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EXHIBIT 99.4
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made as of
January 13, 1998, by and between Greenbriar Corporation, a Nevada corporation
("Greenbriar"), and Lone Star Opportunity Fund, L.P., a Delaware limited
partnership ("Purchaser"). Greenbriar proposes to issue and sell to the
Purchaser, upon the terms set forth in a Stock Purchase Agreement dated as of
December 31, 1997 (the "Purchase Agreement"), 1,400,000 shares of Greenbriar's
Series F Senior Convertible Preferred Stock (the "Series F Senior Preferred
Stock") and 800,000 shares of Greenbriar's Series G Senior Non-Voting
Convertible Preferred Stock (the "Series G Senior Non-Voting Preferred Stock").
The Series F Senior Preferred Stock and the Series G Senior Non-Voting
Preferred Stock are convertible into Common Stock (as defined below) as
provided in the Purchase Agreement. As an inducement to the Purchaser to enter
into the Purchase Agreement and in satisfaction of a condition to the
Purchaser's obligations thereunder, Greenbriar agrees with the Purchaser, for
the benefit of the Purchaser and the other Holders (as defined below), as
follows:
1. Certain Definitions.
As used in this Agreement, the following initially capitalized terms
have the following meanings:
"Agreement" is defined in the preamble to this Agreement.
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, $0.01 par value per share, of
Greenbriar.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
"Greenbriar" is defined in the preamble to this Agreement.
"Holder" means a Person owning Registrable Securities.
"Person" means an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
"Prospectus" means the prospectus included in the Registration
Statement, 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.
"Purchase Agreement" is defined in the preamble to this Agreement.
"Purchaser" is defined in the preamble to this Agreement.
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"Registrable Securities" means (i) shares of Common Stock issued or
transferred pursuant to the conversion of the Series F Senior Preferred Stock
and the Series G Senior Non-Voting Preferred Stock and (ii) any Common Stock
issued as a dividend or other distribution with respect to or in exchange for
or in replacement of the shares referenced in (i) above.
"Registration Statement" means any registration statement under the
Securities Act that is filed by Greenbriar to register sales of Registrable
Securities by Holders, whether or not such registration statement also
registers the issuance or sale of other securities.
"Request Notice" means a written request, approved by Holders of not
less than a majority of the outstanding Registrable Securities, that Greenbriar
effect a registration of all or part of the Registrable Securities.
"Series F Senior Preferred Stock" is defined in the preamble to this
Agreement.
"Series G Senior Non-Voting Preferred Stock" is defined in the
preamble to this Agreement.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar successor federal statute and the rules and regulations thereunder, all
as the same shall be in effect from time to time.
"Underwritten Offering" means a registration in which securities of
Greenbriar are sold to an underwriter for re-offering to the public.
2. Requested Registration.
(a) The Holders of not less than a majority of the
outstanding Registrable Securities may, at any time, issue a Request Notice to
Greenbriar, requesting Greenbriar to effect registration under the Securities
Act of all or any part of the Registrable Securities, for sale in the manner
specified in the Request Notice, provided that such sale will have an aggregate
offering price of at least $3,000,000. Greenbriar shall give written notice of
the proposed registration to all other Holders within 5 business days of
receipt by Greenbriar of the Request Notice. Greenbriar shall use its best
efforts to include in such registration all the Registrable Securities
specified by any other Holder in a written request and received by Greenbriar
within 25 days after the notice to other Holders is mailed or delivered by
Greenbriar.
The Request Notice shall specify the number of shares of Registrable
Securities proposed to be sold by the Holders making such demand request.
Greenbriar shall file a registration statement for the registration of the
Registrable Securities requested to be registered in the Request Notice as soon
as practicable and in any event within 60 days after receiving the demand
request (the "Required Filing Date") and shall use all commercially reasonable
efforts to cause the same to be declared effective by the Commission as
promptly as practicable after such filing; provided, that, subject to Section
2(d), Greenbriar need effect only two demand registrations pursuant to this
Section 2.
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(b) Greenbriar will not effect any other registration of
any of its securities, whether for its own account or that of any other
security holder, from the date of receipt of a Request Notice until the
completion of the distribution of all securities thereunder; provided that on
or after the 60th day after the effective date of a Registration Statement
filed in connection with a Request Notice, Greenbriar may effect the
registration of (i) debt securities by the Company only for its own account or
(ii) equity securities by the Company only for its own account, which equity
securities will be issued as consideration for an acquisition by the Company.
(c) If any of the Registrable Securities included under
the Registration Statement are to be sold in an Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of 50 percent of the
Registrable Securities to be registered, provided, however, that such managing
underwriters shall be reasonably satisfactory to Greenbriar.
(d) A registration shall not count as a Demand
Registration until it has become effective (unless the Requesting Holders
withdraw all their Registrable Securities, in which case such demand shall
count as a Demand Registration unless the Requesting Holders pay all
registration expenses in connection with such withdrawn registration); provided
that if, after it has become effective, an offering of Registrable Securities
pursuant to a registration is interfered with by any stop order, injunction or
other order or requirement of the Commission or other governmental agency or
court, such registration shall be deemed not to have been effected.
(e) Notwithstanding the foregoing, the provisions of this
Section 2 are subject to the terms of the existing registration rights
agreements listed on and the waivers contained in Exhibit A hereto, except to
the extent waived.
3. Piggyback Registration.
(a) If Greenbriar proposes at any time to register any of
its securities either for its own account or the account of a security holder
or holders (other than a registration relating solely to employee benefit
plans, a registration on Form S-4 or a registration relating solely to a Rule
145 transaction) Greenbriar will promptly, but in no event less than 45 days
prior to the initial filing with the Commission of such registration statement,
give written notice to the Holders. Such notice shall specify, to the extent
known, the anticipated filing date, the number of securities proposed to be
registered and the general distribution arrangements. Greenbriar will use its
best efforts to include in such registration and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made by any Holder and received by Greenbriar within 30 days after
the written notice from Greenbriar is mailed or delivered by Greenbriar. Such
written request may specify all or a part of a Holder's Registrable Securities.
(b) Greenbriar may, at any time prior to the
effectiveness of any such registration, abandon the proposed offering;
provided, however, Greenbriar shall give written notice of such abandonment to
each Holder as soon as practical, but in no event more than 20 days after the
determination to abandon such registration.
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(c) The number of Registrable Securities to be included
in such registration may be reduced or eliminated if and to the extent, in the
reasonable opinion of the managing underwriter of such offering, such inclusion
would materially jeopardize the successful marketing of the securities proposed
to sold therein. If the aggregate number of securities must be limited
pursuant to this Section, the total number of securities that may be included
shall be allocated first to Greenbriar or Holders initiating a request for
registration under Section 2, and then pro rata among the Holders and other
security holders requesting their securities of Greenbriar to be registered
pursuant to similar piggy-back registration rights on the basis of the number
of shares requested to be included in such registration by each Holder or other
holder having similar piggy-back registration rights. If a Holder is not
entitled to include all of its Registrable Securities in such registration,
then such Holder may elect to withdraw its request to include any or all of its
Registrable Securities in such registration.
(d) All Holders proposing to distribute their securities
through such underwriting shall, if reasonably requested by Greenbriar or the
managing underwriter in connection with such registration, (i) agree to sell
such Registrable Securities on the basis provided in any underwriting
arrangements entered into in connection therewith, (ii) complete and execute
all questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents that are required under the terms of such underwriting
arrangements and (iii) promptly provide any information requested, in writing,
by Greenbriar or the managing underwriter.
(e) If a Holder decides not to include all of its
Registrable Securities in any registration pursuant to this Section, such
Holder shall nevertheless continue to have the right to include any Registrable
Securities in any subsequent Registration Statement(s) as may be filed by
Greenbriar.
4. Registration on Form S-3.
(a) Greenbriar shall use its best efforts to qualify for
registration on Form S-3 or any comparable or successor form or forms. After
Greenbriar has qualified for the use of Form S-3, in addition to the rights
contained in the foregoing provisions of Section 2, the Holders of Registrable
Securities shall have the right to request registrations on Form S-3 (such
requests shall be in writing and shall state the number of shares of
Registrable Securities to be disposed of and the intended methods of
disposition of such shares by such Holder or Holders); provided, however, that
Greenbriar shall not be obligated to effect any such registration if (i) the
Holders, together with the holders of any other securities of Greenbriar
entitled to inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) on Form S-3 at an aggregate price
to the public of less than $3,000,000 or (ii) in a given twelve-month period,
Greenbriar has effected one (1) such registration in any such period.
(b) If a request complying with the requirements of
Section 4(a) is delivered to Greenbriar, the provisions of Sections 2(b) and
(c) hereof shall apply to such registration.
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(c) Notwithstanding the foregoing, the provisions of this
Section 4 are subject to the terms of the existing registration rights
agreements listed on and the waivers contained in Exhibit A hereto, except to
the extent waived.
5. Registration Procedures.
In connection with any registration to permit the sale or resale of
Registrable Securities pursuant to this Agreement, Greenbriar shall use its
reasonable best efforts to:
(a) Keep such registration effective for a period of 120
days or until the Holders have completed the distribution as specified in the
Request Notice, whichever first occurs; provided, however, (i) that such
120-day period shall be extended for a period of time equal to the period the
Holder refrains from selling any securities included in such registration at
the request of an underwriter of any securities of Greenbriar; and (ii) in the
case of any registration of Registrable Securities on Form S-3 which are
intended to be offered on a continuous or delayed basis, such 120-day period
shall be extended, if necessary, to keep the registration statement effective
until all such Registrable Securities are sold, provided that Rule 145, or any
successor rule under the Securities Act, permits an offering on a continuous or
delayed basis, and provided further that applicable rules under the Securities
Act governing the obligation to file a post-effective amendment permit, in lieu
of filing a post-effective amendment that (A) includes any Prospectus required
by Section 10(a)(3) of the Securities Act or (B) reflects facts or events
representing a material or fundamental change in the information set forth in
the Registration Statement, the incorporation by reference of information
required to be included in (A) and (B) above to be contained in periodic
reports filed pursuant to Section 13 or 15(d) of the Exchange Act in the
Registration Statement;
(b) Furnish to each Holder, prior to the filing thereof
with the Commission, a copy of the Registration Statement and each amendment
thereto or each amendment or supplement to the Prospectus included therein and
shall make Greenbriar's representatives available for discussion of such
document and other customary due diligence matters, and shall use its best
efforts to reflect in each such document, when so filed with the Commission,
such comments as any Holder reasonably may propose;
(c) Take any and all actions as may be necessary so that
(i) the Registration Statement and any amendment thereto and the Prospectus
complies in all material respects with the Securities Act and the rules and
regulations thereunder, (ii) the Registration Statement and any amendment
thereto (in either case, other than with respect to written information
furnished to Greenbriar by or on behalf of any Holder specifically for
inclusion therein) 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 any statement therein not misleading and
(iii) the Prospectus (other than with respect to such information from Holders)
does not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading;
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(d) Keep the Registration Statement continuously
effective and provide all requisite financial statements for the period
specified in Section 5(a); and upon the occurrence of any event that would
cause the Registration Statement or any amendment thereto or the Prospectus (i)
to contain a material misstatement or omission or (ii) not to be effective and
usable for resale of Registrable Securities during the period required by this
Agreement, Greenbriar shall file promptly an appropriate amendment or
supplement to the Registration Statement, in the case of clause (i), correcting
any such misstatement or omission, and, in the case of either clause (i) or
(ii), use its reasonable best efforts to cause such amendment to be declared
effective and such Registration Statement and the related Prospectus to become
usable for their intended purpose(s) as soon as practicable thereafter;
(e) Prepare and file with the Commission such amendments
and post-effective amendments to the Registration Statement as may be necessary
to keep the Registration Statement effective for the applicable period set
forth in Section 5(a); cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, and to comply fully with the applicable provisions of
Rules 424 and 430A under the Securities Act in a timely manner; and comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by the Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the
sellers thereof set forth in the Registration Statement or supplement to the
Prospectus;
(f) As soon as practicable, advise the Holders (which
advice pursuant to clauses (ii)-(iv) shall be deemed to include an instruction
to suspend the use of the Prospectus until the requisite changes have been
made) and, if requested by such Persons, to confirm such advice in writing:
i. when the Prospectus or any supplement or amendment
thereto has been filed with the Commission and when
the Registration Statement or any post-effective
amendment thereto has become effective;
ii. of any request by the Commission for amendments to
the Registration Statement or amendments or
supplements to the Prospectus or for additional
information relating thereto;
iii. of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration
Statement under the Securities Act or of the
suspension by any state securities commission of the
qualification of the Registrable Securities for
offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding
purposes; and
iv. of the existence of any fact or the happening of any
event that makes any statement of a material fact
made in the Registration Statement, the Prospectus,
any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that
requires the making of any additions to or changes in
the Registration Statement or the Prospectus so that
the Registration Statement and the Prospectus do not
contain an untrue statement of a material fact and do
not omit
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to state a material fact required to be stated
therein or necessary to make the statements therein
not misleading;
(g) If at any time the Commission shall issue any stop
order suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the Registrable
Securities under state securities or blue sky laws, obtain the withdrawal or
lifting of such order at the earliest possible time;
(h) Furnish to each Holder and each of the
underwriter(s), if any, without charge, at least one copy of the Registration
Statement and each post-effective amendment thereto, including all financial
statements and schedules, documents incorporated by reference therein and, if
the Holder so requests in writing, all exhibits (including exhibits
incorporated therein by reference);
(i) Deliver to each Holder and each of the
underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) included in the Registration Statement
and any amendment or supplement thereto as such Persons may reasonably request;
and Greenbriar consents to the use of the Prospectus by each of the selling
Holders and each of the underwriter(s), if any, in connection with the offering
and the sale of the Registrable Securities covered by the Prospectus or any
amendment or supplement thereto;
(j) Prior to any public offering pursuant to the
Registration Statement, register or qualify or cooperate with the Holders of
Registrable Securities registered thereunder, the underwriter(s), if any, and
their respective counsel in connection with the registration and qualification
of such Registrable Securities under the securities or blue sky laws of such
jurisdictions as such Holders or underwriters reasonably request in writing and
do any and all other acts or things necessary or advisable to enable the offer
and sale in such jurisdictions of such Registrable Securities; provided,
however, that Greenbriar will not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take any
action that would subject it to general service of process or to taxation,
other than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not then so subject;
(k) Cause the Registrable Securities covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the seller
or sellers thereof or the underwriter(s), if any, to consummate the disposition
of such Registrable Securities, subject to the provision contained in Section
5(f); provided, however, that Greenbriar's obligations pursuant to this Section
5(k) shall not extend to actions necessary to enable the seller or sellers of
Registrable Securities or the underwriter(s), if any, to consummate the
disposition of such Registrable Securities if such actions are necessary only
as a result of the status of such seller or sellers or underwriter(s) as
regulated entities under any regulatory regime other than the securities laws
of the United States or any state thereof;
(l) Unless any Registrable Securities shall be in
book-entry form only, cooperate with the Holders and the underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold under the
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Registration Statement, free of any restrictive legends and in such
denominations and registered in such names as the Holders or the
underwriter(s), if any, may request in connection with the sales of Registrable
Securities pursuant to the Registration Statement;
(m) Upon the occurrence of any event contemplated by
Section 5(f)(ii)-(iv), file (and have declared effective as soon as possible) a
post-effective amendment to the Registration Statement or an amendment or
supplement to the Prospectus or any document incorporated by reference therein
or file any other required document so that, as thereafter delivered to the
purchasers of Registrable Securities, the Prospectus will not contain 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. Each Holder of Registrable Securities registered under
the Registration Statement agrees by acquisition of such Registrable Securities
that, upon receipt of any notice from Greenbriar of the existence of any fact
of the kind described in Section 5(f)(ii)-(iv) hereof, such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to the
Registration Statement until such Holder receives copies of the supplemented or
amended Prospectus contemplated by this Section 5(m), or until such Holder is
advised in writing by Greenbriar that the use of the Prospectus may be resumed,
and such Holder has received copies of any additional or supplemental filings
which are incorporated by reference in the Prospectus. If so directed by
Greenbriar, each Holder will deliver to Greenbriar (at Greenbriar's expense)
all copies, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Registrable Securities current at the time of
receipt of such notice. In the event Greenbriar shall give any such notice,
the time period regarding Greenbriar's obligations to maintain the
effectiveness of the Registration Statement set forth in Section 5(a) hereof
shall be extended by the number of days during the period from and including
the date of the giving of such notice pursuant to Section 5(f) hereof to and
including the date when such Holder shall have received the copies of the
supplemented or amended Prospectus contemplated by this Section 5(m);
(n) Provide CUSIP numbers for all Registrable Securities
at the time of any distribution thereof to Holders, in each case not later than
the effective date of the Registration Statement, and provide a transfer agent
and registrar for the Common Stock;
(o) Cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence investigation by
any underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of the
NASD, and use its best efforts to cause the Registration Statement to become
effective and approved by such governmental agencies or authorities as may be
necessary to enable the Holders selling Registrable Securities to consummate
the disposition of such securities;
(p) Comply with all applicable rules and regulations of
the Commission, and 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 Registration Statement, an
earnings statement satisfying the provisions of Section 11(a) of the Securities
Act;
(q) Request a Holder of Registrable Securities to furnish
to Greenbriar such information regarding such Holder and the distribution of
such Holder's securities thereunder
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as Greenbriar may from time to time reasonably require for inclusion in the
Registration Statement and Greenbriar 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;
(r) If requested by the Holders of Registrable Securities
being sold in an Underwritten Offering or the underwriter(s) thereof, promptly
incorporate in the Registration Statement or Prospectus, pursuant to a
supplement or post-effective amendment, if necessary, such information as such
Holders and underwriter(s), if any, may reasonably request to have included
therein, which may include, without limitation, information relating to the
plan of distribution of the Registrable Securities, information with respect to
the amount of Registrable Securities being sold to such underwriter(s), the
purchase price being paid therefor and with respect to any other terms of the
offering of the Registrable Securities to be sold in such offering; and shall
make all required filings of such Prospectus supplement or post-effective
amendment as soon as practicable after Greenbriar is notified of the matters to
be incorporated in such Prospectus supplement or post-effective amendment;
(s) Enter into such customary agreements (including an
underwriting agreement in customary form, if applicable) and take all such
other appropriate actions in order to expedite or facilitate the disposition of
the Registrable Securities pursuant to the Registration Statement, and in
connection therewith, Greenbriar shall (i) make such representations and
warranties to the Holders of Registrable Securities registered thereunder and
the underwriter(s), if any, in form, substance and scope as are customarily
made by issuers to underwriters in primary underwritten offerings; (ii) obtain
opinions of counsel to Greenbriar and updates thereof (which counsel and
opinions, in form, scope and substance, shall be reasonably satisfactory to
such underwriters and the Holders of a majority of the outstanding Registrable
Securities being sold) addressed to each such Holder and underwriter 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 underwriters; (iii) if and to the extent permitted by Statement of Auditing
Standards No. 72, obtain comfort letters and updates thereof from Greenbriar's
independent certified public accountants addressed to the underwriters
requesting the same, such letters to be in customary form and covering matters
of the type customarily covered in comfort letters in connection with primary
underwritten offerings, and affirming the matters set forth in the comfort
letters delivered pursuant to the underwriting or other agreement, without
exception; (iv) in connection with an Underwritten Offering only, set forth in
full or incorporate by reference in the underwriting agreement the
indemnification provisions and procedures of Section 8 hereof with respect to
all parties to be indemnified pursuant to said Section; and (v) deliver such
documents and certificates as may be reasonably requested by such Holders or
underwriters to evidence compliance with Section 5(m) and with any customary
conditions contained in the underwriting agreement or other agreement entered
into by Greenbriar pursuant to this Section 5(s). The foregoing actions set
forth in clauses (i), (ii), (iii), (iv) and (v) of this Section 5(s) shall be
performed at each closing under any underwriting or similar agreement as and to
the extent required thereunder. If at any time the representations and
warranties of Greenbriar contemplated in clause (i) above cease to be true and
correct, Greenbriar shall so advise the Purchaser and the underwriter(s), if
any, and each selling Holder promptly and, if requested by such Persons, shall
confirm such advice in writing;
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(t) Make available at reasonable times for inspection by
the Holders of the Registrable Securities, any underwriter participating in any
disposition pursuant to the Registration Statement, and any attorney or
accountant retained by any such Holders or underwriters, all financial and
other records, pertinent corporate documents and properties of Greenbriar and
its subsidiaries; and cause Greenbriar's officers, directors and employees to
supply all information reasonably requested by any such Holder, underwriter,
attorney or accountant in connection with the Registration Statement subsequent
to the filing thereof as is customary for similar due diligence examinations;
provided, however, that any information that is designated in writing by
Greenbriar, in good faith, as confidential at the time of delivery of such
information shall be kept confidential by such Holders or any such underwriter,
attorney or accountant, 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 the other parties entitled thereto by
one counsel designated by and on behalf of such Holders and other parties;
(u) Subject to any applicable rules thereto, cause all
Common Stock included among the Registrable Securities to be listed on each
securities exchange on which the Common Stock is listed;
(v) Provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of Section 13
and Section 15 of the Exchange Act.
6. Registration Expenses.
(a) Greenbriar shall bear all expenses incurred in
connection with the performance of or compliance with its obligations under
this Agreement, including without limitation all registration filing,
application and qualification fees, fees and expenses of compliance with
securities or blue sky laws, printing expenses, messenger, delivery and
telephone expenses and fees, and disbursements of counsel for Greenbriar, all
independent certified public accountants and other persons retained by
Greenbriar, all of Greenbriar's internal expenses relating to such registration
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit or quarterly review, the expense of any liability insurance and the
expenses and fees for listing the securities to be registered on each
securities exchange on which similar securities issued by Greenbriar are then
listed.
(b) Each Holder will pay any discounts and commissions
incurred upon the sale of securities by it under such registration.
7. Prior Approval of Subsequent Registration Rights. From and
after the date of this Agreement and until no Registrable Securities remain
outstanding, without the prior written consent of the Holders, Greenbriar shall
not grant (i) any new demand registration rights to any Person or (ii) any new
piggy-back registration rights to any Person unless such rights are expressly
made subject to the prior right of Holders to include any or all of their
Registrable Securities before such other Person includes any shares in any
registration relating to an underwritten public offering with respect to which,
in the opinion of the
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managing underwriter, the inclusion in the offering of all shares requested to
be registered by all Persons holding registration rights would materially
jeopardize the successful marketing of the securities to be sold.
8. Indemnification and Contribution.
(a) In connection with any Registration Statement,
Greenbriar shall indemnify and hold harmless each Holder, its officers,
directors, partners, employees, representatives and agents, and each Person who
controls such Holder within the meaning of the Securities Act or the Exchange
Act against any and all losses, claims, damages, liabilities or expenses,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) which arise out of or are based upon any untrue or alleged
untrue statement of material fact contained in the Registration Statement, or
any Prospectus or preliminary Prospectus or any amendment thereof or supplement
thereto, or arise out of or are based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and agrees to reimburse each such
indemnified Person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability, expense or action, as such expenses are incurred; provided,
however, that Greenbriar will not be liable in any case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
or alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to
Greenbriar by or on behalf of any such Holder and contained in, on the
effective date of, a Registration Statement or any amendment thereto.
Greenbriar also agrees to indemnify or contribute to losses of, as
provided in Section 8(d), any underwriters of Registrable Securities, their
officers, directors, partners, employees, representatives and agents and each
Person, if any, who controls any such underwriter (within the meaning of the
Securities Act) on substantially the same basis as that of the indemnification
of the Holders provided in Section 8(a) and shall, if requested by any Holder,
enter into an underwriting agreement reflecting such agreement.
(b) Each selling Holder, severally and not jointly, shall
indemnify and hold harmless Greenbriar, its officers, directors, partners,
employees, representatives and agents and each Person, if any, who controls
Greenbriar (within the meaning of the Securities Act) against any and all
losses, claims, damages, liabilities or expenses to the same extent as the
foregoing indemnity contained in Section 8(a) hereof resulting from any untrue
or alleged untrue statement of material fact contained in the Registration
Statement or any amendment thereof or supplement thereto or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading to the extent, but
only to the extent, that such loss, claim, damage or liability relates to or
arises from information relating to such Holder furnished in writing by such
Holder specifically for use in the Registration Statement; provided, however,
that the obligation to indemnify will be individual to each Holder and will be
limited to the amount of net proceeds received by such Holder from the sale of
Registrable Securities pursuant to the Registration Statement.
(c) Any Person entitled to indemnification hereunder
shall give notice as promptly as reasonably practicable to each indemnifying
party of any claim or action
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commenced against it in respect of which indemnity may be sought hereunder;
provided, however, that failure to so notify an indemnifying party shall not
relieve such indemnifying party from any obligation that it may have pursuant
to this Section except to the extent that it has been materially prejudiced
(through the forfeiture of substantive rights or defenses) by such failure;
provided further, however, 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 on account of this indemnity agreement. If any such claim
or action shall be brought against an indemnified party, 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 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 under this Section for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof; provided, however, that an indemnified party will have the
right to employ its own counsel in any such action, but the fees, expenses and
other charges of such counsel will be at the expense of such indemnified party
unless (i) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party, (ii) the indemnified party has
reasonably concluded (based on advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are different from
or in addition to those available to the indemnifying party, (iii) a conflict
or potential conflict exists (based on advice of counsel to the indemnified
party) between the indemnified party and indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (iv) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party
or parties. Each indemnified party, as a condition to the indemnity agreements
contained in Sections 8(a) and 8(b), shall use all efforts to cooperate with
the indemnifying party in the defense of any such action or claim. No
indemnifying party shall be liable for any settlement or any such action
effected without its written consent, 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. 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 or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) If the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless an indemnified party, then
each applicable indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect the relative fault of Greenbriar on the one hand and the Holders on the
other in connection with the actions, statements or omissions that resulted in
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof), as well as any
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other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates
to information supplied by Greenbriar on the one hand or the Holders on the
other, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action, statement or omission. The
amount paid or payable by a party as a result of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof), shall be deemed to
include, subject to the limitations set forth in Section 8(c), any legal or
other fees or expenses reasonably incurred by such party in connection with any
investigation or proceedings.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled any contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Holders' obligations in this Section 8(d) to contribute are several in
proportion and not joint.
9. Rules 144 and 144A. Greenbriar shall use commercially
reasonable efforts to file the reports required to be filed by it under the
Securities Act and the Exchange Act in a timely manner and, if at any time
Greenbriar is not required to file such reports, it will, upon the written
request of any Holder of Registrable Securities, make publicly available other
information so long as necessary to permit sales of such Holder's securities
pursuant to Rules 144 and 144A. Greenbriar covenants that it will take such
further action as any Holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such Holder to sell
securities pursuant to Rules 144 and 144A (including the requirements of Rule
144A(d)(4)).
10. Miscellaneous.
(a) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless Greenbriar
has obtained the written consent of the Holders. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of the Holders of
Registrable Securities being sold pursuant to the Registration Statement and
that does not directly or indirectly affect the rights of other Holders may be
given by Holders of the Registrable Securities being sold.
(b) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
certified mail (return receipt requested), telecopier, or air courier
guaranteeing overnight delivery:
i. if to a Holder, at the address of such Holder
maintained by Greenbriar;
ii. if to the Purchaser, at the address set forth in the
Purchase Agreement;
iii. if to Greenbriar, at its address set forth in the
Purchase Agreement;
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or to such other addresses as the recipient party has specified to the sending
party by prior written notice to the sending party.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, certified, return receipt requested and
postage prepaid, if mailed; when receipt is acknowledged by the recipient's
telecopier machine, if telecopied; and on the next business day, if delivered
to a next-day air courier.
(c) Remedies. In the event of a breach by Greenbriar or
by a Holder of any of their respective obligations under this Agreement, each
Holder or Greenbriar, as the case may be, 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.
Greenbriar and each Holder agree 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 agree 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.
(d) Severability. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law. 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. It is hereby stipulated and declared to be the intention of
the parties 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.
(e) No Inconsistent Agreements. Greenbriar will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the Holders in this
Agreement. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders
of Greenbriar's securities under any agreement in effect on the date hereof.
(f) Successors and Assigns. All covenants and agreements
in this Agreement by or on behalf of any of the parties hereto will bind and
inure to the benefit of their respective heirs, executors, administrators,
successors, legal representatives and assigns. In addition, whether or not any
express assignment has been made, the provisions of this Agreement which are
for the benefit of Holders are also for the benefit of, and enforceable by, any
subsequent Holder.
(g) Counterparts. This Agreement may be executed in two
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one
and the same Agreement.
(h) Descriptive Headings. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a part
of this Agreement.
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(i) Governing Law. ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF TEXAS,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE
(WHETHER OF THE STATE OF TEXAS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF TEXAS.
(j) Entire Agreement. This Agreement together with the
other operative documents described in the Purchase Agreement is intended by
the parties as a final expression of their agreement and 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. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein with respect to the registration rights granted by
Greenbriar with respect to the Registrable Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Registration Rights Agreement as of the date first above written.
GREENBRIAR CORPORATION,
a Nevada corporation
By: /s/ XXXX X. XXXXXXXX
------------------------------------
Name: Xxxx X. Xxxxxxxx
-------------------------------
Title: Executive Vice President
------------------------------
LONE STAR OPPORTUNITY FUND, L.P.,
a Delaware limited partnership
By: Lone Star Partners, L.P., its
General Partner
By: Lone Star Management Co., Ltd.,
its General Partner
By: /s/ XXXXX XXXXXXX
----------------------------
Name: Xxxxx Xxxxxxx
-----------------------
Title: Vice President
----------------------
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