1
EXHIBIT 10.5
===============================================================================
REGISTRATION RIGHTS AGREEMENT
DATED AS OF MAY 6, 1998
BETWEEN
HEALTHCARE FINANCIAL PARTNERS REIT, INC.
AND
NATIONSBANC XXXXXXXXXX SECURITIES LLC AND
XXXXXX BROTHERS INC.
AS INITIAL PURCHASERS
AND
THE PARTIES IDENTIFIED ON
SCHEDULE 1 ATTACHED HERETO
AS INITIAL SUBSCRIBERS
================================================================================
2
TABLE OF CONTENTS
1 Definitions ................................................ 1
2 Shelf Registration ......................................... 3
3 Registration Procedures .................................... 3
4 Registration Expenses ...................................... 8
5 Indemnification and Contribution ........................... 8
6 Underwritten Offering ...................................... 11
7 Miscellaneous .............................................. 12
3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of May 6, 1998 by and between HealthCare Financial Partners
REIT, Inc., a Maryland corporation (the "Company") and Xxxxxx Brothers Inc. and
NationsBanc Xxxxxxxxxx Securities LLC (the "Initial Purchasers") and the parties
identified on Schedule 1 hereto (the "Initial Subscribers").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of April 29, 1998, between the Company and the Initial
Purchasers (the "Purchase Agreement"), which provides for the sale by the
Company to the Initial Purchasers of an aggregate of 1,150,000 Units (the "Firm
Units"), each Unit consisting of five shares of the Company's common stock, par
value $.0001 per share (the "Common Stock") and one stock purchase Warrant (a
"Warrant"). The Purchase Agreement also provides for the Company's grant of an
option to the Initial Purchasers to purchase up to 172,000 additional Units (the
"Optional Units") solely for the purpose of covering over-allotments, if any.
Concurrently with the sale of the Firm Units to the Initial Purchasers, the
Company is selling an aggregate of 300,000 Units (the "Initial Subscriber
Units") to the Initial Subscribers. The Firm Units, the Initial Subscriber Units
and the Optional Units are collectively referred to as the "Units." Capitalized
terms used but not specifically defined herein have the respective meanings
ascribed to them in the Purchase Agreement.
The terms of the Warrants shall be as set forth in the Warrant
Agreement (the "Warrant Agreement") to be entered into by the Company and the
Warrant agent on the Closing Date (as hereinafter defined). Each Warrant
entitles the holders thereof for $20.00 to purchase one share (subject to
antidilution provisions) of the Common Stock. The Warrants will become
exercisable six months after the Closing Date and will remain exercisable until
the third anniversary of the Closing Date.
The shares of Common Stock which in part comprise the Units are herein
referred to as the Unit Shares. The shares of Common Stock issuable upon
exercise of the Warrants are herein referred to as the Warrant Shares. The Unit
Shares and the Warrant Shares are herein collectively referred to as the Shares.
The Company agrees with the Initial Purchasers and the Initial
Subscribers (i) for their benefit as Initial Purchasers and Initial Subscribers,
respectively, and (ii) for the benefit of the holders from time to time of the
Units, Warrants, Unit Shares and Warrant Shares (collectively, the
"Securities"), including the Initial Purchasers and Initial Subscribers, (each,
a "Holder" and together the "Holders"), as follows:
1. Definitions. As used in this Agreement, the following
capitalized terms shall have the following meanings:
Affiliate: Any person that, directly or indirectly, is in
control of, is controlled by, or is under common control with a
specified person. For purposes of this definition, control of a person
means the power, direct or indirect, to direct or cause the direction
of the management or policies of such person, whether by contract or
otherwise; the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
4
Commission: The Securities and Exchange Commission.
Closing Date: The date of the payment for and delivery of the
Firm Units to the Initial Purchasers pursuant to the Purchase
Agreement.
DTC: The Depository Trust Company.
Effectiveness Period: As defined in Section 2(b).
Exchange Act: The Securities Exchange Act of 1934, as amended.
Managing Underwriter: The investment banker or bankers and
manager or managers that administer an underwritten offering, if any,
as set forth in Section 6 of this Agreement.
Person: An individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a
government or agency or political subdivision thereof.
Prospectus: The prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A under the
Securities Act), as amended or supplemented by any prospectus
supplement and by all other amendments thereto, including
post-effective amendments, and all material incorporated by reference
into such prospectus.
Registrable Securities: All or any portion of the Units, Unit
Shares, Warrants, Warrant Shares issued from time to time; provided,
however, that a security ceases to be a Registrable Security when it is
no longer a Restricted Security.
Restricted Security: Each Unit, Unit Share, Warrant, Warrant
Share, except any Unit, Unit Share, Warrant, Warrant Share that (i) has
been effectively registered under the Securities Act and sold in a
manner contemplated by the Shelf Registration Statement, or (ii) has
been transferred in compliance with Rule 144 under the Securities Act
(or any successor provision thereto) or is transferable pursuant to
paragraph (k) of Rule 144 (or any successor provision thereto).
Securities Act: The Securities Act of 1933, as amended.
Shelf Registration Statement: A "shelf" registration statement
of the Company pursuant to Section 2 of this Agreement filed with the
Commission, which covers some or all of the Registrable Securities, as
applicable, on an appropriate form under Rule 415 of the Securities
Act, or any similar rule that may be adopted by the Commission,
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated
by reference therein.
2
5
Shelf Registration: A registration effected pursuant to
Section 2 of this Agreement.
Underwriter: Any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration
Statement.
2. Shelf Registration.
(a) The Company shall, within 120 days after the latest
date of initial issuance of the Units (the "Issue Date"), file with the
Commission a Shelf Registration Statement relating to the offer and sale of the
Registrable Securities by the Holders from time to time in accordance with the
method of distribution elected by such Holders and set forth in such Shelf
Registration Statement and, thereafter, shall use its best efforts to cause such
Shelf Registration Statement to be declared effective under the Securities Act
as soon as practicable and in no event later than 180 days after the Issue Date;
provided, however, that no Holder shall be entitled to have the Registrable
Securities held by it covered by such Shelf Registration unless such Holder is
in compliance with Section 3(m) of this Agreement.
(b) The Company shall use its best efforts (i) to keep
the Shelf Registration Statement continuously effective in order to permit the
Prospectus forming a part thereof to be usable by Holders for a period of two
years from the Issue Date or such shorter period that will terminate when there
are no Registrable Securities outstanding (in either case, such period being
referred to as the "Effectiveness Period"), and (ii) after the effectiveness of
the Shelf Registration Statement, promptly upon the request of any Holder, to
take promptly any action reasonably necessary to register the sale of any
Registrable Security of such Holder and to identify such Holder as a selling
stockholder. The Company will be deemed not to have used its best efforts to
keep the Shelf Registration Statement continuously effective during the
requisite period if the Company voluntarily takes any action that would result
in Holders of Registrable Securities covered thereby not being able to offer and
sell any such Registrable Securities during that period, unless (i) such action
is required by applicable law or the rules of any national securities exchange
or other market on which any of the Registrable Securities are then listed or
quoted, (ii) such action is taken upon the occurrence of any event contemplated
by paragraph 3(c)(2)(iii) of this Agreement and in good faith and for valid
business reasons, or (iii) the continued effectiveness of the Shelf Registration
Statement would require the Company to disclose a material financing,
acquisition or other corporate transaction, and the Board of Directors of the
Company shall have determined in good faith that such disclosure is not in the
best interest of the Company and its shareholders and, in the case of clause (i)
or (ii) above, the Company thereafter promptly complies with the requirements of
paragraph 3(i) of this Agreement.
3. Registration Procedures. In connection with any Shelf
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to the Initial Subscribers
and Initial Purchasers, prior to the filing thereof with the Commission, a copy
of any Shelf Registration Statement, and each amendment thereof and each
amendment or supplement, if any, to the Prospectus included therein, and shall
use its best efforts to reflect in each such document, when
3
6
so filed with the Commission, such comments as the Initial Purchasers or the
Initial Subscribers reasonably may propose in a timely manner.
(b) The Company shall take such action as may be
necessary so that (i) any Shelf Registration Statement and any amendment thereto
and any Prospectus forming a part thereof and any amendment or supplement
thereto (and each report or other document incorporated therein by reference in
each case) complies in all material respects with the applicable provisions of
the Securities Act and the Exchange Act and the respective rules and regulations
thereunder, (ii) any Shelf Registration Statement and any amendment thereto does
not, when it becomes effective, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (iii) any Prospectus forming part
of any Shelf Registration Statement, and any amendment or supplement to such
Prospectus, does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements, in the light of
the circumstances under which they were made, not misleading.
(c) (1) The Company shall advise the Initial
Subscribers and the Initial Purchasers and, in the case of clause (i), the
Holders and, if requested by the Initial Purchasers or any such Holder, confirm
such advice in writing: (i) when a Shelf Registration Statement and any
amendment thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto has become
effective; and (ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the Prospectus included
therein or for additional information.
(2) The Company shall advise the Initial
Purchasers and the Holders and, if requested by the Initial Purchasers or any
such Holder, confirm such advice in writing of: (i) the issuance by the
Commission of any stop order suspending effectiveness of the Shelf Registration
Statement or the initiation of any proceedings for that purpose; (ii) the
receipt by the Company of any notification with respect to the suspension of the
qualification of the securities included therein for sale in any jurisdiction or
the initiation of any proceeding for such purpose; and (iii) the happening of
any event that requires the making of any changes in the Shelf Registration
Statement or the Prospectus so that, as of such date, the Shelf Registration
Statement and the Prospectus do not contain an untrue statement of a material
fact and do not omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not misleading (which
advice shall be accompanied by an instruction to suspend the use of the
Prospectus until the requisite changes have been made).
(d) The Company shall exercise its best efforts to
prevent the issuance, and if issued to obtain the withdrawal at the earliest
possible time, of any order suspending the effectiveness of any Shelf
Registration Statement.
(e) The Company shall furnish to each Holder of
Registrable Securities included within the coverage of any Shelf Registration
Statement, without charge, at least one copy of such Shelf Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, and, if the Holder so requests in writing, all
reports, other documents and exhibits (including those incorporated by
reference).
4
7
(f) The Company shall, during the Effectiveness Period,
deliver to each Holder of Registrable Securities included within the coverage of
any Shelf Registration Statement, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request; and the Company consents (except upon and during the
continuance of any event described in paragraph 3(c)(2)(iii) above) to the use
of the Prospectus or any amendment or supplement thereto by each of the selling
Holders of Registrable Securities in connection with the offering and sale of
the Registrable Securities covered by the Prospectus or any amendment or
supplement thereto during the Effectiveness Period.
(g) Prior to any offering of Registrable Securities
pursuant to any Shelf Registration Statement, the Company shall register or
qualify or cooperate with the Holders of Registrable Securities included therein
and their respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions as any such Holders reasonably
request in writing and do any and all other acts or things necessary or
advisable to enable the offer and sale in such United States jurisdictions of
the Registrable Securities covered by such Shelf Registration Statement;
provided, however, that in no event shall the Company be obligated to (i)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to so qualify but for this
Section 3(g), (ii) file any general consent to service of process in any
jurisdiction where it is not as of the date hereof so subject or (iii) subject
itself to taxation in any such jurisdiction if it is not so subject.
(h) To the extent that any Registrable Securities are not
in book-entry only form, the Company shall cooperate with the Holders of
Registrable Securities to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold pursuant to any
Shelf Registration Statement free of any restrictive legends and in such
permitted denominations and registered in such names as Holders may request in
connection with the sale of Registrable Securities pursuant to such Shelf
Registration Statement.
(i) Upon the occurrence of any event contemplated by
paragraph 3(c)(2)(iii) above, the Company shall prepare as soon as reasonably
practicable a post-effective amendment to any Shelf Registration Statement or an
amendment or supplement to the related Prospectus or file any other required
document so that, as thereafter delivered to purchasers of the Registrable
Securities included therein, the Prospectus will not include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If the Company notifies the Holders of the occurrence of any
event contemplated by paragraph 3(c)(2)(iii) above, the Holders shall suspend
the use of the Prospectus until the requisite changes to the Prospectus have
been made.
(j) Not later than the effective date of any Shelf
Registration Statement hereunder, the Company shall provide a CUSIP number for
the securities registered under such Shelf Registration Statement.
5
8
(k) The Company shall use its best efforts to comply with
all applicable rules and regulations of the Commission and shall make generally
available to its security holders or otherwise provide in accordance with
Section 11(a) of the Securities Act as soon as practicable after the effective
date of the applicable Shelf Registration Statement an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act.
(l) The Company shall use its best efforts to cause the
Registrable Securities covered by any Shelf Registration Statement to be
approved for listing on the New York Stock Exchange as soon as possible, subject
to official notice of issuance, and in any event within 180 days after the Issue
Date.
(m) The Company may require each Holder of Registrable
Securities to be sold pursuant to any Shelf Registration Statement to furnish to
the Company such information regarding the Holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably request
for inclusion in such Shelf Registration Statement, and the Company may exclude
from such registration the Registrable Securities of any Holder that fails to
furnish such information within a reasonable time after receiving such request.
(n) The Company shall, if requested, promptly include or
incorporate in a Prospectus supplement or post-effective amendment to a Shelf
Registration Statement, such information as the Managing Underwriters reasonably
agree should be included therein and to which the Company does not reasonably
object, and shall make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after it is notified of the
matters to be included or incorporated in such Prospectus supplement or
post-effective amendment.
(o) The Company shall enter into such customary
agreements (including underwriting agreements in customary form) and take all
other appropriate actions in order to expedite or facilitate the registration or
the disposition of the Registrable Securities, and in connection therewith, if
an underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures substantially identical to those set
forth in Section 5 of this Agreement (or such other provisions and procedures
reasonably acceptable to the Managing Underwriters, if any) with respect to all
parties to be indemnified pursuant to Section 5 of this Agreement.
(p) The Company shall (i) make reasonably available for
inspection by the Holders of Registrable Securities to be registered thereunder,
any Underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and any attorney, accountant or other agent retained by
such Holders or any such Underwriter, all relevant financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries; (ii) cause the Company's officers, directors and employees to make
reasonably available for inspection all relevant information reasonably
requested by such Holders or any such Underwriter, attorney, accountant or agent
in connection with any Registration Statement, in each case as is customary for
similar due diligence examinations; provided, however, that any information that
is designated in writing by the Company, in good faith, as confidential at the
time of delivery of such information shall not be used for any purpose other
than the preparation and filing of the Shelf Registration Statement and shall be
kept confidential by such Holders or
6
9
any such Underwriter, attorney, accountant or agent, unless such disclosure is
made in connection with a court proceeding or required by law, or such
information becomes available to the public generally or through a third party
without an accompanying obligation of confidentiality; and provided further,
that the foregoing inspection and information gathering shall, to the greatest
extent possible, be coordinated on behalf of the Holders and other parties;
(iii) make such representations and warranties to the Holders of Registrable
Securities registered thereunder and the Underwriters, if any, in form,
substance and scope as are customarily made to Underwriters in primary
underwritten offerings and covering matters including, but not limited to, those
set forth in the Purchase Agreement; (iv) use its best efforts to obtain
opinions of counsel to the Company (who may be the general counsel of the
Company) and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Managing Underwriters, if
any) in customary form addressed to each selling Holder and the Underwriters, if
any, covering such matters as are customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
such Holders and the Managing Underwriters (it being agreed that the matters to
be covered by such opinion or a written statement by such counsel delivered in
connection with such opinions shall include, without limitation, as of the date
of the opinion and as of the effective date of the Shelf Registration Statement
or most recent post-effective amendment thereto, as the case may be, that
nothing has come to the attention of such counsel that causes such counsel to
believe that such Shelf Registration Statement or the prospectus included
therein, as then amended or supplemented, including the documents incorporated
by reference therein, included an untrue statement of a material fact or omitted
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading); (v) use its best efforts to obtain
"cold comfort" letters and updates thereof from the independent public
accountants of the Company (and, if necessary, any other independent public
accountants of any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or are required
to be, included in the Shelf Registration Statement), addressed to each such
Holder of Registrable Securities registered thereunder and the Underwriters, if
any, in customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with primary underwritten offerings; and
(vi) deliver such other customary documents and certificates as may be
reasonably requested by any such Holders and the Managing Underwriters, if any,
including those to evidence compliance with Section 3(i) and with any customary
conditions contained in the underwriting agreement or other agreement entered
into by the Company. The foregoing actions set forth in clauses (iii), (iv) and
(v) of this Section 3(p) shall be performed at each closing under any
underwritten offering to the extent required thereunder.
(q) In the event that any broker-dealer registered under
the Exchange Act shall underwrite any Registrable Securities or participate as a
member of an underwriting syndicate or selling group or "assist in the
distribution" (within the meaning of the Rules of Fair Practice and the By-Laws
of the National Association of Securities Dealers, Inc. ("NASD")) thereof,
whether as a Holder of such Registrable Securities or as an underwriter, a
placement or sales agent or a broker or dealer in respect thereof, or otherwise,
the Company shall assist such broker-dealer in complying with the requirement of
such Rules and By-Laws, including, without limitation, by (A) if such Rules or
By-Laws, including Schedule E thereto, shall so require, engaging at the expense
of the Holders a "qualified independent underwriter" (as defined in Schedule E)
to participate in the preparation of the Shelf Registration Statement relating
to such
7
10
Registrable Securities and to exercise usual standards of due diligence with
respect thereto, (B) indemnifying any such qualified independent underwriter to
the extent of the indemnification of Underwriters provided in Section 5 hereof
and (C) providing such information to such broker-dealer as may be reasonably
required in order for such broker-dealer to comply with the requirements of the
Rules of Fair Practice of the NASD.
(r) The Company shall use its best efforts to take all
other steps necessary to effect the registration, offering and sale of the
Registrable Securities covered by the Shelf Registration Statement contemplated
hereby.
4. Registration Expenses.
Except as otherwise provided in Sections 3(q) and 6 of this
Agreement, the Company shall bear all fees and expenses incurred by it in
connection with the performance of its obligations under Sections 2 and 3 of
this Agreement and shall bear or reimburse the Holders for the reasonable fees
and disbursements of one firm of counsel designated by the Initial Purchasers
and reasonably acceptable to the Company and the Holders of the majority of the
Registrable Securities covered by the Shelf Registration Statement to act as
counsel therefor in connection therewith, including any Underwritten Offering
pursuant to Section 6 of this Agreement.
5. Indemnification and Contribution.
(a) In connection with a Shelf Registration Statement,
the Company shall indemnify and hold harmless the Initial Purchasers, each
Holder, each Underwriter who participates in an offering of Registrable
Securities, each of their respective directors, officers, employees and agents,
and each Person, if any, who controls the Initial Purchasers or any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act:
(i) from and against any loss, liability, claim,
damage and expense whatsoever, including any amounts paid in
settlement of any investigation, litigation, proceeding or
claim, joint or several, as incurred, arising out of any
untrue statement or alleged untrue statement of a material
fact contained in any Shelf Registration Statement (or any
amendment thereto) covering Registrable Securities, including
all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any
untrue statement or alleged untrue statement of a material
fact contained in any Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading;
provided however, that the Company shall not be liable under
this clause (i) for any settlement of any action effected
without its written consent, which consent shall not be
unreasonably withheld; and
8
11
(ii) against any and all expenses (including
reasonable fees and disbursements of counsel chosen by the
Holders, such Holder or any Underwriter (except to the extent
otherwise expressly provided in Section 5(c) of this
Agreement)), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or
proceeding by any court or governmental agency or body,
commenced or threatened, or any claim whatsoever based upon
any such untrue statement or omission, or any such alleged
untrue statement or omission, as such expenses are incurred
and to the extent that such expense is not paid under clause
(i) of this Section 5(a);
provided, however, that the indemnity provided for in this Section 5(a) shall
not apply to any loss, liability, claim, damage or expense to the extent arising
out of, or based upon, any untrue statement or alleged untrue statement or
omission or alleged omission (i) made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the Initial
Purchasers, such Holder or any Underwriter expressly for use in the Shelf
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto), or (ii) contained in any preliminary
prospectus or the Prospectus if the Initial Purchasers, such Holder or such
Underwriter failed to send or deliver a copy of the Prospectus (or any amendment
or supplement thereto) to the Person asserting such losses, claims, damages or
liabilities on or prior to the delivery of written confirmation of any sale of
securities covered thereby to such person in any case where such Prospectus
corrected such untrue statement or omission. Any amounts advanced by the Company
to an indemnified party pursuant to this Section 5 as a result of such losses
shall be returned to the Company if it is finally determined by such a court in
a judgment not subject to appeal or final review that the indemnified party was
not entitled to indemnification by the Company.
(b) Each Holder, severally and not jointly, shall
indemnify and hold harmless the Company, the Initial Purchasers, each
Underwriter who participates in an offering of Registrable Securities and other
selling Holders, and each of their respective directors, officers (including
each officer of the Company who signs the Shelf Registration Statement),
employees or agents and each person, if any, who controls the Company, the
Initial Purchasers, any Underwriter or any other selling Holder within the
meaning of Section 15 of the Securities Act Section 20 of the Exchange Act, from
and against any loss, liability, claim, damage and expense whatsoever described
in the indemnity described in Section 5(a) of this Agreement, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Shelf Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such selling Holder expressly for use in the Shelf Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto); provided, however, that no such Holder shall be liable for
any claims hereunder in excess of the amount of gross proceeds received by such
Holder from the sale of Registrable Securities pursuant to the Shelf
Registration Statement.
(c) Promptly after receipt by an indemnified party under
this Section 5 of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 5, notify the indemnifying party in
writing of the claim or the commencement of that action, provided,
9
12
however, that the failure to notify the indemnifying party shall not relieve it
from any liability that it may have under this Section 5 except to the extent it
has been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party otherwise than under this Section 5. If
any such claim or action shall be brought against an indemnified party, and it
shall have notified the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that the indemnified
party shall have the right to employ counsel to represent jointly the
indemnified party and other Holders, Initial Purchasers or Underwriters and
their respective officers, employees and controlling persons who may be subject
to liability arising out of any claim in respect of which indemnity may be
sought against the indemnifying party under this Section 5 if, in the reasonable
judgment of the indemnified party it is advisable for the indemnified party and
those, officers, employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the indemnifying party. In no event shall the
indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to local counsel). Each indemnified party, as a condition
of the indemnity agreements contained in this Section 5, shall use its best
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding, or (ii) be liable for any settlement
for any such action effected without its written consent (which consent shall
not be unreasonably withheld), but if settled with its written consent or if
there be a final judgment of the plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless any indemnified party from and
against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 5
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 5(a) or 5(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, in such
proportion as shall be appropriate to reflect the relative fault of the Company
on the one hand and the Holders and Initial Purchasers on the other with respect
to the statements or omissions that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Holders and Initial Purchasers, the intent
10
13
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Holders and Initial Purchasers agree that it would not be just and equitable
if contributions pursuant to this Section 5(d) were to be determined by pro rata
allocation (even if the Holders and Initial Purchasers were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
5(d) shall be deemed to include, for purposes of this Section 5(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5(d), no Holder or Initial Purchaser shall be
required to contribute any amount in excess of the amount by which proceeds
received by such Holder or Initial Purchaser from an offering of Registrable
Securities exceeds the amount of any damages such Holder or Initial Purchaser
has otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders' and Initial Purchasers' obligations
to contribute as provided in this Section 5(d) are several and not joint.
6. Underwritten Offering.
The Holders of Registrable Securities covered by the Shelf
Registration Statement who desire to do so may sell such Registrable Securities
in an Underwritten Offering. In any such Underwritten Offering, the investment
banker or investment bankers and manager or managers that will administer the
Offering will be selected by, and the underwriting arrangements with respect
thereto will be approved by, the Holders of a majority of the Registrable
Securities to be included in such offering; provided, however, that (a) such
investment bankers and managers and underwriting arrangements (including
indemnification arrangements) must be reasonably satisfactory to the Company,
and (ii) the Company shall not be obligated to cooperate with the Initial
Purchasers or Holders in more than one Underwritten Offering during the
Effectiveness Period. No Holder may participate in an Underwritten Offering
contemplated hereby unless such Holder (a) agrees to sell such Holder's
Registrable Securities in accordance with any approved underwriting
arrangements, (b) completes and executes all reasonable questionnaires, powers
of attorney, indemnities, underwriting agreements, lock-up letters and other
documents required under the terms of such approved underwriting arrangements,
and (c) at least 20% of the outstanding Registrable Securities are included in
such Underwritten Offering. The Holders participating in the Underwritten
Offering shall be responsible for all underwriting discounts and commissions.
The Company shall pay all expenses customarily borne by issuers, including but
not limited to filing fees, the fees and disbursements of its counsel, its
independent public accountants and any printing and other out-of-pocket expenses
incurred by it in connection with such Underwritten Offering, and in accordance
with Section 4 of this Agreement the reasonable fees and disbursements of one
firm of counsel to the selling Holders. Notwithstanding the foregoing or the
provisions of Section 3(n) of this Agreement, upon receipt of a request from the
Managing Underwriter or a representative of the Holders of a majority of the
Registrable Securities outstanding to prepare and file an amendment or
supplement to the Shelf Registration Statement or Prospectus in connection with
an Underwritten Offering, the Company may delay the filing of any such amendment
or supplement for up to 90 days if the Company has a valid business reason for
such delay.
11
14
7. Miscellaneous.
(a) Other Registration Rights.
The Company may grant registration rights that would permit
any Person that is a third party the right to piggy-back on any Shelf
Registration Statement, provided that if the Managing Underwriter, if any, of
such offering delivers an opinion to the selling Holders that the total amount
of securities that they and the holders of such piggy-back rights intend to
include in any Shelf Registration Statement is so large as to materially
adversely affect the success of such offering (including the price at which such
securities can be sold), then (except to the extent otherwise required under the
terms of any registration rights granted by the Company prior to the date
hereof) only the amount, number or kind of securities to be offered for the
account of holders of such piggy-back rights will be reduced to the extent
necessary to reduce the total amount of securities to be included in such
offering to the amount, number or kind recommended by the Managing Underwriter
prior to any reduction in the amount of Registrable Securities to be included.
(b) Amendments and Waiver.
The provision of this Agreement, including the provisions of
this sentence, may not be amended, qualified, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of the Initial Purchasers
and the Initial Subscribers. Any such written consent of the Initial Purchasers
and the Initial Subscribers shall be binding upon each Holder and each
subsequent Holder.
(c) Information Requirements.
The Company shall use its best efforts to file the reports
required to be filed by it under the Securities Act and the Exchange Act, and if
at any time the Company is not required to file such reports, it will, upon the
request of any Holder of Registrable Securities, make publicly available other
information so long as necessary to permit sales pursuant to Rule 144 and Rule
144A under the Securities Act. The Company further covenants that it will
cooperate with any Holder of Registrable Securities and take such further
reasonable action as any Holder of Registrable Securities may reasonably request
(including without limitation making such reasonable representations as any such
Holder may reasonably request), all to the extent required from time to time to
enable such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144 and
Rule 144A under the Securities Act. Upon the request of any Holder of
Registrable Securities, the Company shall deliver to such Holder a written
statement as to whether it has complied with such filing requirements.
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Company to register any of its securities under any section of the
Exchange Act.
12
15
(d) Remedies
Subject to Section 2 hereof, in the event of a breach by the
Company of its obligations under this Agreement, each Holder of Registrable
Securities, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The Company agrees that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by it of
any of the provisions of this Agreement and hereby further agrees that, in the
event of any action for specific performance in respect of such breach, it shall
waive the defense that a remedy at law would be adequate.
(e) Notices.
All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail, telex,
telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address
given by such Holder to the Company in accordance with the provisions
of this Section 7(e);
(2) if to the Initial Purchasers, initially at
the address set forth in the Purchase Agreement; and
(3) if to the Company, initially at its address
set forth in the Purchase Agreement.
(4) if to the Initial Subscribers, at their
respective addresses set forth on Schedule 2 attached hereto.
All such notices and communications shall be deemed
to have duly given when received.
The Initial Purchasers, the Initial Subscribers or the
Company, by notice to the other, may designate additional or different addresses
for subsequent notices or communications.
13
16
(f) Successors and Assigns.
This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties and the Holders,
including, without the need for an express assignment or any consent by the
Company thereto, subsequent Holders of Registrable Securities. The Company
hereby agrees to extend the benefits of this Agreement to any Holder of
Registrable Securities and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.
(g) Counterparts.
This Agreement may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(h) Headings.
The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
(i) Governing law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF.
(j) Severability.
In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected thereby, it being
intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.
[SIGNATURES APPEAR ON NEXT PAGE]
14
17
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
HEALTHCARE FINANCIAL PARTNERS REIT, INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
----------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Chief Financial Officer
INITIAL PURCHASERS:
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXXX BROTHERS INC.
By: NATIONSBANC XXXXXXXXXX SECURITIES
LLC
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Managing Director
INITIAL SUBSCRIBERS:
FARALLON CAPITAL PARTNERS, L.P.
FARALLON CAPITAL INSTITUTIONAL PARTNERS,
L.P.
FARALLON CAPITAL INSTITUTIONAL PARTNERS II,
L.P.
FARALLON CAPITAL INSTITUTIONAL PARTNERS III,
L.P.
TINICUM PARTNERS, L.P.
By: Farallon Partners, L.L.C.
Its General Partner
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Name: Xxxxx X. Xxxx
Title: Managing Member
15
18
THE COMMON FUND
By: Farallon Capital Management, L.L.C.,
its Agent and Attorney-in-Fact
By: /s/ Xxxxx X. Xxxx
--------------------------------------
Name: Xxxxx X. Xxxx
Title: Managing Member
CREDIT SUISSE FIRST BOSTON CORP.
By: /s/ Xxxxxxx Xxxxxxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: Vice President
16
19
SCHEDULE 1
INITIAL SUBSCRIBERS
Farallon Capital Partners, L.P.
Farallon Capital Institutional Partners, L.P.
Farallon Capital Institutional Partners II, L.P.
Farallon Capital Institutional Partners III, L.P.
Tinicum Partners, L.P.
Farallon Capital Management, L.L.C., on
behalf of The Common Fund
Credit Suisse First Boston Corp.
17
20
SCHEDULE 2
ADDRESSES FOR NOTICES TO INITIAL SUBSCRIBERS
Farallon Capital Partners, L.P.
Farallon Capital Institutional Partners, L.P.
Farallon Capital Institutional Partners II, L.P.
Farallon Capital Institutional Partners III, L.P.
Tinicum Partners, L.P.
Farallon Capital Management, L.L.C., on
behalf of The Common Fund
c/o Farallon Capital Management, L.L.C.
Xxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx and Xxxxxxx Xxxxx
and
Credit Suisse First Boston Corp.
c/o Credit Suisse First Boston
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxxxx
00
00
AGREEMENT
This AGREEMENT is made by and between HealthCare Financial Partners
REIT, Inc. (the "Company"), NationsBanc Xxxxxxxxxx Securities LLC, Xxxxxx
Brothers Inc. (NationsBanc Xxxxxxxxxx Securities LLC and Xxxxxx Brothers Inc.,
collectively, the "Initial Purchasers") and the parties on Schedule 1 attached
in this Agreement (the "Initial Subscribers"). All capitalized terms used but
not defined in this agreement have the meanings given to them in that certain
Registration Rights Agreement (the "Registration Rights Agreement"), dated May
6, 1998, between the Company, the Initial Purchasers and the Initial
Subscribers.
WHEREAS, the Company, the Initial Purchasers and the Initial
Subscribers entered into the Registration Rights Agreement in
connection with the Purchase Agreement, dated as of April 29, 1998,
between the Company and the Initial Purchasers, which provided for the
sale by the Company to the Initial Purchasers of an aggregate of
1,150,000 Units, each Unit consisting of five shares of the Company's
common stock, par value $0.0001 per share (the "Common Stock") and one
stock purchase warrant, and in connection with the concurrent sale by
the Company of an aggregate of 300,000 Units to the Initial
Subscribers; and
WHEREAS, Section 7(b) of the Registration Rights Agreement
provides that the Registration Rights Agreement may not be amended
unless the Company has obtained the written consent of the Initial
Purchasers and the Initial Subscribers, which consent shall be binding
on each Holder and each subsequent Holder; and
WHEREAS, the Company, the Initial Purchasers and the Initial
Subscribers each desire to amend the Registration Rights Agreement to
allow the Company to delay the effectiveness of, or suspend sales of
Registrable Securities pursuant to, the Shelf Registration Statement
for a temporary period for the purpose of facilitating the Company's
initial public offering of Common Stock.
NOW, THEREFORE, for good and valuable consideration, the
sufficiency of which is hereby acknowledged by the Company, the Initial
Purchasers and the Initial Subscribers hereby agree as follows.
1. The Registration Rights Agreement is hereby amended as
follows:
(a) the following definition is added to Section 1:
Underwritten Offering: A sale of securities of the
Company to an underwriter or underwriters for
reoffering to the public.
(b) the second sentence of Section 2(b) of the Registration
Rights Agreement is deleted in its entirety; and
22
(c) the following language is inserted as the second
sentence of Section 2(b) of the Registration Rights Agreement:
The Company will be deemed not to have used its best
efforts to keep the Shelf Registration Statement
continuously effective during the requisite period if the
Company voluntarily takes any action that would result in
Holders of Registrable Securities covered thereby not
being able to offer and sell any such Registrable
Securities during that period, unless (i) such action is
required by applicable law or the rules of any national
securities exchange or other market on which any of the
Registrable Securities are then listed or quoted, (ii)
such action is taken upon the occurrence of any event
contemplated by paragraph 3(c)(2)(iii) of this Agreement
and in good faith and for valid business reasons, (iii)
the continued effectiveness of the Shelf Registration
Statement would require the Company to disclose a material
financing, acquisition or other corporate transaction, and
the Board of Directors of the Company shall have
determined in good faith that such disclosure is not in
the best interest of the Company and its shareholders, or
(iv) the Company directs the Holders to suspend offers and
sales of the Registrable Securities pursuant to the Shelf
Registration Statement in connection with an Underwritten
Offering by the Company that is the its initial public
offering of Common Stock (the "IPO") where the Company is
advised by the Managing Underwriter that the sale of
Registrable Securities pursuant to the Shelf Registration
Statement would have a material adverse effect on the IPO,
and (x) in the case of clause (i) or (ii) above, the
Company thereafter promptly complies with the requirements
of paragraph 3(i) of this Agreement, and (y) in the case
of clause (iv) above, the period during which Holders of
Registrable Securities may not offer or sell such
Registrable Securities pursuant to the Shelf Registration
Statement (the "Suspension Period") shall commence on the
date on which the registration statement filed with the
Commission in connection with the IPO is declared
effective by the Commission and shall expire concurrently
with the expiration of the 30-day period during which the
underwriters of the IPO may exercise the over-allotment
option granted in the underwriting agreement executed in
connection with the IPO.
In the case that the Company determines to direct the
Holders to suspend offers and sales of the Registrable
Securities pursuant to the Shelf Registration Statement as
contemplated in clause (iv) above, the Company may give
written notice (a "Suspension Notice") to the Holders, the
Initial Purchasers and the Initial Subscribers. The
Holders, the Initial Purchasers and the Initial
Subscribers shall not effect any sales of the Registrable
Securities pursuant to the Shelf Registration Statement
during the Suspension Period.
2
23
2. The Company, the Initial Purchasers and the Initial
Subscribers agree that at any time and from time to time, upon written
request, they will execute and deliver such further documents and do
such further acts and things as may be reasonably requested in order to
effectuate the purposes of this Agreement and the transactions
contemplated by this Agreement.
3. Except as provided in this Agreement, all other terms of
the Registration Rights Agreement remain in full force and effect.
Dated: August __, 1998
HEALTHCARE FINANCIAL PARTNERS REIT, INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Chief Financial Officer
INITIAL PURCHASERS:
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By:
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Managing Director
XXXXXX BROTHERS, INC.
By:
-----------------------------------------
Name:
Title:
3
24
INITIAL SUBSCRIBERS:
HEALTHCARE FINANCIAL PARTNERS, INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Chief Financial Officer
FARALLON CAPITAL PARTNERS, L.P.
FARALLON CAPITAL INSTITUTIONAL PARTNERS, L.P.
FARALLON CAPITAL INSTITUTIONAL PARTNERS, II L.P.
FARALLON CAPITAL INSTITUTIONAL PARTNERS, II L.P.
TINICUM PARTNERS, L.P.
By: Farallon Partners, L.L.C.
Its General Partner
By:
-----------------------------------------
Name:
Title:
THE COMMON FUND
By: Farallon Capital Management, L.L.C.
Its Agent and Attorney-in-Fact
By:
-----------------------------------------
Name:
Title:
4
25
CREDIT SUISSE FIRST BOSTON CORP.
By:
-----------------------------------------
Name:
Title:
5
26
SCHEDULE 1
INITIAL SUBSCRIBERS
HealthCare Financial Partners, Inc.
Farallon Capital Partners, L.P.
Farallon Capital Institutional Partners, L.P.
Farallon Capital Institutional Partners II, L.P.
Farallon Capital Institutional Partners III, L.P.
Tinicum Partners, L.P.
Farallon Capital Management, L.L.C., on behalf of The Common Fund
Credit Suisse First Boston Corp.
6
