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EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement") by and between HCR
Manor Care, Inc. a Delaware corporation (the "Company"), and the persons listed
on the signature pages hereof (the "Stockholders"), dated _________, 1998.
Capitalized terms used without definition in this Agreement have the meanings
ascribed thereto in the Rights Agreement between the Company and Xxxxxx Trust
and Savings Bank, as amended as of June 10, 1998.
RECITALS
A. The Company and the Stockholders desire to enter into this
Agreement for the purpose of granting to the Stockholders certain rights with
respect to registering under the Securities Act of 1933, as amended, shares of
common stock, par value $.01 per share, of the Company.
B. Such common stock is being acquired by the Stockholders pursuant
to the transactions (the "Transactions") contemplated by the Agreement and Plan
of Merger, dated as of June 10, 1998, among Manor Care, Inc., a Delaware
corporation, Catera Acquisition Corp. and the Company (the "Merger Agreement").
AGREEMENT
In consideration of the recitals, covenants and mutual promises
contained herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties, intending to be legally
bound, hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
"Advice" shall have the meaning set forth in Section 5 hereof.
"Affiliate" means, with respect to any specified person, any other
person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person. For the purposes of this
definition, "control" when used with respect to any specified person, means the
power to direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Business Day" means any day that is not a Saturday, a Sunday or a
legal holiday on which the New York Stock Exchange is not scheduled to be open
for trading.
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"Capital Stock" means, with respect to any person, any and all shares,
interests, participations or other equivalents (however designated) of corporate
stock issued by such person, including each class of common stock and preferred
stock of such person.
"Common Stock" means the common stock, par value $0.01 per share, of
the Company.
"Company" shall have the meaning set forth in the heading hereof.
"Company Offering" shall have the meaning set forth in Section 2(d).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"Holder" means a person who owns Registrable Shares and is either (i) a
Stockholder or (ii) a Permitted Transferee.
"Maximum Number" means 10,000,000 Registrable Shares, subject to
equitable adjustment by the Board of Directors of the Company to reflect any
stock dividend or stock split or other change, conversion, exchange,
subdivision, combination, distribution, recapitalization or reclassification,
which limit may be waived by the Company in its sole discretion.
"Minimum Number" means the lesser of 2,500,000 Registrable Shares,
subject to equitable adjustment by the Board of Directors of the Company to
reflect any stock dividend or stock split or other change, conversion, exchange,
subdivision, combination, distribution, recapitalization or reclassification, or
that number of Registrable Shares which would yield $100 million or more in
aggregate gross proceeds in any public offering thereof, which minimum may be
waived by the Company in its sole discretion.
"Permitted Transferees" means (a) Xxxxxxx Xxxxxx or his spouse or
widow, their lineal descendants or their spouses or widows or widowers (so long
as they remain spouses) (each a "Member of the Xxxxxx Family"), or the estate of
the foregoing persons (but only until such time as the Common Stock are
distributed therefrom), and (b) any partnership, trust, corporation or other
entity (each, an "Entity"), but only if a Member or Members of the Xxxxxx Family
or another Entity satisfying the requirements hereof are the sole "Beneficial
Owners" (as such term is defined in the HCR Rights Plan (as defined in the
Merger Agreement)) of the Common Stock held by such Entity, other than any
officer, trustee, director, or other managing person or managing partner or
managing member of any such Entity to the extent any such person is deemed to be
the Beneficial Owner of Common Stock held by such Entity, provided such person
is not the Beneficial Owner, other than through an Entity described in this
clause (b), of in excess of 1% of the total outstanding Common Stock.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
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"Piggyback Registration" shall have the meaning set forth in Section 3
hereof.
"Prospectus" means the prospectus included in any Registration
Statement (including a prospectus that discloses information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Registrable Shares covered by such Registration Statement and all other
amendments and supplements to such prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.
"Registrable Shares" means any Common Stock issued to any Holder named
on the signature pages hereof in the Transactions or any other shares of capital
stock or other securities of the Company into which such shares of Common Stock
shall be reclassified, converted, exchanged or changed, including, without
limitation, by reason of a merger, consolidation, subdivision, stock
combination, exchange, reorganization or recapitalization. If the Common Stock
has been so reclassified or changed, or if the Company pays a dividend or makes
a distribution on the Common Stock in shares of capital stock or splits or
subdivides (or combines) its outstanding shares of Common Stock into a greater
(or smaller) number of shares of Common Stock, a share of Common Stock shall be
deemed to be such number of shares of stock and amount of other securities to
which a holder of a share of Common Stock outstanding immediately prior to such
change, conversion, reclassification, exchange, dividend, distribution,
subdivision, split or combination would be entitled. As to any particular
Registrable Shares, once issued such shares shall cease to be Registrable Shares
when (i) a Registration Statement with respect to the sale of such shares shall
have become effective under the Securities Act and such shares shall have been
disposed of in accordance with such Registration Statement, (ii) they shall have
been distributed to the public pursuant to Rule 144 (or any successor provision)
under the Securities Act, (iii) they shall have been otherwise transferred and
new certificates for them not bearing a legend restricting further transfer
shall have been delivered by the Company and subsequent disposition of them
shall not require registration or qualification of them under the Securities Act
or any state securities or blue sky law then in force, (iv) they shall have
ceased to be outstanding, (v) when sold, or otherwise transferred to, any Person
who is not a Holder or Permitted Transferee or (vi) there has occurred the first
date on which the number of Registrable Shares outstanding is less than five
percent (5%) of the then outstanding shares of Common Stock.
"Registration" means registration under the Securities Act of an
offering of Registrable Shares pursuant to a Demand Registration or a Piggyback
Registration.
"Registration Period" means, as to any Holder, the period beginning on
the date hereof and ending on the date which is the earlier of (i) the fourth
anniversary of the date hereof and (ii) the date when such Holder no longer owns
any Registrable Shares.
"Registration Statement" means any registration statement of the
Company under the Securities Act that covers any of the Registrable Shares
pursuant to the provisions of this Agreement, including the related Prospectus,
all amendments and supplements to such
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registration statement, including pre- and post-effective amendments, all
exhibits thereto and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
"HCR Rights Plan Amendment" shall have the meaning ascribed to such
term in the Merger Agreement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Underwritten Registration" or "Underwritten Offering" means a
registration under the Securities Act in which securities of the Company are
sold to an underwriter for reoffering to the public.
2. Demand Registration.
(a) Any person designated by the Holders of at least 50% of the
Registrable Shares shall have the right during the Registration Period, by
written notice (the "Demand Notice") given to the Company, to request the
Company to register under and in accordance with the provisions of the
Securities Act all or any portion of the Registrable Shares designated by such
Holders; provided, however, that the aggregate number of Registrable Shares
requested to be registered pursuant to any Demand Notice shall be at least the
Minimum Number. As of the date of this Agreement, until such time as the Holders
of at least 50% of the Registrable Shares shall have notified the Company of
another designee, the person designated to give the Demand Notice shall be
Xxxxxxx Xxxxxx, Xx. Upon receipt of any such Demand Notice, the Company shall
promptly notify all other Holders of the receipt of such Demand Notice and allow
them the opportunity, subject to the other terms of this Section 2, to include
Registrable Shares held by them in the proposed registration by submitting their
own written notice to the Company requesting inclusion of a specified number of
such Holders' Registrable Shares (the "Inclusion Notice"). The Holders as a
group shall be entitled to four Demand Registrations pursuant to this Section 2;
if any such Demand Registration does not become effective or is not maintained
for the period (whether or not continuous) required by Section 2(c), the
affected Holders will be entitled to an additional Demand Registration pursuant
hereto. It is agreed that the registration of Registrable Shares pursuant to an
Inclusion Notice shall not be deemed to be a Demand Registration. Nothing in
this Section 2(a) shall limit any rights pursuant to Section 3 hereof.
(b) Subject to the other terms of this Section 2, the Company,
within 45 days of the date on which the Company receives a Demand Notice given
by Holders in accordance with Section 2(a) hereof, shall file with the SEC, and
the Company shall thereafter use commercially reasonable efforts to cause to be
declared effective, a Registration Statement on the appropriate form for the
registration and sale, in accordance with the intended method or methods of
distribution, of the total number of Registrable Shares specified by the Holders
in
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such Demand Notice, which may include a "shelf" registration (a "Shelf
Registration") pursuant to Rule 415 under the Securities Act (a "Demand
Registration").
(c) The Company shall use commercially reasonable efforts to
cause the Registration Statement to be declared effective and to keep each
Registration Statement filed pursuant to this Section 2 continuously effective
and usable for the resale of the Registrable Shares covered thereby (i) in the
case of a Registration that is not a Shelf Registration, for a period of 60 days
from the date on which the SEC declares such Registration Statement effective
and (ii) in the case of a Shelf Registration, for a period of 120 days from the
date on which the SEC declares such Registration Statement effective, except, in
either case, (x) if earlier, then only until the date all the Registrable Shares
covered by such Registration Statement have been sold pursuant to such
Registration Statement, and (y) if later, until such later date as may be
extended pursuant to this Section 2.
(d) Company's Ability to Postpone.
(i) If, upon receipt of a Demand Notice pursuant to this
Section 2, the Board of Directors of the Company determines in good
faith that a registration at the time and on the terms requested would
adversely affect any public offering of securities of the Company by
the Company (other than in connection with employee benefit and similar
plans) or by or on behalf of any stockholder of the Company exercising
a demand registration right (collectively, a "Company Offering") with
respect to which the Company has commenced preparations for a
registration or received notice of the exercise of such demand
registration right prior to the receipt of a Demand Notice and the
Company furnishes the Holders with a certificate signed by the chief
financial officer of the Company to such effect (the "Transaction Delay
Notice") promptly after such Demand Notice, the Company shall not be
required to file a Registration Statement pursuant to this Section 2
until the earliest of (A) 45 days after the completion of such Company
Offering, (B) promptly after the abandonment of such Company Offering
or (C) 90 days after the date of the Transaction Delay Notice;
provided, however, that in any event the Company shall not be required
to file any Registration Statement prior to the termination, waiver or
reduction of any "blackout period" or Holdback Period required by the
underwriters to be applicable to the Holders or the Company, if any, in
connection with any Company Offering or Section 4 hereof.
(ii) If upon receipt of a Demand Notice pursuant to this
Section 2 or while a registration requested pursuant to this Section 2
is pending, the Company determines in its good faith judgment after
consultation with the Company's principal securities counsel that the
filing of a Registration Statement would require disclosure of material
information which the Company has a bona fide business purpose for
preserving as confidential and the Company provides the Holders written
notice (the "Information Delay Notice" and, together with the
Transaction Delay Notice, the "Delay Notice") thereof promptly after
the Company makes such determination, which shall be made promptly
after the receipt of any Demand Notice, the Company shall not be
required to comply with its obligations under this Section 2 until the
earlier of (A) the
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date upon which such material information is disclosed to the public or
ceases to be material or (B) 90 days after the Holders' receipt of such
Delay Notice.
(iii) Notwithstanding the foregoing provisions of this
Section 2(d), the Company shall be entitled to serve only one Delay
Notice (i) within any period of 270 consecutive days or (ii) with
respect to any two consecutive registrations requested pursuant to this
Section 2.
(iv) At any time when a Registration Statement effected
pursuant to this Section 2 relating to Registrable Shares is effective,
and a Prospectus relating thereto is required to be delivered under the
Securities Act in connection therewith, and the Company becomes aware
that the Prospectus included in such Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits 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 then existing, to the extent that the amendment or
supplement to such prospectus necessary to correct such untrue
statement of a material fact or omission to state a material fact would
require disclosure of material information which the Company has a bona
fide business purpose for preserving as confidential and the Company
provides the Holders written notice thereof promptly after the Company
makes such determination, the Holders shall suspend sales of
Registrable Shares pursuant to such Registration Statement and the
Company shall not be required to comply with its obligations under
Sections 5(e) or 5(h) until the earlier of (A) the date upon which such
material information is disclosed to the public or ceases to be
material or (B) 90 days after the Holders' receipt of such written
notice. If the Holders' disposition of Registrable Shares is
discontinued pursuant to the foregoing sentence, unless the Company
thereafter extends the effectiveness of the Registration Statement to
permit dispositions of Registrable Shares by the Holders for an
aggregate of 60 days, the Registration Statement shall not be counted
for purposes of determining the number of registrations permitted under
Section 2 hereof.
(e) Maximum Registration. In no event shall the Company be
required to effect the registration of Registrable Shares under either Section 2
or 3 hereof which would, when aggregated with prior registrations of Registrable
Shares, concern or result in the sale or resale of more than the Maximum Number
in any twelve month period.
(f) Company and Other Holders. Subject to Section 2(g), the
Company and other holders of Common Stock may include Common Stock in any Demand
Registration, provided that the Company and such holders of Common Stock pay a
pro rata portion of the costs incurred in the preparation and filing of
such Registration Statement based upon the number of shares of Common Stock
registered pursuant to the effective Registration Statement.
(g) Revocation. Holders of a majority in number of the
Registrable Shares to be included in a Registration Statement pursuant to this
Section 2 may, at any time prior to the effective date of the Registration
Statement relating to such Registration, revoke such request by providing a
written notice to the Company revoking such request. The Holders of
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Registrable Shares who revoke such request shall reimburse the Company for all
its out-of-pocket expenses incurred in the preparation, filing and processing of
the Registration Statement. In addition, if pursuant to the terms of this
Section 2(g), the Holders reimburse the Company for its out-of-pocket expenses
incurred in the preparation, filing and processing of any Registration Statement
requested and subsequently revoked by such Holder(s), such Holder(s)
registrations shall not count against the maximum number of Demand Registrations
to which the applicable Holder(s) are entitled under Section 2(a).
(h) Priority on Demand Registrations. Notwithstanding any other
term of this Section 2, if (i) a Registration pursuant to this Section 2
involves an Underwritten Offering and the managing underwriter or underwriters
of such proposed Underwritten Offering advises Company that the number of
securities requested to be included in such Demand Registration exceeds the
number which can be sold in the offering covered by such Demand Registration
without a significant adverse effect on the price, timing or distribution of the
securities offered, or (ii) the number of Registrable Shares requested to be
included in such Demand Registration exceeds the Maximum Number, then the
Company will include in such Registration (A) first, the number of Registrable
Shares that is the lesser of (x) the Maximum Number and (y) the number which, in
the opinion of such managing underwriter or underwriters, can be sold in the
offering without a significant adverse effect on the price, timing or
distribution of the securities offered, selected pro rata among the Holders
which have requested to be included in such Demand Registration based upon
[their relative proportionate total holdings of Common Stock on the date of this
Agreement], (B) second, the lesser of (x) the number of shares of Common Stock
which Company has requested be included in such Registration, which, in the
opinion of the managing underwriter or underwriters, can be sold without such
adverse effect referred to above and (y) if a cutback has been effected on the
basis of the Maximum Number under Clause (A), zero (0), and (C) third, the
lesser of (x) the number of shares of Common Stock which other holders have
requested be included in such Registration, which, in the opinion of the
managing underwriter or underwriters, can be sold without such adverse effect
referred to above, such amount to be allocated pro rata among such other holders
based upon their relative proportionate holdings of Common Stock and (y) if a
cutback has been effected on the basis of the Maximum Number, zero (0).
(i) Selection of Underwriters. If any offering pursuant to a
Demand Registration involves an Underwritten Offering, the Company and Manor
Care shall select a mutually acceptable managing underwriter or underwriters to
administer the offering, which managing underwriters shall be a firm of
nationally recognized standing and reasonably satisfactory to holders of a
majority of the Registrable Shares sought to be included in such Registration
Statement.
3. Piggyback Registration.
(a) Right to Piggyback. If at any time during the Registration
Period the Company proposes to file a registration statement under the
Securities Act with respect to a public offering of securities of the same type
as the Registrable Shares pursuant to a firm commitment underwritten offering
solely for cash for its own account (other than a registration
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statement (i) on Form S-4 or S-8 or any successor forms thereto, or (ii) filed
solely in connection with a dividend reinvestment plan or employee benefit plan
of the Company or its Affiliates) or for the account of any holder of securities
of the same type as the Registrable Shares (to the extent that the Company has
the right to include Registrable Shares in any registration statement to be
filed by the Company on behalf of such holder), then the Company shall give
written notice of such proposed filing to the Holders at least 15 days before
the anticipated effective date. Such notice shall offer the Holders the
opportunity to register such amount of Registrable Shares as they may request (a
"Piggyback Registration"). Subject to Section 3(b) hereof, the Company shall
include in each such Piggyback Registration all Registrable Shares with respect
to which the Company has received written requests for inclusion therein within
10 days after notice has been given to the Holders. Each Holder shall be
permitted to withdraw all or any portion of the Registrable Shares of such
Holder from a Piggyback Registration at any time prior to the effective date of
such Piggyback Registration; provided, however, that if such withdrawal occurs
after the filing of the Registration Statement with respect to such Piggyback
Registration, the withdrawing Holders shall reimburse the Company for the
portion of the registration expenses payable with respect to the Registrable
Shares so withdrawn.
(b) Priority on Piggyback Registrations. Notwithstanding any other
term of this Section 3, if a Registration pursuant to this Section 3 involves an
Underwritten Offering and the managing underwriter or underwriters of such
proposed Underwritten Offering advises Company that in its opinion the number of
securities requested to be included in such Piggyback Registration exceeds the
number which can be sold in the offering covered by such Piggyback Registration
without a significant adverse effect on the price, timing or distribution of the
securities offered, then the Company will include in such Registration (i)
first, the number of Registrable Shares sought to be sold by the person(s) or
entities (including the Company) which initiated such Registration that, in the
opinion of such managing underwriter or underwriters, can be sold in the
offering without a significant adverse effect on the price, timing or
distribution of the securities offered, selected pro rata among the Company and
such holders based upon the relative proportionate shares they proposed to sell
in such Registration and (ii) the number of shares of Common Stock which other
holders (including the Holders) have requested be included in such Registration,
which, in the opinion of the managing underwriter or underwriters, can be sold
without such adverse effect referred to above, such amount to be allocated pro
rata among such Holders and other holders based upon the relative proportionate
shares they propose to sell in such Registration.
(c) Right to Suspend or Abandon. Nothing in this Section 3 or Section
5 hereof (with respect to an offering under this Section 3) shall create any
liability or obligation on the part of the Company to the Holders if the Company
in its sole discretion should decide (i) not to file a registration statement
proposed to be filed pursuant to Section 3(a) hereof, (ii) to withdraw such
registration statement subsequent to its filing and prior to the later of its
effectiveness or the release of the Registrable Shares for public offering by
the managing underwriter, in the case of an underwritten public offering or
(iii) to suspend or terminate any offering or the effectiveness of any
registration statement by the Company or at the request of any person, entity or
governmental authority, regardless of any action whatsoever that a Holder
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may have taken, whether as a result of the issuance by the Company of any notice
hereunder or otherwise.
4. Holdback Agreement. If (i) the Company shall file a registration
statement with respect to the Common Stock or similar securities or securities
convertible into, or exchangeable or exercisable for, such securities and (ii)
the Company (in the case of a nonunderwritten public offering by the Company
pursuant to such registration statement) advises the Holders in writing that a
public sale or distribution of Registrable Shares would materially adversely
affect such offering or the managing underwriter or underwriters (in the case of
an underwritten public offering by the Company pursuant to such registration
statement) advises the Company in writing (in which case the Company shall
notify the Holders) that a public sale or distribution of Registrable Shares
would have a significant adverse effect on the price, timing or distribution of
such offering, then each Holder shall, to the extent not inconsistent with
applicable law, refrain from effecting any public sale or distribution of
Registrable Shares during the 7 days prior to the effective date of such
registration statement and until the earliest of (A) the abandonment of such
offering, (B) 120 days from the effective date of such registration statement
and (C) if such offering is an Underwritten Offering, the termination of any
"hold back" period obtained by the underwriter or underwriters in such offering
from the Company in connection therewith (each such period, a "Hold Back
Period").
5. Registration Procedures. In connection with the registration
obligations of the Company pursuant to and in accordance with Sections 2 and 3
hereof (and subject to Sections 2 and 3 hereof), the Company shall use its best
efforts to effect such registration to permit the sale of such Registrable
Shares in accordance with the intended method or methods of disposition thereof,
and pursuant thereto the Company shall as expeditiously as possible (but subject
to Sections 2 and 3 hereof):
(a) at least ten (10) business days before filing a Registration
Statement or Prospectus or any amendments or supplements thereto, furnish to the
Holders who are participating in such Registration Statement and the
underwriters, if any, copies of all such documents proposed to be filed, which
documents will be subject to the review of such Holders and such underwriters,
and one counsel selected by the Holders of a majority of the Registrable Shares
participating in such Registration Statement ("Holder Counsel") and the
underwriters' counsel, and, in the case of a Demand Registration, the Company
will not file any Registration Statement or amendment thereto or any Prospectus
or any supplement thereof to which the Holders of Registrable Shares
participating in such Registration Statement or the underwriters, if any, shall
reasonably object;
(b) prepare and file with the SEC a Registration Statement for
the sale of the Registrable Shares on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate in accordance
with such Holders' intended method or methods of distribution thereof, subject
to Section 2(b) hereof, and, subject to the Company's right to suspend,
terminate or abandon a registration pursuant to Section 3(c) hereof, use
commercially reasonable efforts to cause such Registration Statement to become
effective and remain effective as provided herein;
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(c) prepare and file with the SEC such amendments (including
post-effective amendments) to such Registration Statement, and such supplements
to the related Prospectus, as may be required by the rules, regulations or
instructions applicable to the Securities Act during the applicable period in
accordance with the intended methods of disposition specified by the Holders of
the Registrable Shares covered by such Registration Statement, make generally
available earnings statements satisfying the provisions of Section 11(a) of the
Securities Act (provided that the Company shall be deemed to have complied with
this clause if it has complied with Rule 158 under the Securities Act), and
cause the related Prospectus as so supplemented to be filed pursuant to Rule 424
under the Securities Act; provided, however, that before filing a Registration
Statement or Prospectus, or any amendments or supplements thereto (other than
reports required to be filed by it under the Exchange Act), the Company shall
furnish to the Holders of Registrable Shares covered by such Registration
Statement and the Holder Counsel for review and comment, copies of all documents
required to be filed;
(d) notify the Holders of any Registrable Shares covered by such
Registration Statement promptly and (if requested) confirm such notice in
writing, (i) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to such Registration Statement or
any post-effective amendment, when the same has become effective, (ii) of any
request by the SEC for amendments or supplements to such Registration Statement
or the related Prospectus or for additional information regarding such Holders,
(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of such Registration Statement or the initiation of any proceedings for that
purpose, (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, and (v) of the happening of any
event that requires the making of any changes in such Registration Statement,
Prospectus or documents incorporated or deemed to be incorporated therein by
reference so that they will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading;
(e) subject to Section 2(d), use its best efforts to obtain the
withdrawal of any order suspending the effectiveness of such Registration
Statement, or the lifting of any suspension of the qualification or exemption
from qualification of any Registrable Shares for sale in any jurisdiction in the
United States;
(f) furnish to the Holder of any Registrable Shares covered by
such Registration Statement, Holder Counsel for such Holders and counsel for
each managing underwriter, if any, without charge, one conformed copy of such
Registration Statement, as declared effective by the SEC, and of each
post-effective amendment thereto, in each case including financial statements
and schedules and all exhibits and reports incorporated or deemed to be
incorporated therein by reference; and deliver, without charge, such number of
copies of the preliminary prospectus, any amended preliminary prospectus, each
final Prospectus and any post-effective amendment or supplement thereto, as such
Holder may reasonably request in order
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to facilitate the disposition of the Registrable Shares of such Holder covered
by such Registration Statement in conformity with the requirements of the
Securities Act;
(g) prior to any public offering of Registrable Shares covered
by such Registration Statement, use commercially reasonable efforts to register
or qualify such Registrable Shares for offer and sale under the securities or
Blue Sky laws of such jurisdictions as the Holders of such Registrable Shares
shall reasonably request in writing; provided, however, that the Company shall
in no event be required to qualify generally to do business as a foreign
corporation or as a dealer in any jurisdiction where it is not at the time so
qualified or to execute or file a general consent to service of process in any
such jurisdiction where it has not theretofore done so or to take any action
that would subject it to general service of process or taxation in any such
jurisdiction where it is not then subject;
(h) subject to Section 2(d), upon the occurrence of any event
contemplated by paragraph 5(d)(v) above, prepare a supplement or post-effective
amendment to such Registration Statement or the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference and file
any other required document so that, as thereafter delivered to the purchasers
of the Registrable Shares being sold thereunder (including upon the termination
of any Delay Period), such Prospectus will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading;
(i) use its best efforts to cause all Registrable Shares
covered by such Registration Statement to be listed on each securities exchange
or automated interdealer quotation system, if any, on which similar securities
issued by the Company are then listed or quoted;
(j) use its best efforts to comply with all applicable rules
and regulations of the SEC and any securities exchange or regulatory body;
(k) on or before the effective date of such Registration
Statement, provide the transfer agent of the Company for the Registrable Shares
with printed certificates for the Registrable Shares covered by such
Registration Statement which are in a form eligible for deposit with The
Depository Trust Company;
(l) if such offering is an Underwritten Offering, make
available for inspection by any Holder of Registrable Shares included in such
Registration Statement, any underwriter participating in any offering pursuant
to such Registration Statement, and any attorney, accountant or other agent
retained by any such Holder or underwriter (collectively, the "Inspectors"),
such financial and other records and other information, pertinent corporate
documents and properties of any of the Company and its subsidiaries and
affiliates (collectively, the "Records"), as shall be reasonably necessary to
enable them to exercise their due diligence responsibilities; provided, however,
that the Records that the Company determines, in good faith, to be confidential
and which it notifies the Inspector in writing are confidential shall not be
disclosed to any Inspector unless such Inspector signs a confidentiality
agreement reasonably satisfactory to the Company; and
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(m) if such offering is an Underwritten Offering, enter into
such agreements (including an underwriting agreement in form, scope and
substance as is customary in underwritten offerings) and take all such other
appropriate and reasonable actions requested by the Holders of a majority of the
Registrable Shares being sold in connection therewith (including those
reasonably requested by the managing underwriters) in order to expedite or
facilitate the disposition of such Registrable Shares, and in such connection,
(i) use commercially reasonable efforts to 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 and
Holder Counsel), addressed to each selling Holder of Registrable Shares covered
by such Registration Statement and each of the underwriters as to the matters
customarily covered in opinions requested in underwritten offerings and such
other matters may be reasonably requested by such counsel and underwriters, (ii)
use commercially reasonable efforts to obtain "cold comfort" letters and updates
thereof from the independent certified public accountants of the Company (and,
if necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to each selling Holder of Registrable
Shares covered by the Registration Statement (unless such accountants shall be
prohibited from so addressing such letters by applicable standards of the
accounting profession) and each of the underwriters, such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings and (iii) if
requested and if an underwriting agreement is entered into, provide
indemnification provisions and procedures substantially to the effect set forth
in Section 7 hereof with respect to all parties to be indemnified pursuant to
said Section 7. The above shall be done at each closing under such underwriting
or similar agreement, or as and to the extent required thereunder.
The Company may require each Holder of Registrable Shares covered
by a Registration Statement to furnish such information regarding such Holder
and such Holder's intended method of disposition of such Registrable Shares as
it may from time to time reasonably request in writing. If any such information
is not furnished within a reasonable period of time after receipt of such
request, the Company may exclude such Holder's Registrable Shares from such
Registration Statement.
Each Holder of Registrable Shares covered by a Registration
Statement agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(d)(ii), 5(d)(iii),
5(d)(iv) or 5(d)(v) hereof, that such Holder shall forthwith discontinue
disposition of any Registrable Shares covered by such Registration Statement or
the related Prospectus until receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 5(h) hereof, or until such Holder is
advised in writing (the "Advice") by the Company that the use of the applicable
Prospectus may be resumed, and has received copies of any amended or
supplemented Prospectus or any additional or supplemental filings which are
incorporated, or deemed to be incorporated, by reference in such Prospectus
(such period during which disposition is discontinued being an "Interruption
Period") and, if requested by the Company, the Holder shall deliver to the
Company (at the expense of the Company) all copies then in its possession, other
than permanent file copies then in such holder's
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possession, of the Prospectus covering such Registrable Shares at the time of
receipt of such request.
Each Holder of Registrable Shares covered by a Registration
Statement further agrees not to utilize any material other than the applicable
current preliminary prospectus or Prospectus in connection with the offering of
such Registrable Shares.
6. Registration Expenses. Whether or not any Registration Statement
is filed or becomes effective, the Company shall pay all costs, fees and
expenses incident to the Company's performance of or compliance with this
Agreement, including (i) all registration and filing fees, including NASD filing
fees, (ii) all fees and expenses of compliance with securities or Blue Sky laws,
including reasonable fees and disbursements of counsel in connection therewith,
(iii) printing expenses (including expenses of printing certificates for
Registrable Shares and of printing preliminary and final prospectuses if the
printing of prospectuses is requested by the Holders or the managing
underwriter, if any), (iv) messenger, telephone and delivery expenses, (v) fees
and disbursements of counsel for the Company and the Holder Counsel, (vi) fees
and disbursements of all independent certified public accountants of the Company
(including expense of any "cold comfort" letters required in connection with
this Agreement) and all other persons retained by the Company in connection with
such Registration Statement, and (vii) all other costs, fees and expenses
incident to the Company's performance or compliance with this Agreement.
Notwithstanding the foregoing, the fees and expenses of any persons retained by
any Holder, other than the Holder Counsel, and any discounts, commissions or
brokers' fees or fees of similar securities industry professionals and any
transfer taxes relating to the disposition of the Registrable Shares by a
Holder, will be payable by such Holder and the Company will have no obligation
to pay any such amounts.
7. Indemnification.
(a) Indemnification by the Company. The Company shall, without
limitation as to time, indemnify and hold harmless, to the full extent permitted
by law, each Holder of Registrable Shares whose Registrable Shares are covered
by a Registration Statement or Prospectus, each Affiliate of such Holder, the
officers, directors and agents and employees of each of them, each Person who
controls (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) each such Holder and the officers, directors, agents and
employees of each such controlling Person, to the fullest extent lawful, from
and against any and all losses, claims, damages, liabilities, judgments, costs
(including, without limitation, costs of preparation and reasonable attorneys'
fees) and expenses (collectively, "Losses"), as incurred, arising out of or
based upon any untrue or alleged untrue statement of a material fact contained
in such Registration Statement or Prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or based upon any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same are based upon information furnished in writing to the Company by or on
behalf of such Holder expressly for use therein or by any underwriter in a
Demand Registration; provided, however, that the Company shall not be liable to
any such
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Holder to the extent that any such Losses arise out of or are based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any preliminary prospectus if (i) having previously been furnished by or
on behalf of the Company with copies of the Prospectus, such Holder failed to
send or deliver a copy of the Prospectus with or prior to the delivery of
written confirmation of the sale of Registrable Shares by such Holder to the
person asserting the claim from which such Losses arise and (ii) the Prospectus
would have corrected in all material respects such untrue statement or alleged
untrue statement or such omission or alleged omission; and provided further,
however, that the Company shall not be liable in any such case to the extent
that any such Losses arise out of or are based upon an untrue statement or
alleged untrue statement or omission or alleged omission in the Prospectus, if
(x) such untrue statement or alleged untrue statement, omission or alleged
omission is corrected in all material respects in an amendment or supplement to
the Prospectus and (y) having previously been furnished by or on behalf of the
Company with copies of the Prospectus as so amended or supplemented, such Holder
thereafter fails to deliver such Prospectus as so amended or supplemented, prior
to or currently with the sale of Registrable Shares. In connection with any
Underwritten Offering, the Company will also indemnify underwriters, selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution, their officers and directors and each Person
who controls (within the meaning of Section 15 of the Securities Act) such
persons to the same extent as provided above with respect to indemnification of
Holders of Registrable Shares, or on such other terms as are reasonable and
customary and requested by the managing underwriter.
(b) Indemnification by Holder of Registrable Shares. In
connection with any Registration Statement in which a Holder is participating,
such Holder shall furnish to the Company in writing such information as the
Company reasonably requests for use in connection with such Registration
Statement or the related Prospectus and agrees to indemnify, to the full extent
permitted by law, the Company, its directors, officers, agents and employees,
each Person who controls (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act) the Company and the directors, officers,
agents and employees of such controlling Persons, from and against all Losses
arising out of or based upon any untrue or alleged untrue statement of a
material fact contained in such Registration Statement or the related Prospectus
or any amendment or supplement thereto, or any preliminary prospectus, or
arising out of or based upon any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that such untrue or alleged
untrue statement or omission or alleged omission is based upon any information
so furnished in writing by or on behalf of such Holder to the Company expressly
for use in such Registration Statement or Prospectus.
(c) If any Person shall be entitled to indemnity hereunder (an
"Indemnified Party"), the Indemnified Party shall give prompt notice to the
party from which such indemnity is sought (the "Indemnifying Party") of any
claim or of the commencement of any proceeding with respect to which the
Indemnified Party seeks indemnification or contribution pursuant hereto;
provided, however, that the delay or failure to so notify the Indemnifying Party
shall not relieve the Indemnifying Party from any obligation or liability except
to the extent that the Indemnifying Party has been prejudiced by such delay or
failure.
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The Indemnifying Party shall have the right, exercisable by giving written
notice to an Indemnified Party promptly after the receipt of written notice from
such Indemnified Party of such claim or proceeding, to assume, at the
Indemnifying Party's expense, the defense of any such claim or proceeding, with
counsel reasonably satisfactory to such Indemnified Party; provided, however,
that (i) an Indemnified Party shall have the right to employ separate counsel in
any such claim or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Party unless: (1) the Indemnifying Party agrees to pay such fees and expenses;
(2) the Indemnifying Party fails promptly to assume the defense of such claim or
proceeding or fails to employ counsel reasonably satisfactory to such
Indemnified Party; or (3) the named parties to any proceeding (including
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnifying Party shall have been advised by counsel that there
may be one or more legal defenses available to it that are inconsistent with
those available to the Indemnifying Party or that a conflict of interest is
likely to exist among such Indemnified Party and any other indemnified parties
(in which case the Indemnifying Party shall not have the right to assume the
defense of such action on behalf of such Indemnified Party); and (ii) subject to
clause (3) above, the Indemnifying Party shall not, in connection with any one
such claim or proceeding or separate but substantially similar or related claims
or proceedings in the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one firm of attorneys (together with appropriate local counsel) at any time for
all of the indemnified parties, or for fees and expenses that are not
reasonable. Whether or not such defense is assumed by the Indemnifying Party,
such Indemnified Party shall not be subject to any liability for any settlement
made without its consent, which shall not be unreasonably withheld. The
Indemnifying Party shall not consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release, in form and
substance reasonably satisfactory to the Indemnified Party, from all liability
in respect of such claim or litigation for which such Indemnified Party would be
entitled to indemnification hereunder.
(d) Contribution. If the indemnification provided for in this
Section 7 is unavailable to an Indemnified Party in respect of any Losses (other
than in accordance with its terms), then each applicable Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount paid
or payable by such Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party, on the one hand, and such Indemnified Party, on the other hand, in
connection with the actions, statements or omissions that resulted in such
Losses as well as any other relevant equitable considerations. The relative
fault of such Indemnifying Party, on the one hand, and Indemnified Party, on the
other hand, shall be determined by reference to, among other things, whether any
action in question, including any untrue statement of a material fact or
omission or alleged omission to state a material fact, has been taken by, or
relates to information supplied by, such Indemnifying Party or Indemnified
Party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent any such action, statement or omission. The
amount paid or payable by a party as a result of any Losses shall be deemed to
include any legal or other fees or expenses incurred by such party in connection
with any investigation or proceeding. The parties hereto agree that it would not
be just and equitable if contribution
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pursuant to this Section 7(d) were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provision of this Section 7(d), an Indemnifying Party that
is a Holder shall not be required to contribute any amount which is in excess of
the amount by which the total proceeds received by such Holder from the sale of
the Registrable Shares sold by such Holder (net of all underwriting discounts
and commissions) exceeds the amount of any damages that such Indemnifying Party
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
8. Rule 144. If the Company shall have filed a registration statement
pursuant to the requirements of Section 12 of the Exchange Act or a registration
statement pursuant to the requirements of the Securities Act, the Company
covenants that it will timely file the reports required to be filed by it under
the Securities Act or the Exchange Act (including but not limited to the reports
under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph
(c)(1) of Rule 144 adopted by the SEC under the Securities Act) and the rules
and regulations adopted by the SEC thereunder (or if the Company is not required
to file such reports, the Company will, upon the request of any Holder of
Registrable Shares, make publicly available other information), and will take
such further action as any Holder of Registrable Shares may reasonably request,
all to the extent required from time to time to enable such Holder of
Registrable Shares to sell Registrable Shares within the exemption provided by
(i) Rule 144 under the Securities Act, as such Rule 144 may be amended from time
to time, or (ii) any similar rule or regulation hereafter adopted by the SEC.
Upon the request of any Holder of Registrable Shares, the Company will deliver
to such Holder, a written statement as to whether it has complied with such
requirements.
9. Rights Plan Amendment. Prior to the Effective Time (as defined in
the Merger Agreement), the Company shall have adopted the HCR Rights Plan
Amendment and from and after the Effective Time, the Company shall not amend or
modify such Rights Plan Amendment without the consent of Xxxxxxx Xxxxxx Xx. or
his designee or adopt any stockholder rights plan after the Effective Time
inconsistent with the purposes of the Rights Plan Amendment.
10. Miscellaneous.
(a) Termination. This Agreement and the obligations of the
Company and the Holders hereunder (other than Section 7 hereof) shall terminate
on the first date on which no Registrable Shares remain outstanding.
(b) Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy, electronic or
digital transmission method; the day after it is sent, if sent for next day
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delivery to a domestic address by recognized overnight delivery service (e.g.,
Federal Express); and upon receipt, if sent by certified or registered mail,
return receipt requested. In each case notice shall be sent to the address for
such party set forth on the signature page hereto, as such address may be
changed by notice thereof conforming herewith.
(c) Interpretation. When a reference is made in this Agreement
to Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. Headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the word "include," "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation". This Agreement shall not be construed for or against either party
by reason of the authorship or alleged authorship of any provision hereof or by
reason of the status of the respective parties. All terms defined in this
Agreement in the singular shall have the same comparable meanings when used in
the plural and vice versa, unless otherwise specified.
(d) Entire Agreement; No Third-Party Beneficiaries. This
Agreement constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof and is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.
(e) Assignment. Neither this Agreement nor any of the rights,
interests, or obligations hereunder shall be assigned (whether by operation of
law or otherwise) by any Holder without the consent of the Company, or by the
Company without the consent of Holders of at least a majority in number of the
Registrable Shares then outstanding provided that any Holder can assign its
rights hereunder to a Permitted Transferee without the consent of the Company.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and assigns. In no event shall any transferee of Common Stock be entitled,
solely as a result of such transfer, to any of the benefits of this Agreement or
to enforce the same.
(f) Governing Law. The Laws of the State of Delaware shall
govern the interpretation, validity and performance of the terms of this
Agreement, regardless of the law that might be applied under principles of
conflicts of law. Any suit, action or proceeding by a party hereto with respect
to this Agreement, or any judgment entered by any court in respect of any
thereof, may be brought in any state or federal court of competent jurisdiction
in the State of Delaware, and each party hereto hereby submits to the exclusive
jurisdiction of such courts for the purpose of any such suit, action, proceeding
or judgment. By the execution and delivery of this Agreement, (i) the Company
appoints The Corporation Trust Company, at its office in Wilmington, Delaware,
as its agent upon which process may be served in any such suit, action or
proceeding and (ii) each Stockholder appoints CSC/The United States Corporation
Company in Wilmington, Delaware, as its agent upon which process may be served
in any such suit, action or proceeding. Service of process upon such agent,
together with notice of such service given to a party hereto in the manner
provided in Section 9(b) hereof, shall be deemed in every respect effective
service of process upon it in any suit, action or proceeding. Nothing herein
shall in any way be deemed to limit the ability of a party hereto to serve any
such writs, process or
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summonses in any other manner permitted by applicable Law. Each party hereto
hereby irrevocably waives any objections which it may now or hereafter have to
the laying of the venue of any suit, action or proceeding arising out of or
relating to this Agreement brought in any state or federal court of competent
jurisdiction in the State of Delaware, and hereby further irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has
been brought in any inconvenient forum. No suit, action or proceeding against a
party hereto with respect to this Agreement may be brought in any court,
domestic or foreign, or before any similar domestic or foreign authority other
than in a court of competent jurisdiction in the State of Delaware, and each
party hereto hereby irrevocably waives any right which it may otherwise have had
to bring such an action in any other court, domestic or foreign, or before any
similar domestic or foreign authority.
(g) Severability. Each party agrees that, should any court or
other competent authority hold any provision of this Agreement or part hereof to
be null, void or unenforceable, or order any party to take any action
inconsistent herewith or not to take an action consistent herewith or required
hereby, the validity, legality and enforceability of the remaining provisions
and obligations contained or set forth herein shall not in any way be affected
or impaired thereby. Upon any such holding that any provision of this Agreement
is null, void or unenforceable, the parties will negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated by this Agreement are consummated to the extent possible. Except as
otherwise contemplated by this Agreement, to the extent that a party hereto took
an action inconsistent herewith or failed to take action consistent herewith or
required hereby pursuant to an order or judgment of a court or other competent
authority, such party shall incur no liability or obligation unless such party
did not in good faith seek to resist or object to the imposition or entering of
such order or judgment.
(h) Injunctive Relief. The parties acknowledge that it will be
impossible to measure in money the damages that would be suffered if the parties
fail to comply with any of the obligations herein imposed on them and that in
the event of any such failure, an aggrieved person or entity will be irreparably
damaged and will not have an adequate remedy at law. Any such person or entity
shall, therefore, be entitled to injunctive relief, including specific
performance, to enforce such obligations, and if any action should be brought in
equity to enforce any of the provisions of this Agreement, none of the parties
shall raise the defense that there is an adequate remedy at law.
(i) Attorneys' Fees. If any party to this Agreement brings an
action to enforce its rights under this Agreement, the prevailing party shall be
entitled to recover its costs and expenses, including without limitation
reasonable attorneys' fees, incurred in connection with such action, including
any appeal of such action.
(j) Cumulative Remedies. All rights and remedies of either
party hereto are cumulative of each other and of every other right or remedy
such party may otherwise have at law or in equity, and the exercise of one or
more rights or remedies shall not prejudice or impair the concurrent or
subsequent exercise of other rights or remedies.
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(k) Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same instrument and
shall become effective when executed and delivered by each of the parties.
(l) Amendments and Waivers. Except as otherwise provided herein,
the provisions of this Agreement may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, except in writing, by the Company and by the Holders of at least a
majority in number of the Registrable Shares then outstanding.
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
HEALTH CARE AND RETIREMENT
CORPORATION
By:
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a duly authorized signatory
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Holder Signature Page for Registration Rights Agreement
HOLDER:
--------------------------------
(entity)
By:
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Title/Authority:
-----------------
Address:
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-------------------------
-------------------------
Facsimile:
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HOLDER:
(individual)
----------------------------------------
Print Name:
---------------------
Address:
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Facsimile:
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