<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
SANTA ANITA REALTY ENTERPRISES, INC.
SANTA ANITA OPERATING COMPANY
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(Name of Issuer)
COMMON STOCK, PAR VALUE $.10 PER SHARE
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(Title of Class of Securities)
8012 09206
8012 12101
-------------------------------
(CUSIP Number)
ABRAHAM D. GOSMAN
MEDITRUST
MEDITRUST ACQUISITION COMPANY
197 FIRST AVENUE
NEEDHAM HEIGHTS, MA 02194-9127
(617) 433-6000
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
JUNE 19, 1997
-------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
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SCHEDULE 13D
8012 09206
CUSIP No. 8012 12101 Page 2 of 11
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MEDITRUST
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Massachusetts
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NUMBER OF 7 SOLE VOTING POWER
SHARES 1,245,171 (SEE PAGE 5, FOOTNOTE 1)
---------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
---------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 1,245,171 (SEE PAGE 5, FOOTNOTE 1)
---------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,245,171 (SEE PAGE 5, FOOTNOTE 1)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.8% (SEE ITEM 5)
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14 TYPE OF REPORTING PERSON
Massachusetts Business Trust (00)
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Page 2 of 11
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SCHEDULE 13D
8012 09206
CUSIP No. 8012 12101 Page 3 of 11
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MEDITRUST ACQUISITION COMPANY
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Massachusetts
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NUMBER OF 7 SOLE VOTING POWER
SHARES 1,245,171 (SEE PAGE 5, FOOTNOTE 1)
---------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
---------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 1,245,171 (SEE PAGE 5, FOOTNOTE 1)
---------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,245,171 (SEE PAGE 5, FOOTNOTE 1)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.8% (SEE ITEM 5)
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14 TYPE OF REPORTING PERSON
Massachusetts Business Trust (00)
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Page 3 of 11
<PAGE>
This Amendment No. 2 hereby amends and supplements the Statement on
Schedule 13D filed by Meditrust on April 23, 1997, as amended by a filing made
on May 19, 1997 (the Schedule 13D as filed on April 23, 1997 being referred to
as the "Original 13D," and such Original 13D as amended by the filing made on
May 19, 1997 being referred to as the "Amended 13D"), in respect of the Common
Stock, par value $.10 per share of Santa Anita Realty Enterprises, Inc.
("Realty") and Santa Anita Operating Company ("Operating" and, together with
Realty, "Santa Anita"). This Amendment No. 2 is being filed, among other
reasons, to add Meditrust Acquisition Company, a Massachusetts business trust
and a wholly-owned subsidiary of Meditrust ("New MAC"), as a filing person to
the Amended 13D, to describe certain of the terms of the Second Amended and
Restated Agreement and Plan of Merger, dated as of April 13, 1997, between Santa
Anita, Meditrust, New MAC and Meditrust Acquisition Corporation IV ("MAC IV")
(the "Amended Merger Agreement") and to disclose New MAC's intention to purchase
in open-market transactions paired shares of the Common Stock, par value $.10
per share, of Santa Anita ("Paired Shares") representing up to 9.8% of the
issued and outstanding Paired Shares.
ITEM 2. IDENTITY AND BACKGROUND
Item 2 of the Amended 13D is hereby amended to include the following:
(a)-(c) and (f) This statement is also being filed by New MAC, a
Massachusetts business trust. The principal executive offices of New MAC are
located at 197 First Avenue, Needham Heights, Massachusetts 02194-9127.
New MAC is a wholly-owned subsidiary of Meditrust formed in June 1997
for the purpose of merging with and into Operating pursuant to the terms of the
Amended Merger Agreement.
David F. Benson is a Trustee and the President of New MAC. Edward F.
Brooke is a Trustee of New MAC. Michael S. Benjamin is the Secretary of New
MAC. The residence or business address and the principal occupation or
employment of each of Mr. Benson, Mr. Brooke and Mr. Benjamin, and the name and
principal business address of any corporation or other organization in which
such employment is conducted, is described on Schedule I of the Original 13D.
(d) During the last five years, neither New MAC nor, to the best of
New MAC's knowledge, any of Mr. Benson, Mr. Brooke or Mr. Benjamin, has been
convicted in any criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, neither New MAC nor, to the best of
New MAC's knowledge, any of Mr. Benson, Mr. Brooke or Mr. Benjamin, has been a
party to any civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which any of such persons was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Page 4 of 11
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ITEM 3. SOURCE AND USES OF FUNDS
Item 3 of the Schedule 13D is hereby amended and restated in its
entirety as follows:
Pursuant to the Amended Merger Agreement, New MAC has agreed to
purchase from Santa Anita, prior to the record date (the "Record Date") for the
Santa Anita shareholder meetings (the "Santa Anita Shareholder Meetings") to be
called for the purpose of approving the mergers (the "Mergers") contemplated by
the Amended Merger Agreement, at $31.00 per Paired Share, such number of Paired
Shares that would result in New MAC and Meditrust owning, in the aggregate,
pursuant to the constructive ownership rules of the Internal Revenue Code, 9.8%
of the number of Paired Shares that will be issued and outstanding immediately
after the consummation of such purchase (the "New MAC Purchase"), taking into
account the number of Paired Shares held by New MAC and/or Meditrust immediately
prior to the consummation of the MAC Purchase. /1/
In addition, pursuant to the Amended Merger Agreement, Meditrust may
designate New MAC and/or one or more unaffiliated persons who may purchase,
prior to the Record Date, from Santa Anita, at $31.00 per Paired Share, up to
such number of Paired Shares, in the aggregate, that is equal to 19.6% of the
issued and outstanding Paired Shares immediately prior to the consummation of
the New MAC Purchase,/2/ less the number of Paired Shares purchased by New MAC
from Santa Anita pursuant to the New MAC Purchase;/3/ provided that in no event
may New MAC or any unaffiliated person designated by Meditrust purchase a number
of such Paired Shares which would result in it owning, pursuant to the
constructive ownership rules of the Internal Revenue Code, in excess of 9.8% of
the issued and outstanding Paired Shares.
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/1/ Based on there being 11,460,664 Paired Shares issued and outstanding as of
June 10, 1997, 1,245,171 Paired Shares would be required to be purchased
by New MAC from Santa Anita pursuant to the New MAC Purchase, assuming no
Paired Shares are held by New MAC or Meditrust immediately prior to the
consummation of the New MAC Purchase. For each Paired Share held by New
MAC or Meditrust immediately prior to the consummation of the New MAC
Purchase, New MAC's obligation to purchase Paired Shares pursuant to the
New MAC Purchase will be reduced by approximately 1.11 Paired Shares.
/2/ Based on there being 11,460,664 Paired Shares issued and outstanding as of
June 10, 1997, 19.6% of the currently issued and outstanding Paired Shares
would represent approximately 2,246,290 Paired Shares.
/3/ Assuming New MAC purchases from Santa Anita 1,245,171 Paired Shares
pursuant to the New MAC Purchase, 1,001,119 Paired Shares would be
available for purchase by New MAC and/or one or more unaffiliated persons
designated by Meditrust. For each Paired Share held by New MAC or
Meditrust immediately prior to the consummation of the New MAC Purchase,
the number of Paired Shares available for purchase by New MAC or one or
more unaffiliated persons designated by Meditrust will be increased by
approximately 1.11 Paired Shares.
Page 5 of 11
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Pursuant to the Amended Merger Agreement, Meditrust is obligated to
transfer to New MAC approximately $43,589,036./4/ Meditrust intends to transfer
such funds from its working capital. Purchases of Paired Shares by New MAC are
intended to be financed with such funds.
ITEM 4. PURPOSE OF TRANSACTION
Item 4 of the Amended 13D is hereby amended and restated in its
entirety as follows:
On June 19, 1997, Santa Anita, Meditrust, MAC IV and New MAC entered
into the Amended Merger Agreement pursuant to which, among other things, (a) a
novation was effected to release MAC IV from its obligations under the Merger
Agreement (as defined in the Original 13D) and to substitute New MAC in its
place, (b) prior to the record date for the shareholder meetings of Meditrust
and New MAC to be called for the purpose of approving the Mergers, Meditrust
will distribute to its shareholders the beneficial ownership of all of the New
MAC shares of beneficial interests without par value ("New MAC Shares") and (c)
Meditrust will be merged into Realty, New MAC will be merged in the Operating,
and each holder of Meditrust shares of beneficial interests without par value
("Meditrust Shares") and New MAC Shares will be entitled to receive in a tax-
free exchange 1.2016 Paired Shares for each Meditrust Share and New MAC Share
owned by such holder. Upon completion of the Mergers, the surviving
corporations will be called Meditrust Corporation and Meditrust Operating
Company, respectively.
As more fully described in Item 3 above, pursuant to the Amended
Merger Agreement, New MAC has agreed to purchase from Santa Anita, prior to the
Record Date, at $31.00 per Paired Share, a number of Paired Shares, and
Meditrust may designate New MAC and/or one or more unaffiliated persons who may,
prior to the Record Date, purchase from Santa Anita, at $31.00 per Paired Share,
a number of Paired Shares.
The Amended Merger Agreement also provides that, if requested by Santa
Anita, Meditrust and New MAC will ensure that $100 million, less the aggregate
purchase price of the Paired Shares purchased from Santa Anita by New MAC and
unaffiliated persons designated by Meditrust pursuant to the Amended Merger
Agreement, is made available to fund, at $31.00 per Paired Share, a cash
election in connection with the Mergers for Paired Shares outstanding prior to
the Mergers. In no event shall the $100 million required to be made available
be reduced, by reason of purchases of Paired Shares by New MAC and unaffiliated
persons designated by
- ----------
/4/ Pursuant to the Amended Merger Agreement, Meditrust is obligated to
transfer to New MAC, immediately prior to the record date for the
shareholder meetings of Meditrust and New MAC to be called for the purpose
of approving the Mergers, an amount of cash equal to .019 multiplied by
the product of $37.25 times the number of Meditrust Shares (as defined in
Item 4) outstanding immediately prior to the time at which such transfer
is effected. Based upon there being 61,588,182 Meditrust Shares issued and
outstanding as of June 17, 1997 such amount would be equal to
approximately $43,589,036.
Page 6 of 11
<PAGE>
Meditrust, by an amount in excess of the product of $31.00 and the number of
Paired Shares that would be required to be purchased by New MAC pursuant to the
New MAC Purchase if no Paired Shares were held by MAC or Meditrust immediately
prior to the consummation of the New MAC Purchase./5/
Upon consummation of the Mergers, up to twelve directors designated by
Meditrust will serve on the Boards of Directors of Meditrust Corporation and
Meditrust Operating Company, the surviving entities. Meditrust Corporation's
Board of Directors will include two current members of the Board of Directors of
Realty, and Meditrust Operating Company's Board of Directors will include two
current members of the Board of Directors of Operating.
In connection with the Mergers, the Certificates of Incorporation of
Realty and Operating will be amended to increase each of their authorized
capital stock to 306,000,000 shares of which 300,000,000 shares will be common
stock and 6,000,000 shares will be preferred stock. Of the 300,000,000 shares
of common stock that will be authorized by the Certificates of Incorporation of
Realty and Operating, 19,000,000 of such shares will be designated as Common
Stock, par value $10 per share, and the remaining 281,000,000 of such shares
will be designated as a new class of common stock ("Series Common Stock"). The
Board of Directors of Meditrust Corporation and Meditrust Operating Company
would have the right to authorize the issuance of the shares of Series Common
Stock in one or more series with such designations, preferences, rights,
qualifications and restrictions with respect to matters such as voting,
dividends, conversion rights etc. as such Boards of Directors may determine in
their sole discretion, without any further authorization by shareholders.
Although they have no present intention to do so, the Boards of Directors of
Meditrust Corporation and Meditrust Operating Company could authorize the
issuance of one or more series of Series Common Stock that could, depending on
the terms of the series in which issued, make more difficult or discourage an
attempt to obtain control of such corporations by means of a merger, tender
offer, proxy contest or otherwise.
Pursuant to the terms of the Amended Merger Agreement, following the
Mergers, Meditrust Corporation and Meditrust Operating Company will be
authorized to transfer some or all of their assets to one or more wholly-owned
subsidiaries in exchange for equity interests in such subsidiaries.
Upon completion of the Mergers, Meditrust Corporation expects to
distribute dividends of at least 95% of its annual REIT taxable income in order
to maintain its status as a real estate investment trust under the Internal
Revenue Code.
The Amended Merger Agreement and the Mergers contemplated thereby,
which have been approved unanimously by the Board of Trustees of Meditrust, the
Board of Trustees of
- ----------
/5/ Assuming New MAC would be required to purchase 1,245,171 Paired Shares
pursuant to the New MAC Purchase (see footnote 1), the maximum amount by
which such $100 million could be reduced would be approximately
$38,600,301.
Page 7 of 11
<PAGE>
New MAC and the Boards of Directors of Santa Anita, are subject to the approval
of the shareholders of Meditrust, New MAC and Santa Anita.
The Amended Merger Agreement is attached hereto as Exhibit 1 and
incorporated herein by reference in its entirety. The foregoing summary of the
Amended Merger Agreement does not purport to be complete and is qualified in its
entirety by reference to such exhibit.
In addition, in view of expressions of interest from third-parties and
in furtherance of Meditrust's and New MAC's business objectives, officers and
representatives of Meditrust and New MAC have contacted, made specific proposals
to, and engaged in discussions with, and intend to continue to contact, make
specific proposals to, and engage in discussions with, third-parties from time
to time, and may from time to time conduct negotiations with third-parties,
regarding possible transactions, including acquisitions, joint ventures,
strategic alliances and other business arrangements, between Meditrust and/or
New MAC and these parties. Any such transaction would be conditioned on the
consummation of the Mergers.
Officers and representatives of Meditrust and New MAC also have
contacted, responded to inquiries of, and engaged in discussions with, and
intend to continue to contact, respond to inquiries of, and engage in
discussions with, third-parties from time to time regarding the possibility of
one or more of these parties purchasing Paired Shares from Santa Anita pursuant
to Meditrust's right under the Amended Merger Agreement to designate
unaffiliated persons to purchase Paired Shares and/or purchasing Meditrust
Shares and/or New MAC Shares from Meditrust or New MAC, as applicable.
There can, of course, be no assurance that any of the contacts,
discussions or negotiations described in the prior two paragraphs will result in
any transactions.
New MAC intends, from time to time prior to the Record Date, to
purchase in open-market transactions, in privately negotiated transactions or
otherwise Paired Shares representing up to 9.8% of the issued and outstanding
Paired Shares. The amounts of any such purchases will depend on prevailing
market conditions as well as the price and other terms of possible transactions.
At any time, prior to the Record Date, New MAC may, temporarily or permanently,
discontinue such purchases.
Except as set forth in this Item 4 or the Amended Merger Agreement,
neither Meditrust, New MAC nor, to the best of Meditrust's and New MAC's
knowledge, any of the individuals named in Schedule I of the Original 13D, has
any plans or proposals which relate to or which would result in any of the
actions specified in clauses (a) through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 of the Amended 13D is hereby amended and restated in its
entirety as follows:
(a)-(b) By reason of their execution of the Amended Merger Agreement
and New MAC's obligation to consummate the New MAC Purchase as described in Item
3, pursuant to Rule 13d-3(d)(1)(i) promulgated under the Securities Exchange Act
of 1934, as amended, Meditrust and New MAC may be each deemed to beneficially
own 1,245,171, shares of the
Page 8 of 11
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issued and outstanding shares of Common Stock, par value $.10 per share, of
Realty ("Realty Common Stock"), or approximately 9.7% of issued and outstanding
Realty Common Stock, and 1,245,171 shares of Common Stock, par value $.10 per
share, of Operating ("Operating Common Stock"), or approximately 9.8% of the
issued and outstanding Operating Common Stock./6/
Neither Meditrust, New MAC nor, to the best of Meditrust's and New
MAC's knowledge, any of the individuals named in Schedule I of the Original 13D
currently owns any Realty Common Stock or Operating Common Stock.
(c) Neither Meditrust, New MAC nor, to the best of New MAC's and
Meditrust's knowledge, any of the individuals named in Schedule I of the
Original 13D has effected any transaction in the Realty Common Stock or
Operating Common Stock during the past 60 days.
(d) Until New MAC purchases Paired Shares pursuant to the Amended
Merger Agreement or otherwise, neither Meditrust nor New MAC will have the right
to receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, any of the Realty Common Stock or Operating Common Stock.
(e) Inapplicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Item 6 of the Amended 13D is hereby amended and restated in its
entirety as follows:
The Amended Merger Agreement contains certain customary restrictions
on the conduct of the business of Santa Anita pending the Mergers, including
certain customary restrictions relating to the Paired Shares. Furthermore, as
described in Item 3, pursuant to the Amended Merger Agreement, Santa Anita
granted New MAC the right to purchase Paired Shares and granted Meditrust the
right to designate New MAC and/or one or more unaffiliated persons who may
purchase from Santa Anita Paired Shares. New MAC intends to vote at the Santa
Anita Shareholder Meetings in favor of the Mergers in respect of all Paired
Shares held by it as of the Record Date. Except as provided in the Amended
Merger Agreement or as set forth herein, neither Meditrust, New MAC nor, to the
best of Meditrust's or New MAC's knowledge, any of the individuals named in
Schedule I of the Original 13D, has any contracts, arrangements, understandings
or relationships (legal or otherwise) with any person with respect to any
securities of Santa Anita, including, but not limited to transfer or voting of
any securities, finder's fees, joint ventures, loan or option arrangements, puts
or calls, guarantees of profits, division of profits or losses, or the giving or
withholding of proxies.
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/6/ These percentages are based on there being 11,586,925 shares of Realty
Common Stock, and 11,460,664 shares of Operating Common Stock, issued and
outstanding as of June 10, 1997.
Page 9 of 11
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
1. Second Amended and Restated Agreement and Plan of Merger, dated as
of April 13, 1997, by and between Santa Anita Realty Enterprises, Inc., Santa
Anita Operating Company, Meditrust, Meditrust Acquisition Company and Meditrust
Acquisition Corporation IV.
Page 10 of 11
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SIGNATURE
---------
After reasonable inquiry and to the best of their knowledge and
belief, the undersigned certify that the information set forth in this statement
is true, complete and correct.
Dated: June 19, 1997 MEDITRUST
By: /s/ Michael S. Benjamin
---------------------------------------------
Name: Michael S. Benjamin
Title: Senior Vice President and Secretary
MEDITRUST ACQUISITION COMPANY
By: /s/ Michael S. Benjamin
---------------------------------------------
Name: Michael S. Benjamin
Title: Secretary
Page 11 of 11
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EXHIBIT 1
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SECOND 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
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TABLE OF CONTENTS
RECITALS
AGREEMENT
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ARTICLE I
THE REORGANIZATION; CLOSING; EFFECTIVE TIME
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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
Section 1.9: Transfer of Assets......................................... 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-4
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
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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
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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-30
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
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<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>
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SECOND AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
This SECOND 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"),
MEDITRUST ACQUISITION COMPANY, a Massachusetts business trust ("MAC"), and
MEDITRUST ACQUISITION CORPORATION IV, a Delaware corporation ("M
Acquisition").
R E C I T A L S
A. Original Agreement. Effective as of April 13, 1997, the Companies,
Meditrust and M Acquisition entered into an Amended and Restated Agreement and
Plan of Merger (the "Original Merger Agreement").
B. Novation. Effective June 19, 1997, the parties hereby effect a novation
whereby MAC becomes a party to the Original Merger Agreement in the place of M
Acquisition, and in connection therewith amend and restate the Original Merger
Agreement in its entirety. In furtherance thereof, (i) M Acquisition hereby
assigns all of its rights under the Original Merger Agreement to MAC, (ii) MAC
hereby assumes all of M Acquisition's obligations and liabilities under the
Original Merger Agreement with the same effect as if it were a party thereto,
(iii) M Acquisition is hereby released from all obligations and liabilities
with respect to the Original Merger Agreement and (iv) the Companies hereby
consent to this novation.
C. 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.
D. Note. Prior to the Effective Time, Operating intends to deliver to Realty
a promissory note or cash in the amount of the Note Amount.
E. 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").
F. 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.
G. 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.
H. 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:
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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."
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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 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 1.6 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 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
A-3
<PAGE>
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.
Section 1.9: Transfer of Assets. Following the Mergers, the Surviving
Corporations may, and are hereby authorized to, transfer some or all of their
assets to one or more wholly-owned subsidiaries in exchange for all of the
equity interests in such subsidiaries. Such subsidiaries may issue additional
equity interests to the Surviving Corporations or to unaffiliated Persons on
such terms as the governing boards of such subsidiaries shall determine.
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, (ii)
the authorized number of Realty Common Shares of Realty Surviving Corporation
shall be 300,000,000, and (iii) the provisions set forth in Annex E hereto
shall be added, 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, (ii) the authorized number of Operating Common Shares of Operating
Surviving Corporation shall be 300,000,000, and (iii) the provisions set forth
in Annex F hereto shall be added, 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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<PAGE>
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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<PAGE>
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, the
Meditrust Board (or, if appropriate, any committee administering the
Stock Plans (as defined below)) shall adopt such resolutions or take
other actions as may be required to effect the following:
(i) adjust the terms of all outstanding employee stock options to
purchase Meditrust Shares ("Employee Stock Options") granted under
Meditrust's equity incentive plans (collectively, the "Stock
Plans"), to provide that, at the Effective Time, each Employee Stock
Option outstanding immediately prior to the Effective Time shall be
deemed to constitute an option to acquire, on the same terms and
conditions as were applicable under such Employee Stock Option, the
same number of Realty Shares as the holder of such Employee Stock
Option would have been entitled to receive pursuant to the Realty
Merger had such holder exercised such Employee Stock Option in full
immediately prior to the Effective Time at a price per share equal
to (y) the aggregate exercise price for the Meditrust Shares
otherwise purchasable pursuant to such Employee Stock Option divided
by (z) the number of Realty Common Shares deemed purchasable
pursuant to such Employee Stock Option; provided, however, that 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 ("qualified stock options"), the option price, the number of
Realty Shares purchasable pursuant to such option and the terms and
conditions of exercise of such option shall be determined in order
to comply with Section 424(a) of the Code; and
(ii) make such other changes to the Stock Plans as it deems
appropriate to give effect to the Mergers (subject to the approval
of Realty and Operating, which shall not be unreasonably withheld).
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No Employee Stock Options will be issued for Operating Common Shares. No
Employee Stock Options granted pursuant to the Stock Plans shall be
exercisable unless the holder submits evidence satisfactory to Realty that,
at the then fair market value of an unpaired share of Operating Common
Share as determined pursuant to the Pairing Agreement, a number of
Operating Common Shares equal to the number of Realty Common Shares to be
received upon exercise of all or a portion of the Employee Stock Option
will, and are able to be, purchased by the holder, such that upon exercise
the holder will acquire an equal number of Realty Common Shares and
Operating Common Shares.
(b) As soon as practicable after the Effective Time, Realty shall deliver
to the holders of Employee Stock Options appropriate notices setting forth
such holders' rights pursuant to the respective Stock Plans and the
agreements evidencing the grants of such Employee Stock Options shall
continue in effect on the same terms and conditions (subject to the
adjustments required by this Section 4.5.10 after giving effect to the
Mergers). Realty shall comply with the terms of the Stock Plans and ensure,
to the extent required by, and subject to the provisions of, such Stock
Plans, that the Employee Stock Options which qualified as qualified stock
options prior to the Effective Time continue to qualify as qualified stock
options after the Effective Time.
(c) Realty and Operating shall take all corporate action necessary to
reserve for issuance a sufficient number of Realty Common Shares for
delivery upon exercise of the Employee Stock Options and Operating Common
Shares for delivery upon purchase as provided in clause (a) above assumed
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 Employee 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
Employee 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:
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.
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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.
(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
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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 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.
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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 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.
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(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.
(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.
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(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.
(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,
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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 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.
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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 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.
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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.
(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.
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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) 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 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.
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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 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.
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(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, and the merger of MAC with and into Operating, shall qualify as
a "reorganization" under Section 368(a) 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, LLP
197 First Avenue One International Place
Needham, Massachusetts 02194 Boston, Massachusetts 02110-2699
Attention: President Attention: Michael J. Bohnen, Esq.
Fax No.: (617) 433-1290 Fax No.: (617) 973-9748
If to Realty, addressed to: with a copy to:
Santa Anita Realty Enterprises, Inc. O'Melveny & Myers LLP
301 West Huntington Drive, Suite 405 400 South Hope Street
Arcadia, California 91007 Los Angeles, California 90071
Attention: Mr. Brian L. Fleming Attention: Frederick B. McLane, Esq.
Fax No.: (818) 574-0634 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 90071
Attention: Mr. William C. Baker Attention: Frederick B. McLane, Esq.
Fax No.: (818) 574-6687 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 and the Original 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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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.
/s/ Brian L. Fleming
By __________________________________
Executive Vice President
Santa Anita Operating Company
/s/ William C. Baker
By __________________________________
Chief Executive Officer
Meditrust
/s/ David F. Benson
By __________________________________
President
Meditrust Acquisition Company
/s/ David F. Benson
By __________________________________
President
Meditrust Acquisition Corporation IV
/s/ David F. Benson
By __________________________________
President
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<PAGE>
ANNEX A TO SECOND
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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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 and issuance
of Operating Common Shares pursuant to the Operating Merger.
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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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 and the issuance
of Realty Common Shares pursuant to the Realty Merger.
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.
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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 SECOND 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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"Merger Agreement": that certain Second 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, Meditrust
Acquisition Company and Meditrust Acquisition Corporation IV.
"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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ANNEX C
TO SECOND
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]
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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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"Merger Agreement": that certain Second 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, Meditrust
Acquisition Company and Meditrust Acquisition Corporation IV.
"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 D
TO SECOND 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 Second 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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<PAGE>
"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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<PAGE>
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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<PAGE>
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 SECOND AMENDED
AND RESTATED
AGREEMENT
AND PLAN OF MERGER
The Common Stock may be created and issued from time to time in one or more
series with such designations, powers, preferences and rights of the shares of
each series and any qualifications, limitations or restrictions thereof as
shall be determined by the Board of Directors of the corporation and set forth
in the resolution or resolutions providing for the creation and issuance of
the stock in such series.
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ANNEX F
TO SECOND AMENDED
AND RESTATED
AGREEMENT
AND PLAN OF MERGER
The Common Stock may be created and issued from time to time in one or more
series with such designations, powers, preferences and rights of the shares of
each series and any qualifications, limitations or restrictions thereof as
shall be determined by the Board of Directors of the corporation and set forth
in the resolution or resolutions providing for the creation and issuance of
the stock in such series.
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