Exhibit 10.1
February 22, 2007
To: MEDICAL PROPERTIES TRUST, INC.
1000 Urban Center Drive, Suite 501
Birmingham, Alabama 35242
From: UBS AG, LONDON BRANCH
c/o UBS Securities LLC
299 Park Avenue
New York, New York 10171
From: UBS SECURITIES LLC,
SOLELY AS AGENT
tel: (212) 821-2100
fax: (212) 821-7031
Dear Sirs,
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the transaction entered into between us on the Trade
Date specified below (the "Transaction"). This Confirmation constitutes a
"Confirmation" as referred to in the ISDA Master Agreement specified below.
1. The definitions and provisions contained in the 2000 ISDA Definitions
(the "2000 Definitions") and the 2002 ISDA Equity Derivatives
Definitions (the "2002 Definitions" and, together with the 2000
Definitions, the "Definitions"), each as published by the International
Swaps and Derivatives Association, Inc., are incorporated into this
Confirmation. In the event of any inconsistency between the 2002
Definitions and the 2000 Definitions, the 2002 Definitions will
govern. In the event of any inconsistency between the Definitions and
this Confirmation, this Confirmation will govern.
This Confirmation evidences a complete and binding agreement between Party
A and Party B as to the terms of the Transaction to which this
Confirmation relates. This Confirmation shall supplement, form a part of,
and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the "Agreement") as if Party A and Party B had executed an
agreement in such form on the Trade Date (but without any Schedule except
for (i) the election of the laws of the State of New York as the governing
law and (ii) United States dollars as the Termination Currency). In the
event of any inconsistency between provisions of that Agreement and this
Confirmation, this Confirmation will prevail for the purpose of the
Transaction to which this Confirmation relates. The parties hereby agree
that no Transaction other than the Transaction to which this Confirmation
relates shall be governed by the Agreement. For purposes of the 2002
Definitions, the Transaction is a Share Forward Transaction.
Party A and Party B each represents to the other that it has entered into
this Transaction in reliance upon such tax, accounting, regulatory, legal,
and financial advice as it deems necessary and not upon any view expressed
by the other.
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2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
General Terms:
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Party A: UBS AG, London Branch
Party B: Medical Properties Trust, Inc.
Trade Date: February 22, 2007
Effective Date: February 28, 2007
Base Amount: Initially, 1,500,000 Shares. On each
Settlement Date, the Base Amount shall be
reduced by the number of Settlement
Shares for such Settlement Date.
Maturity Date: February 28, 2008 (or, if such date is
not a Scheduled Trading Day, the next
following Scheduled Trading Day).
Forward Price: On the Effective Date, the Initial
Forward Price, and on any other day, the
Forward Price as of the immediately
preceding calendar day multiplied by the
sum of (i) 1 and (ii) the Daily Rate for
such day; provided that on each Forward
Price Reduction Date, the Forward Price
in effect on such date shall be the
Forward Price otherwise in effect on such
date minus the Forward Price Reduction
Amount for such Forward Price Reduction
Date.
Initial Forward Price: USD $14.82 per Share.
Daily Rate: For any day, (i)(A) USD-Federal Funds
Rate for such day MINUS (B) the Spread
DIVIDED by (ii) 365.
USD-Federal Funds Rate For any day, the rate set forth for such
day opposite the caption "Federal funds",
as such rate is displayed on the page
"FedsOpen {Index} {GO}" on the BLOOMBERG
Professional Service, or any successor
page; provided that if no rate appears
for any day on such page, the rate for
the immediately preceding day for which a
rate appears shall be used for such day.
Spread: 1.00%
Forward Price Reduction
Date: March 29, 2007, June 14, 2007,
September 14, 2007, and December 13, 2007.
Forward Price Reduction
Amount: As set forth in Schedule I hereto
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Shares: Common Stock, $0.001 par value per share,
of Party B (also referred to herein as
the "Issuer") (Exchange identifier:
"MPW").
Exchange: The New York Stock Exchange.
Related Exchange(s): All Exchanges.
Clearance System: DTC.
Calculation Agent: UBS AG, London Branch
Settlement Terms:
Settlement Date: Any Scheduled Trading Day following the
Effective Date and up to and including
the Maturity Date, as designated (a) by
Party B in a written notice (a
"Settlement Notice") that satisfies the
Settlement Notice Requirements and is
delivered to Party A (i) at least three
Scheduled Trading Days prior to such
Settlement Date, which may be the
Maturity Date, if Physical Settlement
applies, and (ii) a number of Scheduled
Trading Days prior to such Settlement
Date, which may be the Maturity Date,
equal to the greater of (A) 10 and (B)
the product, rounded up to the nearest
whole number, of (1) the number of Shares
to be settled on such date, divided by
the initial Base Amount, and (2) 40, if
Cash Settlement applies; provided that
(i) the Maturity Date shall be a
Settlement Date if on such date the Base
Amount is greater than zero, (ii) if Cash
Settlement applies and Party A shall have
fully unwound its hedge during an Unwind
Period by a date that is more than three
Scheduled Trading Days prior to a
Settlement Date specified above, Party A
may, by written notice to Party B,
specify any Scheduled Trading Day prior
to such originally specified Settlement
Date as the Settlement Date, (iii) if the
Unwind Period for two Settlement Dates
would overlap, the Unwind Period for the
later Settlement Date shall not begin
until the earlier settlement date has
occurred and (iv) the Settlement Date may
be modified as provided under "Unwind
Period" below; or (b) by Party A pursuant
to "Termination Settlement" below.
Settlement Shares: With respect to any Settlement Date, a
number of Shares, not to exceed the Base
Amount, designated as such by Party B in
the related Settlement Notice or by Party
A pursuant to "Termination Settlement"
below; provided that Party B may not
deliver more than two such notices during
the Term of this Transaction and no such
notice shall be delivered with respect to
less than 500,000 Shares; and provided
further that on the Maturity Date the
number of Settlement Shares shall be
equal to the Base Amount on such date.
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Settlement: Physical Settlement or Cash Settlement,
at the election of Party B as set forth
in a Settlement Notice that satisfies the
Settlement Notice Requirements; provided
that Physical Settlement shall apply (i)
if no Settlement Method is validly
selected, (ii) with respect to any
Settlement Shares in respect of which
Party A is unable, in its judgment, to
unwind its hedge by the end of the Unwind
Period in a manner that, in the judgment
of Party A, is consistent with the
requirements for qualifying for the safe
harbor provided by Rule 10b-18 under the
Exchange Act or due to the lack of
sufficient liquidity in the Shares on any
Scheduled Trading Day during the Unwind
Period, (iii) if, at the time of electing
Cash Settlement or as a result of such
election, Party B would be in default
under the Credit Agreement, dated as of
October 27, 2005, as amended, by and
among MPT Operating Partnership L.P., as
borrower, Merrill Lynch Capital, a
division of Merrill Lynch Business
Financial Services, Inc., as
administrative agent and lender, and the
additional lenders from time to time
party thereto (the "Credit Agreement"),
and (iv) to any Termination Settlement
Date (as defined below under "Termination
Settlement").
Settlement Notice
Requirements: Notwithstanding any other provision
hereof, a Settlement Notice delivered by
Party B that specifies Cash Settlement
will not be effective to establish a
Settlement Date or require Cash
Settlement unless Party B delivers to
Party A with such Settlement Notice a
representation signed by Party B
substantially in the following form: "As
of the date of this Settlement Notice,
Party B is not aware of any material
nonpublic information concerning itself
or the Shares, and is designating the
date contained herein as a Settlement
Date in good faith and not as part of a
plan or scheme to evade compliance with
the federal securities laws."
Unwind Period: Each Scheduled Trading Day that is not a
Disrupted Day during the period from and
including the first Scheduled Trading Day
following the date Party B validly elects
Cash Settlement in respect of a
Settlement Date through the third
Scheduled Trading Day preceding such
Settlement Date; subject to "Termination
Settlement" below.
Exchange Act: The Securities Exchange Act of 1934, as
amended from time to time.
Physical Settlement: On any Settlement Date in respect of
which Physical Settlement applies, Party
B shall deliver to Party A through the
Clearance System the Settlement Shares
for such Settlement Date, and Party A
shall deliver to Party B, by wire
transfer of immediately available funds
to an account designated by Party B, an
amount in cash equal to the Physical
Settlement Amount for such Settlement
Date, on a delivery versus payment basis.
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Physical Settlement
Amount: For any Settlement Date in respect of which
Physical Settlement applies, an amount in
cash equal to the product of (i) the Forward
Price on such Settlement Date and (ii) the
number of Settlement Shares for such
Settlement Date.
Cash Settlement: On any Settlement Date in respect of
which Cash Settlement applies, if the
Cash Settlement Amount for such
Settlement Date is a positive number,
Party A will pay such Cash Settlement
Amount to Party B. If the Cash
Settlement Amount is a negative number,
Party B will pay the absolute value of
such Cash Settlement Amount to Party A.
Such amounts shall be paid on the
Settlement Date.
Cash Settlement Amount: For any Settlement Date in respect of
which Cash Settlement applies, an amount
determined by the Calculation Agent equal
to the difference between (1) the product
of (i) (A) the Forward Price on the first
day of the applicable Unwind Period minus
(B) the weighted average of the 10b-18
VWAPs per Share for each Scheduled
Trading Day at which Party A actually
purchases Shares during such Unwind
Period to unwind its hedge, multiplied by
(ii) the number of Settlement Shares for
such Settlement Date, minus (2) the
product of (i) the Forward Price
Reduction Amount for any Forward Price
Reduction Date that occurs during such
Unwind Period multiplied by (ii) the
number of Shares with respect to which
Party A has not unwound its hedge as of
such Forward Price Reduction Date.
10b-18 VWAP: For any Scheduled Trading Day during the
Unwind Period which is not a Disrupted
Day, the volume-weighted average price at
which the Shares trade as reported in the
composite transactions for the Exchange
on such Scheduled Trading Day, excluding
(i) trades that do not settle regular
way, (ii) opening (regular way) reported
trades on the Exchange on such Scheduled
Trading Day, (iii) trades that occur in
the last ten minutes before the scheduled
close of trading on the Exchange on such
Scheduled Trading Day and ten minutes
before the scheduled close of the primary
trading session in the market where the
trade is effected, and (iv) trades on
such Scheduled Trading Day that do not
satisfy the requirements of Rule
10b-18(b)(3), as determined in good faith
by the Calculation Agent. Party B
acknowledges that Party A may refer to
the Bloomberg Page "MPW {Equity} AQR SEC"
(or any successor thereto), in its
discretion, for such Scheduled Trading
Day to determine the 10b-18 VWAP.
Settlement Currency: USD.
Failure to Deliver: Inapplicable.
Adjustments:
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Method of Adjustment: Calculation Agent Adjustment;
notwithstanding anything to the contrary
in the 2002 Definitions, but without
affecting Calculation Agent's
obligations contained in Section 1.40 of
the 2002 Definitions, in effecting any
adjustments contemplated by Section
11.2(c) of the 2002 Definitions, the
Calculation Agent may make an adjustment
pursuant to Calculation Agent Adjustment
to any one or more of the Base Amount,
the Forward Price and any other variable
relevant to the settlement or payment
terms of the Transaction.
Additional Adjustment: If, in Party A's sole judgment, the
actual cost to Party A, over any one
month period, of borrowing a number of
Shares equal to the Base Amount to hedge
its exposure to the Transaction exceeds
a weighted average rate equal to 100
basis points per annum, the Calculation
Agent shall reduce the Forward Price in
order to compensate Party A for the
amount by which such cost exceeded a
weighted average rate equal to 100 basis
points per annum during such period.
The Calculation Agent shall notify Party
B prior to making any such adjustment to
the Forward Price and, upon the request
of Party B, Party A shall provide an
itemized list of its stock loan costs
for the applicable one month period.
Account Details:
Payments to Party A: To be advised under separate
cover or telephone confirmed prior to each
Settlement Date.
Payments to Party B: To be advised under separate
cover or telephone confirmed prior to each
Settlement Date.
Delivery of Shares to
Party A: To be advised.
Delivery of Shares to
Party B: To be advised.
3. Other Provisions:
Conditions to Effectiveness:
The effectiveness of this Confirmation on the Effective Date shall
be subject to (i) the condition that the respective representations
and warranties of UBS Securities LLC ("UBS Securities") and Party B
contained in the Underwriting Agreement dated the date hereof among
Party B, Party A and UBS Securities and Wachovia Capital Markets,
LLC as Representatives of the Several Underwriters (the
"Underwriting Agreement") and any certificate delivered pursuant
thereto by UBS Securities or Party B are true and correct on the
Effective Date as if made as of the Effective Date, (ii) the
condition that UBS Securities and Party B have performed all of
their respective obligations required to be performed by them under
the Underwriting Agreement on or prior to the Effective Date, (iii)
the condition that Party B has delivered to Party A resolutions of
the Board of Directors of Party B authorizing the Transaction, in
form and substance satisfactory to Party A, (iv) the satisfaction of
all of the conditions set forth in Section 7 of the Underwriting
Agreement and (v) the condition that neither of the following has
occurred (A) Party A is unable to borrow and deliver for sale a
number of Shares equal to the Base Amount, or (B) in Party A's sole
judgment either it is impracticable to do so or Party A would incur
a weighted average stock
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loan cost of more than a rate equal to 150 basis points per annum to
do so (in either of which events this Confirmation shall be
effective but the Base Amount for this Transaction shall be the
number of Shares Party A is required to deliver in accordance with
Section 1 of the Underwriting Agreement).
Representations and Agreements of Party B:
Party B (i) has such knowledge and experience in financial and
business affairs as to be capable of evaluating the merits and risks
of entering into this Transaction; (ii) has consulted with its own
legal, financial, accounting and tax advisors in connection with
this Transaction; and (iii) is entering into this Transaction for a
bona fide business purpose.
Party B is not and has not been the subject of any civil proceeding
of a judicial or administrative body of competent jurisdiction that
could reasonably be expected to impair materially Party B's ability
to perform its obligations hereunder.
Party B will by the next succeeding New York Business Day notify
Party A upon obtaining knowledge of the occurrence of any event that
would constitute an Event of Default, a Potential Event of Default
or a Potential Adjustment Event.
Additional Representations, Warranties and Agreements of Party B: Party
B hereby represents and warrants to, and agrees with, Party A as of the
date hereof that:
(a) Any Shares, when issued and delivered in accordance with the
terms of the Transaction, will be duly authorized and validly
issued, fully paid and nonassessable, and the issuance thereof
will not be subject to any preemptive or similar rights.
(b) Party B has reserved and will keep available at all times,
free from preemptive rights, out of its authorized but
unissued Shares, solely for the purpose of issuance upon
settlement of the Transaction as herein provided, the full
number of Shares as shall be issuable at such time upon
settlement of the Transaction. All Shares so issuable shall,
upon such issuance, be accepted for listing or quotation on
the Exchange.
(c) Subject to the last sentence of this paragraph, Party B agrees
to provide Party A at least 30 days' written notice (an
"Issuer Repurchase Notice") prior to executing any repurchase
of Shares by Party B or any of its subsidiaries (or entering
into any contract that would require, or give the option to,
Party B or any of its subsidiaries, to purchase or repurchase
Shares), whether out of profits or capital or whether the
consideration for such repurchase is cash, securities or
otherwise (an "Issuer Repurchase"), that alone or in the
aggregate would result in the Base Amount Percentage (as
defined below) being (i) equal to or greater than 4.5% of the
outstanding Shares and (ii) greater by 0.5% or more than the
Base Amount Percentage at the time of the immediately
preceding Issuer Repurchase Notice (or in the case of the
first such Issuer Repurchase Notice, greater than the Base
Amount Percentage as of the later of the date hereof or the
immediately preceding Settlement Date, if any). The "Base
Amount Percentage" as of any day is the fraction (1) the
numerator of which is the Base Amount and (2) the denominator
of which is the number of Shares outstanding on such day. If
Party B reasonably determines that compliance with any notice
obligations of Party B contained in this paragraph any delay
of related repurchase of Shares could jeopardize Party B's
status as a "real estate investment trust" within the meaning
of the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations promulgated thereunder, then,
notwithstanding any such notice obligations, Party B shall be
entitled to immediately effect any repurchases of Shares
contemplated by Party B's charter ("Charter Repurchases")
reasonable necessary to
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maintain such status and shall use its best efforts to
simultaneously notify Party A of such repurchases.
(d) Neither the execution and delivery of this Confirmation nor
the incurrence or performance of obligations of Party B
hereunder will conflict with or result in a breach of the
Amended and Restated Articles of Incorporation of Party B, as
amended and restated as of the date hereof (the "Articles of
Incorporation") or by-laws (or any equivalent documents) of
Party B, or any applicable law or regulation, including any
provisions of the Maryland General Corporation Law, or any
order, writ, injunction or decree of any court or governmental
authority or agency, or any agreement or instrument to which
the Party B or any of its subsidiaries is a party or by which
the Party B or any of its subsidiaries is bound or to which
the Party B or any of its subsidiaries is subject, including
the Credit Agreement, or constitute a default under, or result
in the creation of any lien under, any such agreement or
instrument, or breach or constitute a default under any
agreements and contracts of the Counterparty and the
significant subsidiaries filed as exhibits to the
Counterparty's Annual Report on Form 10-K.
(e) No filing with, or approval, authorization, consent, license
registration, qualification, order or decree of, any court or
governmental authority or agency, domestic or foreign, is
necessary or required for the execution, delivery and
performance by Party B of this Confirmation and the
consummation of the Transaction (including, without
limitation, the issuance and delivery of Shares on any
Settlement Date) except (i) such as have been obtained under
the Securities Act, and (ii) as may be required to be obtained
under state securities laws.
(f) Party B is not insolvent, nor will Party B be rendered
insolvent as a result of this Transaction.
(g) Neither Party B nor any of its affiliates shall take or
refrain from taking any action (including, without limitation,
any direct purchases by Party B or any of its affiliates or
any purchases by a party to a derivative transaction with
Party B or any of its affiliates), either under this
Confirmation, under an agreement with another party or
otherwise, that might cause any purchases of Shares by Party A
or any of its affiliates in connection with any Cash
Settlement of this Transaction not to meet the requirements of
the safe harbor provided by Rule 10b-18 under the Exchange Act
if such purchases were made by Party B.
(h) Party B will not engage in any "distribution" (as defined in
Regulation M under the Exchange Act) that would cause a
"restricted period" (as defined in Regulation M) to occur
during any Unwind Period.
(i) Party B is an "eligible contract participant" (as such term is
defined in Section 1(a)(12) of the Commodity Exchange Act, as
amended).
(j) In addition to any other requirements set forth herein, Party
B agrees not to elect Physical Settlement or Cash Settlement
if, in the reasonable judgment of either Party A or Party B,
such settlement or Party A's related market activity would
result in a violation of the U.S. federal securities laws or
any other federal or state law or regulation applicable to
Party B.
Covenant of Party B:
The parties acknowledge and agree that any Shares delivered by Party
B to Party A on any Settlement Date will be newly issued Shares and
when delivered by Party A (or an affiliate of Party A) to securities
lenders from whom Party A (or an affiliate of Party A) borrowed
Shares in connection with hedging its exposure to the Transaction
will be freely saleable without further registration or other
restrictions under the Securities Act of 1933, as amended (the
"Securities Act"), in the hands of those securities lenders,
irrespective of whether such stock loan is effected
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by Party A or an affiliate of Party A. Accordingly, Party B agrees
that the Settlement Shares that it delivers to Party A on each
Settlement Date will not bear a restrictive legend and that such
Settlement Shares will be deposited in, and the delivery thereof
shall be effected through the facilities of, the Clearance System.
Covenants of Party A:
(a) Unless the provisions set forth below under "Private Placement
Procedures" shall be applicable, Party A shall use any Shares
delivered by Party B to Party A on any Settlement Date to
return to securities lenders to close out open stock loans, if
any, with respect to Shares.
(b) In connection with bids and purchases of Shares in connection
with any Cash Settlement of this Transaction, Party A shall
use its reasonable best efforts to conduct its activities, or
cause its affiliates to conduct their activities, in a manner
consistent with the requirements of the safe harbor provided
by Rule 10b-18 under the Exchange Act, as if such provisions
were applicable to such purchases.
Insolvency Filing:
Notwithstanding anything to the contrary herein, in the Agreement or in
the Definitions, upon any Insolvency Filing in respect of the Issuer,
the Transaction shall automatically terminate on the date thereof
without further liability of either party to this Confirmation to the
other party (except for any liability in respect of any breach of
representation or covenant by a party under this Confirmation prior to
the date of such Insolvency Filing).
Extraordinary Dividends:
If an ex-dividend date for an Extraordinary Dividend occurs on or after
the Trade Date and on or prior to the Maturity Date, Party B shall pay
an amount, as determined by the Calculation Agent, in cash equal to the
product of such Extraordinary Dividend and the Base Amount on the
record date for such dividend to Party A on the earlier of (i) the date
on which such Extraordinary Dividend is paid by the Issuer to holders
of record of the Shares or (ii) the Maturity Date. "Extraordinary
Dividend" means the per Share amount of any cash dividend or
distribution declared by the Issuer with respect to the Shares that is
specified by the board of directors of the Issuer as an "extraordinary"
dividend.
Acceleration Events:
The following events shall each constitute an "Acceleration Event":
(a) Stock Borrow Events. In the reasonable judgment of Party A (i)
Party A is unable to hedge Party A's exposure to the
Transaction because (A) of the lack of sufficient Shares being
made available for Share borrowing by lenders, or (B) it is
otherwise commercially impracticable or (ii) Party A would
incur a cost to borrow Shares to hedge its exposure to the
Transaction that is greater than a rate equal to 150 basis
points per annum (each of (i) and (ii) a "Stock Borrow
Event");
(b) Dividends and Other Distributions. On any day occurring after
the Trade Date Party B declares a distribution, issue or
dividend to existing holders of the Shares of (i) any cash
dividend (other than an Extraordinary Dividend) to the extent
all cash dividends having an ex-dividend date during the
period from and including any Forward Price Reduction Date
(with each of the Trade Date and the Maturity Date being a
Forward Price Reduction Date having a Forward Price Reduction
Amount equal to $0.00 for purposes of this clause (b)
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only) to but excluding the next subsequent Forward Price
Reduction Date exceeds, on a per Share basis, the sum of the
Forward Price Reduction Amount and $0.01, or (ii) share
capital or securities of another issuer acquired or owned
(directly or indirectly) by Party B as a result of a spin-off
or other similar transaction or (iii) any other type of
securities (other than Shares), rights or warrants or other
assets, for payment (cash or other consideration) at less than
the prevailing market price as determined by Party A;
(d) ISDA Early Termination Date. Either Party A or Party B has the
right to designate an Early Termination Date pursuant to
Section 6 of the Agreement;
(e) Other ISDA Events. The occurrence of an Announcement Date in
respect of an Extraordinary Event; the occurrence of any
Change in Law or Delisting; provided that in case of a
Delisting, in addition to the provisions of Section
12.6(a)(iii) of the 2002 Definitions, it will also constitute
a Delisting if the Exchange is located in the United States
and the Shares are not immediately re-listed, re-traded or
re-quoted on any of the New York Stock Exchange, the American
Stock Exchange or the NASDAQ National Market (or their
respective successors); or
(f) Issuer Repurchases. Party B publicly announces or discloses
any Issuer Repurchase (whether or not subsequently amended)
that alone, or in the aggregate, results in, or could result
in, the Base Amount representing more than 4.5% of the total
outstanding Shares (assuming the consummation of such proposed
Issuer Repurchase).
Termination Settlement:
Upon the occurrence of any Acceleration Event, Party A shall have
the right to designate, upon at least one Scheduled Trading Day's
notice, any Scheduled Trading Day following such occurrence to be a
Settlement Date hereunder (a "Termination Settlement Date") to which
Physical Settlement shall apply, and to select the number of
Settlement Shares relating to such Termination Settlement Date;
provided that (i) in the case of an Acceleration Event arising out
of a Stock Borrow Event, the number of Settlement Shares so
designated by Party A shall not exceed the number of Shares as to
which such Stock Borrow Event exists and (ii) in the case of an
Acceleration Event arising out of an Issuer Repurchase, the number
of Settlement Shares so designated by Party A shall not exceed the
number of Shares necessary to cause the Base Amount to be less than
4.5% of the total outstanding Shares (assuming consummation of such
proposed Issuer Repurchase). If, upon designation of a Termination
Settlement Date by Party A pursuant to the preceding sentence, Party
B fails to deliver the Settlement Shares relating to such
Termination Settlement Date when due, such failure shall constitute
an Event of Default with respect to Party B and Section 6 of the
Agreement shall apply. If an Acceleration Event occurs during an
Unwind Period relating to a number of Settlement Shares to which
Cash Settlement applies, then on the Termination Settlement Date
relating to such Acceleration Event, notwithstanding any election to
the contrary by Party B, Cash Settlement shall apply to the portion
of the Settlement Shares relating to such Unwind Period as to which
Party A has unwound its hedge and Physical Settlement shall apply in
respect of the remainder (if any) of such Settlement Shares, in
addition to the Settlement Shares designated by Party A in respect
of such Termination Settlement Date.
Private Placement Procedures
If Party B is unable to comply with the provisions of "Covenant of
Party B" above because of a change in law or a change in the policy
of the Securities and Exchange Commission or its staff, or Party A
otherwise determines that in its reasonable opinion any Settlement
Shares to be delivered to Party A by Party B may not be freely
returned by Party A or its affiliates to securities lenders as
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described under "Covenant of Party B" above, then delivery of any
such Settlement Shares (the "Restricted Shares") shall be effected
pursuant to Annex A hereto, unless waived by Party A.
Rule 10b5-1:
It is the intent of Party A and Party B that following any election
of Cash Settlement by Party B, the purchase of Shares by Party A
during any Unwind Period comply with the requirements of Rule
10b5-1(c)(1)(i)(B) of the Exchange Act and that this Confirmation
shall be interpreted to comply with the requirements of Rule
10b5-1(c).
Party B acknowledges that (i) during any Unwind Period Party B does
not have, and shall not attempt to exercise, any influence over how,
when or whether to effect purchases of Shares by Party A (or its
agent or affiliate) in connection with this Confirmation and (ii)
Party B is entering into the Agreement and this Confirmation in good
faith and not as part of a plan or scheme to evade compliance with
federal securities laws including, without limitation, Rule 10b-5
promulgated under the Exchange Act.
Party B hereby agrees with Party A that during any Unwind Period
Party B shall not communicate, directly or indirectly, any Material
Non-Public Information (as defined herein) to any EDG Personnel (as
defined below). For purposes of this Transaction, "Material
Non-Public Information" means information relating to Party B or the
Shares that (a) has not been widely disseminated by wire service, in
one or more newspapers of general circulation, by communication from
Party B to its shareholders or in a press release, or contained in a
public filing made by Party B with the Securities and Exchange
Commission and (b) a reasonable investor might consider to be of
importance in making an investment decision to buy, sell or hold
Shares. For the avoidance of doubt and solely by way of
illustration, information should be presumed "material" if it
relates to such matters as dividend increases or decreases, earnings
estimates, changes in previously released earnings estimates,
significant expansion or curtailment of operations, a significant
increase or decline of orders, significant merger or acquisition
proposals or agreements, significant new products or discoveries,
extraordinary borrowing, major litigation, liquidity problems,
extraordinary management developments, purchase or sale of
substantial assets, or other similar information. For purposes of
this Transaction, "EDG Personnel" means any employee on the trading
side of the Equity Derivatives Group of UBS Securities and does not
include Adam Frieman, Dmitriy Mandel, Akshay Mansukhani, Paul
Stowell, Xi Huang or Gordon Kiesling (or any other person or persons
designated from time to time by the respective Compliance Groups of
Party A).
Maximum Share Delivery:
Notwithstanding any other provision of this Confirmation, in no
event will Party B be required to deliver on any Settlement Date,
whether pursuant to Physical Settlement, Termination Settlement or
any Private Placement Settlement, more than 6,000,000 Shares to
Party A, subject to reduction by the amount of any Shares delivered
by Party B on any prior Settlement Date.
Market Disruption Event:
Section 6.3(a) of the 2002 Definitions is amended by deleting the
words "at any time during the one hour period that ends at the
relevant Valuation Time, Latest Exercise Time, Knock-in Valuation
Time or Knock-out Valuation Time, as the case may be,".
Assignment:
11
Party A may assign or transfer any of its rights or delegate
any of its duties hereunder to any affiliate of Party A or any
entity organized or sponsored by Party A without the prior
written consent of Party B. Notwithstanding any other
provision of this Confirmation to the contrary requiring or
allowing Party A to purchase or receive any Shares from Party
B, Party A may designate any of its affiliates to purchase or
receive such Shares or otherwise to perform Party A's
obligations in respect of this Transaction and any such
designee may assume such obligations, and Party A shall be
discharged of its obligations to Party B solely to the extent
of any such performance.
Matters Relating to Agent:
Each party agrees and acknowledges that (i) UBS Securities, as
agent, (the "Agent") acts solely as agent on a disclosed basis
with respect to the transactions contemplated hereunder, and
(ii) the Agent has no obligation, by guaranty, endorsement or
otherwise, with respect to the obligations of either Party B
or Party A hereunder, either with respect to the delivery of
cash or Shares, either at the beginning or the end of the
transactions contemplated hereby. In this regard, each of
Party A and Party B acknowledges and agrees to look solely to
the other for performance hereunder, and not to the Agent.
Indemnity
Party B agrees to indemnify Party A and its affiliates and
their respective directors, officers, agents and controlling
parties (Party A and each such affiliate or person being an
"Indemnified Party") from and against any and all losses,
claims, damages and liabilities incurred by or asserted
against such Indemnified Party arising out of, in connection
with, or relating to, any breach of any covenant or
representation made by Party B in this Confirmation or the
Agreement, the consummation of the transactions contemplated
hereby or any breach of the Articles of Incorporation, and
will reimburse any Indemnified Party for all reasonable
expenses (including reasonable legal fees and expenses) as
they are incurred in connection with the investigation of,
preparation for, or defense of any pending or threatened claim
or any action or proceeding arising therefrom, whether or not
such Indemnified Party is a party thereto. Party B will not be
liable under this Indemnity paragraph to the extent that any
loss, claim, damage, liability or expense is found in a
judgment by a court to have resulted from Party A's gross
negligence, willful misconduct or breach of any representation
or covenant of Party A contained in this Confirmation of the
Agreement.
Notice
Non-Reliance: Applicable
Additional Acknowledgments: Applicable
Agreements and Acknowledgments
Regarding Hedging Activities: Applicable
4. The Agreement is further supplemented by the following provisions:
No Collateral or Setoff.:
Notwithstanding Section 6(f) or any other provision of the
Agreement or any other agreement between the parties to the
contrary, the obligations of Party B hereunder are not secured
by any collateral. Obligations under this Transaction shall
not be set off against any other obligations of
12
the parties, whether arising under the Agreement, this
Confirmation, under any other agreement between the parties
hereto, by operation of law or otherwise, and no other
obligations of the parties shall be set off against
obligations under this Transaction, whether arising under the
Agreement, this Confirmation, under any other agreement
between the parties hereto, by operation of law or otherwise,
and each party hereby waives any such right of setoff. In
calculating any amounts under Section 6(e) of the Agreement,
notwithstanding anything to the contrary in the Agreement, (a)
separate amounts shall be calculated as set forth in such
Section 6(e) with respect to (i) this Transaction and (ii) all
other Transactions, and (b) such separate amounts shall be
payable pursuant to Section 6(d)(ii) of the Agreement.
Status of Claims in Bankruptcy:
Party A acknowledges and agrees that this confirmation is not
intended to convey to Party A rights with respect to the
transactions contemplated hereby that are senior to the claims
of common stockholders in any U.S. bankruptcy proceedings of
Party B; provided, however, that nothing herein shall limit or
shall be deemed to limit Party A's right to pursue remedies in
the event of a breach by Party B of its obligations and
agreements with respect to this Confirmation and the
Agreement; and provided further, that nothing herein shall
limit or shall be deemed to limit Party A's rights in respect
of any transaction other than the Transaction.
Limit on Beneficial Ownership:
Notwithstanding any other provisions hereof, Party A shall not
be entitled to receive Shares or any other class of voting
securities of the Issuer hereunder (whether in connection with
the purchase of Shares on any Settlement Date or any
Termination Settlement Date, any Private Placement Settlement
or otherwise) to the extent (but only to the extent) that such
receipt would result in UBS AG or any of its affiliates or
associates directly or indirectly beneficially owning (as such
term is defined for purposes of Section 13(d) of the Exchange
Act) at any time in excess of 4.5% of the outstanding Shares
or any other class of voting securities of the Issuer. Any
purported delivery hereunder shall be void and have no effect
to the extent (but only to the extent) that such delivery
would result in UBS AG or any of its affiliates or associates
directly or indirectly so beneficially owning in excess of
4.5% of the outstanding Shares or any other class of voting
securities of the Issuer. If any delivery owed to Party A
hereunder is not made, in whole or in part, as a result of
this provision, Party B's obligation to make such delivery
shall not be extinguished and Party B shall make such delivery
as promptly as practicable after, but in no event later than
one Clearance System Business Day after, Party A gives notice
to Party B that such delivery would not result in UBS AG or
any of its affiliates or associates directly or indirectly so
beneficially owning in excess of 4.5% of the outstanding
Shares or any other class of voting securities of the Issuer.
Miscellaneous:
(a) Addresses for Notices. For the purpose of Section 12(a) of
the Agreement:
Address for notices or communications to Party A:
Address: UBS AG, London Branch
c/o UBS Securities LLC
299 Park Avenue
New York, New York 10171
Attention: Equity Derivatives Group
Telephone No.: (212) 821-2100
Facsimile No.: (212) 821-7031
13
With a copy to:
Address: Equities Legal Department
677 Washington Boulevard
Stamford, CT 06901
Attention: David Kelly and Gordon Kiesling
Telephone No.: (203) 719-0268
Facsimile No.: (203) 719-5627
Address for notices or communications to Party B:
Address: Medical Properties Trust, Inc.
1000 Urban Center Drive, Suite 501
Birmingham, Alabama 35242
Attention: Charles Lambert
Telephone No.: (205) 969-3755
Facsimile No.: (205) 969-3756
(b) WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
SUIT, ACTION OR PROCEEDING RELATING TO THIS
CONFIRMATION. Each party (i) certifies that no
representative, agent or attorney of the other party has
represented, expressly or otherwise, that such other
party would not, in the event of such a suit action or
proceeding, seek to enforce the foregoing waiver and
(ii) acknowledges that it and the other party have been
induced to enter into this Confirmation by, among other
things, the mutual waivers and certifications herein.
(c) London Branch. Party A is entering into this
Confirmation and the Agreement through its London
branch. Notwithstanding the foregoing, Party A
represents to Party B that the obligations of Party A
are the same as if it had entered into this Confirmation
and the Agreement through its head or home office in New
York.
Acknowledgments.
The parties hereto intend for:
(a) this Transaction to be a "securities contract" as
defined in Section 741(7) of Title 11 of the United
States Code (the "Bankruptcy Code"), qualifying for the
protections under Section 555 of the Bankruptcy Code;
(b) a party's right to liquidate this Transaction and to
exercise any other remedies upon the occurrence of any
Event of Default under the Agreement with respect to the
other party to constitute a "contractual right" as
defined in the Bankruptcy Code;
(c) Party A to be a "financial institution" within the
meaning of Section 101(22) of the Bankruptcy Code; and
(d) all payments for, under or in connection with this
Transaction, all payments for the Shares and the
transfer of such Shares to constitute "settlement
payments" as defined in the Bankruptcy Code.
14
Severability.
If any term, provision, covenant or condition of this
Confirmation, or the application thereof to any party or
circumstance, shall be held to be invalid or unenforceable in
whole or in part for any reason, the remaining terms,
provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Confirmation had been
executed with the invalid or unenforceable provision
eliminated, so long as this Confirmation as so modified
continues to express, without material change, the original
intentions of the parties as to the subject matter of this
Confirmation and the deletion of such portion of this
Confirmation will not substantially impair the respective
benefits or expectations of parties to this Agreement;
provided, however, that this severability provision shall not
be applicable if any provision of Section 2, 5, 6 or 13 of the
Agreement (or any definition or provision in Section 14 to the
extent that it relates to, or is used in or in connection with
any such Section) shall be so held to be invalid or
unenforceable.
[Remainder of page intentionally left blank]
15
Please confirm that the foregoing correctly sets forth the terms of our
agreement by signing and returning this Confirmation.
Very truly yours,
UBS SECURITIES LLC, UBS AG, LONDON BRANCH
acting solely in its capacity as Agent By: UBS Securities LLC,
of UBS AG, London Branch acting solely in its capacity
as its Agent
By: /s/ Adam Frieman By: /s/ Adam Frieman
Name: Adam Frieman Name: Adam Frieman
Title: Managing Director Title: Managing Director
By: /s/ Dimitry Mandel By: /s/ Dimitry Mandel
Name: Dimitry Mandel Name: Dimitry Mandel
Title: Executive Director Title: Executive Director
Accepted and confirmed as
of the date first above written:
MEDICAL PROPERTIES TRUST, INC.
By: /s/ R. Steven Hamner
Name: R. Steven Hamner
Title: Executive Vice President & CFO
SCHEDULE I
Forward Price Forward Price
Reduction Date Reduction Amount
- -------------- ----------------
March 29, 2007 $0.27
June 14, 2007 $0.28
September 14, 2007 $0.31
December 13, 2007 $0.32
ANNEX A
PRIVATE PLACEMENT PROCEDURES
(i) If Party B delivers the Restricted Shares pursuant to this clause (i) (a
"Private Placement Settlement"), then delivery of Restricted Shares by
Party B shall be effected in customary private placement procedures with
respect to such Restricted Shares reasonably acceptable to Party A;
provided that if , on or before the date that a Private Placement
Settlement would occur, Party B has taken, or caused to be taken, any
action that would make unavailable either the exemption pursuant to
Section 4(2) of the Securities Act for the sale by Party B to Party A (or
any affiliate designated by Party A) of the Restricted Shares or the
exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act
for resales of the Restricted Shares by Party A (or any such affiliate of
Party A) or Party B fails to deliver the Restricted Shares when due or
otherwise fails to perform obligations within its control in respect of a
Private Placement Settlement, it shall be an Event of Default with respect
to Party B and Section 6 of the Agreement shall apply. The Private
Placement Settlement of such Restricted Shares shall include customary
representations, covenants, blue sky and other governmental filings and/or
registrations, indemnities to Party A, due diligence rights (for Party A
or any designated buyer of the Restricted Shares by Party A), opinions and
certificates, and such other documentation as is customary for private
placement agreements, all reasonably acceptable to Party A. In the case of
a Private Placement Settlement, Party A shall, in its good faith
discretion, adjust the amount of Restricted Shares to be delivered to
Party A hereunder in a commercially reasonable manner to reflect the fact
that such Restricted Shares may not be freely returned to securities
lenders by Party A and may only be saleable by Party A at a discount to
reflect the lack of liquidity in Restricted Shares. Notwithstanding the
Agreement or this Confirmation, the date of delivery of such Restricted
Shares shall be the Clearance System Business Day following notice by
Party A to Party B of the number of Restricted Shares to be delivered
pursuant to this clause (i). For the avoidance of doubt, delivery of
Restricted Shares shall be due as set forth in the previous sentence and
not be due on the Settlement Date or Termination Settlement Date that
would otherwise be applicable.
(ii) If Party B delivers any Restricted Shares in respect of the Transaction,
Party B agrees that (i) such Shares may be transferred by and among UBS AG
and its affiliates and (ii) after the minimum "holding period" within the
meaning of Rule 144(d) under the Securities Act has elapsed after the
applicable Settlement Date, Party B shall promptly remove, or cause the
transfer agent for the Shares to remove, any legends referring to any
transfer restrictions from such Shares upon delivery by Party A (or such
affiliate of Party A) to Party B or such transfer agent of seller's and
broker's representation letters customarily delivered by Party A or its
affiliates in connection with resales of restricted securities pursuant to
Rule 144 under the Securities Act, each without any further requirement
for the delivery of any certificate, consent, agreement, opinion of
counsel, notice or any other document, any transfer tax stamps or payment
of any other amount or any other action by Party A (or such affiliate of
Party A).