<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10
General Form For Registration of Securities
Pursuant to Section 12(b) or (g) of
the Securities Exchange Act of 1934
Meditrust Acquisition Company
(Exact name of registrant as specified in its charter)
Massachusetts 04-6840872
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
197 First Avenue, Needham, MA 02194
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 433-6000
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Shares of beneficial interest without par value New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act: None
Not Applicable
(Title of class)
Not Applicable
(Title of class)
<PAGE>
Item 1. Business
Meditrust Acquisition Company ("MAC") is a Massachusetts business trust
and wholly-owned subsidiary of Meditrust, a Massachusetts business trust
("Meditrust"), formed on June 18, 1997 to facilitate the mergers of MAC and
Meditrust into Santa Anita Realty Enterprises, Inc., a Delaware corporation
("Realty"), and Santa Anita Operating Company, a Delaware corporation
("Operating"). On June 19, 1997 Meditrust Acquisition Corporation IV, a Delaware
corporation and wholly-owned subsidiary of Meditrust ("MAC IV"), assigned to MAC
all its rights, interests and obligations under an Amended and Restated
Agreement and Plan of Merger by and among MAC IV, Meditrust, Realty and
Operating and MAC entered into a Second Amended and Restated Agreement and Plan
of Merger with Meditrust, MAC IV, Realty and Operating. The Second Amended and
Restated Agreement and Plan of Merger served as a novation of the original
merger agreement, substituted MAC as a party thereto and discharged MAC IV. In
September 1997, MAC will enter into a Third Amended and Restated Agreement and
Plan of Merger with Meditrust, Realty and Operating (the "Merger Agreement") to
correct certain inaccuracies contained in the Second Amended and Restated
Agreement and Plan of Merger.
In September 1997, MAC expects to receive approximately $43,588,907
from Meditrust and thereafter to purchase shares of the common stock of Realty,
$.10 par value, and Operating, $.10 par value (collectively, with the common
stock of Realty, the "Santa Anita Paired Common Stock") from Realty and
Operating as will be contemplated by the Merger Agreement (the "Acquired
Shares"). If the Merger is not consummated, the Merger Agreement will provide
that MAC will be entitled to customary registration rights with respect to the
Santa Anita Paired Common Stock acquired.
In September 1997, MAC also intends to enter into two agreements with
Meditrust: (i) a Pairing Agreement pursuant to which the MAC shares of
beneficial interest without par value (the "MAC Shares") will be paired with the
Meditrust shares of beneficial interest without par value (the "Meditrust
Shares") so that they are transferable only in units, each of which shall
consist of one Meditrust Share and one MAC Share, and (ii) a Distribution
Agreement pursuant to which Meditrust will distribute to each holder of
Meditrust Shares as a dividend one MAC Share for each Meditrust Share held by
such shareholder (the "Distribution") and Meditrust will provide MAC with such
transitional services as MAC shall reasonably request for a period of time
following the Distribution. MAC will receive no proceeds as a result of the
Distribution.
Other than entering into the Merger Agreement and consummating the
transactions contemplated thereby, purchasing and holding such shares of Santa
Anita Paired Common Stock, and entering into the Pairing Agreement and
Distribution Agreement and consummating the transactions contemplated thereby,
MAC will conduct no business of any kind. Furthermore, MAC has generated no
revenue, profits or losses since its formation and has not entered into any
transactions with any third party except as described above. MAC is not a party
to any legal proceedings.
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<PAGE>
MAC has elected to qualify as a real estate investment trust under
Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the
"Code").
Item 2. Financial Information
MAC has generated no revenue, income or losses, has no assets (other
than the Acquired Shares, when acquired) and has no liabilities other than
liabilities pursuant to the above agreements.
Item 3. Properties
None.
Item 4. Security Ownership of Beneficial Owners and Management
The following table sets forth the number of shares of MAC owned
directly or indirectly by (i) each person who beneficially owns more than 5% of
MAC Shares, and (ii) each Trustee of MAC and all Trustees and executive officers
of MAC as a group.
<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially Owned
Owned as as a Percentage of
Name and Principal Occupation or Employment of August 31, 1997 Shares Outstanding
- ------------------------------------------- ------------------ ------------------
<S> <C> <C>
Meditrust...................................... 100 100%
David F. Benson................................ -- *
President and Treasurer of Meditrust and
President and Trustee of MAC
Edward W. Brooke............................... -- *
Former Partner in the law firm of O'Connor &
Hannan and Trustee of MAC
All trustees and officers of MAC as a group -- *
(3 in number)................................
</TABLE>
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* Less than 1%.
Assuming the Distribution occurred as of July 31, 1997, the following
table sets forth the number of shares of MAC owned directly or indirectly by (i)
each person who beneficially owns more than 5% of MAC Shares, and (ii) each
Trustee of MAC and all Trustees and executive officers of MAC as a group.
Numbers may not be exact as a result of changes in ownership of Meditrust Shares
between July 31, 1997 and the date of the Distribution.
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<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially Owned
as a Percentage of
Name and Principal Occupation or Employment July 31, 1997(1) Shares Outstanding
- ------------------------------------------- ---------------- ------------------
<S> <C> <C>
Franklin Resources, Inc............................ 3,202,838(2) 5.3%
77 Mariners Island Blvd.
San Mateo, CA 94404
David F. Benson.................................... 66,137(3) *
President and Treasurer of Meditrust and
President and Trustee of MAC
Edward W. Brooke................................... 92,555(4) *
Former Partner in the law firm of
O'Connor & Hannan and Trustee of MAC
All Trustees and officers of MAC as a group 180,411(5) *
(3 in number).............................
</TABLE>
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* Less than 1%.
(1) Unless otherwise indicated, the number of MAC Shares stated as being
owned beneficially includes (i) MAC Shares beneficially owned by
spouses, minor children and/or other relatives in which the trustee may
share voting or investment power and (ii) any MAC Shares listed as
being subject to options exercisable within 60 days of July 31, 1997.
(2) Based on information concerning beneficial ownership of Meditrust
Shares as of December 31, 1996 as set forth in the Schedule 13G of
Franklin Resources, Inc. dated February 13, 1997.
(3) Includes 55,706 MAC Shares Mr. Benson has the right to acquire
beneficial ownership of upon exercise of an option exercisable within
60 days of July 31, 1997.
(4) Includes 40,000 MAC Shares Mr. Brooks has the right to acquire
beneficial ownership of upon exercise of an option exercisable within
60 days of July 31, 1997. Does not include 817 MAC Shares owned by Mr.
Brooke's wife, 2,271 MAC Shares owned of record by Mr. Brooke as
custodian for his son and 2,100 MAC Shares owned of record by Mr.
Brooke as trustee for his grandchildren, as to which MAC Shares Mr.
Brooke disclaims any beneficial interest.
(5) Includes 109,039 MAC Shares the Trustees and officers of MAC have the
right to acquire beneficial ownership of upon exercise of an option
exercisable within 60 days of July 31, 1997.
Item 5. Directors and Executive Officers
David F. Benson, age 48, has been the President and a Trustee of MAC
since its inception in June 1997. He has also served as the President and a
Trustee of Meditrust, the sole shareholder of MAC, since September 1991 and
previously was Treasurer of Meditrust from January 1986 to May 1992 and The
Mediplex Group, Inc., from January 1986 through June 1987. He was previously
associated with Coopers & Lybrand, L.L.P., independent accountants, from 1979 to
1985. Mr. Benson is a Trustee of Mid-Atlantic Realty Trust and a member of the
Board of Directors of Harborside Healthcare Corporation and Nursing Home
Properties, Plc.
Edward W. Brooke, age 77, has been a Trustee of MAC since its inception
in June 1997. He has also been a Trustee of Meditrust, the sole shareholder of
MAC, since 1985.
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<PAGE>
Mr. Brooke was a partner of O'Connor & Hannan, a Washington, D.C. law firm, from
1979 until January 1997. From 1979 until October 1990 he was Of Counsel to
Csaplar & Bok, a Boston law firm. He was United States Senator from
Massachusetts from January 1967 to January 1979 and the Massachusetts Attorney
General from 1963 to 1967.
Michael S. Benjamin, age 39, has been the Secretary of MAC since its
inception in June 1997. He has also been Senior Vice President, Secretary and
General Counsel of Meditrust, the sole shareholder of MAC, since October 1993.
He was Vice President, Secretary and General Counsel from May 1992 to October
1993, Secretary and General Counsel from December 1990 to May 1992 and Assistant
Counsel to Meditrust from November 1989 to December 1990. His previous
association was with the firm of Brown, Rudnick, Freed & Gesmer, from 1983 to
1989.
Item 6. Executive Compensation
The management of MAC, including the Chief Executive Officer, receives
no compensation.
Item 7. Certain Relationships and Related Transactions
In September 1997, MAC expects to receive approximately $43,588,907
from Meditrust and thereafter to purchase shares of Santa Anita Paired Common
Stock from Realty and Operating as will be contemplated by the Merger Agreement.
If the Merger is not consummated, the Merger Agreement will provide that MAC
will be entitled to customary registration rights with respect to the Santa
Anita Paired Common Stock acquired.
In September 1997, MAC also intends to enter into two agreements with
Meditrust: (i) a Pairing Agreement pursuant to which the MAC Shares will be
paired with the Meditrust Shares so that they are transferable only in units,
each of which shall consist of one Meditrust Share and one MAC Share, and (ii) a
Distribution Agreement pursuant to which Meditrust will distribute to each
holder of Meditrust Shares as a dividend one MAC Share for each Meditrust Share
held by such shareholder and Meditrust will provide MAC with such transitional
services as MAC shall reasonably request for a period of time following the
Distribution. MAC will receive no proceeds as a result of the Distribution.
Item 8. Legal Proceedings
None.
Item 9. Market Price of and Dividends on MAC Shares Beneficial Interest and
Related Stockholder Matters
There is no established public trading market for the MAC Shares.
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<PAGE>
Under the Pairing Agreement, upon exercise of a stock option or
conversion of any other security convertible into Meditrust Shares granted or
issued by Meditrust prior to the Merger, MAC will agree to issue a number of MAC
Shares to the exercising optionee, or to the holder of such other security
convertible into Meditrust Shares, equal to the number of shares issued by
Meditrust upon such exercise or conversion. Meditrust will agree to pay to MAC
the fair market value of any MAC Shares issued as of the date of such exercise
or conversion.
Other than the MAC Shares to be held by the Trustees and officers of
MAC, no MAC Shares are eligible for sale pursuant to Rule 144 under the
Securities Act of 1933, as amended and MAC has not agreed to register any shares
under the Securities Act for sale by holders of such shares. There are no MAC
shares that are being, or have been publicly proposed to be, publicly offered by
MAC, the offering of which could have a material effect on the market price of
the MAC Shares.
Meditrust is the only holder of MAC Shares as of August 31, 1997.
MAC has elected to qualify as a real estate investment trust under the
Code. In order for MAC's real estate investment income, if any, not to be
subject to federal corporate income taxes, at least 95% of such income must be
distributed to MAC's shareholders.
Item 10. Recent Sales of Unregistered Securities
MAC issued 100 MAC Shares to Meditrust on August 8, 1997.
Item 11. Description of MAC Shares of Beneficial Interest
There is no limit on the number of shares of beneficial interest MAC is
authorized to issue. Shares may be issued by the Board of Trustees in one or
more classes or series with such relative rights and preferences as may be
designated by the Trustees without any vote of the shareholders. The outstanding
shares of MAC are of one class and without par value. The following description
is qualified in all respects by reference to MAC's Declaration of Trust (the
"MAC Declaration") and By-Laws, copies of which are incorporated herein by
reference.
Shares of Beneficial Interest
All of MAC's Shares participate equally in dividends and in net assets
available for distribution to shareholders on liquidation or termination of MAC,
have one vote per share on all matters submitted to a vote of the shareholders
and do not have cumulative voting rights in the election of Trustees.
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<PAGE>
Additional Provisions
The MAC Declaration provides that annual meetings of shareholders are
to be held within six months after the end of each fiscal year and special
meetings of the shareholders may be called by the President of MAC, a majority
of the Trustees or a majority of the Independent Trustees (defined in the MAC
Declaration) and shall be called upon the written request of the holders of 10%
or more of the outstanding MAC Shares.
Whenever any action is to be taken by the shareholders, it shall,
except as otherwise clearly indicated in the MAC Declaration, be authorized by
holders of a majority of the MAC Shares present in person or represented by
proxy and entitled to vote thereon, provided that such majority shall be at
least a majority of the number of MAC Shares required to constitute a quorum.
Notwithstanding the foregoing, at all elections of Trustees, voting by
shareholders shall be conducted under the non-cumulative method and the election
of Trustees shall be by the affirmative vote of the holders of MAC Shares
representing a plurality of the MAC Shares then outstanding which are present in
person or by proxy at a meeting in which a quorum is present.
Whenever shareholders are required or permitted to take any action
(unless a vote at a meeting is specifically required, as with respect to
termination or amendment of the MAC Declaration), such action may be taken
without a meeting by written consents setting forth the action so taken, signed
by the holders of a majority (or such higher percentage as may be specified) of
the outstanding MAC Shares that would be entitled to vote thereon at a meeting.
Except with respect to matters on which a shareholders' vote is
specifically required by the MAC Declaration, no action taken by the
shareholders at any meeting shall in any way bind the Trustees.
The MAC Shares have no preemptive, conversion, exchange, sinking fund
or appraisal rights.
Pairing
The Meditrust Shares and MAC Shares will be transferable and tradeable
only in combination as units, each unit consisting of one Meditrust Share and
one MAC Share. After the Distribution, the MAC Shares will be evidenced by the
certificates for the related Meditrust Shares and the registered holders of the
Meditrust Shares will also be the registered holders of the related MAC Shares.
Transfer Agent and Registrar
Boston EquiServe, Canton, Massachusetts, will act as transfer agent and
registrar of the MAC Shares.
-7-
<PAGE>
Item 12. Indemnification of Trustees and Officers
The MAC Declaration provides for indemnification of present and former
Trustees and officers against expense or liability in any action arising out of
such persons' activities on behalf of MAC, except to the extent arising from his
own gross negligence or willful misconduct.
Item 13. Financial Statements and Supplementary Information.
Because MAC has conducted no business other than that specified in
response to Item 1, no financial statements have been filed as part of this
Registration Statement.
Item 14. Changes in and Disagreements with Accountants and Financial Disclosure
None.
Item 15. Financial Statements and Exhibits.
(a) Exhibits. The following is a list of exhibits which are incorporated
as part of the Registration Statement by reference.
<TABLE>
<CAPTION>
Exhibit No. Exhibit
----------- -------
<S> <C>
*3(i)(a) Declaration of Trust
*3(i)(b) First Amendment to Declaration of Trust
*3(ii)(a) By-Laws
*3(ii)(b) First Amendment to By-Laws
*10.1 Form of Third Amended and Restated Agreement and Plan of Merger
*10.2 Form of Pairing Agreement
*10.3 Form of Agreement and Plan of Distribution
</TABLE>
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* Filed herewith.
-8-
<PAGE>
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, MAC has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
MEDITRUST ACQUISITION COMPANY
By: /s/ Michael S. Benjamin
-------------------------------
Michael S. Benjamin, Secretary
Date: September 10, 1997
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<PAGE>
Exhibit 3(i)(a)
-------------------------------
MEDITRUST ACQUISITION COMPANY
------------
Declaration of Trust
------------
June 2, 1997
------------
Principal Business Address:
197 First Avenue
Needham, MA 02194
------------
Business Address of Meditrust Acquisition Company's Trustees:
197 First Avenue
Needham, MA 02194
------------
Agent for Service of Process for
Meditrust Acquisition Company and its Trustees:
Michael S. Benjamin, Esq
Meditrust Acquisition Company
197 First Avenue
Needham, MA 02194
-------------------------------
<PAGE>
ARTICLE I
THE TRUST; DEFINITIONS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1.1 Name..................................................... 1
1.2 Places of Business....................................... 1
1.3 Nature of Trust ......................................... 1
1.4 Definitions ............................................. 2
ARTICLE II
TRUSTEES
2.1 Number, Term of Office and Qualifications
of Trustees............................................. 4
2.2 Compensation and Other Remuneration ..................... 5
2.3 Resignation, Removal and Death of Trustees .............. 5
2.4 Vacancies................................................ 5
2.5 Successor and Additional Trustees ....................... 6
2.6 Actions by Trustees ..................................... 6
2.7 Certification of Changes in Trustees .................... 6
2.8 Committees .............................................. 7
ARTICLE III
TRUSTEES' POWERS
3.1 Power and Authority of Trustees ......................... 7
3.2 Specific Powers and Authority ........................... 7
3.3 By-Laws .................................................12
ARTICLE IV
ADVISOR
4.1 Employment of Advisor ...................................13
4.2 Other Activities of Advisor .............................13
ARTICLE V
INVESTMENT POLICY
5.1 Statement of Policy .....................................14
</TABLE>
<PAGE>
ARTICLE VI
THE SHARES AND SHAREHOLDERS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
6.1 Description of Shares ...................................14
6.2 Certificates ............................................16
6.3 Fractional Shares .......................................16
6.4 Issuance of Units .......................................16
6.5 Legal Ownership of Trust Estate .........................17
6.6 Shares Deemed Personal Property .........................17
6.7 Share Record; Issuance and Transferability of Shares.....17
6.8 Dividends or Distributions to Shareholders ..............18
6.9 Transfer Agent, Dividend Disbursing Agent and Registrar..18
6.10 Shareholders' Meetings ..................................18
6.11 Proxies .................................................20
6.12 Fixing Record Date ......................................20
6.13 Notice to Shareholders ..................................20
6.14 Shareholder Disclosures; Trustees Right to Refuse to
Transfer Shares; Limitation on Holdings; Redemption of
Shares..................................................20
ARTICLE VII
LIABILITY OF TRUSTEES, SHAREHOLDERS,
OFFICERS, EMPLOYEES AND AGENTS,
AND OTHER MATTERS
7.1 Exculpation of Trustees, Officers, Employees
and Agents .............................................22
7.2 Limitation of Liability of Shareholders, Trustees,
Officers, Employees and Agents .........................22
7.3 Express Exculpatory Clauses and Instruments .............23
7.4 Indemnification and Reimbursement of Trustees,
Officers, Employees, and Agents ........................23
7.5 Right of Trustees, Officers, Employees and Agents to
Own Share or Other Property and to Engage in Other
Business ...............................................24
7.6 Transactions Between Trustees, Officers, Employees or
Agents and the Trust ...................................25
7.7 Restriction of Duties and Liabilities ...................26
7.8 Persons Dealing with Trustees, Officers, Employees
or Agents ..............................................26
7.9 Reliance ................................................26
</TABLE>
<PAGE>
ARTICLE VIII
DURATION, AMENDMENT AND TERMINATION
OF TRUST
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
8.1 Duration of Trust .......................................26
8.2 Termination of Trust ....................................27
8.3 Amendment Procedure .....................................27
8.4 Amendments Effective ....................................28
8.5 Transfer to Successor ...................................28
8.6 Sale of Assets, Merger ..................................28
ARTICLE IX
MISCELLANEOUS
9.1 Applicable Law ..........................................29
9.2 Index and Headings for Reference Only ...................29
9.3 Successors in Interest ..................................29
9.4 Inspection of Records ...................................29
9.5 Counterparts ............................................29
9.6 Provisions of the Trust in Conflict with Law or
Regulations; Severability ..............................29
9.7 Certifications ..........................................30
</TABLE>
<PAGE>
DECLARATION OF TRUST
OF
MEDITRUST
ACQUISITION COMPANY
June 2, 1997
DECLARATION OF TRUST as of the date set forth above by the undersigned
Trustees.
WITNESSETH:
WHEREAS, the Trustees desire to form a trust for the principal purpose of
effecting a Merger with Santa Anita Operating Company;
NOW, THEREFORE, it is hereby agreed and declared that the Trustees will
hold any and all property of every type and description which they are acquiring
or may hereafter acquire as Trustees, together with the proceeds thereof, in
trust, to manage and dispose of the same for the benefit of the holders from
time to time of the Shares of Beneficial Interest being issued and to be issued
hereunder in the manner and subject to the stipulations contained herein.
ARTICLE I
THE TRUST: DEFINITIONS
1.1 Name. The name of the Trust created by this Declaration of Trust
----
shall be "Meditrust Acquisition Company" and so far as may be practicable the
Trustees shall conduct the Trust's activities, execute all documents and sue or
be sued under that name, which name (and the word "Trust" wherever used in this
Declaration of Trust, except where the context otherwise requires) shall refer
to the Trustees collectively but not individually or personally nor to the
officers, agents, employees or Shareholders of the Trust or of such Trustees.
Under circumstances under which the Trustees determine that the use of such name
is not practicable or under circumstances in which the Trustees are
contractually bound to change that name, they may adopt another name under which
the Trust may hold property or conduct its activities.
1.2 Places of Business. The Trust shall maintain an office in
------------------
Massachusetts at such place in Massachusetts as the Trustees may determine from
time to time. The Trust may have such other offices or places of business within
or without the Commonwealth of Massachusetts as the Trustees may from time to
time determine.
1.3 Nature of Trust. The Trust shall be of the type commonly termed a
---------------
Massachusetts business trust. The Trust is not intended to be, shall not be
deemed to be, and shall not be treated as a general partnership, limited
partnership, joint venture, corporation or joint stock company nor shall the
Trustees or Shareholders or any of them for any purpose be, nor be deemed to be,
nor be treated in any way
<PAGE>
whatsoever to be, liable or responsible hereunder as partners or joint
venturers. The relationship of the Shareholders to the Trustees shall be solely
that of beneficiaries of the Trust in accordance with the rights conferred upon
them by this Declaration.
1.4 Definitions. The terms defined in this Section 1.4 wherever used in
-----------
this Declaration shall, unless the context otherwise requires, have the
respective meanings hereinafter specified. Whenever the singular number is used
in this Declaration and when permitted by the context, the same shall include
the plural, and the masculine gender shall include the feminine and neuter
genders and vice versa. Where applicable, calculations to be made pursuant to
any such definition shall be made in accordance with generally accepted
accounting principles as in effect from time to time except as otherwise
provided in such definition.
(a) Advisor. "Advisor" shall mean the Person employed by the
-------
Trustees in accordance with the provisions of Article IV but shall not
include any individual who provides services to the Trust as an employee,
advisor or consultant, on either a full-time or part-time basis.
(b) Affiliate. "Affiliate" shall mean, as to any person, (i) any
---------
other Person directly or indirectly controlling, controlled by or under
common control with such Person, (ii) any other Person that owns
beneficially, directly or indirectly, five percent (5%) or more of the
outstanding capital stock or shares of equity interests of such Person, or
(iii) any officer, director, employee, general partner or trustee of such
Person or of any Person controlling, controlled by or under common control,
with such Person (excluding trustees and persons serving in similar
capacities who are not otherwise an Affiliate of such Person).
(c) Affiliated Trustee. "Affiliated Trustee" shall mean a Trustee
------------------
who is not an Independent Trustee.
(d) Annual Meeting of Shareholders. "Annual Meeting of
------------------------------
Shareholders" shall mean the meeting described in the first sentence of
Section 6.10.
(e) By-Laws. "By-Laws" shall have the meaning set forth in Section
-------
3.3.
(f) Declaration. "Declaration" or "this Declaration" shall mean
-----------
this Declaration of Trust, as amended, restated or modified from time to
time. References in this Declaration to "herein" and "hereunder" shall be
deemed to refer to this Declaration and shall not be limited to the
particular text, article or section in which such words appear.
-2-
<PAGE>
(g) Independent Trustee. "Independent Trustee" shall mean a
-------------------
Trustee, who, in his individual capacity, (i) is not affiliated, directly
or indirectly, with an Advisor of the Trust, whether by ownership of,
ownership interest in, employment by, any business or professional
relationship with, or serves as an officer or director of, such Advisor or
an affiliated business entity of such Advisor and (ii) does not perform any
services for the Trust except as Trustee. An indirect relationship shall
include circumstances in which a member of the immediate family of a
Trustee has one of the foregoing relationships with the Trust or an Advisor
of the Trust.
(h) Internal Revenue Code. "Internal Revenue Code" shall mean the
---------------------
Internal Revenue Code of 1986, as now enacted or hereafter amended, or
successor statutes.
(i) Mortgage Loans. "Mortgage Loans" shall mean notes, debentures,
--------------
bonds and other evidences of indebtedness or obligations which are
negotiable or nonnegotiable and which are secured or collateralized by
Mortgages.
(j) Mortgages. "Mortgages" shall mean mortgages, deeds of trust or
---------
other security interests in Real Property or in rights or interests,
including leasehold interests, in Real Property.
(k) Person. "Person" shall mean and include individuals,
------
corporations, limited partnerships, general partnerships, joint stock
companies or associations, joint ventures, associations, companies, trusts,
banks, trust companies, land trusts, business trusts, or other entities and
governments and agencies and political subdivisions thereof.
(l) Real Property. "Real Property" shall mean and include land,
-------------
leasehold interests (including but not limited to interests of a lessor or
lessee therein), rights and interests in land, and any buildings,
structures, improvements, furnishings, fixtures and equipment located on or
used in connection with land, leasehold interests or rights in land or
interests therein, but does not include investments in Mortgages, Mortgage
Loans or interests therein.
(m) REIT. "REIT" shall mean a real estate investment trust as
----
defined in the REIT Provisions of the Internal Revenue Code.
(n) REIT Provisions of the Internal Revenue Code. "REIT Provisions
--------------------------------------------
of the Internal Revenue Code" shall mean Parts II and III of Subchapter M
of Chapter 1 of Subtitle A of the Internal Revenue Code, or similar
provisions of any successor statute.
-3-
<PAGE>
(o) Securities. "Securities" shall mean any stock, shares, voting
----------
trust certificates, bonds, debentures, notes or other evidences of
indebtedness or in general any instruments commonly known as "securities"
or any certificates of interest, shares or participations in, temporary or
interim certificates for, receipts for, guarantees of, or warrants, options
or rights to subscribe to, purchase or acquire any of the foregoing.
(p) Shareholders. "Shareholders" shall mean as of any particular
------------
time all holders of record of outstanding Shares at such time.
(q) Shares. "Shares" or, as the context may require, "shares" shall
------
mean the shares of beneficial interest of the Trust as described in the
first sentence of Section 6.1 hereof.
(r) Trust. "Trust" shall mean the Trust created by this
-----
Declaration.
(s) Trustees. "Trustees" shall mean, as of any particular time, the
--------
original signatories hereto as long as they hold office hereunder and
additional and successor Trustees, and shall not include the officers,
employees or agents of the Trust or the Shareholders. Nothing herein shall
be deemed to preclude the Trustees from also serving as officers, employees
or agents of the Trust or owning Shares.
(t) Trust Estate. "Trust Estate" shall mean as of any particular
------------
time any and all property, real, personal or otherwise, tangible or
intangible, which is transferred, conveyed or paid to or purchased by the
Trust or Trustees and all rents, income, profits and gains therefrom and
which at such time is owned or held by or for the Trust or the Trustees.
ARTICLE II
TRUSTEES
2.1 Number, Term of Office and Qualifications of Trustees. There shall be
-----------------------------------------------------
no fewer than one (1) nor more than twelve (12) Trustees. The initial Trustees
shall be the signatories hereto. Within the limits set forth in this Section
2.1, the number of Trustees may be increased or decreased from time to time by
the Trustees or by the Shareholders. No reduction in the number of Trustees
shall have the effect of removing any Trustee from office prior to the
expiration of his term. Subject to the provisions of Section 2.3 each Trustee
shall hold office until the next annual meeting of Shareholders and until the
election and qualification of his successor. There shall be no cumulative voting
in the election for Trustees. A Trustee shall be an individual at least twenty-
one (21) years of age who is not under legal disability. At least one of the
Trustees shall at all times be a person who is an Independent Trustee; provided,
--------
however, that upon a failure to comply with this requirement because of the
- -------
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<PAGE>
resignation, removal or death of a Trustee who is an Independent Trustee, such
requirement shall not be applicable for a period of sixty (60) days. Nominees to
serve as Independent Trustees shall be nominated by the then current Independent
Trustees, if any. Unless otherwise required by law, no Trustee shall be required
to give bond, surety or security in any jurisdiction for the performance of any
duties or obligations hereunder. The Trustees in their capacity as Trustees
shall not be required to devote their entire time to the business and affairs of
the Trust.
2.2 Compensation and Other Remuneration. The Trustees shall be entitled
-----------------------------------
to receive such reasonable compensation for their services as Trustees as the
Trustees may determine from time to time. The Trustees and Trust officers shall
be entitled to receive remuneration for services rendered to the Trust in any
other capacity. Subject to Sections 7.5 and 7.6, such services may include,
legal, accounting or other professional services, or services as a broker,
transfer agent or underwriter, whether performed by a Trustee or any person
affiliated with a Trustee.
2.3 Resignation, Removal and Death of Trustees. A Trustee may resign at
------------------------------------------
any time by giving written notice to the remaining Trustees at the principal
office of the Trust. Such resignation shall take effect on the date specified in
such notice, without need for prior accounting. A Trustee may be removed at any
time with or without cause by vote or consent of holders of Shares representing
a majority of the total votes authorized to be cast by Shares then outstanding
and entitled to vote thereon, or with cause by all remaining Trustees. A Trustee
judged incompetent or bankrupt, or for whom a guardian has been appointed, shall
be deemed to have resigned as of the date of such adjudication or appointment.
Upon the resignation or removal of any Trustee, his legal representative shall
perform the acts set forth in the preceding sentence and the discharge mentioned
therein shall run to such legal representative and to the incapacitated Trustee
or the estate of the deceased Trustee, as the case may be.
2.4 Vacancies. If any or all the Trustees cease to be Trustees hereunder,
---------
whether by reason of resignation, removal, incapacity, death or otherwise, such
event shall not terminate the Trust or affect its continuity. Until vacancies
are filled, the remaining Trustee or Trustees may exercise the powers of the
Trustees hereunder. Vacancies (including vacancies created by increases in
number) may be filled by the remaining Trustee or by a majority of the remaining
Trustees (or by the remaining Independent Trustee or a majority of the remaining
Independent Trustees, if any, if the vacant position was formerly held by an
Independent Trustee or is required to be held by an Independent Trustee) or by
vote of the Shareholders. If at any time there shall be no Trustees in office,
successor Trustees shall be elected by the Shareholders as provided in Section
6.10. Any Trustee elected to fill a vacancy created by the resignation, removal
or death of a former Trustee shall hold office for the unexpired term of such
former Trustee.
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2.5 Successor and Additional Trustees. The right, title and interest of
---------------------------------
the Trustees in and to the Trust Estate shall also vest in successor and
additional Trustees upon their qualification, and they shall thereupon have all
the rights and obligations of Trustees hereunder. Such right, title and interest
shall vest in the Trustees whether or not conveyancing documents have been
executed and delivered. Appropriate written evidence of the election and
qualification of successor and additional Trustees shall be filed with the
records of the Trust and in such other offices or places as the Trustees may
deem necessary, appropriate or desirable.
2.6 Actions by Trustees. The Trustees may act with or without a meeting.
-------------------
A quorum for all meetings of the Trustees shall be a majority of the Trustees;
provided, however, that, whenever pursuant to Section 7.6 or otherwise the vote
- -------- -------
of a majority of a particular group of Trustees is required at a meeting, a
quorum for such meeting shall be a majority of the Trustees which shall include
a majority of such group. Unless specifically provided otherwise in this
Declaration, any action of the Trustees may be taken at a meeting by vote of a
majority of the Trustees present (a quorum being present) or without a meeting
by written consents of a majority of the Trustees, which consents shall be filed
with the records of meetings of the Trustees. Any action or actions permitted to
be taken by the Trustees in connection with the business of the Trust may be
taken pursuant to authority granted by a meeting of the Trustees conducted by a
telephone conference call or similar communications equipment by means of which
all persons participating in the meeting can hear each other at the same time,
and participation by such means shall constitute presence in person at the
meeting and the transaction of Trust business represented thereby shall be of
the same authority and validity as if transacted at a meeting of the Trustees
held in person or by written consent. The minutes of any Trustees' meeting held
by telephone shall be prepared in the same manner as a meeting of the Trustees
held in person. Any agreement, deed, mortgage, lease or other instrument or
writing executed by one or more of the Trustees or by any authorized person
shall be valid and binding upon the Trustees and upon the Trust when authorized
or ratified by action of the Trustees or as provided in the By-Laws.
With respect to the actions of the Trustees, Trustees who have, or
are Affiliates of Persons who have, any direct or indirect interest in or
connection with any matter being acted upon may be counted for all quorum
purposes under this Section 2.6 and, subject to the provisions of Section 7.6,
may vote on the matter as to which they or their Affiliates have such interest
or connection.
2.7 Certification of Changes in Trustees. No alteration in the number of
------------------------------------
Trustees, no removal of a Trustee and no election or appointment of any
individual as Trustee (other than an individual who was serving as a Trustee
immediately prior to such election or appointment) shall become effective unless
and until there shall be delivered to the President or the Secretary of the
Trust an instrument in writing signed by a majority of the Trustees, certifying
to such alteration in the number of
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Trustees and/or to such removal of a Trustee and/or naming the individual so
elected or appointed as Trustee, together with his written acceptance thereof
and agreement to be bound thereby.
2.8 Committees. The Trustees may appoint from among their number such
----------
standing committees as the Trustees determine. At least one member of each
standing committee shall be an Independent Trustee; provided, however, that upon
a failure to comply with this requirement because of the resignation, removal or
death of a Trustee who is an Independent Trustee, such requirement shall not be
applicable for a period of sixty (60) days. Each committee shall have such
powers, duties and obligations as the Trustees may deem necessary or
appropriate. The standing committees shall report their activities periodically
to the Trustees.
ARTICLE III
TRUSTEES' POWERS
3.1 Power and Authority of Trustees. The Trustees, subject only to the
-------------------------------
specific limitations contained in this Declaration, shall have, without further
or other authorization, and free from any power or control on the part of the
Shareholders, full, absolute and exclusive power, control and authority over the
Trust Estate and over the business and affairs of the Trust to the same extent
as if the Trustees were the sole owners thereof in their own right and may do
all such acts and things as in their sole judgment and discretion are necessary
for or incidental to or desirable for the carrying out of or conducting the
business of the Trust. Any construction of this Declaration or any determination
made in good faith by the Trustees of the purposes of the Trust or the existence
of any power or authority hereunder shall be conclusive. In construing the
provisions of this Declaration, presumption shall be in favor of the grant of
powers and authority to the Trustees. The enumeration of any specific power or
authority herein shall not be construed as limiting the aforesaid powers or the
general powers or authority or any other specified power or authority conferred
herein upon the Trustees.
3.2 Specific Powers and Authority. Subject only to the express
-----------------------------
limitations contained in this Declaration and in addition to any powers and
authority conferred by this Declaration or which the Trustees may have by virtue
of any present or future statute or rule or law, the Trustees without any action
or consent by the Shareholders shall have and may exercise at any time and from
time to time the following powers and authorities which may or may not be
exercised by them in their sole judgment and discretion and in such manner and
upon such terms and conditions as they may from time to time deem proper:
(a) to retain, invest and reinvest the capital or other funds of
the Trust in, and to acquire, purchase, or own, real or personal
property of any
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kind, (including without limitation Securities of any Person) wherever
located in the world, and make commitments for such investments, all
without regard to whether any such property is authorized by law for
the investment of trust funds or produces or may produce income and to
possess and exercise all the rights, powers and privileges appertaining
to the ownership of the Trust Estate; and to increase the capital of
the Trust at any time by the issuance of any additional Shares or other
Securities of the Trust for such consideration as they deem advisable;
(b) without limitation of the powers set forth in paragraph (a)
above, to invest in, purchase or otherwise acquire for such
consideration as they deem proper, in cash or other property or through
the issuance of Shares or through the issuance of notes, debentures,
bonds or other obligations of the Trust, and to hold for investment,
the entire or any participating interests in any Mortgage Loans, or
interests in Real Property, including ownership of, or participations
in the ownership of, or rights to acquire, equity interests in Real
Property or in Persons owning, developing, improving, operating or
managing Real Property, which interests may be acquired independently
of or in connection with other investment activities of the Trust and,
in the latter case, may include rights to receive additional payments
based on gross income or rental or other income from the Real Property
or improvements thereon; to invest in loans secured by the pledge or
transfer of Mortgage Loans; to develop, operate, pool, utilize, grant
production payments out of or lease or otherwise dispose of mineral,
oil and gas properties and rights;
(c) to sell, rent, lease, hire, exchange, release, partition,
assign, mortgage, pledge, hypothecate, grant security interests in,
encumber, negotiate, convey, transfer or otherwise dispose of any and
all the Trust Estate by deeds (including deeds in lieu of foreclosure),
trust deeds, assignments, bills of sale, transfers, leases, mortgages,
financing statements, security agreements and other instruments for any
of such purposes executed and delivered for and on behalf of the Trust
or the Trustees by one or more of the Trustees or by a duly authorized
officer, employee, agent or nominee of the Trust;
(d) to issue Shares, bonds, debentures, notes or other evidences of
indebtedness which may be secured or unsecured and may be subordinated
to any indebtedness of the Trust to such Persons for such cash,
property or other consideration (including without limitation
Securities issued or created by, or interests in any Person) at such
time or times and on such terms as the Trustees may deem advisable and
to list any of the foregoing Securities issued by the Trust on any
securities exchange and to purchase or otherwise acquire, hold, cancel,
reissue, sell and transfer any of such Securities, and to cause the
instruments evidencing such Securities to bear an actual or facsimile
imprint of the seal of the Trust and to be signed by manual or
facsimile signature or
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<PAGE>
signatures (and to issue such Securities, whether or not any Person
whose manual or facsimile signature shall be imprinted thereon shall
have ceased to occupy the office with respect to which such signature
was authorized), provided that, where only facsimile signatures for the
Trust are used, the instrument shall be countersigned manually by a
transfer agent, registrar or other authentication agent. Any of such
Securities of different types may be issued in combinations or units
with such restrictions on the separate transferability thereof as the
Trustees shall determine;
(e) to enter into leases or subleases of real and personal
property as lessor or lessee and to enter into contracts, obligations
and other agreements for a term, extending beyond the term of office of
the Trustees and beyond the possible termination of the Trust, or
having a lesser term;
(f) to borrow money and give negotiable or non-negotiable
instruments therefor; to guarantee, indemnify or act as surety with
respect to payment or performance of obligations of third parties; to
enter into other obligations on behalf of the Trust; and to assign,
convey, transfer, mortgage, subordinate, pledge, grant security
interests in, encumber or hypothecate the Trust Estate to secure any
indebtedness of the Trust or any other of the foregoing obligations of
the Trust;
(g) to lend money, whether secured or unsecured;
(h) to create reserve funds for any purpose;
(i) to incur and pay out of the Trust Estate any charges or
expenses, and disburse any funds of the Trust, which charges, expenses
or disbursements are, in the opinion of the Trustees, necessary or
incidental to or desirable for the carrying out of any of the purposes
of the Trust or conducting the business of the Trust, including without
limitation taxes and other governmental levies, charges and
assessments, of whatever kind or nature, imposed upon or against the
Trustees in connection with the Trust or the Trust Estate or any part
thereof, and for any of the purposes herein;
(j) to deposit funds of the Trust in banks, trust companies,
savings and loan associations and other depositories, whether or not
such deposits will draw interest, the same to be subject to withdrawal
on such terms and in such manner and by such Person or Persons
(including any one or more Trustees, officers, employees or agents) as
the Trustees may determine;
(k) to possess and exercise all the rights, powers and privileges
pertaining to the ownership of all or any Mortgages or Securities
issued or created by, or interests in, any Person, forming part of the
Trust Estate, to the
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<PAGE>
same extent that an individual might, and, without limiting the
generality of the foregoing, to vote or give any consent, request or
notice, or waive any notice, either in person or by proxy or power of
attorney, with or without power of substitution, to one or more
Persons, which proxies and powers of attorney may be for meetings or
actions generally or for any particular meeting or action, and may
include the exercise of discretionary powers;
(l) to cause to be organized or assist in organizing any Person
under the laws of any jurisdiction to acquire the Trust Estate or any
part or parts thereof or to carry on any business in which the Trust
shall directly or indirectly have any interest, and to sell, rent,
lease, hire, convey, negotiate, assign, exchange or transfer the Trust
Estate or any part or parts thereof to or with any such Person or any
existing Person in exchange for the Securities thereof or otherwise,
and to merge or consolidate the Trust with or into any Person or merge
or consolidate any Person into the Trust, and to lend money to,
subscribe for the Securities of, and enter into any contracts with, any
Person in which the Trust holds or is about to acquire Securities or
any other interest;
(m) to enter into joint ventures, general or limited partnerships,
participation or agency arrangements and any other lawful combination
or associations;
(n) to elect, appoint, engage or employ such officers for the
Trust as the Trustees may determine, who may be removed or discharged
at the discretion of the Trustees, such officers to have such powers
and duties, and to serve such terms, as may be prescribed by the
Trustees or by the By-Laws; to engage or employ any Persons (including,
without limitation, subject to the provisions of Section 7.5 and 7.6,
any Trustee, officer or agent and any Person in which any Trustee,
officer or agent is directly or indirectly interested or with which he
is directly or indirectly connected) as agents, representatives,
employees or independent contractors (including, without limitation,
real estate advisors, investment advisors, transfer agents, registrars,
underwriters, accountants, attorneys at law, real estate agents,
managers, appraisers, brokers, architects, engineers, construction
managers, general contractors or otherwise) in one or more capacities,
and to pay compensation from the Trust for services in as many
capacities as such Person may be so engaged or employed; and to
delegate any of the powers and duties of the Trustees to any one or
more Trustees, agents, representatives, officers, employees,
independent contractors or other Persons; provided, however, that no
such delegation shall be made to an Affiliate of the Advisor, except
with the approval of a majority of the Independent Trustee or a
Trustees Independent;
(o) to determine whether moneys, Securities or other assets
received by the Trust shall be charged or credited to income or capital
or allocated
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<PAGE>
between income and capital, including the power to amortize or fail to
amortize any part or all of any premium or discount, to treat any part
or all the profit resulting from the maturity or sale of any asset
whether purchased at a premium or at a discount, as income or capital,
or apportion the same between income and capital, to apportion the
sales price of any asset between income and capital, and to determine
in what manner any expenses or disbursements are to be borne as between
income and capital, whether or not in the absence of the power and
authority conferred by this subsection such moneys, Securities or other
assets would be regarded as income or as capital or such expense or
disbursement would be charged to income or to capital; to treat any
dividend or other distribution on any investment as income or capital
or apportion the same between income and capital; to provide or fail to
provide reserves for depreciation, amortization or obsolescence in
respect of all or any part of the Trust Estate subject to depreciation,
amortization or obsolescence in such amounts and by such methods as
they shall determine; and to determine the method or form in which the
accounts and records of the Trust shall be kept and to change from time
to time such method or form;
(p) to determine or cause to be determined from time to time the
value of all or any part of the Trust Estate and of any services,
Securities, property or other consideration to be furnished to or
acquired by the Trust, and from time to time to revalue or cause to be
revalued all or any part of the Trust Estate in accordance with such
appraisals or other information as are in the Trustees' sole judgment,
necessary and/or satisfactory;
(q) to collect, sue for, and receive all sums of money coming due
to the Trust, and to engage in, intervene in, prosecute, join, defend,
compound, compromise, abandon or adjust, by arbitration or otherwise,
any actions, suits, proceedings, disputes, claims, controversies,
demands or other litigation relating to the Trust, the Trust Estate or
the Trust's affairs, to enter into agreements therefor, whether or not
any suit is commenced or claim accrued or asserted and, in advance of
any controversy, to enter into agreements regarding arbitration,
adjudication or settlement thereof;
(r) to renew, modify, release, compromise, extend, consolidate
or cancel, in whole or in part, any obligation to or of the Trust or
participate in any reorganization of obligors to the Trust;
(s) to purchase and pay for out of the Trust Estate insurance
contracts and policies insuring the Trust Estate against any and all
risks and insuring the Trust and/or all or any of the Trustees, the
Shareholders, officers, employees or agents against any and all claims
and liabilities of every nature asserted by any Person arising by
reason of any action alleged to have been
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<PAGE>
taken or omitted by the Trust or by the Trustees, Shareholders,
officers, employees or agents;
(t) to cause legal title to any of the Trust Estate to be held by
and/or in the name of the Trustees, or except as prohibited by law by
and/or in the name of the Trust or one or more of the Trustees or any
other Person, on such terms, in such manner, with such powers in such
Person as the Trustees may determine, and with or without disclosure
that the Trust or Trustees are interested therein;
(u) to adopt a fiscal year for the Trust, and from time to time to
change such fiscal year;
(v) to adopt and use a seal (but the use of a seal shall not be
required for the execution of instruments or obligations of the Trust);
(w) to the extent permitted by law, to indemnify or enter into
agreements with respect to indemnification with any Person with which
the Trust has dealings, including without limitation any investment
advisor or independent contractor, to such extent as the Trustees shall
determine;
(x) to confess judgment against the Trust;
(y) to discontinue the operations of the Trust;
(z) to repurchase or redeem Shares; and
(aa) to do all other such acts and things as are incident to
the foregoing, and to exercise all powers which are necessary or useful
to carry on the business of the Trust and to carry out the provisions
of this Declaration, including, without limitation, all powers of
directors of a Massachusetts business trust.
3.3. By-Laws. The Trustees may make or adopt and from time to time amend
-------
or repeal regulations (the "By-Laws") not inconsistent with law or with this
Declaration, containing provisions relating to the business of the Trust and the
conduct of its affairs and in such By-Laws may define the duties of the
officers, employees and agents of the Trust.
ARTICLE IV
ADVISOR
4.1 Employment of Advisor. The Trustees are responsible for the general
---------------------
policies of the Trust and for the general supervision of the business of the
Trust
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conducted by all officers, agents, employees, advisors, managers or independent
contractors of the Trust. However, the Trustees are not and shall not be
required personally to conduct the business of the Trust, and, consistent with
their ultimate responsibility as stated above, the Trustees shall have the power
to appoint, employ or contract with any Person including one or more of
themselves or any corporation, partnership or trust in which one or more of them
may be directors, officers, stockholders, partners or trustees, as the Trustees
may deem necessary or proper for the transaction of the business of the Trust.
The Trustees may therefore employ or contract with such Person (herein referred
to as the "Advisor") and, consistent with their ultimate responsibility as set
forth in this Section 4.l, the Trustees may grant or delegate such authority to
the Advisor as the Trustees may in their sole discretion deem necessary or
desirable without regard to whether such authority is normally granted or
delegated by trustees.
The Trustees shall have the power to determine the terms and
compensation of the Advisor or any other Person whom they may employ or with
whom they may contract; provided, however, that any determination to employ or
-------- -------
contract with any Trustee or any Person such that a Trustee would be an
Affiliated Trustee shall be valid only if made, approved or ratified after
disclosure of such interests by the affirmative vote or written consent of a
majority of the Trustees who would continue to be Independent Trustees. The
Trustees may exercise broad discretion in allowing the Advisor to administer and
regulate the operations of the Trust, to act as agent for the Trust, to execute
documents on behalf of the Trustees and to make executive decisions which
conform to general policies and general principles previously established by the
Trustees.
4.2. Other Activities of Advisor. The Advisor shall not be required to
---------------------------
administer the Trust as its sole and exclusive function and may have other
business interests and may engage in other activities similar or in addition to
those relating to the Trust, including the rendering of advice or services of
any kind to other investors or any other Persons (including other REITs) and the
management of other investments. The Trustees may request the Advisor to engage
in certain other activities which complement the Trust's investments, and the
Advisor may receive compensation or commissions therefor from the Trust or other
Persons.
The Advisor shall be required to use its best efforts to supervise the
operation of the Trust in a manner consistent with the investment policies and
objectives of the Trust. Neither the Advisor nor (subject to any applicable
provisions of Section 7.5) any director, trustee, officer, partner or employee
of the Advisor or of any Person which controls, is controlled by or is under
common control with the Advisor nor any such Person shall be obligated to
present any particular investment opportunities to the Trust, even if such
opportunities are of a character such that, if presented to the Trust, they
could be taken by the Trust, and, subject to the
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<PAGE>
foregoing, each of them shall be protected in taking for its own account or
recommending to others any such particular investment opportunity.
Upon request of any Trustee, the Advisor shall from time to time
promptly furnish the Trustees with such information on a confidential basis as
to any investments within the Trust's investment policies made by the Advisor
for its own account as may be provided in the advisory contract with the Advisor
in effect from time to time.
ARTICLE V
INVESTMENT POLICY
5.1 Statement of Policy. It shall be the policy of the Trustees to make
-------------------
investments in such manner as to comply with the requirements of the Internal
Revenue Code with respect to the composition of the investments and the
derivation of the income for a real estate investment trust as defined in the
REIT Provisions of the Internal Revenue Code; provided, however, that no
Trustee, officer, employee or agent of the Trust shall be liable for any act or
omission resulting in the loss of tax benefits under the Internal Revenue Code,
except for that arising from his own willful misfeasance, bad faith, gross
negligence or reckless disregard of duty.
ARTICLE VI
THE SHARES AND SHAREHOLDERS
6.1 Description of Shares. The interest of the Shareholders shall be
---------------------
divided into shares of beneficial interest which shall be known collectively as
"Shares," all of which shall be validly issued, fully paid and nonassessable by
the Trust upon receipt of full consideration for which they have been issued or
without additional consideration if issued by way of share dividend or share
split. Each holder of Shares shall as a result thereof be deemed to have agreed
to and be bound by the terms of this Declaration. The Shares may be issued for
such consideration as the Trustees shall deem advisable. The Shares shall be
without par value. The number of Shares which the Trust shall have authority to
issue is unlimited. The Trustees are hereby expressly authorized at any time,
and from time to time, to provide for the issuance of Shares upon such terms and
conditions and pursuant to such agreements as the Trustees may determine.
The Shares may consist of one or more classes or series. The Trustees may,
from time to time, establish and designate the different classes and series and
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designate variations in the relative rights and preferences between the
different classes and series as provided below, but in all other respects all
Shares shall be identical.
Subject to the provisions hereof, the Trustees are authorized to establish
one or more classes or series of Shares and, to the extent now or hereafter
permitted by the laws of the Commonwealth of Massachusetts, to fix and determine
the preferences, voting powers, qualifications and special or relative rights or
privileges of each class or series including, but not limited to:
(a) the number of Shares to constitute such class or series and the
distinguishing designation thereof;
(b) the dividend rate on the Shares of such class or series and the
preferences, if any, and the special and relative rights of such Shares of
such series as to dividends;
(c) whether or not the Shares of such class or series shall be
redeemable, and, if redeemable, the price, terms and manner of redemption;
(d) the preferences, if any, and the special and relative rights of
the Shares of such class or series upon the voluntary or involuntary
dissolution or liquidation of the Trust;
(e) whether or not the Shares of such class or series shall be subject
to the operation of a sinking or purchase fund and, if so, the terms and
provisions of such fund;
(f) whether or not the Shares of such class or series shall be
convertible into any other class or series of Shares and, if so, the
conversion price or ratio and other conversion rights;
(g) the conditions under which the Shares of such class or series
shall have separate voting rights or no voting rights; and
(h) such other designations, preferences and relative, participating,
optional or other special rights and qualifications, limitations or
restrictions of such class or series to the full extent now or hereafter
permitted by the laws of the Commonwealth of Massachusetts.
Notwithstanding the fixing of the number of Shares constituting a
particular class or series, the Trustees may at any time authorize the issuance
of additional Shares of the same class or series.
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Before the Trust shall issue any Shares of any newly designated class or
series, a certificate setting forth the resolution or resolutions of the
Trustees fixing the voting powers, designations, preferences and rights of such
class or series, the qualifications, limitations or restrictions thereof, and
the number of Shares of such class or series authorized by the Trustees, shall
be executed by a majority of the Trustees and filed with the Secretary of the
Commonwealth of Massachusetts in accordance with Section 7.4 hereof.
The holders of Shares shall be entitled to receive, when and as declared
from time to time by the Trustees out of any funds legally available for the
purpose, such dividends or distributions as may be declared from time to time by
the Trustees. In the event of the termination of the Trust pursuant to Section
8.l or otherwise, or upon the distribution of its assets, the assets of the
Trust available for payment and distribution to Shareholders shall be
distributed ratably among the holders of Shares at the time outstanding in
accordance with Section 8.2. Except as otherwise authorized by the Trustees with
respect to any particular class or series, all Shares shall have equal
noncumulative voting rights at the rate of one vote per share and equal
dividend, distribution, liquidation and other rights, and shall have no
preference, conversion, exchange, sinking fund or redemption rights. No holder
of Shares shall be entitled as a matter of right to subscribe for or purchase
any part of any new or additional issue of Shares of any class whatsoever of the
Trust, or of securities convertible into any shares of any class whatsoever of
the Trust, whether now or hereafter authorized and whether issued for cash or
other consideration or by way of dividend.
6.2 Certificates. Ownership of Shares shall be evidenced by certificates
------------
representing shares of Meditrust beneficial interest without par value
("Meditrust Shares"). Each holder of Meditrust Shares shall be deemed to own an
equal number of Shares, which shall be held in trust for the benefit of such
holders of Meditrust Shares.
6.3 Fractional Shares. In connection with any issuance of Shares, the
-----------------
Trustees may issue fractional Shares or may provide for the issuance of scrip
including, without limitation, the time within which any such scrip must be
surrendered for exchange into full Shares and the rights, if any, of holders of
scrip upon the expiration of the time so fixed, the rights, if any, to receive
proportional distributions, and the rights, if any, to redeem scrip for cash, or
the Trustees may in their discretion, or if they see fit at the option of each
holder, provide in lieu of scrip for the adjustment of the fractions in cash.
The provisions of Section 6.2 hereof relative to certificates for Shares shall
apply so far as applicable to such scrip, except that such scrip may in the
discretion of the Trustees be signed by a transfer agent alone.
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6.4 Issuance of Units. Notwithstanding any other provisions of this
-----------------
Declaration of Trust, the Trustees may issue from time to time units consisting
of different Securities of the Trust. Any Security issued in any such unit shall
have the same characteristics and shall entitle the registered holder thereof to
the same rights as any identical Securities issued by the Trustees, except that
the Trustees may provide (and may cause a notation to be placed on the
certificate representing such unit or Securities of the Trust issued in any such
unit) that for a specified period not to exceed one year after issuance,
Securities of the Trust issued in any such unit may be transferred upon the
books of the Trust only in such unit.
6.5 Legal Ownership of Trust Estate. The legal ownership of the Trust
-------------------------------
Estate and the right to conduct the business of the Trust are vested exclusively
in the Trustees (subject to Section 3.2(t)), and the Shareholders shall have no
interest therein other than beneficial interest in the Trust conferred by their
Shares issued hereunder and they shall have no right to compel any partition,
division, dividend or distribution of the Trust or any of the Trust Estate.
6.6 Shares Deemed Personal Property. The Shares shall be personal property
-------------------------------
and shall confer upon the holders thereof only the interest and rights
specifically set forth or provided for in this Declaration. The death,
insolvency or incapacity of a Shareholder shall not dissolve or terminate the
Trust or affect its continuity nor give his legal representative any rights
whatsoever, whether against or in respect of other Shareholders, the Trustees or
the Trust Estate or otherwise except the sole right to demand and subject to the
provisions of this Declaration, the By-Laws and any requirements of law, to
receive a new certificate for Shares registered in the name of such legal
representative, in exchange for the certificate held by such Shareholder.
6.7 Share Record; Issuance and Transferability of Shares. Records shall be
----------------------------------------------------
kept by or on behalf of and under the direction of the Trustees, which shall
contain the names and addresses of the Shareholders, the number of Shares held
by them respectively, and the numbers of the certificates representing the
Shares, and in which there shall be recorded all transfers of Shares. The Trust,
the Trustees and the officers, employees and agents of the Trust shall be
entitled to deem the Persons in whose names certificates are registered on the
records of the Trust to be the absolute owners of the Shares represented thereby
for all purposes of this Trust; but nothing herein shall be deemed to preclude
the Trustees or officers, employees or agents of the Trust from inquiring as to
the actual ownership of Shares. Until a transfer is duly effected on the records
of the Trust, the Trustees shall not be affected by any notice of such transfer,
either actual or constructive.
Shares shall be transferable on the records of the Trust only by the
record holder thereof or by his agent thereunto duly authorized in writing upon
delivery to the Trustees or a transfer agent of the certificate or certificates
therefor, properly
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endorsed or accompanied by duly executed instruments of transfer and accompanied
by all necessary documentary stamps together with such evidence of the
genuineness of each such endorsement, execution or authorization and of other
matters as may reasonably be required by the Trustees or such transfer agent.
Upon such delivery, the transfer shall be recorded in the records of the Trust
and a new certificate for the Shares so transferred shall be issued to the
transferee and in case of a transfer of only a part of the Shares represented by
any certificate, a new certificate for the balance shall be issued to the
transferor. Any Person becoming entitled to any Shares in consequence of the
death of a Shareholder or otherwise by operation of law shall be recorded as the
holder of such Shares and shall receive a new certificate therefor but only upon
delivery to the Trustees or a transfer agent of instruments and other evidence
required by the Trustees or the transfer agent to demonstrate such entitlement,
the existing certificate for such Shares and such releases from applicable
governmental authorities as may be required by the Trustees or transfer agent.
In case of the loss, mutilation or destruction of any certificate for Shares,
the Trustees may issue or cause to be issued a replacement certificate on such
terms and subject to such rules and regulations as the Trustees may from time to
time prescribe. Nothing in this Declaration shall impose upon the Trustees or a
transfer agent a duty or limit their rights to inquire into adverse claims.
6.8 Dividends or Distributions to Shareholders. Subject to Section 6.1,
------------------------------------------
the Trustees may from time to time declare and pay to Shareholders such
dividends or distributions in cash, property or assets of the Trust or
Securities issued by the Trust, out of current or accumulated income, capital,
capital gains, principal, surplus, proceeds from the increase or financing or
refinancing of Trust obligations, or from the sale of portions of the Trust
Estate or from any other source as the Trustees in their discretion shall
determine. Shareholders shall have no right to any dividend or distribution
unless and until declared by the Trustees. The Trustees shall furnish the
Shareholders with a statement in writing advising as to the source of the funds
so distributed not later than ninety (90) days after the close of the fiscal
year in which the distribution was made.
6.9 Transfer Agent, Dividend Disbursing Agent and Registrar. The
-------------------------------------------------------
Trustees shall have power to employ one or more transfer agents, dividend
disbursing agents and registrars (including the Advisor and/or its Affiliates)
and to authorize them on behalf of the Trust to keep records, to hold and to
disburse any dividends or distributions, and to have and perform, in respect of
all original issues and transfers of Shares, dividends and distributions and
reports and communications to Shareholders, the powers and duties usually had
and performed by transfer agents, dividend disbursing agents and registrars of a
Massachusetts business trust.
6.10 Shareholders' Meetings. There shall be an annual meeting of the
----------------------
Shareholders at such time and place as shall be determined by or in the manner
prescribed in the By-Laws, at which the Trustees shall be elected and any other
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proper business may be conducted. The Annual Meeting of Shareholders shall be
held within six (6) months after the end of each fiscal year. Special meetings
of Shareholders may be called by the President or by a majority of the Trustees
or of the Independent Trustees and shall be called by the President upon the
written request of Shareholders holding in the aggregate not less than ten
percent (10%) of the total votes authorized to be cast by the outstanding Shares
of the Trust entitled to vote at such meeting, in the manner provided in the
By-Laws. If there shall be no Trustees, the officers of the Trust shall promptly
call a special meeting of the Shareholders entitled to vote for the election of
successor Trustees. Notice of any special meeting shall state the purpose of the
meeting. Upon receipt of a written request either in person or by registered
mail stating the purpose of a special meeting requested by Shareholders, the
Trust shall provide all Shareholders, within ten (10) business days after
receipt of said request, written notice of such special meeting and the purpose
of such special meeting to be held on a date not less than twenty (20) nor more
than sixty (60) days after receipt of said request, at a time and place
convenient to Shareholders.
The holders of Shares entitled to vote at the meeting representing a
majority of the total number of votes authorized to be cast by Shares then
outstanding and entitled to vote on any question present in person or by proxy
shall constitute a quorum at any such meeting for action on such question. Any
meeting may be adjourned from time to time by a majority of the votes properly
cast upon the question, whether or not a quorum is present, and except as
otherwise provided in the By-Laws the meeting may be reconvened without further
notice. At any reconvened session of the meeting at which there shall be a
quorum, any business may be transacted at the meeting as originally noticed.
Whenever any action is to be taken by the Shareholders, it shall,
except as otherwise clearly indicated in this Declaration or the By-Laws,
require, and may be effected by, the affirmative vote of the holders of a
majority of the Shares present or represented and entitled to vote and voting on
such matter, provided that such majority shall be at least a majority of the
number of Shares required to constitute a quorum for action on such matter. Any
election by Shareholders shall be determined by a plurality of the votes cast by
the Shareholders entitled to vote at the election. No ballot shall be required
for such election unless requested by a Shareholder present or represented at
the meeting and entitled to vote in the election.
Whenever Shareholders are required or permitted to take any action
(unless a vote at a meeting is specifically required as in Section 8.1 and 8.3),
such action may be taken without a meeting by written consents setting forth the
action so taken, signed by the holders of a majority (or such higher percentage
as may be specified elsewhere in this Declaration) of the outstanding Shares
that would be entitled to vote thereon at a meeting.
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<PAGE>
The Shareholders shall be entitled, to the same extent as the shareholders
in a Massachusetts business trust, to determine by vote whether a court action,
proceeding or claim should be brought or maintained derivatively or as a class
action on behalf of the Trust or its Shareholders. Except with respect to
matters on which a Shareholders' vote shall be required for or shall determine
action of the Trustees as expressly set forth in this Declaration, no action
taken by the Shareholders at any meeting shall in any way bind the Trustees.
6.11 Proxies. Whenever the vote or consent of a Shareholder entitled to
-------
vote is required or permitted under this Declaration, such vote or consent may
be given either directly by such Shareholder or by a proxy in the form
prescribed in the By-Laws. The Trustees may solicit such proxies from the
Shareholders or any of them entitled to vote in any matter requiring or
permitting the Shareholders' vote or consent. No proxy for any meeting of
Shareholders entitled to vote shall be effective unless such proxy shall have
been placed on file with such officer of the Trust as the Trustees shall have
designated for such purposes for verification prior to such meeting.
6.12 Fixing Record Date. The By-Laws may provide for fixing or, in the
------------------
absence of such provision, the Trustees may fix, in advance, a date as the
record date for determining the Shareholders entitled to notice of or to vote at
any meeting of Shareholders or to express consent to any proposal without a
meeting or for the purpose of determining Shareholders entitled to receive
payment of any dividend or distribution (whether before or after termination of
the Trust) or any communication from the Trustees, or for any other purpose. The
record date so fixed shall be not less than five (5) days nor more than sixty
(60) days prior to the date of the meeting or event for the purpose of which it
is fixed.
6.13 Notice to Shareholders. Any notice of meeting or other notice,
----------------------
communication or report to any Shareholder shall be deemed duly delivered to
such Shareholder when such notice, communication or report is deposited, with
postage thereon prepaid, in the United States mail, addressed to such
Shareholder at his address as it appears on the records of the Trust or is
delivered in person to such Shareholder.
6.14 Shareholders Disclosures; Trustees Right to Refuse to Transfer
--------------------------------------------------------------
Shares; Limitation on Holdings; Redemption of Shares.
- ----------------------------------------------------
(a) The Shareholders shall upon demand disclose to the Trustees in
writing such information with respect to direct and indirect ownership of the
Shares as the Trustees deem necessary or appropriate to comply with the REIT
Provisions of the Internal Revenue Code or to comply with the requirements of
any taxing authority or governmental agency.
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<PAGE>
(b) Whenever it is deemed by them to be reasonably necessary to protect
the status of the Trust as a REIT, the Trustees may require a statement or
affidavit from each Shareholder or proposed transferee of Shares setting forth
the number of Shares already owned by him and any related Person or Affiliate
specified in the form prescribed by the Trustees for that purpose. If, in the
opinion of the Trustees, which shall be conclusive upon any proposed transferee
of Shares, any proposed transfer would jeopardize the status of the Trust as a
REIT, the Trustees shall have the right, but not the duty, to refuse to permit
such transfer.
(c) The Trustees, by notice to the holder thereof, may redeem any or
all Shares which have been transferred pursuant to a transfer which, in the
opinion of the Trustees, would jeopardize the status of the Trust as a REIT.
Without limiting the generality of the foregoing, if the Trustees shall, at any
time and in good faith, be of the opinion that direct or indirect ownership of
at least 9.9% or more of the Shares has or may become concentrated in the hands
of one beneficial owner (as defined on October 1, 1982 in Rule 13d-3 under the
Securities Exchange Act of 1934), the Trustees, shall have the power (i) by lot
or other means deemed equitable by them to call for the purchase from any
Shareholder a number of Shares sufficient, in the opinion of the Trustees, to
maintain or bring the direct or indirect ownership of Shares of such beneficial
owner to no more than 9.9% of the outstanding Shares, and (ii) to refuse to
transfer or issue Shares to any Person whose acquisition of such Shares would,
in the opinion of the Trustees, result in the direct or indirect ownership of
more than 9.9% of the outstanding Shares. The purchase price for any Shares
shall be equal to the fair market value of the Shares reflected in the closing
sale price for the Shares, if then listed on a national securities exchange, or
the average of the closing sales prices for the Shares if then listed on more
than one national securities exchange, or if the Shares are not then listed on a
national securities exchange, the latest bid quotation for the Shares if then
traded over-the-counter, on the last business day immediately preceding the day
on which notices of such acquisition are sent, or, if no such closing sales
prices or quotations are available, then the purchase price shall be equal to
the net asset value of such Shares as determined by the Trustees in accordance
with the provisions of applicable law. Payment of the purchase price shall be
made in cash by the Trust at such time in such manner as may be determined by
the Trustees. From and after the date fixed for purchase by the Trustees, the
holder of any Shares so called for purchase shall cease to be entitled to
distributions, voting rights and other benefits with respect to such Shares,
excepting only the right to payment of the purchase price fixed as aforesaid.
Any transfer of Shares, options, warrants or other securities convertible into
Shares that would create a beneficial owner of more than 9.9% of the outstanding
Shares shall be deemed void ab initio and the intended transferee shall be
-- ------
deemed never to have an interest therein. If the foregoing provision is
determined to be void or invalid by virtue of any legal decision, statute, rule
or regulation, then the transferee of such shares, options, warrants or other
securities convertible into Shares shall be
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<PAGE>
deemed, at the option of the Trust to have acted as agent on behalf of the Trust
in acquiring such Shares and to hold such Shares on behalf of the Trust.
Notwithstanding any other provision in this Declaration of
Trust or the By-Laws of the Trust, the foregoing provision may not be amended or
repealed without the affirmative vote of 90% of the Shares entitled to vote.
(d) Notwithstanding any other provision of this Declaration of Trust to
the contrary, any purported acquisition of Shares of the Trust which would
result in the disqualification of the Trust as a REIT shall be null and void.
(e) Nothing contained in this Section 7.15 or in any other provision of
this Declaration of Trust shall limit the authority of the Trustees to take such
other action as they deem necessary or advisable to protect the Trust and the
interests of the Shareholders by preservation of the Trust status as a REIT.
ARTICLE VII
LIABILITY OF TRUSTEES, SHAREHOLDERS, OFFICERS,
EMPLOYEES AND AGENTS AND OTHER MATTERS
7.1 Exculpation of Trustees, Officers, Employees and Agents. (a) No
-------------------------------------------------------
Trustee, officer, employee, agent or Affiliate of the Trust shall be liable to
the Trust, to any Shareholder or to any other Person for any loss suffered by
the Trust which arises out of any action or inaction of the Trustee, officer,
employee, agent or Affiliate of the Trust if such Trustee, officer, employee,
agent or Affiliate of the Trust, in good faith, determined that such course of
conduct was in the best interests of the Trust and such course of conduct did
not constitute gross negligence or willful misconduct of such Trustee, officer,
employee, agent or Affiliate of the Trust.
(b) No Trustee shall be personally liable to the Trust or its
Shareholders for monetary damages for breach of fiduciary duty by such
Trustee as a Trustee notwithstanding any provision contained in Section
7.1(a) hereof or any provision of law imposing such liability, except to
the extent provided by applicable law for liability (i) for breach of the
Trustee's duty of loyalty to the Trust or its Shareholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or
knowing violation of law, or (iii) for any transaction from which the
Trustee derived an improper personal benefit. Liability of a Trustee for
matters described in clauses (i), (ii) and (iii) in the preceding sentence
shall be determined pursuant to Section 7.1(a) hereof.
7.2 Limitation of Liability of Shareholders, Trustees, Officers,
------------------------------------------------------------
Employees and Agents. The Trustees, officers, employees and agents of the Trust
- --------------------
in incurring any
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<PAGE>
debts, liabilities or obligations or in taking or omitting any other actions for
or in connection with the Trust are, and shall be deemed to be, acting as
Trustees, officers, employees or agents of the Trust and not in their own
individual capacities. The Trustees shall have no power to bind the Shareholders
personally, or to call upon them for the payment of any money or any assessment
whatsoever other than such sums as the Shareholders may at any time personally
agree to pay for new Shares to be acquired from the Trust. No Shareholder and,
except to the extent provided in Section 7.l, no Trustee, officer, employee or
agent shall be liable for (a) any debt, liability or obligation of any kind of,
or with respect to, the Trust or (b) any claim, demand, judgment or decree
against the Trust (in any such case in tort, contract or otherwise) arising out
of any action taken or omitted for or on behalf of the Trust and the Trust shall
be solely liable therefor and resort shall be had solely to the Trust Estate for
the payment or performance thereof, and no Shareholder and, except as aforesaid,
no Trustee, officer, employee or agent shall be subject to any personal
liability whatsoever, in tort, contract or otherwise, to any other Person or
Persons in connection with the Trust Estate or the affairs of the Trust (or any
actions taken or omitted for or on behalf of the Trust), and all such other
Persons shall look solely to the Trust Estate for satisfaction of claims of any
nature arising in connection with the Trust Estate or the affairs of the Trust
(or any action taken or omitted for or on behalf of the Trust). Each Shareholder
shall be entitled to pro rata indemnity from the Trust Estate if, contrary to
the provisions hereof, such Shareholder shall be held to any personal liability.
7.3 Express Exculpatory Clauses and Instruments. Any written instrument
-------------------------------------------
creating an obligation of the Trust shall include a reference to this
Declaration and provide that neither the Shareholders nor the Trustees nor
officers, employees or agents of the Trust shall be liable thereunder and that
all Persons shall look solely to the Trust Estate for the payment of any claim
thereunder or for the performance thereof; however, the omission of such
provision from any such instrument shall not render the Shareholders or any
Trustee, officer, employee or agent of the Trust liable nor shall the Trustees
or any officer, employee or agent of the Trust be liable to anyone for such
omission.
7.4 Indemnification and Reimbursement of Trustees, Officers, Employees
------------------------------------------------------------------
and Agents. The present and former Trustees, officers, employees, agents and
- ----------
Affiliates of the Trust and the present and former directors, officers,
employees, agents and Affiliates of the Advisor who are engaged in business by,
or on behalf of, the Trust (or any person who serves or served, at the Trust's
request, as a director, officer, employer or agent of another organization or
who serves or served at the Trust's request in any capacity with respect to any
employee benefit plan) shall be indemnified by the Trust against any losses,
judgments, liabilities, expenses and amounts paid in settlement of any claims
sustained by them in connection with service in such capacity, provided that
--------
such losses, judgments, liabilities, expenses and amounts paid in settlement
were not the result of gross negligence or willful
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misconduct on the part of such Persons, and provided further, that such Person
-------- -------
gives prompt notice thereof, executes such documents and takes such action as
will permit the Trust to conduct the defense or settlement thereof and cooperate
therein. In the event of a settlement approved by the Trustees of any such
claim, alleged liability, action, suit or proceeding, indemnification and
reimbursement shall be provided except as to such matters covered by the
settlement for which the Trust receives advice of its independent counsel (which
advice the Trust is obligated to request) that such matters, if adjudicated,
would likely be adjudicated to have arisen out of or been based upon such
Person's gross negligence or willful misconduct. Such rights of indemnification
and reimbursement shall be satisfied only out of the Trust Estate. The Trust
shall not incur the cost of that portion of any insurance, other than public
liability insurance, which insures any party against any liability the
indemnification of which is herein prohibited. The rights accruing to any Person
under these provisions shall not exclude any other right to which he may be
lawfully entitled, nor shall anything contained herein restrict such Person's
right to contribution as may be available under applicable law. The Trust may
provide advances to any such Person for legal expenses and other costs related
to a claim which may be indemnified hereunder, provided that such Person
undertakes to repay the advanced funds to the Trust in cases where it is
determined that such Person was not entitled to such indemnification.
Any action taken by or conduct on the part of a Trustee, officer, employee
or agent of the Trust in conformity with or in good faith reliance upon the
provisions of Section 7.5 shall not, for the purposes of this Trust (including
without limitation Sections 7.l, 7.2 and 7.3 and this Section 7.4) constitute
negligence or misconduct.
7.5 Right of Trustees, Officers, Employees and Agents to Own Shares or
------------------------------------------------------------------
Other Property and to Engage in Other Business. Any Trustee or officer, employee
- ----------------------------------------------
or agent of the Trust may acquire, own, hold and dispose of Shares in the Trust,
for his individual account, and may exercise all rights of a Shareholder to the
same extent and in the same manner as if he were not a Trustee or officer,
employee or agent of the Trust. Any Trustee or officer, employee or agent of the
Trust may, in his personal capacity or in the capacity of trustee, officer,
director, stockholder, partner, member, adviser or employee of any Person or
otherwise, have business interests and engage in business activities similar to
or in addition to those relating to the Trust, which interests and activities
may be similar to and competitive with those of the Trust and may include the
acquisition, syndication, holding, management, development, operation or
disposition, for his own account or for the account of such Person or others, of
interests in Mortgages, interests in Real Property, or interests in Persons
engaged in the real estate business. Each Trustee, officer, employee and agent
of the Trust shall be free of any obligation to present to the Trust any
investment opportunity which comes to him in any capacity other than solely as
Trustee, officer, employee or agent of the Trust, even if such opportunity is of
a character which, if presented to the Trust, could be taken by the Trust;
provided, however, that the
- -------- -------
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<PAGE>
provisions of this sentence shall not extend, with respect to interests in Real
Property which could be acquired by the Trust consistent with its then existing
policies, to any of such Trustees or agents who are Affiliated Trustees or would
be Affiliated Trustees were they Trustees rather than agents, or to any officer
or employee of the Trust or (at a time when there is no Advisor or other person
providing an investment program for the Trust) to any Trustee of the Trust, who
in failing to present such opportunity is not acting as a trustee, officer,
director, stockholder, partner, member, adviser or employee of any Person other
than the Trust but is acting for his own personal account. Subject to the
provisions of Article IV and Section 7.6, any Trustee or officer, employee or
agent of the Trust may be interested as trustee, officer, director, stockholder,
partner, member, adviser or employee of, or otherwise have a direct or indirect
interest in, any Person who may be engaged to render advice or services to the
Trust, and may receive compensation from such Person as well as compensation as
Trustee, officer, employee or agent or otherwise hereunder.
7.6 Transactions Between Trustees, Officers, Employees or Agents and the
--------------------------------------------------------------------
Trust. Except as otherwise provided by this Declaration, and in the absence of
- -----
fraud, a contract, act or other transaction, between the Trust and any other
Person, or in which the Trust is interested, shall be valid and no Trustee,
officer, employee or agent of the Trust shall have any liability as a result of
entering into any such contract, act or transaction, even though (a) one or more
Trustees, officers, employees or agents are directly or indirectly interested in
or connected with, or are trustees, partners, directors, employees, officers, or
agents of such other Person, or (b) one or more of the Trustees, officers,
employees or agents of the Trust, individually or jointly with others, is a
party or are parties to, or directly or indirectly interested in, or connected
with, such contract, act or transaction, provided that (i) such interest or
connection is disclosed or known to the Trustees and thereafter the Trustees
authorize or ratify such contract, act or other transaction by affirmative vote
of a majority of the Trustees who are not so interested or (ii) such interest or
connection is disclosed or known to the Shareholders, and thereafter such
contract, act or transaction is approved by Shareholders holding a majority of
the Shares, then outstanding and entitled to vote thereon or (iii) such
contract, act or transaction is fair as to the Trust as of the time it is
authorized, approved or ratified by the Trustees or the Shareholders.
This Section 7.6 shall not prevent any sale of Shares issued by the Trust
for the public offering thereof in accordance with a registration statement
filed with the Securities and Exchange Commission under the Securities Act of
1933. The Trustees are not restricted by this Section 7.6 from forming a
corporation, partnership, trust or other business association owned by any
Trustee, officer, employee or agent or by their nominees for the purpose of
holding title to property of the Trust or managing property of the Trust,
provided that the Trustees make a determination that the creation of such entity
for such purpose is in the best interest of the Trust.
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No Trustee, officer or Advisor of the Trust or any Affiliate of such Person
shall, directly or indirectly, acquire any asset for the purpose of reselling it
to the Trust except to purchase property to be acquired by the Trust upon
completion of financing arrangements by the Trust.
7.7 Restriction of Duties and Liabilities. The Shareholders, Trustees,
-------------------------------------
officers, employees and agents shall in no event have any greater duties or
liabilities than those established by this Declaration of Trust or, in cases as
to which such duties or liabilities are not so established, than those of the
shareholders, directors, officers, employees and agents of a Massachusetts
business trust in effect from time to time.
7.8 Persons Dealing with Trustees, Officers, Employees or Agents. Any
------------------------------------------------------------
act of the Trustees, officers, employees or agents purporting to be done in
their capacity as such, shall, as to any Persons dealing with such Trustees,
officers, employees or agents, be conclusively deemed to be within the purposes
of this Trust and within the powers of the Trustees, officers, employees or
agents. No Person dealing with the Trustees or any of them, or with the
officers, employees or agents of the Trust, shall be bound to see to the
application of any funds or property passing into their hands or control. The
receipt of the Trustees or any of them, or of authorized officers, employees or
agents of the Trust, for moneys or other consideration, shall be binding upon
the Trust.
7.9 Reliance. The Trustees and the officers, employees and agents of the
--------
Trust may consult with counsel and the advice or opinion of such counsel shall
be prima facie evidence of good faith and lack of negligence of all the Trustees
and the officers, employees and agents of the Trust in respect of any action
taken or suffered by them in reliance on or in accordance with such advice or
opinion. In discharging their duties, Trustees or officers, employees or agents
of the Trust, when acting in good faith, may rely upon financial statements of
the Trust represented to them to fairly present the financial position or
results of operations of the Trust by the President of the Trust or the officer
of the Trust having charge of its books of account, or stated in a written
report by an independent certified public accountant fairly to present the
financial position or results of operations of the Trust. The Trustees and the
officers, employees and agents of the Trust may rely, and shall be personally
protected in acting, upon any instrument or other document believed by them in
good faith to be genuine.
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ARTICLE VIII
DURATION, AMENDMENT AND TERMINATION OF TRUST
8.1 Duration of Trust.
-----------------
The Trust shall continue without limitation of time, provided, however,
-------- -------
that the Trust may be terminated at any time by the affirmative vote at a
meeting of Shareholders of the holders of Shares representing a majority, of the
total number of votes authorized to be cast by Shares, then outstanding and
entitled to vote thereon.
8.2 Termination of Trust.
--------------------
(a) Upon the termination of the Trust:
(i) the Trust shall carry on no business except for the
purposes of winding up its affairs;
(ii) the Trustees shall proceed to wind up the affairs of the
Trust and all the powers of the Trustees under this
Declaration shall continue until the affairs of the Trust
shall have been wound up, including the power to fulfill
or discharge the contracts of the Trust, collect its
assets, sell, convey, assign, exchange, transfer or
otherwise dispose of all or any part of the remaining
Trust Estate to one or more persons at public or private
sale for consideration which may consist in whole or in
part of cash, Securities or other property of any kind,
discharge or pay its liabilities, and do all other acts
appropriate to liquidate its business; and
(iii) after paying or adequately providing for the payment of
all liabilities, and upon receipt of such releases,
indemnities and refunding agreements, as they deem
necessary for their protection, the Trustees may
distribute the remaining Trust Estate, in cash or, with
the consent of at least 90% of the Shareholders not
affiliated with the Advisor, in kind or partly each, among
the Shareholders according to their respective rights.
(b) After termination of the Trust and distribution to the
Shareholders as herein provided, the Trustees shall execute and lodge among
the records of the Trust an instrument in writing setting forth the fact of
such termination and such distribution, a copy of which instrument shall be
filed with the Secretary of State of the Commonwealth of Massachusetts, and
the Trustees shall
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thereupon be discharged from all further liabilities and duties hereunder
and the rights and interests of all Shareholders shall thereupon cease.
8.3 Amendment Procedure. This Declaration may be amended (except as to
-------------------
the limitations of personal liability of the Shareholders, Trustees, officers,
employees and agents of the Trust and the prohibition of assessments upon
Shareholders set forth in Section 7.2) at a meeting of Shareholders by holders
of Shares representing a majority (or, with respect to (i) amendments to Article
V, (ii) amendments to the proviso to Section 8.l, and (iii) amendments to this
Section 8.3 that would reduce the percentage vote required to approve any
amendments to this Declaration, three quarters) of the total number of votes
authorized to be cast by Shares, then outstanding and entitled to vote thereon,
provided that the Trustees may authorize one or more classes or series of Shares
to vote separately as a class or series with respect to certain or all
amendments to the Declaration as determined by the Trustees. Two-thirds of the
Trustees may, after fifteen (15) days written notice to the Shareholders, also
amend this Declaration without the vote or consent of Shareholders if they deem
it necessary to conform this Declaration to the requirements of (i) the REIT
Provisions of the Internal Revenue Code, (ii) other applicable federal laws or
regulations or (iii) any state securities or "blue sky" laws or requirements of
administrative agencies thereunder in connection with any public offering of
Shares, but the Trustees shall not be liable for failing so to do. Actions by
the Trustees pursuant to Section 6.1 or Section 9.6(a) that result in amending
this Declaration shall be effected without vote or consent of Shareholders.
8.4 Amendments Effective. Any amendment pursuant to any Section of this
--------------------
Declaration of Trust (including any resolution adopted pursuant to Section 6.1
hereof) shall not become effective until a certification in recordable form
signed by a majority of the Trustees setting forth an amendment and reciting
that it was duly adopted as aforesaid or a copy of this Declaration, as amended,
in recordable form, and executed by a majority of the Trustees, is filed with
the Secretary of State of the Commonwealth of Massachusetts.
8.5 Transfer to Successor. The Trustees, with the approval a majority of
---------------------
the Trustees (including a majority of the Independent Trustees) and the
affirmative vote or written consent, approving a plan for this purpose, of the
holders of Shares representing a majority of the total number of votes
authorized to be cast by Shares then outstanding and entitled to vote thereon,
shall (a) cause the organization of a corporation, association, trust or other
organization to take over the Trust Estate and carry on the affairs of the
Trust, (b) merge the Trust into, or sell, convey and transfer the Trust Estate
to, any such corporation, association, trust or organization in exchange for
Securities thereof, or beneficial interests therein, and the assumption by such
transferee of the liabilities of the Trust and (c) thereupon terminate this
Declaration and deliver such shares, Securities or beneficial interests among
the Shareholders in accordance with such plan.
-28-
<PAGE>
8.6 Sale of Assets, Merger. The Trustees, with the approval of a
----------------------
majority of the Trustees (and, in the case of a merger, a majority of the
Independent Trustees) and the affirmative vote or written consent of the holders
of Shares representing (i) a majority of the total number of votes authorized to
be cast by Shares then outstanding and entitled to vote thereon and (ii) such
percentage as determined by the Trustees of the total number of votes authorized
to be cast by any class and/or series of Shares as shall have been authorized by
the Trustees to vote separately as a class or series on such matters, may: (a)
sell, lease or exchange all or substantially all of the property and assets of
the Trust, (b) merge the Trust into any corporation, association, trust or
organization or (c) merge any corporation, association, trust or organization
into the Trust.
ARTICLE IX
MISCELLANEOUS
9.1 Applicable Law. This Declaration and the rights of all parties and
--------------
the construction and effect of every provision hereof shall be subject to and
construed according to the statutes and laws of the Commonwealth of
Massachusetts.
9.2 Index and Headings for Reference Only. The index and headings
-------------------------------------
preceding the text, articles and sections hereof have been inserted for
convenience and reference only and shall not be construed to affect the meaning,
construction or effect of this Declaration.
9.3 Successors in Interest. This Declaration and the By-Laws shall be
----------------------
binding upon and inure to the benefit of the undersigned Trustees and their
successors, assigns, heirs, distributees and legal representatives, and every
Shareholder and his successors, assigns, heirs, distributees and legal
representatives.
9.4 Inspection of Records. Trust records shall be available for
---------------------
inspection by Shareholders at the same time and in the same manner and to the
extent that comparable records of a Massachusetts business trust would be
available for inspection by shareholders, under the laws of the Commonwealth of
Massachusetts. Except as specifically provided for in this Declaration,
Shareholders shall have no greater right than shareholders of a Massachusetts
business trust to require financial or other information from the Trust,
Trustees or officers of the Trust. Any federal or state securities
administration or other similar authority shall have the right, at reasonable
times during business hours and for proper purposes, to inspect the books and
records of the Trust.
9.5 Counterparts. This Declaration may be simultaneously executed in
------------
several counterparts, each of which when so executed shall be deemed to be an
-29-
<PAGE>
original and such counterparts together shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
9.6 Provisions of the Trust in Conflict with Law or Regulations;
------------------------------------------------------------
Severability.
- ------------
(a) The provisions of this Declaration are severable, and if the
Trustees shall determine, with the advice of counsel, that any one or more
of such provisions (the "Conflicting Provisions") are in conflict with the
REIT Provisions of the Internal Revenue Code, or with other applicable
federal laws and regulations, the Conflicting Provisions shall be deemed
never to have constituted a part of the Declaration; provided, however,
-------- -------
that such determination by the Trustees shall not affect or impair any of
the remaining provisions of this Declaration or render invalid or improper
any action taken or omitted (including but not limited to the election of
Trustees) prior to such determination. A certification in recordable form
signed by a majority of the Trustees setting forth any such determination
and reciting that it was duly adopted by the Trustees, or a copy of this
Declaration, with the Conflicting Provisions removed pursuant to such a
determination, in recordable form, signed by a majority of the Trustees,
shall be conclusive evidence of such determination when filed with the
Secretary of State of the Commonwealth of Massachusetts. The Trustees shall
not be liable for failure to make any determination under this Section
9.6(a). Nothing in this Section 9.6(a) shall in any way limit or affect the
right of the Trustees to amend this Declaration as provided in Section 8.3.
(b) If any provision of this Declaration shall be held invalid or
unenforceable, such invalidity or unenforceability shall attach only to
such provision and shall not in any manner affect or render invalid or
unenforceable any other provision of this Declaration, and this Declaration
shall be carried out as if any such invalid or unenforceable provision were
not contained herein.
9.7 Certifications. The following certifications shall be final and
--------------
conclusive as to any Persons dealing with the Trust:
(a) a certification of a vacancy among the Trustees by reason of
resignation, removal, increase in the number of Trustees, incapacity, death
or otherwise, when made in writing by a majority of the remaining Trustees;
(b) a certification as to the individuals holding office as Trustees
or officers at any particular time, when made in writing by any one of the
president, vice president, treasurer, assistant treasurer, secretary or
assistant secretary of the Trust or by any Trustee;
-30-
<PAGE>
(c) a certification that a copy of this Declaration or of the By-Laws
is a true and correct copy thereof as then in force, when made in writing
by any one of the president, vice president, treasurer, assistant
treasurer, secretary or assistant secretary of the Trust or by any Trustee;
(d) the certifications referred to in Sections 2.7, 8.4 and 9.6(a);
and
(e) a certification as to any actions by Trustees, other than the
above, when made in writing by any one of the president, vice president,
treasurer, assistant treasurer, secretary or assistant secretary of the
Trust or by any Trustee.
-31-
<PAGE>
IN WITNESS WHEREOF, the undersigned has signed these presents all on the
day and year first above written.
David Benson
/s/ David F. Benson
--------------------------------
As Trustee, and not individually
ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS June 2, 1997
SS:
COUNTY OF SUFFOLK
On this 2 day of June, 1997, before me personally appeared David Benson, to
me known to be the person described in and who executed the foregoing
instrument, and acknowledged that he executed the same as his free act and deed.
Notarial Seal /s/ Jennifer K. Smith
------------------------------------
Notary Public
My commission expires: Jan. 22, 2004
-32-
<PAGE>
IN WITNESS WHEREOF, the undersigned has signed these presents all on the
day and year first above written.
Edward W. Brooke
/s/ Edward W. Brooke
--------------------------------
As Trustee, and not individually
ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS June 2, 1997
SS:
COUNTY OF SUFFOLK
On this __ day of June, 1997, before me personally appeared Edward W.
Brooke, to me known to be the person described in and who executed the foregoing
instrument, and acknowledged that he executed the same as his free act and deed.
Notarial Seal /s/ Sherma E. Munger
----------------------------------------
Alexandria, Virginia Notary Public
My commission expires:
September 30, 1999
-33-
<PAGE>
Exhibit 3(i)(b)
MEDITRUST ACQUISITION COMPANY
-------------------------------
FIRST AMENDMENT TO DECLARATION OF TRUST
-----------------------------------------
AUGUST 8, 1997
WITNESSETH:
WHEREAS, Meditrust Acquisition Company (the "Trust") was formed as a
Massachusetts business trust pursuant to a Declaration of Trust, dated June 2,
1997 and filed with the Secretary of State of the Commonwealth of Massachusetts
on June 18, 1997 (the "Declaration"), for the principal purpose of affecting a
Merger with Santa Anita Operating Company; and
WHEREAS, the Trustees desire to amend the Declaration in order to
clarify and more accurately state a particular provision of the Declaration;
NOW, THEREFORE, it is hereby agreed and declared by the Trustees that
Section 6.2 of the Declaration is hereby amended and replaced with the
following:
6.2 Certificates. Initial ownership of Shares by Meditrust, a
------------
Massachusetts business trust, shall be evidenced by
certificates (the "Original MAC Shares"). Upon the exchange by
Meditrust of the Original MAC Shares for a number of Shares
equal to the total number of Meditrust shares outstanding as
of the Record Date for the Spin-Off (as such terms are defined
in that certain Agreement and Plan of Distribution, to be
entered into by and between Meditrust and the Trust),
ownership of Shares shall be evidenced by certificates
representing shares of Meditrust beneficial interest without
par value ("Meditrust Shares"). Each holder of Meditrust
Shares shall be deemed to own an equal number of Shares.
<PAGE>
IN WITNESS WHEREOF, the undersigned has signed these presents all on the day
and year first above written.
David Benson
/s/ David F. Benson
--------------------------------
As Trustee, and not individually
ACKNOWLEDGEMENT
COMMONWEALTH OF MASSACHUSETTS ,1997
SS:
COUNTY OF SUFFOLK
On this 28th day of August, 1997, before me personally appeared David
Benson, to me known to be the person described in and who executed the foregoing
instrument, and acknowledged that he executed the same as his free act and deed.
Notarial Seal /s/ Jennifer K. Smith
-----------------------------
Notary Public
My commission expires: January 22, 2004
-2-
<PAGE>
IN WITNESS WHEREOF, the undersigned has signed these presents all on
the day and year first above written.
Edward W. Brooke
/s/ Edward W. Brooke
---------------------------------
As Trustee, and not individually
ACKNOWLEDGMENT
COMMONWEALTH OF VIRGINIA __, 1997
SS:
CITY OF ALEXANDRIA
On this 21st day of August, 1997, before me personally appeared Edward
W. Brooke, to me known to be the person described in and who executed the
foregoing instrument, and acknowledged that he executed the same as his free act
and deed.
Notarial Seal /s/ Sherma E. Munger
----------------------------
Notary Public
My commission expires:
September 30, 1999
-3-
<PAGE>
Exhibit 3(ii)(a)
- --------------------------------------------------------------------------------
MEDITRUST ACQUISITION COMPANY
------------------
BY-LAWS
------------------
Adopted as of June 19, 1997
- --------------------------------------------------------------------------------
<PAGE>
INDEX TO TRUSTEES' REGULATIONS
OF
MEDITRUST
Page
----
ARTICLE I - TRUSTEES......................................................... 1
SECTION 1.1. Qualifying Shares Not Required........................ 1
SECTION 1.2. Quorum................................................ 1
SECTION 1.3. Election.............................................. 1
SECTION 1.4. Place of Meeting...................................... 1
SECTION 1.5. Organization Meeting.................................. 1
SECTION 1.6. Regular Meetings...................................... 2
SECTION 1.7. Special Meetings...................................... 2
SECTION 1.8. Adjourned Meetings.................................... 3
SECTION 1.9. Waiver of Notice...................................... 3
SECTION 1.10. Action Without Meeting............................... 3
SECTION 1.11. Telephone Matters.................................... 4
SECTION 1.12. Committee Rules...................................... 4
SECTION 1.13. Required Attendance at Meetings...................... 4
ARTICLE II - OFFICERS........................................................ 5
SECTION 2.1. Enumeration........................................... 5
SECTION 2.2. Powers and Duties of the Chairman..................... 5
SECTION 2.3. Powers and Duties of the President.................... 5
SECTION 2.4. Powers and Duties of Vice President................... 6
SECTION 2.5. Duties of the Secretary............................... 6
SECTION 2.6. Duties of the Treasurer............................... 7
ARTICLE III - SHAREHOLDERS................................................... 8
SECTION 3.1. Effect of Quorum...................................... 8
SECTION 3.2. Place of Meeting...................................... 8
SECTION 3.3. Annual Meeting........................................ 8
SECTION 3.4. Special Meetings...................................... 8
SECTION 3.5. Notice of Regular or Special Meetings................. 9
(i)
<PAGE>
Page
----
SECTION 3.6. Notice of Adjourned Meetings.......................... 9
SECTION 3.7. Proxies.............................................. 10
SECTION 3.8. Consent of Absentees................................. 10
SECTION 3.9. Voting Rights........................................ 11
SECTION 3.10. Inspectors of Election.............................. 11
ARTICLE IV - TRANSFER OF SHARES............................................. 12
SECTION 4.1. Transferability of Shares............................ 12
SECTION 4.2. Transfers of Stock................................... 13
ARTICLE V - MISCELLANEOUS................................................... 17
SECTION 5.1. Record Dates and Closing of Transfer Books........... 17
SECTION 5.2. Inspection of By-Laws................................ 17
ARTICLE VI - SEAL........................................................... 17
SECTION 6.1. Seal................................................. 17
ARTICLE VII - AMENDMENTS.................................................... 18
SECTION 7.1. By Trustees.......................................... 18
ARTICLE VIII - DEFINITIONS.................................................. 18
SECTION 8.1. Definitions.......................................... 18
ARTICLE IX - FISCAL YEAR.................................................... 18
SECTION 9.1. Fiscal Year.......................................... 18
(ii)
<PAGE>
ARTICLE I
TRUSTEES
--------
SECTION 1.1. Qualifying Shares Not Required. Trustees need not be
----------- ------------------------------
Shareholders of MEDITRUST ACQUISITION COMPANY (the "Trust").
SECTION 1.2. Quorum. A majority of the Trustees shall constitute a
----------- ------
quorum subject to the provisions of Section 2.6 of the Trust's Declaration of
Trust, as it may be amended from time to time (the "Declaration").
SECTION 1.3. Election. Trustees shall be elected at each Annual Meeting
----------- --------
of Shareholders. If Trustees are not elected at an annual meeting or if such
meeting is not held, Trustees may be elected at a special meeting of
Shareholders.
SECTION 1.4. Place of Meeting. Meetings of the Trustees shall be held
----------- ----------------
at the principal office of the Trust or at such place within or without the
Commonwealth of Massachusetts as the President shall direct or as is fixed from
time to time by resolution of the Trustees. Whenever a place other than the
principal office is fixed by the President or by resolution as the place at
which future meetings are to be held, written notice thereof shall be sent to
all Trustees a reasonable time in advance of any meeting to be held at such
place.
SECTION 1.5. Organization Meeting. Immediately following each Annual
----------- --------------------
Meeting of Shareholders, a regular meeting of the Trustees shall be held for the
purpose of
<PAGE>
organizing, electing officers and transacting other business. Notice of such
meetings need not be given.
SECTION 1.6. Regular Meetings. Regular meetings of the Trustees shall
----------- ----------------
be held at the place determined pursuant to Section 1.4 on the dates, if any,
established at each organizational meeting of the Trustees and notice of such
regular meetings of the Trustees is hereby dispensed with.
SECTION 1.7. Special Meetings. Special meetings of the Trustees may be
----------- ----------------
called at any time by the Chairman or President, and the Chairman or President
shall call a special meeting at any time upon the written request of three (3)
Trustees. Written notice of the time and place of a special meeting shall be
given to each Trustee, either personally or by sending a copy thereof by mail or
by telegraph, charges prepaid, to his address appearing on the books of the
Trust or theretofore given by him to the Trust for the purpose of notice. In
case of personal service, such notice shall be so delivered at least twenty-four
(24) hours prior to the time fixed for the meeting. If such notice is mailed, it
shall be deposited in the United States mail in the place in which the principal
office of the Trust is located at least seventy-two (72) hours prior to the time
fixed for the holding of the meeting. If telegraphed, it shall be delivered to
the telegraph company at least forty-eight (48) hours prior to the time fixed
for the holding of the meeting. If notice is not so given by the Secretary it
may be given in the same manner by the Chairman, President or the Trustees
requesting the meeting.
-2-
<PAGE>
SECTION 1.8. Adjourned Meetings. A quorum of the Trustees may adjourn
----------- ------------------
any Trustees' meeting to meet again at a stated day and hour. In the absence of
a quorum, a majority of the Trustees present may adjourn from time to time to
meet again at a stated day and hour prior to the time fixed for the next regular
meeting of the Trustees. The motion for adjournment shall be lodged with the
records of the Trust. Notice of the time and place of an adjourned meeting need
not be given to any Trustee present at the adjourned meeting if the time and
place is fixed at the meeting adjourned.
SECTION 1.9. Waiver of Notice. The transactions of any meeting of the
----------- ----------------
Trustees, however called and noticed or wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice if a quorum is
present and if, either before or after the meeting, each of the Trustees not
present signs a written waiver of notice, a consent to the holding of such
meeting or an approval of the minutes thereof. All such waivers, consents, or
approvals shall be lodged with the Trust records or made a part of the minutes
of the meeting.
SECTION 1.10. Action Without Meeting. Unless specifically otherwise
------------ ----------------------
provided in the Declaration, any action required or permitted to be taken by the
Trustees may be taken without a meeting if a majority of the Trustees (or a
majority of the Independent Trustees as to any action which requires such a
majority) shall individually or collectively consent in writing to such action.
Such written consent or consents shall be lodged with the records of the Trust
and shall have the same force and effect as an unanimous vote of such Trustees.
-3-
<PAGE>
SECTION 1.11. Telephone Matters. The Trustees may meet by means of a
------------ -----------------
telephone conference circuit or similar communications equipment by means of
which all persons participating in the meeting shall be able to hear one another
and participate therein. Such meeting shall be deemed to have been held at a
place designated by the Trustees at the meeting. Participation in a telephone
conference meeting shall constitute presence in person at such meeting for all
purposes except pursuant to Section 1.13 hereof.
SECTION 1.12. Committee Rules. Unless the Trustees otherwise provide,
------------ ---------------
each committee designated by the Trustees may adopt, amend and repeal rules for
the conduct of such committee's business. In the absence of a provision by the
Trustees or a provision in the rules of such committee to the contrary, a
majority of the entire authorized number of members of such committee shall
constitute a quorum for the transaction of business, the vote of a majority of
the members present at a meeting at the time of such vote if a quorum is then
present shall be the act of such committee, and in other respects each committee
shall conduct its business in the same manner as the Trustees conduct their
business pursuant to Article II of the Declaration and this Article I of these
regulations.
SECTION 1.13. Required Attendance at Meetings. Any Trustee who fails to
------------ -------------------------------
attend in person (i) three (3) consecutive meetings of the Trustees or (ii) at
least 75% of all meetings of the Trustees during any calendar year, except for
absences caused by the illness of the Trustee or other justifiable cause as
determined by the Trustees, shall be automatically removed as a Trustee without
any further action by the Trustees or the Shareholders. For
-4-
<PAGE>
purposes of this provision, participation by conference telephone is not deemed
to constitute attendance in person.
ARTICLE II
OFFICERS
--------
SECTION 2.1. Enumeration. The officers of the Trust shall be a President,
----------- -----------
a Secretary, a Treasurer, and such other officers as are elected by the Trustees
including, in their discretion, a Chairman, with such duties as are assigned to
them by the Trustees. Officers shall be elected by and shall hold office at the
pleasure of the Trustees. When the duties do not conflict, any two or more
officers, except those of Chairman and/or President and Secretary, may be held
by the same person.
SECTION 2.2. Powers and Duties of the Chairman. The Chairman, if there
----------- ---------------------------------
shall be such an officer, shall, if present, preside at all meetings of the
Shareholders and the Trustees and may be the chief executive officer of the
Trust if the Trustees so elect.
SECTION 2.3. Powers and Duties of the President. Subject to such
----------- ----------------------------------
supervisory powers, if any, as may be given by the Trustees to the Chairman, the
President shall, subject to the control of the Trustees and the supervision of
the Chairman, have general supervision, direction and control of the business of
the Trust and its employees and shall exercise such general powers of management
as are usually vested in the office of president of the
-5-
<PAGE>
corporation. In the absence of the Chairman, or if there be none, he shall
preside at all meetings of the Shareholders and/or Trustees and, unless the
Chairman has been designated as chief executive officer, shall be chief
executive officer of the Trust. He shall be ex officio, a member of all
standing committees.
SECTION 2.4. Powers and Duties of Vice President. Each Vice President, if
----------- -----------------------------------
any, designated by the Trustees shall be an administrative officer of the Trust
and have such duties as are designated by the President or the Trustees.
SECTION 2.5. Duties of the Secretary. The Secretary shall:
----------- -----------------------
(a) Minutes. Keep full and complete minutes of the meetings (or
-------
actions in lieu thereof) of the Trustees of any committees of the Trustees and
the Shareholders and give notice, as required, of all such meetings;
(b) Trust Seal. Keep the seal of the Trust and affix the same to all
----------
instruments executed by the Trust which require it;
(c) Books and Other Records. Maintain custody of and keep the books
-----------------------
of account and other records of the Trust except such that are in the custody of
the Treasurer;
-6-
<PAGE>
(d) Share Register. Maintain at the principal office of the Trust a
--------------
share register, showing the ownership and transfers of ownership of all shares
of the Trust, unless a transfer agent is employed to maintain and does maintain
such a share register; and
(e) General Duties. Generally, perform all duties which pertain to
--------------
his office and which are required by the Trustees.
An Assistant Secretary or Secretaries may be appointed to act in the
absence of the Secretary.
SECTION 2.6. Duties of the Treasurer. The Treasurer shall perform all
----------- -----------------------
duties which pertain to his office and which are required by the Trustees,
including without limitation the receipt, deposit and disbursement of funds
belonging to the Trust.
An Assistant Treasurer or Treasurers may be appointed to act in the absence
of the Treasurer.
-7-
<PAGE>
ARTICLE III
SHAREHOLDERS
------------
SECTION 3.1. Effect of Quorum. Subject to the provisions of the
----------- ----------------
Declaration, the Shareholders present at a duly called or held meeting at which
a quorum is present may continue to do business until adjournment
notwithstanding the withdrawal of enough Shareholders to leave less than a
quorum.
SECTION 3.2. Place of Meeting. Meetings of the Shareholders shall
----------- ----------------
be held at the principal office of the Trust or at such place within or without
the Commonwealth of Massachusetts as is designated by the Trustees or the
Chairman or President or by the written consent of a majority of the
Shareholders entitled to vote thereat, given either before or after the meeting
and filed with the Secretary of the Trust.
SECTION 3.3. Annual Meeting. A regular annual meeting of the
----------- --------------
Shareholders shall be called by the Chairman or President within six months
after the end of each fiscal year commencing with the fiscal year ending
December 31, 1997.
SECTION 3.4. Special Meetings. Special Meetings of the Shareholders
----------- ----------------
may be held at any time for any purpose or purposes permitted by the
Declaration.
-8-
<PAGE>
SECTION 3.5. Notice of Regular or Special Meetings. Written notice
----------- -------------------------------------
specifying the place, day and hour of any regular or special meeting, the
purposes of the meeting and all other matters required by law shall be given to
each Shareholder of record entitled to vote, either personally or by sending a
copy thereof by mail or telegraph, charges prepaid, to his address appearing on
the books of the Trust or theretofore given by him to the Trust for the purpose
of notice or, if no address appears or has been given, addressed to the place
where the principal office of the Trust is situated. It shall be the duty of
the Secretary to give notice of each Annual Meeting of the Shareholders at least
fifteen (15) days and not more than sixty (60) days before the date on which it
is to be held. Whenever an officer has been duly requested to call a special
meeting of Shareholders, it shall be his duty to fix the date and hour thereof,
which date shall be not less than twenty (20) days and not more than sixty (60)
days after the receipt of such request if the request has been delivered in
person or after the date of mailing the request, as the case may be, and to give
notice of such special meeting within ten (10) days after the receipt of such
request. If the date of such special meeting is not so fixed and notice thereof
given within ten (10) days after the date of receipt of the request, the date
and hour of such meeting may be fixed by the Person or Persons calling or
requesting the meeting and notice thereof shall be given by such Person or
Persons not less than twenty (20) nor more than sixty (60) days before the date
on which the meeting is to be held.
SECTION 3.6. Notice of Adjourned Meetings. It shall not be
----------- ----------------------------
necessary to give notice of the time and place of any adjourned meeting or of
the business to be transacted
-9-
<PAGE>
thereat other than by announcement at the meeting at which such adjournment is
taken, except that when a meeting is adjourned for thirty (30) days or more,
notice of the adjourned meeting shall be given as in the case of an original
meeting.
SECTION 3.7. Proxies. The appointment of a proxy or proxies shall
----------- -------
be made by an instrument in writing executed by the Shareholder or his duly
authorized agent and filed with the Secretary of the Trust. No proxy shall be
valid after the expiration of eleven (11) months from the date of its execution.
At a meeting of Shareholders, all questions concerning the qualification of
voters, the validity of proxies and the acceptance or rejection of votes, shall
be decided by the Secretary of the meeting unless inspectors of election are
appointed pursuant to Section 3.10 in which event such inspectors shall pass
upon all questions and shall have all other duties specified in said section.
SECTION 3.8. Consent of Absentees. The transactions of any meeting
----------- --------------------
of Shareholders, either annual, special or adjourned, however called and
noticed, shall be as valid as though had at a meeting duly held after the
regular call and notice if a quorum is present and if, either before or after
the meeting, each Shareholder entitled to vote, not present in person or by
proxy, signs a written waiver of notice, a consent to the holding of such
meeting or an approval of the minutes thereof. All such waivers, consents or
approvals shall be lodged with the Trust records or made a part of the minutes
of the meeting.
-10-
<PAGE>
SECTION 3.9. Voting Rights. If no date is fixed for the
----------- -------------
determination of the Shareholders entitled to vote at any meeting of
Shareholders, only Persons in whose names Shares entitled to vote stand on the
share records of the Trust at the opening of business on the day of any meeting
of Shareholders shall be entitled to vote at such meeting.
SECTION 3.10. Inspectors of Election. In advance of any meeting of
------------ ----------------------
Shareholders, the Trustees may appoint inspectors of election to act at the
meeting or any adjournment thereof. If inspectors of election are not so
appointed, the Chairman of any meeting of Shareholders may, and on the request
of any Shareholder or his proxy shall, appoint inspectors of election at the
meeting. The number of inspectors shall be either one or three. If appointed at
the meeting on the request of one or more Shareholders or proxies, a majority of
Shares present, shall determine whether one or three inspectors are to be
appointed. In case any Person appointed as inspector fails to appear or fails
or refuses to act, the vacancy may be filled by appointment made by the Trustees
in advance of the convening of the meeting or at the meeting by the Chairman of
the meeting. The inspectors of election shall determine the number of Shares
outstanding, the Shares represented at the meeting, the existence of a quorum,
and the authenticity, validity and effect of proxies, receive votes, ballots, or
consents, hear and determine all challenges and questions in any way arising in
connection with the right to vote, count and tabulate all votes or consents,
determine the results and do such acts as may be proper to conduct the election
or vote with fairness to all Shareholders. If there are three inspectors of
election, the decision, act or certificate of a majority is effective in all
respects as the decision, act or certificate of all. On request of the
-11-
<PAGE>
Chairman of the meeting or of any Shareholder or his proxy, the inspectors
shall make a report in writing of any challenge, question or matter determined
by them and execute a certificate of any facts found by them.
ARTICLE IV
TRANSFER OF SHARES
------------------
SECTION 4.1. Transferability of Shares. Shares shall be transferable on
----------- -------------------------
the records of the Trust only by the record holder thereof or by his agent
thereunto duly authorized in writing upon delivery to the Trustees or a transfer
agent of the certificate or certificates therefor, properly endorsed or
accompanied by duly executed instruments of transfer and accompanied by all
necessary documentary stamps together with such evidence of the genuineness of
each such endorsement, execution or authorization and of other matters as may
reasonably be required by the Trustees or such transfer agent. Upon such
delivery, the transfer shall be recorded in the records of the Trust and a new
certificate for the Shares so transferred shall be issued to the transferee and
in case of a transfer of only a part of the Shares represented by any
certificate, a new certificate for the balance shall be issued to the
transferor. Any Person becoming entitled to any Shares of the Trust in
consequence of the death of a Shareholder or otherwise by operation of law shall
be recorded as the holder of such Shares and shall receive a new certificate
therefor but only upon delivery to the trustees or a transfer agent of
instruments and other evidence required by the Trustees or such transfer agent
to demonstrate such entitlement, the existing certificate for such Shares and
-12-
<PAGE>
such releases from applicable governmental authorities as may be required by the
Trustees or transfer agent.
SECTION 4.2. Transfers of Stock.
----------- ------------------
(a) Subject to paragraphs (b), (c) and (d) of this Section 4.2, upon
delivery to the Trustees or transfer agent of a certificate for Shares of the
Trust as set forth in Section 4.1, it shall be the duty of the Trust to issue a
new certificate to the Person entitled thereto, cancel the old certificate and
record the transaction on the records of the Trust.
(b) Immediately following the payment by Meditrust, a Massachusetts
business trust, of Shares of the Trust (the "effective time of the
restriction"), and continuing thereafter until such time as the limitation on
transfer provided for in the Pairing Agreement between the Trust and Meditrust
shall be terminated in the manner therein provided:
(i) the Shares shall not be transferable, and shall not be
transferred on the records of the Trust, unless (1) a simultaneous transfer
is made by the same transferor to the same transferee, or (2) such
transferor has previously arranged with Meditrust for the transfer to the
transferee, of a like number of shares
-13-
<PAGE>
of Meditrust beneficial interest without par value (the "Meditrust Shares")
and such shares are paired with one another.
(ii) Each certificate evidencing ownership of Shares of the Trust
issued and not cancelled prior to the effective time of the restriction
shall be deemed to evidence a like number of Meditrust Shares.
(iii) A conspicuous legend shall be placed on the face of each
certificate evidencing ownership of Shares of the Trust issued after the
effective time of the restriction, referring to the restrictions on
transfer set forth in the By-laws of the Trust.
(c) The Shareholders shall upon demand disclose to the Trustees in
writing such information with respect to direct and indirect ownership of the
Shares as the Trustees deem necessary or appropriate to comply with the REIT
Provisions of the Internal Revenue Code or to comply with the requirements of
any taxing authority or governmental agency.
(d) Whenever it is deemed by them to be reasonably necessary to
protect the status of the Trust as REIT, the Trustees may require a statement or
affidavit from each Shareholder or proposed transferee of Shares setting forth
the number of Shares already owned by him and any related Person or Affiliate
specified in the form prescribed by
-14-
<PAGE>
the Trustees for that purpose. If, in the opinion of the Trustees, which shall
be conclusive upon any proposed transferee of Shares, any proposed transfer
would jeopardize the status of the Trust as a REIT, the Trustees shall have the
right, but not the duty, to refuse to permit such transfer.
(e) The Trustees, by notice to the holder thereof, may redeem any or
all Shares which have been transferred pursuant to a transfer which, in the
opinion of the Trustees, would jeopardize the status of the Trust as a REIT.
Without limiting the generality of the foregoing, if the Trustees shall, at any
time and in good faith, be of the opinion that direct or indirect ownership of
at least 9.9% or more of the Shares has or may become concentrated in the hands
of one beneficial owner (as defined under Rule 13d-3 under the Securities
Exchange Act of 1934), the Trustees, shall have the power (i) by lot or other
means deemed equitable by them to call for the purchase from any Shareholder a
number of Shares sufficient, in the opinion of the Trustees, to maintain or
bring the direct or indirect ownership of Shares of such beneficial owner to no
more than 9.9% of the outstanding Shares, and (ii) to refuse to transfer or
issue Shares to any Person whose acquisition of such Shares would, in the
opinion of the Trustees, result in the direct or indirect ownership of more than
9.9% of the outstanding Shares. The purchase price for any Shares shall be
equal to the fair market value of the Shares reflected in the closing sale price
for the Shares, if then listed on a national securities exchange, or the average
of the closing sales prices for the Shares if then listed on more than one
national securities exchange, or if the Shares are not then listed on a national
securities exchange, the latest bid quotation for the Shares if then
-15-
<PAGE>
traded over-the-counter, on the last business day immediately preceding the day
on which notices of such acquisition are sent, if no such closing sales prices
or quotations are available, then the purchase price shall be equal to the net
asset value of such Shares as determined by the Trustees in accordance with the
provisions of applicable law. Payment of the purchase price shall be made in
cash by the Trust as such time in such manner as may be determined by the
Trustees. From and after the date fixed for purchase by the Trustees, the
holder of any Shares so called for purchase shall cease to be entitled to
distributions, voting rights and other benefits with respect to such Shares,
excepting only the right to payment of the purchase price faxed as aforesaid.
Any transfer of Shares, options, warrants or other securities convertible into
Shares that would create a beneficial owner of more than 9.9% of the outstanding
Shares shall be deemed void ab initio and the intended transferee shall be
-- ------
deemed never to have an interest therein. If the foregoing provision is
determined to be void or invalid by virtue of any legal decision, statute, rule
or regulation, then the transferee of such shares, options, warrants or other
securities convertible into Shares shall be deemed, at the option of the Trust
to have acted as agent on behalf of the Trust in acquiring such Shares and to
hold such Shares on behalf of the Trust. Notwithstanding any other provision of
these By-laws to the contrary, any purported acquisition of Shares of the Trust
which would result in the disqualification of the Trust as a REIT shall be null
and void.
-16-
<PAGE>
ARTICLE V
MISCELLANEOUS
-------------
SECTION 5.1. Record Dates and Closing of Transfer Books. Pursuant to
----------- ------------------------------------------
the Declaration, the Trustees may fix record dates for specified purposes. If a
record date is so fixed, only Shareholders of record on the date so fixed shall
be entitled to the rights to which the record date pertains. The Trustees may
close the books of the Trust against transfers of Shares during the whole or any
part of the period between the record date and the date fixed for the meeting,
payment, distribution or other event to which the record date relates.
SECTION 5.2. Inspection of By-Laws. The Trustees shall keep at the
----------- ---------------------
principal office for the transaction of business of the Trust the original or a
copy of the By-Laws as amended or otherwise altered to date, certified by the
Secretary, which shall be open to inspection by the Shareholders at all
reasonable times during office hours.
ARTICLE VI
----------
SEAL
----
SECTION 6.1. Seal. The Trust shall have a seal containing substantially
----------- ----
the following words, "MEDITRUST ACQUISITION COMPANY, a Massachusetts business
trust", and referring to the date or year of organization of the Trust.
-17-
<PAGE>
ARTICLE VII
-----------
AMENDMENTS
----------
SECTION 7.1. By Trustees. Except for any change for which the
----------- -----------
Declaration or these By-Laws require approval by more than a majority vote,
these By-Laws may be amended or repealed or new or additional By-Laws may be
adopted by the vote or written consent of a majority of the Trustees.
ARTICLE VIII
------------
DEFINITIONS
-----------
SECTION 8.1. Definitions. All terms defined in the Declaration shall
----------- -----------
have the same meaning when used in these By-Laws.
ARTICLE IX
----------
FISCAL YEAR
-----------
SECTION 9.1. Fiscal Year. The fiscal year of the Trust shall be the
----------- -----------
year ending with the 31st day of December in each year.
-18-
<PAGE>
Exhibit 3(ii)(b)
MEDITRUST ACQUISITION COMPANY
-----------------------------
FIRST AMENDMENT TO BY-LAWS
-----------------------------
Adopted as of August 8, 1997
Pursuant to that certain Action by Unanimous Written Consent of the
Trustees, dated August 8, 1997, the By-Laws of Meditrust Acquisition Company are
amended as follows:
1. Section 4.2(b) is deleted and replaced with the following:
(b) Notwithstanding anything in Section 4.1 to the contrary,
immediately following the exchange by Meditrust of the
Original MAC Shares for a number of Shares equal to the
total number of Meditrust Shares (as defined herein)
outstanding as of the Record Date of the Spinoff, and
continuing thereafter until such time as the limitation on
transfer provided for in the Pairing Agreement between the
Trust and Meditrust shall be terminated in the manner
therein provided:
(i) the Shares shall not be transferable, and shall not
be transferred on the records of the Trust, unless
(1) a simultaneous transfer is made by the same
transferor to the same transferee, or (2) such
transferor has previously arranged with Meditrust
for the transfer to the transferee, of a like
number of shares of Meditrust beneficial interest
without par value (the "Meditrust Shares") and such
shares are paired with one another.
(ii) Ownership of Shares shall be evidenced by Meditrust
Shares. Each holder of Meditrust Shares shall be
deemed to own an equal number of Shares, which
shall be held in trust for the benefit of such
holders of Meditrust Shares.
(iii) A conspicuous legend shall be placed on each
Meditrust Share certificate evidencing ownership of
Meditrust Shares and Shares issued after the Record
Date of the Spinoff, referring to the restrictions
or transfer set forth in the Pairing Agreement.
<PAGE>
Exhibit 10.1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THIRD AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
DATED AS OF APRIL 13, 1997
BY AND AMONG
SANTA ANITA REALTY ENTERPRISES, INC.,
SANTA ANITA OPERATING COMPANY
MEDITRUST
AND
MEDITRUST ACQUISITION COMPANY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
RECITALS
AGREEMENT
<TABLE>
<CAPTION>
PAGE
----
ARTICLE I
THE REORGANIZATION; CLOSING; EFFECTIVE TIME
<C> <S> <C>
Section 1.1: Meditrust Acquisition Company; the Distribution........... A-2
1.1.1 Meditrust Acquisition Company............................. A-2
1.1.2 Distribution.............................................. A-2
1.1.3 Pairing................................................... A-2
Section 1.2: Delivery of Note.......................................... A-2
Section 1.3: The Mergers............................................... A-2
1.3.1 Realty Merger............................................. A-2
1.3.2 Operating Merger.......................................... A-2
Section 1.4: Effective Time............................................ A-2
Section 1.5: Closing................................................... A-3
Section 1.6: Sale of Santa Anita Shares to MAC......................... A-3
Section 1.7: Sale of Santa Anita Shares to Designee of Meditrust....... A-3
Section 1.8: Assurance by Meditrust.................................... A-4
ARTICLE II
CERTIFICATE OF INCORPORATION AND BY-LAWS; CORPORATE NAME
Section 2.1: Realty Certificate of Incorporation....................... A-4
Section 2.2: Realty By-laws............................................ A-4
Section 2.3: Operating Certificate of Incorporation.................... A-4
Section 2.4: Operating By-laws......................................... A-5
ARTICLE III
DIRECTORS AND OFFICERS
Section 3.1: Realty Directors.......................................... A-5
Section 3.2: Operating Directors....................................... A-5
ARTICLE IV
MERGER CONSIDERATION; ASSIGNMENT CONSIDERATION;
CONVERSION OR CANCELLATION OF SHARES IN THE MERGERS
Realty Merger Consideration; Conversion or Cancellation of
Section 4.1: Meditrust Shares.......................................... A-5
Operating Merger Consideration; Conversion or Cancellation
Section 4.2: of MAC Shares............................................. A-5
Section 4.3: Exchange Ratio............................................ A-5
Section 4.4: Pairing of Realty and Operating Shares.................... A-6
Section 4.5: Exchange of Old Certificates for New Certificates......... A-6
4.5.1 Effect on Meditrust Shares and MAC Shares................. A-6
4.5.2 Appointment of Exchange Agent............................. A-6
4.5.3 Exchange Procedures....................................... A-6
4.5.4 Fractional Shares......................................... A-7
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
4.5.5 Distributions with Respect to Unexchanged Shares............ A-7
4.5.6 Transfers................................................... A-8
4.5.7 No Liability................................................ A-8
4.5.8 Withholding Rights.......................................... A-8
4.5.9 Transfer Taxes.............................................. A-8
4.5.10 Stock Options............................................... A-8
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1: Representations and Warranties of Meditrust................. A-9
5.1.1 Organization of Meditrust................................... A-9
5.1.2 Operating Subsidiaries and MAC.............................. A-10
5.1.3 Capitalization.............................................. A-10
5.1.4 Authority................................................... A-10
5.1.5 Litigation.................................................. A-11
5.1.6 Financial Statements........................................ A-11
5.1.7 Absence of Changes.......................................... A-11
5.1.8 No Undisclosed Liabilities.................................. A-11
5.1.9 Meditrust SEC Documents..................................... A-11
5.1.10 Certain Matters............................................. A-12
5.1.11 Environmental Matters....................................... A-12
5.1.12 Compliance with Laws and Orders............................. A-12
5.1.13 Real Property............................................... A-12
5.1.14 Indebtedness................................................ A-12
5.1.15 No Finder................................................... A-12
5.1.16 Tax Matters................................................. A-12
5.1.17 Benefit Plans............................................... A-13
Section 5.2: Representations and Warranties of Realty.................... A-14
5.2.1 Organization of Realty...................................... A-14
5.2.2 Capitalization.............................................. A-14
5.2.3 Authority................................................... A-14
5.2.4 Litigation.................................................. A-15
5.2.5 Financial Statements........................................ A-15
5.2.6 Absence of Changes.......................................... A-15
5.2.7 No Undisclosed Liabilities.................................. A-15
5.2.8 Santa Anita SEC Documents................................... A-15
5.2.9 Certain Matters............................................. A-16
5.2.10 Environmental Matters....................................... A-16
5.2.11 Compliance with Laws and Orders............................. A-16
5.2.12 Real Property............................................... A-16
5.2.13 Indebtedness................................................ A-16
5.2.14 No Finder................................................... A-16
5.2.15 Former Agreement............................................ A-16
5.2.16 Tax Matters................................................. A-17
5.2.17 Benefit Plans............................................... A-17
5.2.18 Hahn Agreement.............................................. A-18
Section 5.3: Representations and Warranties of Operating................. A-18
5.3.1 Organization of Operating................................... A-18
5.3.2 Operating Subsidiaries...................................... A-18
5.3.3 Capitalization.............................................. A-19
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
5.3.4 Authority.................................................. A-19
5.3.5 Litigation................................................. A-20
5.3.6 Financial Statements....................................... A-20
5.3.7 Absence of Changes......................................... A-20
5.3.8 No Undisclosed Liabilities................................. A-20
5.3.9 Santa Anita SEC Documents.................................. A-20
5.3.10 Certain Matters............................................ A-20
5.3.11 Environmental Matters...................................... A-20
5.3.12 Compliance with Laws and Orders............................ A-21
5.3.13 Real Property.............................................. A-21
5.3.14 Indebtedness............................................... A-21
5.3.15 No Finder.................................................. A-21
5.3.16 Former Agreement........................................... A-21
5.3.17 Tax Matters................................................ A-21
5.3.18 Benefit Plans.............................................. A-22
ARTICLE VI
COVENANTS
Section 6.1: Conduct Pending the Closing................................ A-22
Section 6.2: Acquisition Proposals...................................... A-24
Section 6.3: Information Supplied....................................... A-25
Section 6.4: Shareholder Approvals; Registration Statement.............. A-25
6.4.1 Registration Statement..................................... A-25
6.4.2 Shareholder Meetings....................................... A-25
Section 6.5: Other Actions.............................................. A-25
Section 6.6: Access..................................................... A-26
Section 6.7: Notification of Certain Matters............................ A-27
Section 6.8: Publicity.................................................. A-27
Section 6.9: Indemnification of Directors and Officers.................. A-28
Section 6.10: Colony Termination Fee..................................... A-28
ARTICLE VII
CONDITIONS
Section 7.1: Conditions to Each Party's Obligation...................... A-28
7.1.1 Shareholder Approval....................................... A-28
7.1.2 Governmental and Regulatory Consents....................... A-29
7.1.3 Third-Party Consents....................................... A-29
7.1.4 Litigation................................................. A-29
7.1.5 Opinions................................................... A-29
7.1.6 Registration Statement..................................... A-29
Section 7.2: Conditions to Obligation of Meditrust...................... A-29
7.2.1 Representations and Warranties............................. A-29
7.2.2 Performance of Obligations................................. A-30
7.2.3 No Material Adverse Effect................................. A-30
7.2.4 Rights..................................................... A-30
7.2.5 Resignation of Directors................................... A-30
7.2.6 The Exchange Approval...................................... A-30
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Section 7.3: Conditions to Obligation of Realty and Operating........... A-30
7.3.1 Representations and Warranties............................. A-30
7.3.2 Performance of Obligations................................. A-30
7.3.3 No Material Adverse Effect................................. A-30
ARTICLE VIII
TERMINATION
Section 8.1: Termination by Mutual Consent.............................. A-30
Section 8.2: Termination by any Party Hereto............................ A-31
Section 8.3: Termination by Meditrust................................... A-31
Section 8.4: Termination by Either of Realty or Operating............... A-31
Section 8.5: Effect of Termination and Abandonment...................... A-31
Section 8.6: Payment of Expenses and Termination Fee.................... A-31
ARTICLE IX
MISCELLANEOUS AND GENERAL
Section 9.1: Survival................................................... A-32
Section 9.2: Modification or Amendment.................................. A-32
Section 9.3: Waiver of Conditions....................................... A-32
Section 9.4: Counterparts............................................... A-32
Section 9.5: Governing Law.............................................. A-32
Section 9.6: Notices.................................................... A-32
Section 9.7: Entire Agreement, Etc. .................................... A-33
Section 9.8: Captions................................................... A-33
Section 9.9: Severability............................................... A-33
Section 9.10: No Third-Party Beneficiaries............................... A-33
Section 9.11: Specific Performance....................................... A-33
Section 9.12: Trusts..................................................... A-33
</TABLE>
iv
<PAGE>
THIRD AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
This THIRD AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of
April 13, 1997 (this "Agreement"), by and among SANTA ANITA REALTY ENTERPRISES,
INC., a Delaware corporation ("Realty"), SANTA ANITA OPERATING COMPANY, a
Delaware corporation ("Operating" and together with Realty, the "Companies"),
MEDITRUST, a Massachusetts business trust ("Meditrust"), and MEDITRUST
ACQUISITION COMPANY, a Massachusetts business trust ("MAC").
R E C I T A L S
A. Original Agreement. Effective as of April 13, 1997, the Companies,
Meditrust and Meditrust Acquisition Corporation IV, a Delaware Corporation ("M
Acquisition"), entered into an Amended and Restated Agreement and Plan of
Merger (the "Original Merger Agreement").
B. Novation. Effective June 19, 1997, pursuant to a Second Amended and
Restated Agreement and Plan of Merger dated as of April 13, 1997 (the "Second
Restated Merger Agreement") the parties to the Original Merger Agreement and
MAC effected a novation whereby MAC became a party to the Original Merger
Agreement in the place of M Acquisition, and in connection therewith amended
and restated the Original Merger Agreement in its entirety.
C. The parties hereby amend and restate the Second Restated Merger Agreement
in its entirety.
D. Spin-off. Prior to the record dates for the shareholder meetings of
Meditrust and MAC referred to in Section 6.4.2, Meditrust intends to transfer
to MAC, a wholly owned subsidiary of Meditrust, cash equal to the MAC Amount,
and to distribute beneficial ownership of shares of MAC to its shareholders,
which will be represented by the share certificates for Meditrust Shares
pending the Mergers described below.
E. Note. Prior to the Effective Time, Operating intends to deliver to Realty
a promissory note or cash in the amount of the Note Amount.
F. The Mergers. At the Effective Time, the parties intend to effect a merger
of Meditrust with and into Realty, with Realty being the surviving corporation
(the "Realty Merger"), and a merger of MAC with and into Operating, with
Operating being the surviving corporation (the "Operating Merger").
G. Intention of the Parties. It is the intention of the parties to this
Agreement that for United States federal income tax purposes the Realty Merger
and the Operating Merger (the "Mergers") shall qualify as "reorganizations"
within the meaning of Section 368(a) of the Code.
H. Approvals. The respective Board of Directors or Board of Trustees of each
party hereto has determined that this Agreement is in the best interests of
such party and its shareholders and has duly approved this Agreement and the
consummation of the transactions contemplated hereby and authorized its
execution and delivery.
I. Defined Terms. Defined terms used herein shall have the meanings set forth
herein and in Annex A hereto.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, the parties hereto
hereby agree as follows:
1
<PAGE>
ARTICLE I
THE REORGANIZATION; CLOSING; EFFECTIVE TIME
Section 1.1: Meditrust Acquisition Company; the Distribution.
1.1.1 Meditrust Acquisition Company. Prior to the record dates for the
shareholder meetings of Meditrust and MAC referred to in Section 6.4.2,
Meditrust will transfer to MAC cash equal to the MAC Amount, and will cause
MAC to issue an amount of its shares of beneficial interest to Meditrust
equal to the number of Meditrust Shares then outstanding and to take all
necessary actions required in connection therewith.
1.1.2 Distribution. Prior to the record dates for the shareholder
meetings of Meditrust and MAC referred to in Section 6.4.2, Meditrust will
effect the distribution to its shareholders of the beneficial ownership of
all the outstanding MAC Shares, with the MAC Shares being deemed to be
represented by the Meditrust Shares pending the Mergers. Meditrust will
take all necessary actions required in connection with such distribution.
1.1.3 Pairing. The transferee of any Meditrust Shares following the time
of the distribution referred to in Section 1.1.2 shall also receive a
beneficial interest in an equal number of MAC Shares.
Section 1.2: Delivery of Note. Prior to the Effective Time, Operating will
deliver to Realty a promissory note or cash, in whole or in part, in the amount
of the Note Amount.
Section 1.3: The Mergers.
1.3.1 Realty Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time, Realty and Meditrust will consummate the
Realty Merger in which Meditrust will be merged with and into Realty and
the separate legal existence of Meditrust will thereupon cease. Realty will
be the surviving corporation of the Realty Merger (sometimes hereinafter
referred to as the "Realty Surviving Corporation") and will continue to be
a corporation governed by the laws of the State of Delaware.
1.3.2 Operating Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time, Operating and MAC will consummate the
Operating Merger in which MAC will be merged with and into Operating and
the separate legal existence of MAC will thereupon cease. Operating will be
the surviving corporation of the Operating Merger (sometimes hereinafter
referred to as the "Operating Surviving Corporation") and will continue to
be a corporation governed by the laws of the State of Delaware.
Section 1.4: Effective Time. Realty and Meditrust will cause a certificate of
merger to be executed and delivered to the Secretary of State of the State of
Delaware in accordance with the DGCL (the "Realty Merger Certificate") and
Meditrust will cause a certificate of termination to be executed and delivered
to the Secretary of State of the Commonwealth of Massachusetts. The Realty
Merger will become effective at such time as the Realty Merger Certificate has
been filed with the Secretary of State of the State of Delaware in accordance
with the provisions of the DGCL or at such other time as may be agreed upon by
the parties and specified in the Realty Merger Certificate in accordance with
applicable law. Operating and MAC will cause a certificate of merger to be
executed and delivered to the Secretary of State of the State of Delaware as
provided in the DGCL (the "Operating Merger Certificate") and MAC will cause a
certificate of termination to be executed and delivered to the Secretary of
State of the Commonwealth of Massachusetts. The Operating Merger will become
effective at such time as the Operating Merger Certificate has been filed with
the Secretary of State of the State of Delaware in accordance with the
provisions of the DGCL or at such other time as may be agreed upon by the
parties and specified in the Operating Merger Certificate in accordance with
applicable law. It is the intention of the parties that the Mergers shall
become effective at the same time, and that the Realty Merger Certificate and
the Operating Merger Certificate shall so provide. The date and time when the
Mergers become effective is referred to herein as the "Effective Time."
2
<PAGE>
Section 1.5: Closing. The closing of the Reorganization (the "Closing") will
take place at the offices of O'Melveny & Myers LLP, Los Angeles, California at
10:00 A.M. on the first business day on which all the conditions set forth in
Article VII can be fulfilled or are waived, or at such other place or time as
the parties hereto may agree. The date upon which the Closing occurs is herein
called the "Closing Date".
Section 1.6: Sale of Santa Anita Shares to MAC. Realty and Operating will
notify Meditrust at least seven days in advance of the record dates for the
Realty and Operating shareholder meetings provided for in Section 6.4.2. Prior
to such record dates, MAC shall purchase from Realty and Operating newly
issued, fully paid and nonassessable Santa Anita Shares at a purchase price of
$31.00 per Santa Anita Share (the "Acquired Shares"). With respect to any such
purchase, MAC shall for all purposes be deemed to have become the holder of
record of the number of Santa Anita Shares to be purchased immediately upon
delivery to Realty and Operating of written notice from MAC of its intention to
make such purchase and payment of the aggregate purchase price as provided in
clause (ii) below and delivery of the certificate in clause (iii) below. The
Santa Anita Share Certificates issued pursuant to this Section 1.6 shall have
impressed on, printed on, written on or otherwise attached to them the legend
set forth in Section 3(c) of the Rights Agreement and MAC shall have all the
rights to which a holder of Rights as of the Rights Record Date (as defined in
the Rights Agreement) is entitled. The number of Acquired Shares shall equal
such number of Santa Anita Shares that will result, immediately after the
issuance and sale of the Acquired Shares and after taking into account any
Santa Anita Shares purchased by Meditrust and MAC in the open market, in (a)
Meditrust and/or MAC owning, after application of the Constructive Ownership
Rules (as defined in the certificate described in clause (iii) below), 9.8% of
the outstanding Santa Anita Shares and (b) no other person owning, after
application of such Constructive Ownership Rules, in excess of 9.8% of the
outstanding Santa Anita Shares. To consummate the purchase of the Acquired
Shares and as a condition to their issuance, (i) Realty and Operating will have
delivered to MAC certificates representing the Acquired Shares, (ii) MAC will
have paid to Realty and Operating the aggregate purchase price for the Acquired
Shares in immediately available funds, (iii) MAC shall have delivered to Realty
and Operating a certificate in the form attached hereto as Annex B, (iv) the
Acquired Shares will have been approved for listing on the Exchange upon
official notice of issuance, and (v) O'Melveny & Myers LLP will have delivered
to MAC an opinion to the effect that the Acquired Shares have been duly
authorized by all necessary corporate action on the part of the issuer and that
the Acquired Shares are validly issued, fully paid and nonassessable. In the
event that this Agreement is terminated pursuant to Article VIII, MAC shall be
entitled to the benefit of the registration rights set forth in Annex D hereto
with respect to the Acquired Shares.
Section 1.7: Sale of Santa Anita Shares to Designee of Meditrust. Prior to
the record date for the Realty and Operating shareholder meetings provided for
in Section 6.4.2, Meditrust may designate MAC and/or one or more Unaffiliated
Persons who may, prior to such record date, purchase from Realty and Operating
newly issued, fully paid and nonassessable Santa Anita Shares at a purchase
price of $31.00 per Santa Anita Share (the "Unaffiliated Acquired Shares").
With respect to any such purchase, MAC and/or the designated Unaffiliated
Person or Unaffiliated Persons shall for all purposes be deemed to have become
the holder or holders of record of the number of Santa Anita Shares to be
purchased immediately upon delivery to Realty and Operating of written notice
from Meditrust of such purchaser's or purchasers' intention to make such
purchase and payment of the aggregate purchase price as provided in clause (ii)
below and delivery of the certificate in clause (iii) below. The Santa Anita
Share Certificates issued pursuant to this Section 1.7 shall have impressed on,
printed on, written on or otherwise attached to them the legend set forth in
Section 3(c) of the Rights Agreement and the holder or holders of such shares
shall have all the rights to which a holder of Rights as of the Rights Record
Date (as defined in the Rights Agreement) is entitled. The aggregate number of
Unaffiliated Acquired Shares which may be purchased pursuant to this Section
1.7 is up to (a) 19.6% of the issued and outstanding Santa Anita Shares
immediately prior to the issuance and sale of the Acquired Shares to MAC
pursuant to Section 1.6 less (b) the number of Acquired Shares to be issued to
MAC pursuant to Section 1.6; provided, however, that no person, as a result of
the issuance and sale of the Unaffiliated Acquired Shares, shall own, after
application of the Constructive Ownership Rules, in excess of 9.8% of the
outstanding Santa Anita Shares. To consummate the purchase of the Unaffiliated
Acquired Shares and as a condition to their issuance, (i) Realty and Operating
will have delivered to the purchasers certificates representing the
Unaffiliated
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Acquired Shares, (ii) such purchasers will have paid to Realty and Operating
the purchase price for the Unaffiliated Acquired Shares in immediately
available funds, (iii) such purchasers will have delivered to Realty and
Operating a certificate in the form attached hereto as Annex B if such
purchaser is MAC or in the form attached hereto as Annex C if such purchaser is
an Unaffiliated Purchaser, (iv) the Unaffiliated Acquired Shares will have been
approved for listing on the Exchange upon official notice of issuance, and (v)
O'Melveny & Myers LLP will have delivered to such purchasers an opinion to the
effect that such Unaffiliated Acquired Shares have been duly authorized by all
necessary corporate action on the part of the issuer and that such Acquired
Shares are validly issued, fully paid and nonassessable. In the event that this
Agreement is terminated pursuant to Article VIII or upon the effectiveness of
the Mergers, such purchasers who are Unaffiliated Persons shall be entitled to
the benefit of the registration rights set forth in Annex D hereto with respect
to the Unaffiliated Acquired Shares. In the event that this Agreement is
terminated pursuant to Article VIII and such purchaser is MAC, MAC shall be
entitled to the benefit of the registration rights set forth in Annex D hereto
with respect to the Unaffiliated Acquired Shares.
Section 1.8: Assurance by Meditrust. At the option of the Realty Board and
the Operating Board, subject to and concurrent with the consummation of the
Mergers, Meditrust and MAC will ensure that Realty and Operating have available
in the aggregate up to $100,000,000 in cash in immediately available funds, in
the ratio of $98,900,000 for Realty and $1,100,000 for Operating, to fund a
cash election effective immediately after consummation of the Mergers by the
holders of Santa Anita Shares outstanding prior to the Mergers at $31.00 per
Santa Anita Share; provided that the sum of any amounts provided by Meditrust
and MAC shall be reduced by the purchase price paid (i) by MAC for the Acquired
Shares pursuant to Section 1.6, (ii) by MAC for the Unaffiliated Acquired
Shares pursuant to Section 1.7 and (iii) by Unaffiliated Purchasers for the
Unaffiliated Acquired Shares pursuant to Section 1.7; provided further that in
no event shall the sum of any such amounts provided by Meditrust and MAC be
reduced by an amount in excess of $31.00 multiplied by such number that would
represent the number of Acquired Shares that would be required to be purchased
by MAC pursuant to Section 1.6 if immediately prior to such purchase MAC owned,
pursuant to the Constructive Ownership Rules, no Santa Anita Shares. Such funds
shall be provided to Realty and Operating after the delivery by Operating to
Realty of the promissory note referred to in Section 1.1.2 and immediately
after the consummation of the Mergers.
ARTICLE II
CERTIFICATE OF INCORPORATION AND BY-LAWS; CORPORATE NAME
Section 2.1: Realty Certificate of Incorporation. At the Effective Time, the
Certificate of Incorporation of Realty shall be amended to reflect that (i) the
name of Realty Surviving Corporation shall be Meditrust Corporation, and (ii)
the Fourth Article shall be as set forth in Annex E hereto, and as so amended,
will be the certificate of incorporation of Realty Surviving Corporation, until
duly amended in accordance with the terms thereof and the DGCL.
Section 2.2: Realty By-laws. The By-laws of Realty will be the By-laws of the
Realty Surviving Corporation, until duly amended in accordance with the terms
thereof, the Realty Certificate and the DGCL.
Section 2.3: Operating Certificate of Incorporation. At the Effective Time,
the Certificate of Incorporation of Operating shall be amended to reflect that
(i) the name of Operating Surviving Corporation shall be Meditrust Operating
Company, and (ii) the Fourth Article shall be as set forth in Annex F hereto,
and as so amended, will be the certificate of incorporation of the Operating
Surviving Corporation, until duly amended in accordance with the terms thereof
and the DGCL.
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Section 2.4: Operating By-laws. The By-laws of Operating, as in effect at the
Effective Time, will be the By-laws of Operating Surviving Corporation, until
duly amended in accordance with the terms thereof, the Operating Certificate
and the DGCL.
ARTICLE III
DIRECTORS AND OFFICERS
Section 3.1: Realty Directors. Immediately after the Effective Time, the
Board of Directors of Realty Surviving Corporation will consist of up to 12
directors and will be comprised of up to 10 individuals to be designated by
Meditrust and two current members of the Realty or Operating Board to be
designated by Meditrust after consultation with Realty. The designation of such
directors will occur prior to the initial filing of the Registration Statement
with the SEC. The new directors of Realty Surviving Corporation will be
appointed to different classes as designated by the Meditrust Board, and they
will commence to serve at the Effective Time and will remain directors until
their successors have been duly elected and qualified.
Section 3.2: Operating Directors. Immediately after the Effective Time, the
Board of Directors of Operating Surviving Corporation will consist of up to 12
directors and will be comprised of up to 10 individuals to be designated by
Meditrust and two current members of the Operating or Realty Board to be
designated by Meditrust after consultation with Operating. The designation of
such directors will occur prior to the initial filing of the Registration
Statement with the SEC. The new directors of Operating Surviving Corporation
will be appointed to different classes as designated by the Meditrust Board,
and they will commence to serve at the Effective Time and will remain directors
until their successors have been duly elected and qualified.
ARTICLE IV
MERGER CONSIDERATION; ASSIGNMENT CONSIDERATION;
CONVERSION OR CANCELLATION OF SHARES IN THE MERGERS
Section 4.1: Realty Merger Consideration; Conversion or Cancellation of
Meditrust Shares. At the Effective Time, by virtue of the Realty Merger and
without any action on the part of the holder of any capital stock of Meditrust,
subject to Sections 4.4 and 4.5, each Meditrust Share issued and outstanding
immediately prior to the Effective Time (other than any Meditrust Share held in
Meditrust's treasury (which shall be cancelled)) will be converted into the
right to receive such number of fully paid and nonassessable Realty Common
Shares as may be calculated in accordance with the Exchange Ratio. Realty
Shares outstanding immediately prior to the Effective Time shall remain
outstanding after the Effective Time and shall not be converted or exchanged in
the Realty Merger, except that any Realty Shares held by MAC may be cancelled
at the option of Operating Surviving Corporation.
Section 4.2: Operating Merger Consideration; Conversion or Cancellation of
MAC Shares. At the Effective Time, by virtue of the Operating Merger and
without any action on the part of the holder of any capital stock of MAC,
subject to Sections 4.4 and 4.5, each MAC Share issued and outstanding
immediately prior to the Effective Time (other than any MAC Share held in MAC's
or Meditrust's treasury (which shall be cancelled)) will be converted into the
right to receive such number of fully paid and nonassessable Operating Shares
as may be calculated in accordance with the Exchange Ratio. Operating Shares
outstanding immediately prior to the Effective Time shall remain outstanding
after the Effective Time and shall not be converted or exchanged in the
Operating Merger, except that any Operating Shares held by MAC shall be
cancelled.
Section 4.3: Exchange Ratio. The number of Realty Common Shares into which
each Meditrust Share will be converted, as provided in Section 4.1, and the
number of Operating Common Shares into which each MAC Share will be converted,
as provided in Section 4.2, will be equal to the number obtained by dividing
(i) $37.25, by (ii) the sum of (x) $31.00 and (y) if the Closing Date occurs
after December 31, 1997, as a result of acquisitions and other business
combinations proposed to be entered into by Meditrust or MAC (and provided that
there are no other conditions to closing within Realty's or Operating's control
or for which they are responsible that have not yet been satisfied), a number
equal to the per share amount of any dividends of
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Meditrust, if any, accrued with respect to periods after such date and prior to
the Closing Date divided by 1.2016 less the per share amount of any dividends
of Realty accrued with respect to periods after such date and prior to the
Closing Date (the "Exchange Ratio").
Section 4.4: Pairing of Realty and Operating Shares. Pursuant to the Pairing
Agreement, each and every Realty Share issued in connection with the Realty
Merger will be paired with an Operating Share issued in connection with the
Operating Merger, with the effect that each Meditrust shareholder will receive
paired shares of common stock of Realty Surviving Corporation and Operating
Surviving Corporation.
Section 4.5: Exchange of Old Certificates for New Certificates.
4.5.1 Effect on Meditrust Shares and MAC Shares.
(a) At the Effective Time, all Meditrust Shares and MAC Shares will
cease to be outstanding, will be cancelled and retired and will cease
to exist, and each holder of an Old Meditrust Certificate will
thereafter cease to have any rights with respect to such Old Meditrust
Certificates, except the right to receive, without interest, upon
exchange of such Old Meditrust Certificates in accordance with this
Section 4.5, the Santa Anita Share Certificates and payments to which
such holder is entitled pursuant to this Article IV. A holder of an Old
Meditrust Certificate shall have no rights as a shareholder of Realty
or Operating until the Old Meditrust Certificate have been exchanged
for Santa Anita Share Certificates and cash as provided herein.
(b) Notwithstanding anything contained in this Agreement to the
contrary, in order for Realty Surviving Corporation to continue to meet
the REIT Requirements, no person or entity shall own, or be deemed to
own by virtue of the attribution provisions of Section 544 (as modified
by Section 856(h)(1)(B)) or Section 318 (as modified by Section
856(d)(5)) of the Code, more than 9.8% of the outstanding Santa Anita
Shares (the "Ownership Limit") at or after the Effective Time.
Therefore, if any holder of Meditrust Shares or MAC Shares would
receive in connection with the Mergers a number of Santa Anita Shares
such that any person or entity would own, or be deemed to own under the
applicable attribution rules of the Code referred to above, Santa Anita
Shares in excess of the Ownership Limit, then such holder shall acquire
no right or interest in such number of Santa Anita Shares which would
cause such person or entity to exceed the Ownership Limit, but such
holder shall, in lieu of receiving those Santa Anita Shares which would
cause the Ownership Limit to be exceeded (the "Limited Shares"), have
the right to be paid by Realty Surviving Corporation an amount in cash
for such Limited Shares equal to the product of the Fair Market Value
(as hereinafter defined) per Limited Share multiplied by the number of
such Limited Shares. "Fair Market Value" shall be equal to the average
closing price of the Santa Anita Shares on the Exchange on the five (5)
trading days immediately preceding the Effective Time.
4.5.2 Appointment of Exchange Agent. From and after the Effective Time
until the end of the six-month period following the Effective Time, the
Surviving Corporations will make available or cause to be made available to
an exchange agent appointed by Meditrust and reasonably acceptable to
Realty and Operating (the "Exchange Agent"), certificates for (a) paired
Realty and Operating Common Shares (the "Santa Anita Share Certificates"),
and (b) cash in amounts sufficient to allow the Exchange Agent to make all
deliveries of Santa Anita Share Certificates and payments that may be
required in exchange for Old Meditrust Certificates pursuant to this
Article IV.
4.5.3 Exchange Procedures. Promptly after the Effective Time, the
Surviving Corporations will cause the Exchange Agent to mail or deliver to
each person who was, at the Effective Time, a holder of record of Meditrust
Shares a form (the terms of which will be mutually agreed upon by the
parties hereto prior to the Effective Time) of letter of transmittal
containing instructions for use in effecting the surrender of the Old
Meditrust Certificates in exchange for Santa Anita Share Certificates and
payments pursuant to this Article IV. Upon surrender to the Exchange Agent
of an Old Meditrust Certificate for cancellation together with such letter
of transmittal, duly executed and completed in accordance with the
instructions thereto, the holder of such Old Meditrust Certificate will be
entitled to receive in exchange therefor a Santa Anita Share Certificate
representing paired shares of the Surviving Corporations, to which such
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holder is entitled pursuant to this Article IV, and the Old Meditrust
Certificate shall be cancelled. No interest will be paid or will accrue on
the amount payable upon surrender of Old Meditrust Certificates. If any
Santa Anita Share Certificate is to be issued in a name other than that in
which the Old Meditrust Certificate surrendered in exchange therefor is
registered, it will be a condition of such exchange that the person
requesting such exchange will pay any transfer or other taxes required by
reason of the issuance of such Santa Anita Share Certificate in a name
other than that of the registered holder of the Old Meditrust Certificate
surrendered, or will establish to the satisfaction of the Surviving
Corporations that any such taxes have been paid or are not applicable. Six
months after the Effective Time, the Surviving Corporations will be
entitled to cause the Exchange Agent to deliver to them any applicable
Santa Anita Share Certificates, or cash (including any interest thereon)
made available to the Exchange Agent that are unclaimed by the former
shareholders of Meditrust and MAC. Any such former shareholders who have
not theretofore exchanged their Old Meditrust Certificates for Santa Anita
Share Certificates and cash pursuant to this Article IV will thereafter be
entitled to look exclusively to the Surviving Corporations and only as
general creditors thereof for the Santa Anita Shares and cash to which they
become entitled upon exchange of their Old Meditrust Certificates pursuant
to this Article IV. Each Surviving Corporation will pay all applicable
charges and expenses, including its applicable share of those of the
Exchange Agent, in connection with the exchange of Santa Anita Share
Certificates and cash as contemplated hereby.
4.5.4 Fractional Shares. No fractional Santa Anita Shares will be issued
in the Reorganization. In lieu of any such fractional shares, each person
who would otherwise have been entitled to a fraction of a Santa Anita Share
upon surrender of an Old Meditrust Certificate pursuant to this Article IV
will be paid an amount in cash (without interest) equal to such holder's
proportionate interest in the net proceeds from the sale or sales in the
open market by the Exchange Agent, on behalf of all such holders, of the
aggregate fractional Santa Anita Shares which would otherwise be issued
pursuant to this Article IV. As soon as practicable following the Effective
Time, the Exchange Agent will determine the excess of (i) the number of
full Santa Anita Shares delivered to the Exchange Agent over (ii) the
aggregate number of full Santa Anita Shares to be distributed in respect of
Meditrust Shares and MAC Shares (such excess being herein called the
"Excess Shares"), and the Exchange Agent, as agent for the former holders
of such shares, will sell the Excess Shares at the prevailing prices on the
open market. The sale of the Excess Shares by the Exchange Agent will be
executed on the Exchange through one or more firms and will be executed in
round lots to the extent practicable. All commissions, transfer taxes and
other out-of-pocket transaction costs, including the expenses and
compensation of the Exchange Agent, incurred in connection with such sale
of Excess Shares, will be deducted from the proceeds from the sale of the
Excess Shares. Until the earlier of six months following the Effective Time
and the date the net proceeds of such sale or sales have been distributed,
the Exchange Agent will hold such proceeds in trust for such former
shareholders. As soon as practicable after the determination of the amount
of cash to be paid in lieu of any fractional interests, the Exchange Agent
will make available in accordance with this Agreement such amounts to such
former shareholders.
4.5.5 Distributions with Respect to Unexchanged Shares. Notwithstanding
any other provisions of this Agreement, as provided in Section 4.5.1, no
holder of an Old Meditrust Certificate shall have rights as a shareholder
of Realty or Operating until such holder has exchanged its Old Meditrust
Certificate for a Santa Anita Share Certificate; therefore, no dividends
will be paid to any person holding an Old Meditrust Certificate until such
Old Meditrust Certificate is surrendered for exchange as provided herein
(it being understood that such dividends will be paid to the Exchange Agent
to be held for distribution upon the exchange for Old Meditrust
Certificates as herein provided). Subject to the effect of applicable laws,
following surrender of any such Old Meditrust Certificate by any holder
thereof, there will be paid to the holder of the Santa Anita Share
Certificate issued in exchange therefor, without interest, (i) at the time
of such surrender, the amount of dividends or other distributions with a
record date after the Effective Time theretofore payable with respect to
the Santa Anita Shares represented thereby and not paid, less the amount of
any withholding taxes which may be required thereon, and (ii) at the
appropriate payment date, the amount of dividends or other distributions
with a record date after the Effective Time but prior to the time of such
surrender and a payment date subsequent to the time of such surrender
payable with respect
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to the Santa Anita Shares represented thereby, less the amount of any
withholding taxes which may be required thereon.
4.5.6 Transfers. At or after the Effective Time, there will be no
transfers on the stock transfer books of either Surviving Corporation of
Meditrust Shares or MAC Shares which were outstanding immediately prior to
the Effective Time.
4.5.7 No Liability. In the event that any Old Meditrust Certificate is
lost, stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming such Old Meditrust Certificate to be lost, stolen or
destroyed and, if required by the Surviving Corporations, the posting by
such person of a bond in such reasonable amount as the Surviving
Corporations may direct as indemnity against any claim that may be made
against it with respect to such Old Meditrust Certificate, the Surviving
Corporations will, in exchange for such lost, stolen or destroyed Old
Meditrust Certificates, issue or cause to be issued the Santa Anita Shares
and pay or cause to be paid the amounts deliverable in respect thereof
pursuant to this Article IV. None of any party hereto, the Exchange Agent
or either Surviving Corporation will be liable to any holder of Meditrust
Shares or MAC Shares for any cash, Santa Anita Shares or other property
from the payment fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
4.5.8 Withholding Rights. The Surviving Corporations will be entitled to
deduct and withhold from the consideration otherwise payable pursuant to
this Agreement to any holder of Meditrust Shares or MAC Shares such amounts
as may be required to be deducted and withheld with respect to the making
of such payment under the Code, or under any provision of state or local
tax law. To the extent that amounts are so withheld and paid over to the
appropriate taxing authority, such withheld amounts will be treated for all
purposes of this Agreement as having been paid to the holder of the
Meditrust Shares in respect of which such deduction and withholding was
made.
4.5.9 Transfer Taxes. Except as provided above, the Surviving
Corporations will pay or cause to be paid any transfer or gains tax
(including, without limitation, any real property gains or transfer tax)
imposed in connection with or as a result of the Mergers, including any
such tax that is imposed on a shareholder of Meditrust.
4.5.10 Stock Options.
(a) As soon as practicable following the date of this Agreement (i)
the Compensation Committee administering the Meditrust 1988 Stock
Option Plan (or the Meditrust Board, if appropriate) shall, in
accordance with its authority to interpret said Plan, determine that
the Mergers provided for in this Agreement constitute the merger of
Meditrust into another entity under Section 13 of said Plan, and (ii)
the Stock Option Committee administering the Meditrust 1992 Equity
Incentive Plan (or the Meditrust Board, if appropriate) shall, in the
exercise of its discretion under Section 11(e) of said Plan, determine
that a change of control of the Company shall occur upon the Mergers
provided for in this Agreement, and Realty shall assume the stock
options granted under said Plans. Pursuant to the Mergers, each
outstanding option to purchase a Meditrust Share will be converted into
an option to purchase from Realty (pursuant to the Realty 1995 Share
Award Plan if the amendment to the 1995 Realty Share Award Plan is
approved by the shareholdes of Realty in connection with the Mergers)
such number of Santa Anita Shares (rounded down to the nearest whole
number) as is equal to the number of Meditrust Shares issuable upon
exercise of such option multiplied by the Exchange Ratio. The
respective Committees (or the Meditrust Board, if appropriate) shall
also provide that such options (to the extent issued prior to August 1,
1997), as converted, are immediately exercisable. The exercise price
per share of each such option, as so converted, will be equal to (x)
the aggregate exercise price for the Meditrust Shares otherwise
purchasable pursuant to such Meditrust option immediately prior to the
Effective Time divided by (y) the number of whole Santa Anita Shares
deemed purchasable from Realty pursuant to such Meditrust option as
determined above (rounded to the nearest whole cent).
(b) Realty shall purchase from Operating (provided that Realty shall
not have the option to acquire at any time more than 9.8% of the
outstanding shares of Operating) or make arrangements with Operating
for simultaneous issuance by Operating of the number of shares of
Operating
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Common Stock to be delivered by Realty in connection with the exercise
of the Meditrust stock options as converted as provided in paragraph
(a) above, so that upon exercise the holder of such an option will
receive Santa Anita Shares as provided in paragraph (a) above.
Operating shall sell to Realty or make arrangements with Realty for
simultaneous issuance by Operating of the number of shares of Operating
Common Shares to be delivered by Realty in connection with the exercise
of Meditrust stock options as converted as provided in paragraph (a)
above so that upon exercise the holder of such an option will receive
Santa Anita shares as provided in paragraph (a) above.
The Realty 1995 Share Award Plan shall be amended as of the Effective
Time (if such amendment is approved by shareholders of Realty in
connection with the Mergers) to provide that each option granted
pursuant thereto shall entitle the holder thereof to receive from
Realty Santa Anita Shares upon exercise of such option and to provide
that the number of Realty Common Shares available for issuance pursuant
thereto shall be 5% of the number of shares of such stock outstanding
at the time of any particular issuance, plus a number of shares equal
to the number of shares with respect to which options granted under the
Meditrust 1988 Stock Option Plan and the Meditrust 1992 Equity
Incentive Plan prior to the Effective Time may be exercised, with
4,000,000 shares being available as incentive stock options. The
Operating 1995 Share Award Plan shall be amended as of the Effective
Time (if such amendment is approved by shareholders of Operating in
connection with the Mergers) to provide that the number of Operating
Common Shares available for issuance pursuant thereto shall be 5% of
the number of shares of such stock outstanding at the time of any
particular issuance, with 4,000,000 shares being available as incentive
stock options. Each such plan shall also be amended to increase the
maximum number of shares with respect to which options may be granted
to an eligible employee during any one-year period so as not to exceed
450,000.
(c) Realty shall assume the obligations under and comply with the
terms of the Meditrust Stock Option Plan and Equity Incentive Plan
(both as modified in accordance with paragraph (a) of this Section
4.5.10) and ensure, to the extent required by and subject to the
provisions of such Plans that the options granted thereunder which
qualified as qualified stock options prior to the Effective Time
continue to qualify as qualified stock options after the Effective
Time. In the case of any option to which Section 421 of the Code
applies by reason of its qualification under any of Sections 422-424 of
the Code, the option price, the number of Santa Anita Shares
purchasable pursuant to such options and the terms and conditions of
exercise of such option shall be determined in order to comply with
Section 424(a) of the Code.
(d) Realty and Operating shall take all corporate action necessary to
reserve for issuance a sufficient number of Realty and Operating Common
Shares for delivery upon exercise of the Meditrust stock options above
assumed by Realty in accordance with this Section 4.5.10. The Surviving
Corporations shall use their reasonable best efforts to have declared
effective as soon as practicable following the Effective Time, a
registration statement on Form S-8 (or any successor or other
appropriate form) with respect to the Santa Anita Shares subject to
such Meditrust stock options and shall use their reasonable best
efforts to maintain the effectiveness of such registration statement or
registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as such
Meditrust stock options remain outstanding. With respect to those
individuals who subsequent to the Mergers will be subject to the
reporting requirements under Section 16(a) of the Exchange Act, where
applicable, the Surviving Corporations shall administer the Stock Plans
assumed pursuant to this Section 4.5.10 in a manner that complies with
Rule 16b-3 promulgated under the Exchange Act to the extent the
applicable Stock Plan complied with such rule prior to the Mergers.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1: Representations and Warranties of Meditrust.
As an inducement to Realty and Operating to enter into this Agreement and to
consummate the transactions contemplated hereby, Meditrust represents and
warrants to Realty and Operating and agrees as follows:
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5.1.1 Organization of Meditrust. Meditrust is a business trust duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts. Meditrust is duly qualified to transact
business and is in good standing in each of the jurisdictions in which the
ownership or leasing of the properties used in its business or the conduct
of its business requires such qualification (each of which is listed in the
Meditrust Disclosure Schedule), other than in such jurisdictions where the
failure to be so qualified and in good standing would not, individually or
in the aggregate, have a Material Adverse Effect on Meditrust. Meditrust
has all requisite power and authority to own or lease and operate its
properties and to carry on its business as now conducted. Meditrust has
delivered to Realty and Operating complete and correct copies of the
Restated Declaration of Trust and By-laws of Meditrust (the "Meditrust
Charter") as amended and in effect on the date hereof. Meditrust has no
subsidiaries other than as set forth in the Meditrust Disclosure Schedule.
5.1.2 Operating Subsidiaries and MAC. The Meditrust Disclosure Schedule
accurately and completely sets forth as to (a) each subsidiary of Meditrust
which is a corporation, its name, the jurisdiction of its incorporation,
the number of shares of its capital stock of each class outstanding and the
number of such outstanding shares owned by Meditrust and its other
subsidiaries and (b) as to each subsidiary of Meditrust which is not a
corporation, its name, the jurisdiction of its organization or formation
and a detailed description of its capital structure which indicates the
direct or indirect interest of Meditrust in such subsidiary. Each of the
subsidiaries of Meditrust and MAC is a trust, corporation, limited
liability company or partnership duly organized, validly existing and in
good standing under the laws of the jurisdiction of its formation and has
all requisite power and authority to own or lease and operate its
properties, and to carry on its business as now conducted. All of the
issued and outstanding shares of capital stock or other equity interests in
each subsidiary of Meditrust are validly issued, fully paid and
nonassessable and owned beneficially by Meditrust, free and clear of any
liens or other encumbrances, and there are no options, warrants or other
rights to acquire, or agreements or commitments pursuant to which any such
subsidiary is obligated to issue, sell, purchase or redeem shares of
capital stock or other equity interests in such subsidiary. Immediately
prior to the Effective Time, all of the issued and outstanding MAC Shares
will be validly issued, fully paid and nonassessable.
5.1.3 Capitalization. As of March 31, 1997, the authorized capital of
Meditrust consists of an unlimited number of shares of beneficial interest
without par value (the "Meditrust Shares"), of which 61,495,104 Meditrust
Shares are validly issued and outstanding and are fully paid and
nonassessable. As of the date of this Agreement, Meditrust has outstanding
options to purchase an aggregate of 893,832 Meditrust Shares (the
"Meditrust Options") pursuant to option plans of Meditrust, and has made
grants pursuant to which it is committed to issue 36,103 Meditrust Shares
under its Meditrust 1992 Equity Incentive Plan (the "Stock Grant Shares").
Except for the Meditrust Options, the Stock Grant Shares and the
convertible debt referred to in the audited balance sheet of Meditrust as
of December 31, 1996 referenced in Section 5.1.6 hereof, as of the date of
this Agreement, there are no options, warrants or other rights to acquire,
or agreements or commitments pursuant to which Meditrust is obligated to
issue, sell, purchase or redeem shares of capital stock of Meditrust.
Immediately prior to the Effective Time, the issued and outstanding capital
of MAC shall be the same as Meditrust.
5.1.4 Authority.
(a) Each of Meditrust and MAC has full power and authority to enter
into this Agreement and, subject to the approval by the shareholders of
Meditrust of the Meditrust Shareholder Matters and of MAC of the MAC
Shareholder Matters, to consummate the transactions contemplated
hereby.
(b) The execution, delivery and performance by each of Meditrust and
MAC of this Agreement and the consummation by each of Meditrust and MAC
of the transactions contemplated hereby have been duly authorized by
all necessary action on the part of Meditrust or MAC, as the case may
be, subject to the approval by the shareholders of Meditrust of the
Meditrust Shareholder Matters and by the shareholders of MAC of the MAC
Shareholder Matters. This Agreement is the legal, valid and binding
agreement of each of Meditrust and MAC, enforceable against Meditrust
and MAC, respectively, in accordance with its terms.
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(c) The execution or delivery by each of Meditrust and MAC of this
Agreement, and consummation of the transactions contemplated hereby or
compliance with or fulfillment of the terms and provisions hereof by
each of Meditrust and MAC, will not (i) conflict with, result in a
breach of the terms, conditions or provisions of, or constitute a
default, an event of default or an event creating rights of
acceleration, termination or cancellation or a loss of rights, or
result in the creation or imposition of any encumbrance upon any of the
assets of Meditrust, MAC or any other subsidiary of Meditrust, under
the Meditrust Charter, the Declaration of Trust or By-Laws of MAC (the
"MAC Charter") or the charter documents of any of the other
subsidiaries of Meditrust, or any other instrument or agreement to
which Meditrust, MAC or any other subsidiary of Meditrust is a party or
any of its properties is subject or by which it is bound or any
statute, other law or regulatory provision affecting it, (ii) require
the approval, consent or authorization of, or the making of any
declaration, filing or registration with, any third party or any
foreign, federal, state or local court, governmental authority or
regulatory body, by or on behalf of Meditrust, MAC or any other
subsidiary of Meditrust, or (iii) adversely affect the qualification of
Meditrust as a REIT, except for (A) the filing of appropriate documents
with the SEC and pursuant to the HSR Act, (B) approval by the
shareholders of Meditrust of the Meditrust Shareholder Matters and by
the shareholders of MAC of the MAC Shareholder Matters, (C) those
matters set forth in the Meditrust Disclosure Schedule, (D) filings
with the Secretary of State of the States of Delaware and Massachusetts
and (E) such conflicts, breaches, defaults, events, creations,
impositions, approvals, consents, declarations, filings or
authorizations which would not reasonably be expected to either (x)
have a Material Adverse Effect on Meditrust or (y) prevent or hinder
the consummation of the transactions contemplated hereby.
(d) At all times since 1985, Meditrust has been and will continue to
be organized and operated in conformity with the REIT Requirements, and
its proposed method of operation, until the Realty Merger occurs, will
enable it to continue to meet the REIT Requirements.
5.1.5 Litigation. Except as disclosed in the Meditrust Disclosure
Schedule or in the Meditrust SEC Documents, there are no actions, suits or
proceedings or court orders or decrees pending, or, to the knowledge of
Meditrust, threatened to which Meditrust, MAC or any subsidiary of
Meditrust is a party or any of their respective properties is subject or by
which any of them is bound before or by any court or governmental agency,
which if determined adversely to the interests of Meditrust, MAC or any
subsidiary of Meditrust, would reasonably be expected to either (x) have a
Material Adverse Effect on Meditrust or (y) prevent or hinder the
consummation of the transactions contemplated hereby.
5.1.6 Financial Statements. Prior to the execution of this Agreement,
Meditrust has delivered to Realty and Operating true and complete copies of
the audited balance sheets of Meditrust as of December 31, 1996, 1995 and
1994, and the related audited statements of operations, shareholders'
equity and cash flows for each of the fiscal years then ended, together
with a true and correct copy of the report on such audited information by
Coopers & Lybrand L.L.P., and all letters from such accountants with
respect to the results of such audits. Except as set forth in the notes
thereto, all such financial statements were prepared in accordance with
GAAP and fairly present the financial condition and results of operations
of Meditrust as of the respective dates thereof and for the respective
periods covered thereby.
5.1.7 Absence of Changes. Except for the execution and delivery of this
Agreement and the transactions to take place pursuant hereto on the Closing
Date, since December 31, 1996, except as disclosed in the Meditrust
Disclosure Schedule, there has not been any material adverse change, or any
event or development which, individually or together with other such
events, could reasonably be expected to result in a Material Adverse Effect
on Meditrust.
5.1.8 No Undisclosed Liabilities. Except as reflected or reserved against
in the balance sheet included in Meditrust's audited financial statements
for the year ended December 31, 1996 or in the notes thereto or as
disclosed in the Meditrust Disclosure Schedule, there are no liabilities
against, relating to or affecting Meditrust, MAC or any subsidiary of
Meditrust or any of their respective assets and properties, known, unknown,
fixed or contingent, other than liabilities incurred in the ordinary course
of business
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consistent with past practice and such other liabilities which in the
aggregate would not reasonably be expected to result in a Material Adverse
Effect on Meditrust.
5.1.9 Meditrust SEC Documents. Meditrust has previously delivered or made
available to Realty and Operating complete and correct copies of all
Meditrust SEC Documents. As of their respective dates, none of the
Meditrust SEC Documents contained any 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. Meditrust has
timely made all filings required under the Securities Act and the Exchange
Act and, as of their respective dates, all such filings complied, in all
material respects, with the requirements of the Securities Act and the
Exchange Act, as applicable.
5.1.10 Certain Matters. Except as disclosed in the Meditrust Disclosure
Schedule, the Meditrust SEC Documents, or in reports of consultants or
title companies delivered to Realty and Operating prior to the date of this
Agreement, there are no structural, mechanical, HVAC, zoning or title
conditions relating to the real property of Meditrust, MAC or any
subsidiary of Meditrust that would reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect on Meditrust.
5.1.11 Environmental Matters. Each of Meditrust, MAC and each subsidiary
of Meditrust has obtained all licenses which are required in respect of its
business, operations, assets and properties under applicable environmental
laws, other than those which the failure to obtain would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect on Meditrust. Each of Meditrust, MAC and each subsidiary of
Meditrust is in compliance with the terms and conditions of all such
licenses and with any applicable environmental law, except those where the
failure to be in compliance would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect on Meditrust.
5.1.12 Compliance with Laws and Orders. Except as disclosed in the
Meditrust Disclosure Schedule, none of Meditrust, MAC or any of the
subsidiaries of Meditrust is in violation of or in default under any law or
order applicable to Meditrust, MAC or any subsidiary of Meditrust or any of
their respective assets and properties, which violation or default would
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect on Meditrust or MAC.
5.1.13 Real Property. (a) As to the real property which is owned by
Meditrust, MAC, or to the best of Meditrust's knowledge, any of the
subsidiaries of Meditrust, such entity has good and marketable title to
such real property, free and clear of any liens or other encumbrances,
except the liens and encumbrances disclosed in the Meditrust Disclosure
Schedule or which would not, individually or in the aggregate, have a
Material Adverse Effect on Meditrust.
(b) As to real property in which any of Meditrust, MAC or any of the
subsidiaries of Meditrust has a leasehold interest, Meditrust has a
valid, binding and enforceable leasehold interest, free and clear of
all liens and encumbrances, except for any liens or encumbrances
disclosed in the Meditrust Disclosure Schedule or which would not,
individually or in the aggregate, have a Material Adverse Effect on
Meditrust.
(c) As to real property which is owned indirectly by Meditrust
through Meditrust's interest in a joint venture, partnership or similar
ownership venture, (i) Meditrust has a good and valid interest in such
joint venture, partnership or other entity, free and clear of all liens
and encumbrances, except for any liens or encumbrances disclosed in the
Meditrust Disclosure Schedule or which would not, individually or in
the aggregate, have a Material Adverse Effect on Meditrust; and (ii) to
the knowledge of Meditrust, such joint venture, partnership or other
entity has good and marketable title to such real property, in the case
of owned real property, or a valid, binding and enforceable leasehold
interest in such real property, in the case of leased real property, in
each case free and clear of all liens and encumbrances, except for any
liens or encumbrances disclosed in the Meditrust Disclosure Schedule or
which would not, individually or in the aggregate, have a Material
Adverse Effect on Meditrust.
5.1.14 Indebtedness. Neither Meditrust, MAC nor any of the subsidiaries
of Meditrust is in default or breach under any indebtedness of Meditrust,
MAC or any of the subsidiaries of Meditrust, except where
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such default or breach, individually or in the aggregate, would not have a
Material Adverse Effect on Meditrust or MAC.
5.1.15 No Finder. Neither Meditrust nor any party acting on behalf of
Meditrust has paid or become obligated to pay any fee or commission to any
broker, finder or intermediary for or on account of the transactions
contemplated by this Agreement other than to Lazard Freres & Co. LLC
pursuant to a letter agreement dated as of February 1, 1997.
5.1.16 Tax Matters.
(a) At all times since the initial public offering of Meditrust,
Meditrust has been and will continue to be organized and operated in
conformity with the REIT Requirements, and its proposed method of
operation will enable it to continue to meet the REIT Requirements.
(b) The execution or delivery by Meditrust of this Agreement and the
consummation by Meditrust of the transactions contemplated hereby or
compliance with or fulfillment of the terms and provisions hereof by
Meditrust, will not adversely affect the qualification of Meditrust as
a REIT, for each taxable year ending on or after the date of this
Agreement.
(c) Each of Meditrust, MAC and each subsidiary of Meditrust has
timely, completely and correctly filed all Federal, state and local tax
returns and reports required to be filed by them, and have timely paid
or made adequate provision for the payment of all taxes, if any,
required to be paid with respect thereto, except where the failure to
file or pay is not reasonably expected to have a Material Adverse
Effect on Meditrust. Except as set forth in the Meditrust Disclosure
Schedule, neither Meditrust, MAC nor any of the subsidiaries of
Meditrust have been audited or examined by the IRS or any state or
local taxing authority and no notice of any such audit has been
received by Meditrust, MAC or any of the subsidiaries of Meditrust, nor
have Meditrust, MAC or any of the subsidiaries of Meditrust extended
any applicable statute of limitations for the assessment or collections
of tax. No liens for taxes exist with respect to any assets or
properties of Meditrust, MAC or any of the subsidiaries of Meditrust,
except for statutory liens for taxes not yet due.
(d) Each of Meditrust, MAC and each subsidiary of Meditrust has
complied with all applicable laws, rules and regulations relating to
the payment and withholding of taxes (including, without limitations,
withholding of taxes pursuant to Sections 1441, 1442, 3121 and 3402 of
the Code or similar provisions under any foreign federal laws or any
state or local laws, domestic or foreign) and has, within the time and
the manner prescribed by law, withheld from and paid over to the proper
governmental authorities all amounts required to be so withheld and
paid over under applicable laws, except where the failure to pay or
withhold is not reasonably expected to have a Material Adverse Effect
on Meditrust.
5.1.17 Benefit Plans.
(a) Each "employee pension benefit plan" (as defined in Section 3(2)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) (hereinafter a "Pension Plan"), "employee welfare benefit
plan" (as defined in Section 3(1) of ERISA) (hereinafter a "Welfare
Plan"), and other plan, arrangement or policy (written or oral)
relating to stock options, stock purchases, compensation, deferred
compensation, severance, fringe benefits or other employee benefits, in
each case maintained or contributed to, or required to be maintained or
contributed to, by Meditrust, MAC or the subsidiaries of Meditrust for
the benefit of any present or former employee, officer or director
(each of the foregoing, a "Benefit Plan") has been administered in all
material respects in accordance with its terms. Each of Meditrust, MAC
and each subsidiary of Meditrust and all their Benefit Plans are in
compliance with the applicable provisions of ERISA, all other
applicable laws and all applicable collective bargaining agreements,
except where the failure to comply would not reasonably be expected to
have a Material Adverse Effect on Meditrust.
(b) None of Meditrust or any Commonly Controlled Entity has incurred
any liability to a Pension Plan under Title IV of ERISA (other than for
contributions or liabilities under Section 412 of the Code not yet due)
or to the Pension Benefit Guaranty Corporation (other than for payment
of premiums not yet due) that, when aggregated with other such
liabilities, would result in a material liability of Meditrust, which
liability has not been fully paid.
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(c) No Commonly Controlled Entity has withdrawn from any
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA) where
such withdrawal has resulted or would result in any material
"withdrawal liability" (within the meaning of Section 4201 of ERISA)
that has not been fully paid.
(d) Each Benefit Plan that is a Welfare Plan may be amended or
terminated at any time after the Effective Time without any material
increase in liability to the Surviving Corporations.
(e) No employee of Meditrust, MAC or any of the subsidiaries of
Meditrust will be entitled to any additional benefits or any
acceleration of the time of payment or vesting of any benefits under
any Benefit Plan as a result of the transactions contemplated by this
Agreement.
(f) Each such Benefit Plan intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from
the IRS that covers the Tax Reform Act of 1986.
Section 5.2: Representations and Warranties of Realty.
As an inducement to Meditrust and MAC to enter into this Agreement and to
consummate the transactions contemplated hereby, Realty represents and warrants
to Meditrust and MAC and agrees as follows:
5.2.1 Organization of Realty. Realty is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware. Realty is duly qualified to transact business and is in good
standing in each of the jurisdictions in which the ownership or leasing of
the properties used in its business or the conduct of its business requires
such qualification (each of which is listed in the Realty Disclosure
Schedule), other than in such jurisdictions where the failure to be so
qualified and in good standing would not, individually or in the aggregate,
have a Material Adverse Effect on Realty. Realty has all requisite
corporate power and authority to own or lease and operate its properties
and to carry on its business as now conducted. Realty has delivered to
Meditrust complete and correct copies of the Certificate of Incorporation
(the "Realty Certificate") and by-laws (the "Realty By-laws") of Realty, in
each case as amended and in effect on the date hereof. Realty has no
subsidiaries, other than Santa Anita Realty LLC, which has not conducted,
and conducts no business.
5.2.2 Capitalization. On the date hereof, the authorized capital of
Realty consists of 6,000,000 shares of preferred stock, $.10 par value (the
"Realty Preferred Shares"), and 19,000,000 shares of common stock, $.10 par
value (the "Realty Common Shares" and together with the Realty Preferred
Shares, the "Realty Shares"), of which 867,343 Realty Preferred Shares and
11,586,925 Realty Common Shares are validly issued and outstanding and are
fully paid and nonassessable and of which none is reserved for any purpose,
except those Realty Shares issuable upon exercise of the Realty Options (as
defined below), the exchange of outstanding Realty Preferred Shares and the
Rights. As of the date of this Agreement, Realty has granted options to
purchase an aggregate of 315,675 Realty Common Shares (the "Realty
Options") pursuant to option plans of Realty. Except for the Realty Options
and the Rights, and except as contemplated by this Agreement or as
disclosed in the Realty Disclosure Schedule, as of the date of this
Agreement, there are no options, warrants or other rights to acquire, or
agreements or commitments pursuant to which Realty is obligated to issue,
sell, purchase or redeem shares of capital stock of Realty. 59,291
restricted Realty Common Shares and options to purchase 470,000 Realty
Common Shares have been issued pursuant to Operating's option plans. No
restricted Santa Anita Shares have been issued pursuant to Realty's 1995
Share Award Plan. The Acquired Shares and the Unaffiliated Acquired Shares
have been duly authorized and, when issued and paid for in accordance with
the terms of this Agreement, will be fully paid and nonassessable Santa
Anita Shares, not subject to any preemptive right.
5.2.3 Authority.
(a) Realty has full corporate power and authority to enter into this
Agreement and, subject to the approval by the shareholders of Realty of
the Realty Shareholder Matters, to consummate the transactions
contemplated hereby.
(b) The execution, delivery and performance by Realty of this
Agreement and the consummation by Realty of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Realty, subject to the approval by the
shareholders of Realty of the Realty Shareholder Matters. This
Agreement is the legal, valid and binding agreement of Realty,
enforceable against Realty in accordance with its terms.
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(c) The execution or delivery by Realty of this Agreement and
consummation of the transactions contemplated hereby or compliance with
or fulfillment of the terms and provisions hereof by Realty, will not
(i) conflict with, result in a breach of the terms, conditions or
provisions of, or constitute a default, an event of default or an event
creating rights of acceleration, termination or cancellation or a loss
of rights, or result in the creation or imposition of any encumbrance
upon any of the assets of Realty, under the Realty Certificate, the
Realty By-laws, the Pairing Agreement dated December 20, 1979 (the
"Pairing Agreement") between Realty and Operating, or any other
instrument or agreement to which Realty is a party or any of its
properties is subject or by which it is bound or any statute, other law
or regulatory provision affecting it, or (ii) require the approval,
consent or authorization of, or the making of any declaration, filing
or registration with, any third party or any foreign, federal, state or
local court, governmental authority or regulatory body, by or on behalf
of Realty, except, in the case of clauses (i) and (ii) above, for (A)
the filing of appropriate documents with the SEC and pursuant to the
HSR Act, (B) approval by the shareholders of Realty of the Realty
Shareholder Matters, (C) those matters set forth in the Realty
Disclosure Schedule, (D) filings with the Secretary of State of the
State of Delaware and (E) such conflicts, breaches, defaults, events,
creations, impositions, approvals, consents, declarations, filings or
authorizations which would not reasonably be expected to either (x)
have a Material Adverse Effect on Realty or (y) prevent or hinder the
consummation of the transactions contemplated hereby.
(d) The Board of Directors of Realty has taken all action to exempt
the transactions contemplated by this Agreement from Section 203 of the
DGCL, the Rights Agreement and Article Ninth of the Realty Certificate.
5.2.4 Litigation. Except as disclosed in the Realty Disclosure Schedule
or in the Santa Anita SEC Documents, there are no actions, suits or
proceedings or court orders, or decrees pending or, to the knowledge of
Realty, threatened to which Realty is a party or any of its properties is
subject or by which it is bound before or by any court or governmental
agency, which if determined adversely to the interests of Realty, would
reasonably be expected to either (x) have a Material Adverse Effect on
Realty or (y) prevent or hinder the consummation of the transactions
contemplated hereby.
5.2.5 Financial Statements. Except as referenced in the Realty Disclosure
Schedule, (i) prior to the execution of this Agreement, Realty has
delivered to Meditrust true and complete copies of the audited balance
sheets of Realty as of December 31, 1996, 1995 and 1994, and the related
audited statements of operations, shareholders' equity and cash flows for
each of the fiscal years then ended, together with a true and correct copy
of the report on such audited information by Kenneth Leventhal & Co (for
the 1994 fiscal year) and Ernst & Young LLP (for the 1995 and 1996 fiscal
years), and all letters from such accountants with respect to the results
of such audits; and (ii) except as set forth in the notes thereto, all such
financial statements were prepared in accordance with GAAP and fairly
present the financial condition and results of operations of Realty as of
the respective dates thereof and for the respective periods covered
thereby.
5.2.6 Absence of Changes. Except for the execution and delivery of this
Agreement and the transactions to take place pursuant hereto on the Closing
Date, since December 31, 1996, except as disclosed in the Realty Disclosure
Schedule, there has not been any material adverse change, or any event or
development which, individually or together with other such events, could
reasonably be expected to result in a Material Adverse Effect on Realty.
5.2.7 No Undisclosed Liabilities. Except as reflected or reserved against
in the balance sheet included in Realty's audited financial statements for
the year ended December 31, 1996 or in the notes thereto or as disclosed in
the Realty Disclosure Schedule, there are no liabilities against, relating
to or affecting Realty or any of its assets and properties, known, unknown,
fixed or contingent, other than liabilities incurred in the ordinary course
of business consistent with past practice and such other liabilities which
in the aggregate would not reasonably be expected to result in a Material
Adverse Effect on Realty.
5.2.8 Santa Anita SEC Documents. Except as referenced in the Realty
Disclosure Schedule, (i) Realty has previously delivered or made available
to Meditrust complete and correct copies of all Santa Anita SEC Documents;
(ii) as of their respective dates, none of the Santa Anita SEC Documents
contained
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any 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; and (iii) Realty has timely made all filings required under
the Securities Act and the Exchange Act and, as of their respective dates,
all such filings complied, in all material respects, with the requirements
of the Securities Act and the Exchange Act, as applicable.
5.2.9 Certain Matters. Except as disclosed in the Realty Disclosure
Schedule, the Santa Anita SEC Documents, or in reports of consultants or
title companies delivered to Meditrust prior to the date of this Agreement,
there are no structural, mechanical, HVAC, zoning or title conditions
relating to Realty's real property that would reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on
Realty.
5.2.10 Environmental Matters. Realty has obtained all licenses which are
required in respect of its business, operations, assets and properties
under applicable environmental laws other than those which the failure to
obtain would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect on Realty. Except as disclosed in the
Realty Disclosure Schedule, Realty is in compliance with the terms and
conditions of all such licenses and with any applicable environmental law,
except those where the failure to be in compliance would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect on Realty.
5.2.11 Compliance with Laws and Orders. Except as disclosed in the Realty
Disclosure Schedule, Realty is not, nor has Realty at any time within the
last five years been, in violation of or in default under any law or order
applicable to Realty or any of its assets and properties, which violation
or default would reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect on Realty.
5.2.12 Real Property.
(a) As to real property which is owned by Realty, Realty has good and
marketable title to such real property, free and clear of any liens or
other encumbrances, except the liens and encumbrances disclosed in the
Realty Disclosure Schedule or which would not, individually or in the
aggregate, have a Material Adverse Effect on Realty.
(b) As to real property in which Realty has a leasehold interest,
Realty has a valid, binding and enforceable leasehold interest, free
and clear of all liens and encumbrances, except for any liens or
encumbrances disclosed in the Realty Disclosure Schedule or which would
not, individually or in the aggregate, have a Material Adverse Effect
on Realty.
(c) As to real property which is owned indirectly by Realty through
Realty's interest in a joint venture, partnership or similar ownership
venture, (i) Realty has a good and valid interest in such joint
venture, partnership or other entity, free and clear of all liens and
encumbrances, except for any liens or encumbrances disclosed in the
Realty Disclosure Schedule or which would not, individually or in the
aggregate, have a Material Adverse Effect on Realty; and (ii), to the
knowledge of Realty, such joint venture, partnership or other entity
has good and marketable title to such real property, in the case of
owned real property, or a valid, binding and enforceable leasehold
interest in such real property, in the case of leased real property,
free and clear of all liens and encumbrances, except for any liens or
encumbrances disclosed in the Realty Disclosure Schedule or which would
not, individually or in the aggregate, have a Material Adverse Effect
on Realty.
5.2.13 Indebtedness. Except as disclosed in the Realty Disclosure
Schedule, Realty is not in default or breach under any indebtedness of
Realty, except where such default or breach, individually or in the
aggregate, would not have a Material Adverse Effect on Realty.
5.2.14 No Finder. Neither Realty nor any party acting on behalf of Realty
has paid or become obligated to pay any fee or commission to any broker,
finder or intermediary for or on account of the transactions contemplated
by this Agreement other than to Morgan Stanley & Co. Incorporated pursuant
to a letter agreement dated August 1, 1996.
5.2.15 Former Agreement. The Amended and Restated Formation Agreement,
dated as of October 24, 1996, as amended as of January 7, 1997, among
Operating, Realty and Colony Investors II, L.P. ("Colony") has been
terminated in accordance with its terms and Realty and Operating have no
liabilities
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or obligations, contingent or otherwise, under or arising out of such
agreement or the transactions contemplated thereby, except for obligations
under the confidentiality provisions of such agreement, certain
registration rights, certain limited rights of indemnification and as
disclosed in the Realty Disclosure Schedule.
5.2.16 Tax Matters.
(a) At all times since January 1, 1980, Realty has been and will
continue to be organized and operated in conformity with the REIT
Requirements, and its proposed method of operation will enable it to
continue to meet the REIT Requirements and to otherwise preserve the
federal income tax status of its paired share status. The Pairing
Agreement was duly and validly authorized and is a valid and binding
agreement, enforceable against Realty in accordance with its terms. The
Realty Shares are paired with the Operating Shares pursuant to the
Pairing Agreement and such pairing is grandfathered from the
application of Section 269B(a)(3) of the Code pursuant to Section
136(c)(3) of the Deficit Reduction Act of 1984.
(b) The execution or delivery by Realty of this Agreement and the
consummation by Realty of the transactions contemplated hereby or
compliance with or fulfillment of the terms and provisions hereof by
Realty, will not (i) conflict with the private letter rulings issued by
the IRS to Realty dated October 16, 1979 and January 11, 1980 (the
"Private Letter Rulings") or (ii) adversely affect the qualification of
Realty as a REIT, for each taxable year ending on or after the date of
this Agreement or adversely affect the ability of Realty to retain its
status as grandfathered from the application of Section 269B(a)(3) of
the Code pursuant to Section 136(c)(3) of the Deficit Reduction Act of
1984.
(c) Since January 1, 1980, Realty and Operating have operated
consistent with the Private Letter Rulings and the IRS has not revoked
or threatened to revoke the Private Letter Rulings.
(d) Except as disclosed in the Realty Disclosure Schedule, Realty has
timely, completely and correctly filed all Federal, state and local tax
returns and reports required to be filed by them, and has timely, paid
or made adequate provision for the payment of all taxes, if any,
required to be paid with respect thereto, except where the failure to
file or pay is not reasonably expected to have a Material Adverse
Effect on Realty. Except as set forth in the Realty Disclosure
Schedule, neither Realty nor any of its subsidiaries have been audited
or examined by the IRS or any state or local taxing authority and no
notice of any such audit has been received by Realty, nor has Realty
extended any applicable statute of limitations for the assessment or
collections of tax. Except as disclosed in the Realty Disclosure
Schedule, no liens for taxes exist with respect to any assets or
properties of Realty or any of its subsidiaries, except for statutory
liens for taxes not yet due.
(e) Realty has complied with all applicable laws, rules and
regulations relating to the payment and withholding of taxes (including
without limitations, withholding of taxes pursuant to Sections 1441,
1442, 3121 and 3402 of the Code or similar provisions under any foreign
federal laws or any state or local laws, domestic or foreign) and has,
within the time and the manner prescribed by law, withheld from and
paid over to the proper governmental authorities all amounts required
to be so withheld and paid over under applicable laws, except where the
failure to pay or withhold is not reasonably expected to have a
Material Adverse Effect on Realty.
5.2.17 Benefit Plans.
(a) Each Pension Plan, Welfare Plan and other plan, arrangement or
policy (written or oral) relating to stock options, stock purchases,
compensation, deferred compensation, severance, fringe benefits or
other employee benefits, in each case maintained or contributed to, or
required to be maintained or contributed to, by Realty for the benefit
of any present or former employee, officer or director (each of the
foregoing, a "Benefit Plan") has been administered in all material
respects in accordance with its terms. Realty and all their Benefit
Plans are in compliance with the applicable provisions of ERISA, all
other applicable laws and all applicable collective bargaining
agreements, except where the failure to comply would not reasonably be
expected to have a Material Adverse Effect on Realty.
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(b) None of Realty or any Commonly Controlled Entity has incurred any
liability to a Pension Plan under Title IV of ERISA (other than for
contributions or liabilities under Section 412 of the Code not yet due)
or to the Pension Benefit Guaranty Corporation (other than for payment
of premiums not yet due) that, when aggregated with other such
liabilities, would result in a material liability of Realty, which
liability has not been fully paid.
(c) No Commonly Controlled Entity has withdrawn from any
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA) where
such withdrawal has resulted or would result in any material
"withdrawal liability" (within the meaning of Section 4201 of ERISA)
that has not been fully paid.
(d) Each Benefit Plan that is a Welfare Plan may be amended or
terminated at any time after the Effective Time without any material
increase in liability to the Surviving Corporations.
(e) Except as set forth in the Realty Disclosure Schedule, no
employee of Realty or any of its subsidiaries will be entitled to any
additional benefits or any acceleration of the time of payment or
vesting of any benefits under any Benefit Plan as a result of the
transactions contemplated by this Agreement.
(f) Each such Benefit Plan intended to qualify under Section 401(a)
of the Code has received a favorable determination letter from the IRS
that covers the Tax Reform Act of 1986.
5.2.18 Hahn Agreement. Realty has entered into a Memorandum of Agreement,
dated as of January 27, 1997 (the "Memorandum"), with TrizecHahn Centers,
Inc. ("Hahn"), pursuant to which Realty and Hahn have agreed (i) to
cooperate to obtain the agreement of The Mitsubishi Bank, Limited to
release Realty from the Santa Anita Repayment Guaranty (as defined in the
Memorandum) and (iii) that Hahn will, subject to the full and faithful
performance by Realty of its obligations under the Memorandum, defend,
indemnify and hold Realty harmless from and against any and all claims,
demands, damages, losses, liabilities, costs and expenses, including
reasonable attorneys' and consultant fees, arising out of or in connection
with any liability under the Santa Anita Repayment Guaranty). To the
knowledge of Realty, Hahn has a net worth in excess of $500 million.
Section 5.3 Representations and Warranties of Operating.
As an inducement to Meditrust and MAC to enter into this Agreement and to
consummate the transactions contemplated hereby, Operating represents and
warrants to Meditrust and MAC and agrees as follows:
5.3.1 Organization of Operating. Operating is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Delaware. Operating and its subsidiaries are each duly qualified
to transact business and are each in good standing in each of the
jurisdictions in which the ownership or leasing of the properties used in
its business or the conduct of its business requires such qualification
(each of which is listed in the Operating Disclosure Schedule), other than
in such jurisdictions where the failure to be so qualified and in good
standing would not, individually or in the aggregate, have a Material
Adverse Effect on Operating. Operating has all requisite corporate power
and authority to own or lease and operate its properties and to carry on
its business as now conducted. Operating has delivered to Meditrust
complete and correct copies of the Certificate of Incorporation (the
"Operating Certificate") and by-laws (the "Operating By-laws") of
Operating, in each case as amended and in effect on the date hereof.
5.3.2 Operating Subsidiaries. The Operating Disclosure Schedule
accurately and completely sets forth as to (a) each subsidiary of Operating
which is a corporation, its name, the jurisdiction of its incorporation,
the number of shares of its capital stock of each class outstanding and the
number of such outstanding shares owned by Operating and its other
subsidiaries and (b) as to each subsidiary of Operating which is not a
corporation, its name, the jurisdiction of its organization or formation
and a detailed description of its capital structure which indicates the
direct or indirect interest of Operating in such subsidiary. Each
subsidiary of Operating is a trust, corporation, limited liability company
or partnership duly organized, validly existing and in good standing under
the laws of the jurisdiction of its formation and has all requisite power
and authority to own or lease and operate its properties, and to carry on
its business as now conducted. All of the issued and outstanding shares of
capital stock or other equity interests in each subsidiary of Operating are
validly issued, fully paid and nonassessable and owned
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beneficially by Operating, free and clear of any liens or other
encumbrances, and there are no options, warrants or other rights to
acquire, or agreements or commitments pursuant to which any such subsidiary
is obligated to issue, sell, purchase or redeem shares of capital stock or
other equity interests in such subsidiary.
5.3.3 Capitalization. On the date hereof, the authorized capital of
Operating consists of 6,000,000 shares of preferred stock, $.10 par value
(the "Operating Preferred Shares"), and 19,000,000 shares of common stock,
$.10 par value (the "Operating Common Shares" and together with the
Operating Preferred Shares, the "Operating Shares"), of which 867,343
Operating Preferred Shares and 11,496,225 Operating Common Shares are
validly issued and outstanding and are fully paid and nonassessable and of
which none is reserved for any purpose, except those Operating Shares
issuable upon exercise of the Operating Options (as hereinafter defined),
the exchange of outstanding Operating Preferred Shares and the Rights.
Operating has granted options to purchase an aggregate of 470,000 Operating
Common Shares (the "Operating Options") pursuant to option plans of
Operating. Except for the Operating Options, and except as contemplated by
this Agreement or as disclosed in the Operating Disclosure Schedule, there
are no options, warrants or other rights to acquire, or agreements or
commitments pursuant to which Operating is obligated to issue, sell,
purchase or redeem shares of capital stock of Operating. 59,291 restricted
Operating Common Shares have been issued pursuant to Operating's 1995 Share
Award Plan. The Acquired Shares and the Unaffiliated Acquired Shares have
been duly authorized and when issued and paid for in accordance with the
terms of this Agreement, will be fully paid and nonassessable Santa Anita
Shares, not subject to any preemptive right.
5.3.4 Authority.
(a) Operating has full corporate power and authority to enter into
this Agreement and, subject to the approval by the shareholders of
Operating of the Operating Shareholder Matters, to consummate the
transactions contemplated hereby.
(b) The execution, delivery and performance by Operating of this
Agreement and the consummation by Operating of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Operating, subject to the approval by
the shareholders of Operating of the Operating Shareholder Matters.
This Agreement is the legal, valid and binding agreement of Operating,
enforceable against Operating in accordance with its respective terms.
(c) The execution or delivery by Operating of this Agreement and
consummation of the transactions contemplated hereby or compliance with
or fulfillment of the terms and provisions hereof by Operating, will
not (i) conflict with, result in a breach of the terms, conditions or
provisions of, or constitute a default, an event of default or an event
creating rights of acceleration, termination or cancellation or a loss
of rights, or result in the creation or imposition of any encumbrance
upon any of the assets of Operating or any of its subsidiaries, under
the Operating Certificate, the Operating By-laws, the organizational
documents of any subsidiary of Operating, the Pairing Agreement or any
other instrument or agreement to which Operating or any of its
subsidiaries is a party or any of their respective properties is
subject or by which any of them is bound or any statute, other law or
regulatory provision affecting any of them, or (ii) require the
approval, consent or authorization of, or the making of any
declaration, filing or registration with, any third party or any
foreign, federal, state or local court, governmental authority or
regulatory body, by or on behalf of Operating or any of its
subsidiaries, except for (A) the filing of appropriate documents with
the SEC and pursuant to the HSR Act, (B) approval by the shareholders
of Operating of the Operating Shareholder Matters, (C) those matters
set forth in the Operating Disclosure Schedule, (D) filings with the
Secretary of State of Delaware and (E) such conflicts, breaches,
defaults, events, creations, impositions, approvals, consents,
declarations, filings or authorizations, which would not reasonably be
expected to either (x) have a Material Adverse Effect on Operating or
(y) prevent or hinder the consummation of the transactions contemplated
hereby.
(d) The Pairing Agreement is duly and validly authorized and is a
valid and binding agreement, enforceable against Operating in
accordance with its terms. The Operating Shares are paired with the
Realty Shares pursuant to the Pairing Agreement and Section 136(c)(3)
of the Deficit Reduction Act
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of 1984; such pairing does not cause the activities of Operating to be
attributed to Realty as provided in Section 269B(a)(3) of the Code.
(e) The Board of Directors of Operating has taken all action to
exempt the transactions contemplated by this Agreement from Section 203
of the DGCL, the Rights Agreement and Article Ninth of the Operating
Certificate.
5.3.5 Litigation. Except as disclosed in the Operating Disclosure
Schedule or in the Santa Anita SEC Documents, there are no actions, suits
or proceedings or court orders or decrees pending, or, to the knowledge of
Operating, threatened to which Operating or its subsidiaries is a party or
any of its properties is subject or by which it is bound before or by any
court or governmental agency, which if determined adversely to the
interests of Operating or its subsidiaries, would reasonably be expected to
either (x) have a Material Adverse Effect on Operating or (y) prevent or
hinder the consummation of the transactions contemplated hereby.
5.3.6 Financial Statements. Prior to the execution of this Agreement,
Operating has delivered to Meditrust true and complete copies of the
audited consolidated balance sheets of Operating and its subsidiaries as of
December 31, 1996, 1995 and 1994, and the related audited consolidated
statements of operations, shareholders' equity and cash flows for each of
the fiscal years then ended, together with a true and correct copy of the
report on such audited information by Kenneth Leventhal & Co. (for the 1994
fiscal year) and Ernst & Young LLP (for the 1995 and 1996 fiscal years),
and all letters from such accountants with respect to the results of such
audits. Except as set forth in the notes thereto, all such financial
statements were prepared in accordance with GAAP and fairly present the
consolidated financial condition and results of operations of Operating and
its consolidated subsidiaries as of the respective dates thereof and for
the respective periods covered thereby.
5.3.7 Absence of Changes. Except for the execution and delivery of this
Agreement and the transactions to take place pursuant hereto on the Closing
Date, and except as disclosed in the Operating Disclosure Schedule, since
December 31, 1996, there has not been any material adverse change, or any
event or development which, individually or together with other such
events, could reasonably be expected to result in a Material Adverse Effect
on Operating.
5.3.8 No Undisclosed Liabilities. Except as reflected or reserved against
in the consolidated balance sheet included in Operating's audited financial
statements for the year ended December 31, 1996 or in the notes thereto or
as disclosed in the Operating Disclosure Schedule, there are no liabilities
against, relating to or affecting Operating or any of its subsidiaries or
any of its assets and properties, known, unknown, fixed or contingent,
other than liabilities incurred in the ordinary course of business
consistent with past practice and such other liabilities which in the
aggregate would not reasonably be expected to result in a Material Adverse
Effect on Operating.
5.3.9 Santa Anita SEC Documents. Except as referenced in the Operating
Disclosure Schedule, (i) Operating has previously delivered or made
available to Meditrust complete and correct copies of the Santa Anita SEC
Documents; (ii) as of their respective dates, none of the Santa Anita SEC
Documents contained any 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; and (iii) Operating has timely made
all filings required under the Securities Act and the Exchange Act and, as
of their respective dates, all such filings complied, in all material
respects, with the requirements of the Securities Act and the Exchange Act,
as applicable.
5.3.10 Certain Matters. Except as disclosed in the Santa Anita SEC
Documents, the Operating Disclosure Schedule or in reports of consultants
or title companies delivered to Meditrust prior to the date of this
Agreement, there are no structural, mechanical, HVAC, zoning or title
conditions relating to real property of Operating or any of its
subsidiaries would reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect on Operating.
5.3.11 Environmental Matters. Each of Operating and its subsidiaries has
obtained all licenses which are required in respect of its business,
operations, assets and properties under applicable environmental laws other
than those which the failure to obtain would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on
Operating. Except as disclosed in
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the Operating Disclosure Schedule, each of Operating and its subsidiaries
is in compliance with the terms and conditions of all such licenses and
with any applicable environmental law, except those where the failure to be
in compliance would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect on Operating.
5.3.12 Compliance with Laws and Orders. Except as disclosed in the
Operating Disclosure Schedule, none of Operating and its subsidiaries is,
nor has any of Operating and its subsidiaries at any time within the last
five years been, in violation of or in default under any law or order
including, without limitation, the California Horse Racing Board applicable
to Operating and its subsidiaries or any of their assets and properties,
which violations or default would reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect on Operating.
5.3.13 Real Property
(a) As to real property which is owned to the best of its knowledge,
by Operating or by any of its subsidiaries, good and marketable title
to the real property, free and clear of any liens or other
encumbrances, except the liens and encumbrances disclosed in the
Operating Disclosure Schedule or which would not individually or in the
aggregate, have a Material Adverse Effect on Operating.
(b) As to real property in which Operating or any of its subsidiaries
has a leasehold interest, Operating or such subsidiary has a valid,
binding and enforceable leasehold interest, free and clear of any liens
or other encumbrances except the liens and encumbrances disclosed in
the Operating Disclosure Schedule or which would not, individually or
in the aggregate, have a Material Adverse Effect on Operating.
(c) As to real property which is owned indirectly by Operating or any
of its subsidiaries, through Operating's or any of its subsidiaries'
interest in a joint venture, partnership or similar ownership venture,
(i) Operating or its subsidiaries, as the case may be, has a good and
valid interest in such joint venture, partnership or other entity free
and clear of any liens or other encumbrances; and (ii), to the
knowledge of Operating such joint venture, partnership or other entity
has good and marketable title to such real property, in the case of
owned real property, or a valid, binding and enforceable leasehold
interest in such real property, in the case of leased real property,
free and clear of any liens or other encumbrances, except the liens and
encumbrances disclosed in the Operating Disclosure Schedule or which
would not, individually or in the aggregate, have a Material Adverse
Effect on Operating.
5.3.14 Indebtedness. Neither Operating nor any of its subsidiaries is in
default or breach under any indebtedness of Operating or any of its
subsidiaries, except where such default or breach, individually or in the
aggregate, would not have a Material Adverse Effect on Operating.
5.3.15 No Finder. Neither Operating nor any party acting on behalf of
Operating has paid or become obligated to pay any fee or commission to any
broker, finder or intermediary for or on account of the transactions
contemplated by this Agreement, other than to Morgan Stanley & Co.
Incorporated pursuant to a letter agreement dated August 1, 1996.
5.3.16 Former Agreement. The Amended and Restated Formation Agreement,
dated as of October 24, 1996, as amended as of January 7, 1997, among
Operating, Realty and Colony has been terminated in accordance with its
terms and Realty and Operating have no liabilities or obligations,
contingent or otherwise, under or arising out of such agreement or the
transactions contemplated thereby, except for obligations under the
confidentiality provisions of such agreement, certain registration rights,
certain limited rights of indemnification and as disclosed in the Operating
Disclosure Schedule.
5.3.17 Tax Matters.
(a) Operating and its subsidiaries have timely, completely and
correctly filed all Federal, state and local tax returns and reports
required to be filed by them, and have timely paid or made adequate
provision for the payment of all taxes, if any, required to be paid
with respect thereto, except where the failure to file or pay is not
reasonably expected to have a Material Adverse Effect on Operating.
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Except as set forth in the Operating Disclosure Schedule, neither
Operating nor any of its subsidiaries have been audited or examined by
the IRS or any state or local taxing authority and no notice of any
such audit has been received by Operating or any of its subsidiaries,
nor have Operating or any of its subsidiaries extended any applicable
statute of limitations for the assessment or collections of tax. No
liens for taxes exist with respect to any assets or properties of
Operating or any of its subsidiaries, except for statutory liens for
taxes not yet due.
(b) Operating and each of its subsidiaries has complied with all
applicable laws, rules and regulations relating to the payment and
withholding of taxes (including, without limitations, withholding of
taxes pursuant to Sections 1441, 1442, 3121 and 3402 of the Code or
similar provisions under any foreign federal laws or any state or local
laws, domestic or foreign) and has, within the time and the manner
prescribed by law, withheld from and paid over to the proper
governmental authorities all amounts required to be so withheld and
paid over under applicable laws, except where the failure to pay or
withhold is not reasonably expected to have a Material Adverse Effect
on Operating.
5.3.18 Benefit Plans.
(a) Each Pension Plan, Welfare Plan and other plan, arrangement or
policy (written or oral) relating to stock options, stock purchases,
compensation, deferred compensation, severance, fringe benefits or
other employee benefits, in each case maintained or contributed to, or
required to be maintained or contributed to, by Operating or its
subsidiaries for the benefit of any present or former employee, officer
or director (each of the foregoing, a "Benefit Plan") has been
administered in all material respects in accordance with its terms.
Operating and its subsidiaries and all their Benefit Plans are in
compliance with the applicable provisions of ERISA, all other
applicable laws and all applicable collective bargaining agreements,
except where the failure to comply would not reasonably be expected to
have a Material Adverse Effect on Operating.
(b) None of Operating or any Commonly Controlled Entity has incurred
any liability to a Pension Plan under Title IV of ERISA (other than for
contributions or liabilities under Section 412 of the Code not yet due)
or to the Pension Benefit Guaranty Corporation (other than for payment
of premiums not yet due) that, when aggregated with other such
liabilities, would result in a material liability of Operating, which
liability has not been fully paid.
(c) No Commonly Controlled Entity has withdrawn from any
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA) where
such withdrawal has resulted or would result in any material
"withdrawal liability" (within the meaning of Section 4201 of ERISA)
that has not been fully paid.
(d) Each Benefit Plan that is a Welfare Plan may be amended or
terminated at any time after the Effective Time without any material
increase in liability to the Surviving Corporations.
(e) Except as set forth in the Operating Disclosure Schedule, no
employee of Operating or any of its subsidiaries will be entitled to
any additional benefits or any acceleration of the time of payment or
vesting of any benefits under any Benefit Plan as a result of the
transactions contemplated by this Agreement.
(f) Each such Benefit Plan intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from
the IRS that covers the Tax Reform Act of 1986.
ARTICLE VI
COVENANTS
Section 6.1: Conduct Pending the Closing. Each of Meditrust, MAC, Realty and
Operating covenants and agrees as to itself and its subsidiaries that, from and
after the date hereof until the Effective Time, except insofar as the other
party shall otherwise consent or except as otherwise contemplated by this
Agreement or its Disclosure Schedule:
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6.1.1 Taking into account any operational matters that may arise that are
primarily attributable to the pendency of the Reorganization, it will use
reasonable best efforts such that the business of it and its subsidiaries
will be conducted only in the ordinary and usual course consistent with
past practice and existing business plans and, to the extent consistent
therewith, it and its subsidiaries will use all reasonable efforts to
preserve their business organization intact and maintain their existing
relations with customers, suppliers, employees and business associates.
6.1.2 Neither Realty, MAC nor Meditrust shall take any action or omit to
take any action that would cause Realty, MAC or Meditrust to be
disqualified as a REIT or which would result in a loss of Realty's status
as grandfathered from the application of Section 269B(a)(3) of the Code
pursuant to Section 136(c)(3) of the Deficit Reduction Act of 1984 or other
failure to meet the REIT Requirements.
6.1.3 Neither Realty nor Operating shall, and Operating shall cause the
subsidiaries it controls not to, without the prior written consent of
Meditrust, which shall not be unreasonably withheld,
(a) voluntarily sell, transfer or dispose of any real property of
Realty or of Operating;
(b) incur any debt or lease obligations or purchase money financing
obligations, other than, in each case, in the ordinary course of
business consistent with past practice (for example, trade payables);
(c) acquire any additional real estate or other assets (other than
receipt of cash or investments of cash in cash-equivalents in
connection with permitted sales of assets);
(d) adopt or propose any change in their respective certificates of
incorporation or any material change in their respective bylaws;
(e) subject to the provisions of Section 6.2, adopt, or permit any of
their respective subsidiaries to adopt, a plan or agreement of complete
or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other material reorganization of
Operating, Realty or any of their respective subsidiaries (other than a
liquidation or dissolution of any subsidiary or a merger or
consolidation between wholly owned subsidiaries);
(f) redeem, purchase or otherwise acquire directly or indirectly any
of Operating's or Realty's capital stock except acquisitions of
restricted stock pursuant to the terms of Operating's option plans;
(g) (i) grant any severance or termination pay to any director,
officer or employee, (ii) enter into any employment, deferred
compensation or other similar agreement (or any amendment to any such
existing agreement) with any director, officer or employee, (iii)
increase benefits payable under any existing severance or termination
pay policies or employment agreements or (iv) increase compensation,
bonus or other benefits payable to directors, officers or employees
other than, in the case of clause (iv) only, increases in compensation,
bonus or other benefits payable to employees in the ordinary course of
business consistent with past practice or merit increases in salaries
of employees at regularly scheduled times in customary amounts
consistent with past practices;
(h) issue or enter into any executory agreement to issue any new
equity securities other than (A) Santa Anita Shares issued in
replacement of lost, stolen or transferred outstanding shares, (B)
Santa Anita Shares to be issued upon exercise of options or warrants
outstanding, (C) Santa Anita Shares to be issued upon exchange of Santa
Anita Preferred Shares, (D) Santa Anita Shares to be issued pursuant to
the Rights Agreement, or (E) as otherwise contemplated by this
Agreement;
(i) declare and pay any dividends or make other distributions to
holders of Realty Shares in excess of $.20 per Realty Share per quarter
or such additional dividends as are otherwise necessary for Realty to
satisfy the REIT Requirements, or repay indebtedness except for
scheduled repayments pursuant to the terms of such indebtedness;
(j) amend or terminate the Rights Agreement unless advised by outside
counsel that such amendment or termination could reasonably be required
by the fiduciary duties of its Board of Directors; or
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(k) agree, or permit any subsidiary to agree, or commit to do any of
the foregoing.
6.1.4 Meditrust shall not, without the prior written consent of Realty
and Operating, which shall not be unreasonably withheld,
(a) issue any Meditrust Shares at a price materially less than
prevailing market prices, except for Meditrust Shares issued pursuant
to existing contractual obligations or pursuant to employee benefit
plans; and
(b) increase its quarterly dividends to holders of Meditrust Shares
by more than $.0075 per Meditrust Share per quarter or by such
additional amount as is otherwise necessary for Meditrust to satisfy
the REIT Requirements.
Section 6.2: Acquisition Proposals. (a) From the date of this Agreement until
the Closing Date, neither Realty nor Operating nor any of their respective
subsidiaries will, and each of Realty and Operating will use their best efforts
to cause their respective directors and any other persons acting, or purporting
to act, on their behalf (including, but not limited to, their officers,
employees, investment bankers, financial advisors, attorneys or accountants)
not to, initiate any contact with, solicit, encourage or enter into or continue
any discussions, negotiations, understandings or agreements with, anyone other
than Meditrust (a "Third Party") with respect to, or furnish or disclose any
non-public information regarding Realty, Operating or their subsidiaries, to
any Third Party in connection with, any Competing Transaction Proposal.
Notwithstanding the foregoing, to the extent the Realty Board and the Operating
Board could reasonably be required by their fiduciary duties as determined in
good faith on the written advice of outside counsel to Realty and Operating, to
take the following steps at any time prior to approval by the Realty
shareholders of the Realty Shareholder Matters and approval by the Operating
shareholders of the Operating Shareholder Matters, (i) Realty and Operating
may, in response to an unsolicited request, furnish non-public information with
respect to Realty and Operating or their subsidiaries to any Third Party
pursuant to a customary confidentiality and standstill agreement and discuss
that information (but not a Competing Transaction Proposal) with the Third
Party and (ii) upon receipt by Realty or Operating of a Competing Transaction
Proposal from a Third Party, if each of the Realty Board and the Operating
Board has reasonably determined that the transaction contemplated by the
Competing Transaction Proposal, if consummated, would constitute an Alternative
Transaction, then Realty and Operating may participate in discussions and
negotiations with the Third Party regarding the Competing Transaction Proposal.
(b) At least five business days prior to entering into definitive agreements
with respect to an Alternative Transaction, Realty and Operating will deliver
an Alternative Transaction Notice to Meditrust advising it of the determination
by the Realty Board and the Operating Board that the transaction contemplated
by the Competing Transaction Proposal would constitute an Alternative
Transaction, which notice will include a summary of the Alternative
Transaction. During such five business day period, Meditrust may propose an
improved transaction to Realty and Operating.
(c) If prior to the approval by the shareholders of Realty of the Realty
Shareholder Matters and approval by the shareholders of Operating of the
Operating Shareholder Matters (i) Realty and Operating have delivered an
Alternative Transaction Notice to Meditrust in accordance with Section 6.2(b),
(ii) the terms of the Alternative Transaction are not modified in a manner
adverse to Realty or Operating and (iii) Realty and Operating have paid the
Termination Fee to Meditrust and reimbursed Meditrust's Transaction Expenses,
then Realty and Operating may terminate this Agreement and enter into an
agreement with a Qualified Third Party with respect to the Alternative
Transaction described in the Alternative Transaction Notice that Realty and
Operating gave to Meditrust. A "Qualified Third Party" means a Third Party
which the Board of Directors of Realty and Operating reasonably determine has
the financial ability (including, to the extent external financing will be
required, binding commitments for that financing) to complete an Alternative
Transaction.
(d) Neither Realty nor Operating will modify, or release any third party
from, any confidentiality or standstill agreement to which either of them is a
party.
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Section 6.3: Information Supplied. Each of the parties hereto agrees that
none of the information supplied or to be supplied by it for inclusion or
incorporation by reference in any registration statement, proxy statement or
Schedule 14A, or any amendment or supplement thereto, will, in the case of a
registration statement, at the time such registration statement and each
amendment and supplement thereto becomes effective under the Securities Act,
or, in the case of a proxy statement or Schedule 14A, at the time such proxy
statement or Schedule 14A and each amendment and supplement thereto is filed
with the SEC or mailed to shareholders and at the time of the applicable
meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading.
Section 6.4: Shareholder Approvals; Registration Statement.
6.4.1 Registration Statement. Realty, Operating, Meditrust and MAC shall
prepare and file with the SEC the Registration Statement registering the
issuance of the Santa Anita Shares to Meditrust's and MAC's shareholders,
which shall include a joint proxy statement to solicit proxies in
connection with the meetings of the shareholders of each of Realty,
Operating, Meditrust and MAC referred to in Section 6.4.2 (the form of such
joint proxy statement, together with any amendments thereof or supplements
thereto, mailed to the shareholders of each of Realty, Operating, Meditrust
and MAC in connection with such meetings is referred to herein as the
"Proxy Statement").
6.4.2 Shareholder Meetings. Subject to the second succeeding sentence,
each of Realty, Operating, Meditrust and MAC agrees to take, in accordance
with applicable law and its Certificate of Incorporation and By-laws or
Charter, all action necessary to convene a meeting of its respective
shareholders, as promptly as practicable after the Proxy Statement is
cleared by the SEC, to consider and vote upon the approval of the
transactions contemplated hereby. Subject to the next succeeding sentence,
each of the Realty Board, the Operating Board, the Meditrust Board and the
Board of Trustees of MAC shall recommend such adoption and approval and
shall take all lawful action to solicit such approval by shareholders. Each
of the Realty Board or the Operating Board may fail to take action
necessary to convene a meeting of its shareholders or make such a
recommendation, or withdraw, modify, or change any such recommendation, or
recommend any other offer or proposal, only if Realty and Operating have
complied with Section 6.2(a) and an Alternative Transaction is pending at
the time the Realty Board and Operating Board make such determination;
provided that no such failure to convene a meeting or to recommend, or no
such withdrawal, modification or change of any such recommendation or
recommendation of any other offer or proposal shall be made unless (a)
Realty and Operating shall have delivered to Meditrust at least 48 hours
written notice advising Meditrust that the Boards of Realty and Operating
have received a proposal for an Alternative Transaction and identifying the
person or persons making such proposal and (b) such Board, based on the
written opinion of its outside counsel, has determined that convening such
a meeting, making such recommendation, or the failure to recommend any
other offer or proposal, or the failure to so withdraw, modify, or change
its recommendation, or the failure to recommend any other offer or
proposal, could reasonably be deemed to cause the members of such board to
breach their fiduciary duties under applicable law. In such event,
notwithstanding anything contained in this Agreement to the contrary, any
such failure to convene such a meeting, failure to recommend, withdrawal,
modification, or change of recommendation or recommendation of such other
offer or proposal, or the entering by Realty and Operating into an
agreement with respect to an Alternative Transaction in accordance with
Section 6.2, shall not constitute a breach of this Agreement by Realty and
Operating. Neither Meditrust nor MAC shall be required to convene its
shareholder meeting if Realty and Operating do not convene their respective
shareholder meetings as described in this Section 6.4.2.
Section 6.5: Other Actions.
6.5.1 Each party hereto shall cooperate with the other parties hereto,
subject to the terms and conditions set forth herein, use its reasonable
best efforts promptly to prepare and file all necessary documentation, to
effect all necessary applications, notices, petitions, filings and other
documents, and to obtain as promptly as practicable all necessary permits,
consents, orders, approvals and authorizations of,
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or any exemption by, all third parties and Governmental Entities necessary
or advisable to consummate the transactions contemplated hereby. Each party
shall have the right to review in advance, and each will use its best
efforts to consult with the other, in each case, subject to applicable laws
relating to the exchange of information, with respect to all the
information relating to the other parties which appear in any filing made
with, or written materials submitted to, any third party or any
Governmental Entity in connection with the transactions contemplated
hereby. In exercising the foregoing rights, each of the parties hereto
shall act reasonably and as promptly as practicable. Each party hereto
shall consult with the other parties hereto with respect to the obtaining
of all permits, consents, approvals and authorizations of all third parties
and Governmental Entities necessary or advisable to consummate the
transactions contemplated hereby and each party shall keep the other
parties hereto apprised of the status of matters relating to completion of
the transactions contemplated hereby.
6.5.2 Each party hereto shall, upon request and except as otherwise may
be required by applicable law, furnish the other parties hereto with all
information concerning itself, its subsidiaries, directors, trustees,
officers and shareholders and other Affiliates and such other matters as
may be reasonably necessary or advisable in connection any statement,
filing, notice or application made by or on behalf of such other party or
any of its Affiliates to any Governmental Entity in connection with any
transactions contemplated by this Agreement.
6.5.3 Each party hereto shall, subject to applicable laws relating to the
exchange of information, promptly furnish the other parties hereto with
copies of written communications received by each such party, or any of its
subsidiaries, associates or other Affiliates, from, or delivered by any of
the foregoing to, any Governmental Entity in respect of the transactions
contemplated hereby.
6.5.4 Each party hereto shall cooperate with each other party hereto and
promptly take or cause to be taken all actions and do or cause to be done
all things necessary, proper or advisable to obtain favorable review of the
proposed transaction under the HSR Act, which efforts shall include,
without limitation, except as otherwise may be required by applicable law,
obtaining mutual agreement concerning agency appearances and submissions
and allowing each party or its attorneys to (i) interview the other party's
employees, (ii) review the other party's documents and data, (iii) assist
in all preparation for any agency interviews, depositions or voluntary
agency appearances and attend such appearances to the extent permitted by
agency rules and (iv) review and approve in advance of submission any
written materials to be submitted to the agency. Each of the parties hereto
shall use reasonable best efforts to resolve any objections that may be
asserted with respect to the Reorganization by the Department of Justice,
the Federal Trade Commission, any State Attorney General or any other
Governmental Entity (including, without limitation, objections under any
antitrust laws). In the event a suit is threatened or instituted
challenging the Reorganization as violative of any antitrust laws, each
party shall use reasonable efforts to avoid the filing of, resist or
resolve such suit. The parties hereto shall use reasonable efforts to take
such action as may be required: (i) by the Department of Justice, the
Federal Trade Commission, any State Attorney General or any other
Governmental Entity in order to resolve such objections as any of them may
have to the Reorganization, or (ii) by any federal or state court of the
United States, in any suit brought by a private party or Governmental
Entity challenging the Reorganization as violative of any antitrust laws,
in order to avoid the entry of, or to cause the withdrawal or voiding of,
any injunction, temporary restraining order or other order which has the
effect of preventing the consummation of the transactions contemplated
hereby.
Section 6.6: Access.
(a) Upon reasonable notice, and except as may otherwise be required by
applicable law or contractual requirements, each party hereto shall afford each
other party's Representatives full access, during normal business hours
throughout the period until the Effective Time, to its properties, books,
Contracts, records, employees, contract employees and accountants and, during
such period, shall (and shall cause each of its subsidiaries to) furnish
promptly to the other party all information concerning its business, properties
and personnel as may reasonably be requested, provided that no investigation
pursuant to this Section 6.6 shall be
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deemed to modify any representation or warranty made by the party furnishing
such information. Each party hereto shall not, and shall cause its respective
Representatives not to, use any information obtained pursuant to this Section
for any purpose unrelated to the consummation of the transactions contemplated
by this Agreement. Subject to the requirements of law, pending consummation of
the transactions herein contemplated, each party conducting an investigation
hereunder (the "Examining Party") shall keep confidential, and shall cause its
Representatives to keep confidential, all information and documents obtained
from the other party (the "Examined Party") pursuant to this Section or during
the investigation leading up to the execution of this Agreement unless such
information (i) was already known to the Examining Party (unless subject to a
separate confidentiality agreement with the Examined Party), (ii) becomes
available to the Examining Party from other sources not known by the Examining
Party to be bound by a confidentiality obligation to the Examined Party, (iii)
is independently acquired by the Examining Party as a result of work carried
out by any employee or representative of the Examining Party to whom no
disclosure of such information has been made, (iv) is disclosed with the prior
written approval of the Examined Party or (v) is or becomes readily
ascertainable from published information or trade sources. Upon any termination
of this Agreement, each party shall (i) collect and deliver to the other party
all nonpublic documents obtained by it or any of its Representatives from the
other party and then in their possession and any copies thereof and (ii)
destroy or cause to be destroyed all notes, memoranda or other documents in the
possession of it or any of its Representatives containing or reflecting any
nonpublic information obtained from the other party.
(b) Each of Realty and Operating agrees that it will notify Meditrust in
advance of any material communications made to or received from the SEC, the
IRS, the California Horse Racing Board and any other regulatory authority
having jurisdiction over Realty or Operating and, to the extent reasonably
practicable, will solicit Meditrust's comments regarding such communications
and any written materials submitted to any such authority.
(c) Each of Realty and Operating agrees to make available to Meditrust
promptly upon the written request of Meditrust, and in no event later than the
time prescribed by applicable statute, all information and materials to which
Meditrust would be entitled under Section 220 of the DGCL if Meditrust were a
shareholder of Realty and Operating at the time of such request. Each of Realty
and Operating further agrees to treat Meditrust as a shareholder of such
company and to afford to Meditrust all rights to which Meditrust would be
entitled a shareholder under Rules 14a-7 and 14d-5 under the Exchange Act (it
being understood that such right may not be satisfied by Realty or Operating
electing to mail materials to its shareholders).
Section 6.7: Notification of Certain Matters.
(a) Each party shall give prompt notice to the other party of any change that
is reasonably likely to result in any Material Adverse Effect.
(b) Each of Realty and Operating shall promptly (and in any event within 48
hours) notify Meditrust and provide copies of (i) any request made by any
shareholder pursuant to Section 220 of the DGCL or Rules 14d-5 or 14a-7 under
the Exchange Act and (ii) any amendments filed by any person holding in excess
of 5% of the Santa Anita Shares to their statements on Schedule 13D.
(c) Each party shall give prompt notice to the other parties of (i) any
notice or communication from any Person alleging that the consent of such
person is or may be required in connection with the consummation of the
transactions contemplated by this Agreement and (ii) any actions, suits,
proceedings, court orders or decrees commenced or, to its knowledge, threatened
against it or any of its subsidiaries which, if pending on the date of this
Agreement, would be required to be disclosed pursuant to Section 5.1.5, 5.2.4
or 5.3.5, as applicable.
Section 6.8: Publicity. The initial press release relating hereto shall be a
joint press release and, thereafter, each party hereto shall consult with each
other party hereto prior to issuing any press releases or otherwise making
public statements with respect to the transactions contemplated hereby and
prior to making any filings with any Governmental Entity or stock exchange with
respect thereto.
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Section 6.9: Indemnification of Directors and Officers. From and after the
Closing Date, each of Realty Surviving Corporation and Operating Surviving
Corporation shall indemnify, defend and hold harmless the respective present
officers, directors and employees of Realty and Operating and any of their
respective subsidiaries against all losses, expenses, claims, damages or
liabilities arising out of actions or omissions occurring on or prior to the
Closing Date (including, without limitation, the transactions contemplated by
this Agreement) to the full extent permitted or required under applicable law
(and shall also advance expenses as incurred to the fullest extent permitted
under applicable law, provided that, to the extent required by applicable law,
the person to whom expenses are advanced provides an undertaking to repay such
advances if it is ultimately determined that such person is not entitled to
indemnification). Each of Realty and Operating agrees that all rights to
indemnification, including provisions relating to advances of expenses incurred
in defense of any action or suit, existing in favor of the present directors,
officers and employees of Realty and Operating or any of their respective
subsidiaries (collectively, the "Indemnified Parties") as provided in the
Realty Certificate or Realty By-laws and the Operating Certificate or Operating
By-laws or pursuant to other agreements, as in effect as of the date hereof,
shall survive the Closing and shall continue in full force and effect. Each of
Realty Surviving Corporation and Operating Surviving Corporation shall maintain
in effect for not less than six years the current policies (or comparable
policies) of directors' and officers' liability insurance maintained by Realty
and Operating with respect to matters occurring prior to the Closing Date;
provided however, that if the aggregate annual premiums for such insurance
during such six year period shall exceed 200% of the per annum rate of the
aggregate premium currently paid by Operating and Realty and any of their
respective subsidiaries for such insurance on the date of this Agreement, then
Meditrust shall cause each of Realty Surviving Corporation and Operating
Surviving Corporation to, and each of Realty Surviving Corporation and
Operating Surviving Corporation shall, provide the most advantageous coverage
that shall then be available at an annual premium equal to 200% of such rate.
This Section 6.9 is intended to benefit the Indemnified Parties.
Section 6.10: Colony Termination Fee. Realty and Operating have paid to
Colony $4,500,000 as a termination fee and transaction expenses pursuant to the
Amended and Restated Formation Agreement, dated as of October 24, 1996, as
amended as of January 7, 1997. If either Meditrust or MAC fail to call their
respective shareholders meetings or the shareholders fail to approve the
Meditrust Shareholder Matters or the MAC Shareholder Matters at their
respective shareholder meetings, and the Realty Shareholder Matters and the
Operating Shareholder Matters are approved and all other conditions to
Meditrust's consummation of the Reorganization have been satisfied, Meditrust
shall pay to Realty and Operating $4,000,000 in the aggregate; provided,
however, that if Realty determines, in its sole and absolute discretion, that
its portion of such amount will affect its qualification as a REIT, then the
parties will negotiate in good faith an arrangement acceptable to Realty. In no
event shall such payment be less than the lower of (a) the maximum amount which
Realty may receive without affecting its qualification as a REIT and (b) the
amount to be paid pursuant to this Section 6.10 without regard to this
sentence.
ARTICLE VII
CONDITIONS
Section 7.1: Conditions to Each Party's Obligation. The respective obligation
of each party hereto to consummate the Mergers is subject to the fulfillment of
each of the following conditions:
7.1.1 Shareholder Approval. The Meditrust Shareholder Matters shall have
been duly approved by the shareholders of Meditrust, the MAC Shareholder
Matters shall have been duly approved by the shareholders of MAC, the
Realty Shareholder Matters shall have been duly approved by the
shareholders of Realty and the Operating Shareholder Matters shall have
been duly approved by the shareholders of Operating in accordance with
Massachusetts law (in the case of Meditrust and MAC), the DGCL, other
applicable law and the Certificates of Incorporation and By-laws or Charter
of each of them.
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7.1.2 Governmental and Regulatory Consents. The waiting periods
applicable to the consummation of the transactions contemplated hereby
under the HSR Act shall have expired or been terminated and all filings
required to be made prior to the Closing by any party hereto or any of its
respective subsidiaries with, and all consents, approvals and
authorizations required to be obtained prior to the Closing by any party
hereto or any of its respective subsidiaries from, any Governmental Entity
in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby shall have been made
or obtained, except where the failure to obtain such consents is not
reasonably likely to have a Material Adverse Effect on the Surviving
Corporations and could not reasonably be expected to subject the parties
hereto or their Affiliates or any directors, trustees or officers of any of
the foregoing to the risk of criminal liability.
7.1.3 Third-Party Consents. All consents or approvals of all persons
(other than Governmental Entities) required for or in connection with or as
a result of the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby shall have been
obtained and shall be in full force and effect, except for those the
failure of which to obtain would not have a Material Adverse Effect.
7.1.4 Litigation. No United States or state court or other Governmental
Entity of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, judgment, decree,
injunction or other order (whether temporary, preliminary or permanent)
which is in effect and prohibits consummation of the transactions
contemplated hereby.
7.1.5 Opinions.
(a) Meditrust, Realty and Operating shall have received an opinion
from O'Melveny & Myers LLP, dated the Effective Time, and reasonably
satisfactory to Meditrust, Realty and Operating, to the effect that (i)
for the calendar year 1996, Realty met the requirements of the Code for
qualification as a REIT, and if Realty continues its operations in the
same manner as it has in such year, Realty will continue to so qualify;
and (ii) (A) the consummation by Realty and Operating of the
transaction contemplated by this Agreement will not adversely affect
the qualification of Realty as a REIT or (B) its ability to retain its
status as grandfathered from the application of Section 269B(a) (3) of
the Code pursuant to Section 136(c) (3) of the Deficit Reduction Act of
1984. Nutter, McClennen & Fish, LLP may rely upon the opinion in clause
(ii)(B) in giving its opinion referred to in clause (b) below.
(b) Meditrust, Realty and Operating shall have received an opinion of
Nutter, McClennen & Fish, LLP, dated the Effective Time, and reasonably
satisfactory to Meditrust, Realty and Operating, to the effect that (i)
immediately prior to the Effective Time, Meditrust was qualified as a
REIT and (ii) the consummation by Realty and Operating of the
transaction contemplated by this Agreement will not adversely affect
the qualification of Realty as a REIT or its ability to retain its
status as grandfathered from the application of Section 269B(a)(3) of
the Code pursuant to Section 136(c)(3) of the Deficit Reduction Act of
1984.
(c) Meditrust shall have received an opinion from Nutter, McClennen &
Fish, LLP, dated the Effective Time, and reasonably satisfactory to
Meditrust, to the effect that the merger of Meditrust with and into
Realty shall qualify as a "reorganization" under Section 368(a) of the
Code, and the merger of MAC with and into Operating shall qualify as a
"reorganization" under Section 368(a) of the Code, or, alternatively,
under Section 351 of the Code.
7.1.6 Registration Statement. The Registration Statement shall have
become effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the
SEC.
Section 7.2: Conditions to Obligation of Meditrust. The obligation of
Meditrust to consummate the Reorganization is also subject to the fulfillment
or waiver by Meditrust prior to the Closing of each of the following
conditions:
7.2.1 Representations and Warranties. The representations and warranties
of each of Realty and Operating set forth in this Agreement qualified by
materiality shall be true and correct and those not so
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qualified shall be true and correct in all material respects as of the date
of this Agreement and as of the Closing Date as though made on and as of
the Closing Date (except that representations and warranties that by their
terms speak as of the date of this Agreement or some other date shall be
true and correct as of such date), and Meditrust shall have received
certificates signed on behalf of each of Realty and Operating by an officer
to such effect.
7.2.2 Performance of Obligations. Realty and Operating shall have
complied with all covenants in all material respects and performed in all
material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and Meditrust shall have
received a certificate signed on behalf of each of the Companies by an
officer to such effect.
7.2.3 No Material Adverse Effect. Between the date hereof and the Closing
Date, there shall have been no Material Adverse Effect on Realty or
Operating; and there shall have been delivered to Meditrust a certificate
with respect to Realty and a certificate with respect to Operating, each to
such effect, dated the Closing Date, signed on behalf of Realty and
Operating; provided that no Material Adverse Effect on Realty or Operating
shall be deemed to occur solely as a result of actions taken or not taken
in accordance with the provisions of Section 6.1.
7.2.4 Rights. The Rights under the Rights Agreement shall not have become
exercisable.
7.2.5 Resignation of Directors. Meditrust shall have received the
resignations of all directors of Realty and Operating, except those
directors designated by Meditrust pursuant to Section 3.1 and Section 3.2
hereof.
7.2.6 The Exchange Approval. The Santa Anita Shares to be issued in the
Mergers shall have been approved for listing on the Exchange upon official
notice of issuance.
Section 7.3: Conditions to Obligation of Realty and Operating. The obligation
of Realty and Operating to consummate the Reorganization is also subject to the
fulfillment or waiver by Realty and Operating prior to the Closing Date of each
of the following conditions:
7.3.1 Representations and Warranties. The representations and warranties
of Meditrust set forth in this Agreement qualified by materiality shall be
true and correct and those not so qualified shall be true and correct in
all material respects as of the date of this Agreement (except to the
extent such representations or warranties relate to MAC, in which case as
of June 19, 1997) and as of the Closing Date as though made on and as of
the Closing Date (except that representations and warranties that by their
terms speak as of the date of this Agreement or some other date shall be
true and correct as of such date) and Realty and Operating shall have
received certificates signed on behalf of Meditrust by an officer to such
effect.
7.3.2 Performance of Obligations. Each of Meditrust and MAC shall have
complied with all covenants in all material respects (it being understood
that MAC's obligation to comply shall have commenced on June 19, 1997) and
performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and Realty and
Operating shall have received certificates signed on behalf of each of
Meditrust and MAC by an officer to such effect.
7.3.3 No Material Adverse Effect. Between the date hereof and the Closing
Date, there shall have been no Material Adverse Effect on Meditrust; and
there shall have been delivered to Realty and Operating a certificate with
respect to Meditrust to such effect, dated the Closing Date, signed on
behalf of Meditrust.
ARTICLE VIII
TERMINATION
Section 8.1: Termination by Mutual Consent. This Agreement may be terminated,
and the Reorganization may be abandoned, at any time prior to the Effective
Time, before or after the approval by the shareholders of Meditrust, MAC,
Operating and/or Realty, by the mutual consent of each party hereto, by action
of its Board.
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Section 8.2: Termination by any Party Hereto. This Agreement may be
terminated, and the Reorganization may be abandoned before or after the
approval by the shareholders of Meditrust, MAC, Operating and/or Realty, by
action of the Board of any party hereto, if (i) the Reorganization shall not
have been consummated by April 13, 1998 or (ii) if Meditrust, Realty, Operating
or MAC convene the shareholders meeting contemplated by Section 6.4 and
Meditrust's, Realty's, Operating's or MAC's shareholders fail to approve the
Meditrust Shareholder Matters, Realty Shareholder Matters, Operating
Shareholder Matters or MAC Shareholder Matters, as the case may be, at their
respective shareholders meetings or (iii) Realty and Operating enter into an
Alternative Transaction pursuant to Section 6.2, provided that, (A) in the case
of a termination pursuant to clause (i) above, the terminating party shall not
have breached in any material respect its obligations under this Agreement in
any manner that shall have caused or resulted in the failure referred to above
and (B) Realty and Operating shall not have the right to terminate pursuant to
clause (iii) unless they have complied with their obligations under Section
6.2(a), Section 6.2(b) and Section 6.2(c) and paid the Termination Fee and
expenses pursuant to Section 8.6.
Section 8.3: Termination by Meditrust. This Agreement may be terminated and
the Reorganization may be abandoned at any time prior to the Effective Time,
before or after the adoption and approval by shareholders of Meditrust referred
to in Section 6.4, by action of the Meditrust Board, if (i) either Realty or
Operating shall have failed to comply in any material respect with any of the
covenants or agreements contained herein to be performed by such Company at or
prior to the time of termination; or (ii) either of the Realty Board or the
Operating Board shall have failed to recommend to its shareholders the approval
of the transactions contemplated hereby or shall have withdrawn, modified or
changed in a manner adverse to Meditrust its approval or recommendation of this
Agreement.
Section 8.4: Termination by Either of Realty or Operating. This Agreement may
be terminated and the Reorganization may be abandoned at any time prior to the
Effective Time, before or after the adoption and approval by shareholders of
Realty or Operating referred to in Section 6.4, by action of either the Realty
Board or the Operating Board, if (i) Meditrust shall have failed to comply in
any material respect with any of the covenants or agreements contained herein
to be performed by it at or prior to the time of termination; or (ii) the Board
of Trustees of Meditrust or MAC shall have failed to recommend to their
respective shareholders the approval of the transactions contemplated hereby,
or shall have withdrawn, modified or changed in a manner adverse to Realty or
Operating its approval or recommendation of this Agreement.
Section 8.5: Effect of Termination and Abandonment. In the event of
termination of this Agreement and the abandonment of the Reorganization
pursuant to this Article VIII, other than as set forth in Section 8.6 and the
following sentence, no party hereto (or any of its directors or officers) shall
have any liability or further obligation to any other party, except that
nothing herein will relieve any party from liability for any material and
willful breach of any covenant contained herein, and except that the provisions
of Sections 6.6 (excluding the first sentence thereof), 6.10, 8.6 and this
Section 8.5 shall survive such termination. If Realty or Operating merges with,
or sells or otherwise transfers directly or indirectly more than 25% of its
assets to a Third Party, or any Third Party (individually or as part of a
group), acquires directly or indirectly beneficial ownership of more than 30%
of the Santa Anita Shares, or Realty or Operating enter into an agreement
providing for any of the foregoing, in each case within one year after the
earlier of (i) the date of the meeting of shareholders of Realty and Operating
convened to consider the Realty Shareholder Matters and the Operating
Shareholder Matters and (ii) the termination of this Agreement (other than
pursuant to Section 6.2(c)), Realty and Operating shall pay Meditrust the sum
of $12 million in the aggregate, less the amount of the Termination Fee, if
paid.
Section 8.6: Payment of Expenses and Termination Fee. Each party shall bear
its own expenses in connection with the matters contemplated by this Agreement,
except that Realty and Operating shall pay (a) the Termination Fee and
Transaction Expenses to Meditrust under the circumstances set forth in Section
6.2; (b) the Transaction Expenses to Meditrust if the Realty Shareholder
Matters or the Operating Shareholder Matters are not approved as contemplated
in Section 6.4; and (c) the amount set forth in Section 8.5 if the conditions
set forth therein are satisfied. Meditrust shall pay the amount set forth in
Section 6.10 if the conditions set forth therein are satisfied.
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ARTICLE IX
MISCELLANEOUS AND GENERAL
Section 9.1: Survival. Only those agreements and covenants of the parties
which by their express terms apply in whole or in part after the Effective Time
shall survive the Effective Time. All other representations, warranties,
agreements and covenants, shall be deemed only to be conditions of the
Reorganization and shall not survive the Effective Time.
Section 9.2: Modification or Amendment. Subject to the applicable provisions
of the DGCL, at any time prior to the Effective Time, before or after the
adoption and approval by shareholders of any party referred to in Section 6.4,
the parties hereto may modify or amend this Agreement, by written agreement
executed and delivered by duly authorized officers of the respective parties.
Section 9.3: Waiver of Conditions. The conditions to each party's obligation
to consummate the Reorganization are for the sole benefit of such party and may
be waived by such party in whole or in part to the extent permitted by
applicable law.
Section 9.4: Counterparts. For the convenience of the parties hereto, this
Agreement may be executed in any number of separate counterparts, each such
counterpart being deemed to be an original instrument, and all such
counterparts shall together constitute the same agreement.
Section 9.5: Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware applicable to contracts
made and performed in such state.
Section 9.6: Notices. Any notice, request, instruction or other document to
be given hereunder by any party to the other shall be in writing and shall be
deemed to have been duly given (i) on the date of delivery if delivered
personally, or by telecopy or facsimile, upon confirmation of receipt, (ii) on
the first business day following the date of dispatch if delivered by Federal
Express or other next-day courier service, or (iii) on the third business day
following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice.
If to Meditrust or MAC, addressed to: with a copy to:
Meditrust Nutter, McClennen & Fish,
197 First Avenue LLP
Needham, Massachusetts 02194 One International Place
Attention: President Boston, Massachusetts
Fax No.: (617) 433-1290 02110-2699
Attention: Michael J.
Bohnen, Esq.
Fax No.: (617) 973-9748
If to Realty, addressed to:
with a copy to:
Santa Anita Realty Enterprises, Inc.
301 West Huntington Drive, Suite 405 O'Melveny & Myers LLP
Arcadia, California 91007 400 South Hope Street
Attention: Mr. Brian L. Fleming Los Angeles, California
Fax No.: (818) 574-0634 90071
Attention: Frederick B.
McLane, Esq.
Fax No.: (213) 669-6407
If to Operating, addressed to:
with a copy to:
Santa Anita Operating Company O'Melveny & Myers LLP
285 West Huntington Drive 400 South Hope Street
Arcadia, California 91007 Los Angeles, California
Attention: Mr. William C. Baker 90071
Fax No.: (818) 574-6687 Attention: Frederick B.
McLane, Esq.
Fax No.: (213) 669-6407
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Section 9.7: Entire Agreement, Etc. This Agreement (and the Exhibits and
Disclosure Schedules hereto) (a) constitute the entire agreement, and supersede
all other prior agreements, understandings, representations and warranties,
both written and oral, among the parties, with respect to the subject matter
hereof including, without limitation, the Agreement and Plan of Merger dated as
of April 13, 1997, the Original Merger Agreement and the Second Restated Merger
Agreement, and (b) shall not be assignable by operation of law or otherwise.
Section 9.8: Captions. The Article, Section and paragraph captions herein are
for convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
Section 9.9: Severability. If any provision of this Agreement or the
application thereof to any person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination, the parties shall negotiate in
good faith in an effort to agree upon a suitable and equitable substitute
provision to effect the original intent of the parties.
Section 9.10: No Third-Party Beneficiaries. Nothing contained in this
Agreement, except as provided in Section 6.9 hereof, expressed or implied, is
intended to confer upon any person or entity other than the parties hereto, any
benefit, right or remedies.
Section 9.11: Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any of the provisions of this Agreement were
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
Section 9.12: Trusts. The Declaration of Trust establishing Meditrust, dated
August 6, 1985, a copy of which, together with all amendments thereto (the
"Declaration"), is duly filed in the office of the Secretary of State of the
Commonwealth of Massachusetts, provides that the name "Meditrust" refers to the
trustees under the Declaration collectively as trustees, but not individually
or personally. No trustee, officer, director, shareholder, employee or agent of
Meditrust or its subsidiaries shall be held to any personal liability, jointly
or severally, for any obligation of, or claim against Meditrust or any of its
subsidiaries. All persons dealing with Meditrust, in any way, shall look only
to Meditrust's assets for recovery of any judgment or suit or the performance
of any obligation.
The Declaration of Trust establishing MAC, dated June 2, 1997, a copy of
which, together with all amendments thereto (the "MAC Declaration"), is duly
filed in the office of the Secretary of State of the Commonwealth of
Massachusetts, provides that the name "Meditrust Acquisition Company" refers to
the trustees under the MAC Declaration collectively as trustees, but not
individually or personally. No trustee, officer, director, shareholder,
employee or agent of MAC or its subsidiaries shall be held to any personal
liability, jointly or severally, for any obligation of, or claim against MAC or
any of its subsidiaries. All persons dealing with MAC, in any way, shall look
only to MAC's assets for recovery of any judgment or suit or the performance of
any obligation.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties hereto on the date first
hereinabove written.
Santa Anita Realty Enterprises, Inc.
By __________________________________
Executive Vice President
Santa Anita Operating Company
By __________________________________
Chief Executive Officer
Meditrust
By __________________________________
President
Meditrust Acquisition Company
By __________________________________
President
34
<PAGE>
ANNEX A TO THIRD
AMENDED AND
RESTATED
AGREEMENT AND
PLAN OF MERGER
DEFINED TERMS
Acquired Shares: as defined in Section 1.6.1.
Affiliate: as defined in Rule 12b-2 under the Exchange Act.
Agreement: as defined in the Preamble.
Alternative Transaction: a transaction that is the subject of a Competing
Transaction Proposal with a Third Party that the Realty Board and the Operating
Board in good faith on the advice of a nationally recognized financial advisor
determine could provide greater value to their shareholders than the
transactions contemplated here.
Alternative Transaction Notice: a notice of the determination of the Realty
Board and the Operating Board that the transaction contemplated by a Competing
Transaction Proposal would be an Alternative Transaction, which notice contains
the information described in 6.2(b).
Benefit Plan: as defined in Section 5.1.17.
Board: the Meditrust Board, the Operating Board or the Realty Board.
Closing: as defined in Section 1.5.
Closing Date: as defined in Section 1.5.
Code: the Internal Revenue Code of 1986, as amended.
Commonly Controlled Entity: any person or entity that, together with another
person or entity, is treated as a single employer under Section 414 of the
Code.
Competing Transaction Proposal: a bona fide proposal from a Third Party
relating to any recapitalization, business combination, asset sale, joint
venture or other transaction which would be inconsistent with the transactions
which are the subject of this Agreement.
Contract: any agreement, lease, contract, note, mortgage, indenture,
arrangement or other obligation or commitment.
DGCL: the Delaware General Corporation Law as in effect at the relevant times
for purposes of this Agreement.
Disclosure Schedules: the Operating Disclosure Schedule, the Realty
Disclosure Schedule and the Meditrust Disclosure Schedule.
Effective Time: as defined in Section 1.4.
Employee Stock Options: as defined in Section 4.5.10.
ERISA: as defined in Section 5.1.17.
Examined Party: as defined in Section 6.6.
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<PAGE>
Examining Party: as defined in Section 6.6.
Excess Shares: as defined in Section 4.5.4.
Exchange: the New York Stock Exchange, Inc.
Exchange Act: the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
Exchange Agent: as defined in Section 4.5.2.
Exchange Ratio: as defined in Section 4.3.
GAAP: generally accepted accounting principles consistently applied.
Governmental Entity: any governmental or regulatory authority, agency, court,
commission or other entity.
HSR Act: the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
Indemnified Parties: as defined in Section 6.9.
IRS: the United States Internal Revenue Service.
Material Adverse Effect: with respect to any party, an effect which would be
materially adverse to the properties, business, financial condition, results of
operations or prospects of such party and its subsidiaries taken as a whole.
Mergers: as defined in Recital F.
MAC: as defined in the Preamble.
MAC Amount: an amount equal to .019 multiplied by the product of $37.25 times
the number of shares outstanding immediately prior to the payment of cash to
MAC by Meditrust pursuant to Section 1.1.1.
MAC Charter: as defined in Section 5.1.4.
MAC Shareholder Matters: adoption of this Agreement.
MAC Shares: the common stock of MAC issued to Meditrust and distributed to
Meditrust's shareholders prior to the Mergers equal in amount to the number of
Meditrust Shares outstanding immediately prior to the Mergers.
Meditrust: as defined in the Preamble.
Meditrust Board: the Board of Trustees of Meditrust.
Meditrust Charter: as defined in Section 5.1.1.
Meditrust Disclosure Schedule: the disclosure schedule dated the date of the
Agreement delivered by Meditrust to the other parties and relating to this
Agreement.
Meditrust Options: as defined in Section 5.1.3.
Meditrust SEC Documents: all filings made by Meditrust with the SEC since
December 31, 1994.
Meditrust Shares: the shares of beneficial interest without par value of
Meditrust.
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Meditrust Shareholder Matters: the adoption of this Agreement.
Note Amount: an amount equal to the number of Operating Shares outstanding as
of the date the promissory note referred to in Section 1.2 is issued,
multiplied by the excess of (i) $31.00 multiplied by a fraction equal to the
relative value of (x) an Operating Share to (y) a paired Realty Share and
Operating Share as determined by Morgan Stanley & Co. Incorporated as of April
13, 1997; over (ii) the product of .019 multiplied by $31.00.
Old Meditrust Certificate: a certificate for Meditrust Shares.
Operating: as defined in the Preamble.
Operating Board: the Board of Directors of Operating.
Operating By-Laws: as defined in Section 5.3.1.
Operating Certificate: as defined in Section 5.3.1.
Operating Common Shares: as defined in Section 5.3.3.
Operating Disclosure Schedule: the disclosure schedule dated the date of the
Agreement delivered by Operating to Meditrust and relating to this Agreement.
Operating Merger: as defined in Recital E.
Operating Merger Certificate: as defined in Section 1.4.
Operating Options: as defined in Section 5.3.3.
Operating Preferred Shares: as defined in Section 5.3.3.
Operating Shareholder Matters: the adoption of this Agreement.
Operating Shares: as defined in Section 5.3.3.
Operating Surviving Corporation: as defined in Section 1.3.2.
Pairing Agreement: as defined in Section 5.2.3(c).
Pension Plan: as defined in Section 5.1.17.
Person: an individual, joint venture, partnership, limited liability company,
trust, business trust, corporation, cooperative, association, private
foundation, charitable trust, employee pension, profit sharing, stock bonus or
supplemental unemployment benefit trust, or any other entity.
Private Letter Rulings: as defined in Section 5.2.16(b).
Proxy Statements: as defined in Section 6.4.1.
Realty: as defined in the Preamble.
Realty Board: the Board of Directors of Realty.
Realty By-Laws: as defined in Section 5.2.1.
Realty Certificate: as defined in Section 5.2.1.
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<PAGE>
Realty Common Shares: as defined in Section 5.2.3.
Realty Disclosure Schedule: the disclosure schedule dated the date of this
Agreement delivered by Realty to Meditrust and relating to this Agreement.
Realty Merger: as defined in Recital E.
Realty Merger Certificate: as defined in Section 1.4.
Realty Options: as defined in Section 5.2.2.
Realty Preferred Shares: as defined in Section 5.2.2.
Realty Shareholder Matters: the adoption of this Agreement.
Realty Shares: as defined in Section 5.2.2.
Realty Surviving Corporation: as defined in Section 1.3.1.
Registration Statement: the registration statement on Form S-4 to be filed by
Realty and Operating with the SEC in connection with the Reorganization with
respect to the Santa Anita Shares to be issued to Meditrust's shareholders.
Reorganization: the Mergers and other transactions contemplated hereby.
REIT: a real estate investment trust, as defined in Section 856 of the Code.
REIT Requirements: the requirements for Realty or Meditrust, as applicable,
to (i) qualify as a REIT under the Code, (ii) to avoid any federal income or
excise tax liability, (iii) as to Realty only, retain its status as
grandfathered from the application of Section 269B(a)(3) of the Code pursuant
to Section 136(c)(3) of the Deficit Reduction Act of 1984, (iv) as to Realty
only, retain the benefits of the Private Letter Rulings, and (v) otherwise
maintain the current federal income tax treatment of the pairing arrangement
for the Santa Anita Shares.
Representatives: with respect to any party, such party's officers, employees,
counsel, accountants and other authorized representatives.
Rights: the rights of the shareholders of Realty and Operating under the
Rights Agreement.
Rights Agreement: the Rights Agreement, dated as of June 15, 1989, among
Realty, Operating and Union Bank, as Rights Agent.
Santa Anita SEC Documents: all filings made by Realty or Operating with the
SEC since December 31, 1994, including the Annual Report on Form 10-K for the
year ended December 31, 1996, in the form attached to the Realty and Operating
Disclosure Schedules.
Santa Anita Shares: paired common stock, $.10 par value per share, of Realty
and Operating.
Santa Anita Share Certificates: as defined in Section 4.5.2.
SEC: the Securities and Exchange Commission.
Securities Act: the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
38
<PAGE>
subsidiary: any corporation or other organization whether incorporated or
unincorporated of which at least 25% of the securities or interests having by
the terms thereof or any agreement ordinary voting power to elect the board of
directors or others performing similar functions with respect to such
corporation or other organization that is directly or indirectly owned or
controlled by such party or by any one or more of its subsidiaries, or by such
party and one or more of its subsidiaries.
Surviving Corporations: the Realty Surviving Corporation and the Operating
Surviving Corporation, each as "Surviving Corporation".
Termination Fee: $12,000,000, provided, however, that if Meditrust
determines, in its sole and absolute discretion, that such amount will affect
its qualification as a REIT, then the parties will reasonably negotiate an
arrangement acceptable to Meditrust. In no event shall such payment be less
than the lower of (a) the maximum amount which Meditrust may receive without
affecting its qualification as a REIT and (b) the amount to be paid without
regard to this sentence.
Third Party: as defined in Section 6.2.
Transaction Expenses: fees and disbursements of Meditrust's counsel,
accountants and other financial, legal, accounting or other advisors incurred
by it in connection with the preparation and negotiation of the Agreement and
the consummation of the matters contemplated hereby in an amount no greater
than $1,000,000.
Unaffiliated Acquired Shares: as defined in Section 1.7.
Unaffiliated Person: a Person whose ownership of Unaffiliated Acquired Shares
will not cause (i) any Person to own, directly or indirectly, after application
of the attribution rules of Section 318(a) of the Code, as modified by Section
856(d) (5) of the Code, more than 9.9% in value of the common stock and
preferred stock of Realty and Operating, or (ii) Realty to fail to satisfy any
of the REIT Requirements.
Welfare Plans: as defined in Section 5.1.17.
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<PAGE>
ANNEX B
TO THIRD AMENDED
AND RESTATED
AGREEMENT AND
PLAN OF
MERGER
CERTIFICATE
REGARDING CERTAIN SHARE OWNERSHIP MATTERS
In connection with the issuance to Meditrust Acquisition Company
("Purchaser") by the Company of its common stock constituting [ %] of the total
outstanding common stock of the Company, Purchaser hereby certifies and
warrants that for the period beginning April 13, 1997 through the Effective
Time:
1. No Person Constructively Owns, directly or indirectly, more than 9.9%
in value of the stock of Purchaser.
2. No corporation (as defined for federal or state income tax purposes)
of which Purchaser Constructively Owns, directly or indirectly, more than
9.9% in value of the stock of such corporation, Constructively Owns any
shares of the Company (excluding for this purpose any Paired Shares owned,
directly or indirectly, by Purchaser without regard to the Constructive
Ownership Rules).
3. No partnership (as defined for federal or state income tax purposes)
of which Purchaser is a partner or other equity member Constructively Owns
any shares of the Company (excluding for this purpose any Paired Shares
owned, directly or indirectly, by Purchaser without regard to the
Constructive Ownership Rules).
4. No trust (as defined for federal or state income tax purposes) of
which Purchaser is a beneficiary Constructively Owns any shares of the
Company (excluding for this purpose any Paired Shares owned, directly or
indirectly, by Purchaser without regard to the Constructive Ownership
Rules).
5. Purchaser Constructively Owns, directly or indirectly, no more than
9.9% by value of the stock of the Company (including for this purpose any
Paired Shares issued pursuant to the Merger Agreement).
6. The issuance of Paired Shares to Purchaser pursuant to Section 1.6 of
the Merger Agreement will not cause Purchaser or any other Person to
Constructively Own more than 9.9% by value of the stock of the Company or
cause any rent received by the Company to fail to qualify as "rents from
real property" within the meaning of Section 856(d)(2)(B) of the Code or
cause the Company to be "closely held" within the meaning of Section 856(h)
of the Code.
7. Purchaser is acquiring Paired Shares for investment purposes only, and
not with a view to their resale or other distribution.
8. Purchaser is an "accredited investor" within the meaning of Regulation
D under the Securities Act of 1933.
9. Purchaser will not transfer all or any portion of the Paired Shares to
any Person if the ownership of such shares by such Person will cause any
Person to Constructively Own, directly or indirectly, more than 9.9% by
value of the stock of the Company (including for this purpose any Paired
Shares issued pursuant to the Merger Agreement) or cause the Company to be
"closely held" within the meaning of Section 856(h) of the Code.
For the purposes of this Certificate capitalized terms shall have the
meanings assigned to such terms in Exhibit A hereto.
IN WITNESS WHEREOF, I have executed this Certificate as of , 1997.
MEDITRUST ACQUISITION COMPANY,
a Massachusetts Business Trust
By: _________________________________
Name:
Title:
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<PAGE>
EXHIBIT A
DEFINITIONS
"Code": the Internal Revenue Code of 1986, as amended.
"Company": Santa Anita Realty Enterprises, Inc.
"Constructive Ownership Rules": the constructive ownership rules of Section
318 of the Code, as modified by Section 856(d)(5) of the Code. Generally, these
rules provide:
(1) an individual is considered as owning the Ownership Interest that is
owned, directly or constructively, by or for his spouse, his children, his
grandchildren, and his parents;
(2) an Ownership Interest that is owned, directly or constructively, by
or for a partnership or estate is considered as owned proportionately by
its partners or beneficiaries;
(3) an Ownership Interest that is owned, directly or constructively, by
or for a trust is considered as owned by its beneficiaries in proportion to
the actuarial interest of such beneficiaries (provided, however, that in
the case of a "grantor trust" the Ownership Interest will be considered as
owned by the grantors);
(4) if 10 percent or more in value of the stock in a corporation is
owned, directly or constructively, by or for any person, such person shall
be considered as owning the Ownership Interest that is owned, directly or
constructively, by or for such corporation in that proportion which the
value of the stock which such person so owns bears to the value of all the
stock in such corporation;
(5) an Ownership Interest that is owned, directly or constructively, by
or for a partner of a partnership or a beneficiary of an estate or trust
shall be considered as owned by the partnership, estate, or trust;
(6) if 10 percent or more in value of the stock in a corporation is
owned, directly or constructively, by or for any person, such corporation
shall be considered as owning the Ownership Interest that is owned,
directly or constructively, by or for such person;
(7) if any person has an option to acquire an Ownership Interest
(including an option to acquire an option or any one of a series of such
options), such Ownership Interest shall be considered as owned by such
person;
(8) an Ownership Interest that is constructively owned by a person by
reason of the application of the rules described in paragraphs (1) through
(7) above shall, for purposes of applying paragraphs (1) through (7), be
considered as directly owned by such person provided, however, that (a) an
Ownership Interest constructively owned by an individual by reason of
paragraph (1) shall not be considered as owned by him for purposes of again
applying paragraph (1) in order to make another the constructive owner of
such Ownership Interest, (b) an Ownership Interest constructively owned by
a partnership, estate, trust, or corporation by reason of the application
of paragraphs (5) or (6) shall not be considered as owned by it for
purposes of applying paragraphs (2), (3), or (4) in order to make another
the constructive owner of such Ownership Interest, (c) if an Ownership
Interest may be considered as owned by an individual under paragraphs (1)
or (7), it shall be considered as owned by him under paragraph (7), and (d)
for purposes of the above described rules, an S corporation shall be
treated as a partnership and any shareholder of the S corporation shall be
treated as a partner of such partnership except that this rule shall not
apply for purposes of determining whether stock in the S corporation is
constructively owned by any person.
(9) For purposes of the above summary of the constructive ownership
rules, the term "Ownership Interest" means the ownership of stock with
respect to a corporation and, with respect to any other type of entity, the
ownership of an interest in either its assets or net profits.
"Constructively Owns": a Person constructively owns any asset which such
Person is considered to own after application of the Constructive Ownership
Rules.
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<PAGE>
"Merger Agreement": that certain Third Amended and Restated Agreement and
Plan of Merger dated as of April 13, 1997, by and among Santa Anita Realty
Enterprises, Inc., Santa Anita Operating Company, Meditrust and Meditrust
Acquisition Company.
"Paired Shares": paired common stock, $.10 par value per share, of Santa
Anita Realty Enterprises, Inc. and Santa Anita Operating Company.
"Person": an individual, joint venture, partnership, limited liability
company, trust, business trust, corporation, cooperative, association, private
foundation, charitable trust, employee pension, profit sharing, stock bonus or
supplemental unemployment benefit trust, or any other entity.
"REIT": a real estate investment trust which meets the requirements of
Sections 856 through 860 of the Code.
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<PAGE>
ANNEX C
TO THIRD
AMENDED
AND RESTATED
AGREEMENT AND
PLAN OF MERGER
CERTIFICATE
REGARDING CERTAIN SHARE OWNERSHIP MATTERS
In connection with the issuance to ("Purchaser") by the Company of its
common stock constituting [ %] of the total outstanding common stock of the
Company, Purchaser hereby certifies and warrants that for the period beginning
April 13, 1997 through the Effective Time:
1. If the Purchaser is a corporation (as defined for federal or state
income tax purposes), no Person Constructively Owns, directly or
indirectly, more than 9.9% in value of the stock of Purchaser.
2. If the Purchaser is not a corporation (as defined for federal or state
income tax purposes), no Person Constructively Owns, directly or
indirectly, an interest of more than 9.9% in the assets or net profits of
the Purchaser.
3. No corporation (as defined for federal or state income tax purposes)
of which Purchaser Constructively Owns, directly or indirectly, more than
9.9% in value of the stock of such corporation, Constructively Owns any
shares of the Company (excluding for this purpose any Paired Shares owned,
directly or indirectly, by Purchaser without regard to the Constructive
Ownership Rules).
4. No partnership (as defined for federal or state income tax purposes)
of which Purchaser is a partner or other equity member Constructively Owns
any shares of the Company (excluding for this purpose any Paired Shares
owned, directly or indirectly, by Purchaser without regard to the
Constructive Ownership Rules).
5. No trust (as defined for federal or state income tax purposes) of
which Purchaser is a beneficiary Constructively Owns any shares of the
Company (excluding for this purpose any Paired Shares owned, directly or
indirectly, by Purchaser without regard to the Constructive Ownership
Rules).
6. Purchaser Constructively Owns, directly or indirectly, no more than
9.9% by value of the stock of the Company (including for this purpose any
Paired Shares issued pursuant to the Merger Agreement).
7. The issuance of Paired Shares to Purchaser pursuant to Section 1.7 of
the Merger Agreement will not cause Purchaser or any other Person to
Constructively Own more than 9.9% by value of the stock of the Company or
cause any rent received by the Company to fail to qualify as "rents from
real property" within the meaning of Section 856(d)(2)(B) of the Code or
cause the Company to be "closely held" within the meaning of Section 856(h)
of the Code.
8. Purchaser is acquiring Paired Shares for investment purposes only, and
not with a view to their resale or other distribution.
9. Purchaser is an "accredited investor" within the meaning of Regulation
D under the Securities Act of 1933.
10. There is no understanding or arrangement between Purchaser and any
other Person as to how the Purchaser will vote the Paired Shares being
issued to Purchaser.
11. Purchaser will not transfer all or any portion of the Paired Shares
to any Person if (i) the ownership of such shares by such Person will cause
any Person to Constructively Own, directly or indirectly, more than 9.9% by
value of the stock of the Company (including for this purpose any Paired
Shares issued pursuant to the Merger Agreement), or (ii) there is any
understanding or arrangement between the transferee and any other Person
who Constructively Owns Paired Shares as to how the transferee will vote
such Paired Shares, or (iii) the ownership of such shares by such Person
will cause the Company to be "closely held" within the meaning of Section
856(h) of the Code.
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For the purposes of this Certificate capitalized terms shall have the
meanings assigned to such terms in Exhibit A hereto.
IN WITNESS WHEREOF, I have executed this Certificate as of , 1997.
_____________________________________
[Name]
_____________________________________
[Title]
44
<PAGE>
EXHIBIT A
DEFINITIONS
"Code": the Internal Revenue Code of 1986, as amended.
"Company": Santa Anita Realty Enterprises, Inc.
"Constructive Ownership Rules": the constructive ownership rules of Section
318 of the Code, as modified by Section 856(d)(5) of the Code. Generally, these
rules provide:
(1) an individual is considered as owning the Ownership Interest that is
owned, directly or constructively, by or for his spouse, his children, his
grandchildren, and his parents;
(2) an Ownership Interest that is owned, directly or constructively, by
or for a partnership or estate is considered as owned proportionately by
its partners or beneficiaries;
(3) an Ownership Interest that is owned, directly or constructively, by
or for a trust is considered as owned by its beneficiaries in proportion to
the actuarial interest of such beneficiaries (provided, however, that in
the case of a "grantor trust" the Ownership Interest will be considered as
owned by the grantors);
(4) if 10 percent or more in value of the stock in a corporation is
owned, directly or constructively, by or for any person, such person shall
be considered as owning the Ownership Interest that is owned, directly or
constructively, by or for such corporation in that proportion which the
value of the stock which such person so owns bears to the value of all the
stock in such corporation;
(5) an Ownership Interest that is owned, directly or constructively, by
or for a partner of a partnership or a beneficiary of an estate or trust
shall be considered as owned by the partnership, estate, or trust;
(6) if 10 percent or more in value of the stock in a corporation is
owned, directly or constructively, by or for any person, such corporation
shall be considered as owning the Ownership Interest that is owned,
directly or constructively, by or for such person;
(7) if any person has an option to acquire an Ownership Interest
(including an option to acquire an option or any one of a series of such
options), such Ownership Interest shall be considered as owned by such
person;
(8) an Ownership Interest that is constructively owned by a person by
reason of the application of the rules described in paragraphs (1) through
(7) above shall, for purposes of applying paragraphs (1) through (7), be
considered as directly owned by such person provided, however, that (a) an
Ownership Interest constructively owned by an individual by reason of
paragraph (1) shall not be considered as owned by him for purposes of again
applying paragraph (1) in order to make another the constructive owner of
such Ownership Interest, (b) an Ownership Interest constructively owned by
a partnership, estate, trust, or corporation by reason of the application
of paragraphs (5) or (6) shall not be considered as owned by it for
purposes of applying paragraphs (2), (3), or (4) in order to make another
the constructive owner of such Ownership Interest, (c) if an Ownership
Interest may be considered as owned by an individual under paragraphs (1)
or (7), it shall be considered as owned by him under paragraph (7), and (d)
for purposes of the above described rules, an S corporation shall be
treated as a partnership and any shareholder of the S corporation shall be
treated as a partner of such partnership except that this rule shall not
apply for purposes of determining whether stock in the S corporation is
constructively owned by any person.
(9) For purposes of the above summary of the constructive ownership
rules, the term "Ownership Interest" means the ownership of stock with
respect to a corporation and, with respect to any other type of entity, the
ownership of an interest in either its assets or net profits.
"Constructively Owns": a Person constructively owns any asset which such
Person is considered to own after application of the Constructive Ownership
Rules.
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"Merger Agreement": that certain Third Amended and Restated Agreement and
Plan of Merger dated as of April 13, 1997, by and among Santa Anita Realty
Enterprises, Inc., Santa Anita Operating Company, Meditrust and Meditrust
Acquisition Company.
"Paired Shares": paired common stock, $.10 par value per share, of Santa
Anita Realty Enterprises, Inc. and Santa Anita Operating Company.
"Person": an individual, joint venture, partnership, limited liability
company, trust, business trust, corporation, cooperative, association, private
foundation, charitable trust, employee pension, profit sharing, stock bonus or
supplemental unemployment benefit trust, or any other entity.
"REIT": a real estate investment trust which meets the requirements of
Sections 856 through 860 of the Code.
46
<PAGE>
ANNEX D
TO THIRD AMENDED
AND RESTATED
AGREEMENT
AND PLAN OF
MERGER
REGISTRATION RIGHTS
Unless otherwise indicated, capitalized terms used herein shall have the
meanings assigned to them in the Third Amended and Restated Agreement and Plan
of Merger dated as of April 13, 1997 (the "Agreement") to which this exhibit is
attached.
Section 1. Definitions and Usage.
1.1. Definitions. As used in this Exhibit:
"Beneficially Owning" means owning Realty Shares directly, indirectly or
constructively by a Person through the application of Section 318(a) of the
Code, as modified by Section 856(d)(5) of the Code, or Section 544 of the Code,
as modified by Section 856(h) of the Code. The term "Beneficially Own" shall
have a correlative meaning.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time.
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Continuously Effective", with respect to a specified registration statement,
shall mean that such registration statement shall not cease to be effective and
available for Transfers of Registrable Securities thereunder for longer than
either (i) any ten (10) consecutive business days, or (ii) an aggregate of
fifteen (15) business days during the period specified in the relevant
provision of this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934 and the rules
and regulations of the Commission thereunder, all as the same shall be in
effect at the time.
"Issuance Percentage", when used with respect to Realty and Operating, shall
mean the relative percentages that Realty and Operating may from time to time
determine based on their joint determination of the relative values of Realty
Shares and Operating Shares.
"MT" shall mean Meditrust Acquisition Company under the Agreement or any
purchaser of Unaffiliated Acquired Shares pursuant to Section 1.7 of the
Agreement.
"Ownership Limit" when used with respect to Realty means 8% in value, voting
power or in number, whichever is more restrictive, of the issued and
outstanding capital stock of Realty and, when used with respect to Operating
means 8% in value, voting power or in number, whichever is more restrictive, of
the issued and outstanding capital stock of Operating.
"Paired Shares" means an Operating Share and a Realty Share which are
"paired" pursuant to the Pairing Agreement dated December 20, 1979 between
Realty and Operating, as it may be amended from time to time.
"Person" shall mean any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"Register", "registered", and "registration" shall refer to a registration
effected by preparing and filing a registration statement or similar document
in compliance with the Securities Act, and the declaration or ordering by the
Commission of effectiveness of such registration statement or document.
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"Registrable Securities" shall mean any Santa Anita Shares issued pursuant to
Section 1.6 or 1.7 of the Agreement.
"Registrable Securities then outstanding" shall mean, with respect to a
specified determination date, the Registrable Securities owned by MT on such
date.
"Registration Expenses" shall have the meaning set forth in Section 5.1.
"REIT Requirements" shall mean the requirements for Realty to (i) continue to
qualify as a REIT under the Code and the rules and regulations promulgated
thereunder, (ii) retain the benefits of those certain private letter rulings
issued by the Internal Revenue Service to Realty dated as of October 16, 1979,
as supplemented January 11, 1980, (iii) avoid any federal income or excise tax
liability, and (iv) retain its status as grandfathered from the application of
Section 269B(a)(3) of the Code pursuant to Section 136(c)(3) of the Deficit
Reduction Act of 1984.
"Securities Act" shall mean the Securities Act of 1933 and the rules and
regulations of the Commission thereunder, all as the same may be in effect at
the time.
"Transfer" shall mean and include the act of selling, giving, transferring,
creating a trust (voting or otherwise), assigning or otherwise disposing of
(other than pledging, hypothecating or otherwise transferring as security) (and
correlative words shall have correlative meanings); provided, however, that any
transfer or other disposition upon foreclosure or other exercise of remedies of
a secured creditor after an event of default under or with respect to a pledge,
hypothecation or other transfer as security shall constitute a "Transfer."
"Underwriters' Representative" shall mean the managing underwriter, or, in
the case of a co-managed underwriting, the managing underwriter designated as
the Underwriters' Representative by the co-managers.
"Violation" shall have the meaning set forth in Section 6.1.
Section 2. Shelf Registration.
2.1. If (a) the Agreement is terminated for any reason and within 15 business
days after the date of such termination MT shall make a written request to
Realty and Operating or (b) the Mergers are effective and MT shall make a
written request to Realty or Operating, then Realty and Operating shall cause
to be filed with the Commission a registration statement under the Securities
Act for an offering by Meditrust Acquisition Company by means of a distribution
to its shareholders or an offering by MT on a delayed or continuous basis
pursuant to Rule 415 or such other appropriate rule under the Securities Act,
and Realty and Operating shall include therein all or any portion of the
Registrable Securities as MT shall request in such written request. Any request
made pursuant to this Section 2.1 shall be addressed to the attention of the
Secretary of each of Realty and Operating, and shall specify the number of
Registrable Securities to be registered, the intended methods of disposition
thereof and that the request is for a demand Registration pursuant to this
Section 2.1.
2.2. Realty and Operating shall be entitled to postpone for up to 90 days the
filing, effectiveness, supplementing or amending of any registration statement
otherwise required to be prepared and filed pursuant to this Section 2, if the
Board of Directors of Realty or the Board of Directors of Operating determines
that such registration and the Transfer of Registrable Securities contemplated
thereby would interfere with, or require premature disclosure of, any material
financing, acquisition, disposition, reorganization or other transaction
involving Realty or Operating or any of their respective subsidiaries and
Realty or Operating, as the case may be, promptly gives MT notice of such
determination. MT hereby acknowledges that any notice given by Realty or
Operating pursuant to this Section 2.2 shall constitute material non-public
information and that the United States securities laws prohibit any Person who
has material non-public information about a company from purchasing or selling
securities of such company or from communicating such information to any other
Person under circumstances in which it is reasonably foreseeable that such
Person is likely to purchase or sell such securities.
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2.3. Following receipt of a request for a registration pursuant to Section
2.1, Realty and Operating shall:
(i) File the registration statement with the Commission as promptly as
practicable and shall use their respective reasonable efforts to have the
registration declared effective under the Securities Act as soon as
reasonably practicable, in each instance giving due regard to the need to
prepare current financial statements, conduct due diligence and complete
other actions that are reasonably necessary to effect a registered public
offering.
(ii) Use their respective reasonable efforts to keep the relevant
registration statement Continuously Effective until such date as of which
all the Registrable Securities under the registration statement have been
disposed of in a manner described in the registration statement, but in no
event later than the 120th day following the effective date of such
registration statement. Notwithstanding the foregoing, if for any reason
the effectiveness of a registration pursuant to this Section 2 is
suspended, the relevant foregoing period shall be extended by the aggregate
number of days of such suspension.
2.4. Notwithstanding anything in this Agreement to the contrary, no
registration shall be effected hereunder and no Transfer of Registrable
Securities may be effected if as a result thereof Realty would not satisfy the
REIT Requirements in any respect or if such registration or Transfer would
result in any Person Beneficially Owning Paired Shares in excess of the
Ownership Limit. For purposes of the preceding sentence, registration shall not
be deemed to have been effected (i) unless a registration statement with
respect thereto has become effective, or (ii) if after such registration
statement has become effective, the related offer, sale or distribution of
Registrable Securities thereunder is prohibited by any stop order, injunction
or other order or requirement of the Commission or other governmental agency or
court for any reason not attributable to MT and such prohibition is not
thereafter eliminated. If Realty and Operating shall have complied with their
respective obligations under this Agreement, a right to demand a registration
pursuant to this Section 2 shall be deemed to have been satisfied upon the
effective date of the registration statement, provided no stop order or similar
order, or proceedings for such an order, is thereafter entered or initiated.
2.5. A registration pursuant to this Section 2 shall be on such appropriate
registration form of the Commission as shall be selected by Realty and
Operating and shall permit the disposition of the Registrable Securities in
accordance with the intended method or methods of disposition specified in the
request pursuant to Section 2.1.
2.6. If the registration pursuant to Section 2 involves an underwritten
offering (whether on a "firm commitment," "best efforts" or "all reasonable
efforts" basis or otherwise), MT shall select the underwriter or underwriters
and manager or managers to administer such underwritten offering; provided,
however, that each Person so selected shall be acceptable to Realty and
Operating.
Section 3. Registration Procedures. Whenever required under Section 2 to
effect the registration of any Registrable Securities, Realty and Operating
shall, as expeditiously as practicable:
3.1. Prepare and file with the Commission a registration statement with
respect to such Registrable Securities and use their respective reasonable
efforts to cause such registration statement to become effective; provided,
however, that before filing a registration statement or prospectus or any
amendments or supplements thereto, Realty and Operating shall furnish to one
firm of counsel for MT copies of all such documents in the form substantially
as proposed to be filed with the Commission.
3.2. Prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act and rules thereunder with respect to the disposition of all
securities covered by such registration statement. Realty and Operating shall
amend the registration statement or supplement the prospectus so that it will
remain current and in compliance with the requirements of the Securities Act
for the period specified in Section 2.3(ii), and if during such period any
event or development occurs as a result of which the registration statement or
prospectus contains a misstatement of a material fact or
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omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, Realty or Operating shall promptly
notify MT, amend the registration statement or supplement the prospectus so
that each will thereafter comply with the Securities Act and furnish to MT such
amended or supplemented prospectus, which MT shall thereafter use in the
Transfer of Registrable Securities covered by such registration statement.
Pending any such amendment or supplement, MT shall cease making offers or
Transfers of Registrable Shares pursuant to the prior prospectus. In the event
that any Registrable Securities included in a registration statement subject
to, or required by, this Agreement remain unsold at the end of the period
during which Realty and Operating are obligated to use their respective
reasonable efforts to maintain the effectiveness of such registration
statement, Realty and Operating may file a post-effective amendment to the
registration statement for the purpose of removing such Registrable Securities
from registered status.
3.3. Furnish to MT without charge, such numbers of copies of the registration
statement, any pre-effective or post-effective amendment thereto, the
prospectus, including each preliminary prospectus and any amendments or
supplements thereto, in each case in conformity with the requirements of the
Securities Act and the rules thereunder, and such other related documents as MT
may reasonably request in order to facilitate the disposition of Registrable
Securities owned by MT.
3.4. Use their respective reasonable efforts (i) to register and qualify the
securities covered by such registration statement under such other securities
or Blue Sky laws of such states where an exemption from registration is not
available and as shall be reasonably requested by the Underwriters'
Representative and (ii) to obtain the withdrawal of any order suspending the
effectiveness of a registration statement, or the lifting of any suspension of
the qualification (or exemption from qualification) of the offer and transfer
of any of the Registrable Securities in any state, at the earliest possible
moment; provided, however, that neither Realty nor Operating shall be required
in connection therewith or as a condition thereto to qualify to do business or
to consent to general service of process in any state.
3.5. In the event of any underwritten offering, use their respective
reasonable efforts to enter into and perform their respective obligations under
an underwriting agreement (including indemnification and contribution
obligations of underwriters), in usual and customary form, with the managing
underwriter or underwriters of such offering. Realty and Operating shall also
cooperate with MT and the Underwriters' Representative for such offering in the
marketing of the Registrable Securities, including making available the
officers, accountants, counsel, premises, books and records of Realty and
Operating for such purpose, but neither Realty nor Operating shall be required
to incur any material out-of-pocket expense pursuant to this sentence.
3.6. Promptly notify MT of any stop order issued or threatened to be issued
by the Commission in connection therewith and take all reasonable actions
required to prevent the entry of such stop order or to remove it if entered.
3.7. Make available for inspection by MT, any underwriter participating in
such offering and the representatives of MT and such Underwriter (but not more
than one firm of counsel to MT), all financial and other information as shall
be reasonably requested by them, and provide MT, any underwriter participating
in such offering and the representatives of MT and such Underwriter the
reasonable opportunity to discuss the business affairs of Realty and Operating
with their principal executives and independent public accountants who have
certified the audited financial statements included in such registration
statement, in each case all as necessary to enable them to exercise their due
diligence responsibility under the Securities Act; provided, however, that
information that Realty or Operating determines to be confidential and which
Realty or Operating advises such Person in writing, is confidential shall not
be disclosed unless such Person signs a confidentiality agreement reasonably
satisfactory to Realty and Operating or MT agrees to be responsible for such
Person's breach of confidentiality on terms reasonably satisfactory to Realty
and Operating.
3.8. Use their respective reasonable efforts to obtain a so-called "comfort
letter" from the independent public accountants of Realty and Operating, and
legal opinions of counsel to Realty and Operating addressed to
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MT in customary form and covering such matters of the type customarily covered
by such letters, and in a form that shall be reasonably satisfactory to MT.
Delivery of any such opinion or comfort letter shall be subject to the
recipient furnishing such written representations or acknowledgements as are
customarily provided by selling stockholders who receive such comfort letters
or opinions.
3.9. Use their respective reasonable efforts to cause the Registrable
Securities covered by such registration statement (i) if the Paired Shares are
then listed on a securities exchange or included for quotation in a recognized
trading market, to continue to be so listed or included for a reasonable period
of time after the offering, and (ii) to be registered with or approved by such
other United States or state governmental agencies or authorities as may be
necessary by virtue of the business and operations of Realty and Operating to
enable MT to consummate the disposition of such Registrable Securities.
3.10. Take such other actions as are reasonably required in order to expedite
or facilitate the disposition of Registrable Securities included in each such
registration.
Section 4. MT's Obligations. It shall be a condition precedent to the
obligations of Realty and Operating to take any action pursuant to this
Agreement with respect to the Registrable Securities of MT that MT shall:
4.1. Furnish to Realty and Operating such information regarding MT, the
number of the Registrable Securities owned by it, and the intended method of
disposition of such securities as shall be required to effect the registration
of MT's Registrable Securities, and to cooperate fully with Realty and
Operating in preparing such registration.
Section 5. Expenses of Registration. Expenses in connection with
registrations pursuant to this Agreement shall be allocated and paid as
follows:
5.1. Realty and Operating shall bear and pay all expenses incurred in
connection with any registration, filing, or qualification of Registrable
Securities, including all registration, filing and National Association of
Securities Dealers, Inc. fees, all fees and expenses of complying with
securities or blue sky laws, all printing expenses, messenger and delivery
expenses, the reasonable fees and disbursements of counsel for Realty and
Operating, and of the independent public accountants for Realty and Operating,
including the expenses of "cold comfort" letters required by or incident to
such performance and compliance (the "Registration Expenses"), but excluding
underwriting discounts and commissions relating to Registrable Securities
(which shall be paid by MT) and all fees and expenses of counsel for MT;
provided, however, that Realty and Operating shall not be required to pay for
any expenses of any registration proceeding begun pursuant to Section 2 if the
registration is subsequently withdrawn. Realty and Operating each agree between
themselves that they shall bear and pay Registration Expenses in an amount
equal to its respective Issuance Percentage of such Registration Expenses and
that they shall reimburse each other to the extent necessary to cause each of
them to so bear and pay such respective amounts.
Section 6. Indemnification; Contribution. If any Registrable Securities are
included in a registration statement under this Agreement:
6.1. To the extent permitted by applicable law, each of Realty and Operating,
severally and not jointly, shall indemnify and hold harmless MT, each Person,
if any, who controls MT within the meaning of the Securities Act, and each
officer, director, partner and employee of MT and such controlling Person,
against any and all losses, claims, damages, liabilities and expenses (joint or
several), including reasonable attorneys' fees and disbursements and reasonable
expenses of investigation, incurred by such party pursuant to any actual or
threatened action, suit, proceeding or investigation, or to which any of the
foregoing Persons may otherwise become subject under the Securities Act, the
Exchange Act or other federal or state laws, insofar as such losses, claims,
damages, liabilities and expenses arise out of or are based upon any of the
following statements, omissions or violations (collectively a "Violation"):
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(i) Any untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein, or any amendments or
supplements thereto; or
(ii) The omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein
not misleading; provided, however, that the indemnification required by
this Section 6.1 shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or expense if such settlement is effected
without the consent of Realty or Operating (which consent shall not be
unreasonably withheld), nor shall Realty or Operating be liable in any such
case for any such loss, claim, damage, liability or expense to the extent
that it arises out of or is based upon a Violation which occurs in reliance
upon and in conformity with information furnished to Realty or Operating by
MT expressly for use in connection with such registration; and provided,
further, that the indemnity agreement contained in this Section 6 shall not
apply to the extent that any such loss is based on or arises out of an
untrue statement or alleged untrue statement of a material fact, or an
omission or alleged omission to state a material fact, contained in or
omitted from any preliminary prospectus if the final prospectus shall
correct such untrue statement or alleged untrue statement, or such omission
or alleged omission, and a copy of the final prospectus has not been sent
or given to such person at or prior to the confirmation of sale to such
person if an underwriter was under an obligation to deliver such final
prospectus and failed to do so.
6.2. To the extent permitted by applicable law, MT shall indemnify and hold
harmless Realty, Operating, each of the directors, officers and employees of
Realty and Operating, and each Person, if any, who controls Realty or Operating
within the meaning of the Securities Act, against any and all losses, claims,
damages, liabilities and expenses (joint and several), including reasonable
attorneys' fees and disbursements and reasonable expenses of investigation,
incurred by such party pursuant to any actual or threatened action, suit,
proceeding or investigation, or to which any of the foregoing Persons may
otherwise become subject under the Securities Act, the Exchange Act or other
federal or state laws, but only insofar as such losses, claims, damages,
liabilities and expenses arise out of or are based upon any Violation, in each
case to the extent that such Violation arises out of or is based upon
information furnished by MT expressly for use in connection with such
registration; provided, however, that (x) the indemnification required by this
Section 6.2 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or expense if such settlement is effected without the
consent of MT (which consent shall not be unreasonably withheld) and (y) in no
event shall the amount of any indemnity under this Section 6.2 exceed the gross
proceeds from the applicable offering received by MT.
6.3. Promptly after receipt by an indemnified party under this Section 6 of
notice of the commencement of any action, suit, proceeding, investigation or
threat thereof made in writing for which such indemnified party may make a
claim under this Section 6, such indemnified party shall deliver to the
indemnifying party a written notice thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties. The
failure to deliver written notice to the indemnifying party within a reasonable
time following the commencement of any such action, if prejudicial to its
ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 6 to the extent of such
prejudice but shall not relieve the indemnifying party of any liability that it
may have to any indemnified party otherwise than pursuant to this Section 6.
Any fees and expenses incurred by the indemnified party (including any fees and
expenses incurred in connection with investigating or preparing to defend such
action or proceeding) shall be paid to the indemnified party, as incurred,
within thirty (30) days of written notice thereof to the indemnifying party.
Any such indemnified party shall have the right to employ separate counsel in
any such action, claim or proceeding and to participate in the defense thereof,
but the fees and expenses of such counsel shall be the expenses of such
indemnified party unless (i) the indemnifying party has agreed to pay such fees
and expenses or (ii) the indemnifying party shall have failed to promptly
assume the defense of such action, claim or proceeding or (iii) the named
parties to any such action, claim or proceeding (including any impleaded
parties) include both such indemnified party and the
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indemnifying party, and such indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to it which are
different from or in addition to those available to the indemnifying party and
that the assertion of such defenses would create a conflict of interest such
that counsel employed by the indemnifying party could not faithfully represent
the indemnified party (in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action, claim or proceeding on behalf of
such indemnified party, it being understood, however, that the indemnifying
party shall not, in connection with any one such action, claim or proceeding or
separate but substantially similar or related actions, claims or proceedings in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (together with appropriate local counsel) at any
time for all such indemnified parties, unless in the reasonable judgment of
such indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to
such action, claim or proceeding, in which event the indemnifying party shall
be obligated to pay the fees and expenses of such additional counsel or
counsels).
6.4. If the indemnification required by this Section 6 from the indemnifying
party is unavailable to an indemnified party hereunder in respect of any
losses, claims, damages, liabilities or expenses referred to in this Section 6:
(i) The indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or expenses
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The relative fault of
such indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any Violation has been committed
by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such Violation. The
amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 6.1 and Section
6.2, any legal or other fees or expenses reasonably incurred by such party
in connection with any investigation or proceeding.
(ii) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 6.4 were determined by pro rata
allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in Section 6.4(i). No
Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
6.5. If indemnification is available under this Section 6, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in
this Section 6 without regard to the relative fault of such indemnifying party
or indemnified party or any other equitable consideration referred to in
Section 6.4.
6.6. The obligations of Realty, Operating and MT under this Section 6 shall
survive the completion of any offering of Registrable Securities pursuant to a
registration statement under this Agreement, and otherwise.
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ANNEX E
TO THIRD AMENDED
AND RESTATED
AGREEMENT
AND PLAN OF MERGER
FOURTH: Capitalization. Section 1. The total number of shares of all classes
of stock which the Corporation shall have authority to issue is 306,000,000, of
which 270,000,000 shares of the par value of $.10 each are to be of a class
designated Common Stock, 6,000,000 shares of the par value of $.10 each are to
be of a class designated Preferred Stock and 30,000,000 shares of the par value
of $.10 each are to be of a class designated Series Common Stock.
Section 2. The shares of Preferred Stock may be issued from time to time in
one or more series. The Board of Directors of the Corporation is hereby
authorized to fix or alter the dividend rights, dividend rate, conversion
rights, voting rights, rights and terms of redemption (including sinking fund
provisions), the redemption price or prices, and the liquidation preferences of
any wholly unissued series of Preferred Stock and the number of shares
constituting any such series and the designation thereof, or all or any of
them.
Section 3. The shares of Series Common Stock may be issued from time to time
in one or more series. The Board of Directors of the Corporation is hereby
authorized to fix or alter the dividend rights, dividend rate, conversion
rights, voting rights, rights and terms of redemption (including sinking fund
provisions), the redemption price or prices, and the liquidation preferences of
any wholly unissued series of Series Common Stock and the number of shares
constituting any such series and the designation thereof, or all or any of
them.
Section 4. (a) Each holder of Common Stock, as such, shall be entitled to one
vote for each share of Common Stock held of record by such holder on all
matters on which stockholders generally are entitled to vote.
(b) Except as otherwise required by law, holders of a series of Preferred
Stock or Series Common Stock, as such, shall be entitled only to such voting
rights, if any, as shall expressly be granted thereto by this Certificate of
incorporation (including any Certificate of Designation relating to such
series).
(c) Subject to applicable law and the rights, if any, of the holders of any
outstanding series of Preferred Stock or Series Common Stock or any class or
series of stock having a preference over or the right to participate with the
Common Stock with respect to the payment of dividends, dividends may be
declared and paid on the Common Stock at such times and in such amounts as the
Board of Directors in its discretion shall determine.
(d) Upon the dissolution, liquidation or winding up of the Corporation,
subject to the rights, if any, of the holders of any outstanding series of
Preferred Stock or Series Common Stock or any class or series of stock having a
preference over or the right to participate with the Common Stock with respect
to the distribution of assets of the Corporation upon such dissolution,
liquidation or winding up of the Corporation, the holders of the Common Stock,
as such, shall be entitled to receive the assets of the Corporation available
for distribution to its stockholders ratably in proportion to the number of
shares held by them.
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ANNEX F
TO THIRD AMENDED
AND RESTATED
AGREEMENT
AND PLAN OF MERGER
FOURTH: Capitalization. Section 1. The total number of shares of all classes
of stock which the Corporation shall have authority to issue is 306,000,000, of
which 270,000,000 shares of the par value of $.10 each are to be of a class
designated Common Stock, 6,000,000 shares of the par value of $.10 each are to
be of a class designated Preferred Stock and 30,000,000 shares of the par value
of $.10 each are to be of a class designated Series Common Stock.
Section 2. The shares of Preferred Stock may be issued from time to time in
one or more series. The Board of Directors of the Corporation is hereby
authorized to fix or alter the dividend rights, dividend rate, conversion
rights, voting rights, rights and terms of redemption (including sinking fund
provisions), the redemption price or prices, and the liquidation preferences of
any wholly unissued series of Preferred Stock and the number of shares
constituting any such series and the designation thereof, or all of any of
them.
Section 3. The shares of Series Common Stock may be issued from time to time
in one or more series. The Board of Directors of the Corporation is hereby
authorized to fix or alter the dividend rights, dividend rate, conversion
rights, voting rights, rights and terms of redemption (including sinking fund
provisions), the redemption price or prices, and the liquidation preferences of
any wholly unissued series of Series Common Stock and the number of shares
constituting any such series and the designation thereof, or all or any of
them.
Section 4. (a) Each holder of Common Stock, as such, shall be entitled to one
vote for each share of Common Stock held of record by such holder on all
matters on which stockholders generally are entitled to vote.
(b) Except as otherwise required by law, holders of a series of Preferred
Stock or Series Common Stock, as such, shall be entitled only to such voting
rights, if any, as shall expressly be granted thereto by this Certificate of
Incorporation (including any Certificate of Designation relating to such
series).
(c) Subject to applicable law and the rights, if any, of the holders of any
outstanding series of Preferred Stock or Series Common Stock or any class or
series of stock having a preference over or the right to participate with the
Common Stock with respect to the payment of dividends, dividends may be
declared and paid on the Common Stock as such times and in such amounts as the
Board of Directors in its discretion shall determine.
(d) Upon the dissolution, liquidation or winding up of the Corporation,
subject to the rights, if any, of the holders of any outstanding series of
Preferred Stock or Series Common Stock or any class or series of stock having a
preference over or the right to participate with the Common Stock with respect
to the distribution of assets of the Corporation upon such dissolution,
liquidation or winding up of the Corporation, the holders of the Common Stock,
as such, shall be entitled to receive the assets of the Corporation available
for distribution to its stockholders ratably in proportion to the number of
shares held by them.
55
<PAGE>
Exhibit 10.2
PAIRING AGREEMENT
THIS AGREEMENT (the "Pairing Agreement") is dated as of the ____ day of
September, 1997 by and between Meditrust, a Massachusetts business trust
("Meditrust"), and Meditrust Acquisition Company, a Massachusetts business trust
("MAC").
R E C I T A L S
WHEREAS, the Boards of Trustees of Meditrust and MAC have proposed a series
of transactions pursuant to which: (i) Meditrust will transfer $43,588,907 to
MAC, (ii) Meditrust and MAC will pair the outstanding Meditrust shares of
beneficial interest without par value (the "Meditrust Shares") with the MAC
shares of beneficial interest without par value (the "MAC Shares") so that they
are transferable only in units (the "Paired Shares"), each of which shall
consist of one Meditrust Share and one MAC Share (the "Pairing") and (iii)
Meditrust will distribute to each holder of Meditrust Shares as a dividend one
MAC Share for each Meditrust Share held by such shareholder (the "Spin-Off");
and
WHEREAS, the by-laws of Meditrust and MAC each provide that, commencing on
the effective date of the Spin-Off, the Meditrust Shares and the MAC Shares are
not transferable, and shall not be transferred on the books of Meditrust or MAC,
as the case may be, except in combination with an equal number of shares of the
other company; and
WHEREAS, Meditrust and MAC wish to enter into this Pairing Agreement for
the purpose of further effectuating the Pairing, including the establishment of
the terms and conditions which will govern the issuance and the transfer of
Meditrust Shares and MAC Shares after the effective date of the Spin-Off.
C O V E N A N T S
1. Transfer of Shares. Commencing at the time the Spin-Off becomes
effective (the "Effective Time of the Pairing") and continuing until such time
as the Pairing shall have been terminated in the manner herein provided:
(a) No Meditrust Shares shall be transferable, and they shall not be
transferred on the books of Meditrust, unless (i) a simultaneous transfer
of the same number of MAC Shares is made by the same transferor to the same
transferee, or (ii) such transferor, to the extent the transferor does not
itself own MAC Shares, has previously arranged with MAC for the transfer to
the transferee, of the same number of MAC Shares, except that MAC may
transfer Meditrust Shares acquired by it from Meditrust to a person to whom
MAC simultaneously issues the same number of MAC Shares.
<PAGE>
(b) No MAC Shares shall be transferable, and they shall not be
transferred on the books of MAC, unless (i) a simultaneous transfer of the
same number of Meditrust Shares is made by the same transferor to the same
transferee, or (ii) such transferor, to the extent the transferor does not
itself own Meditrust Shares, has previously arranged with Meditrust for the
transfer to the transferee, of the same number of Meditrust Shares, except
that Meditrust may transfer MAC Shares acquired by it from MAC to a person
to whom Meditrust simultaneously issues the same number of Meditrust
Shares.
(c) Each certificate evidencing ownership of Meditrust Shares issued
and not cancelled prior to the Effective Time of the Pairing shall be
deemed to evidence, in addition to the Meditrust Shares represented
thereby, the same number of MAC Shares, certificates for which shall be
deemed to be held in trust by Meditrust for the benefit of the holders of
the Meditrust Shares.
2. Issuance of Shares. Commencing at the Effective Time of the Pairing
and continuing until such time as the Pairing shall have been terminated in the
manner herein provided:
(a) Meditrust shall not issue or agree to issue any Meditrust Shares
to any person except MAC unless effective provision has been made for the
simultaneous issuance or transfer to the same person of the same number of
MAC Shares and for the pairing of such shares of Meditrust and MAC and
unless Meditrust and MAC have agreed on the manner and basis of allocating
the consideration to be received upon such issuance between Meditrust and
MAC or, if allocation of such consideration between them is not
practicable, on the payment by one company to the other of cash or other
consideration in lieu thereof. Any such allocation or payment shall be
based on the respective fair market values of the Meditrust Shares and the
MAC Shares.
(b) MAC shall not issue or agree to issue any MAC Shares to any
person except Meditrust unless effective provision has been made for the
simultaneous issuance or transfer to the same person of the same number of
Meditrust Shares and for the pairing of such shares of MAC and Meditrust
and unless MAC and Meditrust have agreed on the manner and basis of
allocating the consideration to be received upon such issuance between MAC
and Meditrust or, if allocation of such consideration between them is not
practicable, on the payment by one company to the other of cash or other
consideration in lieu thereof. Any such allocation or payment shall be
based on the respective fair market values of the Meditrust Shares and the
MAC Shares.
(c) Upon the exercise of any stock option or the conversion of any
other security convertible into Meditrust Shares granted or issued by
Meditrust prior to the Mergers (as such term is defined in that certain
Third Amended and Restated Agreement and Plan of Merger to which Meditrust
and MAC will be parties, to be dated as of April 13, 1997 (the "Merger
Agreement"), MAC agrees, upon request by management of Meditrust, that it
will simultaneously issue a number of MAC Shares to Meditrust or to
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<PAGE>
the exercising optionee, or to the holder of such other security
convertible into Meditrust Shares, equal to the number of Meditrust Shares
issued by Meditrust pursuant to such exercise, and Meditrust agrees to pay
to MAC the fair market value of each MAC Share so issued at the date of
exercise of such option, notwithstanding the provisions of subsection (b)
of this Section 2.
(d) The fair market value of the MAC Shares as determined by Coopers
& Lybrand, LLP as of the Effective Time of the Pairing shall be used in all
calculations pursuant to this Section 2. The fair market value of each
Meditrust Share shall be determined by subtracting the fair market value of
one MAC Share from the average of the closing sale prices of a unit
consisting of one Meditrust Share and one MAC Share as reported on the New
York Stock Exchange during the ten trading days prior to any date of
determination of the fair market value of Meditrust Shares.
3. Registration.
(a) MAC agrees to cause the MAC Shares to be duly registered
and to maintain effective such registration with the Securities and Exchange
Commission (the "SEC") pursuant to Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(b) Meditrust agrees to maintain an effective registration statement
with the SEC pursuant to Section 12 of the Exchange Act.
4. Stock Dividends, Reclassifications, etc. Commencing at the Effective
Time of the Pairing and continuing until such time as the Pairing shall have
been terminated in the manner herein provided:
(a) Meditrust shall not declare or pay any stock dividend consisting
in whole or in part of Meditrust Shares, issue any rights or warrants to
purchase any Meditrust Shares, or subdivide, combine or otherwise
reclassify the Meditrust Shares, unless MAC simultaneously takes the same
or equivalent action with respect to the MAC Shares, to the end that the
outstanding Meditrust Shares and MAC Shares will at all times be
effectively "paired" on a one-for-one basis as contemplated herein.
(b) MAC shall not declare or pay any stock dividend consisting in
whole or in part of MAC Shares, issue any rights or warrants to purchase
any MAC Shares, or subdivide, combine or otherwise reclassify the MAC
Shares, unless Meditrust simultaneously takes the same or equivalent action
with respect to the Meditrust Shares, to the end that the outstanding MAC
Shares and the outstanding Meditrust Shares will at all times be
effectively "paired" on a one-for-one basis as contemplated herein.
5. Merger, Sale of Assets, etc. Commencing at the Effective Time of the
Pairing and continuing until such time as the Pairing shall have been terminated
in the manner provided
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<PAGE>
herein, neither Meditrust nor MAC will be a party to any merger, consolidation,
sale of assets, liquidation or other form of reorganization pursuant to which
either the Meditrust Shares or the MAC Shares, as the case may be, are
converted, redeemed, exchanged or otherwise changed unless the other party
hereto (MAC or Meditrust, as the case may be) is also a party to such
transaction and the Meditrust Shares and the MAC Shares are treated
substantially identically in such transaction.
6. Repurchase of Shares. Commencing at the Effective Time of the Pairing
and continuing until such time as the Pairing shall have been terminated in the
manner provided herein, if at any time the direct or indirect ownership of the
Meditrust Shares or MAC Shares has or may become concentrated to an extent which
is not in conformity with the requirements of Section 856 of the Internal
Revenue Code of 1986, as amended, or similar provisions of successor statutes
(the "Code"), the Board of Trustees of Meditrust and/or MAC shall call for
purchase from such shareholders of such number of shares as may be necessary to
maintain or bring the direct or indirect ownership of the Meditrust Shares
and/or MAC Shares into conformity with the requirements of the Code and shall
refuse to register any transfer of Meditrust Shares and/or MAC Shares to any
person whose acquisition of such shares would result in Meditrust and/or MAC
being unable to conform to the requirements of the Code. The provisions of this
Section 6 shall apply to all outstanding Meditrust Shares and MAC Shares
notwithstanding any other provision of this Pairing Agreement.
7. Termination. This Pairing Agreement and the Pairing may not be
terminated except in the case of (i) a merger or other business combination
involving Meditrust and MAC in which Meditrust and MAC are not the surviving
corporations or (ii) a liquidation, dissolution or other termination of the
existence of MAC, in which case prior thereto the parties agree to cooperate to
effect a separation of the paired securities so as to permit the separate
issuance and transfer of the Meditrust Shares, and, in that connection,
appropriate provision shall be made to honor any outstanding commitments to
issue additional Meditrust Shares and MAC Shares.
8. Amendment. This Pairing Agreement may (other than Section 7) be
amended by action of the Board of Trustees of both Meditrust and MAC.
9. Trusts. The Declaration of Trust establishing Meditrust, dated
August 6, 1985, a copy of which, together with all amendments thereto (the
"Declaration"), is duly filed in the office of the Secretary of State of the
Commonwealth of Massachusetts, provides that the name "Meditrust" refers to the
trustees under the Declaration collectively as trustees, but not individually or
personally. No trustee, officer, director, shareholder, employee or agent of
Meditrust or its subsidiaries shall be held to any personal liability, jointly
or severally, for any obligation of, or claim against Meditrust or any of its
subsidiaries. All persons dealing with Meditrust, in any way, shall look only to
Meditrust's assets for recovery of any judgment or suit or the performance of
any obligation.
The Declaration of Trust establishing MAC, dated June 2, 1997, a copy of
which, together with all amendments thereto (the "MAC Declaration"), is duly
filed in the office of the
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<PAGE>
Secretary of State of the Commonwealth of Massachusetts, provides that the name
"Meditrust Acquisition Company" refers to the trustees under the MAC Declaration
collectively as trustees, but not individually or personally. No trustee,
officer, director, shareholder, employee or agent of MAC or its subsidiaries
shall be held to any personal liability, jointly or severally, for any
obligation of, or claim against MAC or any of its subsidiaries. All persons
dealing with MAC, in any way, shall look only to MAC's assets for recovery of
any judgment or suit or the performance of any obligation.
IN WITNESS WHEREOF the parties hereto have set their hands and seals to
this Pairing Agreement as of the date first mentioned above.
MEDITRUST
By
--------------------------------------------
President
MEDITRUST ACQUISITION COMPANY
By
--------------------------------------------
President
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<PAGE>
Exhibit 10.3
AGREEMENT AND PLAN OF DISTRIBUTION
AGREEMENT AND PLAN OF DISTRIBUTION, dated as of September __, 1997 by
and between MEDITRUST, a Massachusetts business trust ("Meditrust"), and
MEDITRUST ACQUISITION COMPANY, a Massachusetts business trust and wholly owned
subsidiary of Meditrust ("MAC").
RECITALS
WHEREAS, Meditrust, MAC, Santa Anita Realty Enterprises, Inc., a
Delaware corporation ("Realty"), and Santa Anita Operating Company, a Delaware
corporation ("Operating"), will enter into a Third Amended and Restated
Agreement and Plan of Merger, dated as of April 13, 1997 (the "Merger
Agreement"), providing for the merger of Meditrust with and into Realty and MAC
with and into Operating with Realty and Operating being the surviving
corporations (the "Mergers");
WHEREAS, the Boards of Trustees of Meditrust and MAC have proposed a
series of transactions whereby immediately prior to the record date for the
Special Meetings of Shareholders of Meditrust and MAC (the "Record Date"): (i)
Meditrust will transfer approximately $43,588,907 to MAC, (ii) Meditrust and
MAC will pair Meditrust's outstanding shares of beneficial interest without par
value (the "Meditrust Shares") with MAC's shares of beneficial interest without
par value (the "MAC Shares") so that they are transferable only in units, each
of which shall consist of one Meditrust Share and one MAC Share, and (iii)
Meditrust will distribute to each holder of Meditrust Shares as a dividend one
MAC Share for each Meditrust Share held by such shareholder (the "Spin-Off");
and
WHEREAS, the purpose of the Spin-Off is to make possible the Mergers by
creating two entities with a paired share structure to merge with and into
Realty and Operating which have such a paired share structure.
NOW, THEREFORE, in consideration of the premises, and of the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto hereby agree as follows:
ARTICLE I
Cash Contribution to MAC; Mechanics of Spin-Off
SECTION 1.1. Cash Contribution to MAC. Immediately prior to the Record
Date, Meditrust shall cause $43,588,907 in cash or other immediately available
funds to be transferred to MAC.
SECTION 1.2. Recapitalization of MAC.
(a) The authorized capital stock of MAC is unlimited and currently
there are 100 MAC Shares issued and outstanding, all of which are owned
beneficially and of record by Meditrust.
(b) Immediately prior to the Time of Distribution (as hereinafter
defined), Meditrust shall exchange the 100 MAC Shares owned by Meditrust for a
total number of MAC Shares equal to the total number of Meditrust Shares
outstanding as of the Record Date for the Spin-Off (as hereinafter defined).
SECTION 1.3. Mechanics of Spin-Offs. The Spin-Off shall be effected by
(i) the contribution of cash by Meditrust to MAC as set forth in Section 1.1 of
this Agreement and Plan of Distribution, (ii) the execution and delivery of the
Pairing Agreement by each of Meditrust and MAC and (iii) the declaration and
payment of a dividend by Meditrust to each holder of record of Meditrust Shares
(the "Meditrust Shareholders"), as of the close of the stock transfer books on
the record date designated by or pursuant to the authorization of the Board of
Trustees of Meditrust (the "Record Date for the Spin-Off"), of one MAC Share for
each Meditrust Share held by such holder, which MAC Shares shall be evidenced by
the certificates for the Meditrust Shares (the "Dividend").
<PAGE>
SECTION 1.4. Timing of Spin-Off. As promptly as practicable after (and
in any event no later than 10 days after) the Board of Trustees of Meditrust has
formally declared the Dividend, Meditrust shall pay the Dividend, subject to the
satisfaction or waiver of the conditions set forth in Article V of this
Agreement and Plan of Distribution. The Spin-Off shall be effected (the "Time of
Distribution") at such time as the Board of Trustees of Meditrust shall have
determined that all conditions st forth in Article V shall have been satisfied
and in any event not later than the Record Date. Following such determination,
Meditrust shall promptly notify the Meditrust Shareholders that (A) the Dividend
has been declared and (B) each certificate representing Meditrust Shares has
been deemed to represent an equivalent number of MAC Shares. Promptly following
the Time of Distribution, Meditrust agrees to deliver to the holders of
Meditrust Shares a description of the MAC Shares. In addition, promptly upon the
declaration of the Dividend, Meditrust shall issue a press release describing
the Spin-Off, setting forth, among other things, the fact that the MAC Shares
will not trade separately from the Meditrust Shares and that MAC is a party to
the Merger Agreement and describing MAC's assets.
ARTICLE II
Ancillary Agreements and Documents
SECTION 2.1. Pairing Agreement. Prior to the Time of Distribution, each
of Meditrust and MAC shall execute and deliver an agreement providing that the
Meditrust Shares and the MAC Shares are transferable only in units, each of
which shall consist of one Meditrust Share and one MAC Share, substantially in
the form attached hereto as Exhibit A (the "Pairing Agreement").
SECTION 2.2. Description of MAC Shares. Promptly following the Time of
Distribution, Meditrust shall deliver to the Meditrust Shareholders a
description of the MAC Shares substantially in the form attached hereto as
Exhibit B (the "Description of Meditrust Acquisition Company Shares").
ARTICLE III
Representation and Warranties
SECTION 3.1. Representation and Warranties of Meditrust. Meditrust
hereby represents and warrants to MAC as follows:
(a) Organization, Standing and Power. Meditrust is a Massachusetts
business trust duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts and has all
requisite power and authority to own, lease and operate its properties
and to carry on its business as now being conducted.
(b) Authority. Meditrust has all requisite power and authority to
execute this Agreement and Plan of Distribution and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and Plan of Distribution and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary action on the part of Meditrust. This Agreement and Plan of
Distribution has been duly executed and delivered by Meditrust and
constitutes a legal, valid and binding obligation of Meditrust
enforceable against it in accordance with its terms.
(c) No Conflict. The execution, delivery and performance by Meditrust
of this Agreement and Plan of Distribution will not contravene,
violate, result in a breach of or constitute a default under (i) any
provision of applicable law or of the declaration of trust or by-laws
of Meditrust or other organizational document, (ii) any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable
to Meditrust or any of its properties or assets, or (iii) any material
contract, instrument or other agreement to which Meditrust is a party
or by which Meditrust or any of its properties is bound.
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<PAGE>
(d) Approvals. No consent, approval, order, authorization of, or
registration, declaration or filing with, any third party or any
foreign, federal, state or local court, governmental authority or
regulatory body is required in connection with the making or
performance by Meditrust of this Agreement and Plan of Distribution,
except (i) filings with the Securities and Exchange Commission (the
"SEC") of (A) a registration statement on Form 10 with respect to the
MAC Shares and (B) a joint proxy statement/prospectus on Form S-4 with
respect to the Mergers, which shall contain information regarding MAC
of the nature and extent required by a registration statement on Form
S-1; and (ii) application for listing of the MAC shares on the New York
Stock Exchange.
SECTION 3.2. Representations and Warranties of MAC. MAC hereby
represents and warrants to Meditrust as follows:
(a) Organization, Standing and Power. MAC is a Massachusetts business
trust duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has all requisite power
and authority to own, lease and operate its properties and to carry on
its business as now being conducted.
(b) Authority. MAC has all requisite power and authority to execute
this Agreement and Plan of Distribution and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and Plan of Distribution and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary action on the part of MAC and the holders of MAC Shares. This
Agreement and Plan of Distribution has been duly executed and delivered
by MAC and constitutes a legal, valid and binding obligation of MAC
enforceable against it in accordance with its terms.
(c) No Conflict. The execution, delivery and performance by MAC of this
Agreement and Plan of Distribution will not contravene, violate, result
in a breach of or constitute a default under (i) any provision of
applicable law or of the declaration of trust or by-laws of MAC or
other charter or organizational documents, (ii) any judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to MAC
or any of its properties or (iii) any material contract, instrument or
other agreement to which MAC is a party or by which MAC or any of its
properties is bound.
(d) Approvals. No consent, approval, order, authorization of, or
registration, declaration or filing with any third party or any
foreign, federal, state or local court, governmental authority or
regulatory body is required in connection with the making or
performance by MAC of this Agreement and Plan of Distribution, except
(i) filings with the SEC of (A) a registration statement on Form 10
with respect to the MAC Shares and (B) a joint proxy
statement/prospectus on Form S-4 with respect to the Mergers, which
shall contain information regarding MAC of the nature and extent
required by a registration statement on Form S-1; and (ii) application
for listing of the MAC Shares on the New York Stock Exchange.
ARTICLE IV
Certain Covenants
SECTION 4.1. Transitional Services. Meditrust will provide such
transitional services as MAC shall reasonably request and MAC will reimburse
Meditrust for actual costs and expenses incurred in connection with the
provision of such services.
SECTION 4.2. Access to Information. After the Time of Distribution,
each of Meditrust and MAC shall provide the other and the other's
representatives with reasonable access during normal business hours and
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<PAGE>
upon reasonable advance notice to all information within the possession or
control of the other insofar as such access is reasonably required for a
reasonable purpose.
ARTICLE V
Conditions
The obligations of Meditrust and MAC to consummate the Spin-Off shall
be subject to the fulfillment of each of the following conditions:
SECTION 5.1. Cash Contribution to MAC. The cash contribution by
Meditrust to MAC in accordance with Section 1.1 hereof shall have been completed
substantially as described therein.
SECTION 5.2. Pairing Agreement. The Pairing Agreement shall have been
executed and delivered by each of Meditrust and MAC.
SECTION 5.3. Conditions to Merger Satisfied. The conditions set forth
in Section 7.1.6 of the Merger Agreement shall have been satisfied.
SECTION 5.4. Registration of MAC Shares. A registration statement on
Form 10 shall have been filed by MAC with the SEC pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act") for the issuance of the
MAC Shares and shall have become effective under the Exchange Act and shall not
be the subject of any stop order or proceeding by the SEC seeking a stop order.
SECTION 5.5. Quotation on NYSE. The MAC Shares to be issued in the
Spin-Off shall have been listed on the New York Stock Exchange, subject to
official notice of issuance.
SECTION 5.6. Regulatory Approvals. All authorizations, consents, orders
or approvals of, or declarations or filings with, or expirations of waiting
periods imposed by, any governmental authority necessary for the consummation of
the transactions contemplated by this Agreement and Plan of Distribution shall
have been obtained or filed or shall have occurred.
SECTION 5.7. No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Spin-Off shall be in effect (each party agreeing to use all
reasonable efforts to have any such order reversed or injunction lifted).
ARTICLE VI
Termination, Amendment and Waiver
SECTION 6.1. Termination. Notwithstanding anything to the contrary in
this Agreement and Plan of Distribution, this Agreement and Plan of Distribution
may be terminated and the transactions contemplated hereby abandoned at any time
prior to the Time of Distribution by mutual written consent of Meditrust and MAC
in the event the Merger Agreement is terminated by any party thereto in
accordance with the terms thereof.
SECTION 6.2. Amendments and Waivers. This Agreement and Plan of
Distribution may not be amended, nor may compliance with any term or provision
of this Agreement and Plan of Distribution be waived, except by an instrument in
writing signed on behalf of each of the parties hereto.
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<PAGE>
ARTICLE VII
General Provisions
SECTION 7.1. Counterparts. This Agreement and Plan of Distribution may
be executed in separate counterparts, each such counterpart being deemed to be
an original instrument and which counterparts shall together constitute the same
agreement.
SECTION 7.2. Governing Law. This Agreement and Plan of Distribution
shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts, without reference to its conflicts of law
principles.
SECTION 7.3. Notices. Any notice hereunder shall be in writing and
shall be deemed given or delivered two (2) days after it has been mailed by
registered or certified mail, postage prepaid, or one (1) day after being sent
by a recognized national courier service, in each case addressed as follows:
If to Meditrust:
197 First Avenue
Needham Heights, MA 02194
Attention: Michael S. Benjamin, Esq.
with a copy (which shall not constitute notice) to:
Nutter, McClennen & Fish, LLP
One International Place
Boston, MA 02110
Attention: Michael J. Bohnen, Esq.
If to MAC:
197 First Avenue
Needham Heights, MA 02194
Attention: Michael S. Benjamin, Esq.
with a copy (which shall not constitute notice) to:
Nutter, McClennen & Fish, LLP
One International Place
Boston, MA 02110
Attention: Michael J. Bohnen, Esq.
except that either party may from time to time by written notice to the other,
designate another address which shall thereupon become his effective address for
the purposes of this Section.
SECTION 7.4. Captions. All Article, Section and paragraph captions
herein are for convenience of reference only, do not constitute part of this
Agreement and Plan of Distribution and shall not be deemed to limit or otherwise
affect any of the provisions hereof.
SECTION 7.5. Interpretation. When a reference is made in this Agreement
and Plan of Distribution to a Section, Schedule or Exhibit, such reference shall
be to a Section, Schedule or Exhibit of this Agreement and Plan of Distribution
unless otherwise indicated. The headings contained in this Agreement and Plan of
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<PAGE>
Distribution are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement and Plan of Distribution.
SECTION 7.6. Trusts. The Declaration of Trust establishing Meditrust,
dated August 6, 1985, a copy of which, together with all amendments thereto (the
"Declaration"), is duly filed in the office of the Secretary of State of the
Commonwealth of Massachusetts, provides that the name "Meditrust" refers to the
trustees under the Declaration collectively as trustees, but not individually or
personally. No trustee, officer, director, shareholder, employee or agent of
Meditrust or its subsidiaries shall be held to any personal liability, jointly
or severally, for any obligation of, or claim against Meditrust or any of its
subsidiaries. All persons dealing with Meditrust, in any way, shall look only to
Meditrust's assets for recovery of any judgment or suit or the performance of
any obligation.
The Declaration of Trust establishing MAC, dated June 2, 1997, a copy
of which, together with all amendments thereto (the "MAC Declaration"), is duly
filed in the office of the Secretary of State of the Commonwealth of
Massachusetts, provides that the name "Meditrust Acquisition Company" refers to
the trustees under the MAC Declaration collectively as trustees, but not
individually or personally. No trustee, officer, director, shareholder, employee
or agent of MAC or its subsidiaries shall be held to any personal liability,
jointly or severally, for any obligation of, or claim against MAC or any of its
subsidiaries. All persons dealing with MAC, in any way, shall look only to MAC's
assets for recovery of any judgment or suit or the performance of any
obligation.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands under
seal as of the day and year first above written.
MEDITRUST
By:
---------------------------------
Name:
Title:
MEDITRUST ACQUISITION COMPANY
By:
---------------------------------
Name:
Title:
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<PAGE>
Exhibit A
PAIRING AGREEMENT
THIS AGREEMENT (the "Pairing Agreement") is dated as of the ____ day of
September, 1997 by and between Meditrust, a Massachusetts business trust
("Meditrust"), and Meditrust Acquisition Company, a Massachusetts business trust
("MAC").
R E C I T A L S
WHEREAS, the Boards of Trustees of Meditrust and MAC have proposed a series
of transactions pursuant to which: (i) Meditrust will transfer $43,588,907 to
MAC, (ii) Meditrust and MAC will pair the outstanding Meditrust shares of
beneficial interest without par value (the "Meditrust Shares") with the MAC
shares of beneficial interest without par value (the "MAC Shares") so that they
are transferable only in units (the "Paired Shares"), each of which shall
consist of one Meditrust Share and one MAC Share (the "Pairing") and (iii)
Meditrust will distribute to each holder of Meditrust Shares as a dividend one
MAC Share for each Meditrust Share held by such shareholder (the "Spin-Off");
and
WHEREAS, the by-laws of Meditrust and MAC each provide that, commencing on
the effective date of the Spin-Off, the Meditrust Shares and the MAC Shares are
not transferable, and shall not be transferred on the books of Meditrust or MAC,
as the case may be, except in combination with an equal number of shares of the
other company; and
WHEREAS, Meditrust and MAC wish to enter into this Pairing Agreement for
the purpose of further effectuating the Pairing, including the establishment of
the terms and conditions which will govern the issuance and the transfer of
Meditrust Shares and MAC Shares after the effective date of the Spin-Off.
C O V E N A N T S
1. Transfer of Shares. Commencing at the time the Spin-Off becomes
effective (the "Effective Time of the Pairing") and continuing until such time
as the Pairing shall have been terminated in the manner herein provided:
(a) No Meditrust Shares shall be transferable, and they shall not be
transferred on the books of Meditrust, unless (i) a simultaneous transfer
of the same number of MAC Shares is made by the same transferor to the same
transferee, or (ii) such transferor, to the extent the transferor does not
itself own MAC Shares, has previously arranged with MAC for the transfer to
the transferee, of the same number of MAC Shares, except that MAC may
transfer Meditrust Shares acquired by it from Meditrust to a person to whom
MAC simultaneously issues the same number of MAC Shares.
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(b) No MAC Shares shall be transferable, and they shall not be
transferred on the books of MAC, unless (i) a simultaneous transfer of the
same number of Meditrust Shares is made by the same transferor to the same
transferee, or (ii) such transferor, to the extent the transferor does not
itself own Meditrust Shares, has previously arranged with Meditrust for the
transfer to the transferee, of the same number of Meditrust Shares, except
that Meditrust may transfer MAC Shares acquired by it from MAC to a person
to whom Meditrust simultaneously issues the same number of Meditrust
Shares.
(c) Each certificate evidencing ownership of Meditrust Shares issued
and not cancelled prior to the Effective Time of the Pairing shall be
deemed to evidence, in addition to the Meditrust Shares represented
thereby, the same number of MAC Shares, certificates for which shall be
deemed to be held in trust by Meditrust for the benefit of the holders of
the Meditrust Shares.
2. Issuance of Shares. Commencing at the Effective Time of the Pairing
and continuing until such time as the Pairing shall have been terminated in the
manner herein provided:
(a) Meditrust shall not issue or agree to issue any Meditrust Shares
to any person except MAC unless effective provision has been made for the
simultaneous issuance or transfer to the same person of the same number of
MAC Shares and for the pairing of such shares of Meditrust and MAC and
unless Meditrust and MAC have agreed on the manner and basis of allocating
the consideration to be received upon such issuance between Meditrust and
MAC or, if allocation of such consideration between them is not
practicable, on the payment by one company to the other of cash or other
consideration in lieu thereof. Any such allocation or payment shall be
based on the respective fair market values of the Meditrust Shares and the
MAC Shares.
(b) MAC shall not issue or agree to issue any MAC Shares to any
person except Meditrust unless effective provision has been made for the
simultaneous issuance or transfer to the same person of the same number of
Meditrust Shares and for the pairing of such shares of MAC and Meditrust
and unless MAC and Meditrust have agreed on the manner and basis of
allocating the consideration to be received upon such issuance between MAC
and Meditrust or, if allocation of such consideration between them is not
practicable, on the payment by one company to the other of cash or other
consideration in lieu thereof. Any such allocation or payment shall be
based on the respective fair market values of the Meditrust Shares and the
MAC Shares.
(c) Upon the exercise of any stock option or the conversion of any
other security convertible into Meditrust Shares granted or issued by
Meditrust prior to the Mergers (as such term is defined in that certain
Third Amended and Restated Agreement and Plan of Merger to which Meditrust
and MAC will be parties, to be dated as of April 13, 1997 (the "Merger
Agreement"), MAC agrees, upon request by management of Meditrust, that it
will simultaneously issue a number of MAC Shares to Meditrust or to
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the exercising optionee, or to the holder of such other security
convertible into Meditrust Shares, equal to the number of Meditrust Shares
issued by Meditrust pursuant to such exercise, and Meditrust agrees to pay
to MAC the fair market value of each MAC Share so issued at the date of
exercise of such option, notwithstanding the provisions of subsection (b)
of this Section 2.
(d) The fair market value of the MAC Shares as determined by Coopers
& Lybrand, LLP as of the Effective Time of the Pairing shall be used in all
calculations pursuant to this Section 2. The fair market value of each
Meditrust Share shall be determined by subtracting the fair market value of
one MAC Share from the average of the closing sale prices of a unit
consisting of one Meditrust Share and one MAC Share as reported on the New
York Stock Exchange during the ten trading days prior to any date of
determination of the fair market value of Meditrust Shares.
3. Registration.
(a) MAC agrees to cause the MAC Shares to be duly registered
and to maintain effective such registration with the Securities and Exchange
Commission (the "SEC") pursuant to Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(b) Meditrust agrees to maintain an effective registration statement
with the SEC pursuant to Section 12 of the Exchange Act.
4. Stock Dividends, Reclassifications, etc. Commencing at the Effective
Time of the Pairing and continuing until such time as the Pairing shall have
been terminated in the manner herein provided:
(a) Meditrust shall not declare or pay any stock dividend consisting
in whole or in part of Meditrust Shares, issue any rights or warrants to
purchase any Meditrust Shares, or subdivide, combine or otherwise
reclassify the Meditrust Shares, unless MAC simultaneously takes the same
or equivalent action with respect to the MAC Shares, to the end that the
outstanding Meditrust Shares and MAC Shares will at all times be
effectively "paired" on a one-for-one basis as contemplated herein.
(b) MAC shall not declare or pay any stock dividend consisting in
whole or in part of MAC Shares, issue any rights or warrants to purchase
any MAC Shares, or subdivide, combine or otherwise reclassify the MAC
Shares, unless Meditrust simultaneously takes the same or equivalent action
with respect to the Meditrust Shares, to the end that the outstanding MAC
Shares and the outstanding Meditrust Shares will at all times be
effectively "paired" on a one-for-one basis as contemplated herein.
5. Merger, Sale of Assets, etc. Commencing at the Effective Time of the
Pairing and continuing until such time as the Pairing shall have been terminated
in the manner provided
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herein, neither Meditrust nor MAC will be a party to any merger, consolidation,
sale of assets, liquidation or other form of reorganization pursuant to which
either the Meditrust Shares or the MAC Shares, as the case may be, are
converted, redeemed, exchanged or otherwise changed unless the other party
hereto (MAC or Meditrust, as the case may be) is also a party to such
transaction and the Meditrust Shares and the MAC Shares are treated
substantially identically in such transaction.
6. Repurchase of Shares. Commencing at the Effective Time of the Pairing
and continuing until such time as the Pairing shall have been terminated in the
manner provided herein, if at any time the direct or indirect ownership of the
Meditrust Shares or MAC Shares has or may become concentrated to an extent which
is not in conformity with the requirements of Section 856 of the Internal
Revenue Code of 1986, as amended, or similar provisions of successor statutes
(the "Code"), the Board of Trustees of Meditrust and/or MAC shall call for
purchase from such shareholders of such number of shares as may be necessary to
maintain or bring the direct or indirect ownership of the Meditrust Shares
and/or MAC Shares into conformity with the requirements of the Code and shall
refuse to register any transfer of Meditrust Shares and/or MAC Shares to any
person whose acquisition of such shares would result in Meditrust and/or MAC
being unable to conform to the requirements of the Code. The provisions of this
Section 6 shall apply to all outstanding Meditrust Shares and MAC Shares
notwithstanding any other provision of this Pairing Agreement.
7. Termination. This Pairing Agreement and the Pairing may not be
terminated except in the case of (i) a merger or other business combination
involving Meditrust and MAC in which Meditrust and MAC are not the surviving
corporations or (ii) a liquidation, dissolution or other termination of the
existence of MAC, in which case prior thereto the parties agree to cooperate to
effect a separation of the paired securities so as to permit the separate
issuance and transfer of the Meditrust Shares, and, in that connection,
appropriate provision shall be made to honor any outstanding commitments to
issue additional Meditrust Shares and MAC Shares.
8. Amendment. This Pairing Agreement may (other than Section 7) be
amended by action of the Board of Trustees of both Meditrust and MAC.
9. Trusts. The Declaration of Trust establishing Meditrust, dated
August 6, 1985, a copy of which, together with all amendments thereto (the
"Declaration"), is duly filed in the office of the Secretary of State of the
Commonwealth of Massachusetts, provides that the name "Meditrust" refers to the
trustees under the Declaration collectively as trustees, but not individually or
personally. No trustee, officer, director, shareholder, employee or agent of
Meditrust or its subsidiaries shall be held to any personal liability, jointly
or severally, for any obligation of, or claim against Meditrust or any of its
subsidiaries. All persons dealing with Meditrust, in any way, shall look only to
Meditrust's assets for recovery of any judgment or suit or the performance of
any obligation.
The Declaration of Trust establishing MAC, dated June 2, 1997, a copy of
which, together with all amendments thereto (the "MAC Declaration"), is duly
filed in the office of the
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Secretary of State of the Commonwealth of Massachusetts, provides that the name
"Meditrust Acquisition Company" refers to the trustees under the MAC Declaration
collectively as trustees, but not individually or personally. No trustee,
officer, director, shareholder, employee or agent of MAC or its subsidiaries
shall be held to any personal liability, jointly or severally, for any
obligation of, or claim against MAC or any of its subsidiaries. All persons
dealing with MAC, in any way, shall look only to MAC's assets for recovery of
any judgment or suit or the performance of any obligation.
IN WITNESS WHEREOF the parties hereto have set their hands and seals to
this Pairing Agreement as of the date first mentioned above.
MEDITRUST
By
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President
MEDITRUST ACQUISITION COMPANY
By
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President
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EXHIBIT B
DESCRIPTION OF MEDITRUST ACQUISITION COMPANY SHARES
There is no limit on the number of MAC Shares which MAC is authorized to
issue. MAC Shares may be issued by the Board of Trustees without any vote of the
shareholders. The MAC Shares are without par value. On the date hereof, the
outstanding MAC Shares are of one class. The following description is qualified
in all respects by reference to the MAC Declaration and the MAC By-laws.
Redemption. For MAC to qualify as a real estate investment trust under the
Internal Revenue Code of 1986, as amended (the "Code"), in any taxable year, not
more than 50% of its outstanding shares may be owned by five or fewer
individuals and MAC Shares must be owned by 100 or more persons during at least
335 days of a taxable year of 12 months or during a proportionate part of a
shorter taxable year. In order to meet these requirements, the Trustees have the
power to redeem or prohibit the transfer of a sufficient number of MAC Shares
selected in a manner deemed appropriate to maintain or bring the ownership of
the MAC Shares into conformity with such requirements. In connection with the
foregoing, if the Trustees shall, at any time and in good faith, be of the
opinion that direct or indirect ownership of at least 9.9% or more of the MAC
Shares has or may become concentrated in the hands of one beneficial owner, the
Trustees shall have the power (i) by lot or other means deemed equitable by them
to call for the purchase from any shareholder of MAC of a number of MAC Shares
sufficient, in the opinion of the Trustees, to maintain or bring the direct or
indirect ownership of MAC Shares of such owner to a level of no more than 9.9%
of the outstanding MAC Shares, and (ii) to refuse to transfer or issue MAC
Shares to any person whose acquisition of such MAC Shares would cause a
beneficial holder to hold in excess of 9.9% of the outstanding MAC Shares.
Further, any transfer of MAC Shares that would create a beneficial owner of more
than 9.9% of the outstanding MAC Shares shall be deemed void and the intended
transferee shall be deemed never to have had an interest therein. The purchase
price for any MAC Shares so redeemed shall be equal to the fair market value of
the MAC Shares reflected in the closing sales price for the MAC Shares, if then
listed on a national securities exchange, or the average of the closing sales
price for the MAC Shares if then listed on more than one national securities
exchange, or if the MAC Shares are not then listed on a national securities
exchange, the latest bid quotation for the MAC Shares if then traded over-the-
counter, on the last business day immediately preceding the day on which notices
of such acquisition are sent by MAC. From and after the date fixed for purchase
by the Trustee, the holder of any MAC Shares so called for purchase shall cease
to be entitled to distributions, voting rights and other benefits with respect
to such MAC Shares, except the right to payment of the purchase price for the
MAC Shares.
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The foregoing provisions may have the effect of discouraging unilateral
tender offers or other takeover proposals which certain shareholders might deem
in their interest or in which they might receive a substantial premium. The
provisions could also have the effect of insulating current management against
the possibility of removal and could, by possibly reducing temporary
fluctuations in market price caused by accumulations of MAC Shares, deprive
shareholders of opportunities to sell at a temporarily higher market price.
Additional Provisions. The MAC Declaration provides that annual meetings of
shareholder are to be held within six months after the end of each fiscal year
and special meetings of the shareholders may be called by the President of MAC,
a majority of the Trustees or a majority of the Independent Trustees (defined in
the MAC Declaration) and shall be called upon the written request of the holders
of 10% or more of the outstanding MAC Shares.
Whenever any action is to be taken by the shareholders, it shall, except as
otherwise clearly indicated in the MAC Declaration or By-Laws, be authorized by
holders of a majority of the MAC Shares present in person or represented by
proxy and entitled to vote thereon, provided that such majority shall be at
least a majority of the number of MAC Shares that constitute a quorum.
Notwithstanding the foregoing, at all elections of Trustees, voting by
shareholders shall be conducted under the non-cumulative method and the election
of Trustees shall be by the affirmative vote of the holders of the MAC Shares
representing a plurality of the MAC Shares then outstanding which are present in
person or by proxy at a meeting in which a quorum is present.
Whenever shareholders are required or permitted to take any action (unless
a vote at a meeting is specifically required, as with respect to termination or
amendment of the MAC Declaration), such action may be taken without a meeting by
written consents setting forth the action so taken, signed by the holders of a
majority (or such higher percentage as may be specified) of the outstanding MAC
Shares that would be entitled to vote thereon at a meeting.
Except with respect to matters on which a shareholders' vote is
specifically required by the MAC Declaration, no action taken by the
shareholders at any meeting shall in any way bind the Trustees.
The MAC Shares have no preemptive or appraisal rights.
The MAC Declaration provides that shareholders of MAC shall not be subject
to any liability for the acts or obligations of MAC and that, as far as is
practicable, each written agreement of MAC is to contain provision to that
effect. No personal liability will attach to the shareholders for claims under
any contract containing such a provision in writing where adequate notice is
given of such provision, except possibly in a few jurisdictions. With respect to
all types of claims in such jurisdictions and with respect to tort claims,
contract claims where the shareholder liability is not disavowed as described
above, claims for taxes and certain statutory liabilities in other
jurisdictions, a shareholder may be held personally
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liable to the extent claims are not satisfied by MAC. However, the MAC
Declaration provides that, upon payment of any such liability, the shareholder
will be entitled to reimbursement from the general assets of MAC. The Trustees
intend to conduct the operations of MAC, with the advice of counsel, in such a
way as to avoid, as far as is practicable, the ultimate liability of the
shareholders of MAC. The Trustees do not intend to provide insurance covering
such risks to shareholders.
All MAC Shares participate equally in dividends and in net assets available
for distribution to holders of MAC Shares on liquidation or termination of MAC,
have one vote per share on all matters submitted to a vote of the shareholders
and do not have cumulative voting rights in the election of Trustees. The MAC
Shares have no conversion, exchange or sinking fund rights.
Paired Share Structure. MAC Shares are transferable and tradeable only in
combination as a unit with shares of Meditrust, each unit consisting of one
share of Meditrust and one MAC Share. These restrictions are imposed by the MAC
By-Laws. The MAC Shares are evidenced by the certificates for the related
Meditrust shares.
Transfer Agent and Registrar. Boston Equiserve, Canton, Massachusetts, acts
as transfer agent and registrar of the MAC Shares.
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