Exhibit 3
EXECUTION COPY
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AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
by and among
ARV ASSISTED LIVING, INC.
and
PROMETHEUS ASSISTED LIVING LLC
dated as of
October 29, 1997
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TABLE OF CONTENTS
Page
Section 1. Definitions.................................................1
(a) "Agreement"..............................................1
(b) "Buyer"..................................................1
(c) "Commencement Date"......................................1
(d) "Commission".............................................1
(e) "Company"................................................1
(f) "Company Registration Expenses"..........................1
(g) "Demand Registration"....................................2
(h) "Exchange Act"...........................................2
(i) "NASD"...................................................2
(j) "Registrable Securities".................................2
(k) "Registration Expenses"..................................2
(l) "Registration Suspension Period".........................2
(m) "Securities Act".........................................2
(n) "Stock Purchase Agreement"...............................2
(o) "Suspension Notice"......................................2
(p) "Underwritten/Placed Offering"...........................3
Section 2. Demand Registration.........................................3
(a) Obligation to File.......................................3
(b) Black-Out Periods of Buyer...............................3
(c) Number of Demand Registrations...........................4
(d) Size of Demand Registration..............................4
(e) Notice...................................................4
(f) Expenses.................................................5
(g) Selection of Underwriters................................5
Section 3. Incidental Registrations....................................5
(a) Notification and Inclusion...............................5
(b) Cut-back Provisions......................................5
(c) Expenses.................................................6
(d) Duration of Effectiveness................................6
(e) Limitation on Availability...............................6
Section 4. Registration Procedures.....................................6
Section 5. Requested Underwritten Offerings............................9
Section 6. Preparation; Reasonable Investigation.......................9
Section 7. Indemnification.............................................9
(a) Indemnification by the Company...........................9
(b) Indemnification by Buyer................................10
(c) Notices of Claims, etc..................................11
(d) Other Indemnification...................................11
(e) Indemnification Payments................................11
(f) Contribution............................................11
Section 8. Covenants Relating to Rule 144.............................12
Page
Section 9. Miscellaneous..............................................12
(a) Counterparts............................................12
(b) Governing Law...........................................12
(c) Entire Agreement........................................12
(d) Notices.................................................12
(e) Successors and Assigns..................................13
(f) Headings................................................13
(g) Amendments and Waivers..................................14
(h) Interpretation; Absence of Presumption..................14
(i) Severability............................................14
AMENDED AND RESTATED REGISTRATION RIGHTS
AGREEMENT (the "Agreement") dated as of October
29, 1997, by and among ARV Assisted Living, Inc.,
a California corporation (the "Company"), and
Prometheus Assisted Living LLC, a Delaware limited
liability company ("Buyer"). Capitalized terms not
otherwise defined herein have the meaning ascribed
to them in the Stock Purchase Agreement (as
hereinafter defined).
RECITALS:
WHEREAS, the Company, the Advancing Party and Buyer have
entered into a Stock Purchase Agreement, dated as of July 14, 1997 (as
amended to date, including the Amended and Restated Stock and Note Purchase
Agreement dated as of the date hereof, the "Stock Purchase Agreement") that
provides for the purchase by Buyer and sale by the Company to Buyer of
shares of Company Common Stock and Company Notes; and
WHEREAS, in order to induce Buyer to enter into the Stock
Purchase Agreement, the Company agreed to provide registration rights
pursuant to a Registration Rights Agreement dated as of July 14, 1997, by
and among the Company and Buyer (the "Registration Rights Agreement");
WHEREAS, the Company and Buyer desire to amend and restate
the Registration Rights Agreement as contemplated by the Stock Purchase
Agreement;
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
hereby agree to amend and restate the Registration Rights Agreement as
follows:
Section 1. Definitions. As used herein, the following terms
shall have the following meanings:
"Agreement" shall have the meaning set forth in the first
paragraph hereof.
"Buyer" shall mean Buyer together with any other Investor as
defined in the Stockholders Agreement.
"Commencement Date" shall mean July 14, 1999.
"Commission" shall mean the Securities and Exchange
Commission, and any successor thereto.
"Company" shall have the meaning set forth in the first
paragraph hereof.
"Company Registration Expenses" shall mean the fees and
disbursements of counsel and independent public accountants for
the Company incurred in connection with the Company's performance
of or compliance with this
Agreement, including the expenses of any special audits or "cold
comfort" letters required by or incident to such performance and
compliance, and any premiums and other costs of policies of
insurance obtained by the Company against liabilities arising out
of the sale of any securities.
"Demand Registration" shall have the meaning set forth in
Section 2(a).
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and any successor thereto, and the rules and
regulations thereunder.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Registrable Securities" shall mean (i) any and all shares
of Company Common Stock acquired by Buyer pursuant to the Stock
Purchase Agreement, (ii) any and all securities acquired by Buyer
upon conversion of the Company Notes, (iii) any and all
securities acquired by Buyer pursuant to Section 3.2 of the
Stockholders Agreement, and (iv) any securities issued or
issuable with respect to any Company Common Stock or other
securities referred to in clause (i), (ii) or (iii) by way of
conversion, exchange, stock dividend or stock split or in
connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise. As to
any particular Registrable Securities, once issued such
securities shall cease to be Registrable Securities when (A) a
registration statement with respect to the sale of such
securities shall have become effective under the Securities Act
and such securities shall have been disposed of in accordance
with such registration statement, (B) such securities shall have
been sold in accordance with Rule 144 (or any successor
provision) under the Securities Act or (C) such securities are
eligible to be resold pursuant to Rule 144(k).
"Registration Expenses" shall mean all registration, filing
and stock exchange or NASD fees, all fees and expenses of
complying with securities or blue sky laws, all printing
expenses, messenger and delivery expenses, any fees and
disbursements of any separate counsel retained by Buyer, and
transfer taxes, if any, and any premiums and other costs of
policies of insurance obtained by Buyer against liabilities
arising out of the public offering of securities, including
Company Registration expenses, but specifically excludes any fees
and disbursements of underwriters customarily paid by sellers of
securities who are not the issuers of such securities and all
underwriting discounts and commissions.
"Registration Suspension Period" shall have the meaning set
forth in Section 2(b).
"Securities Act" shall mean the Securities Act of 1933, as
amended, and any successor thereto, and the rules and regulations
thereunder.
"Stock Purchase Agreement" shall have the meaning set forth
in the Recitals hereof.
"Suspension Notice" shall have the meaning set forth in
Section 2(b).
"Underwritten/Placed Offering" shall mean a sale of
securities of the Company to an underwriter or underwriters for
reoffering to the public or on behalf of a person other than the
Company through an agent for sale to the public.
Section 2. Demand Registration
(a) Obligation to File. At any time following the
Commencement Date, promptly upon the written request of Buyer,
the Company will use its reasonable best efforts to file with the
Commission a registration statement under the Securities Act for
the offering of all of the Registrable Securities which Buyer
requests to be registered (the "Demand Registration"). The Demand
Registration shall be on an appropriate form and the Demand
Registration and any form of prospectus included therein shall
reflect such plan of distribution or method of sale as Buyer
notifies the Company, including the sale of some or all of the
Registrable Securities in a public offering or, if requested by
Buyer, subject to receipt by the Company of such information
(including information relating to purchasers) as the Company
reasonably may require, (i) in a transaction constituting an
offering outside the United States which is exempt from the
registration requirements of the Securities Act in which the
seller undertakes to effect registration after the completion of
such offering in order to permit such shares to be freely
tradeable in the United States, (ii) in a transaction
constituting a private placement under Section 4(2) of the
Securities Act in connection with which the seller undertakes to
effect a registration after the conclusion of such placement to
permit such shares to be freely tradeable by the purchasers
thereof, or (iii) in a transaction under Rule 144A of the
Securities Act, if available, in connection with which the seller
undertakes to effect a registration after the conclusion of such
transaction to permit such shares to be freely tradeable by the
purchasers thereof. The Company shall use its reasonable best
efforts to cause the Demand Registration to become effective,
and, upon the request of Buyer, keep the Demand Registration
effective for up to 90 days, unless the distribution of
securities registered thereunder has been earlier completed;
provided, however, that if such Demand Registration will require
the Company to prepare or file audited financial statements with
respect to any fiscal year by a date prior to the date on which
the Company would otherwise be required to prepare and file such
audited financial statements, then Buyer must notify the Company
at least thirty days in advance of the date upon which such
audited financial statements will be required to be filed. During
the period during which the Demand Registration is effective, the
Company shall supplement or make amendments to the Demand
Registration, if required by the Securities Act or if reasonably
requested by Buyer or an underwriter of Registrable Securities,
including to reflect any specific plan of distribution or method
of sale, and shall use its reasonable best efforts to have such
supplements and amendments declared effective, if required, as
soon as practicable after filing.
(b) Black-Out Periods of Buyer. Notwithstanding anything
herein to the contrary, (i) the Company shall have the right from
time to time to require Buyer not to sell under the Demand
Registration or to suspend the effectiveness thereof during the
period starting with the date 30 days prior to the Company's good
faith estimate, as certified in writing by an executive officer
of the Company to Buyer, of the proposed date of filing of a
registration statement or a preliminary prospectus supplement
relating to an existing shelf registration statement, in either
case, pertaining to an underwritten public offering of equity
securities of the Company for the account of the Company, and
ending on the date 75 days following the effective date of such
registration statement or the date of filing of the final
prospectus supplement, and (ii) the Company shall be entitled to
require Buyer not to sell under the Demand Registration or to
suspend the effectiveness thereof (but not for a period exceeding
75 days in any calendar year) if the Company determines, in its
good faith judgment, that such offering or continued
effectiveness would interfere with any material financing,
acquisition, disposition, corporate reorganization or other
material transaction involving the Company or any of its
subsidiaries or public disclosure thereof would be required prior
to the time such disclosure might otherwise be required, or when
the Company is in possession of material information that it
deems advisable not to disclose in a registration statement.
Once any registration statement filed pursuant to this
Section 2 or in which Registrable Securities are included
pursuant to Section 3 has been declared effective, any period
during which the Company fails to keep such registration
statement effective and usable for resale of Registrable
Securities for the period required by Section 4(b) shall be
referred to as a "Registration Suspension Period". A Registration
Suspension Period shall commence on and include the date that the
Company gives written notice to Buyer of its determination that
such registration statement is no longer effective or usable for
resale of Registrable Securities (the "Suspension Notice") to and
including the date when the Company notifies Buyer that the use
of the prospectus included in such registration statement may be
resumed for the disposition of Registrable Securities.
(c) Number of Demand Registrations. The Company shall be
obligated to effect, under this Section 2, only six Demand
Registrations (no more than two of which may be requested in any
two-year period). A Demand Registration shall not be deemed to
have been effected, nor shall it be sufficient to reduce the
number of Demand Registrations available to Buyer under this
Section 2, if such registration cannot be used by Buyer for more
than 60 days as a result of any stop order, injunction or other
order of the Commission or other Government Authority for any
reason other than an act or omission of Buyer and all the
Registerable Securities registered thereunder are not sold.
(d) Size of Demand Registration. The Company shall not be
required to effect a Demand Registration of less than a fair
market value, based on the closing market price on the trading
day immediately prior to the date of notice (as reported in the
Wall Street Journal), of $10,000,000, except that if the fair
market value, based on the closing market price on the trading
day immediately prior to the date of notice (as reported in the
Wall Street Journal), of the Registrable Securities outstanding
is less than $10,000,000, then the Company shall be required to
effect a Demand Registration of all of the remaining Registrable
Securities outstanding.
(e) Notice. The Company shall give Buyer prompt notice in
the event that the Company has suspended sales of Registrable
Securities under Section 2(b).
(f) Expenses. All Registration Expenses incurred in
connection with the first four Demand Registrations which may be
requested under this Section 2 shall be borne by the Company,
with Buyer only paying underwriting fees and discounts. All
Registration Expenses and underwriting fees and discounts
incurred in connection with any further Demand Registrations
which may be requested under this Section 2 shall be borne by
Buyer.
(g) Selection of Underwriters. Any and all underwriters or
other agents involved in any sale of Registrable Securities
pursuant to a registration statement contemplated by this Section
2 shall include such underwriter(s) or other agent(s) as selected
by Buyer and approved by the Company, which approval shall not be
unreasonably withheld; provided that any Affiliate of Buyer shall
in all events be approved by the Company.
Section 3. Incidental Registrations
(a) Notification and Inclusion. If the Company proposes to
register for its own account any common equity securities of the
Company or any securities convertible into common equity
securities of the Company under the Securities Act (other than a
registration relating solely to the sale of securities to
participants in a dividend reinvestment plan, a registration on
Form S-4 relating to a business combination or similar
transaction permitted to be registered on such Form S-4, a
registration on Form S-8 relating solely to the sale of
securities to participants in a stock or employee benefit plan, a
registration permitted under Rule 462 under the Securities Act
registering additional securities of the same class as were
included in an earlier registration statement for the same
offering, and declared effective) the Company shall, at each such
time after the Commencement Date until Buyer no longer holds
Registerable Securities, promptly give written notice of such
registration to Buyer. Upon the written request of Buyer given
within 10 days after receipt of such notice by Buyer, the Company
shall seek to include in such proposed registration such
Registrable Securities as Buyer shall request be so included and
shall use its reasonable best efforts to cause a registration
statement covering all of the Registrable Securities that Buyer
has requested to be registered to become effective under the
Securities Act. The Company shall be under no obligation to
complete any offering of securities it proposes to make under
this Section 3 and shall incur no liability to Buyer for its
failure to do so. If, at any time after giving written notice of
its intention to register any securities and prior to the
effective date of the registration statement filed in connection
with such registration, the Company shall determine for any
reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice
of such determination to Buyer and, thereupon, (i) in the case of
a determination not to register, the Company shall be relieved of
its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to
pay the Registration Expenses incurred in connection therewith)
and (ii) in the case of a determination to delay registering, the
Company shall be permitted to delay registering any Registrable
Securities for the same period as the delay in registering such
other securities.
(b) Cut-back Provisions. If a registration pursuant to this
Section 3 involves an Underwritten/Placed Offering of the
securities so being registered, whether or not solely for sale
for the account of the Company, which securities
are to be distributed by or through one or more underwriters of
recognized standing under underwriting terms customary for such
transaction, and the underwriter or the managing underwriter, as
the case may be, of such Underwritten/ Placed Offering shall
inform the Company of its belief that the amount of securities
requested to be included in such registration or offering exceeds
the amount which can be sold in (or during the time of) such
offering without delaying or jeopardizing the success of the
offering (including the price per share of the securities to be
sold), then the Company will include in such registration (i)
first, all the securities of the Company which the Company
proposes to sell for its own account or the account of others
(other than Buyer) requesting inclusion in such registration
pursuant to rights to registration on request, and (ii) second,
to the extent of the amount which the Company is so advised can
be sold in (or during the time of) such offering, Registrable
Securities and other securities requested to be included in such
registration, pro rata among Buyer and others exercising
incidental registration rights, on the basis of the shares of
Company Common Stock owned by all such persons.
(c) Expenses. The Company shall bear and pay all Company
Registration Expenses incurred in connection with any
registration of Registrable Securities pursuant to this Section 3
for Buyer and all Registration Expenses incurred in connection
with any registration of any securities for the Company's own
account referred to in the first sentence of Section 3(a), and
Buyer shall bear and pay all Registration Expenses (other than
Company Registration Expenses) and all underwriting fees and
discounts incurred in connection with any registration of
Registrable Securities pursuant to this Section 3 for Buyer.
(d) Duration of Effectiveness. At the request of Buyer, the
Company shall, subject to Section 2(b), use its reasonable best
efforts to keep any registration statement for which Registrable
Securities are included under this Section 3 effective and usable
for up to 90 days (subject to extension for the length of any
Registration Suspension Period), unless the distribution of
securities registered thereunder has been earlier completed;
provided, however, that in no event will the Company be required
to prepare or file audited financial statements with respect to
any fiscal year by a date prior to the date on which the Company
would be so required to prepare and file such audited financial
statements if such registration statement were no longer
effective and usable.
(e) Limitation on Availability. The registration rights set
forth in Section 2 shall not be exercisable unless Buyer is at
the time permitted to sell Registrable Securities pursuant to
Section 4.3 of the Stockholders Agreement and the registration
rights set forth in this Section 3 shall not be exercisable
unless Buyer is at the time permitted to sell Registrable
Securities pursuant to Section 4.3 or 5.2 of the Stockholders
Agreement.
Section 4. Registration Procedures. In connection with the
filing of any registration statement as provided in Section 2 or 3, the
Company shall use its reasonable best efforts to, as expeditiously as
reasonably practicable:
(a) prepare and file with the Commission the requisite
registration statement (including a prospectus therein) to effect
such registration and use its reasonable best efforts to cause
such registration statement to become effective,
provided that before filing such registration statement or any
amendments or supplements thereto, the Company will furnish to
the counsel selected by Buyer copies of all such documents
proposed to be filed, which documents will be subject to the
review of such counsel before any such filing is made, and the
Company will comply with any reasonable request made by such
counsel to make changes in any information contained in such
documents relating to Buyer;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to maintain the
effectiveness of such registration and to comply with the
provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement until
the earlier of such time as all of such securities have been
disposed of and the date which is 90 days after the date of
initial effectiveness of such registration statement;
(c) furnish to Buyer such number of conformed copies of such
registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of
copies of the prospectus contained in such registration
statements (including each complete prospectus and any summary
prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the
Securities Act, and such other documents, including documents
incorporated by reference, as Buyer may reasonably request;
(d) register or qualify all Registrable Securities under
such other securities or blue sky laws of such jurisdictions as
Buyer shall reasonably request, to keep such registration or
qualification in effect for so long as such registration
statement remains in effect, and take any other action which may
be reasonably necessary or advisable to enable Buyer to
consummate the disposition in such jurisdictions of the
securities owned by Buyer, except that the Company shall not for
any such purpose be required to qualify generally to do business
as a foreign corporation in any jurisdiction wherein it would not
but for the requirements of this paragraph be obligated to be so
qualified, or to consent to general service of process in any
such jurisdiction, or to subject the Company to any material tax
in any such jurisdiction where it is not then so subject;
(e) cause all Registrable Securities covered by such
registration statement to be registered with or approved by such
other Government Authority as may be reasonably necessary to
enable Buyer to consummate the disposition of such Registrable
Securities;
(f) furnish to Buyer a signed counterpart, addressed to
Buyer (and the underwriters, if any), of
(i) an opinion of counsel for the Company, dated the
effective date of such registration statement (and, if such
registration includes an underwritten public offering, dated
the date of the closing under the underwriting agreement),
reasonably satisfactory in form and substance to Buyer, and
(ii) to the extent permitted by then applicable rules of
professional conduct, a "comfort" letter, dated the
effective date of such registration statement (and, if such
registration includes an underwritten public offering, dated
the date of the closing under the underwriting agreement),
signed by the independent public accountants who have
certified the Company's financial statements included in
such registration statement, covering substantially the same
matters with respect to such registration statement (and the
prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to
the date of such financial statements, all as are
customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to the underwriters in
underwritten public offerings of securities;
(g) immediately notify Buyer at any time when the Company
becomes aware that a prospectus relating thereto is required to
be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under
which they were made, and at the request of Buyer promptly
prepare and furnish to Buyer a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of
such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under
which they were made;
(h) comply or continue to comply in all material respects
with the Securities Act and the Exchange Act and with all
applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at
least 12 months, but not more than 18 months, beginning with the
first full calendar month after the effective date of such
registration statement, which earnings statement shall satisfy
the provisions of Section 11 (a) of the Securities Act, and not
file any amendment or supplement to such registration statement
or prospectus to which Buyer shall have reasonably objected on
the grounds that such amendment or supplement does not comply in
all material respects with the requirements of the Securities
Act, having been furnished with a copy thereof at least five
Business Days prior to the filing thereof;
(i) provide a transfer agent and registrar for all
Registrable Securities covered by such registration statement not
later than the effective date of such registration statement; and
(j) list all Company Common Stock covered by such
registration statement on any securities exchange on which any of
the Company Common Stock is then listed.
Buyer shall furnish in writing to the Company such information regarding
Buyer (and any of its affiliates), the Registrable Securities to be sold,
the intended method of distribution of such Registrable Securities, and
such other information requested by the Company as
is necessary for inclusion in the registration statement relating to such
offering pursuant to the Securities Act and the rules of the Commission
thereunder. Such writing shall expressly state that it is being furnished
to the Company for use in the preparation of a registration statement,
preliminary prospectus, supplementary prospectus, final prospectus or
amendment or supplement thereto, as the case may be.
Buyer agrees by acquisition of the Registrable Securities that
upon receipt of any notice from the Company of the happening of any event
of the kind described in paragraph (g) of this Section 4, Buyer will
forthwith discontinue its disposition of Registrable Securities pursuant to
the registration statement relating to such Registrable Securities until
Buyer's receipt of the copies of the supplemented or amended prospectus
contemplated by paragraph (g) of this Section 4.
Section 5. Requested Underwritten Offerings. If requested by
the underwriters for any underwritten offerings by Buyer, under a
registration requested pursuant to Section 2(a), the Company will enter
into a customary underwriting agreement with such underwriters for such
offering, to contain such representations and warranties by the Company and
such other terms as are customarily contained in agreements of this type,
including indemnities to the effect and to the extent provided in Section
7. Buyer shall be a party to such underwriting agreement and may, at its
option, require that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of Buyer. Buyer shall not be
required to make any representations or warranties to or agreement with the
Company or the underwriters other than representations, warranties or
agreements regarding Buyer and Buyer's intended method of distribution and
any other representation or warranty required by law.
Section 6. Preparation; Reasonable Investigation. In
connection with the preparation and filing of the registration statement
under the Securities Act, the Company will give Buyer, its underwriters, if
any, and their respective counsel, the opportunity to participate in the
preparation of such registration statement, each prospectus included
therein or filed with the Commission, and each amendment thereof or
supplement thereto, and will give each of them such access to its books and
records and such opportunities to discuss the business of the Company with
its officers, its counsel and the independent public accountants who have
certified its financial statements as shall be necessary, in the opinion of
Buyer's and such underwriters' respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
Section 7. Indemnification
(a) Indemnification by the Company. In the event of any
registration of any Registrable Securities of the Company under
the Securities Act, the Company will, and hereby does, indemnify
and hold harmless Buyer, each other person who participates as an
underwriter in the offering or sale of such securities and each
other person who controls any such underwriter within the meaning
of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which Buyer or any such
underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of
any material fact contained in the registration
statement under which such Registrable Securities were registered
under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and
the Company will reimburse Buyer and each such underwriter and
controlling person for any reasonable legal or any other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceedings;
provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information
furnished to the Company by Buyer or any other person who
participates as an underwriter in the offering or sale of such
securities, in either case, specifically stating that it is for
use in the preparation thereof, and provided, further, that the
Company shall not be liable to any person who participates as an
underwriter in the offering or sale of Registrable Securities or
any other person, if any, who controls such underwriter within
the meaning of the Securities Act in any such case to the extent
that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of such
person's failure to send or give a copy of the final prospectus
or supplement to the persons asserting an untrue statement or
alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable
Securities to such person if such statement or omission was
corrected in such final prospectus or supplement. Such indemnity
shall remain in full force and effect regardless of any
investigation made by or on behalf of Buyer or any such
underwriter or controlling person and shall survive the transfer
of such securities by Buyer.
(b) Indemnification by Buyer. The Buyer will, and hereby
does, indemnify, and hold harmless (in the same manner and to the
same extent as set forth in paragraph (a) of this Section 7) the
Company, each director of the Company, each officer of the
Company and each other person, if any, who controls the Company
within the meaning of the Securities Act, and each other person
who participates as an underwriter in the offering or sale of
such securities and each other person who controls any such
underwriter within the meaning of the Securities Act, with
respect to any untrue statement or alleged untrue statement of a
material fact in or omission or alleged omission to state a
material fact from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, if such untrue
statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Company by Buyer specifically
stating that it is for use in the preparation of such
registration statement, preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement. Such indemnity shall
remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any such director,
officer, or controlling person and shall survive the transfer of
such securities by Buyer.
(c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or
proceeding involving a claim referred to in the preceding
paragraphs of this Section 7, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of
such action; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under the
preceding paragraphs of this Section 7, except to the extent that
the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to
assume the defense thereof, jointly with any other indemnifying
party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to the indemnified party
for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than
reasonable costs of investigation.
(d) Other Indemnification. Indemnification similar to that
specified in the preceding paragraphs of this Section 7 (with
appropriate modifications) shall be given by the Company and
Buyer with respect to any required registration or other
qualification of securities under any federal or state law or
regulation of Governmental Authority other than the Securities
Act.
(e) Indemnification Payments. The Indemnification required
by this Section 7 shall be made by periodic payments of the
amount thereof during the course of the investigation or defense,
as and when bills are received or expense, loss, damage or
liability is incurred.
(f) Contribution. If, for any reason, the foregoing
indemnity is unavailable, or is insufficient to hold harmless an
indemnified party, then the indemnifying party shall contribute
to the amount paid or payable by the indemnified party as a
result of the expense, loss, damage or liability, (i) in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party on
the other (determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact
or omission relates to information supplied by the indemnifying
party or the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission), or (ii) if the
allocation provided by clause (i) above is not permitted by
applicable law or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, in the proportion as is
appropriate to reflect not only the relative fault of the
indemnifying party and the indemnified party, but also the
relative benefits received by the indemnifying party on the one
hand and the indemnified party on the other, as well as any other
relevant equitable considerations. No indemnified party guilty of
fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any indemnifying party who was
not guilty of such fraudulent misrepresentation.
Section 8. Covenants Relating to Rule 144. The Company will
file in a timely manner (taking into account any extensions granted by the
Commission), information, documents and reports in compliance with the
Exchange Act and will, at its expense, forthwith upon the request of Buyer,
deliver to Buyer a certificate, signed by the Company's principal financial
officer, stating (a) the Company's name, address and telephone number
(including area code), (b) the Company's Internal Revenue Service
identification number, (c) the Company's Commission file number, (d) the
number of shares of Company Common Stock and the number of shares of
Company Preferred Stock outstanding as shown by the most recent report or
statement published by the Company, and (e) whether the Company has filed
the reports required to be filed under the Exchange Act for a period of at
least 90 days prior to the date of such certificate and in addition has
filed the most recent annual report required to be filed thereunder. If at
any time the Company is not required to file reports in compliance with
either Section 13 or Section 15(d) of the Exchange Act, the Company will,
at its expense, forthwith upon the written request of Buyer, make available
adequate current public information with respect to the Company within the
meaning of paragraph (c)(2) of Rule 144 of the General Rules and
Regulations promulgated under the Securities Act.
Section 9. Miscellaneous
(a) Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the
same agreement, and shall become effective when one or more
counterparts have been signed by each of the parties and
delivered to the other party. Copies of executed counterparts
transmitted by telecopy, telefax or other electronic transmission
service shall be considered original executed counterparts for
purposes of this Section 9, provided receipt of copies of such
counterparts is confirmed.
(b) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA
WITHOUT REFERENCE TO THE CHOICE OF LAW PRINCIPLES THEREOF.
(c) Entire Agreement. This Agreement (including agreements
incorporated herein) contains the entire agreement between the
parties with respect to the subject matter hereof and there are
no agreements or understandings between the parties other than
those set forth or referred to herein. This Agreement is not
intended to confer upon any person not a party hereto (and their
successors and assigns) any rights or remedies hereunder.
(d) Notices. All notices and other communications hereunder
shall be sufficiently given for all purposes hereunder if in
writing and delivered personally, sent by documented overnight
delivery service or, to the extent receipt
is confirmed, telecopy, telefax or other electronic transmission
service to the appropriate address or number as set forth below.
Notices to the Company shall be addressed to:
ARV Assisted Living, Inc.
000 Xxxxxxx Xxxxxx, X-0
Xxxxx Xxxx, XX 00000
Attention: President and General Counsel
Telecopy Number: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
or at such other address and to the attention of such other person as the
Company may designate by written notice to Buyer. Notices to Buyer shall be
addressed to:
Prometheus Assisted Living LLC
c/o Lazard Freres Real Estate Investors L.L.C.
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Xxxxx X. Xxxxx and
Xxxxx Xxxxxxxxxxx
Telecopy Number: (000) 000-0000
with a copy to:
Cravath, Swaine & Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopy Number: (000) 000-0000
(e) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors. Neither party shall be permitted to assign
any of its rights hereunder to any third party, except that if
(i) Buyer transfers or pledges any or all Registrable Securities
to a bona fide financial institution as security for any bona
fide indebtedness of any Buyer and such financial institution
agrees to be bound by the Stockholders Agreement, the pledgee of
the Registrable Securities shall be considered an intended
beneficiary hereof and may exercise all rights of Buyer
hereunder, and (ii) any person included within the definition of
the term Buyer shall be permitted to assign its rights hereunder
to any other person included within such definition.
(f) Headings. The Section and other headings contained in
this Agreement are inserted for convenience of reference only and
will not affect the meaning or interpretation of this Agreement.
All references to Sections or other
headings contained herein mean Sections or other headings of this
Agreement unless otherwise stated.
(g) Amendments and Waivers. This Agreement may not be
modified or amended except by an instrument or instruments in
writing signed by the party against whom enforcement of any such
modification or amendment is sought. Either party hereto may,
only by an instrument in writing, waive compliance by the other
party hereto with any term or provision hereof on the part of
such other party hereto to be performed or complied with. The
waiver by any party hereto of a breach of any term or provision
hereof shall not be construed as a waiver of any subsequent
breach.
(h) Interpretation; Absence of Presumption. For the purposes
hereof, (i) words in the singular shall be held to include the
plural and vice versa and words of one gender shall be held to
include the other gender as the context requires, (ii) the terms
"hereof", "herein", and "herewith" and words of similar import
shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, paragraph or other references are to the
Sections, paragraphs, or other references to this Agreement
unless otherwise specified, (iii) the word "including" and words
of similar import when used in this Agreement shall mean
"including, without limitation," unless the context otherwise
requires or unless otherwise specified, (iv) the word "or" shall
not be exclusive, and (v) provisions shall apply, when
appropriate, to successive events and transactions.
This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation
against the party drafting or causing any instrument to be
drafted.
(i) Severability. Any provision hereof which is invalid or
unenforceable shall be ineffective to the extent of such
invalidity or unenforceability, without affecting in any way the
remaining provisions hereof.
IN WITNESS WHEREOF, this Agreement has been signed by or on
behalf of each of the parties hereto as of the day first above written.
ARV ASSISTED LIVING, INC.
by /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
PROMETHEUS ASSISTED LIVING LLC
by /s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
