REGISTRATION RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT (the “Agreement”), by and among EMERITUS
CORPORATION, a Washington corporation (the “Company”); XX XXXXXXXXXXX, LLC, a
Delaware limited liability company (“XX Xxxxxxxxxxx”), XX XXXXXXXXXXX XX,
LLC, a Delaware limited liability company (“XX Xxxxxxxxxxx XX”), APOLLO
REAL ESTATE INVESTMENT FUND III, L.P., a Delaware limited partnership
(“XXXXX III”), and APOLLO REAL ESTATE INVESTMENT FUND IV, L.P., a
Delaware limited partnership (“XXXXX IV”, and together with XX Xxxxxxxxxxx,
XX Xxxxxxxxxxx XX and XXXXX III, the “Apollo Holders”); XXXXXXX
XXXX (“Xxxx”);
Xxxxxx X. Xxxx ("Xxxx"), XXXXXXXX GENERAL PARTNERSHIP, L.P., a Washington
limited partnership ("Catalina"), COLUMBIA SELECT, L.P., a Washington limited
partnership ("Columbia"), and B.F., LIMITED PARTNERSHIP, a Washington limited
partnership ("B.F.", and together with Xxxx, Xxxxxxxx and Columbia, the “Xxxx
Holders”); and SARATOGA PARTNERS IV, L.P., a Delaware limited partnership,
SARATOGA COINVESTMENT IV, LLC, a Delaware limited liability company, and
SARATOGA MANAGEMENT COMPANY, LLC, a Delaware limited liability company (the
“Saratoga Holders”, and together with the Apollo Holders, Xxxx, and the Xxxx
Holders, and their respective successors and assigns, the “Holders”) is entered
into as of March 29, 2007, to be effective as of the Effective Time (as defined
in the Merger Agreement).
WHEREAS,
the Company, Summerville Senior Living, Inc. ("Summerville") and certain
shareholders of the Company and Summerville have entered into that certain
Agreement and Plan of Merger of even date herewith (the “Merger Agreement”)
under which XX Xxxxxxxxxxx and XX Xxxxxxxxxxx XX have acquired shares of
Common Stock of the Company.
WHEREAS,
as contemplated by the Merger Agreement, XXXXX III and XXXXX IV have received
shares of Common Stock of the Company in connection with the Apollo Debt
Repayment (as defined in the Merger Agreement).
WHEREAS,
the Company and the Holders now desire to enter into this Agreement concurrently
with the issuance of shares pursuant to the Merger Agreement and the Apollo
Debt
Repayment to define the rights which exist among the Holders, on the one hand,
and the Company, on the other, with respect to the Registrable Securities (as
defined herein);
NOW,
THEREFORE, in consideration of the mutual premises, agreements and covenants
hereinafter set forth, the parties hereto agree as follows:
ARTICLE
1
DEFINITIONS
1
For
purposes of this Agreement, the following terms shall have the following
respective meanings (each such meaning to be equally applicable to the singular
and plural forms thereof):
“Agreement”
means this Registration Rights Agreement.
"Apollo
Group" means the group of persons comprised of the Apollo Holders.
"Xxxx
Group" means the group of persons comprised of the Xxxx Holders.
“Commission”
shall mean the Securities and Exchange Commission, and any other similar or
successor agency of the federal government at the time administering the
Securities Act or the Securities Exchange Act.
“Common
Stock” means the Company’s voting Common Stock, par value $.0001 per
share.
“Company”
has the meaning assigned such term in the preamble hereto.
“Counsel,”
with respect to any Registration Statement to be filed by the Company pursuant
to this Agreement, shall mean a single law firm selected by a majority in
interest of Holders of Registrable Securities to be included in such
Registration Statement to represent all of the Holders of Registrable Securities
with respect to such Registration Statement.
“Holders”
has the meaning assigned such term in the preamble hereto.
“Holders
of Registrable Securities” shall mean a person who owns Registrable Securities
or has the right to acquire such Registrable Securities, whether or not such
acquisition has actually been effected and disregarding any legal restrictions
upon the exercise of such right.
"Major
Shareholder Group" means the Apollo Group, the Xxxx Group or the Saratoga
Group.
"Maximum
Amount" means, with respect to an Underwritten Offering, the maximum number
of
Registrable Securities that, in the opinion of the managing underwriter(s)
for
such offering, can be marketed at a price reasonably related to the then current
market value of such securities and without materially and adversely affecting
such offering.
“NASD”
means the National Association of Securities Dealers, Inc. and any successor
organization thereto.
2
"person"
means an individual, corporation, partnership, limited liability company, trust
or other entity.
“Prospectus”
means the prospectus included in any Registration Statement, as amended or
supplemented by any prospectus supplement with respect to the terms of the
offering, registering for sale any of the Registrable Securities and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference in such
Prospectus.
“Registrable
Securities” means the shares of Common Stock of the Company beneficially owned
by the Holders as of the effective date hereof; provided, that any security’s
status as a Registrable Security shall cease when the registration rights with
respect to such security shall have terminated pursuant to Section
2.10.
“Registration
Statement” means any registration statement of the Company which registers for
sale any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
Registration Statement, including post-effective amendments, all exhibits and
all material incorporated by reference in such Registration
Statement.
“Rule
144” means Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the
Commission.
"Saratoga
Group" means the group of persons comprised of the Saratoga
Holders.
“Securities
Act” shall mean the Securities Act of 1933, as amended, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as
the
same shall be in effect at the time.
“Securities
Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
“Underwritten
Offering” means an offering pursuant to a Registration Statement in which
securities of the Company are sold (i) to an underwriter for reoffering to
the
public or (ii) through a broker-dealer acting as a sales agent other than
ordinary trading transactions for which the broker-dealer is not required to
deliver a Prospectus (other than the base Prospectus forming a part of a shelf
Registration Statement filed pursuant to Rule 415 under the Securities Act).
For
purposes of this Agreement only, a broker-dealer acting either as an underwriter
as described in clause (i) of the preceding sentence or as a sales agent as
described in clause (ii) thereof, is referred to as an
3
"underwriter"
and any agreement entered into with any such underwriter is referred to as
an
"underwriting agreement".
ARTICLE
2
REGISTRATION
RIGHTS
SECTION
2.1 Shelf
Registration.
2.1.1 The
Company shall cause to be filed with the Commission on or prior to January
1,
2008 (or such later date as a majority in interest of the Apollo Electing
Holders may agree), a shelf registration statement (the “Initial Shelf
Registration Statement”) pursuant to Rule 415 under the Securities Act (the
“Initial Shelf Registration”) on Form S-3 to cover resales by the Apollo
Electing Holders (as defined below) of Registrable Securities held by them
at
the time of the filing of the Initial Shelf Registration Statement (the "Apollo
Initial Shelf Shares") and resales by the Saratoga Holders of up to the number
of Saratoga Initial Shelf Shares determined under Section 2.1.2). "Apollo
Electing Holders means XX Xxxxxxxxxxx, XXXXX III and/or the limited
partners of XXXXX III.”). The Company shall use its commercially reasonable best
efforts to cause such Initial Shelf Registration Statement to be declared
effective by the Commission on or prior to April 1, 2008 (or such later date
as
a majority in interest of the Apollo Electing Holders may agree). The
Company shall, subject to Section 2.1.5, use its commercially reasonable best
efforts to keep the Initial Shelf Registration Statement continuously effective
until the earlier of (1) the sale of all Registrable Securities registered
under
the Initial Shelf Registration; (2) when all of the Registrable Securities
covered by the Initial Shelf Registration Statement may be sold or transferred
pursuant to Rule 144(k) (or any similar provisions then in force) under the
Securities Act or otherwise and (3) April 1, 2010, which date shall be extended
by the aggregate number of days of any suspensions by the Company under Section
2.1.5 (such period being referred to herein as the “Effectiveness Period”).
2.1.2 The
Saratoga Holders shall be entitled to include in the Initial Shelf Registration
Statement that number of shares of Common Stock (the "Saratoga Initial Shelf
Shares") equal to 1,800,000 minus the number of shares, if any, in excess of
2,000,000 that one or more of the Saratoga Holders have sold from March 28,
2006
through the date on which the Initial Shelf Registration Statement is declared
effective with the Commission.
2.1.3 None
of
the Company nor any of its security holders other than the Apollo Electing
Holders and the Saratoga Holders (to the extent determined under Section 2.1.2
above) shall have the right to include any of the Company’s securities in the
Initial Shelf Registration Statement.
2.1.4 A
majority in interest of the Apollo Electing Holders may elect to effect an
offering of Registrable Securities under the Initial Shelf Registration
Statement
4
pursuant
to an Underwritten Offering. The Apollo Electing Holders electing to participate
in such Underwritten Offering shall select a managing underwriter or
underwriters of recognized national standing reasonably acceptable to the
Company. The Company will cooperate in the customary manner in such Underwritten
Offering. The Saratoga Holders shall have the right to include (pro rata based
on the number of shares of Common Stock held by each of the Saratoga Holders)
in
such Underwritten Offering up to that number of Saratoga Initial Shelf Shares
as
are then owned by the Saratoga Holders; provided, however, that if, in the
opinion of the of the managing underwriter(s) for such Underwritten Offering,
the total number of shares that the Apollo Electing Holders and the Saratoga
Holders wish to include in such Underwritten Offering exceeds the Maximum
Amount, then the Apollo Electing Holders who have elected to participate in
such
offering shall be entitled to include (pro rata based on the number of shares
of
Common Stock owned by each of them) their Proportionate Share (as defined below)
of the Maximum Amount in such offering and the Saratoga Holders who have elected
to participate in such offering shall be entitled to include (pro rata based
on
the number of shares of Common Stock owned by each of them) their Proportionate
Share of the Maximum Amount in such offering. For these purposes, the term
"Proportionate Share" shall mean (i) with respect to the Apollo Electing
Holders, a fraction, the numerator of which is the Apollo Initial Shelf Shares
and the denominator of which is the sum of the Apollo Initial Shelf Shares
and
the Saratoga Initial Shelf Shares and (ii) with respect to the Saratoga Holders,
a fraction, the numerator of which is the Saratoga Initial Shelf Shares and
the
denominator of which is the sum of the Apollo Initial Shelf Shares and the
Saratoga Initial Shelf Shares. The Apollo Electing Holders shall have the right
to effect only one Underwritten Offering under the Initial Shelf Registration
Statement.
2.1.5 The
Company may suspend the use of the Prospectus forming a part of the Initial
Shelf Registration Statement for a period not to exceed an aggregate of 180
days
during the Effectiveness Period if the Board of Directors of the Company shall
have determined in good faith that because of valid business reasons (not
including avoidance of the Company’s obligations hereunder), including the
acquisition or divestiture of assets, pending corporate developments and similar
events, it is in the best interests of the Company to suspend such use, and
prior to suspending such use the Company provides the Apollo Electing Holders
and the Saratoga Holders with written notice of such suspension, which notice
need not specify the nature of the event giving rise to such
suspension.
SECTION
2.2 Registration
on Demand.
2.2.1 Demand.
At any
time that is eighteen (18) months after the effective date of this Agreement
("Demand Date"), upon the written request (each, a “Demand”; collectively,
“Demands”) of a majority in interest of the Apollo Holders, a majority in
interest of the Xxxx Holders or a majority in interest of the Saratoga Holders
(the “Demand Holders”) that the Company effect the registration under the
Securities
5
Act
of
the number of Registrable Securities specified by the Demand Holders, the
Company shall, subject to the provisions hereof, file, as soon as practicable
and in any event within 60 days after the Demand is received from the Demand
Holders, the registration under the Securities Act of the Registrable Securities
on behalf of the Holders and any of their Affiliates which the Company has
been
so requested to register by the Demand Holders (each, a “Demand Registration”)
and shall use its commercially reasonable best efforts, subject to Section
2.6
below, to cause the same to be declared effective by the Commission as soon
as
practicable and in any event within 120 days after receipt of such
Demand.
Requests
from any Holder to include shares in a registration pursuant to Section 2.3
and
the Initial Shelf Registration Statement provided for in Section 2.1 shall
not
constitute a Demand for purposes of this Section 2.2.1.
2.2.2 Shelf
Registration.
In
addition to the Initial Shelf Registration Statement provided for in Section
2.1, at any time after the Demand Date that the Company is eligible to use
a
short-form registration statement for registering securities for sale to the
public at large, a majority in interest of the Apollo Holders, a majority in
interest of the Xxxx Holders or a majority in interest of the Saratoga Holders
may, at their option, request (a “Shelf Demand”) that a Registration be effected
on a delayed or continuous basis, pursuant to Rule 415 under the Securities
Act
(the “Demand Shelf Registration”). The Company agrees to keep effective such
registration statement (the “Demand Shelf Registration Statement”), subject to
Section 2.6 below, until the earlier of (a) such date as of which all the
Registrable Securities under the Demand Shelf Registration Statement have been
disposed of in the manner described in such registration statement, (b) when
all
of the Registrable Securities covered by the Demand Shelf Registration Statement
may be sold or transferred pursuant to Rule 144(k) (or any similar provisions
then in force) under the Securities Act or otherwise and (3) one year
after the date on which such Demand Shelf Registration Statement is declared
effective; provided, however, that the one-year period for which the Demand
Shelf Registration Statement shall be effective shall be extended on a
day-for-day basis for any day during such period that the Holders are unable
to
sell shares of Registrable Securities pursuant to the Demand Shelf Registration
Statement due to a delay or suspension imposed by the Company under Section
2.6;
provided, further, that no more than one (1) Shelf Demand may be made by each
of
the Apollo Group, the Xxxx Group and the Saratoga Group pursuant to this
Section 2.2.2.
2.2.3 Registration
Statement Form.
Registrations under this Section 2.2 shall be on such appropriate registration
form of the Commission as shall be reasonably selected by the Company. The
Company shall include in any such registration statement all information which,
in the opinion of counsel to the Company, is required to be
included.
2.2.4 Limitations
on Registration on Demand; Shelf Registrations.
The
Company shall not be required to prepare and file a registration statement
pursuant to
6
this
Section 2.2 which would become effective within 120 days (or such shorter period
as may be acceptable to the Company) following the effective date of a
registration statement (other than pursuant to registrations on Form S-4 or
Form
S-8 or any successor form or forms) filed by the Company with the Commission
pertaining to an Underwritten Offering of convertible debt securities or equity
securities for cash for the account of the Company or another holder of
securities of the Company. Notwithstanding anything in this Section 2.2 to
the
contrary, in no event shall the Company be required to effect in the aggregate,
more than two (2) registrations pursuant to this Section 2.2 for each of the
Apollo Group, the Xxxx Group and the Saratoga Group.
2.2.5 Holders,
Ability to Withdraw Registration Statement.
The
Demand Holder shall have the right to request that the Company not have a
registration statement filed pursuant to a Demand declared effective. If the
Demand Holders elect to pay or reimburse the Company for the Company’s
out-of-pocket expenses incurred in connection with such registration, or if
the
Demand Holders withdraw their Demand during the pendency of a delay as described
in Section 2.6, such withdrawn registration statement shall not be counted
for purposes of the requests for registration to which such Demanding Holder
is
entitled pursuant to Section 2.2.1 hereof.
2.2.6 Registration
of Other Securities.
A
registration statement filed pursuant to the request of the Demand Holders
may,
subject to the provisions of Section 2.9 hereof, include (a) Registrable
Securities of Holders not making a demand pursuant to this Section 2.2.1 or
2.2.2 and (b) other securities of the Company with respect to which
registration rights have been granted and may include securities of the Company
being sold for the account of the Company.
SECTION
2.3 Incidental
Registration.
If the
Company, at any time or any one or more occasions after the effective date
of
this Agreement, proposes to register (other than pursuant to Section 2.1) any
shares of Common Stock under the Securities Act for sale to the public, whether
for its own account or for the account of other security holders or both (other
than pursuant to registrations on Form S-4 or Form S-8 or any successor form
or
forms) the Company shall give not less than 15 days’ nor more than 90 days’
prior written notice to each Holder of Registrable Securities of its intention
to do so. Upon the written request from the Holders of Registrable Securities
given within twenty (20) days after receipt of such notice from the Company,
the
Company will use its commercially reasonable best efforts to cause the
Registrable Securities requested to be registered to be so registered under
the
Securities Act. A request pursuant to this Section 2.3 shall state the number
of
Registrable Securities requested to be registered and the intended method of
distribution thereof. In connection with any registration subject to this
Section 2.3, the Holders shall enter into such underwriting, lock-up and other
agreements, and shall execute and complete such questionnaires and other
documents, as are reasonably requested by the representative of the
underwriters. The Company shall have the right to delay, suspend, terminate
or
withdraw any registration
7
initiated
by it under this Section 2.3 prior to the effectiveness of such registration
for
any reason whether or not any Holder has elected to include any securities
in
such registration. Notwithstanding any other provision of this Agreement, if
the
representative of the underwriters advises the Company in writing that marketing
factors require a limitation on the number of shares to be underwritten, the
number of shares to be included in the underwriting or registration shall be
allocated as set forth in Section 2.9 hereof.
No
registration effected under this Section 2.3 shall relieve the Company of its
obligation to effect a registration required under Section 2.1 or
2.2.
SECTION
2.4 Effective
Registration Statement.
A
registration pursuant to Section 2.1 and Section 2.2 shall not be deemed to
have
been effected (a) unless a registration statement with respect thereto has
become effective, (b) if after it has become effective, such registration
is interfered with by any stop order, injunction or other order or requirement
of the Commission or other governmental agency or court for any reason not
attributable to the Holders and has not thereafter become effective, (c) if
the conditions to closing specified in the underwriting agreement, if any,
entered into in connection with such registration are not satisfied or waived,
other than by reason of a failure on the part of the Holders, or (d) if an
Initial Shelf Registration Statement or a Demand Shelf Registration Statement,
if such registration statement has not been kept effective for the periods
set
forth in Sections 2.1.1 and 2.2.2, respectively.
SECTION
2.5 Underwritten
Offering; Selection of Underwriter.
If the
Holders of Registrable Securities so elect, an offering of Registrable
Securities pursuant to a registration under Section 2.2.1 may be effected in
the
form of an Underwritten Offering. If a registration under Section 2.2.1 is
an
Underwritten Offering, the Demand Holders shall select a managing underwriter
or
underwriters of recognized national standing reasonably acceptable to the
Company to administer the offering. The Company will cooperate in the customary
manner in such Underwritten Offering.
SECTION
2.6 Suspension.
The
Company may delay, suspend, delay the effectiveness of or withdraw the
registration of the Registrable Securities required pursuant to Section 2.2,
or
the preparation or furnishing of a supplemental or amended Prospectus pursuant
to Section 2.7(l), for an aggregate of 120 days per year (on a rolling twelve
month basis) if the Board of Directors of the Company shall have determined
in
good faith that because of valid business reasons (not including avoidance
of
the Company’s obligations hereunder), including the acquisition or divestiture
of assets, pending corporate developments and similar events, it is in the
best
interests of the Company to suspend such use, and prior to suspending such
use
the Company provides the Holders whose shares are covered by the registration
8
statement
with written notice of such suspension, which notice need not specify the nature
of the event giving rise to such suspension.
SECTION
2.7 Registration
Procedures.
In
connection with the registration of any Registrable Securities in accordance
with this Article 2, the Company shall effect such registrations to permit
the
sale of such Registrable Securities in accordance with the intended method
or
methods of disposition thereof, and pursuant thereto the Company shall as
expeditiously as possible:
(a) prepare
and file with the Commission within the time limits prescribed herein a
Registration Statement with respect to such securities and use its commercially
reasonable best efforts to cause such Registration Statement to become effective
and remain effective as provided herein;
(b) prepare
and file with the Commission such amendments and post-effective amendments
to
each Registration Statement as may be necessary and, subject to Section 2.1.5
and Section 2.6 herein, use its commercially reasonable best efforts to keep
such Registration Statement continuously effective; cause the related Prospectus
to be supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 (or any similar provisions then in force)
under
the Securities Act; and comply with the provisions of the Securities Act, the
Securities Exchange Act and the rules and regulations of the Commission
promulgated thereunder applicable to it with respect to the disposition of
all
securities covered by such Registration Statement as so amended or in such
Prospectus as so supplemented; the Company shall not be deemed to have used
its
commercially reasonable best efforts to keep a registration statement effective
during a period if it voluntarily takes any action that results in participating
Holders not being able to sell such Registrable Securities during such period,
unless such action (i) is required under applicable law, (ii) is permitted
pursuant to Sections 2.1.5 and 2.6, or (iii) is determined in good faith by
the Board of Directors of the Company to be in the Company’s best
interest;
(c) notify
the Holders of Registrable Securities and underwriters, if any, promptly (but
in
any event within two business days), and confirm such notice in writing,
(i) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to a Registration Statement or
any
post-effective amendment, when the same has become effective, (ii) of the
issuance (or, to the Company’s best knowledge, the threat or contemplation) by
the Commission of any stop order suspending the effectiveness of such
Registration Statement or of any order preventing or suspending the use of
any
preliminary prospectus or the initiation of any proceedings for that purpose,
(iii) of any request by the Commission for amendments or supplements to a
Registration Statement or related Prospectus or for additional information,
(iv) if at any time the representations and warranties of the Company
contained in any agreement contemplated by Section 2.7(q) and Section 2.7(r)
below
9
cease
to
be true and correct, (v) of the reasonable determination of the Company
that a post-effective amendment to such Registration Statement would be
appropriate, and (vi) of the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from
qualification of a Registration Statement or any of the Registrable Securities
for offer or sale in any jurisdiction, or the initiation or threatening of
any
proceeding for such purpose;
(d) use
every
reasonable effort to prevent the issuance of any order suspending the
effectiveness of a Registration Statement or of any order preventing or
suspending the use of a Prospectus or suspending the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction, and, if any such order is issued, to obtain the withdrawal of
any
such order at the earliest possible moment;
(e) if
requested by the managing underwriters or the Holders of Registrable Securities,
(i) promptly incorporate in a Prospectus supplement or post-effective
amendment such information as the managing underwriters and the Company agree
should be included therein and as may be required by applicable law,
(ii) make all required filings of such Prospectus supplement or such
post-effective amendment as is commercially reasonable after the Company has
received notification of the matters to be incorporated in such Prospectus
supplement or such post-effective amendment and (iii) supplement or make
amendments to such Registration Statement; provided, however, that the Company
shall not be required to take any of the actions in this Section 2.7(e) which
are not, in the opinion of counsel for the Company, in compliance with
applicable law;
(f) furnish
to each seller and to each duly authorized broker or underwriter of each seller
such number of authorized copies of a Prospectus, including copies of a
preliminary Prospectus, in conformity with the requirements of the Securities
Act, and such other customary documents as such seller, broker or underwriter
may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities owned by such seller; the Company
consents to the use of such Prospectus or any amendment or supplement thereto
by
each seller of Registrable Securities and the underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered
by
such Prospectus or any amendment or supplement thereto;
(g) use
its
commercially reasonable best efforts to register or qualify (and to keep each
such registration and qualification effective, including through new filings,
renewals or amendments, during the period such registration statement is
required to be kept effective) the securities covered by such Registration
Statement under such securities or blue sky laws of such jurisdictions as each
seller shall reasonably request, and do any and all other reasonable acts and
things which may be necessary under such securities or blue sky laws to enable
such seller to consummate
10
the
public sale or other disposition in such jurisdictions of the Registrable
Securities to be sold by such seller, except that the Company shall not for
any
such purpose be required to qualify to do business as a foreign corporation,
or
to consent to the jurisdiction of any court or subject itself to suit in any
jurisdiction wherein it is not qualified;
(h) before
filing the Registration Statement or Prospectus or amendments or supplements
thereto, furnish to Counsel for the Holders of Registrable Securities included
in such Registration Statement copies of all such documents proposed to be
filed, all of which shall be subject to the review and comment of such Counsel
in the exercise of their reasonable judgment;
(i) use
its
commercially reasonable best efforts to cause such Registrable Securities
covered by such Registration Statement to be registered with or approved by
such
other governmental agencies or authorities exercising jurisdiction over the
Company as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Registrable Securities;
(j) in
connection with an Underwritten Offering, participate, to the extent reasonably
requested by the managing underwriter for the offering or the Holders of
Registrable Securities, in customary efforts to sell the securities under the
offering, including, without limitation, participating in “road
shows”;
(k) cause
the
Registrable Securities covered by each Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may
be
necessary to enable the seller or sellers thereof or the underwriters, if any,
to consummate the disposition of such Registrable Securities;
(l) notify
each seller of any such Registrable Securities covered by such Registration
Statement, of the Company’s becoming aware that such Registration Statement or
the Prospectus included in such Registration Statement, as then in effect,
or
any document incorporated or deemed to be incorporated therein by reference,
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,
in the light of the circumstances under which they were made, not misleading,
and, at the written request of any such seller, but subject to Sections 2.1.5
and 2.6, promptly prepare a supplement or post-effective amendment to each
Registration Statement or a supplement to the related Prospectus or any document
incorporated therein by reference, or file any other document so that, as
thereafter delivered to the purchasers of such Registrable 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, in the light of the circumstances under which they were
made, not misleading;
11
(m) comply
with all applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve consecutive months
beginning with the first day of the Company’s first calendar quarter after the
effective date of the Registration Statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;
(n) use
its
commercially reasonable best efforts to cause all such Registrable Securities
covered by such Registration Statement to be listed or quoted on the principal
securities exchange on which similar securities issued by the Company are then
listed or quoted, if the listing or quoting of such Registrable Securities
is
then permitted under the rules of such exchange;
(o) provide
a
transfer agent, registrar and/or trustee, as applicable, for all such
Registrable Securities covered by such Registration Statement not later than
the
effective date of such Registration Statement;
(p) cooperate
with the selling holders of Registrable Securities and the underwriters, if
any,
to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold, which certificates shall not bear any
restrictive legends; and enable such Registrable Securities to be in such
denominations and registered in such names as the underwriters, if any, or
holders may reasonably request at least two business days prior to any sale
of
Registrable Securities in a firm commitment Underwritten Offering, or at least
ten business days prior to any other such sale;
(q) in
connection with an Underwritten Offering, enter into an underwriting agreement
with such underwriters for such offering, such agreement to be reasonably
satisfactory in substance and form to the Company and to the Holders of
Registrable Securities participating therein, and to contain such
representations and warranties by the Company and such other terms as are
generally prevailing in agreements of that type or may reasonably be requested
by the underwriters, including, without limitation, indemnification and
contribution to the effect and to the extent provided herein;
(r) enter
into such customary agreements and take all such other customary actions
reasonably requested in connection therewith (including those reasonably
requested by the managing underwriters, if any, or the Holders of Registrable
Securities) in order to expedite or facilitate the disposition of such
Registrable Securities and in such connection, whether or not an underwriting
agreement is entered into and whether or not the registration is an underwritten
registration (i) make such representations and warranties to the Holders of
Registrable Securities and the underwriters, if any, with respect to the
business of the Company and its subsidiaries, the Registration Statement, the
Prospectus, and documents, if any
12
incorporated
or deemed to be incorporated by reference in the Registration Statement, 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, and the Holders
of
Registrable Securities) addressed to the Holders of Registrable Securities
and
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 the Holders of Registrable Securities and such
underwriters, (iii) obtain “cold comfort” letters and updates thereof from
the independent certified public accountants of the Company (and, if necessary,
any other 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 to the Holders of Registrable 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, cause the
same to contain indemnification provisions and procedures no less favorable
than
those set forth in Section 2.12 hereof (or such other provisions and procedures
acceptable to the Holders of Registrable Securities) with respect to all parties
to be indemnified pursuant to said Section; and (v) deliver such documents
and certificates as may be requested by the Holders of Registrable Securities
and the managing underwriters, if any, to evidence the continued validity of
the
representations and warranties of the Company made pursuant to clause (i) above
and to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the
Company;
(s) cooperate
with the Holders of Registrable Securities and each underwriter participating
in
the disposition of such Registrable Securities and their respective counsel
in
connection with any filings required to be made with the NASD;
(t) upon
execution and delivery of such confidentiality agreements as the Company shall
reasonably request (which agreement shall not restrict any such person’s
obligations under applicable securities laws), make available for inspection
by
any seller of such Registrable Securities covered by such Registration
Statement, by any underwriter participating in any disposition to be effected
pursuant to such Registration Statement and by any attorney, accountant or
other
agent retained by the sellers or any such underwriter, pertinent financial
and
other records, pertinent corporate documents and properties of the Company,
and
cause the Company’s officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant
or
agent in connection with such Registration Statement, all as necessary to
conduct a reasonable investigation within the meaning of Section 11 of the
Securities Act; and
13
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 the insertion therein of language, in form and substance 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; provided, that in the event that such reference
to
such Holder by name or otherwise is not in the judgment of the Company, as
advised by counsel, required by the Securities Act or any similar federal
statute or any state “blue sky” or securities law then in force, the Company may
delete the reference to such Holder rather than include such
language.
SECTION
2.8 Expenses.
All
expenses incurred in effecting the registrations (whether or not such
registrations are consummated) provided for in this Article 2, including without
limitation all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, expenses of any audits incident to
or
required by any such registration (including the costs of any comfort letters)
and expenses of complying with the securities or blue sky laws of any
jurisdictions pursuant to Section 2.7(g) hereof, transfer taxes, fees of
transfer agents, registrars and trustees, costs of insurance, duplicating fees,
delivery expenses, expenses incurred with the listing of the securities on
any
securities exchange, shall be paid by the Company; provided, however, that
such
the Company shall not bear any underwriting discounts and commissions relating
to Registrable Securities.
SECTION
2.9 Marketing
Restrictions.
If
(i) a Holder of Registrable Securities requests registration of Registrable
Securities as contemplated by Section 2.2 or Section 2.3, (ii) the offering
proposed to be made is to be an Underwritten Offering, and (iii) the
managing underwriters of such public offering are of the opinion that the total
amount of securities to be included in such offering would exceed the Maximum
Amount, then the rights of the Holders of Registrable Securities and the holders
of other securities having the right to include such securities in such such
Underwritten Offering shall be as follows:
(a) If
such
Underwritten Offering shall have been proposed by the Company, (a) the
Company shall be entitled to participate in such Underwritten Offering first;
(b) then Holders of Registrable Securities who elect to participate shall
be entitled to participate in such Underwritten Offering (pro rata based on
the
number of shares of Common Stock held by the participating Holders of
Registrable Securities (on an as converted basis), and in accordance with other
relative priorities, if any, as shall exist among them); and (c) then other
holders of securities of the Company, if any, entitled to participate pursuant
to any other agreement between the Company and such holders shall be entitled
to
participate in such Underwritten Offering (with the holders of such securities
being entitled to participate in accordance with other relative priorities,
if
14
any,
as
shall exist among them), in each case with further pro rata allocations to
the
extent any such person has requested registration of fewer securities than
such
person is entitled to have registered so that the number of securities to be
included in such registration will not exceed the Maximum Amount;
(b) If
such
Underwritten Offering shall have been requested by the Demand Holders pursuant
to Section 2.2 hereof, (1) the Holders of Registrable Securities shall be
entitled to participate in such Underwritten Offering (pro rata based on the
number of Registrable Securities (on an as converted basis) held by each) first;
(2) then the Company will be entitled to participate in such Underwritten
Offering and (3) then the other security holders of the Company, if any,
entitled to participate pursuant to any other agreement between the Company
and
such holders will be entitled to participate in such Underwritten Offering
(with
the holders of such securities being entitled to participate in accordance
with
the relative priorities, if any, as shall exist among them), in each case with
further pro rata allocations to the extent any such person has requested to
include in such Underwritten Offering fewer securities than such person is
entitled to have included in such Underwritten Offering so that the number
of
securities to be included in such Underwritten Offering will not exceed the
Maximum Amount;
(c) If
such
Underwritten Offering shall have been requested by the holders of other
securities pursuant to a right granted by the Company to request such
Underwritten Offering, (A) the holders requesting such Underwritten
Offering shall be entitled to participate in such registration (with such
holders being entitled to participate in accordance with the relative
priorities, if any, as shall exist among them) first; (B) then the Holders
of Registrable Securities, the Company and other holders of securities of the
Company entitled to participate pursuant to any other agreement between the
Company and such holders shall be entitled to participate in such registration
(pro rata based on the number of shares of Common Stock held by each Holder,
the
number of shares proposed to be registered by the Company and the number of
shares held by other holders of securities (on an as converted basis) and in
accordance with the other relative priorities, if any, as shall exist among
them), in each case with further pro rata allocations to the extent any such
person has requested registration of fewer securities than such person is
entitled to have registered so that the number of securities to be included
in
such registration will not exceed the Maximum Amount; and
(d) no
securities (issued or unissued) other than those registered and included in
the
Underwritten Offering shall be offered for sale or other disposition in a
transaction which would require registration under the Securities Act (but
excluding any issuance of shares pursuant to registrations on Form S-4 or Form
S-8 or any successor form or forms) until the expiration of 90 days after the
effective date of the Registration Statement in which Registrable Securities
were included pursuant to Section 2.3 or such shorter period as may be
acceptable to the Company and the
15
Holders
of a majority of the Registrable Securities who may be participating in such
offering.
In
the
event that any Major Shareholder Group proposes to sell, pursuant to a
then-effective Demand Registration Statement, more than 30% of the shares of
Common Stock then owned by such Major Shareholder Group in a transaction or
series of related transactions not involving an Underwritten Offering, then
such
Major Shareholder Group shall notify the designated representatives of the
other
Major Shareholder Groups a reasonable period of time prior to such proposed
sale
and each of the other Major Shareholder Groups shall have the right, exercisable
upon prompt notice to the designated representative of the Major Shareholder
Group proposing the sale, to participate in such sale on a pro rata basis (in
accordance with the number of shares of Common Stock then held by each Major
Shareholder Group). For these purposes, Xxxxxx Xxxxxx shall be the designated
representative of the Apollo Group, Xxxxx Xxxxxxx shall be the designated
representative of the Saratoga Group and Xxxx will be the designated
representative of the Xxxx Group.
SECTION
2.10 Termination
of Rights.
Notwithstanding the foregoing provisions of this Article 2, the rights to
registration shall terminate as to any particular Registrable Securities when
(a) a Registration Statement covering such Registrable Securities has been
declared effective and such Registrable Securities have been disposed of in
accordance with such effective Registration Statement, (b) written
opinion(s), to the effect that such Registrable Securities may be sold without
registration under the Securities Act or applicable state law and without
restriction as to the volume and timing of such sale, shall have been received
from counsel for the Company reasonably acceptable to the Holders of a majority
of such Registrable Securities sought to be sold, or (c) such Registrable
Securities have been sold in a transaction in which the transferee receives
a
certificate without a restrictive legend.
SECTION
2.11 Rule
144.
The
Company shall file the reports required to be filed by it under the Securities
Act and the Securities Exchange Act and the rules and regulations promulgated
thereunder (or, if the Company is not required to file such reports, it will,
upon the written request of any Holder of Registrable Securities as soon as
practicable, make publicly available such information as is necessary to permit
sales under Rule 144), and will take such further actions as any Holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemption
provided by Rule 144. Upon the request of any Holder of Registrable Securities,
the Company shall deliver to such Holder a written statement as to whether
it
has complied with such requirements.
SECTION
2.12 Indemnification.
16
(a) In
the
event of any registration of any Registrable Securities under the Securities
Act
pursuant to this Agreement, the Company will, and hereby does, indemnify and
hold harmless, to the fullest extent permitted by law, the seller of any
Registrable Securities covered by such Registration Statement, its directors
and
officers or general and limited partners (and the directors and officers
thereof) (each, a “Person”), each person who participates as an underwriter or
qualified independent underwriter/pricer (“independent underwriter”), if any, in
the offering or sale of such securities, each officer, director or partner
of
such underwriter or independent underwriter, and each other Person, if any,
who
controls such seller or any such underwriter within the meaning of the
Securities Act, against any and all losses, claims, damages or liabilities,
joint or several, and expenses (including fees of counsel and any amounts paid
in any settlement approved by the Company (which such approval shall not be
unreasonably withheld or delayed)) to which such seller, any such director
or
officer or general or limited partner or any such underwriter or independent
underwriter, such officer, director or partner of such underwriter or
independent underwriter or controlling person may become subject under the
Securities Act, common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings, whether commenced or threatened,
in
respect thereof), or expenses arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement under which such securities were registered under the
Securities Act or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary, final or summary Prospectus
(together with the documents incorporated by reference or filed with the
Commission) and any amendment thereof or supplement thereto, or the omission
or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (iii) any
violation by the Company of any federal or state rule or regulation applicable
to the Company and relating to action required of or inaction by the Company
in
connection with any such registration, and the Company will reimburse as
incurred such seller and each such director, officer, general or limited
partner, underwriter, independent underwriter, director, or officer or partner
of such underwriter or independent underwriter and controlling person for any
legal or any other expenses incurred by any of them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding; provided, that the Company shall not be liable to any such seller
or
any such director, officer, general or limited partner, underwriter, independent
underwriter, director or officer or partner of such underwriter or independent
underwriter or controlling person in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding, whether commenced
or
threatened, in respect thereof) or expense arises out of or is based upon
(A) any untrue statement or alleged untrue statement or omission or alleged
omission made in such Registration Statement or amendment thereof or supplement
thereto or in any such
17
preliminary,
final or summary Prospectus in reliance upon and in conformity with information
furnished to the Company in writing by or on behalf of any such seller or any
such director, officer, general or limited partner, underwriter, independent
underwriter, director or officer or partner of such underwriter or independent
underwriter or controlling person, expressly for use in the preparation thereof
or (B) the failure of any such seller or any such director, officer,
general or limited partner, underwriter, independent underwriter or controlling
person, to comply with any legal requirement applicable to him to deliver a
copy
of a Prospectus or any supplements or amendments thereto after the Company
has
made such documents available to such Persons. Such indemnity and reimbursement
of expenses shall remain in full force and effect following the transfer of
such
securities by such seller.
(b) The
Company, as a condition to including any Registrable Securities in any
Registration Statement filed in accordance with this Agreement, shall have
received an undertaking reasonably satisfactory to it from the prospective
seller of such Registrable Securities and any underwriter or independent
underwriter, to indemnify and hold harmless (in the same manner and to the
same
extent as set forth in paragraph (a) of this Section 2.12) the Company and
its directors and officers and all other prospective sellers and their
directors, officers, general and limited partners and respective controlling
Persons (within the meaning of the Securities Act) with respect to any statement
or alleged statement in or omission or alleged omission from such Registration
Statement, any preliminary, final or summary Prospectus contained therein,
or
any amendment or supplement thereto, if such statement or alleged statement
or
omission or information has been furnished to the Company or its representative
by or on behalf of such seller or underwriter expressly for use in the
preparation of such Registration Statement, preliminary, final or summary
Prospectus or amendment or supplement; provided, however, that the aggregate
amount which any such seller or prospective seller shall be required to pay
pursuant to such undertaking shall be limited to the amount of the net proceeds
received by such Person upon the sale of the Registrable Securities pursuant
to
the Registration Statement giving rise to such claim. Such indemnity shall
remain in full force and effect following the transfer of such securities by
such seller.
(c) As
soon
as possible after receipt by an indemnified party hereunder of written notice
of
the commencement of any action or proceeding with respect to which a claim
for
indemnification may be made pursuant to this Section 2.12, 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, 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 2.12, except to the extent that the
indemnifying party is actually and materially prejudiced by such failure to
give
notice. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein, and, to the
18
extent
that it wishes, jointly with any other similarly notified indemnifying party,
to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to such indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 2.12 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof unless the indemnifying
party has failed to assume the defense of such claim or to employ counsel
reasonably satisfactory to such indemnified party; provided that the indemnified
parties shall have the right to employ one counsel (in each case together with
appropriate local counsel) (such counsel to be selected by the Holders of a
majority of the Registrable Securities included in such registration) to
represent such indemnified parties if, in such indemnified parties’ reasonable
judgment, a conflict of interest between the indemnified parties and the
indemnifying parties exists or may exist in respect of such claim, and in that
event the fees and expenses of such separate counsel shall be paid as incurred
by the indemnifying party. No indemnifying party will consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimants or plaintiffs to such indemnified
party
of an unconditional release from all liability in respect to such claim or
litigation. No indemnifying party will be liable for any settlement effected
without its prior written consent, which consent will not be unreasonably
withheld or delayed.
(d) Indemnification
similar to that specified in the preceding paragraphs of this Section 2.12
(with
appropriate modifications) shall be given by the Company and each seller of
Registrable Securities with respect to any required registration or other
qualification of securities under any state securities and “blue sky”
laws.
(e) If
the
indemnification provided for in this Section 2.12 is unavailable or insufficient
to hold harmless an indemnified party under Section 2.12(a) or (b) of this
Agreement, then each indemnifying party shall contribute to the amount paid
or
payable by such indemnified party as a result of the losses, claims, damages
or
liabilities referred to in Section 2.12(a) or (b) 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 hand in connection with statements
or omissions which resulted in such losses, claims, damages or liabilities,
as
well as any other relevant equitable considerations. The relative fault shall
be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or other omission or alleged omission to
state a material fact 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 statements or
omission. The parties hereto agree that it would not be just and equitable
if
contributions pursuant to this Section 2.12(e) were to be determined by pro
rata
allocation or by any other method of allocation which does not take account
of
the equitable considerations referred to in the first sentence of this Section
2.12(e). The
19
amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this Section 2.12(e) shall
be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action
or
claim (which shall be limited as provided in Section 2.12(c) if the indemnifying
party has assumed the defense of any such action in accordance with the
provisions thereof) which is the subject of this Section 2.12(e). 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. Promptly after receipt by
an
indemnified party under this Section 2.12(e) of notice of the commencement
of
any action against such party in respect of which a claim for contribution
may
be made against an indemnifying party under this Section 2.12(e), such
indemnified party shall notify the indemnifying party in writing of the
commencement thereof if the notice specified in Section 2.12(c) has not been
given with respect to such action; provided that the omission so to notify
the
indemnifying party shall not relieve the indemnifying party from any liability
which it may have to any indemnified party otherwise under this Section 2.12(e),
except to the extent that the indemnifying party is actually and materially
prejudiced by such failure to give notice. Notwithstanding anything in this
Section 2.12(e) to the contrary, no indemnifying party (other than the Company)
shall be required pursuant to this Section 2.12(e) to contribute any amount
in
excess of the net proceeds received by such indemnifying party from the sale
of
Registrable Securities in the offering to which the losses, claims, damages
or
liabilities of the indemnified parties relate.
(f) The
provisions of this Section 2.12 shall be in addition to any other rights to
indemnification or contribution which any indemnified party may have pursuant
to
law or contract and shall remain in full force and effect following the transfer
of the Registrable Securities by any such party.
SECTION
2.13 Agreements
of Holders.
(a) Each
Holder of Registrable Securities shall advise the Company of the dates on which
any disposition of Registrable Securities hereunder is expected to commence
and
terminate, the number of Registrable Securities expected to be sold, the method
of disposition, and such other information as the Company may reasonably request
in order to supplement the Prospectus in accordance with the rules and
regulations of the Commission.
(b) Each
Holder of Registrable Securities agrees by acquisition of such Registrable
Securities that, upon receipt of a notice from the Company under Section 2.7(l)
of the Company’s becoming aware that the Prospectus included in the 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, in the light of the circumstances under which
they
were
20
made,
not
misleading, such Holder shall not dispose of, sell or offer for sale Registrable
Securities under the Registration Statement until such Holder receives
(i) copies of the supplemented or amended Prospectus or until counsel for
the Company shall have determined that such disclosure is not required due
to
subsequent events, (ii) notice in writing (the “Advice”) from the Company
that the use of the Prospectus may be resumed, and (iii) copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus.
(c) In
the
event the Company shall give any such notice, the time period regarding the
effectiveness of the Registration Statement set forth in this Article 2 shall
be
extended by the number of days during the period from and including the date
of
the giving of such notice to and including the date when each selling Holder
covered by the Registration Statement shall have received the copies of the
supplemented or amended Prospectus, the Advice and any additional or
supplemental filings that are incorporated by reference in the
Prospectus.
ARTICLE
3
CHANGES
IN REGISTRABLE SECURITIES
If,
and
as often as, there is any change in the Registrable Securities by way of a
combination or reclassification, or through a merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof so that the rights and
privileges granted hereby shall continue with respect to the Registrable
Securities as so changed.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The
Company represents and warrants to the Holders of the Registrable Securities
as
of the date of this Agreement as follows:
SECTION
4.1 Due
Authorization.
The
execution, delivery and performance of this Agreement by the Company has been
duly authorized by all requisite action.
SECTION
4.2 Binding
Obligation.
This
Agreement has been duly executed and delivered by the Company and constitutes
the legal, valid and binding obligation of the Company.
SECTION
4.3 No
Violation.
The
execution, delivery and performance of this Agreement, and the consummation
of
the transactions contemplated herein, by the Company does not violate any
provision of law, any order of any court or other agency of government, any
organizational document of the Company or any provision of any material
indenture, agreement or other instrument to which the Company or any of its
properties or assets is bound, or conflict with, result in a breach of or
constitute (with
21
due
notice or lapse of time or both) a default under any such indenture, agreement
or other instrument or result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any of the properties or assets
of
the Company which violation, conflict, breach or default or lien, charge,
restriction or encumbrance would have a material adverse effect on the business,
condition (financial or otherwise) of the Company taken as a whole.
SECTION
4.4 Government
Action.
No
action has been taken and no statute, rule or regulation or order has been
enacted, no injunction, restraining order or order of any nature has been issued
by a federal or state court of competent jurisdiction and no action, suit or
proceeding is pending against or affecting or threatened against, the Company
before any court or arbitrator or any governmental body, agency or official
which, if adversely determined, would in any manner draw into question the
validity of this Agreement. Other than filings required with the Commission
and
under state securities laws, no action or approval by, or filing or registration
with, any court or governmental agency or body is required for the consummation
of the transactions contemplated by this Agreement by the Company.
ARTICLE
5
BENEFITS
OF AGREEMENT
The
obligations of the Company under this Agreement shall inure to the benefit
of,
and be enforceable by, the initial Holders and their successors and assigns
without any further action on the part of any party hereto.
ARTICLE
6
MISCELLANEOUS
SECTION
6.1 Notices.
All
notices, requests, consents and other communications provided for herein shall
be in writing and shall be effective upon delivery in person, faxed or
telecopied, or mailed by certified or registered mail, return receipt requested,
postage pre-paid, addressed as follows:
(a) if
to the
Company, 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxx Xxxxxxxxxx; with a copy to Xxxxxxx Coie LLP, 0000 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxxx, Esq.;
(b) if
to an
initial Holder of Registrable Securities, at such address as may have been
furnished to the Company in writing by such Holder;
or,
in
any case, at such other address or addresses as shall have been furnished in
writing to the Company (in the case of a holder of Registrable Securities)
or to
the
22
Holders
of Registrable Securities (in the case of the Company) in accordance with the
provisions of this paragraph.
SECTION
6.2 Waivers;
Amendments.
No
failure or delay of any Holder of Registrable Securities or the Company in
exercising any power or right hereunder shall operate as a waiver thereof,
nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of such Holder and the Company are
cumulative and not exclusive of any rights or remedies which it would otherwise
have. The provisions of this Agreement may be amended, modified or waived with
(and only with) the written consent of the Company and a majority in interest
of
each Major Shareholder Group. No notice or demand on the Company in any case
shall entitle the Company to any other or further notice or demand in similar
or
other circumstances.
SECTION
6.3 Governing
Law.
This
Agreement shall be construed in accordance with and governed by the laws of
the
State of Washington without regard to principles of conflicts of
law.
SECTION
6.4 Survival
of Agreements; Representations and Warranties, etc.
All
warranties, representations and covenants made by the Company herein or in
any
certificate or other instrument delivered by it or on its behalf in connection
with this Agreement shall be considered to have been relied upon by the Holders
of Registrable Securities and shall continue in full force and effect so long
as
this Agreement is in effect regardless of any investigation made by such
Holders. All statements in any such certificate or other instrument shall
constitute representations and warranties hereunder.
SECTION
6.5 Covenants
to Bind Successors and Assigns.
All the
covenants, stipulations, promises and agreements in this Agreement contained
by
or on behalf of the parties hereto shall bind their successors and assigns,
whether so expressed or not.
SECTION
6.6 Severability.
In case
any one or more of the provisions contained in this Agreement shall be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor
in
good faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close
as
possible to that of the invalid, illegal or unenforceable
provisions.
SECTION
6.7 Section
Headings.
The
section headings used herein are for convenience of reference only, are not
part
of this Agreement and are not to affect the construction of or be taken into
consideration in interpreting this Agreement.
23
SECTION
6.8 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
SECTION
6.9 Termination.
The
obligations of the Company to register the Registrable Securities hereunder
shall terminate in accordance with the terms of this Agreement.
SECTION
6.10 Complete
Agreement.
This
document and the documents referred to herein contain the complete agreement
between the parties and supersede any prior understandings, agreements or
representations by or between the parties, written or oral, which may have
related to the subject matter hereof in any way, and any other agreements or
understandings as to securities registration or similar rights among the parties
hereto are hereby terminated.
SECTION
6.11 No
More Favorable Agreements.
Without
the written consent of the holders of a majority in aggregate amount of
Registrable Securities then outstanding, the Company will not hereafter, enter
into any other agreement with respect to its securities with any person which
grants such person the right to request the Company to register any securities
of the Company under the Securities Act unless the rights so granted are subject
to the prior rights of the Holders of Registrable Securities as set forth herein
and are not otherwise in conflict or inconsistent with the provisions of this
Agreement.
SECTION
6.12 Termination
of Existing Agreement.
Upon
effective date of this Agreement, that certain Registration Rights Agreement
dated as of December 30, 1999 by and between the Company and Saratoga Partners
IV, L.P. shall terminate and be of no further force and effect.
(REMAINER
OF PAGE INTENTIONALLY LEFT BLANK)
24
IN
WITNESS WHEREOF, the parties hereto have entered into this Agreement as of
the
date first set forth above.
EMERITUS
CORPORATION
By:
/s/
Xxxxxx X. Xxxx
Name:
Xxxxxx X. Xxxx
Title:
Chairman
and Chief Executive Officer
XX
XXXXXXXXXXX, LLC
By: KRONUS
PROPERTY III, INC.
its
Manager
By:
/s/
Xxxxxx Xxxxxx
Name:
Xxxxxx Xxxxxx
Title:
Vice
President, Chief Financial Officer
XX
XXXXXXXXXXX XX, LLC
By: KRONUS
PROPERTY IV, INC.
its
Manager
By:
/s/
Xxxxxx Xxxxxx
Name: Xxxxxx
Xxxxxx
Title:
Vice
President, Chief Financial Officer
APOLLO
REAL ESTATE INVESTMENT FUND III, L.P.
By: Apollo
Real Estate Advisors III, L.P.,
its
General Partner
By: Apollo
Real Estate Capital
Advisors III,
Inc., its
General Partner
By: /s/
Xxxxxx Xxxxxx
Name:
Xxxxxx Xxxxxx
Title: Vice
President, Chief Financial Officer
APOLLO
REAL ESTATE INVESTMENT FUND IV, L.P.
By: Apollo
Real Estate Advisors IV, L.P.,
its
General
Partner
By: Apollo
Real Estate Capital
Advisors IV,
Inc., its General Partner
By: s/
Xxxxxx
Xxxxxx
Name:
Xxxxxx Xxxxxx
Title: Vice
President, Chief Financial Officer
/s/
Xxxxxxx Xxxx
XXXXXXX
XXXX
/s/
Xxxxxx X. Baty_____________
XXXXXX
X.
XXXX
XXXXXXXX
GENERAL PARTNERSHIP, L.P.
By: B.F.,
LIMITED PARTNERSHIP,
its
general partner
By: Columbia
Pacific Group, Inc.,
its
general partner
By: s/
Xxxxxx
X. Xxxx ______
Name:
Xxxxxx X. Xxxx
Title: President_______________
COLUMBIA
SELECT, L.P.
By: B.F.,
LIMITED PARTNERSHIP,
its
general partner
By: Columbia
Pacific Group, Inc.,
its
general partner
By: s/
Xxxxxx
X. Xxxx ___
Name: Xxxxxx
X.
Xxxx _________
Title: President
________
B.F.,
LIMITED PARTNERSHIP
By: Columbia
Pacific Group, Inc.,
its
general partner
By: s/
Xxxxxx
X. Xxxx _____
Name: _
Xxxxxx
X. Xxxx _________
Title: President
________
SARATOGA
PARTNERS IV, L.P.
By: SARATOGA
ASSOCIATES IV LLC,
its
General Partner
By SARATOGA
MANAGEMENT
COMPANY
LLC, as Manager
By: /s/
Xxxxxxx X. Xxxxxx, Xx._______
Its: Member_________
SARATOGA
COINVESTMENT IV LLC
By: SARATOGA
MANAGEMENT COMPANY,
LLC,
its
Managing Member
By: /s/
Xxxxxxx X. Xxxxxx, Xx.____
Its: Member
____________
SARATOGA
MANAGEMENT COMPANY, LLC
By: /s/
Xxxxxxx X. Xxxxxx, Xx.______
Its: Member
__________
