Exhibit 99.2
SHAREHOLDERS AGREEMENT
This Shareholders Agreement, dated as of January 3, 1998 (this
Agreement ), is among Meditrust Corporation, a Delaware corporation ( REIT ),
Meditrust Operating Company, a Delaware corporation ( OPCO
), the shareholders
of the Company named on the signature page hereto (individually, a
Shareholder and collectively, the Shareholders ) and, solely for purposes
of Section
3.6
hereof, La
Quinta
Inns, Inc., a Texas corporation (the
Company ).
RECITALS:
A. As of the date hereof, each Shareholder owns the number of
Shares of Common Stock, par value $0.01 per share ( Company Stock ), of the
Company set forth on Exhibit A (such
shares,
and any
shares
of Common Stock
hereafter acquired by such Shareholders, are hereinafter referred to as the
Shares );
B. REIT,
OPCO
and the Company propose to enter into an Agreement
and Plan of Merger, dated as of the date hereof (as the same may be amended
from time to time, the Merger Agreement ), which provides, on the terms and
subject to the conditions thereof, for the merger of the Company with and into
REIT (the Merger ); and
C. As a condition to the willingness of REIT to enter into the
Merger Agreement, REIT has requested that the Shareholders agree, and, in
order to induce REIT to enter into the Merger Agreement, the Shareholders are
willing to agree, to grant REIT an irrevocable proxy to vote, or to otherwise
cause to be voted, the Shares pursuant to the terms and conditions hereof and
to grant REIT an option to purchase the Shares owned by Shareholders on the
terms and conditions contained herein.
NOW, THEREFORE, the parties hereto agree as follows:
I. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders hereby represent and warrant to REIT and
OPCO
as
follows:
1.1 Due Authority. The Shareholders have full power and authority
to execute and deliver this Agreement and to perform their obligations
hereunder and consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by or on behalf of the Shareholders and,
assuming its due authorization, execution and delivery by REIT and
OPCO
,
constitutes a legal, valid and binding obligation of the Shareholders,
enforceable against them in accordance with their terms.
1.2 No Conflict; Consents. (a) The execution and delivery of this
Agreement by the Shareholders do not, and the performance by the Shareholders
of their obligations under this Agreement and the compliance by the
Shareholders with the provisions hereof do not and will not, (
i
) conflict with
or violate any law, statute, rule, regulation, order, writ, judgment or decree
applicable to any of the Shareholders or the Shares, (ii) conflict with or
violate the instruments under which any of the Shareholders were formed, (iii)
result in any breach of or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or encumbrance on any of the Shares pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which any of the Shareholders
is a party or by which any of the Shareholders or any of the Shares are bound
or (iv) violate any order, writ, injunction, decree, judgment, order, statute,
rule or resolution applicable to any of the Shareholders or any of the Shares.
(b) The execution and delivery of this Agreement by the Shareholders
do not, and the performance of this Agreement by the Shareholders will not,
require any consent, approval, authorization or permit of, or filing with
(except for applicable requirements, if any, of the Securities Exchange Act of
1934, as amended (the Exchange Act )) or notification to, any government or
regulatory authority by the Shareholders.
(c) No other person or entity has or will have during the Proxy Term
any right directly or indirectly to vote or control or affect the voting of
the Shares.
1.3 Title to Shares. The Shareholders (a) are the record or
beneficial owners of the Shares as listed on Exhibit A free and clear of any
proxy or voting restriction other than pursuant to this Agreement and (b)
have, and during the Proxy Term will have, sole power of disposition with
respect to the Shares. Such Shares are the only Shares of the Company s stock
owned of record or beneficially by any of the Shareholders.
1.4 No Encumbrances. The Shares and the certificates representing
the Shares are now and at all times during the Proxy Term hereof will be held
by the Shareholders, or by a nominee or custodian for the benefit of the
Shareholders, free and clear of all proxies, voting trusts and voting
agreements, understandings or arrangements and free and clear of all liens,
claims, security interests and any other encumbrances whatsoever except any
such encumbrances or proxies arising under this
Agreement and except as set
forth on Exhibit A.
1.5 Brokers. The Shareholders are not liable for, and will
indemnify the Company, REIT and
OPCO
against, any broker s, finder s,
financial advisor s or other similar fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf
of any of the Shareholders.
1.6 Tax Representations. (a) Neither the issuance of Paired Shares
(as such term is defined in the Merger Agreement) to the Shareholders in
connection with the Merger nor the other transactions contemplated by this
Agreement will cause any person to violate the restrictions on ownership and
transfer contained in
the Certificate of Incorporation, as amended, of REIT or
in the By-laws, as amended, of REIT, copies of which have been provided to and
reviewed by the Shareholders and their counsel. The Shareholders will provide
to REIT such information as REIT may reasonably request so that REIT may
confirm the accuracy of this representation.
(b) No Shareholder has or will have at the Effective Date any
present plan, intention, or arrangement to sell or dispose of any of the
Paired Shares to be received in the Merger. For purposes of this Section 1.6,
a sale or disposition includes any constructive sale within the meaning of
Section 1259(c)(1)(A) - (E) of the Internal Revenue Code of 1986, as amended
(the Code ).
II. REPRESENTATIONS AND WARRANTIES OF REIT AND OPCO
REIT and
OPCO
each hereby represent and warrant to the Shareholders
as follows:
2.1 Due Authority. Such party has full power, corporate or
otherwise, and authority to execute and deliver this Agreement and to perform
its obligations hereunder. This Agreement has been duly executed and
delivered by or on behalf of such party and, assuming its due authorization,
execution and delivery by the other parties hereto, constitutes a legal, valid
and binding obligation of such party, enforceable against such party in
accordance with its terms.
2.2 No Conflict; Consents. (a) The execution and delivery of this
Agreement by such party do not, and the performance by such party of its
obligations contemplated by this Agreement and the compliance by such party
with any provisions hereof do not and will not, (
i
) conflict with or violate
any law, statute, rule, regulation, order, writ, judgment or decree applicable
to such party, (ii) conflict with or violate such party s charter or bylaws,
or (iii) result in any breach of or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which such party is a
party or by which such party is bound.
(b) The execution and delivery of this Agreement by such party do
not, and the performance of this Agreement by such party will not, require any
consent, approval, authorization or permit of, or filing with (except for
applicable requirements, if any, of the Exchange Act) or notification to, any
governmental or regulatory authority by such party.
III. CERTAIN COVENANTS OF THE SHAREHOLDERS
The Shareholders hereby covenant and agree with REIT and
OPCO
as
follows:
3.1 Transfer of Shares. During the Proxy Term the Shareholders will
not (a) sell, tender, transfer, encumber,
pledge (except as set forth on
Exhibit A),
assign or otherwise dispose of any of the Shares, (b) deposit the
Shares into a voting trust or enter into a voting agreement or arrangement
with respect to the Shares or grant any proxy or power of attorney with
respect thereto, (c) enter into any contract, option or other legally binding
undertaking providing for any transaction prohibited by (a) or (b) hereof, or
(d) take any action that would make any representation or warranty of the
Shareholders contained herein untrue or incorrect or have the effect of
preventing or disabling the Shareholders from performing any of the
Shareholders obligations under this
Agreement.
3.2 Proxy. (a) Each Shareholder, by this Agreement, hereby
constitutes and appoints REIT, with full power of substitution, during and for
the Proxy Term, as such Shareholder s true and lawful attorney and irrevocable
proxy, for and in such Shareholder s name, place and stead, to vote each of
such Shares owned by such Shareholder as Shareholder s proxy, at every meeting
of the shareholders of the Company or any adjournment thereof or in connection
with any written consent of the Company s shareholders, (
i
) in favor of the
adoption of the Merger Agreement and approval of the Merger and the other
transactions contemplated by the Merger Agreement, (ii) against (x) any
Company
Takeover
Proposal
(which term as used in this Agreement shall have the meaning
as defined in the Merger Agreement), and any proposal for any action or
agreement that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of the Company under the Merger
Agreement or which is reasonably likely to result in any of the conditions of
the Company s obligations under the Merger Agreement not being fulfilled and
(y) any change in the directors of the Company, any change in the present
capitalization of the Company or any amendment to the Company s articles of
organization or bylaws, any other material change in the Company s corporate
structure or business, or any other action which in the case of each of the
matters referred to in this clause (y) could reasonably be expected to impede,
interfere with, delay, postpone or materially adversely affect the
transactions contemplated by the Merger Agreement or the likelihood of such
transactions being consummated, and (iii) in favor of any other matter
necessary for consummation of the transactions contemplated by the Merger
Agreement which is considered at any such meeting of shareholders or in such
consent, and in connection therewith to execute any documents which are
necessary or appropriate in order to effectuate the foregoing, including the
ability for REIT or its nominees to vote such Shares directly. Each
Shareholder intends intends the foregoing proxy to be, and it shall be,
irrevocable and coupled with an interest during the Proxy Term and hereby
revokes any proxies previously granted by such Shareholder with respect to the
Shares to the extent inconsistent with the foregoing proxy.
(b)
Each
Shareholder hereby further agrees, with respect to any
Shares not voted pursuant to paragraph (a) above, including without limitation
any Shares owned beneficially but not of record by such Shareholder, that
during the Proxy Term, at every meeting of the shareholders of the Company or
any adjournment thereof or in connection with any written consent of the
Company s shareholders, such Shareholder shall vote (or cause to be voted) all
Shares whether or not owned of record or beneficially by such Shareholder
except as specifically requested in writing by REIT in advance, (
i
) in favor
of the adoption of the Merger Agreement and approval of the Merger and the
other transactions contemplated by the Merger Agreement, (ii) against (x) any
Company Takeover Proposal and any proposal for any action or agreement that
would result in a breach of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Merger Agreement or
which is reasonably likely to result in any of the conditions of the Company s
obligations under the Merger Agreement not being fulfilled or (y) any change
in the directors of the Company, any change in the present capitalization of
the Company or any amendment to the Company s certificate of incorporation or
bylaws, any other material change in the Company s corporate structure or
business, or any other action which in the case of each of the matters
referred to in this clause (y) could reasonably be expected to, impede,
interfere with, delay, postpone or materially adversely affect the
transactions contemplated by the Merger Agreement or the likelihood of such
transactions being consummated, and (iii) in favor of any other matter
necessary for consummation of the transactions contemplated by the Merger
Agreement which is considered at any such meeting of shareholders or in such
consent, and in connection therewith to execute any documents which are
necessary or appropriate in order to effectuate the
foregoing.
(c) For the purposes of this Agreement, Proxy Term means the
period from the date hereof until the earlier of (
i
) twelve (12) months after
the termination of the Merger
Agreement (provided, however, that after the
termination of the Merger Agreement Sections 3.2(a) and 3.2(b) hereof shall
apply only to an aggregate number of Shares equal to ten percent of the number
of shares of the Company Stock outstanding from time to time, and the parties
hereto shall agree in writing which Shares shall no longer be subject to the
provisions of such Sections)
and (ii) the Effective Time.
3.3 Further Assurances. During the Proxy Term, each Shareholder in
its capacity as a shareholder of the Company shall perform such further acts
and execute such further documents and instruments as REIT or
OPCO
may
reasonably request.
3.4. No Solicitation. During the Proxy Term each Shareholder
individually or in its capacity as a Shareholder of the Company shall not
(
i
) solicit, initiate or knowingly encourage the submission of, any inquiries,
proposals or offers from any person relating to a Company Takeover Proposal,
(ii) enter into any agreement with respect to any Company Takeover Proposal,
or (iii) enter into or participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or take
any other action to knowingly facilitate any inquiries or the making of any
proposal that constitutes, or would reasonably be expected to lead to, any
Company Takeover Proposal.
3.5 Certain Events. Each Shareholder agrees that this Agreement
and the obligations hereunder will attach to the Shares and will be binding
upon any person or entity to which legal or beneficial ownership of the Shares
may pass, whether by operation of law or otherwise.
3.6 Stop Transfer. Each Shareholder agrees with, and covenants to,
REIT that the Shareholder will not request that the Company register the
transfer (book-entry or otherwise) or any certificate or
uncertificated
interest representing any of the Shares. Each Shareholder and the Company
further agree that the Company shall instruct the transfer agent for its
Common Stock
to
refuse to permit the transfer of the Shares during the Proxy
Term except as permitted by the terms of this Agreement.
3.7 Agreement to Elect Cash. The Shareholders agree that
prior to
the Election Deadline they
will irrevocably elect to receive with respect to
all of the Shares, pursuant to and in accordance with the provisions of the
Merger Agreement, the maximum amount of cash permitted to be received pursuant
to the Merger Agreement for such Shares.
3.8 Cooperation. Each Shareholder agrees to cooperate with REIT
after the date hereof in determining and investigating whether there exist any
circumstances which could cause REIT to be closely held within the meaning
of Section 856(a) of the Code or to derive or accrue or be allocated any
amount that is treated as other than rents from real property by reason of
Section 856(d)(2)(B) of the Code and without limiting the foregoing agrees to
provide to REIT as promptly as practical all relevant information and
documents (or, with respect to information and documents which such
Shareholder does not have or own, use commercially reasonable efforts to
obtain and provide them to REIT as promptly as practical) which REIT
reasonably requests in connection with such determination and investigation.
ARTICLE IV
STANDSTILL
(a)
Each Shareholder hereby covenants and agrees that from and after
the Effective Time hereof neither such Shareholder nor any of the Affiliates
will, without the prior written consent of REIT specifically expressed in a
vote adopted after the Merger by the Board of Directors of REIT (the Board ),
directly or indirectly, purchase or cause to be purchased or otherwise acquire
(other than pursuant to a stock split, stock dividend or similar transaction
or agree to acquire, or become or agree to become the beneficial owner of, any
additional equity securities, or any securities convertible into or
exercisable or exchangeable for any equity securities (collectively, Stock )
of REIT,
OPCO
, or any of their subsidiaries.
During the first 90 calendar
days from and after the date the Merger becomes effective (the Effective
Time ), each Shareholder will not directly or indirectly sell, assign,
transfer, pledge (except that such Shareholder may pledge shares to a
brokerage firm pursuant to a margin account with customary terms) or otherwise
dispose of, or enter into any put or other contract, option or other
arrangement or undertaking with respect to the direct or indirect sale,
assignment, transfer or other disposition of, any common stock of REIT ( REIT
Common Stock ) or common stock of OPCO ( OPCO Common Stock ) to be received by
such Shareholder in the Merger. After such 90-day period, the Shareholders
will have the benefit of the rights granted pursuant to the Registration
Rights Agreement to be executed by the Shareholders, REIT and OPCO prior to
the Effective Time (the Registration Rights Agreement ). Each
Shareholder
further agrees
that
after such 90-day period neither
it nor any Affiliates
will, without the prior written consent of the Board specifically expressed in
a vote adopted by the Board, directly or
indirectly sell, assign, transfer,
pledge (except that such Shareholder may pledge shares to a brokerage firm
pursuant to a margin account with customary terms) or otherwise dispose of, or
enter into any put or other contract, option or other arrangement or
undertaking with respect to the direct or indirect sale, assignment, transfer
or other disposition of,
any
shares of
Stock,
except for (
i
) transfers made
pursuant to the provisions of Section
4(b)
below, (ii) transfers to
Affiliates, or to charitable remainder trusts, that agree in
a
written
agreement with REIT pursuant to which such Transferee agrees to be bound by
all of the terms and conditions of, and makes, as of a time immediately prior
to such transfer, each of the representations and warranties contained in
(applied to such Transferee as if such Affiliate were
any Shareholder
for
purposes thereof), this
Agreement
(provided that such Shareholder shall remain
liable under and bound by this Agreement, in its entirety, with respect to all
such transferred
Stock,
(iii) bona fide pledges to financial institutions,
such as commercial or investment banks, broker/dealers, insurance companies
and finance companies and resales thereof by the
pledgees
thereof pursuant to
the terms of the applicable pledge agreements, (iv) gifts to charitable
institutions, (v) transfers pursuant to a publicly announced tender offer for
any shares of Stock by any corporation, entity, person or group (other than
any Shareholder
or the Affiliates) which the Board has voted to recommend to
holders of any such shares of Stock, (vi) transfers effected pursuant to a
registration statement filed pursuant to a registration rights agreement with
REIT or
OPCO and any
Shareholder
or, after the first anniversary of the
Effective Time, pursuant to Rule 145(d) promulgated under the Securities Act
of 1933, as amended (the Securities Act ), and
(vii) open market sales of not
more than
1.0%
of the outstanding
shares of REIT Common Stock or OPCO Common
Stock in
any ninety (90) day period (calculated in the aggregate with respect
to all sales by the Shareholders and the Affiliates, other than sales made
pursuant to any of clauses (
i
) through (vi) of this Section
4(a))
effected in
accordance with the brokers transactions restrictions of subsections (f)
(excluding the last sentence thereof) and (g) of Rule 144 promulgated under
the Securities Act of 1933, as
amended; provided, however, that
notwithstanding anything in this Section 4(a) to the contrary, the
Shareholders and their Affiliates shall not in the aggregate sell (which for
this purpose shall include the entering into any put or other contract, option
or other arrangement or undertaking with respect to the direct or indirect
sale, assignment, transfer or other disposition of Stock), including any Stock
sold pursuant to Section 3(b) hereof, more than 1,300,000, 2,000,000,
2,000,000, 2,500,000 and 2,500,000 shares of REIT Common Stock or OPCO Common
Stock (the Quarterly Limits ) in any of the ninety-day periods which begin on
the 91st, 181st, 271st, 361st and 451st day, respectively, after the Effective
Time and provided further, however, that if in any such ninety-day period (a
Calculation Period ) REIT or OPCO exercise their rights under the provisions
of Section 3 or Section 4 of the Registration Rights Agreement to suspend or
defer the Shareholders rights to sell Stock for a number of days in such
period, then the Quarterly Limit for each succeeding ninety-day period shall
be increased by the excess, if any, of (A) the Quarterly Limit for the
Calculation Period multiplied by a fraction, the numerator of which is such
number of days and the denominator of which is ninety, over (B) the aggregate
number of shares of Stock sold by the Shareholders and the Affiliates in each
ninety day period after the Calculation Period over the Quarterly Limit (prior
to any adjustment) for such period.
For purposes of this Agreement, the
Affiliates of any Shareholder shall mean any person or entity who
directly
or indirectly controls,
is controlled by, or is under common control with any
Shareholder, and transfer shall mean and include any sale, assignment,
gift, pledge, the imposition of any other encumbrance or any other disposition
or any agreement or obligation to do any of the foregoing.
(b) If any Shareholder or any Affiliate desires to sell any shares
of Stock (a Selling Stockholder ) (other than pursuant to clauses (ii)
through (vii) of Section
4(a)
hereof), the Shareholders will cause the
following requirements to be satisfied:
(
i
) The Selling Stockholder shall notify REIT in writing of the
proposed sale (the Notice of Proposed Transfer ). The Notice of Proposed
Transfer shall identify and, to the extent known by the Selling Stockholder,
provide reasonable information concerning the background, business experience
and business affiliations of the proposed transferee (the Transferee ), the
purchase price or other consideration, if any, the number of shares and type
of Stock to be transferred and the complete terms of the proposed transaction.
(ii) For a period of five (5) business days following the
receipt of the Notice of Proposed Transfer, REIT and/or any substitute
designated by REIT (REIT and/or such substitute designee is hereinafter
sometimes called the Buyer ) shall have the option to purchase all, but not
less than all, the Stock specified in the Notice of Proposed Transfer at the
price and upon the terms set forth in the Notice of Proposed Transfer;
provided, however, that if the type of consideration that was to be paid was
non-cash consideration, then the amount payable by the Buyer for such Stock
shall be determined by an independent investment banker of national reputation
chosen by mutual agreement of REIT and such Selling Stockholder. In the event
that Buyer elects to purchase all, but not less than all, of the Stock
specified in the Notice of Proposed Transfer, it shall give written notice to
the Selling Stockholder of its election, in which case settlement for said
Stock shall be made and the Buyer shall purchase such Stock for such price, in
cash within five (5) business days after the date Buyer sends such notice. In
the event that Buyer elects not to purchase all of the Stock specified in the
Notice of Proposed Transfer, the Selling Stockholder may consummate the
proposed transfer of said Stock with the Transferee at any time during the
following thirty (30) days.
(c)
Each Shareholder hereby agrees that, from and after the
Effective Time and prior to the
third anniversary
of the Effective Time,
neither such Shareholder nor any of the Affiliates will, directly or
indirectly, or will solicit, request, advise, assist or encourage others,
directly or indirectly, to:
(a) form, join in or in any other way participate in a
partnership, limited partnership, syndicate or other group within
the meaning of Section 13(d)(3) of the Exchange Act with respect to
any Stock or deposit any Stock in a voting trust or similar
arrangement or subject any Stock to any voting agreement or pooling
arrangement, other than solely with one or more Affiliates with
respect to the Shares;
(b) solicit proxies or written consents of shareholders with
respect to Stock under any circumstances, or make, or in any way
participate in, any solicitation of any proxy to vote any shares
of Stock, or become a participant in any election contest with
respect to REIT or
OPCO
(as such terms are defined or used in Rules
14a
-1 and
14a
-11 under the Exchange Act);
(c) seek to call, or to request the call of, a special meeting
of the shareholders of REIT or
OPCO
or seek to make, or make, a
shareholder proposal at any meeting of the shareholders of REIT or
OPCO
;
(d) commence or announce any intention to commence any tender
offer for any Stock, or file with or send to the SEC a Schedule
13D
or any amendments thereto under the Exchange Act with respect to
Stock, except (x) the Schedule
13D
, if any, to be filed with the SEC
in connection with the issuance to one or more of the Shareholders of
Paired Shares and Unpaired Shares pursuant to the Merger Agreement
(the Current Schedule
13D
), and (y) any amendment to the Current
Schedule
13D
to reflect changes to the disclosures set forth therein
and exhibits filed therewith, to the extent such changes result from
actions that are not prohibited by or inconsistent with this
Agreement (such permitted amendments and additional exhibits to the
Current Schedule
13D
being referred to as the Permitted Schedule
13D
Amendments );
(e) make a proposal or bid with respect to, announce any
intention or desire to make, or publicly make or disclose, cause to
be made or disclosed publicly, facilitate the making public or public
disclosure of, any proposal or bid with respect to, the acquisition
of any substantial portion of the assets of REIT,
OPCO
or of the
assets or stock of any of their respective subsidiaries or of all or
any portion of the outstanding Stock (except each Shareholder may
file Permitted Schedule
13D
Amendments), or any merger,
consolidation, other business combination, restructuring,
recapitalization, liquidation or other extraordinary transaction
involving REIT,
OPCO
or any of their respective subsidiaries;
(f) otherwise act alone or in concert with others to seek to
control or influence in any manner the management, the Board or the
Board of Directors of
OPCO
(including the composition thereof) or the
business, operations or affairs of REIT or
OPCO
;
(g) take any action or form any intention which would require
an amendment to the Current Schedule
13D
(other than amendments
containing only the Permitted Schedule
13D
Amendments);
(
h
) arrange, or in any way participate in, any financing for
any transaction referred to in clauses (a) through
(g)
above
inclusive; or
(i)
make public, or cause or facilitate the making public
(including by disclosure to any journalist or other representative of
the media) of, any request, or otherwise seek (in any fashion that
would require public disclosure by REIT,
OPCO
, any of the
Shareholders or Affiliates), to obtain any waiver or amendment of any
provision of this Agreement, or to take any action restricted hereby.
Notwithstanding the foregoing, any Shareholder and the Affiliates, if
applicable, may make such filings with the SEC pursuant to Section 16(a) of
the Exchange Act to reflect changes in the beneficial ownership of any shares
of Stock owned by Shareholder or any Affiliate (to the extent such changes
reflect action taken by any Shareholder or such Affiliate which is not
prohibited by this Agreement).
Each Shareholder hereby covenants and agrees that such Shareholder
will promptly notify REIT when and if such Shareholder receives or learns of
(
i
) any oral or written request to such Shareholder or any of the Affiliates
to participate in any of the transactions or actions referred to in paragraphs
(a) through (
i
) above inclusive or (ii) any oral or written communication from
or by any person or entity (other than REIT or
OPCO
) with respect to any of
the transactions or actions referred to in paragraphs (a) through (
i
) above
inclusive, if such person or entity could reasonably be deemed to be capable
of effecting, participating in or materially assisting in such an action or
transaction (through one or more affiliates or otherwise) and such oral or
written communication was of a nature that could reasonably be deemed to
indicate a serious interest in effecting, participating in or materially
assisting in such an action or transaction.
ARTICLE V
OPTIONS
TO PURCHASE SHARES
5.1 Grant of
Options.
Subject to the terms, provisions and
conditions contained in this Agreement, each Shareholder hereby grants to REIT
and its designees an option to purchase
part
or all of the Shares held by such
Shareholder at the Exercise Price (as hereinafter defined) per share (the
options granted hereby are referred to individually as an Option and
collectively as the Options ).
5.2
Exercisability
of Options; Procedures
for
Exercise of Options.
(a)
If the REIT believes in good faith that the receipt by one
or more of the Shareholders of Paired Shares pursuant to the Merger Agreement
will or may cause (X) such Shareholder or any other person to own, or be
deemed to own under the applicable attribution rules of Section 318 (as
modified by Section 856(d)(5)) of the Code, immediately after the Merger
Paired Shares of REIT Common Stock and OPCO
Common Stock in excess of the
amounts or percentages of the outstanding Paired Shares of REIT Common Stock
and
OPCO
Common Stock permitted to be owned thereby by REIT s Certificate of
Incorporation or By-laws, both as amended through the Effective Time, or (Y)
any amount derived or received by, or allocated to, REIT to fail to qualify as
rents from real property by reason of Section 856(d)(2)(B) of the Code (such
limitations set forth in the foregoing clauses (X) and (Y) being referred to
herein collectively as the Paired Ownership Limitations ), then REIT shall
have the right to exercise one or more of the Options in whole or
in part in
order to reduce or eliminate any possibility that the issuance of Paired
Shares in the Merger will cause any of the Paired Ownership
Limitations
to be
exceeded
or violated.
In addition, REIT may exercise one or more of the
Options if any Shareholder does not comply with the provisions of Section 3.7
or of Section 3.8. If
REIT chooses to exercise one or more of such Options in
whole or in part, it may do so only by sending a written notice to one or more
of the Shareholders from and after the Election Deadline and prior to the
Effective Time stating its intention to exercise such Option or Options, which
notice
shall be sent to any such Shareholder x/x Xxxxxxx X. Xxxxxxx, Xxxxx
0000, Xxxxx Xxxxxxxx Bank Tower, 000 Xxxx Xxxxxx, Xxxx Xxxxx, Xxxxx 00000 and
shall
include a date and time at which the closing for
any such
exercise (the
Option Closing ) shall occur, such date to be not less than one business day
and not more than five business days after the giving of such notice. The
sale and delivery and the purchase and acceptance of the Shares being acquired
shall take place at the offices of
Xxxxxxx
,
Procter
& Xxxx
LLP
at Exchange
Place, Boston, Massachusetts, or such other place as shall be mutually agreed
upon by REIT and such Shareholder.
(b) At each Option Closing, REIT or its designee shall pay the
Exercise Price (as determined pursuant to Section 5.3 below) for each Share
being purchased in cash by a cashiers check or federal funds wire transfer to
an account designated by such Shareholder against delivery of any necessary or
appropriate stock certificates and duly executed instruments of transfer to
REIT or its designee.
Each Shareholder represents and warrants to REIT and its designee that upon
payment of the applicable purchase price at each Option Closing, such
Shareholder shall have transferred to REIT or its designee the legal and
beneficial ownership of the Shares being sold at such Option Closing, free and
clear of any liens, encumbrances, charges, restrictions or other adverse
claims.
5.3 Exercise Price. The exercise price (the Exercise Price ) shall
equal the Maximum Cash Consideration Per
Share, as such term is defined in the
Merger Agreement.
5.4 Escrow. Upon request by REIT, each Shareholder agrees to place
the Shares subject to the Options in escrow with a mutually agreeable escrow
agent until the termination of the Options.
5.5 Term of Options. The Options shall terminate on the earlier of
(
i
) the termination of the Merger Agreement and (ii) the Effective Time.
VI. MISCELLANEOUS; GENERAL PROVISIONS
6.1 Severability. If any term or other provision of this Agreement
is determined to be invalid, illegal or incapable of being enforced by any
rule of law or public policy, all other
conditions and provisions of this Agreement will nevertheless remain in full
force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto will negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
6.2 Entire Agreement. This Agreement constitutes the entire
agreement of the parties and supersedes all prior agreements and undertakings,
both written and oral, between the parties with respect to the subject matter
hereof.
6.3 Amendments. This Agreement may not be modified, amended,
waived, altered or supplemented, except upon the execution and delivery of a
written agreement executed by the parties hereof.
6.4 Assignment. This Agreement may not be assigned by operation of
law or otherwise.
6.5 Parties in Interest. This Agreement is binding upon, and shall
inure solely to the benefit of, each party hereto and nothing in this
Agreement, express or implied, is intended to or will confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
6.6 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof or was otherwise breached. It
is accordingly agreed that the parties will be entitled to specific relief
hereunder including, without limitation, an injunction or injunctions to
prevent and enjoin breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof, in any state or federal court in
the State of Delaware,
in addition to any other remedy to which they may be
entitled at law or in equity. Any requirements for the securing or posting of
any bond with respect to any such remedy are hereby waived.
6.7 Governing Law; Jurisdiction and Venue. This Agreement shall be
governed by, and construed in accordance with, the internal laws of the
State
of
Delaware without
regard to its rules of conflict of laws. The parties
hereto hereby irrevocably and unconditionally consent to and submit to the
exclusive jurisdiction of the
Delaware Courts
for any litigation arising out
of or relating to this Agreement and the transactions contemplated hereby (and
agrees not to commence any litigation relating thereto except in such courts),
waives any objection to the laying of venue of any such litigation in the
Delaware Courts
and agrees not to plead or claim in any
Delaware Court
that
such litigation brought therein has been brought in any inconvenient forum.
6.8 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed will be deemed to be an original but all of which
taken together will constitute one and the same agreement.
6.9 Directors and Officers. Notwithstanding anything herein to the
contrary, the covenants and agreements set forth herein shall not prevent any
Shareholder or its representatives or designees who are serving on the Board
of Directors of the Company or who are officers of the Company from taking any
action, subject to the applicable provisions of the Merger Agreement, in his
or her capacity as a director or officer of the Company.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first written above.
MEDITRUST CORPORATION
By: ____________________________
Name:
Title:
MEDITRUST OPERATING COMPANY
By: ____________________________
Name:
Title:
LA QUINTA INNS, INC.
By: ____________________________
Name:
Title:
XXXXXX X. XXXXXX & CO.
By:_________________________________
Name: X.X. Xxxxxxx, Xx.
Title: Vice President
XXX X. XXXX, INC.
By:_______________________________
Name: X.X. Xxxxxxx, Xx.
Title: Vice President
XXX X. XXXX, INC.
By:________________________________
Name: X.X. Xxxxxxx, Xx.
Title: Vice President
THE BASS MANAGEMENT TRUST
By:__________________________________
Xxxxx X. Xxxx, Trustee,
by X.X. Xxxxxxx, Attorney-in-fact
THE AIRLI
E GROUP, L.P.
By: EBD, L.P., General Partner
By: TMT-FW Inc.
By:______________________
X.X. Xxxxxxx, Xx.
Vice President
XXXXXXX X. HALLMA
N, JR.
_____________________________________
Xxxxxxx X.
Hallma
n, Jr.
XXXXX X. XXXX GRANDSON S TRUST FOR
XXX X. XXXX
By:____________________________________
Xxxxxxx X. Hallma
n, Jr., Trustee
XXXXX X. XXXX GRANDSON S TRUST FOR
XXX X. XXXX
By:_____________________________________
Xxxxxxx X.
Hallma
n, Jr., Trustee
XXXXX XXXXXXXX
________________________________________
Xxxxx Xxxxxxxx
XXXX X. XXXX
_________________________________________
Xxxx X. Xxxx
HYATT XXXX XXXX SUCCESSOR TRUST
By: Panther City Investment
Co., Trustee
By:
__________________________________
X.X. Xxxxxxx Xx.,
Vice President
XXXXXXXX XXXX BASS SUCCESSOR TRUST
By: Panther City Investment Co., Trustee
By: __________________________________
X.X. Xxxxxxx Xx.,
Vice President
PORTFOLIO C INVESTORS, L.P.
By: Portfolio Associates, Inc.,
General Partner
By: __________________________________
X.X. Xxxxxxx Xx.,
Vice President
EXHIBIT A
Number of Shares of
Number of Shares of Company Stock Owned
Name and Address Company Stock Owned Beneficially But Not
of Shareholder of Record by Shareholder of Record by Shareholder
Xxxxxx X. Xxxxxx & Co. 0 3,461,280
Xxx X. Xxxx, Inc. 0 4,147,957
Xxx X. Xxxx, Inc. 0 4,147,957
The Bass Management Trust 0 1,190,622
The Airlie Group, L.P. 0 487,500
Xxxxxxx X. Xxxxxxx, Xx. 0 253,125
Xxxxx X. Xxxx Grandson s Trust for
Xxx X. Xxxx 0 806,305
Xxxxx X. Xxxx Grandson s Trust for
Xxx X. Xxxx 0 806,305
Xxxxx Xxxxxxxx 0 339,185
Xxxx X. Xxxx 303,750 0
Hyatt X. Xxxx Successor Trust 0 1,550,733
Xxxxxxxx Xxxx Bass Successor Trust 0 1,550,733
Portfolio C Investors, L.P. 0 3,223,700
All of the above shares, except those owned by Xxxx X. Xxxx, are subject to
liens arising out of margin account borrowings with one or more brokerage
firms on customary terms.
