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EXHIBIT 4.2
Execution Copy
ARV Assisted Living, Inc.
$50,000,000
6 3/4% Convertible Subordinated Notes Due 2006
REGISTRATION AGREEMENT
New York, New York
March 28, 1996
Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
ARV Assisted Living, Inc., a California corporation (the "Company"),
proposes to issue and sell to you (the "Purchaser"), upon the terms set forth
in a purchase agreement of even date herewith (the "Purchase Agreement"),
$50,000,000 principal amount (plus an additional $7,500,000 principal amount to
cover over-allotments, if any) of its 6 3/4% Convertible Subordinated Notes due
2006 (the "Securities") (the "Initial Placement"). The Securities will be
convertible into shares of Common Stock, no par value (the "Common Stock"), of
the Company at the conversion price set forth in the Final Memorandum. As an
inducement to the Purchaser to enter into the Purchase Agreement and in
satisfaction of a condition to your obligations thereunder, the Company agrees
with you, (i) for your benefit and (ii) for the benefit of the holders of the
Securities or the Common Stock issuable upon conversion of the Securities
(including you) from time to time until such time as such Securities or Common
Stock issued upon conversion of such Securities have been sold pursuant to the
Shelf Registration Statement (as defined below) (each of the foregoing a
"Holder" and together the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following capitalized defined terms shall have the
following meanings:
"Act" means the Securities Act of 1933, as amended, and the rules and
regulations of the commission promulgated thereunder.
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"Affiliate" of any specified person means any other person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Closing Date" has the meaning set forth in the Purchase Agreement.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Final Memorandum" has the meaning set forth in the Purchase
Agreement.
"Holder" has the meaning set forth in the preamble hereto.
"Indenture" means the Indenture relating to the Securities, to be
entered into by the Company and The Chase Manhattan Bank, N.A., as trustee, as
the same may be amended from time to time in accordance with the terms thereof.
"Initial Placement" has the meaning set forth in the preamble hereto.
"Majority Holders" means the Holders of a majority of the aggregate
principal amount of Securities registered under a Shelf Registration Statement
provided that Holders of Common Stock issued upon conversion of Securities
shall be deemed to be Holders of the aggregate principal amount of Securities
from which such Common Stock was converted.
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering
of the securities covered by the Shelf Registration Statement.
"Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Securities or Common Stock issuable upon
conversion thereof, covered by such Shelf Registration Statement, and all
amendments and supplements to the Prospectus, including post-effective
amendments.
"Securities" has the meaning set forth in the preamble hereto.
"Shelf Registration" means a registration effected pursuant to Section
2 hereof.
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"Shelf Registration Period" has the meaning set forth in Section 2(b)
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
of the Company pursuant to the provisions of Section 2 hereof which covers some
or all of the Securities and the Common Stock issuable upon conversion thereof,
as applicable, on an appropriate form under Rule 415 under the Act or any
similar rule that may be adopted by the Commission, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Trustee" means the trustee with respect to the Securities under the
Indenture.
"Underwriter" means any underwriter of Securities or Common Stock
issuable upon conversion thereof in connection with an offering thereof under a
Shelf Registration Statement.
2. Shelf Registration; Suspension of Use of Prospectus.
(a) The Company shall prepare and file with the Commission and
thereafter, but no later than January 15, 1997, shall cause to be declared
effective under the Act a Shelf Registration Statement relating to the offer
and sale of the Securities and the Common Stock issuable upon conversion
thereof by the Holders from time to time in accordance with the methods of
distribution elected by such Holders and set forth in such Shelf Registration
Statement.
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the Prospectus
forming part thereof to be usable by Holders for a period of three years (or
such shorter period relating to resales of restricted securities as shall be
permitted under the Act) from the date the Shelf Registration Statement is
declared effective by the Commission or such shorter period that will terminate
when all the Securities or Common Stock issuable upon conversion thereof
covered by the Shelf Registration Statement have been sold pursuant to the
Shelf Registration Statement (in any such case, such period being called the
"Shelf Registration Period"). The Company shall be deemed not to have used its
best efforts to keep the Shelf Registration Statement effective during the
requisite period if it voluntarily takes any action that would result in
Holders of securities covered thereby not being able to offer and sell such
securities during that period, unless such action is (i) required by applicable
law or (ii) pursuant to Section 2(c) hereof, and, in either case, so long as
the Company promptly thereafter complies with the requirements of Section 3(i)
hereof, if applicable.
(c) The Company may suspend the use of the Prospectus for a period
not to exceed 45 days in any three month period or two periods not to exceed an
aggregate of 75 days in any 12 month period for valid business reasons (not
including avoidance of the Company's obligations hereunder), including the
acquisition or divestiture of assets, public filings with the Commission,
pending corporate developments and similar events.
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3. Registration Procedures. In connection with any Shelf
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to you, prior to the filing thereof
with the Commission, a copy of any Shelf Registration Statement, and each
amendment thereof and each amendment or supplement, if any, to the Prospectus
included therein and shall use its best efforts to reflect in each such
document, when so filed with the Commission, such comments as you reasonably
may propose.
(b) The Company shall ensure that (i) any Shelf Registration
Statement and any amendment thereto and any Prospectus forming part thereof and
any amendment or supplement thereto complies in all material respects with the
Act and the rules and regulations thereunder, (ii) any Shelf Registration
Statement and any amendment thereto does not, when it becomes effective,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading and (iii) any Prospectus forming part of any Shelf
Registration Statement, and any amendment or supplement to such Prospectus,
does not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(c) (1) The Company shall advise you and the Holders and, if
requested by you or any such Holder, confirm such advice in writing:
(i) when a Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto has
become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the Prospectus
included therein or for additional information.
(2) The Company shall advise you and the Holders and, if
requested by you or any such Holder, confirm such advice in writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or
the initiation of any proceedings for that purpose;
(ii) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the securities
included in any Shelf Registration Statement for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and
(iii) of the suspension of the use of the Prospectus
pursuant to Section 2(c) hereof or of the happening of any event that
requires the making of any changes in the Shelf
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Registration Statement or the Prospectus so that, as of such date, the
statements therein are not misleading and do not omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein (in the case of the Prospectus, in light
of the circumstances under which they were made) not misleading (which
advice shall be accompanied by an instruction to suspend the use of
the Prospectus until the requisite changes have been made); provided
that such notice shall not be required to specify the nature of the
event giving rise to the notice requirement hereunder.
(d) The Company shall use its best efforts to obtain the
withdrawal of any order suspending the effectiveness of any Shelf Registration
Statement at the earliest possible time.
(e) The Company shall furnish to each Holder of securities
included within the coverage of any Shelf Registration Statement, without
charge, at least one copy of such Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
and, if the Holder so requests in writing, all exhibits (including those
incorporated by reference).
(f) The Company shall, during the Shelf Registration Period,
deliver to each Holder of securities included within the coverage of any Shelf
Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Holder may reasonably
request; and the Company consents to the use of the Prospectus or any amendment
or supplement thereto by each of the selling Holders of securities in
connection with the offering and sale of the securities covered by the
Prospectus or any amendment or supplement thereto.
(g) Prior to any offering of securities pursuant to any Shelf
Registration Statement, the Company shall register or qualify or cooperate with
the Holders of securities included therein and their respective counsel in
connection with the registration or qualification of such securities for offer
and sale under the securities or blue sky laws of such jurisdictions as any
such Holders reasonably request in writing and do any and all other acts or
things reasonably necessary or advisable to enable the offer and sale in such
jurisdictions of the securities covered by such Shelf Registration Statement;
provided, however, that the Company will not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or to take
any action which would subject it to general service of process or to taxation
in any such jurisdiction where it is not then so subject.
(h) The Company shall cooperate with the Holders of the Securities
or the Common Stock issued upon conversion thereof to facilitate the timely
preparation and delivery of certificates representing the Securities or the
Common Stock issued upon conversion thereof to be sold pursuant to any Shelf
Registration Statement free of any restrictive legends and in such
denominations and registered in such names as Holders may request prior to
sales of securities pursuant to such Shelf Registration Statement.
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(i) Upon the occurrence of any event contemplated by paragraph
(c)(2)(iii) above, the Company shall, if required pursuant to the Act or
paragraph (c)(2)(iii) above, promptly prepare a post-effective amendment to any
Shelf Registration Statement or an amendment or supplement to the related
Prospectus or file any other required document so that, as thereafter delivered
to purchasers of the securities included therein, the Prospectus will not
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(j) Not later than the effective date of any Shelf Registration
Statement hereunder, the Company shall (i) use its commercially reasonable best
efforts to arrange for the assignment of a CUSIP number for the Securities
registered under such Shelf Registration Statement that will be of the type of
CUSIP numbers commonly assigned to unrestricted securities and to cause The
Depository Trust Company ("DTC") to reflect the assignment of such new CUSIP
number in its electronic records with respect to such Securities and (ii)
provide the Trustee with printed certificates for such Securities, in a form
eligible for deposit with DTC.
(k) The Company shall cause the Indenture to be qualified under
the Trust Indenture Act in a timely manner.
(l) The Company may require each Holder of securities to be sold
pursuant to any Shelf Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of such securities as the
Company may from time to time reasonably require for inclusion in such Shelf
Registration Statement. Any Holder who fails to provide such information shall
not be entitled to use the Prospectus and may not require any Liquidated
Damages (as specified in Section 11 of the Securities) to be paid until such
time as the information is provided.
(m) The Company shall, if requested, promptly incorporate in a
Prospectus supplement or post effective amendment to a Shelf Registration
Statement, such information as the Managing Underwriters and Majority Holders
reasonably agree should be included therein and shall make all required filings
of such Prospectus supplement or post-effective amendment as soon as notified
of the matters to be incorporated in such Prospectus supplement or
post-effective amendment.
(n) The Company shall enter into such agreements (including
underwriting agreements) and take all other appropriate actions in order to
expedite or facilitate the registration or the disposition of the Securities or
the Common Stock issuable upon conversion thereof, and in connection therewith,
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 5 (or such other provisions and procedures acceptable to the
Majority Holders and the Managing Underwriters, if any), with respect to all
parties to be indemnified pursuant to Section 5 from Holders of the Securities
or the Common Stock issuable upon conversion thereof to the Company.
(o) The Company shall (i) make reasonably available for inspection
by the Holders of securities to be registered thereunder, any underwriter
participating in any disposition pursuant to
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such Shelf Registration Statement, and any attorney, accountant or other agent
retained by the Holders or any such underwriter all relevant financial and
other records, pertinent corporate documents and properties of the Company and
its subsidiaries; (ii) cause the Company's officers, directors and employees to
supply all relevant information reasonably requested by the Holders or any such
underwriter, attorney, accountant or agent in connection with such Shelf
Registration Statement as is customary for similar due diligence examinations;
provided, however, that any information that is designated in writing by the
Company, in good faith, as confidential at the time of delivery of such
information shall be kept confidential by the Holders or any such underwriter,
attorney, accountant or agent, unless disclosure thereof is made in connection
with a court proceeding or required by law, or such information has become
available (not in violation of this Agreement) to the public generally or
through a third party without an accompanying obligation of confidentiality;
(iii) if requested to do so in writing by a Holder, make such representations
and warranties to the Holders of securities registered thereunder and the
underwriters, if any, in form, substance and scope as are customarily made by
issuers to underwriters in primary underwritten offerings and covering matters
including, but not limited to, those set forth in the Purchase Agreement; (iv)
if requested to do so in writing by a Holder, obtain opinions of counsel to the
Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Managing Underwriters, if
any) addressed to each selling Holder and the underwriters, if any, covering
such matters as are customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such Holders
and underwriters; (v) if requested to do so in writing by a Holder, 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 Shelf Registration Statement),
addressed to each selling Holder of securities registered thereunder and the
underwriters, if any, in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with primary
underwritten offerings; and (vi) deliver such documents and certificates as may
be reasonably requested by the Majority Holders and the Managing Underwriters,
if any, including those to evidence compliance with Section 3(i) and with any
customary conditions contained in the underwriting agreement or other agreement
entered into by the Company. The foregoing actions set forth in clauses (iii),
(iv), (v) and (vi) of this Section 3(p) shall be performed at (A) the
effectiveness of such Shelf Registration Statement and each post-effective
amendment thereto and (B) each closing under any underwriting or similar
agreement as and to the extent required thereunder.
4. Registration Expenses. The Company shall bear all expenses
incurred in connection with the performance of its obligations under Sections 2
and 3 hereof and shall reimburse the Holders for the reasonable and duly
documented fees and disbursements of one firm or counsel designated by the
Majority Holders to act as counsel for the Holders in connection therewith.
5. Indemnification and Contribution. (a) In connection with any
Shelf Registration Statement, the Company agrees to indemnify and hold harmless
each Holder of securities covered thereby (including the Purchaser), the
directors, officers, employees and agents of each such Holder
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and each person who controls any such Holder within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained
in the Shelf Registration Statement as originally filed or in any amendment
thereof, or in any preliminary Prospectus or Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state in (i) the Shelf Registration Statement as
originally filed or in any amendment thereof a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(ii) the Prospectus or in any amendment thereof or supplement thereto 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, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that (i) the Company will not be liable in any case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any such Holder or
underwriter or Managing Underwriter specifically for inclusion therein, (ii)
the Company shall not be liable to any indemnified party under this indemnity
agreement with respect to any Shelf Registration Statement or Prospectus to the
extent that any such loss, claim, damage or liability of such indemnified party
results solely from an untrue statement of a material fact contained in, or the
omission of a material fact from, the Shelf Registration Statement or
Prospectus which untrue statement or omission was corrected in an amended or
supplemented Shelf Registration Statement or Prospectus, if the person alleging
such loss, claim, damage or liability was not sent or given, at or prior to the
written confirmation of such sale, a copy of the amended or supplemented Shelf
Registration Statement or Prospectus if the Company had previously furnished
copies thereof to such indemnified party and if such delivery of a Prospectus
is finally judicially determined to be required by the Act and was not so made
and (iii) the Company will not be liable to any indemnified party under this
indemnity agreement with respect to any Shelf Registration Statement or
Prospectus to the extent that any such loss, claim, damage or liability of such
indemnified party results (A) from the use of a Shelf Registration Statement
during a period when a stop order has been issued in respect thereof or any
proceedings for that purpose have been initiated or (B) from the use of the
Prospectus during a period when the use of the Prospectus has been suspended in
accordance with Section 2(c) hereof, provided, in each case, that Holders
received prior notice of such stop order, initiation of proceedings or
suspension. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
The Company also agrees to indemnify or contribute to Losses, as
provided in Section 5(d), of any underwriters of the Securities or the Common
Stock issued upon conversion thereof registered under a Shelf Registration
Statement, their officers and directors and each person who controls such
underwriters on substantially the same basis as that of the indemnification of
the Purchaser and the
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selling Holders provided in this Section 5(a) and shall, if requested by any
Holder, enter into an underwriting agreement reflecting such agreement, as
provided in Section 3(o) hereof.
(b) Each Holder of securities covered by a Shelf Registration
Statement (including the Purchaser) severally agrees to indemnify and hold
harmless (i) the Company, (ii) each of its directors, (iii) each of its
officers who signs such Shelf Registration Statement and (iv) each person who
controls the Company within the meaning of either the Act or the Exchange Act
to the same extent as the foregoing indemnity from the Company to each such
Holder, but only with reference to written information relating to such Holder
furnished to the Company by or on behalf of such Holder specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any such Holder
may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 5 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 5, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate
counsel retained by the indemnified party or parties except as set forth
below); provided, however, that such counsel shall be reasonably satisfactory
to the indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel (and local counsel) if (i) the use
of counsel chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, (iii) the indemnifying party shall
not have employed counsel satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising, out of such claim, action,
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suit or proceeding. An indemnified party will not, without the prior written
consent of the indemnifying parties, settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnifying parties are actual or
potential parties to such claim or action) unless such settlement, compromise
or consent includes an unconditional release of each indemnifying party from
all liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party each of the indemnifying parties jointy and severally shall
be obligated to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending the same) (collectively "Losses") to
which such indemnified party may be subject in such proportion as is
appropriate to reflect the relative benefits received by such indemnifying
party, on the one hand, and such indemnified party, on the other hand, from the
Initial Placement and the Shelf Registration Statement which resulted in such
Losses; provided, however, that in no case shall the Purchaser or any
subsequent Holder of any Security or the Common Stock issued upon conversion
thereof be responsible, in the aggregate, for any amount in excess of the
purchase discount or commission applicable to such Security, as set forth on
the cover page of the Final Memorandum, nor shall any underwriter be
responsible for any amount in excess of the underwriting discount or commission
applicable to the securities purchased by such underwriter under the Shelf
Registration Statement which resulted in such Losses. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the indemnifying party and the indemnified party shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of such indemnifying party, on the one hand, and such
indemnified party, on the other hand, in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal
to the sum of (x) the total net proceeds from the Initial Placement (before
deducting expenses) as set forth on the cover page of the Final Memorandum and
(y) the total amount of additional interest which the Company was not required
to pay as a result of registering the securities covered by the Shelf
Registration Statement which resulted in such Losses. Benefits received by the
Purchaser shall be deemed to be equal to the total purchase discounts and
commissions as set forth on the cover page of the Final Memorandum. Benefits
received by any other Holders shall be deemed to be equal to the market price
obtained by such Holder on the resale of the Securities or Common Stock issued
on conversion of Securities held thereby that were registered under the Act,
less any underwriting discounts, commissions or expenses paid thereby in
connection with such resale and less the price paid by such Holder in acquiring
such Securities. Benefits received by any underwriter shall be deemed to be
equal to the total underwriting discounts and commissions, as set forth on the
cover page of the Prospectus forming a part of the Shelf Registration Statement
which resulted in such Losses. Relative fault shall be determined by reference
to whether any alleged untrue statement or omission relates to information
provided by the indemnifying party, on the one hand, or by the indemnified
party, on the other hand. The parties agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the
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provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 5, each person who controls a
Holder within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of such Holder shall have the same rights
to contribution as such Holder, and each person who controls the Company within
the meaning of either the Act or the Exchange Act, each officer of the Company
who shall have signed the Shelf Registration Statement and each director of the
Company shall have the same rights to contribution as the Company, subject in
each case to the applicable terms and conditions of this paragraph (d).
(e) The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder or
the Company or any of the officers, directors or controlling persons referred
to in Section 5 hereof, and will survive the sale by a Holder of securities
covered by a Shelf Registration Statement.
6. Miscellaneous.
(a) No Inconsistent Agreement. The Company has not, as of the
date hereof, entered into, nor shall it, on or after the date hereof, enter
into, any agreement with respect to its securities that is inconsistent with
the rights granted to the Holders herein or otherwise conflicts with the
provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of the Majority Holders of the then outstanding aggregate principal
amount of Securities and the Common Stock issued upon conversion thereof;
provided that, with respect to any matter that directly or indirectly affects
the rights of the Purchaser hereunder, the Company shall obtain the written
consent of the Purchaser. Notwithstanding the foregoing (except the foregoing
proviso), a waiver or consent to departure from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders whose
securities are being sold pursuant to a Shelf Registration Statement and that
does not directly or indirectly affect the rights of other Holders may be given
by the Majority Holders, determined on the basis of securities being sold
rather than registered under such Shelf Registration Statement.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by
such Holder to the Company in accordance with the provisions of this
Section 6(c), which address initially is, with respect to each Holder,
the address of such Holder maintained by the Registrar under the
Indenture, with a copy in like manner to Salomon Brothers Inc;
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(2) if to you, initially at the address set forth in the
Purchase Agreement; and
(3) if to the Company, initially at its address set forth
in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received.
The Purchaser or the Company by notice to the other may designate
additional or different addresses for subsequent notices or communications.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any consent
by the Company thereto, subsequent Holders of Securities or the Common Stock
issuable upon conversion thereof. The Company hereby agrees to extend the
benefits of this Agreement to any Holder of Securities and any such Holder may
specifically enforce the provisions of this Agreement as if an original party
hereto.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed in said State.
(h) Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances,
is held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the consent or
approval of Holders of a specified percentage of principal amount of Securities
or the Common Stock issued upon conversion thereof is required hereunder,
Securities or the Common Stock issued upon conversion thereof held by the
Company or its Affiliates (other than subsequent Holders of Securities or the
Common Stock issuable upon conversion thereof if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
ARV ASSISTED LIVING, INC.
By
----------------------------
Name:
Title:
Accepted in New York, New York
SALOMON BROTHERS INC
By
---------------------------
Name:
Title:
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