EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of April 7, 2004, by and among MEDICAL PROPERTIES TRUST, INC., a
Maryland corporation (the "Company"), and FRIEDMAN, BILLINGS, XXXXXX & CO.,
INC., A Delaware corporation ("FBR") and the HOLDERS (as defined below).
THE PARTIES ENTER THIS AGREEMENT on the basis of the following facts,
understandings and intentions:
A. The Company, MPT Operating Partnership, L.P., a Delaware limited
partnership ("MPT Partnership") and FBR entered into that certain
Purchase/Placement Agreement dated as of March 31, 2004 (the "Purchase
Agreement") in connection with the offering and sale (the "Offering") of
22,000,000 shares of common stock, par value $.001 per share, of the Company
("Common Stock"), including up to 3,300,000 shares of Common Stock that may be
issued pursuant to an additional allotment option granted to FBR.
B. In order to induce the investors who are purchasing the Common Stock
in the Offering to purchase such Common Stock and FBR to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights provided
for in this Agreement for the Holders and such investors have, by separate
instrument, agreed to be bound by the terms and provisions hereof.
C. The execution and delivery of this Agreement is a condition to the
closing of the transactions contemplated by the Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
of the parties hereto, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms have the
following meanings:
Additional Shares: Shares or FBR Shares (as defined below) or other
securities issued in respect of the Shares or FBR Shares by reason of or in
connection with any stock dividend, stock distribution, stock split, or similar
issuance.
Agreement: As defined in the preamble hereof.
Affiliate: As to any specified Person, (i) any Person that directly, or
indirectly through one or more intermediaries or relationships, controls or is
controlled by, or is under common control with, the specified Person, (ii) any
executive officer, director, trustee, managing member, general partner or Person
in a similar capacity of the specified Person and (iii) any legal entity for
which the specified Person acts as an executive officer, director, trustee,
managing member, general partner or Person in a similar capacity. For purposes
of this definition, "control" (including the correlative meanings of the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly, or indirectly
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through one or more intermediaries or relationships, of the power to direct or
cause the direction of the management and policies of such Person, whether by
contract, through the ownership of voting securities, partnership or member
interests or other equity interests or otherwise. An indirect relationship
includes, but is not limited to, circumstances in which a Person's spouse,
children, parents, siblings or mother-, father-, sister- or brother-in-law is or
has been associated with a Person.
Business Day: With respect to any act to be performed hereunder, each
Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in New York, New York are authorized or obligated by
applicable law, regulation or executive order to close.
Closing Time: April 7, 2004, or such other time or such other date as FBR
and the Company may agree in writing.
Commission: The Securities and Exchange Commission.
Common Stock: As defined in recital A hereof.
Company: As defined in the preamble hereof, and any successor thereto.
Controlling Person. As defined in Section 6(a) hereof.
End of Suspension Notice: As defined in Section 5(b) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the Commission thereunder.
FBR: As defined in the preamble hereof, and any successor thereto.
FBR Shares: The 226,933 shares of Common Stock issued to FBR, or its
designees, pursuant to and in accordance with the Purchase Agreement.
Holder: Each record owner of any Registrable Shares from time to time.
Indemnified Party: As defined in Section 6(c) hereof.
Indemnifying Party: As defined in Section 6(c) hereof.
IPO Registration Statement: As defined in Section 2(b) hereof.
Liabilities: As defined in Section 6(a) hereof.
Mandatory Shelf Registration Statement: As defined in Section 2(a)
hereof.
MPT Partnership: As defined in recital A hereof.
NASD: The National Association of Securities Dealers, Inc.
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Offering: As defined in recital A hereof.
Person: An individual, partnership, corporation, trust, limited liability
company, unincorporated organization, government or agency or political
subdivision thereof, or any other legal entity.
Proceeding: An action (including a class action), claim, suit, demand,
arbitration or other proceeding (including without limitation, an investigation
or partial proceeding, such as a deposition), whether commenced or, to the
knowledge of the Person subject thereto, threatened.
Prospectus: The prospectus included in any Registration Statement,
including any preliminary prospectus, and all other amendments and supplements
to any such prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such prospectus.
Purchase Agreement: As defined in recital A hereof, as amended from time
to time in accordance with the terms thereof.
Purchaser Indemnitee: As defined in Section 6(a) hereof.
Registrable Shares: Each of the Shares, each of the FBR Shares and any
Additional Shares, upon original issuance thereof, and at all times subsequent
thereto, including upon the transfer thereof by the original holder or any
subsequent holder, until, in the case of any such Shares or Additional Shares,
as applicable, the earliest to occur of:
(i) the date on which such Shares have been sold pursuant to a
Registration Statement or sold, transferred or otherwise disposed of pursuant to
Rule 144;
(ii) the date on which such Shares not held by Affiliates of the
Company are eligible for purchase without registration under the Securities Act
pursuant to subparagraph (k) of Rule 144;
(iii) the date on which such Shares have been otherwise transferred,
new certificates for them not bearing a legend restricting further transfer have
been delivered by the Company and subsequent public distribution of such Shares
shall not require registration or qualification of under the Securities Act or
any similar state law then in force; or
(iv) the second annual anniversary of the initial effective date of
the Mandatory Shelf Registration Statement.
Registration Expenses: Any and all expenses of the Company incident to the
performance of or compliance with this Agreement, including, without limitation:
(i) all Commission, securities exchange, NASD or other registration, listing,
inclusion and filing fees, (ii) all fees and expenses incurred in connection
with compliance with international, federal or state securities or blue sky laws
(including, without limitation, any registration, listing and filing fees and
reasonable fees and disbursements of counsel in connection with blue sky
qualification of any of the Registrable Shares and the preparation of a blue sky
memorandum and compliance with the rules of the NASD), (iii) all expenses of any
Persons in preparing or assisting in
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preparing, word processing, duplicating, printing, delivering and distributing
any Registration Statement, any Prospectus, any amendments or supplements
thereto, any underwriting agreements, agreements among underwriters, securities
sales agreements, certificates and any other documents relating to the
performance of the Company under and compliance by the Company with this
Agreement, (iv) all fees and expenses incurred in connection with the listing or
inclusion of any of the Registrable Shares on any securities exchange or
national quotation system pursuant to Section 4(n) of this Agreement or
otherwise, (v) the fees and disbursements of counsel for the Company and of the
independent public accountants of the Company (including, without limitation,
the expenses of any special audit and "cold comfort" letters required by or
incident to such performance), and the reasonable fees and disbursements (up to
a maximum aggregate amount of $50,000) of one counsel and one accounting firm
(as selected by FBR) for the selling Holders to review any Registration
Statement, and (vi) any fees and disbursements customarily paid or otherwise
negotiated for payment by issuers in connection with issues and sales of
securities (including the fees and expenses of any experts retained by the
Company in connection with any Registration Statement), provided, however, that
Registration Expenses shall exclude brokers' or underwriters' discounts and
commissions and transfer taxes or transfer fees, if any, relating to the sale or
disposition of Registrable Shares by a Holder and the fees and disbursements of
any counsel to or accounting firm of the Holders other than as provided for in
subparagraph (v) above.
Registration Statement: Any Shelf Registration Statement, any Subsequent
Shelf Registration Statement or the IPO Registration Statement (that covers the
resale of any Registrable Shares), including the Prospectus, amendments and
supplements to such registration statement or Prospectus, including pre-and
post-effective amendments, all exhibits thereto and all material incorporated by
reference or deemed to be incorporated by reference, if any, in such
registration statement.
Rule 144: Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
Rule 144A: Rule 144A promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
Rule 158: Rule 158 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
Rule 415: Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
Rule 424: Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
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Rule 429: Rule 429 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated by the Commission thereunder.
Shares: As defined in the Purchase Agreement.
Shelf Registration Statement: The Mandatory Shelf Registration Statement
or any Subsequent Shelf Registration Statement.
Subsequent Shelf Registration Statement: As defined in Section 2(c)
hereof.
Suspension Event: As defined in Section 5(b) hereof.
Suspension Notice: As defined in Section 5(b) hereof.
Underwritten Offering: A sale of securities of the Company to an
underwriter or underwriters for reoffering to the public.
2. Registration Rights.
(a) Mandatory Shelf Registration. The Company agrees to file with the
Commission as soon as practicable, but in no event later than nine months from
the date hereof, a Shelf Registration Statement on Form S-11 or such other form
under the Securities Act then available to the Company providing for the resale
pursuant to Rule 415 from time to time by the Holders of all of the Registrable
Shares (including for the avoidance of doubt any Additional Shares that are
issued prior to the effectiveness of such shelf registration statement)
(including the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto and all material incorporated by reference or deemed to be
incorporated by reference, if any, in such registration statement, the
"Mandatory Shelf Registration Statement"). The Company shall use reasonable best
efforts to cause such Shelf Registration Statement to be declared effective by
the Commission as promptly as practicable following such filing. Such reasonable
best efforts shall include, without limitation, responding to any comments
issued by the staff of the Commission with respect to any Registration Statement
and filing any related amendment to such Registration Statement as soon as
reasonably practicable after receipt of such comments. Any Shelf Registration
Statement shall provide for the resale from time to time and pursuant to any
method or combination of methods legally available (including, without
limitation, an Underwritten Offering) by the Holders of any and all Registrable
Shares.
(b) IPO Registration. If the Company proposes to file a registration
statement on Form S-11 or such other form under the Securities Act providing
for the initial public offering of shares of Common Stock (including the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto
and all material incorporated by reference or deemed to be incorporated by
reference, if any, in such registration statement, the "IPO Registration
Statement"), the Company will notify,
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in writing, each Holder of the proposed filing and afford each Holder an
opportunity to include in such IPO Registration Statement all or any part of the
Registrable Shares then held by such Holder. Each Holder desiring to include in
any such IPO Registration Statement all or part of the Registrable Shares held
by such Holder shall, within twenty (20) Business Days after receipt of the
above-described written notice by the Company, so notify the Company in writing,
and in such notice shall inform the Company of the number of Registrable Shares
such Holder wishes to include in such IPO Registration Statement. Any election
by any Holder to include any Registrable Shares in such IPO Registration
Statement will not affect the inclusion of such Registrable Shares in the Shelf
Registration Statement until such Registrable Shares have been sold under the
IPO Registration Statement; provided, however, that at such time of sale, the
Company shall have the right to remove from the Shelf Registration Statement the
Registrable Shares sold pursuant to the IPO Registration Statement.
(i) Right to Terminate or Delayed IPO Registration. At any time, the
Company shall have the right to terminate or withdraw any IPO Registration
Statement referred to in this Section 2(b) whether or not any Holder has elected
to include Registrable Shares in such registration; provided, however, the
Company must provide each Holder that elected to include any Registrable Shares
in such IPO Registration Statement prompt written notice of such termination.
Furthermore, in the event the IPO Registration Statement is not declared
effective by the Commission within ninety (90) Business Days following delivery
by the Company of notice to the Holders of their initial opportunity to include
all or any part of the Registrable Shares then held by such Holders in the IPO
Registration Statement, the Company shall promptly provide a new written notice
to all Holders giving them another opportunity to elect to include Registrable
Shares in the pending IPO Registration Statement. Each Holder receiving such
notice shall have the same election rights afforded such Holder as described in
clause (b) above.
(ii) Underwriting, The Company shall give written notice to the
Holders who elected to be included in the IPO Registration Statement of the
managing underwriters for the Underwritten Offering proposed under the IPO
Registration Statement. The right of any such Holder's Registrable Shares to be
included in any IPO Registration Statement pursuant to this Section 2(b) shall
be conditioned upon such Holder's participation in such Underwritten Offering
and the inclusion of such Holder's Registrable Shares in the Underwritten
Offering to the extent provided herein. All Holders proposing to distribute
their Registrable Shares through such Underwritten Offering shall enter into an
underwriting agreement in customary form with the managing underwriters selected
by the Company (consistent with its contractual obligations) for such
underwriting and complete and execute, as reasonably requested as to scope and
form, any questionnaires, powers of attorney, indemnities, securities escrow
agreements and other documents reasonably required under the terms of such
underwriting, and furnish to the Company such information in writing as the
Company may reasonably request for inclusion in the Registration Statement;
provided, however, that no Holder shall be required to make any representations
or warranties to or agreements (including indemnities) with the Company or the
underwriters other than representations, warranties or agreements (including
indemnities) as are customary and reasonably requested by the underwriters with
the understanding that the foregoing shall be several, not joint and several,
and no such agreement (including indemnities) shall require any Holder to be
liable for an amount in excess of the net proceeds received by such Holder
through such Underwritten Offering. Notwithstanding any other provision of this
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Agreement, if the managing underwriters determine in their sole discretion that
marketing factors require a limitation on the number of shares to be included,
then the managing underwriters may exclude shares (including Registrable Shares)
from the IPO Registration Statement and the Underwritten Offering and any Shares
included in the IPO Registration Statement and the Underwritten Offering shall
be allocated, first, to the Company, and second, to each of the Holders
requesting inclusion of their Registrable Shares in such IPO Registration
Statement on a pro rata basis based on the total number of Registrable Shares
then requested for inclusion by each such Holder. If any Holder disapproves of
the terms of any Underwritten Offering that is undertaken in compliance with the
terms hereof, such Holder may elect to withdraw therefrom by written notice to
the Company and the underwriter, delivered at least five (5) Business Days prior
to the effective date of the IPO Registration Statement. Any Registrable Shares
excluded or withdrawn from such Underwritten Offering shall be excluded and
withdrawn from the IPO Registration Statement.
(iii) Hold-Each Agreement. By electing to include Registrable Shares
in the IPO Registration Statement, if any, the Holder shall be deemed to have
agreed not to effect any sale or distribution of securities of the Company of
the same or similar class or classes of the securities included in the
Registration Statement or any securities convertible into or exchangeable or
exercisable for such securities, including a sale pursuant to Rule 144 or Rule
144A under the Securities Act, during such periods as reasonably and customarily
requested by the managing underwriter (but in no event for a period longer than
sixty (60) days following the effective date of the IPO Registration Statement,
provided each of the executive officers and directors of the Company that hold
shares of Common Stock of the Company or securities convertible into or
exchangeable or exercisable for shares of Common Stock of the Company are
subject to the same restriction for the entire time period required of the
Holders hereunder), if an Underwritten Offering.
(iv) Shelf Registration not Impacted by IPO Registration Statement.
The Company's obligation to file and keep effective any Shelf Registration
Statement shall not be affected by the filing or effectiveness of the IPO
Registration Statement.
(c) Subsequent Shelf Registration for Additional Shares Issued after
Effectiveness of the Mandatory Shelf Registration Statement. If any Additional
Shares are issued or distributed to Holders after the effectiveness of the
Mandatory Shelf Registration Statement, or such Additional Shares were otherwise
not included in a prior Shelf Registration Statement, then the Company shall as
soon as practicable, but in no event later than sixty (60) days after the
issuance of such Additional Shares, file an additional shelf registration
statement (including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement,
a "Subsequent Shelf Registration Statement") covering such Additional Shares on
behalf of the Holders thereof in the same manner, and subject to the same
provisions in this Agreement as the Mandatory Shelf Registration Statement,
provided that the provisions of the first sentence of Section 2(a) hereof will
not apply to any such Subsequent Shelf Registration Statement.
(d) Expenses. The Company shall pay all Registration Expenses in
connection with the registration of the Registrable Shares pursuant to this
Agreement. Each Holder participating
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in a registration pursuant to this Section 2 shall bear such Holder's
proportionate share (based on the total number of Registrable Shares sold in
such registration) of all discounts and commissions payable to underwriters or
brokers and all transfer taxes and transfer fees in connection with a
registration of Registrable Shares pursuant to this Agreement and any other
expense of the Holders not allocated to the Company pursuant to this Agreement
relating to the sale or disposition of such Holder's Registrable Shares pursuant
to any Registration Statement.
3. Rules 144 and 144A Reporting.
With a view to making available the benefits of certain rules and
regulations of the Commission that may permit the sale of the Registrable Shares
to the public without registration, the Company agrees to, until such date as no
Holder owns any Registrable Shares:
(a) at all times after the effective date of the first Registration
Statement under the Securities Act filed by the Company for an offering of its
securities to the general public, make and keep public information available, as
those terms are understood and defined in Rule 144(c) under the Securities Act;
(b) use its best efforts to timely file with the Commission all reports
and other documents required to be filed by the Company under the Securities Act
and the Exchange Act (at any time after it has become subject to such reporting
requirements);
(c) if the Company is not required to file reports and other documents
under the Securities Act and the Exchange Act, make available other information
as required by, and so long as necessary to permit sales of Registrable Shares
pursuant to, Rule 144A; and
(d) without cost to any Holder, furnish to any Holder promptly upon
request a written statement by the Company as to its compliance in all material
respects with the reporting requirements of Rule 144 (at any time after ninety
(90) days after the effective date of the first Registration Statement filed by
the Company for an offering of its securities to the general public) and of the
Securities Act and the Exchange Act (at any time after it has become subject to
the reporting requirements of the Exchange Act), a copy of the most recent
annual and quarterly report(s) of the Company, and such other reports, documents
or shareholder communications of the Company, and take such further actions
consistent with this Section, as a Holder may reasonably request in availing
itself of any rule or regulation of the Commission allowing a Holder to sell any
such Registrable Shares without registration.
4. Registration Procedures.
In connection with the obligations of the Company with respect to any
registration pursuant to this Agreement, the Company shall use its reasonable
best efforts to effect or cause to be effected the registration of the
Registrable Shares under the Securities Act to permit the public resale of such
Registrable Shares by the Holder or Holders in accordance with the Holders'
intended method or methods of resale and distribution, and the Company shall,
without limitation:
(a) prepare and file with the Commission, as specified in this Agreement,
a Shelf Registration Statement, which Shelf Registration Statement shall comply
as to form with the
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requirements of the applicable form and include all financial statements
required by the Commission to be filed therewith, and use its reasonable best
efforts to cause such Registration Statement to become effective as soon as
practicable after filing and to remain effective, subject to Section 5 hereof,
until the date on which no Holders hold Registrable Shares; provided, however,
that if the Company has an effective Shelf Registration Statement on Form S-11
under the Securities Act and becomes eligible to use Form S-3 or such other
short-form registration statement under the Securities Act, the Company may,
upon twenty (20) Business Days' prior written notice to all Holders of
Registrable Shares, register any Registrable Shares registered but not yet
distributed under the effective Shelf Registration Statement on such a
short-form Shelf Registration Statement and, once the short-form Shelf
Registration Statement is declared effective, de-register such shares under the
previous Registration Statement or transfer filing fees from the previous
Registration Statement (such transfer pursuant to Rule 429) unless any Holder of
Registrable Shares registered under the initial Shelf Registration Statement
notifies the Company within fifteen (15) Business Days of receipt of the Company
notice that such a registration under a new Registration Statement and
de-registration of the initial Shelf Registration Statement would materially
interfere with its distribution of Registrable Shares already in progress, in
which case the Company shall delay the effectiveness of the short-form Shelf
Registration Statement and de-registration until not later than thirty (30)
Business Days from the date that the Company receives the notice from a Holder
requesting a delay;
(b) subject to Section 4(i) hereof, (i) prepare and file with the
Commission such amendments and post-effective amendments to each such Shelf
Registration Statement as may be necessary to keep such Shelf Registration
Statement effective for the period described in Section 4(a) hereof, (ii) cause
each Prospectus contained therein to be supplemented by any required prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 or any
similar rule that may be adopted under the Securities Act, and (iii) comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by each Shelf Registration Statement during the applicable
period in accordance with the intended method or methods of distribution by the
selling Holders thereof;
(c) furnish to the Holders, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder may reasonably
request, in order to facilitate the public sale or other disposition of the
Registrable Shares; the Company consents, subject to Section 5, to the use of
such Prospectus, including each preliminary Prospectus, by the Holders, if any,
in connection with the offering and sale of the Registrable Shares covered by
any such Prospectus;
(d) use its reasonable best efforts to (i) register or qualify, or obtain
exemption from registration or qualification for, all Registrable Shares by the
time the applicable Registration Statement is declared effective by the
Commission under all applicable state securities or "blue sky" laws of such
domestic United States jurisdictions as FBR or any Holder covered by a
Registration Statement shall reasonably request in writing, (ii) keep each such
registration or qualification or exemption effective during the period such
Registration Statement is required to be kept effective pursuant to Section 4(a)
and (iii) do any and all other acts and things that may be reasonably necessary
or advisable to enable such Holder to consummate the disposition in each such
jurisdiction of such Registrable Shares owned by such Holder; provided, however,
that the Company shall not be required to (i) qualify generally to do business
in any jurisdiction or to
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register as a broker or dealer in such jurisdiction where it would not otherwise
be required to qualify but for this Section 4(d), (ii) subject itself to
taxation in any such jurisdiction, or (iii) submit to the general service of
process in any such jurisdiction; provided, further, that if the Company is
unable to list the Registrable Shares on a national stock exchange or qualify
for quotation on an automatic quotation system at or prior to the time the
Registration Statement is declared effective by the Commission because it fails
to meet requirements for such listing or quotation regarding the number of
holders of its Common Stock, the obligation in this Section 4(d) shall not
require the Company to register or qualify the Registrable Shares in any state
or foreign jurisdiction where the Company reasonably concludes, based upon the
advice of securities counsel, that such registration or qualification would
require unreasonable efforts (including, without limitation, amendments to this
Company's charter or bylaws) or expense;
(e) use its reasonable best efforts to cause all Registrable Shares
covered by such Registration Statement to be registered and approved by such
other domestic state or local governmental agencies or authorities in the United
States, if any, as may be necessary to enable the Holders thereof to consummate
the disposition of such Registrable Shares;
(f) notify FBR and each Holder with Registrable Shares covered by a
Registration Statement promptly and, promptly confirm such advice in writing at
the address determined in accordance with Section 10(c), (i) when such
Registration Statement has become effective and when any post- effective
amendments and supplements thereto become effective, (ii) of the issuance by the
Commission or any state securities authority of any stop order suspending the
effectiveness of such Registration Statement or the initiation of any
Proceedings for that purpose, (iii) of any request by the Commission or any
other federal or state governmental authority for amendments or supplements to
such Registration Statement or related Prospectus or for additional information,
and (iv) of any reason, including, but not limited to, the happening of any
event during the period such Registration Statement is effective as a result of
which such Registration Statement or the related Prospectus or any document
incorporated by reference therein contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading (which information shall
be accompanied by an instruction to suspend the use of the Registration
Statement and the Prospectus until the requisite changes have been made);
(g) during the period of time referred to in Section 4(a) above, use its
reasonable best efforts to avoid the issuance of, or if issued, to obtain the
withdrawal of, any order enjoining or suspending the use or effectiveness of a
Shelf Registration Statement or suspending the qualification (or exemption from
qualification) of any of the Registrable Shares for sale in any jurisdiction, as
promptly as practicable;
(h) provide to FBR and its counsel within three (3) Business Days of
receipt by the Company or its counsel, copies of any material correspondence
(which FBR may disclose to any other Holder) with or from the Commission or its
staff with respect to a Registration Statement; and upon request, furnish to
each requesting Holder with Registrable Shares covered by a Registration
Statement, without charge, at least one (1) conformed copy of such Registration
Statement and any post-effective amendment or supplement thereto (without
documents incorporated therein by reference or exhibits thereto, unless
requested);
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(i) except as provided in Section 5, upon the occurrence of any event
contemplated by Section 4(f)(iv) hereof, use its reasonable best efforts to
promptly prepare a supplement or post-effective amendment to a Shelf
Registration Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Shares, such Prospectus will not
contain any 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, in
the light of the circumstances under which they were made, not misleading, and,
upon request and without charge, promptly furnish to each requesting Holder a
reasonable number of copies of each such supplement or post-effective amendment;
(j) if requested by the representative of the underwriters, if any, or any
Holders of Registrable Shares being sold in connection with an Underwritten
Offering, (i) promptly incorporate in a prospectus supplement or post-effective
amendment such material information as the representative of the underwriters,
if any, or such Holders indicate in writing relates to them or otherwise
reasonably request in writing be included therein and (ii) make all required
filings of such prospectus supplement or such post-effective amendment as soon
as practicable after the Company has received written notification of the
matters to be incorporated in such prospectus supplement or post-effective
amendment; provided, however, that the Company shall not be required to take any
action pursuant to this Section 4(j) that would, in the opinion of counsel for
the Company, violate applicable law;
(k) in the case of an Underwritten Offering, use its reasonable best
efforts to furnish or caused to be furnished to each Holder of Registrable
Shares covered by such Registration Statement and the underwriters a signed
counterpart, addressed to each such Holder and the underwriters, of: (i) an
opinion of counsel for the Company, dated the date of each closing under the
underwriting agreement, reasonably satisfactory to such Holder; and (ii) a
"comfort" letter, dated the effective date of such Registration Statement and
the date of each closing under the underwriting agreement, signed by the
independent public accountants who have certified the Company's financial
statements included in such Registration Statement, covering substantially the
same matters with respect to such Registration Statement (and the Prospectus
included therein) and with respect to events subsequent to the date of such
financial statements, as are customarily covered in accountants' letters
delivered to underwriters in underwritten public offerings of securities and
such other financial matters as such Holder and the underwriters may reasonably
request and customarily obtained by underwriters in underwritten offerings;
(l) enter into customary agreements (including in the case of an
Underwritten Offering, an underwriting agreement in customary form) and take all
other reasonable action in connection therewith in order to expedite or
facilitate the distribution of the Registrable Shares included in such
Registration Statement and, in the case of an Underwritten Offering, make
representations, warranties and agreements (including indemnities) to the
Holders of Registrable Shares covered by such Registration Statement and to the
underwriters in such form and scope as are customarily made by issuers to
underwriters and Holders in underwritten offerings and confirm the same in
writing to the extent customary if and when requested;
(m) in connection with an Underwritten Offering, make available for
inspection by one representative appointed by the Holders of a majority of the
Registrable Shares and the
11
representative of any underwriters participating in any disposition pursuant to
a Registration Statement and any counsel and accounting firm retained by the
Holders and underwriters, respectively, all financial and other records,
pertinent corporate documents and properties of the Company and cause the
respective officers, directors, employees and agents of the Company to supply
all information reasonably requested by any such representatives, the
representative of the underwriters, counsel thereto or accountants in connection
with a Registration Statement; provided, however, that such records, documents
or information that the Company determines, in good faith, to be confidential
and notifies such representative of the Holders, representative of the
underwriters, counsel thereto or accountants thereto are confidential shall not
be disclosed by the representatives, representative of the underwriters, counsel
thereto or accountants unless (i) the disclosure of such records, documents or
information is necessary to avoid or correct a misstatement or omission in a
Registration Statement or Prospectus and the Registrable Shares are not subject
to a suspension of sales pursuant to Section 5 hereof, (ii) the release of such
records, documents or information is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction, or (iii) such records, documents
or information have been generally made available to the public; provided
further, that to the extent practicable, the foregoing inspection and
information gathering shall be coordinated on behalf of the Holders and the
other parties entitled thereto by one counsel designated by and on behalf of the
Holders and the other parties.
(n) use its reasonable best efforts to qualify for, and list or include
all Registrable Shares on, the New York Stock Exchange or the Nasdaq National
Market as soon as practicable (including, without limitation, seeking to cure in
the Company's listing or inclusion application any deficiencies cited by the
exchange or market) and thereafter use reasonable best efforts to maintain such
listing;
(o) prepare and timely file all documents, reports and certifications
required by the Securities Act and the Exchange Act at all times beginning from
the date the Company is first subject to such filing, reporting or certification
requirements through the date no Holders hold Registrable Shares;
(p) provide a CUSIP number for all Registrable Shares, not later than the
effective date of the Registration Statement;
(q) (i) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission and, as applicable, the New
York Stock Exchange, Nasdaq National Market or other listing standard, (ii) use
reasonable best efforts to make generally available to its stockholders, as soon
as reasonably practicable, earnings statements covering at least twelve (12)
months beginning after the effective date of the Registration Statement that
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 (or
any similar rule promulgated under the Securities Act) thereunder, no later than
forty-five (45) days after the end of each fiscal quarter occurring after the
first anniversary of the effective date of the Registration Statement (unless
such fiscal quarter is the last fiscal quarter of the Company's fiscal year, in
which case such earnings statement shall be delivered no later than ninety (90)
days after such fiscal quarter occurring after the first anniversary of the
effective date of the Registration Statement) and (iii) delay filing any
Registration Statement or Prospectus or amendment or supplement to such
Registration Statement or Prospectus to which any Holder of Registrable
12
Shares covered by any Registration Statement shall have reasonably objected on
the grounds that such Registration Statement or Prospectus or amendment or
supplement does not comply in all material respects with the requirements of the
Securities Act, such Holder having been furnished with a copy thereof at least
three (3) Business Days prior to the filing thereof, provided that the Company
may file such Registration Statement or Prospectus or amendment or supplement
following such time as the Company shall have made a good faith effort to
resolve any such issue with the objecting Holder and shall have advised the
Holder in writing of its reasonable belief that such filing complies with the
requirements of the Securities Act;
(r) provide and cause to be maintained a registrar and transfer agent for
all Registrable Shares covered by any Registration Statement from and after a
date not later than the effective date of such Registration Statement;
(s) in connection with any sale or transfer of the Registrable Shares
(whether or not pursuant to a Registration Statement) that will result in the
security being delivered no longer being Registrable Shares, cooperate with the
Holders and the representative of the underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing the Registrable
Shares to be sold, which certificates shall not bear any transfer restrictive
legends (other than as required by the Company's Charter) and to enable such
Registrable Shares to be in such denominations and registered in such names as
the representative of the underwriters, if any, or the Holders may reasonably
request at least three (3) Business Days prior to any sale of the Registrable
Shares; and
(t) upon effectiveness of the first Registration Statement filed by the
Company, the Company will take such actions and make such filings as are
necessary to effect the registration of the Common Stock under the Exchange Act
simultaneously with or as soon as practicable following the effectiveness of the
Registration Statement.
The Company may require the Holders to furnish to the Company such
information regarding the proposed distribution by such Holder as the Company
may from time to time reasonably request in writing or as shall be required to
effect the registration of the Registrable Shares and no Holder shall be
entitled to be named as a selling stockholder in any Registration Statement and
no Holder shall be entitled to use the Prospectus forming a part thereof if such
Holder does not provide such reasonable information to the Company. Any Holder
that sells Registrable Shares pursuant to a Registration Statement or as a
selling stockholder pursuant to an Underwritten Offering shall be required to be
named as a selling stockholder in the related prospectus and to deliver a
prospectus to purchasers. Each Holder further agrees to furnish promptly to the
Company in writing all information required from time to time to make the
information previously furnished by such Holder not misleading and each Holder
shall have a reasonable opportunity to review and comment upon the Registration
Statement with respect to the accuracy of the information provided by such
Holder, which shall include at least five (5) Business Days after receipt of any
Registration Statement to provide comments thereon to the Company or its
counsel. The designated counsel, if any, for the Holders shall, on behalf of the
Holders, have the right to review and comment upon the Registration Statement
prior to the time it is filed with the Commission, which shall include at least
ten (10) Business Days after receipt of any Registration Statement to provide
comments thereon to the Company or its counsel.
13
Each Holder agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 4(f)(ii), 4(f)(iii)
or 4(f)(iv) hereof, such Holder will immediately discontinue disposition of
Registrable Shares pursuant to a Registration Statement until such Holder's
receipt of copies of the supplemented or amended Prospectus. If so directed by
the Company, such Holder will deliver to the Company (at the reasonable expense
of the Company) all copies in its possession, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Registrable
Shares current at the time of receipt of such notice.
5. Black-Out Period.
(a) Subject to the provisions of this Section 5 and a good faith
determination by a majority of the independent members of the Board of Directors
of the Company that it is in compliance with the terms hereof and that is in the
best interests of the Company to suspend the use of the Registration Statement,
following the effectiveness of a Registration Statement (and the filings with
any international, federal or state securities commissions), the Company, by
written notice to FBR and the Holders, may direct the Holders to suspend sales
of the Registrable Shares pursuant to a Registration Statement for such times as
the Company reasonably may determine is necessary and advisable (but in no event
for more than an aggregate of ninety (90) days in any rolling twelve (12)-month
period commencing on the Closing Time or more than sixty (60) days in any
rolling ninety (90)-day period, and no more than three (3) separate times in any
rolling 12 month period) if any of the following events shall occur: (i) the
majority of the independent members of the Board of Directors of the Company in
good faith determine that (A) the offer or sale of any Registrable Shares would
materially impede, delay or interfere with any material proposed acquisition,
merger, tender offer, business combination, corporate reorganization,
consolidation or other similar material transaction involving the Company, (B)
after the advice of counsel, sale of Registrable Shares pursuant to the
Registration Statement would require disclosure of non-public material
information not otherwise required to be disclosed under applicable law, and (C)
disclosure would have a material adverse effect on the Company or the Company's
ability to consummate such transaction in each case under circumstances that
would make it impractical or inadvisable to cause the Registration Statement (or
such filings) to become effective or to promptly amend or supplement the
Registration Statement on a post-effective basis, as applicable; or (ii) the
majority of the independent members of the Board of Directors of the Company
shall have determined in good faith, after the advice of counsel, that it is
required by law, rule or regulation to supplement the Registration Statement or
file a post-effective amendment to the Registration Statement in order to
incorporate information, into the Registration Statement for the purpose of (1)
including in the Registration Statement any Prospectus required under Section
10(a)(3) of the Securities Act; (2) reflecting in the Prospectus included in the
Registration Statement any facts or events arising after the effective date of
the Registration Statement (or of the most-recent post-effective amendment)
that, individually or in the aggregate, represents a fundamental change in the
information set forth therein; or (3) including in the Prospectus included in
the Registration Statement any material information with respect to the plan of
distribution not disclosed in the Registration Statement or any material change
to such information. Upon the occurrence of any such suspension, the Company
shall use its reasonable best efforts to cause the Registration Statement to
become effective or to promptly amend or supplement the Registration Statement
14
on a post-effective basis or to take such action as is necessary to permit
resumed use of the Registration Statement as soon as possible.
(b) In the case of an event that causes the Company to suspend the use of
a Registration Statement (a "Suspension Event"), the Company shall give written
notice (a "Suspension Notice") to the Holders to suspend sales of the
Registrable Shares and such notice shall state generally the basis for the
notice and certify, by an officer of the Company, that such suspension shall
continue only for so long as the Suspension Event or its effect is continuing
and the Company is using its reasonable best efforts and taking all reasonable
steps to terminate suspension of the use of the Registration Statement as
promptly as possible. The Holders shall not effect any sales of the Registrable
Shares pursuant to such Registration Statement (or such filings) at any time
after receiving a Suspension Notice from the Company and prior to receipt of an
End of Suspension Notice (as defined below). If so directed by the Company, each
Holder will deliver to the Company (at the expense of the Company) all copies
other than permanent file copies then in such Holder's possession of the
Prospectus covering the Registrable Shares at the time of receipt of the
Suspension Notice. The Holders may recommence effecting sales of the Registrable
Shares pursuant to the Registration Statement (or such filings) following
further notice to such effect (an "End of Suspension Notice") from the Company,
which End of Suspension Notice shall be given by the Company to the Holders and
FBR in the manner described above promptly following the conclusion of any
Suspension Event and its effect.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless (i) FBR and each
Holder, (ii) each Person, if any, who controls (within the meaning of Section 15
of the Securities Act or Section 20(a) of the Exchange Act), any of the
foregoing (any of the Persons referred to in this clause (ii) being hereinafter
referred to as a "Controlling Person"), and (iii) the respective officers,
directors, partners, members, managers, employees, representatives and agents of
FBR and each Holder or any Controlling Person (any Person referred to in clause
(i), (ii) or (iii) may hereinafter be referred to as a "Purchaser Indemnitee")
from and against any and all losses, damages, judgments, Proceedings, reasonable
out-of- pocket expenses, and other liabilities (collectively, the
"Liabilities"), including, without limitation and as incurred, reimbursement of
all reasonable costs of investigating, preparing, pursuing or defending any
Proceeding by any governmental agency or body, commenced or threatened,
including to the extent hereinafter provided, the reasonable fees and expenses
of outside counsel to any Purchaser Indemnitee, joint or several, directly or
indirectly related to, based upon, arising out of or in connection with any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (as amended or supplemented if the Company
shall have promptly furnished to such Purchaser Indemnitee any amendments or
supplements thereto), or any preliminary Prospectus or any other document
prepared by the Company used to sell the Registrable Shares, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except to the extent such
Liabilities arise out of or are based upon (i) any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity
with information relating to any Purchaser Indemnitee furnished to the Company
or any underwriter in writing by such Purchaser Indemnitee expressly for use
therein, or (ii) any untrue statement contained in or omission from a
preliminary
15
Prospectus if a copy of the Prospectus (as then amended or supplemented, if the
Company shall have promptly furnished to or on behalf of the Holder
participating in the distribution relating to the relevant Registration
Statement any amendments or supplements thereto) was not sent or given by or on
behalf of such Holder to the Person asserting any such Liabilities who purchased
Shares, if such Prospectus (or Prospectus as amended or supplemented) is
required by law to be sent or given at or prior to the written confirmation of
the sale of such Shares to such Person and the untrue statement contained in or
omission from such preliminary Prospectus was corrected in the Prospectus (or
the Prospectus as amended or supplemented if the Company shall have promptly
furnished any amendments or supplements thereto). The indemnity provided for
herein shall remain in full force and effect regardless of any investigation
made by or on behalf of any Purchaser Indemnitee.
(b) In connection with any Registration Statement in which a Holder is
participating and as a condition to such participation, such Holder agrees,
severally and not jointly, to indemnify and hold harmless the Company, each
Person who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act and the respective partners,
directors, officers, members, representatives, employees and agents of the
Company and each such Person to the same extent as the foregoing indemnity from
the Company to each Purchaser Indemnitee, but only with reference to untrue
statements or omissions or alleged untrue statements or omissions made in
reliance upon and in strict conformity with information relating to such
Purchaser Indemnitee furnished to the Company in writing by such Purchaser
Indemnitee expressly for use in any Registration Statement or Prospectus, any
amendment or supplement thereto, or any preliminary Prospectus. The liability of
any Purchaser Indemnitee pursuant to this paragraph shall in no event exceed the
net proceeds received by such Purchaser Indemnitee from sales of Registrable
Shares giving rise to such obligations.
(c) If any Proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any Person
in respect of which indemnity may be sought pursuant to paragraph (a) or (b)
above, such Person (the "Indemnified Party," or if more than one Indemnified
Party, the "Indemnified Parties"), shall promptly notify the Person against whom
such indemnity may be sought (the "Indemnifying Party"), in writing of the
commencement thereof (but the failure to so notify an Indemnifying Party shall
not relieve it from any liability which it may have under this Section 6, except
to the extent the Indemnifying Party is actually and materially prejudiced by
the failure to give notice), and the Indemnifying Party, shall assume the
defense of such Proceeding and retain counsel chosen by the Indemnifying Party
and approved by the Indemnified Party, which approval shall not be unreasonably
withheld, to represent the Indemnified Party and any others the Indemnifying
Party may reasonably designate in such Proceeding and shall pay the reasonable
fees and expenses actually incurred by such counsel related to such Proceeding.
Notwithstanding the foregoing, in any such Proceeding, any Indemnified Party
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party, unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed in
writing to the contrary, (ii) the Indemnifying Party failed within a reasonable
time after notice of commencement of the Proceeding to assume the defense and
engage counsel approved by the Indemnified Party as hereinabove provided, (iii)
the Indemnifying Party and its counsel do not pursue in a reasonable manner the
defense of such Proceeding, (iv) such Indemnified Party shall
16
have been reasonably advised by counsel that, either (x) there may be one or
more legal defenses available to it which are different from or additional to
those available to the Indemnifying Party or such affiliate of the Indemnifying
Party or (y) a conflict exists between such Indemnified Party and the
Indemnifying Party or such affiliate of the Indemnifying Party, then the
Indemnifying Party shall not have the right to assume nor direct the defense of
such Proceeding on behalf of such Indemnified Party, it being understood,
however, that the Indemnifying Party shall not, in connection with any one such
Proceeding or separate but substantially similar or related Proceedings arising
out of the same general allegations or circumstances, be liable for the fees and
expenses of more than one (1) separate firm of attorneys (in addition to any
local counsel), for all such Indemnified Parties, which firm shall be designated
in writing by those Indemnified Parties who sold a majority of Registrable
Shares sold by all such Indemnified Parties (excluding Registrable Shares sold
by the Company at its Affiliates) and any such separate firm for the Company,
the directors, the officers and such control Persons of the Company as shall be
designated in writing by the Company. The Indemnifying Party shall not be liable
for any settlement of any Proceeding effected without its written consent, which
consent shall not be unreasonably withheld or delayed, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Party agrees to indemnify any Indemnified Party from and against any loss or
liability resulting from such settlement or judgment. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened Proceeding in respect of which any
Indemnified Party is a party or the subject thereof and indemnity could have
been sought hereunder by such Indemnified Party, unless (i) such settlement
includes an unconditional release of such Indemnified Party from all liability
on claims that are the subject matter of such Proceeding in a form satisfactory
to the Indemnified Party and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act by or on behalf of the
Indemnified Party.
(d) If the indemnification provided for in paragraphs (a) and (b) of this
Section 6 is for any reason held to be unavailable to an Indemnified Party in
respect of any Liabilities referred to therein (other than by reason of the
exceptions provided therein) or is insufficient to hold harmless a party
indemnified thereunder, then each Indemnifying Party under such paragraphs, in
lieu of indemnifying such Indemnified Party thereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such Liabilities
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Parties and the Indemnified Party, as well as any other relevant
equitable considerations. The relative fault of the Company, on the one hand,
and any Purchaser Indemnitees, on the other, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by such Purchaser Indemnitees
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 6 were determined by pro rata allocation
(even if such Indemnified Parties were treated as one entity for such purpose),
or by any other method of allocation that does not take account of the equitable
considerations referred to in paragraph 6(d) above. The amount paid or payable
by an Indemnified Party as a result of any Liabilities referred to paragraph
6(d) shall be deemed to include, subject to the limitations set forth above, any
reasonable legal or other expenses actually incurred by such Indemnified Party
in connection with investigating or
17
defending any such Proceeding, Notwithstanding the provisions of this Section 6,
in no event shall a Purchaser Indemnitee be required to contribute any amount in
excess of the amount by which proceeds (net of any discounts or commissions)
received by such Purchaser Indemnitee from sales of Registrable Shares exceeds
the amount of any damages that such Purchaser Indemnitee has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. For purposes of this Section 6, each Person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act) FBR or a Holder shall have the same rights to contribution as FBR
or such Holder, as the case may be, and each Person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act) the Company, and each officer, director, partner, employee, representative,
agent or manager of the Company shall have the same rights to contribution as
the Company. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any Proceeding against such party in respect of which
a claim for contribution may be made against another party or parties, notify
each party or parties from whom contribution may be sought, but the omission to
so notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 6 or otherwise, except to the extent that any party is actually and
materially prejudiced by the failure to give notice. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 1l(f) of the
Securities Act), shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this Section 6
will be in addition to any liability which the Indemnifying Parties may
otherwise have to the Indemnified Parties referred to above. The Purchaser
Indemnitee's obligations to contribute pursuant to this Section 6 are several in
proportion to the respective number of Shares sold by each of the Purchaser
Indemnitees hereunder and not joint.
7. Market Stand-off Agreement.
Each Holder hereby agrees that it shall not, to the extent requested in
writing by the Company or an underwriter of securities of the Company, directly
or indirectly sell, offer to sell (including without limitation any short sale),
grant any option or otherwise transfer or dispose of any Registrable Shares or
other shares of Common Stock of the Company or any securities convertible into
or exchangeable or exercisable for shares of Common Stock of the Company then
owned by such Holder (other than to donees or partners of the Holder who agree
to be similarly bound) within sixty (60) days following either (x) the effective
date of the IPO Registration Statement of the Company filed under the Securities
Act or (y) the date of an Underwritten Offering by the Company pursuant to a
shelf registration statement of the Company filed under the Securities Act;
provided, however, that:
(a) with respect to the up to 60-day restriction that follows the
effective date of the IPO Registration Statement, such agreement shall not be
applicable to Registrable Shares sold pursuant to such IPO Registration
Statement;
(b) all executive officers and directors of the Company then holding
shares of Common Stock or securities convertible into or exchangeable or
exercisable for shares of
18
Common Stock of the Company shall enter into similar agreements for not less
than the entire time period required of the Holders hereunder; and
(c) the Holders shall be allowed any concession or proportionate release
allowed to any executive officer or director that entered into similar
agreements.
In order to enforce the foregoing covenant, the Company shall have the
right to place restrictive legends on the certificates representing the
securities subject to this Section 7 and to impose stop transfer instructions
with respect to the Registrable Shares and such other securities of each Holder
(and the securities of every other Person subject to the foregoing restriction)
until the end of such period.
8. Termination of the Company's Obligations.
The Company shall have no further obligations pursuant to this Agreement
at such time as no Registrable Shares are outstanding, provided, however, that
the Company's obligations under Sections 6 and 10(a) through and including 10(m)
of this Agreement shall remain in full force and effect following such time.
9. Limitations on Subsequent Registration Rights.
From and after the date of this Agreement, the Company shall not, without
the prior written consent of the Holders (other than Affiliates of the Company)
of a majority of the then outstanding Registrable Shares, enter into any
agreement with any holder or prospective holder of any securities of the Company
that would allow such holder or prospective holder to include such securities in
the IPO Registration Statement, if any, filed pursuant to the terms hereof,
unless under the terms of such agreement, such holder or prospective holder may
include such securities in any such registration only to the extent that the
inclusion of his securities will not reduce the amount of Registrable Shares of
the Holders that is included.
10. Miscellaneous.
(a) Remedies. If (i) the Company does not initially file the Mandatory
Shelf Registration Statement with the Commission within nine months from the
date hereof or does not file a Subsequent Shelf Registration Statement within
the prescribed sixty (60) day period set forth in Section 2(c), (ii) the Company
fails to comply with its obligations set forth in Sections 2 and 4 to file, when
and as required, any documents or other materials necessary to effect, or
maintain the effectiveness of, any Shelf Registration Statement or (iii) the
Board of Directors of the Company determines to direct, or the Holders are
otherwise required, to suspend sales of Registrable Shares under any effective
Registration Statement for more than ninety (90) days during any rolling twelve
(12) month period commencing on the Closing Time, for more than sixty (60) days
during any rolling ninety (90) day period or more than three (3) separate times
in any rolling 12 month period, then the Company hereby agrees and acknowledges
that each Holder of the Registrable Shares will be entitled as the sole and
exclusive remedy for any and all concurrent breaches of this Agreement related
to one or more concurrent such failures or excess periods of suspension, to
liquidated and agreed upon damages payable cumulatively on each Registrable
Share for each day of each such delay, failure to maintain effectiveness or
excess period of suspension, as the case may be. Such liquidated damages shall
be payable quarterly, in
19
arrears within ten (10) days of the end of each fiscal quarter and shall accrue
daily at a rate of (i) $0.25 per Registrable Share per annum (or $0.00069444 per
day) during the first 90 days of the delay, failure to maintain effectiveness or
excess suspension period, (ii) $0.50 per Registrable Share per annum (or
$0.0013888 per day) during days 91 to 180 of the delay, failure to maintain
effectiveness or excess suspension period, (iii) $0.75 per Registrable Share per
annum (or $0.00208333 per day) during days 181 to 270 of the delay, failure to
maintain effectiveness or excess suspension period, and (iv) $1.00 per
Registrable Share per annum (or $0.00277777 per day) after the 270th day of the
delay, failure to maintain effectiveness or excess suspension period. Liquidated
damages will be computed on the basis of a 360-day year comprised of twelve
30-day months. Affiliates of the Company shall not be entitled to any liquidated
damages with respect to Registrable Shares held by such Affiliates. The
liquidated damages provisions set forth in this Section 10(a) shall not limit
the remedies of any party hereto with respect to the breach of any provisions of
this Agreement not addressed by this Section 10(a).
(b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to or departures from the provisions hereof may not be
given, without the written consent of the Company and Holders beneficially
owning not less than fifty percent (50%) of the then outstanding Registrable
Shares; provided, however, that for purposes of this Agreement, Registrable
Shares that are owned, directly or indirectly, by an Affiliate of the Company
shall not be deemed to be outstanding. Notwithstanding the foregoing, a waiver
or consent to or departure from the provisions hereof with respect to a matter
that relates exclusively to the rights of a Holder whose securities are being
sold pursuant to a Registration Statement and that does not directly or
indirectly affect, impair, limit or compromise the rights of other Holders may
be given by such Holder, provided that the provisions of this sentence may not
be amended, modified or supplemented except in accordance with the provisions of
the immediately preceding sentence.
(c) Notices. All notices and other communications, provided for or
permitted hereunder shall be made in writing by delivered by facsimile (with
receipt confirmed), overnight courier or registered or certified mail, return
receipt requested, or by telegram
(i) if to a Holder, at the most current address given by the
transfer agent and registrar of the Shares to the Company; and
(ii) if to the Company, at the offices of the Company at 0000 Xxxxx
Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx, 00000, Attention: Xxxxxx X. Xxxxx,
Xx., President and Chief Executive Officer, (fax (000) 000-0000).
Receipt of any notice sent pursuant to this Agreement shall be deemed to occur
five (5) days after mailing by the party giving such notice. The Company shall
cause the transfer agent to use commercially reasonable efforts to maintain
current addresses of the Holders.
(d) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of the parties
hereto including the Holders. The Company agrees that the Holders shall be
parties to the agreements made hereunder and shall be entitled to the benefits
and subject to the obligations hereof. The
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Company may assign its rights and obligations hereunder to any successor of the
Company's business involving a transaction approved by the Company's stockholder
in accordance with applicable law, or with the prior written consent of Holders
(other than Affiliates of the Company) of a majority of the then outstanding
Registrable Shares.
(e) Stock Legend. In addition to any other legend that may appear on the
stock certificates evidencing the Registrable Shares, for so long as any Shares
remain Registrable Shares each stock certificate evidencing such Registrable
Shares shall contain a legend to the following effect: "THE SHARES EVIDENCED BY
THIS CERTIFICATE ARE SUBJECT TO AND ENTITLED TO THE BENEFITS OF A CERTAIN
REGISTRATION RIGHTS AGREEMENT, DATED APRIL 7, 2004".
(f) 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.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF MARYLAND, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
(h) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties hereto that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(i) Entire Agreement. This Agreement, together with the Purchase
Agreement, is intended by the parties hereto as a final expression of their
agreement, and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein.
(j) Registrable Shares Held by the Company or its Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable Shares
is required hereunder, Registrable Shares held by the Company or its Affiliates
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
(k) Survival. This Agreement is intended to survive the consummation of
the transactions contemplated by the Purchase Agreement. The indemnification and
contribution obligations under Section 6 of this Agreement shall survive the
termination of the Company's obligations under Section 2 of this Agreement.
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(l) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the provisions of this
Agreement. All references made in this Agreement to "Section" refer to such
Section of this Agreement, unless expressly stated otherwise.
(m) Attorneys' Fees. In any Proceeding brought to enforce any provision of
this Agreement, or where any provision hereof is validly asserted as a defense,
the prevailing party, as determined by the court, shall be entitled to recover
its reasonable attorneys' fees in addition to any other available remedy.
[Signatures on the Following Page]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
MEDICAL PROPERTIES TRUST, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------------------
Xxxxxx X. Xxxxx, Xx.
President, Chairman and Chief Executive
Officer
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------------
Xxxxx X. Xxxxxxxxx
Senior Managing Director
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