the same instrument. Delivery of an executed counterpart of a signature
page to this Deposit Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Deposit Agreement.
Section 7.2 Exclusive Benefits of Parties. This Deposit Agreement is for
the exclusive benefit of the parties hereto, and their respective successors
hereunder, and shall not be deemed to give any legal or equitable right, remedy
or claim to any other person whatsoever.
Section 7.3 Invalidity of Provisions. In case any one or more of the
provisions contained in this Deposit Agreement or in the Receipts shall be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
in no way be affected, prejudiced or disturbed thereby.
Section 7.4 Notices. Any and all notices to be given to the Company
hereunder or under the Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail, by overnight courier,
or by telegram or facsimile transmission confirmed by letter, addressed to the
Company at:
Meditrust Corporation
197 First Avenue
Needham Heights, Massachusetts 02194-9127
Attention: Michael S. Benjamin
Telephone No.: (781) 433-6000
or at any other address of which the Company shall have notified the Depositary
in writing.
Any notices to be given to the Depositary hereunder or under the Receipts
shall be in writing and shall be deemed to have been duly given if personally
delivered or sent by mail, by overnight courier, or by telegram or telex or
telecopier confirmed by letter, addressed to the Depositary at the Corporate
Office.
Any notices given to any record holder of a Receipt or, if applicable, any
Prohibited Owner or the Beneficiary hereunder or under the Receipts shall be in
writing and shall be deemed to have been duly given if personally delivered or
sent by mail, by overnight courier, or by telegram or telex or telecopier
confirmed by letter, addressed to such record
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<PAGE>
holder at the address of such record holder as it appears on the books of the
Depositary or, in the case of a Prohibited Owner or the Beneficiary, at its
address provided to the Depositary by the Company or, if such holder or
Prohibited Owner or the Beneficiary, as the case may be, shall have filed with
the Depositary in a timely manner a written request that notices intended for
such person be mailed or delivered to some other address, at the address
designated in such request.
Delivery of a notice sent by mail or by telegram or telex or telecopier
shall be deemed to be effected at the time when a duly addressed letter
containing the same (or a confirmation thereof in the case of a telegram or
telex or telecopier message) is deposited, postage prepaid, in a post office
letter box. The Depositary or the Company may, however, act upon any telegram or
telex or telecopier message received by it from the other or from any holder of
a Receipt or, if applicable, from any Prohibited Owner or the Beneficiary,
notwithstanding that such telegram or telex or telecopier message shall not
subsequently be confirmed by letter as aforesaid.
Section 7.5 Depositary's Agents. The Depositary may from time to time
appoint Depositary's Agents to act in any respect for the Depositary for the
purposes of this Deposit Agreement and may at any time appoint additional
Depositary's Agents and vary or terminate the appointment of such Depositary's
Agents. The Depositary will notify the Company of any such action, except that
no such notice shall be required if the Depositary's Agent in question is Boston
EquiServe Limited Partnership.
Section 7.6 Holders of Receipts Are Parties. The holders of Receipts from
time to time shall be deemed to be parties to this Deposit Agreement and shall
be bound by all of the terms and conditions hereof and of the Receipts by
acceptance of delivery thereof. In addition, Prohibited Owners of Depositary
Shares representing Excess Stock issued upon conversion of deposited Preferred
Stock shall be entitled to the rights and benefits expressly granted to such
Prohibited Owners under this Agreement.
Section 7.7 Governing Law. This Deposit Agreement and the Receipts and all
rights hereunder and thereunder and provisions hereof and thereof shall be
governed by, and construed in accordance with, the law of the State of New York
applicable to agreements made and to be performed in said State.
Section 7.8 Inspection of Deposit Agreement and Certificate of Designation.
Copies of this Deposit Agreement and the Certificate of Designation shall be
filed with the Depositary and the Depositary's Agents and shall be open to
inspection during business hours at the Corporate Office, the New York Office
and the respective offices of the Depositary's Agents, if any, by any holder of
any Receipt.
Section 7.9 Headings. The headings of articles and sections in this Deposit
Agreement (including Exhibit A hereto) and in the Receipts have been inserted
for convenience only and are not to be regarded as a part of this Deposit
Agreement or the
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<PAGE>
Receipts or to have any bearing upon the meaning or interpretation of any
provision contained herein or in the Receipts.
IN WITNESS WHEREOF, Meditrust Corporation and STATE STREET BANK AND TRUST
COMPANY have duly executed this Deposit Agreement as of the day and year first
above set forth and all holders of Receipts shall become parties hereto by and
upon acceptance by them of delivery of Receipts issued in accordance with the
terms hereof.
MEDITRUST CORPORATION
By: ________________________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
By: ________________________________________________
Name:
Title:
<PAGE>
EXHIBIT A
Form of Receipt
<PAGE>
[FORM OF FACE OF RECEIPT]
The Company (as defined herein) will furnish to any holder hereof who so
requests and any other stockholder who so requests, without charge, the powers,
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights. The Company will
also furnish without charge to each holder hereof who so requests, without
charge, a copy of the Deposit Agreement (as defined below) and a copy of the
Certificate of Designation with respect to the Stock (as defined below) of the
Company. Any such request may be made to the Secretary of the Company at its
principal office or to the Depositary (as defined below).
The shares of Stock represented by the Depositary Shares (as defined below)
evidenced by this Receipt (as defined below) are subject to restrictions in the
by-laws of the Company which prohibit any person from acquiring or maintaining
any ownership interest in the stock of the Company which is inconsistent with
the requirements of the Internal Revenue Code of 1986, as amended (the "Code"),
pertaining to real estate investment trusts and which permit the Company to
purchase from any stockholder such number of shares sufficient to maintain or
bring the ownership of stock of the Company into conformity with such
requirements of the Code. The Deposit Agreement provides that this Receipt and
the Depositary Shares evidenced by this Receipt are subject to the foregoing
provisions of the Company's by-laws as if the holder hereof owned the shares
(including fractional shares) of Stock represented by such Depositary Shares
directly, and this Receipt and the Depositary Shares evidenced hereby are
therefore subject to the restrictions on ownership and transfer set forth in,
and may be purchased by the Company in accordance with, the provisions and
restrictions in its by-laws referred to above. The holder of this Receipt by his
or her acceptance hereof consents to be bound by such provisions and
restrictions.
As set forth in the Joint Proxy Statement/Prospectus dated May 18, 1998
(the "Proxy Statement") of The Meditrust Companies and La Quinta Inns, Inc., the
Company is soliciting the vote of its stockholders in favor of amendments (the
"Amendments") to its certificate of incorporation which would (i) add a new
Article Thirteenth to such certificate of incorporation in the form set forth as
Annex E to the Proxy Statement ("Article Thirteenth") and (ii) authorize a new
class of capital stock of the Corporation to be known as Excess Stock ("Excess
Stock"). The provisions of Article Thirteenth prohibit (a) any Person (as such
term and other capitalized terms used in this paragraph and not defined in this
Receipt are defined in Article Thirteenth) (other than a Look-Through Entity)
from Beneficially Owning or Constructively Owning in excess of 9.25% of the
number of outstanding shares of any class or series of Equity Stock, (b) any
Look-Through Entity from Beneficially Owning or Constructively Owning in excess
of 9.8% of the number of outstanding shares of any class or series of Equity
Stock, (c) any Person from acquiring or maintaining any ownership interest in
the stock in the Company that is inconsistent with (i) the requirements of the
Internal Revenue Code of 1986, as amended, pertaining to real estate investment
trusts or (ii) Article Thirteenth of the certificate of incorporation of the
Company. If the Amendments are approved and become effective in accordance with
the General Corporation Law of the State
<PAGE>
of Delaware (the "DGCL"), then, from and after the date on which the Amendments
shall have become effective in accordance with the DGCL, the Stock shall be
subject to all of the terms and provisions of Article Thirteenth and the Deposit
Agreement provides that, from and after such effective date (1) this Receipt and
the Depositary Shares evidenced by this Receipt will be subject to the
provisions of Article Thirteenth as if the holder hereof owned the shares
(including fractional shares) of Stock represented by such Depositary Shares
directly and (2) the Stock represented by the Depositary Shares evidenced by
this Receipt may be converted into Excess Stock of the Company upon the terms
and conditions set forth in Article Thirteenth and, upon any such conversion
into Excess Stock, the Prohibited Owner shall submit this Receipt to the Company
for registration in the name of the applicable Trustee, all on the terms and
subject to the conditions set forth in the Deposit Agreement. The holder of this
Receipt by his or her acceptance hereof consents to be bound by such provisions
and restrictions in the event the Amendments become effective as aforesaid.
DRC- This Depositary Receipt is transferable in Boston, MA or New York,
New York.
See reverse for certain definitions.
DEPOSITARY RECEIPT FOR DEPOSITARY SHARES CUSIP
EACH REPRESENTING 1/10TH OF A SHARE OF
9% SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK
OF
MEDITRUST CORPORATION
(a Delaware corporation)
State Street Bank and Trust Company, as Depositary (the "Depositary", which
term includes any successor depositary under the Deposit Agreement referred to
below), hereby certifies that ____________________________________ is the
registered owner of ____________ DEPOSITARY SHARES ("Depositary Shares"), each
Depositary Share representing 1/10th of one share of 9% Series A Cumulative
Redeemable Preferred Stock, par value $0.10 per share (the "Stock"), of
Meditrust Corporation, a Delaware corporation (the "Company", which term, as
used herein, includes it successors), on deposit with the Depositary, subject to
the terms and entitled to the benefits of the Deposit Agreement dated as of June
17, 1998 (as the same may be amended or supplemented from time to time, the
"Deposit Agreement") among the Company, the Depositary and the holders from time
to time of depositary receipts ("Receipts") issued thereunder. By accepting this
Receipt, the holder hereof becomes a party to and agrees to be bound by all the
terms and conditions of the Deposit Agreement. This Receipt shall not be valid
or obligatory for any purpose or entitled to any benefits under the Deposit
Agreement unless it shall have been executed by the Depositary by the manual
signature of a duly authorized signatory of the Depositary, provided that, if a
Registrar in respect of the Receipts (other than the Depositary) shall have been
appointed, then this Receipt may be signed by the facsimile signature of a duly
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<PAGE>
authorized signatory of the Depository so long as it is countersigned by the
manual signature of a duly authorized signatory of such Registrar.
This Receipt is continued on the reverse hereof and the additional
provisions therein set forth (including, without limitation, those relating to
redemption) for all purposes have the same effect as if set forth at this place.
Dated:
STATE STREET BANK AND TRUST COMPANY,
as Depositary, Transfer Agent and Registrar
By: _________________________________
Authorized Signatory
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<PAGE>
[FORM OF REVERSE OF RECEIPT]
MEDITRUST CORPORATION
1. The Deposit Agreement. Receipts, of which this Receipt is one, are made
available upon the terms and conditions set forth in the Deposit Agreement (as
defined on the face hereof). The Deposit Agreement (copies of which are on file
at the Corporate Office of the Depositary and at the office of any agent of the
Depositary) sets forth the rights of holders of Receipts and the rights and
duties of the Depositary. The statements made on the face and the reverse of
this Receipt are summaries of certain provisions of the Deposit Agreement and
are subject to the detailed provisions thereof, to which reference is hereby
made. In the event of any conflict between the provisions of this Receipt and
the provisions of the Deposit Agreement, the provisions of the Deposit Agreement
will govern.
2. Definitions. Unless otherwise expressly herein provided, all defined
terms used in this summary of the Deposit Agreement shall have the meanings
ascribed thereto in the Deposit Agreement.
3. Redemption of Stock. Whenever the Company shall elect to redeem shares
of Stock, it shall (unless otherwise agreed in writing with the Depositary) give
the Depositary not less than 60 days' notice of the date of such proposed
redemption and of the number of such shares of Stock held by the Depositary to
be redeemed and the applicable redemption price. The Depositary shall mail,
first-class postage prepaid, notice furnished by the Company of the redemption
of Stock and the proposed simultaneous redemption of Depositary Shares
representing the Stock to be redeemed, not less than 30 and not more than 60
days prior to the date fixed for redemption of such Stock and Depositary Shares,
to the holders of record at the close of business on the record date fixed for
such redemption pursuant to the Deposit Agreement of the Receipts evidencing the
Depositary Shares to be so redeemed, at the addresses of such holders as the
same appear on the records of the Depositary. Any such notice shall also be
published in the manner specified in the Deposit Agreement. On the date of such
redemption, the Depositary shall redeem the number of Depositary Shares
representing such Stock so called for redemption; provided, that the Company
shall then have paid in full to the Depositary the cash redemption price of the
Stock to be redeemed (including any accrued and unpaid dividends (including,
without limitation, accumulated dividends, if any, for prior dividend periods)
to the date of redemption). If fewer than all the outstanding Depositary Shares
are to be redeemed, the Depositary Shares to be redeemed shall be selected pro
rata or by lot or by any other equitable method determined by the Company (a)
that will not give the Company the right to purchase Receipts, Depositary Shares
or shares of Stock represented by such Depositary Shares pursuant to any
provisions in its by-laws allowing the purchase of its capital stock to preserve
the status of the Company as a real estate investment trust for federal income
tax purposes and (b) if the Amendments (as defined on the face hereof) become
effective in accordance with the DGCL (as defined on the face hereof), that will
not result in the conversion of any Stock into Excess Stock (as defined on the
face hereof) of the Corporation. Notice having been mailed as aforesaid, from
and after the redemption date (unless the
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<PAGE>
Company shall have failed to redeem the shares of Stock to be redeemed by it as
set forth in the notice of redemption and to pay in full the redemption price
therefor (including accrued and unpaid dividends (including accumulated
dividends, if any, for prior dividend periods)), all dividends in respect of the
shares of Stock called for redemption shall cease to accrue, the Depositary
Shares called for redemption shall be deemed no longer to be outstanding and all
rights of the holders of Receipts evidencing such Depositary Shares (except the
right to receive the redemption price together with accrued and unpaid
dividends, if any, thereon (including, without limitation, accumulated
dividends, if any, for prior dividend periods) and any money or other property
to which holders of such Receipts were entitled upon such redemption) shall, to
the extent of such Depositary Shares, cease and terminate. Upon surrender in
accordance with said notice of the Receipts evidencing such Depositary Shares
(properly endorsed or assigned for transfer, if the Depositary shall so
require), such Depositary Shares shall be redeemed at a cash redemption price
per Depositary Share of $25, plus 1/10th of the accrued and unpaid dividends
(including, without limitation, accumulated dividends, if any, for prior
dividend periods), if any, payable on one share of Stock upon such redemption,
plus 1/10th of any other money and other property payable in respect of one such
share of Stock upon such redemption. The foregoing is subject to the further
terms and conditions of the Certificate of Designation and the Deposit
Agreement. If fewer than all of the Depositary Shares evidenced by this Receipt
are called for redemption, the Depositary will deliver to the holder of this
Receipt upon its surrender to the Depositary, together with the cash redemption
price, a new Receipt evidencing the Depositary Shares evidenced by such prior
Receipt and not called for redemption.
4. Surrender of Receipts and Withdrawal of Stock. Upon surrender of this
Receipt to the Depositary at the Corporate Office or the New York Office or at
such other office as the Depositary may designate, and subject to the provisions
of the Deposit Agreement, the holder hereof is entitled to withdraw, and to
obtain delivery, without unreasonable delay, to or upon the order of such
holder, any or all of the Stock (in whole or fractional shares of Stock) and all
money and other property, if any, represented by the Depositary Shares evidenced
by this Receipt; provided, however, that, in the event this Receipt shall
evidence a number of Depositary Shares in excess of the number of Depositary
Shares representing the number of whole or fractional shares of deposited Stock
to be withdrawn, the Depositary shall at the same time, in addition to such
number of whole or fractional shares of Stock and such money and other property,
if any, to be withdrawn, deliver to or upon the order of such holder, a new
Receipt or Receipts evidencing such excess number of Depositary Shares.
5. Transfers, Split-Ups, Combinations. Subject to the Deposit Agreement,
this Receipt is transferable on the books of the Depositary upon surrender of
this Receipt by the holder hereof in person or by a duly authorized attorney to
the Depositary, properly endorsed or accompanied by a properly executed
instrument of transfer or endorsement, together with evidence of the payment of
any transfer taxes as may be required by law. Upon such surrender the Depositary
shall sign and deliver a Receipt or Receipts to or upon the order of the person
entitled thereto, all as provided in and subject to the Deposit Agreement.
Subject
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<PAGE>
to the terms of the Deposit Agreement, this Receipt may be split into other
Receipts or combined with other Receipts into one Receipt evidencing the same
aggregate number of Depositary Shares evidenced by the Receipt or Receipts
surrendered; provided, however, that the Depositary shall not issue any Receipt
evidencing a fractional Depositary Share.
6. Conditions to Signing and Delivery, Transfer, etc. of Receipts. As a
condition precedent to the execution and delivery, transfer, split-up,
combination, surrender or exchange of this Receipt, the Depositary, any of the
Depositary's Agents or the Company may require any or all of the following: (i)
payment to it of a sum sufficient for the payment (or, in the event that the
Depositary or the Company shall have made such payment, the reimbursement to it)
of any transfer tax or similar governmental charge with respect thereto
(including any such tax or charge with respect to the Stock being deposited or
withdrawn); (ii) production of proof satisfactory to it as to the identity and
genuineness of any signature (or the authority of any signature); and (iii)
compliance with such reasonable regulations, if any, as the Depositary or the
Company may establish consistent with the provisions of the Deposit Agreement or
as may be required by any securities exchange upon which the deposited Stock,
the Depositary Shares or the Receipts may be included for quotation or listed.
7. Suspension of Delivery, Transfer, etc. The deposit of Stock may be
refused, the delivery of this Receipt against Stock may be suspended, the
transfer of Receipts may be refused, and the transfer, split-up, combination,
surrender or exchange of this Receipt may be suspended (i) during any period
when the register of stockholders of the Company is closed or (ii) if any such
action is deemed reasonably necessary or advisable by the Depositary, any of the
Depositary's Agents or the Company at any time or from time to time because of
any requirement of law or of any government or governmental body or commission,
or under any provision of the Deposit Agreement.
8. Amendment. The Receipts and any provision of the Deposit Agreement
(including any provision of the form of Receipt attached as an exhibit thereto)
may at any time and from time to time be amended by agreement between the
Company and the Depositary in any respect that they may deem necessary or
desirable; provided, however, that no such amendment which (i) shall materially
and adversely alter the rights of holders of Receipts or (ii) would be
materially and adversely inconsistent with the rights granted to the holders of
the Stock pursuant to the Certificate of Designation shall be effective unless
such amendment shall have been approved by the holders of at least two-thirds of
the Depositary Shares evidenced by Receipts then outstanding. The holder of this
Receipt at the time any such amendment becomes effective shall be deemed, by
continuing to hold this Receipt, to consent and agree to such amendment and to
be bound by the Deposit Agreement as amended thereby. In no event shall any
amendment impair the right, as provided in the Deposit Agreement, of the owner
of the Depositary Shares evidenced by this Receipt to surrender this Receipt
with instructions to the Depositary to deliver to the holder the deposited Stock
and all money and other property, if any, represented thereby, except in order
to comply with mandatory provisions of applicable law.
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<PAGE>
9. Charges and Expenses. The Company will pay all transfer and other taxes
and governmental charges arising solely from the existence of the depositary
arrangement, except such charges as are expressly provided in the Deposit
Agreement to be at the expense of holders of Receipts.
10. Title to Receipts. Title to this Receipt (and to the Depositary Shares
evidenced hereby), when properly endorsed or accompanied by a properly executed
instrument of transfer or endorsement, is transferable by delivery with the same
effect as in the case of a negotiable instrument; provided, however, that until
this Receipt is transferred on the books of the Depositary as provided in the
Deposit Agreement, the Depositary may, notwithstanding any notice to the
contrary, treat the record holder hereof at such time as the absolute owner
hereof for the purpose of determining the person entitled to distribution of
dividends or other distributions or to any notice provided for in the Deposit
Agreement and for all other purposes.
11. Dividends and Distributions. Whenever the Depositary shall receive any
cash dividend or other cash distribution on the deposited Stock, the Depositary
shall, subject to the provisions of the Deposit Agreement, distribute to record
holders of Receipts evidencing Depositary Shares representing the deposited
Stock on the record date fixed pursuant to the Deposit Agreement such amounts of
such sums as are, as nearly as practicable, in proportion to the respective
numbers of such Depositary Shares evidenced by the Receipts held by such
holders; provided, however, that in case the Company or the Depositary shall be
required by law to withhold and shall withhold from any cash dividend or other
cash distribution in respect of the Stock represented by the Depositary Shares
which are evidenced by the Receipts held by any holder an amount on account of
taxes, the amount made available for distribution or distributed in respect of
Depositary Shares evidenced by such Receipts shall be reduced accordingly. The
Depositary shall distribute or make available for distribution, as the case may
be, only such amount, however, as can be distributed without attributing to any
holder of Receipts a fraction of one cent, and any balance not so distributable
shall be held by the Depositary (without liability for interest thereon) and
shall be added to and be treated as part of the next sum received by the
Depositary for distribution to record holders of Receipts then outstanding.
Notwithstanding the foregoing, (i) if less than all of the outstanding
Depositary Shares are to be redeemed and the Depositary Shares to be so redeemed
are not selected pro rata, then only the record holders of the Receipts
evidencing the Depositary Shares selected for redemption will be entitled to
receive the cash redemption price therefor or any other amounts payable upon
such redemption; and (ii) if any Depositary Shares are purchased by the Company
pursuant to Section 7.5 of its by-laws, then only the record holders of the
Receipts evidencing such Depositary Shares shall be entitled to receive the
purchase price therefor or any other amounts payable upon such purchase; and
(iii) in the event that the Amendments become effective in accordance with
applicable law and, thereafter, any Stock is converted into Excess Stock, then,
anything herein to the contrary notwithstanding, any monies, securities or other
property (including any rights, preferences or privileges) payable,
distributable or offered in respect of the Stock or the Excess Stock shall be
paid, distributed or offered, as
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<PAGE>
the case may be, to the persons specified, and as otherwise provided, in the
Deposit Agreement.
12. Subscription Rights, Preferences or Privileges. If the Company shall at
any time offer or cause to be offered to the persons in whose names deposited
Stock is registered on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance, subject to the provisions of the Deposit
Agreement, be made available by the Depositary to the record holders of Receipts
in such manner as the Company shall instruct (including by the issue to such
record holders of warrants representing such rights, preferences and
privileges).
13. Notice of Distributions, Fixing of Record Date. Whenever any cash
dividend or other cash distribution shall become payable, any distribution other
than cash shall be made, or any rights, preferences or privileges shall at any
time be offered with respect to the deposited Stock, or whenever the Depositary
shall receive notice of (i) any meeting at which holders of such Stock are
entitled to vote or of which holders of such Stock are entitled to notice or
(ii) any election on the part of the Company to redeem any such shares of Stock,
the Depositary shall in each such instance fix a record date (which shall be the
same date as the record date fixed by the Company with respect to the Stock) for
the determination of the holders of Receipts who shall be entitled (x) to
receive such dividend, distribution, rights, preferences or privileges or the
net proceeds of the sale thereof, or (y) to give instructions for the exercise
of voting rights at any such meeting or to receive notice of such meeting or
whose Depositary Shares are to be so redeemed.
14. Voting Rights. Upon receipt of notice of any meeting at which the
holders of deposited Stock are entitled to vote, the Depositary, as soon as
practicable thereafter, shall mail to the record holders of Receipts a notice,
which shall be provided by the Company and which shall contain (i) such
information as is contained in such notice of meeting, (ii) a statement that the
holders of Receipts at the close of business on a specified date fixed as
provided in the Deposit Agreement will be entitled, subject to any applicable
provisions of law, to instruct the Depositary as to the exercise of the voting
rights pertaining to the Stock represented by their respective Depositary Shares
and (iii) a brief statement as to the manner in which such instructions may be
given. Upon the written request of a holder of this Receipt on such record date,
the Depositary shall vote or cause to be voted the Stock represented by the
Depositary Shares evidenced by this Receipt in accordance with the instructions
set forth in such request. The Company hereby agrees to take all reasonable
action that may be deemed necessary by the Depositary in order to enable the
Depositary to vote such Stock or cause such Stock to be voted. In the absence of
specific instructions from the holder of this Receipt, the Depositary will
abstain from voting to the extent of the Stock represented by the Depositary
Shares evidenced by this Receipt. The Depositary shall not be required to
exercise discretion in voting the Stock represented by the Depositary Shares
evidenced by this Receipt.
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<PAGE>
15. Reports, Inspection of Transfer Books. The Depositary shall transmit to
the record holders of Receipts at the addresses recorded in the Depositary's
books copies of all notices and reports (including financial statements)
required by law, by the rules of any national securities exchange upon which the
Stock, the Depositary Shares or the Receipts are included for quotation or
listed or by the Certificate of Incorporation, the Company's by-laws or the
Certificate of Designation to be furnished by the Company to holders of the
deposited Stock that are received by the Depositary from the Company. The
Depositary shall keep books at the Corporate Office and the New York Office for
the registration and transfer of Receipts, which books at all reasonable times
will be open for inspection by the record holders of Receipts.
16. Liability of the Depositary, the Depositary's Agents, the Registrar and
the Company. Neither the Depositary, any Depositary's Agent, any Registrar nor
the Company shall incur any liability to any holder of this Receipt, if by
reason of any provision of any present or future law or regulation thereunder of
the United States of America or of any other governmental authority or, in the
case of the Depositary, any Depositary's Agent or any Registrar, by reason of
any provision, present or future, of the Certificate of Incorporation or the
Certificate of Designation or, in the case of the Company, the Depositary, any
Depositary's Agent or any Registrar, by reason of any act of God or war or other
circumstances beyond the control of the relevant party, the Depositary, any
Depositary's Agent, any Registrar or the Company shall be prevented or forbidden
from doing or performing any act or thing that the terms of the Deposit
Agreement provide shall be done or performed; nor shall the Depositary, any
Depositary's Agent, any Registrar or the Company incur any liability to any
holder of this Receipt by reason of any nonperformance or delay, caused as
aforesaid, in the performance of any act or thing that the terms of the Deposit
Agreement provide shall or may be done or performed, or by reason of any
exercise of, or failure to exercise, any discretion provided for in the Deposit
Agreement.
17. Obligations of the Depositary's Agents, the Registrar and the Company.
Neither the Depositary, any Depositary's Agent, any Registrar nor the Company
assumes any obligation or shall be subject to any liability under the Deposit
Agreement or this Receipt to the holder hereof other than from acts or omissions
arising out of conduct constituting bad faith, negligence or willful misconduct
in the performance of such duties as are specifically set forth in the Deposit
Agreement.
Neither the Depositary, any Depositary's Agent, any Registrar nor the
Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding with respect to the deposited Stock, Depositary
Shares or Receipts that in its reasonable opinion may involve it in expense or
liability, unless indemnity reasonably satisfactory to it against all expense
and liability be furnished as often as may be reasonably required.
Neither the Depositary, any Depositary's Agent, any Registrar nor the
Company shall be liable for any action or any failure to act by it in reliance
upon the written advice of legal counsel or accountants, or information provided
by any person presenting Stock for deposit,
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<PAGE>
any holder of this Receipt or any other person believed by it in good faith to
be competent to give such information. The Depositary, any Depositary's Agent,
any Registrar and the Company may each rely and shall each be protected in
acting upon any written notice, request, direction or other document believed by
it in good faith to be genuine and to have been signed or presented by the
proper party or parties.
18. Termination of Deposit Agreement. The Deposit Agreement may be
terminated by the Company upon not less than 30 days' prior written notice to
the Depositary if (i) such termination is necessary to preserve the Company's
status as a real estate investment trust under the Internal Revenue Code of
1986, as amended (or any successor thereto) or (ii) the holders of Receipts
evidencing a majority of the outstanding Depositary Shares consent to such
termination, whereupon the Depositary shall deliver or make available to each
holder of a Receipt, upon surrender of the Receipt held by such holder, such
number of whole or fractional shares of deposited Stock as are represented by
the Depositary Shares evidenced by such Receipt, together with any cash or other
property held by the Depositary in respect of such Receipt. In the event that
the Deposit Agreement is terminated pursuant to clause (i) of the immediately
preceding sentence, the Company has agreed in the Deposit Agreement to use its
best efforts to list the Stock issued upon surrender of the Receipts evidencing
the Depositary Shares represented thereby on a national securities exchange.
Upon the termination of the Deposit Agreement, the Company shall be discharged
of all obligations thereunder except for its obligations to the Depositary, any
Depositary's Agent and any Registrar under Sections 5.6 and 5.7 of the Deposit
Agreement.
19. Excess Stock. The Deposit Agreement contains certain provisions which
will affect the Receipts, the Depositary Shares and the rights and obligations
of the owners and holders thereof in the event that the Amendments become
effective in accordance with applicable law and, thereafter, deposited Stock is
converted into Excess Stock or Excess Stock is converted into deposited Stock,
and this Receipt and the rights and obligations of the holder hereof are
expressly qualified by, and made subject to, all such provisions. Without
limitation to the foregoing, in the event that the Amendments become effective
in accordance with applicable law and, thereafter, any Stock is converted into
Excess Stock pursuant to Article Thirteenth then, upon the terms and subject to
the conditions set forth in the Deposit Agreement, (i) the Depositary Shares
which previously represented the shares of Stock so converted shall instead be
deemed to represent such shares of Excess Stock, (ii) such Depositary Shares,
the Receipts evidencing such Depositary Shares and such Excess Stock shall be
subject to the other terms and provisions, and entitled to the rights and
benefits, set forth in the Deposit Agreement, (iii) the Depositary Shares
representing Excess Stock shall not represent a fractional interest in or be
entitled to receive any monies, securities or other property (including any
rights, preferences or privileges) payable, distributable or offered in respect
of deposited Stock and (iv) the Depositary Shares representing deposited Stock
shall not represent a fractional interest in or be entitled to receive any
monies, securities or other property (including any rights, preferences or
privileges) payable, distributable or offered in respect of such Excess Stock,
all on the terms and conditions set forth in the Deposit Agreement.
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<PAGE>
20. Governing Law. The Deposit Agreement and this Receipt and all rights
thereunder and hereunder and provisions thereof and hereof shall be governed by,
and construed in accordance with, the law of the State of New York applicable to
agreements made and to be performed in said State.
The following abbreviations when used in the instructions on the face of
this Receipt shall be construed as though they were written out in full
according to applicable laws or regulations.
<TABLE>
<CAPTION>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - ________________ Custodian ____________
TEN ENT - as tenants by the (Cust) (Minor)
entireties
Under Uniform Gifts to Minors Act
JT TEN - as joint tenants with
right of survivorship
and not as tenants in ____________________________
common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
For value received, _________________________________ hereby sell(s),
assign(s) and transfers) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
Please Print Or Typewrite Name And Address Including Postal Zip Code Of
Assignee
Depositary Shares represented by the within Receipt, and do(es) hereby
irrevocably constitute and appoint _____________________________________
Attorney to transfer the said Depositary Shares on the books of the within named
Depositary with full power of substitution in the premises.
Dated: _____________________ Signed: ________________________________
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<PAGE>
NOTICE: THE SIGNATURE TO THE ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THIS RECEIPT IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER
Signature(s) Guaranteed:
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS) WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO
S.E.C. RULE 17Ad-15.
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