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EXHIBIT 4.2
5 1/2% CONVERTIBLE SUBORDINATED NOTES DUE 2002
REGISTRATION RIGHTS AGREEMENT
DATED AS OF JUNE 6, 1997
BY AND AMONG
SUNRISE ASSISTED LIVING, INC.
AS THE COMPANY,
AND
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
AND
ALEX. ▇▇▇▇▇ & SONS
INCORPORATED
AS THE INITIAL PURCHASERS
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made and entered into as
of June 6, 1997, by and among Sunrise Assisted Living, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities
Corporation and Alex. ▇▇▇▇▇ & Sons Incorporated (collectively, the "Initial
Purchasers").
This Agreement is made pursuant to the Purchase Agreement,
dated June 2, 1997, among the Company and the Initial Purchasers (the "Purchase
Agreement"). In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
contained in this Agreement to the Initial Purchasers and to their respective
direct and indirect transferees. The execution of this Agreement is a
condition to the closing of the transactions contemplated by the Purchase
Agreement.
The parties hereby agree as follows:
I. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Advice: As defined in the last paragraph of Section 4 hereof.
Affiliate of any specified person shall mean any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this
definition, "control," when used with respect to any person, means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise
and the terms "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.
Agreement: This Registration Rights Agreement, as the same
may be amended, supplemented or modified from time to time in accordance with
the terms hereof.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
Closing Date: The Closing Date as defined in the Purchase
Agreement.
Common Stock: Common Stock, $.01 par value per share, of the
Company.
Company: Sunrise Assisted Living, Inc., a Delaware
corporation, and any successor corporation thereto.
controlling person: As defined in Section 6(a) hereof.
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Damage Payment Date: Each of the semi-annual interest payment
dates provided in the Indenture.
Effectiveness Period: As defined in Section 2(a) hereof.
Effectiveness Target Date: The 180th day following the
Closing Date.
Exchange Act: The Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC pursuant thereto.
Filing Date: The 90th day after the Closing Date.
Holder: Each registered holder of any Transfer Restricted
Securities.
Indemnified Person: As defined in Section 6(a) hereof.
Indenture: The Indenture, dated the date hereof, between the
Company and the Trustee thereunder, pursuant to which the Notes are being
issued, as amended, modified or supplemented from time to time in accordance
with the terms thereof.
Initial Purchasers: As defined in the preamble hereof.
Liquidated Damages: As defined in Section 3(a) hereof.
Notes: Up to $150,000,000 aggregate principal amount of 5
1/2% Convertible Subordinated Notes due 2002 of the Company being issued (or
authorized to be issued) pursuant to the Indenture.
Paying Agent: As defined in the Indenture.
Proceeding: An action, claim, suit or proceeding (including,
without limitation, an investigation or partial proceeding, such as a
deposition), whether commenced or threatened.
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated pursuant to the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Transfer Restricted
Securities covered by such Registration Statement, and all other amendments and
supplements to any such prospectus, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by
reference, if any, in such prospectus.
Registration Default: As defined in Section 3(a) hereof.
Registration Statement: Any registration statement of the
Company that covers any of the Transfer Restricted Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference, if any, in such
registration statement.
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Rule 144: Rule 144 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 144A: Rule 144A promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 158: Rule 158 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 174: Rule 174 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 415: Rule 415 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 424: Rule 424 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
Shelf Registration Statement: As defined in Section 2 hereof.
Special Counsel: Any special counsel to the holders of
Transfer Restricted Securities, for which holders of Transfer Restricted
Securities will be reimbursed pursuant to Section 5 hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Transfer Restricted Securities: The Notes and the shares of
Common Stock into which the Notes are convertible, upon original issuance
thereof, and at all times subsequent thereto, until, in the case of any such
Note or share, the earliest of (i) the date on which it has been registered
effectively pursuant to the Securities Act and disposed of in accordance with
the Registration Statement relating to it, (ii) the date on which either such
Note or the shares of Common Stock issued upon conversion of such Note are
distributed to the public pursuant to Rule 144 (or any similar provisions then
in effect) or are salable pursuant to Rule 144(k) promulgated by the SEC
pursuant to the Securities Act or (iii) the date on which it ceases to be
outstanding.
Trustee: First Union National Bank, the trustee under the
Indenture.
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underwritten registration or underwritten offering: A
registration in connection with which securities of the Company are sold to an
underwriter for reoffering to the public pursuant to an effective Registration
Statement.
2. Shelf Registration
(a) The Company agrees to file with the SEC as promptly
as practicable after the Closing Date, but in no event later than the Filing
Date, a Registration Statement for an offering to be made on a continuous basis
pursuant to Rule 415 covering all of the Transfer Restricted Securities (the
"Shelf Registration Statement"). The Shelf Registration Statement shall be on
Form S-3 under the Securities Act or another appropriate form permitting
registration of such Transfer Restricted Securities for resale by the Holders
in the manner or manners reasonably designated by them (including, without
limitation, one or more underwritten offerings). The Company shall use all
reasonable efforts, as described in Section 4, to cause the Shelf Registration
Statement to be declared effective pursuant to the Securities Act as promptly
as practicable following the filing thereof, but in no event later than the
Effectiveness Target Date, and to keep the Shelf Registration Statement
continuously effective under the Securities Act for 24 months after the Closing
Date (the "Effectiveness Period"), or such shorter period ending when either
(1) all Transfer Restricted Securities covered by the Shelf Registration
Statement have been sold in the manner set forth in the Shelf Registration
Statement or (2) there cease to be outstanding any Transfer Restricted
Securities.
(b) Supplements and Amendments. The Company shall use
all reasonable efforts to keep the Shelf Registration Statement continuously
effective by supplementing and amending the Shelf Registration Statement if
required by the rules, regulations or instructions applicable to the
registration form used for such Shelf Registration Statement, if required by
the Securities Act, or if reasonably requested by the holders of a majority of
the Transfer Restricted Securities (on a fully converted basis) covered by such
Shelf Registration Statement or by any underwriter of such Transfer Restricted
Securities.
(c) Suspension of Shelf Registration Statement.
Notwithstanding anything to the contrary in this Section 2, but subject to
compliance with Section 3, the Company may, by delivering written notice to the
Holders, prohibit offers and sales of Transfer Restricted Securities pursuant
to the Shelf Registration Statement at any time if (A) (i) The Company is in
possession of material non-public information, (ii) the Company determines
(based on advice of counsel) that such prohibition is necessary in order to
avoid a requirement to disclose such material non-public information and (iii)
the Company determines in good faith that disclosure of such material
non-public information would not be in the best interests of the Company and
its stockholders or (B) (i) the Company has made a public announcement relating
to an acquisition or business combination transaction including the Company
and/or one or more of its subsidiaries that is material to the Company and its
subsidiaries taken as a whole and (ii) the Company determines in good faith
that (x) offers and sales of Transfer Restricted Securities pursuant to the
Shelf Registration Statement prior to the consummation of such transaction (or
such earlier date as the Company shall determine) is not in the best interests
of the Company and its stockholders or (y) that it would be impracticable at
the time to obtain any financial statements relating to such acquisition or
business combination transaction that would be required to be set forth in the
Shelf Registration Statement; provided, however, that upon (i) the public
disclosure by the Company of the material non-public information described in
clause (A) of this paragraph or (ii) the abandonment or termination of, or the
availability of the required financial statements with respect
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to, a transaction described in clause (B) of this paragraph, the suspension of
the use of the Shelf Registration Statement pursuant to this Section 2(c) shall
cease and the Company shall promptly comply with Section 4(b) hereof.
3. Liquidated Damages
(a) The Company and the Initial Purchasers agree that the
Holders of Transfer Restricted Securities will suffer damages if the Company
fails to fulfill its obligations pursuant to Section 2 and Section 4(b) hereof
and that it would not be possible to ascertain the extent of such damages.
Accordingly, in the event of such failure by the Company to fulfill such
obligations, the Company hereby agrees to pay liquidated damages ("Liquidated
Damages") to each Holder of Transfer Restricted Securities under the
circumstances and to the extent set forth below:
(i) if the Shelf Registration Statement has not
been filed with the SEC on or prior to the Filing Date; or
(ii) if the Shelf Registration Statement is not
declared effective by the SEC on or prior to the Effectiveness
Target Date; or
(iii) the Shelf Registration Statement has been
declared effective by the SEC and thereafter ceases to be
effective or the Prospectus contained therein ceases to be
usable (including as a result of a suspension of the use of
the Shelf Registration Statement as described in Section 2(c)
hereof) for a period of time that exceeds 90 days in any
period of 365 consecutive days.
(any of the foregoing, a "Registration Default") then the Company shall pay
Liquidated Damages to each Holder of Transfer Restricted Securities during the
first 90-day period immediately following the occurrence of such Registration
Default in an amount equal to $.05 per week per $1,000 principal amount of
Notes and, if applicable, $.00186 per week per share (subject to adjustment in
the event of stock splits, stock recombinations, stock dividends and the like)
of Common Stock constituting Transfer Restricted Securities held by such Holder
for each week or portion thereof that the Registration Default continues. The
amount of such Liquidated Damages will increase by an additional $.05 per week
per $1,000 principal amount of Notes and, if applicable, by $.00186 per week
per share (subject to adjustment as set forth above) of Common Stock
constituting Transfer Restricted Securities for each subsequent 90-day period
until all Registration Defaults have been cured; provided, however, that
Liquidated Damages shall not at any time exceed $.25 per week per $1,000
principal amount of Notes or, if applicable, $.0093 per week per share (subject
to adjustment as set forth above) of Common Stock constituting Transfer
Restricted Securities. Following the cure of all Registration Defaults
relating to any Transfer Restricted Securities, the accrual of Liquidated
Damages with respect to such Transfer Restricted Securities will cease. A
Registration Default under clause (i) above shall be cured on the date that the
Shelf Registration Statement is filed with the SEC; a Registration Default
under clause (ii) above shall be cured on the date that the Shelf Registration
Statement is declared effective by the SEC; and a Registration Default under
clause (iii) above shall be cured on the date the Shelf Registration Statement
is declared effective or the Prospectus contained therein again becomes usable.
(b) The Company shall notify the Trustee within one
Business Day after each and every date on which a Registration Default occurs.
On each Damage Payment Date,
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Liquidated Damages shall be paid by the Company to the Holders of Transfer
Restricted Securities as of the immediately preceding Interest Record Date (as
defined in the Indenture) specified in the Indenture in the same manner
interest is paid to Holders of Notes pursuant to the Indenture. Each
obligation to pay Liquidated Damages shall be deemed to commence accruing on
the date of the applicable Registration Default and to cease accruing when all
Registration Defaults have been cured. In no event shall the Company pay
Liquidated Damages in excess of the applicable maximum weekly amount set forth
above, regardless of whether one or multiple Registration Defaults exist (e.g.,
subject to increase as set forth above for each subsequent 90-day period,
Liquidated Damages shall equal $.05 per week per $1,000 principal amount of
Notes during the first 90-day period immediately following the occurrence of
the first Registration Default regardless of whether additional Registration
Defaults occur during such 90-day period).
4. Registration Procedures
In connection with the Company's registration obligations
pursuant to Section 2 above, the Company shall as expeditiously as possible:
(a) No fewer than five Business Days prior to the initial
filing of a Registration Statement or Prospectus and no fewer than two Business
Days prior to the filing of any amendment or supplement thereto (other than any
document that would be incorporated or deemed to be incorporated therein by
reference), furnish to the Holders of the Transfer Restricted Securities, their
Special Counsel and the managing underwriters, if any, copies of all such
documents proposed to be filed, which documents (other than those incorporated
or deemed to be incorporated by reference) will be subject to the review of
such Holders, their Special Counsel and such underwriters, if any, and cause
the officers and directors of the Company, counsel to the Company and
independent certified public accountants to the Company to respond to such
inquiries as shall be necessary in connection with such Registration Statement,
in the reasonable opinion of Special Counsel and such underwriters, to conduct
a reasonable investigation within the meaning of the Securities Act.. The
Company shall not file any such Registration Statement or related Prospectus or
any amendments or supplements thereto (other than any document that would be
incorporated or deemed to be incorporated in the Registration Statement by
reference) to which the Holders of a majority of the Transfer Restricted
Securities, their Special Counsel, or the managing underwriters, if any, shall
reasonably object on a timely basis; provided, that the Company may assume, for
the purposes of this subparagraph (a), that objections to the inclusion of
information specifically requested to be included in the Registration Statement
by the staff of the SEC, or in the opinion of counsel to the Company required
to be in the Registration Statement, or specifically required by the Securities
Act or other applicable law, shall not be deemed to be reasonable.
(b) Prepare and file with the SEC such amendments,
including post-effective amendments, to each Registration Statement as may be
necessary, subject to Section 2(c) hereof, to keep such Registration Statement
continuously effective for the applicable time period; cause, subject to
Section 2(c) hereof, the Prospectus and any document incorporated or deemed to
be incorporated therein by reference to be supplemented or amended, and file,
subject to Section 2(c) hereof, any other required document so that, as
thereafter delivered such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and comply with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Transfer Restricted Securities covered by such
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Registration Statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such Registration
Statement as so amended or in such Prospectus as so supplemented;
(c) Notify the Holders of Transfer Restricted Securities
to be sold or their Special Counsel and the managing underwriters, if any,
promptly (and in the case of an event specified by clause (i)(A) of this
paragraph in no event fewer than two Business Days prior to such filing), and
(if requested by any such person), confirm such notice in writing, (i)(A) when
a Prospectus or any Prospectus supplement or post-effective amendment is
proposed to be filed, and, (B) with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the SEC or any other Federal or state governmental authority for
amendments or supplements to a Registration Statement or related Prospectus or
for additional information, (iii) of the issuance by the SEC, any state
securities commission, any other governmental agency or any court of any stop
order, order or injunction suspending or enjoining the use or the effectiveness
of a Registration Statement or the initiation of any proceedings for that
purpose, (iv) if at any time any of the representations and warranties of the
Company contained in any agreement (including any underwriting agreement)
contemplated by Section 4(l) hereof cease to be true and correct in all
material respects, (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of any of the Transfer Restricted Securities for sale in any jurisdiction, or
the initiation or threatening of any Proceeding for such purpose, and (vi) of
the happening of any event that makes any statement made in such Registration
Statement or related Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires the making of any changes in such Registration Statement, Prospectus
or documents so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and that, in the case of the Prospectus, it will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(d) Use all reasonable efforts to avoid the issuance of,
or, if issued, obtain the withdrawal of any order enjoining or suspending the
use or effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Transfer Restricted Securities for sale in any jurisdiction, at the earliest
practicable moment;
(e) If requested by the managing underwriters, if any, or
the Holders of a majority of the Transfer Restricted Securities (on a fully
converted basis) being sold in connection with such offering, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriters, if any, and such Holders reasonable
request should be included therein relating to the terms of the sale of the
Transfer Restricted Securities of such Holder in the Prospectus, and (ii) make
all required filings of such Prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received notification of
the matters to be incorporated in such Prospectus supplement or post-effective
amendment; provided, however, that the Company shall not be required to take
any action pursuant to this Section 4(e) that would, in the opinion of counsel
for the Company, violate applicable law;
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(f) Furnish to each Holder of Transfer Restricted
Securities, their Special Counsel and each managing underwriter, if any,
without charge, at least one conformed copy of each Registration Statement and
each amendment thereto, including financial statements (but excluding
schedules, all documents incorporated or deemed to be incorporated therein by
reference and all exhibits, unless requested in writing by such Holder, counsel
or managing underwriter);
(g) Deliver to each Holder of Transfer Restricted
Securities, their Special Counsel, and the underwriters, if any, without
charge, as many copies of the Prospectus or Prospectuses and each amendment or
supplement thereto as such persons reasonably request; and the Company hereby
consents, subject to Section 4(p) hereof, to the use of such Prospectus and
each amendment or supplement thereto by each of the selling Holders of Transfer
Restricted Securities and the underwriters, if any, in connection with the
offering and sale of the Transfer Restricted Securities covered by such
Prospectus and any amendment or supplement thereto;
(h) Prior to any public offering of Transfer Restricted
Securities, use all reasonable efforts to register or qualify or cooperate with
the Holders of Transfer Restricted Securities to be sold, the underwriters, if
any, and their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Transfer Restricted Securities for offer and sale under the securities or Blue
Sky laws of such jurisdictions within the United States as any Holder or
underwriter reasonably requests in writing; keep each such registration or
qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and all
other acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the applicable
Registration Statement; provided, however, that the Company shall 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 in any such jurisdiction where it is not then so subject or
subject the Company to any tax in any such jurisdiction where it is not then so
subject;
(i) In connection with any sale or transfer of Transfer
Restricted Securities that will result in such securities no longer being
Transfer Restricted Securities, cooperate with the Holders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Securities to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company and to enable such
Transfer Restricted Securities to be in such denominations and registered in
such names as the managing underwriters, if any, or Holders may request at
least two Business Days prior to any sale of Transfer Restricted Securities;
(j) Use all reasonable efforts to cause the offering of
the Transfer Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or authorities
within the United States as may require such registration or approval, except
as may be required as a consequence of the nature of such selling Holder's
business, in which case the Company will cooperate in all reasonable respects
with the filing of such Registration Statement and the granting of such
approvals as may be necessary to enable the seller or sellers thereof or the
underwriters, if any, to consummate the disposition of such Transfer Restricted
Securities; provided, however, that the Company shall not be required to
register the Transfer Restricted Securities in any jurisdiction that would
subject it to general service of process in any
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such jurisdiction where it is not then so subject or subject the Company to any
tax in any such jurisdiction where it is not then so subject or to require the
Company to qualify to do business in any jurisdiction where it is not then so
qualified;
(k) Prior to the effective date of the first Registration
Statement relating to the Transfer Restricted Securities, provide a CUSIP
number for the Transfer Restricted Securities;
(l) Enter into such agreements (including an underwriting
agreement in form, scope and substance as is customary in underwritten
offerings) and take all such other reasonable actions in connection therewith
(including those reasonably requested by the managing underwriters, if any, or
the Holders of a majority of the Transfer Restricted Securities (on a fully
converted basis) being sold) in order to expedite or facilitate the disposition
of such Transfer Restricted Securities, and in such connection, if an
underwriting agreement is entered into, (i) make such representations and
warranties to the underwriters, if any, with respect to the business of the
Company and its subsidiaries (including with respect to businesses or assets
acquired or to be acquired by any of them), and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, in form, substance and scope as are
customarily made by issuers to underwriters in underwritten offerings, and
confirm the same if and when requested; (ii) obtain opinions of counsel to the
Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing underwriters, if
any), addressed to each of the underwriters, if any, covering the matters
customarily covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by such Special Counsel and
underwriters; (iii) use all reasonable efforts to obtain customary "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data is, or is
required to be, included in the Registration Statement), addressed (where
reasonably possible) to the selling Holders of Transfer Restricted Securities
and each of the underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings; (iv) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and procedures
no less favorable to the selling Holders of Transfer Restricted Securities and
the underwriters, if any, than those set forth in Section 6 hereof (or such
other provisions and procedures acceptable to Holders of a majority of the
Transfer Restricted Securities (on a fully converted basis) covered by such
Registration Statement and the managing underwriters); and (v) deliver such
documents and certificates as may be reasonably requested by the managing
underwriters, if any, to evidence the continued validity of the representations
and warranties made pursuant to clause (i) of this Section 4(l) and to evidence
compliance with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company;
(m) Make available for inspection by a representative of
the Holders of not less than 50% of the Transfer Restricted Securities (on a
fully-converted basis) being sold, any underwriter participating in any such
disposition of Transfer Restricted Securities, if any, and any Special Counsel,
consultant or accountant retained by such selling Holders or underwriter, at
the offices where normally kept, during reasonable business hours, all
financial and other records, pertinent corporate documents and properties of
the Company and its subsidiaries as they may reasonably request (including with
respect to business and assets acquired or to be acquired to the extent that
such information is available to the Company), and cause the officers,
directors, agents and employees of the Company and its subsidiaries (including
with respect to business and assets
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acquired or to be acquired to the extent that such information is available to
the Company) to supply all information in each case reasonably requested by any
such representative, underwriter, attorney, consultant or accountant in
connection with such Registration Statement, provided, however, that such
persons shall first agree in writing with the Company that any information that
is reasonably and in good faith designated by the Company in writing as
confidential at the time of delivery of such information shall be kept
confidential by such persons, unless (i) disclosure of such information is
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure of such information is
required by law (including any disclosure requirements pursuant to Federal
securities laws in connection with the filing of any Registration Statement or
the use of any Prospectus), (iii) such information becomes generally available
to the public other than as a result of a disclosure or failure to safeguard by
any such person or (iv) such information becomes available to any such person
from a source other than the Company and such source is not bound by a
confidentiality agreement;
(n) Cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement relating to
the Transfer Restricted Securities; and in connection therewith, cooperate with
the trustee under the Indenture and the holders of the Transfer Restricted
Securities to effect such changes to the Indenture as may be required for such
Indenture to be so qualified in accordance with the terms of the TIA; and
execute, and use all reasonable efforts to cause such trustee to execute, all
customary documents as may be required to effect such changes, and all other
forms and documents required to be filed with the SEC to enable the Indenture
to be so qualified in a timely manner;
(o) Make generally available to its security holders
earning statements satisfying the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder, no later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in which
Transfer Restricted Securities are sold to underwriters in a firm commitment or
reasonable efforts underwritten offering and (ii) if not sold to underwriters
in such an offering, commencing on the first day of the first fiscal quarter
after the effective date of a Registration Statement, which statement shall
cover said period, consistent with the requirements of Rule 158; and
(p) concurrently with the effectiveness of the first
Registration Statement (i) list all Notes and Common Stock covered by such
Registration Statement on any securities exchange on which the Common Stock is
then listed or (ii) authorize for quotation the Notes on the Nasdaq Small Cap
Market and the Common Stock covered by such Registration Statement on the
Nasdaq National Market if the Common Stock is then so authorized for quotation.
The Company may require each seller of Transfer Restricted
Securities as to which any registration is being effected to furnish to the
Company such information regarding the distribution of such Transfer Restricted
Securities as is required by law to be disclosed in the applicable Registration
Statement and the Company may exclude from such registration the Transfer
Restricted Securities of any seller who unreasonably fails to furnish such
information within a reasonable time after receiving such request. Each Seller
of Transfer Restricted Securities will furnish to the Company information
concerning sales made pursuant to the Registration Statement. Each such Holder
agrees, by the acquisition of Transfer Restricted Securities, and agrees to
confirm such agreement in writing upon request of the Company, to notify the
Company as promptly as practicable of any inaccuracy or change in information
previously furnished by such Holder to the Company or of the occurrence of any
event as a result
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of which any Prospectus relating to such registration contains or would contain
an untrue statement of material fact regarding such Holder or such Holder's
intended method of distribution of such Transfer Restricted Securities, or
omits to state any material fact regarding such Holder or such Holder's
intended method of distribution of such Transfer Restricted Securities, or
omits to state any material fact regarding such Holder or such Holder's
intended method of distribution of such Transfer Restricted Securities,
necessary to make the statement therein, in light of the circumstances then
existing, not misleading and promptly to furnish to the Company any additional
information required to correct and update any previously furnished information
or required so that such Prospectus shall not contain, with respect to such
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances then existing, not
misleading.
If any such Registration Statement refers to any Holder by
name or otherwise as the holder of any securities of the Company, then such
Holder shall have the right to require (i) the insertion therein of language,
in form and substance reasonably satisfactory to such Holder, to the effect
that the holding by such Holder of such securities is not to be construed as a
recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such
Holder will assist in meeting any future financial requirements of the Company,
or (ii) in the event that such reference to such Holder by name or otherwise is
not required by the Securities Act or any similar Federal statute then in
force, the deletion of the reference to such Holder in any amendment or
supplement to the Registration Statement filed or prepared subsequent to the
time that such reference ceases to be required.
Each Holder of Transfer Restricted Securities agrees by
acquisition of such Transfer Restricted Securities that, upon receipt of any
notice from the Company pursuant to Section 2(c) hereof or of the happening of
any event of the kind described in Section 4(c)(ii), 4(c)(iii), 4(c)(v) or
4(c)(vi) hereof, such Holder will forthwith discontinue disposition of such
Transfer Restricted Securities covered by such Registration Statement or
Prospectus until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 4(b) hereof, or until it is advised
in writing (the "Advice") by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus and, if so directed by the
Company, such Holder will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such Holder's possession of
the Prospectus covering such Transfer Restricted Securities at the time of
receipt of such notice.
5. Registration Expenses
(a) All fees and expenses incident to the performance of
or compliance with this Agreement by the Company shall be borne by it whether
or not any Registration Statement is filed or becomes effective and whether or
not any securities are issued or sold pursuant to any Registration Statement.
The fees and expenses referred to in the foregoing sentence shall include,
without limitation, (i) all registration and filing fees (including, without
limitation, fees and expenses (A) with respect to filings required to be made
with the National Association of Securities Dealers, Inc., (B) in compliance
with securities or Blue Sky laws (including, without limitation and in addition
to that provided for in (b) below, reasonable fees and disbursements of counsel
for the underwriters or Special Counsel for the Holders in connection with Blue
Sky qualifications of the Transfer Restricted Securities and determination of
the eligibility of the
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Transfer Restricted Securities for investment under the laws of such
jurisdictions as the managing underwriters, if any, or Holders of a majority
(on a fully converted basis) of Transfer Restricted Securities may designate))
and (C) the fees payable in connection with the listing of the Notes in
accordance with Section 4(p) hereof, (ii) printing expenses (including, without
limitation, expenses of printing certificates for Transfer Restricted
Securities in a form eligible for deposit with The Depository Trust Company and
of printing Prospectuses if the printing of Prospectuses is requested by the
managing underwriters, if any), (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Company and Special
Counsel for the Holders (plus any local counsel, deemed appropriate by the
Holders of a majority of the Transfer Restricted Securities on a
fully-converted basis), in accordance with the provisions of Section 5(b)
hereof, (v) fees and disbursements of all independent certified public
accountants referred to in Section 4(m)(iii) (including, without limitation,
the expenses of any special audit and "cold comfort" letters required by or
incident to such performance), (vi) Securities Act liability insurance, if the
Company so desires such insurance, and (vii) fees and expenses of all other
persons retained by the Company. In addition, the Company shall pay its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit, and the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange.
Notwithstanding the foregoing, the Holders of the Transfer Restricted
Securities being registered shall pay all commissions, placement agent fees and
underwriting discounts and commissions attributable to the sale of such
Transfer Restricted Securities and the fees and disbursements of any counsel or
other advisors or experts retained by such Holders (severally or jointly),
other than Special Counsel.
(b) In connection with any registration hereunder, the
Company shall reimburse the Holders of the Transfer Restricted Securities being
registered in such registration for the reasonable fees and disbursements of
not more than one firm of attorneys representing the selling Holders (in
addition to any local counsel), which firm, if any, shall be chosen by the
Holders of a majority of the Transfer Restricted Securities (on a fully
converted basis).
6. Indemnification
(a) The Company agrees to indemnify and hold harmless (i)
each Initial Purchaser, (ii) each Holder of Transfer Restricted Securities,
(iii) each person, if any, who controls (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) any of the foregoing (any
of the persons referred to in this clause (iii) being hereinafter referred to
as a "controlling person"), and (iv) the respective officers, directors,
partners, employees, representatives and agents of the Initial Purchasers, each
Holder of Transfer Restricted Securities, or any controlling person (any person
referred to in clause (i), (ii), (iii) or (iv) may hereinafter be referred to
as an "Indemnified Person"), from and against any and all losses, claims,
damages, liabilities and judgments caused by any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement,
preliminary Prospectus or in any amendment or supplement thereto, or caused by
any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein (in the case of
any Prospectus or preliminary Prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Indemnified Person furnished in writing to the
Company by or on behalf of such Indemnified Person expressly for use therein;
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provided that the foregoing indemnity with respect to any preliminary
Prospectus shall not inure to the benefit of any Indemnified Person from whom
the person asserting such losses, claims, damages, liabilities and judgments
purchased securities if such untrue statement or omission or alleged untrue
statement or omission made in such preliminary Prospectus is eliminated or
remedied in the Prospectus and a copy of the Prospectus shall not have been
furnished to such person in a timely manner due to the wrongful action or
wrongful inaction of such Indemnified Person; provided that the Company has
delivered the Prospectus to such Indemnified Person in requisite quantity on a
timely basis to permit such delivery or sending. This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
(b) In case any action shall be brought against any
Indemnified Person, based upon any Registration Statement, any preliminary
prospectus or the Prospectus or any amendment or supplement thereto and with
respect to which indemnity may be sought against the Company, such Indemnified
Person shall promptly notify the Company in writing and the Company shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Person and payment of all fees and expenses.
Any Indemnified Person shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person, unless (i)
the employment of such counsel shall have been specifically authorized in
writing by the Company, (ii) the Company shall have failed to assume the
defense and employ counsel or (iii) the named parties to any such action
(including any impleaded parties) include both such Indemnified Person and the
Company, and such Indemnified Person shall have been advised by counsel that
there may be one or more legal defenses available to it which are different
from or additional to those available to the Company (in which case the Company
shall not have the right to assume the defense of such action on behalf of such
Indemnified Person, it being understood, however, that the Company shall not,
in connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all such Indemnified Persons, which firm shall be designated in writing by such
Indemnified Persons, and that all such fees and expenses shall be reimbursed as
they are incurred). The Company shall not be liable for any settlement of any
such action effected without its written consent, but if settled with its
written consent, it agrees to indemnify and hold harmless any Indemnified
Person from and against any loss or liability by reason of such settlement. 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.
(c) In connection with any Registration Statement in
which a Holder of Transfer Restricted Securities is participating, such Holder
of Transfer Restricted Securities agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers and any
person controlling the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to each Holder but only with reference to information relating
to such Holder furnished in writing by or on behalf of such Indemnified Person
expressly for use in such Registration Statement, the Prospectus or any
preliminary prospectus. In case any action shall be brought against the
Company, any of its directors, any such officer or any person controlling the
Company based on such Registration Statement, the Prospectus or any preliminary
prospectus and in respect of which
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indemnity may be sought against any Holder, the Holder shall have the rights
and duties given to the Company (except that if the Company shall have assumed
the defense thereof, such Holder shall not be required to do so, but may employ
separate counsel therein and participate in defense thereof but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person),
and the Company, its directors, any such officers and any person controlling
the Company shall have the rights and duties given to the Holder, by Section
6(b) hereof. This indemnity agreement will be in addition to any other
liability which such Holder may otherwise have.
(d) If the indemnification provided for in this Section 6
is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities and judgments in such proportion as is appropriate
to reflect the relative fault of the Company and each such Indemnified Person
in connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company and each such
Indemnified Person shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Company or such Indemnified Person and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 6(d) were
determined by pro rata allocation (even if the Indemnified Persons were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6, no
Indemnified Person shall be required to contribute any amount in excess of the
amount by which the proceeds received by it in connection with the sale of
Transfer Restricted Securities pursuant to this Agreement exceeds the amount of
any damages which such Indemnified Person has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Indemnified Persons' obligations to contribute pursuant to this Section 6(d)
are several in proportion to the respective amount of Transfer Restricted
Securities included in any such Registration Statement by each Indemnified
Person and not joint.
7. Rules 144 and 144A
The Company shall 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 it is not required to file such reports but in the past had been required
to or did file such reports, it will, upon the request of any holder of
Transfer Restricted Securities, make available other information as required
by, and so
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long as necessary to permit, sales of its Transfer Restricted Securities
pursuant to Rule 144 and Rule 144A. Notwithstanding the foregoing, nothing in
this Section 7 shall be deemed to require the Company to register any of its
securities pursuant to the Exchange Act.
8. Underwritten Registrations
(a) If any of the Transfer Restricted Securities covered
by any Shelf 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 a majority (on a
fully converted basis) of such Transfer Restricted Securities included in such
offering, subject to the consent of the Company (which will not be unreasonably
withheld or delayed).
No person may participate in any underwritten registration
hereunder unless such person (i) agrees to sell such person's Transfer
Restricted Securities on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
(b) Each Holder of Transfer Restricted Securities agrees,
if requested (pursuant to a timely written notice) by the managing underwriters
in an underwritten offering or placement agent in a private offering of the
Company's securities, not to effect any private sale or distribution (including
a sale pursuant to Rule 144(k) and Rule 144A, but excluding non-public sales to
any of its affiliates, officers, directors, employees and controlling persons
of any of the Notes, in the case of an offering of the Company's debt
securities, or the Common Stock, in the case of an offering of the Company's
equity securities), during the period ending 90 days after the closing date of
the underwritten offering.
(c) The Initial Purchasers and all Holders of Transfer
Restricted Securities agree that, notwithstanding any other term or provision
hereof, the Company shall not be required to enter into any agreements
(including underwriting agreements) or take any other actions contemplated by
Section 4(1) hereof unless requested in writing by the holders of at least 50%
of the Transfer Restricted Securities (on a fully converted basis) sold to the
Initial Purchasers pursuant to the Purchase Agreement.
The foregoing provisions shall not apply to any Holder of
Transfer Restricted Securities if such Holder is prevented by applicable
statute or regulation from entering into any such agreement.
9. Miscellaneous
(a) Remedies. In the event of a breach by the Company,
or by a holder of Transfer Restricted Securities, of any of their obligations
under this Agreement, each holder of Transfer Restricted Securities or the
Company, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The Company and each holder of Transfer
Restricted Securities 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 agrees that, in the
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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.
(b) No Inconsistent Agreements. The Company shall not
enter into any agreement with respect to its securities that is inconsistent
with the rights granted to the holders of Transfer Restricted Securities in
this Agreement or otherwise conflicts with the provisions hereof.
(c) No Piggyback on Registrations. The Company shall not
grant to any of its security holders (other than the Holders of Transfer
Restricted Securities in such capacity) the right to include any of its
securities in any Shelf Registration Statement other than Transfer Restricted
Securities.
(d) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, without the written consent of the Holders
of a majority of the then outstanding Transfer Restricted Securities (on a
fully converted basis); provided, however, that, for the purposes of this
Agreement, Transfer Restricted Securities that are owned, directly or
indirectly, by either the Company or an Affiliate of the Company shall not be
deemed outstanding. 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 Holders of Transfer Restricted Securities whose
securities are being sold pursuant to a Registration Statement and that does
not directly or indirectly affect the rights of other Holders of Transfer
Restricted Securities may be given by Holders of a majority of the Transfer
Restricted Securities (on a fully converted basis) being sold by such Holders
pursuant to such Registration Statement; provided, however, that the provisions
of this sentence may not be amended, modified, or supplemented except in
accordance with the provisions of the immediately preceding sentence.
(e) Notices. All notices and other communications
provided for herein shall be made in writing by hand-delivery, next-day air
courier, certified first-class mail, return receipt requested, telex or
telecopy:
(i) if to the Company, as provided in the
Purchase Agreement,
(ii) if to the Initial Purchasers, as provided in
the Purchase Agreement, or
(iii) if to any other person who is then the
registered Holder of any Transfer Restricted
Securities, to the address of such Holder as
it appears in the Note or Common Stock
register of the Company.
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given: when delivered by hand,
if personally delivered; one Business Day after being timely delivered to a
next-day air courier; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; and when receipt is
acknowledged by the recipient's telecopier machine, if telecopied.
(f) Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors and permitted assigns of
each of the parties and shall inure to the benefit of each Holder of Transfer
Restricted Securities. The Company may not assign its rights
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or obligations hereunder without the prior written consent of each Holder of
Transfer Restricted Securities. Notwithstanding the foregoing, no transferee
shall have any of the rights granted under this Agreement until such transferee
shall acknowledge its rights and obligations hereunder by a signed written
statement of such transferee's acceptance of such rights and obligations.
(g) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and, all of which
taken together shall constitute one and the same Agreement.
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(h) Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, as applied to contracts made
and performed within the State of New York without regard to principles of
conflicts of law.
(i) 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, and the parties hereto shall use their reasonable efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the
parties 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.
(j) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof. All references made in this Agreement to "Section" and
"paragraph" refer to such Section or paragraph of this Agreement, unless
expressly stated otherwise.
(k) Attorneys' Fees. In any action or proceeding brought
to enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party, as determined by the
court, shall be entitled to recover its reasonable attorneys' fees in addition
to any other available remedy.
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IN WITNESS WHEREOF, the parties have caused this Registration
Rights Agreement to be duly executed as of the date first written above.
SUNRISE ASSISTED LIVING, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
The foregoing Registration Rights Agreement is
hereby confirmed and accepted as of the date
first above written.
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
ALEX. ▇▇▇▇▇ & SONS INCORPORATED
By: ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation
By: /s/ W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
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Name: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
-------------------------------------------------------
Title: Managing Director
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