Exhibit 10.7
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REGISTRATION RIGHTS AGREEMENT
DATED AS OF MAY 4, 1998
BY AND AMONG
SUN FINANCING I
AS ISSUER,
SUN HEALTHCARE GROUP, INC.
AS GUARANTOR,
AND
BEAR, XXXXXXX & CO. INC.,
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION,
X.X. XXXXXX SECURITIES INC.,
NATIONSBANC XXXXXXXXXX SECURITIES LLC
AND
XXXXXXXX & CO. INC.
AS INITIAL PURCHASERS
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of May 4, 1998, among SUN FINANCING I, a statutory business
trust formed under the laws of the State of Delaware (the "Issuer"), SUN
HEALTHCARE GROUP, INC., a Delaware corporation (the "Guarantor"), and BEAR,
XXXXXXX & CO. INC., XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION, X.X.
XXXXXX SECURITIES INC., NATIONSBANC XXXXXXXXXX SECURITIES LLC and XXXXXXXX &
CO. INC. (collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated
April 28, 1998, among the Issuer, the Guarantor and the Initial Purchasers
(the "Purchase Agreement"), which provides for the sale by the Issuer to the
Initial Purchasers of up to 13,800,000 7% Convertible Trust Issued Preferred
Securities (liquidation amount $25 per preferred security) (collectively, the
"Convertible Preferred Securities"). The Convertible Preferred Securities
are guaranteed on a subordinated basis by the Guarantor as to the payment of
distributions, and as to payments on liquidation or redemption, to the extent
set forth in a guarantee agreement (the "Guarantee") between the Guarantor
and The Bank of New York, a New York banking corporation, as trustee, and may
be converted or exchanged under certain circumstances into the 7% Convertible
Junior Subordinated Debentures due May 1, 2028 of the Guarantor (the
"Convertible Debentures") held by the Issuer and then into common stock, $.01
par value per share ("Underlying Common Stock"), of the Guarantor's Common
Stock (the "Sun Common Stock") as set forth in the Issuer's Declaration. In
order to induce the Initial Purchasers to enter into the Purchase Agreement,
the Issuer and the Guarantor have agreed to provide to the Initial Purchasers
and their respective direct and indirect transferees, among other things, the
registration rights for the Transfer Restricted Securities set forth in this
Agreement. The execution of this Agreement is a condition to the closing of
the transactions contemplated by the Purchase Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
(a) As used in this Agreement, the following terms shall have the
following meanings (and, unless otherwise indicated, capitalized terms used
herein
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without definition shall have the respective meanings ascribed to them by the
Purchase Agreement):
CONVERTIBLE DEBENTURES: See the introductory paragraphs to this
Agreement.
CONVERTIBLE PREFERRED SECURITIES: See the introductory paragraphs
to this Agreement.
DECLARATION: As defined in the Offering Memorandum.
EFFECTIVENESS PERIOD: See Section 2(a) hereof.
EFFECTIVENESS TARGET DATE: See Section 3(a)(ii) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
GUARANTEE: See the introductory paragraphs to this Agreement.
GUARANTOR: See the introductory paragraphs to this Agreement.
HOLDER: Any holder of Transfer Restricted Securities.
INDEMNIFIED PARTY: See Section 6 hereof.
INDEMNIFIED PERSON: See Section 6 hereof.
INDEMNIFYING PERSON: See Section 6 hereof.
INDENTURE: The Indenture, dated as of the date hereof, by and
among the Issuer, the Guarantor and the Bank of New York, a New York banking
corporation, as trustee, pursuant to which the Convertible Preferred
Securities are being issued, as amended or supplemented from time to time in
accordance with the terms thereof.
INITIAL PURCHASERS: See the introductory paragraphs to this
Agreement.
INSPECTORS: See Section 3(m) hereof.
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ISSUE DATE: The date of the original issuance of the Transfer
Restricted Securities.
ISSUER: See the introductory paragraphs to this Agreement.
LIQUIDATED DAMAGES: See Section 3(a) hereof.
OFFERING MEMORANDUM: The final Offering Memorandum dated April 29,
1998 related to the sale of the Convertible Preferred Securities.
PERSON or PERSON: An individual, trustee, corporation,
partnership, joint stock company, trust, unincorporated association, union,
business association, limited liability company, limited liability
partnership, firm or other legal entity.
PROSPECTUS: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule
430A promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any
portion of the Transfer Restricted Securities (as applicable), covered by
such Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in such
Prospectus.
RECORDS: See Section 4(m) hereof.
REGISTRATION DEFAULT: See Section 4(a) hereof.
REGISTRATION STATEMENT: Any registration statement of the Issuer
and/or the Guarantor that covers the Transfer Restricted Securities pursuant
to the provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective
amendments, all exhibits, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.
RULE 144: Rule 144 promulgated pursuant to the Securities Act, as
currently in effect, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.
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RULE 144A: Rule 144A promulgated pursuant to the Securities Act,
as currently in effect, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.
RULE 415: Rule 415 promulgated pursuant to the Securities Act, as
such rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
"SECURITIES" means the Convertible Preferred Securities, the
Convertible Debentures, the Guarantee and the Underlying Common Stock
issuable upon conversion or exchange of the Convertible Preferred Securities
and the Convertible Debentures.
SECURITIES ACT: The Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
SHELF REGISTRATION STATEMENT: See Section 2(a) hereof.
SUN COMMON STOCK: See the introductory paragraphs to this Agreement.
TIA: The Trust Indenture Act of 1939, as amended, and the rules
and regulations of the SEC promulgated thereunder.
TRANSFER RESTRICTED SECURITIES: The Securities upon original
issuance thereof and at all times subsequent thereto, until (i) a
Registration Statement covering such Securities has been declared effective
by the SEC and such Securities have been disposed of in accordance with such
effective Registration Statement, (ii) such Securities are sold in compliance
with Rule 144 or are eligible for sale under Rule 144(k), (iii) such
Securities cease to be outstanding or (iv) if the Security has otherwise been
transferred and a new Security not subject to transfer restrictions under the
Securities Act has been delivered by or on behalf of the Guarantor in
accordance with the Declaration of Indenture, as the case may be.
TRUSTEE: The trustee under the Indenture.
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UNDERLYING COMMON SECURITIES: See the introductory paragraphs to
this Agreement.
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration
in which securities of the Issuer or the Guarantor are sold to an underwriter
for reoffering to the public.
(b) Wherever there is a reference in this Agreement to a
percentage of the "principal amount" of Transfer Restricted Securities or to
a percentage of Transfer Restricted Securities, the Convertible Preferred
Securities and the Convertible Debentures issuable upon exchange of the
Convertible Preferred Securities will be treated as the same class of
Securities and Underlying Common Stock shall be treated as representing the
liquidation amount of Convertible Preferred Securities or the principal
amount of Convertible Debentures which was surrendered for conversion in
order to receive such number of shares of Underlying Common Stock.
2. SHELF REGISTRATION
(a) The Issuer and the Guarantor shall prepare and file with the
SEC, within 90 days after the Issue Date, a Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415 covering all
of the Transfer Restricted Securities (the "Shelf Registration Statement").
The Shelf Registration Statement shall be on Form S-3 or another appropriate
form permitting registration of the Transfer Restricted Securities for resale
by the Holders in the manner or manners reasonably designated by the Holders
of a majority in aggregate principal amount of the outstanding Transfer
Restricted Securities (including, without limitation, an underwritten
offering). The Issuer and the Guarantor shall not permit any securities
other than the Transfer Restricted Securities to be included in the Shelf
Registration Statement. The Issuer and the Guarantor shall use their
reasonable best efforts to cause the Shelf Registration Statement to be
declared effective (the "Effective Time") pursuant to the Securities Act on
or prior to 60 days after the filing of such Shelf Registration Statement and
to keep the Shelf Registration Statement continuously effective under the
Securities Act until the earlier of (i) the date which is 24 months after the
Issue Date, (ii) the date that all Transfer Restricted Securities covered by
the Shelf Registration Statement have been sold in the manner set forth and
as contemplated in the Shelf Registration Statement, or (iii) the date that
there ceases to be outstanding any Transfer Restricted Securities (the
"Effectiveness Period"); PROVIDED, HOWEVER, that no Holder shall be entitled
to have the Transfer
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Restricted Securities held by it covered by such Shelf Registration Statement
unless such Holder is in compliance with Section 4(s).
(b) If at any time prior to the end of the Effectiveness Period,
the Convertible Preferred Securities are convertible into securities other
than Underlying Common Stock, the Issuer and the Guarantor shall cause such
securities to be included in the Shelf Registration Statement no later than
the date on which the Convertible Preferred Securities may first be converted
into such securities.
3. LIQUIDATED DAMAGES
(a) The Issuer, the Guarantor and the Initial Purchasers agree
that the Holders of Transfer Restricted Securities will suffer damages if the
Issuer or the Guarantor fails to fulfill its obligations pursuant to Section
2 hereof and that it would not be possible to ascertain the extent of such
damages. Accordingly, in the event of such failure by the Issuer or the
Guarantor to fulfill such obligations, the Issuer hereby agrees to pay
liquidated damages ("Liquidated Damages") to each Holder of Transfer
Restricted Securities under the circumstances and to the extent set forth
below:
If (i) on or prior to 90 days following the Issue Date, a Shelf
Registration Statement has not been filed with the SEC, or (ii) on or prior
to the 150th day following the Issue Date (the "Effectiveness Target Date")
such Shelf Registration Statement is not declared effective (each, a
"Registration Default"), additional interest will accrue on the Convertible
Debentures and, accordingly, additional distributions will accrue on the
Convertible Preferred Securities, in each case from and including the day
following such Registration Default. Liquidated Damages will be paid
quarterly in arrears, with the first quarterly payment due on the first
interest or distribution payment date, as applicable, following the date on
which such Liquidated Damages begin to accrue, and will accrue at a rate per
annum equal to an additional one-quarter of one percent (0.25%) of the
principal amount or liquidation amount, as applicable, to and including the
90th day following such Registration Default and one-half of one percent
(0.50%) thereof from and after the 91st day following such Registration
Default. The curing of any Registration Default will reset the rate at which
Liquidated Damages begin to accrue for any subsequent new Registration
Default to a rate per annum equal to an additional one-quarter of one percent
(0.25%) of the principal amount or liquidation amount, as applicable, to and
including the 90th day following such Registration Default and one-half of
one percent (0.50%) thereof from and after the 91st day following such new
Registration Default. The Guarantor
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shall have the right to suspend the Shelf Registration Statement under
certain circumstances for up to 90 consecutive days. In the event that the
Shelf Registration Statement ceases to be effective during the Effectiveness
Period for more than 90 consecutive days or any 120 days, whether or not
consecutive, during any 12-month period, then the interest rate borne by the
Convertible Debentures and the distribution rate borne by the Convertible
Preferred Securities will each increase by an additional one quarter of one
percent (0.25%) per annum from such 91st or 121st day, as applicable, until
such time as (i) the Shelf Registration Statement again becomes effective or
(ii) the Effectiveness Period expires.
(b) The Issuer shall promptly notify the Trustee after each and
every date on which a Registration Default first occurs. Accrued and unpaid
Liquidated Damages shall be paid by the Issuer to the Holders in the same
manner dividends are made pursuant to the Declaration or by wire transfer of
immediately available funds to the accounts specified by them or by mailing
checks to their registered addresses if no such accounts have been specified
on each interest payment date provided in the Indenture (whether or not any
interest is then payable on the Convertible Debentures) and on each payment
date provided in the Indenture including, without limitation, whether upon
redemption, maturity (by acceleration or otherwise), purchase upon a change
of control or purchase upon a sale of assets (subject to the Guarantor's
right to defer the payment of Liquidated Damages during any Extension Period
(as defined in the Indenture)). Each obligation to pay Liquidated Damages
with respect to any Registration Default shall be deemed to commence accruing
on the date of such Registration Default and to cease accruing when such
Registration Default has been cured. In no event shall the Issuer pay
Liquidated Damages in excess of the applicable maximum weekly amount set
forth above, regardless of whether one or multiple Registration Defaults
exist.
(c) The parties hereto agree that the Liquidated Damages provided
for in this Section 3 constitute a reasonable estimate of the damages that
will be suffered by Holders by reason of the failure to file the Shelf
Registration Statement, the failure of the Shelf Registration Statement to be
declared effective or the failure of the Shelf Registration Statement to
remain effective, as the case may be, in accordance with this Agreement.
4. REGISTRATION PROCEDURES
In connection with the registration of any Transfer Restricted
Securities pursuant to Section 2 hereof, the Issuer and the Guarantor shall
effect such
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registration to permit the sale of such Transfer Restricted Securities (as
applicable) in accordance with the intended method or methods of disposition
thereof, and pursuant thereto the Issuer and the Guarantor shall:
(a) prepare and file with the SEC, a Registration Statement or
Registration Statements as prescribed by Section 2 hereof, and to use their
reasonable best efforts to cause such Registration Statement to become
effective and remain effective as provided herein; PROVIDED that, before
going effective on any Registration Statement or Prospectus or filing any
amendments or supplements thereto, the Issuer and the Guarantor shall furnish
to and afford the Initial Purchasers and their counsel, the Holders of the
Transfer Restricted Securities covered thereby and their counsel and the
managing underwriters, if any, a reasonable opportunity to review copies of
all such documents filed or proposed to be filed. Such documents shall be so
furnished at least 3 business days prior to going effective, or such later
date as is reasonable under the circumstances. The Issuer and the Guarantor
shall not file any Registration Statement or Prospectus or any amendments or
supplements thereto if the Initial Purchasers and their counsel, the Holders
of a majority in aggregate principal amount of the Transfer Restricted
Securities covered by such Registration Statement and their counsel, or the
managing underwriters, if any, shall reasonably object on a timely basis
(except that documents filed as exhibits that are incorporated by reference
or deemed to be incorporated by reference shall not be subject to such
objections);
(b) prepare and file with SEC such amendments and post-effective
amendments to each Shelf Registration Statement as may be necessary to keep
such Registration Statement continuously effective for the Effectiveness
Period or such shorter period as will terminate when all Transfer Restricted
Securities covered by such Registration Statement have been sold; cause the
related Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 (or any similar
provisions then in force) under the Securities Act; and comply with the
provisions of the Securities Act, the Exchange Act and the rules and
regulations of the SEC promulgated thereunder with respect to the disposition
of all securities covered by such Registration Statement, as so amended, or
in such Prospectus, as so supplemented; the Issuer and the Guarantor shall be
deemed not to have used their reasonable best efforts to keep a Registration
Statement effective during the Effectiveness Period, if they voluntarily take
any action that would result in selling Holders of the Transfer Restricted
Securities covered thereby not being able to sell such Transfer Restricted
Securities during such Period, unless (i) such action is required by
applicable law, or (ii) such action is taken by
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them in good faith and for valid business reasons (not including avoidance of
their obligations hereunder), including the acquisition or divestiture of
assets;
(c) if a Shelf Registration Statement is filed pursuant to Section 2
hereof, the Company shall notify the selling Holders of Transfer Restricted
Securities that have provided in writing to the Company a telephone or
facsimile number and address for notices, their counsel if such counsel has
provided in writing to the Company a telephone or facsimile number and
address for notices and the managing underwriters, if any, promptly and, if
requested, confirm such notice in writing, (i) when a Prospectus, any
prospectus supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective amendment has
become effective (including in any such written notice a statement that any
Holder may, upon request, obtain, without charge, one conformed copy of such
Registration Statement or post-effective amendment including financial
statements and schedules, documents incorporated or deemed to be incorporated
by reference and exhibits), (ii) of the issuance by the SEC of any stop order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of any Prospectus or the initiation of any
proceedings for that purpose, (iii) of the receipt by the Issuer or the
Guarantor of any notification with respect to the suspension of the
qualification or exemption from qualification of a Registration Statement or
the initiation of any proceeding for such purpose, (iv) of the happening of
any material event or any material information becoming known that makes any
statement made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any changes in
such Registration Statement, Prospectus or documents so that, in the case of
the Registration Statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and that
in the case of the Prospectus, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (v) of the
Issuer's and the Guarantor's reasonable determination that sales under the
Registration Statement need to be terminated to comply with applicable law or
that a post-effective amendment to a Registration Statement would be
appropriate;
(d) if a Shelf Registration Statement is filed pursuant to Section 2
hereof, use their reasonable best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing
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or suspending the use of a Prospectus and, if any such order is issued, to
use their reasonable best efforts to obtain the withdrawal of any such order
at the earliest possible moment;
(e) if a Shelf Registration Statement is filed pursuant to Section 2
hereof and if requested by the managing underwriters, if any, or the Holders
of a majority in aggregate principal amount of the Transfer Restricted
Securities being sold in connection with an underwritten offering, (i)
promptly incorporate in a prospectus supplement or post-effective amendment
such information relating to underwriters, if any, any Holder of Transfer
Restricted Securities or the plan of distribution of the Transfer Restricted
Securities as the managing underwriter, if any, or such Holders may
reasonably request to be included therein, (ii) make all required filings of
such prospectus supplement or such post-effective amendment as soon as
reasonably practicable after the Issuer has received notification of the
matters to be incorporated in such prospectus supplement or post-effective
amendment pursuant to clause (i), and (iii) supplement or make amendments to
such Registration Statement with such information as is required in
connection with any request made pursuant to clause (i);
(f) if a Shelf Registration Statement is filed pursuant to Section 2
hereof, furnish to each selling Holder of Transfer Restricted Securities who
so requests and to each managing underwriter, if any, without charge, one
conformed copy of the Registration Statement or Registration Statements and
each post-effective amendment thereto, including financial statements and
schedules, and, if requested, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits;
(g) if a Shelf Registration Statement is filed pursuant to Section
2 hereof, deliver to each selling Holder, its counsel, and the underwriters,
if any, without charge, as many copies of the Prospectus or Prospectuses
(including each form of preliminary Prospectus), and each amendment or
supplement thereto and any documents incorporated by reference therein, as
such Persons may reasonably request; and, subject to the last paragraph of
this Section 4 hereof, the Issuer and the Guarantor hereby consent to the use
of such Prospectus and each amendment or supplement thereto by each of the
selling Holders and their underwriters or agents, if any, and dealers, if
any, in connection with the offering and sale of the Transfer Restricted
Securities covered by such Prospectus and any amendment or supplement thereto;
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(h) prior to any public offering of Transfer Restricted Securities,
use their reasonable best efforts to register or qualify, and to cooperate
with the selling Holders of Transfer Restricted Securities, the underwriters,
if any, and their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Transfer Restricted Securities for offer and sale under the securities or
Blue Sky laws of such jurisdictions as any selling Holder, or the managing
underwriters reasonably request in writing; keep each such registration or
qualification (or exemption therefrom), effective during the period such
Registration Statement is required to be kept effective and do any and all
other acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted Securities
covered by the applicable Registration Statement; PROVIDED that the Issuer
and the Guarantor shall not be required to (A) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where they are
not then so qualified, (B) take any action that would subject them to general
service of process in any such jurisdiction where they are not then so
subject or (C) subject themselves to taxation in any such jurisdiction where
they are not then so subject;
(i) if a Shelf Registration Statement is filed pursuant to Section
2 hereof, cooperate with the selling Holders of Transfer Restricted
Securities and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold, which certificates shall not bear any restrictive
legends and shall be in a form eligible for deposit with The Depository Trust
Company ("DTC"), and enable such Transfer Restricted Securities to be in such
denominations and registered in such names as the managing underwriters, if
any, or Holders may reasonably request at least two business days prior to
any sale of the Transfer Restricted Securities;
(j) if a Shelf Registration Statement is filed pursuant to Section
2 hereof, upon the occurrence of any event contemplated by paragraph 4(c)(iv)
or 4(c)(v) above, as promptly as practicable prepare and (subject to Section
4(a) hereof), file with the SEC, at the expense of the Issuer, a supplement
or post-effective amendment to the Registration Statement or a supplement to
the related Prospectus or any document incorporated or deemed to be
incorporated therein by reference, or file any other required document so
that, as thereafter delivered to the purchasers of the Transfer Restricted
Securities being sold thereunder, any such Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
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(k) prior to the effective date of the first Registration Statement
relating to the Transfer Restricted Securities, (i) provide the Trustee with
certificates for the Transfer Restricted Securities in a form eligible for
deposit with DTC and (ii) use its reasonable best efforts to provide a CUSIP
number for the Transfer Restricted Securities;
(l) in connection with an underwritten offering of Transfer
Restricted Securities pursuant to a Shelf Registration Statement, enter into
an underwriting agreement as is customary in underwritten offerings and take
all other customary and appropriate actions as are reasonably requested by
the managing underwriters in order to expedite or facilitate the registration
or the disposition of such Transfer Restricted Securities, and in such
connection, (i) make such representations and warranties to the underwriters,
with respect to the business of the Issuer, the Guarantor and the
Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in underwritten offerings; (ii)
use their reasonable best efforts to obtain opinions of counsel to the Issuer
and Guarantor and updates thereof in form and substance reasonably
satisfactory to the managing underwriters, addressed to the underwriters
covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested
by underwriters; (iii) use their reasonable best efforts to obtain "cold
comfort" letters and updates thereof in form and substance reasonably
satisfactory to the managing underwriters from the independent certified
public accountants of the Issuer and the Guarantor (and, if necessary, any
other independent certified public accountants of any subsidiary of the
Issuer or the Guarantor or of any business acquired by any of them for which
financial statements and financial data are, or are required to be, included
in the Registration Statement), addressed to 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 such other matters as are reasonably requested by underwriters as
permitted by STATEMENT ON AUDITING STANDARDS NO. 72; and (iv) if an
underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable than those set
forth in Section 6 hereof with respect to all parties to be indemnified
pursuant to said Section. The above shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder;
(m) if a Shelf Registration Statement is filed pursuant to Section 2
hereof, make available for inspection by any selling Holder of such Transfer
Restricted Securities being sold, any underwriter participating in any such
disposition
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of Transfer Restricted Securities, if any, and any attorney, accountant or
other agent retained by any such selling Holder, or underwriter
(collectively, the "Inspectors"), at the offices where normally kept, during
reasonable business hours, all financial and other records, pertinent
corporate documents and properties of the Issuer, the Guarantor and their
subsidiaries (collectively, the "Records"), as shall be reasonably necessary
to enable them to exercise any applicable due diligence responsibilities, and
cause the officers, directors and employees of the Issuer, the Guarantor and
their subsidiaries to supply all relevant information reasonably requested by
any such Inspector in connection with such Registration Statement as is
customary for due diligence examinations; provided, however, that the
foregoing inspection and information gathering shall, to the extent
reasonably possible, be coordinated on behalf of the Inspectors by one
counsel designated by and on behalf of all such Inspectors. Records which
the Issuer determines, in good faith, to be confidential and any Records
which it notifies the Inspectors are confidential shall not be disclosed by
the Inspectors, unless (i) the release of such Records is ordered pursuant to
a subpoena or other order from a court of competent jurisdiction and only to
the extent required thereby or (ii) the information in such Records has been
made generally available to the public, other than as a result of the
disclosure or failure to safeguard by such Inspector;
(n) provide an indenture trustee for the Transfer Restricted
Securities and cause the Indenture to be qualified under the TIA not later
than the effective date of the Exchange Offer or the first Registration
Statement relating to the Transfer Restricted Securities; and in connection
therewith, cooperate with the trustee under any such indenture and the
Holders of the Transfer Restricted Securities, to effect such changes to such
indenture as may be required for such indenture to be so qualified in
accordance with the terms of the TIA; and execute, and use their reasonable
best efforts to cause such trustee to execute, all customary documents as may
be required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable such indenture to be so qualified
in a timely manner;
(o) use their reasonable best efforts to comply with all applicable
rules and regulations of the SEC and, as soon as reasonably practicable after
the effective date of the applicable Registration Statement, make generally
available to the Holders, if any, a consolidated earning statement of the
Issuer that satisfies the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder;
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(p) cooperate with each seller of Transfer Restricted Securities
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Transfer Restricted Securities and
their respective counsel in connection with any filings required to be made
with the National Association of Securities Dealers, Inc. (the "NASD");
(q) use their reasonable best efforts to take all other steps
necessary to effect the registration of the Transfer Restricted Securities
covered by a Registration Statement contemplated hereby; and
(r) use their reasonable best efforts to cause the Underlying
Common Stock issuable upon conversion of the Convertible Preferred Securities
to be listed for quotation on the New York Stock Exchange or other stock
exchange or trading system on which the Sun Common Stock primarily trades on
or as promptly as practicable after the Effective Time of the Shelf
Registration Statement hereunder.
(s) The Issuer and the Guarantor may require each seller of
Transfer Restricted Securities as to which any registration is being effected
to furnish to the Issuer such information regarding such seller and the
distribution of such Transfer Restricted Securities as the Issuer may, from
time to time, reasonably request. The Issuer may exclude from such
registration the Transfer Restricted Securities of any seller who fails to
furnish such information within a reasonable time after receiving such
request.
Each Holder of Transfer Restricted Securities agrees by acquisition
of such Transfer Restricted Securities that, upon receipt of any notice from
the Issuer of the happening of any event of the kind described in Section
4(c)(ii), 4(c)(iv), 4(c)(v) or 4(c)(vi) hereof, such Holder shall forthwith
discontinue disposition of such Transfer Restricted Securities covered by
such Registration Statement or Prospectus until such Holder's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 4(j)
hereof, or until it is advised in writing by the Issuer that the use of the
applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto.
14
5. REGISTRATION EXPENSES
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Issuer and the Guarantor shall be borne
by the Issuer and the Guarantor, whether or not a Shelf Registration
Statement is filed or becomes effective, including, without limitation, (i)
all registration and filing fees (including, without limitation, (A) fees
with respect to filings required to be made with the NASD in connection with
an underwritten offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees
and disbursements of counsel in connection with Blue Sky qualifications of
the Transfer Restricted Securities), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Transfer Restricted
Securities in a form eligible for deposit with DTC and of printing
Prospectuses, (iii) fees and disbursements of counsel for the Issuer and the
Guarantor, (iv) fees and disbursements of all independent certified public
accountants referred to in Section 4(l)(iii) hereof (including, without
limitation, the expenses of any special audit and "cold comfort" letters
required by or incident to such performance), (v) the fees and expenses of
any "qualified independent underwriter" or other independent appraiser
participating in an offering pursuant to Section 3 of Schedule E to the
By-laws of the NASD, (vi) rating agency fees, (vii) fees and expenses of all
other Persons retained by the Issuer and the Guarantor, (viii) internal
expenses of the Issuer and the Guarantor (including, without limitation, all
salaries and expenses of officers and employees of the Issuer and the
Guarantor performing legal or accounting duties), (ix) the expense of any
annual audit and (x) the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange.
Nothing contained in this Section 5 shall create an obligation on the part of
the Issuer or the Guarantor to pay or reimburse any Holder for any
underwriting commission or discount attributable to any such Holder's
Transfer Restricted Securities included in an underwritten offering pursuant
to a Registration Statement filed in accordance with the terms of this
Agreement, or to guarantee such Holder any profit or proceeds from the sale
of such Convertible Preferred Securities.
(b) In connection with any Shelf Registration Statement hereunder,
the Issuer and the Guarantor shall reimburse the Holders of the Transfer
Restricted Securities being registered in such registration for the
reasonable fees and disbursements of not more than one counsel chosen by the
Holders of a majority in aggregate principal amount of the Transfer
Restricted Securities to be included in such Registration Statement.
15
6. INDEMNIFICATION
In connection with any Registration Statement, the Issuer and the
Guarantor jointly and severally agree to indemnify and hold harmless (i) the
Initial Purchasers, (ii) each Holder covered thereby and (iii) each person,
if any, who controls (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act), any such Person (any of the persons
referred to in this clause (ii) being hereinafter referred to as a
"controlling person"), and (iv) the respective officers, directors, partners,
employees, representatives and agents of any of such Person or any
controlling person (any person referred to in clause (i), (ii), (iii) or (iv)
may hereinafter be referred to as an "Indemnified Person"), to the fullest
extent lawful, from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any legal or other
expenses incurred in connection with defending and investigating any matter,
including any action that could give rise to any such losses, claims,
damages, liabilities or judgments) directly or indirectly based upon or
arising out of any untrue statement or alleged untrue statement of a material
fact contained in such Registration Statement or any Prospectus (as amended
or supplemented if the Issuer shall have furnished to such Indemnified Person
any amendments or supplements thereto), or any preliminary prospectus,
arising out of or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except insofar as such losses, claims, damages or
liabilities arise out of or are based upon (i) any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Indemnified Person furnished to
the Issuer, the Guarantor or any underwriter in writing by such Indemnified
Person expressly for use therein, or (ii) any untrue statement contained in
or omission from a preliminary Prospectus or Prospectus if a copy of the
Prospectus (as then amended or supplemented, if the Issuer shall have
furnished to or on behalf of the Holder participating in the distribution
relating to the relevant Registration Statement any amendments or supplements
thereto) was not sent or given by or on behalf of such Holder to the person
asserting any such losses, liabilities, claims, damages or expenses who
purchased Convertible Preferred Securities, if such Prospectus (or Prospectus
as amended or supplemented), is required by law at or prior to the written
confirmation of the sale of such Convertible Preferred Securities to such
person and the untrue statement contained in or omission from such
preliminary Prospectus or Prospectus was corrected in the Prospectus (or the
Prospectus as amended or supplemented) or (iii) the Holder has not complied
with the last paragraph of Section 4 of this Agreement.
16
In connection with any Registration Statement in which a Holder of
Transfer Restricted Securities is participating, such Holder of Transfer
Restricted Securities agrees, severally and not jointly, to indemnify and
hold harmless the Issuer, each Guarantor, each person who controls the Issuer
or the Guarantor within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act and the respective partners, directors,
officers, representatives, employees and agents of such person or controlling
person to the same extent as the foregoing indemnity from the Issuer and the
Guarantor to each Indemnified Person, but only with reference to information
relating to such Holder furnished to the Issuer in writing by or on behalf of
such Holder expressly for use in any Registration Statement or Prospectus,
any amendment or supplement thereto, or any preliminary Prospectus. The
liability of any Indemnified Person pursuant to this paragraph shall in no
event exceed the net proceeds received by such Indemnified Person from sales
of Transfer Restricted Securities giving rise to such obligations.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted
against any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (the "Indemnified
Party"), shall promptly notify the person against whom such indemnity may be
sought (the "Indemnifying Person"), in writing (enclosing a copy of all
papers served on such indemnified party), and the Indemnifying Person, upon
request of the Indemnified Party, shall assume promptly the defense of such
action, including the employment of counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding. In any such proceeding, any Indemnified Party shall have
the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party, unless (i) the
employment of such counsel shall have been specifically authorized in writing
by the Indemnifying Person (ii) the Indemnifying Person failed promptly to
assume the defense and employ counsel reasonably satisfactory to the
Indemnified Party or (iii) the named parties to any such action (including
any impleaded parties) include both such Indemnified Party and the
Indemnifying Person, or any affiliate of the Indemnifying Person, and such
Indemnified Party shall have been reasonably advised by counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the Indemnifying Person or such affiliate of
the Indemnifying Person (in which case the Indemnifying Person shall not have
the right to assume the defense of such action on behalf of such Indemnified
Party). In any such case, the
17
Indemnifying Person shall not, in connection with any one such action or
separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel), for all such indemnified parties, which
firm shall be designated in writing by those indemnified parties who sold a
majority in outstanding aggregate principal amount of Transfer Restricted
Securities sold by all such indemnified parties, and any such separate firm
for the Issuer and the Guarantor, their directors, their officers and such
control persons of the Issuer and the Guarantor shall be designated in
writing by the Guarantor. The Indemnifying Person shall not be liable for
any settlement of any proceeding effected without its written consent, which
consent shall not be unreasonably withheld, but if settled with such consent
or if there be a final judgment for the plaintiff, the Indemnifying Person
agrees to indemnify any Indemnified Party from and against any loss or
liability by reason of such settlement or judgment. No Indemnifying Person
shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes
an unconditional release of such Indemnified Party from all liability on
claims that are the subject matter of such proceeding.
If the indemnification provided for in the first and second
paragraphs of this Section 6 is unavailable to an Indemnified Party in
respect of any losses, claims, damages, liabilities, judgments, actions or
expenses referred to therein (other than by reason of the exceptions provided
therein), then each Indemnifying Person under such paragraphs, in lieu of
indemnifying such Indemnified Party thereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages, liabilities, or expenses (i) in such proportion as is
appropriate to reflect the relative benefits of the Indemnified Party on the
one hand and the Indemnifying Person(s) on the other in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Indemnifying Person(s) and the
Indemnified Party, as well as any other relevant equitable considerations.
The relative fault of the Issuer and the Guarantor on the one hand and any
Indemnified Party(s) on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Issuer and the
18
Guarantor or by such Indemnified Party(s) and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The parties agree that it would not be just and equitable if
contribution pursuant to this Section 6 were determined by PRO RATA
allocation (even if such indemnified parties were treated as one entity for
such purpose), or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Party as a
result of the losses, liabilities, claims, damages, judgments, actions and
expenses referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any reasonable legal
or other expenses actually incurred by such Indemnified Party in connection
with investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 6, in no event shall an Indemnified Person be
required to contribute any amount in excess of the amount by which proceeds
received by such Indemnified Person from sales of Transfer Restricted
Securities exceeds the amount of any damages that such Indemnified Person has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act), shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section
6 will be in addition to any liability which the indemnifying parties may
otherwise have to the indemnified parties referred to above. The Indemnified
Persons' obligations to contribute pursuant to this Section 6 are several in
proportion to the respective principal amount of Convertible Preferred
Securities sold by each of the Indemnified Persons hereunder and not joint.
7. RULES 144 AND 144A
The Issuer and the Guarantor covenant that they will file the
reports required to be filed by them pursuant to the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder in a
timely manner and, if at any time the Issuer and the Guarantor are not
required to file such reports, they will, upon the request of any Holder of
Transfer Restricted Securities, make available information required by Rule
144 and Rule 144A under the Securities Act in order to permit sales pursuant
to Rule 144 and Rule 144A. The Issuer and the Guarantor
19
further covenant that they will take such further action as any Holder of
Transfer Restricted Securities may reasonably request, all to the extent
required from time to time to enable such Holder to sell Transfer Restricted
Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 and Rule 144A or (b)
any similar rule or regulation hereafter adopted by the SEC.
8. UNDERWRITTEN REGISTRATIONS
(a) If any of the Transfer Restricted Securities covered by any
Shelf Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
manage the offering will be selected by the Holders of a majority in
aggregate principal amount of such Transfer Restricted Securities included in
such offering and shall be reasonably acceptable to the Issuer and the
Guarantor. The Issuer and the Guarantor shall not be obligated to arrange for
more than one underwritten offering during the Effectiveness Period.
No Holder of Transfer Restricted Securities may participate in any
underwritten registration hereunder, unless such Holder (a) agrees to sell
such Holder's Transfer Restricted Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
(b) Each Holder of Transfer Restricted Securities agrees, if
requested (pursuant to a timely written notice) by the managing underwriters
in an underwritten offering or by a placement agent in a private offering of
the Issuer's or the Guarantor's securities, not to effect any private sale or
distribution (including a sale pursuant to Rule 144(k) or Rule 144A under the
Securities Act, but excluding non-public sales to any of its affiliates,
officers, directors, employees and controlling persons), of any of the
Convertible Preferred Securities, Convertible Debentures or Underlying Common
Stock or securities convertible into or exercisable or exchangeable therefor,
during the period beginning 10 days prior to, and ending 90 days after, the
closing date of the underwritten offering.
The foregoing provisions shall not apply to any Holder of Transfer
Restricted Securities if such Holder is prevented by applicable statute or
regulation from entering into any such agreement.
20
The Guarantor agrees not to offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities of the Issuer or the
Guarantor or any warrants, rights or options to purchase or otherwise acquire
securities of the Guarantor (other than (i) the Convertible Preferred
Securities, (ii) commercial paper issued in the ordinary course of business,
(iii) securities issued in transactions not registered under the Securities
Act (although they may be subject to registration rights agreements) in
connection with acquisitions by the Guarantor or any of its subsidiaries or
pursuant to agreements of the Guarantor entered into prior to the 10 day
period referred to below which were not entered into in contemplation of
these restrictions, (iv) securities issued pursuant to employee benefit plans
and (v) securities issued upon exercise of stock options or convertible or
exchangeable securities outstanding prior to the 10 day period referred to
below ), during such reasonable and customary period beginning 10 days prior
to, and ending 60 days after the closing date of each underwritten offering
made pursuant to such Registration Statement as the managing underwriters
therefor request, without the prior written consent of such managing
underwriters of an underwritten offering of Transfer Restricted Securities
covered by a Registration Statement filed pursuant to Section 2 hereof;
PROVIDED, HOWEVER, that the Guarantor shall not be obligated to comply with
the last paragraph of this Section 8 more than once unless certain Holders of
Transfer Restricted Securities have not been given the benefit of this
provision because of some action on the part of the Guarantor (and in no case
shall the Guarantor be obligated to comply with this provision on more than
one occasion in any 12-month period.
9. MISCELLANEOUS
(a) OTHER REGISTRATION RIGHTS. The Guarantor may grant
registration rights that would permit any Person that is a third party the
right to piggyback on any Shelf Registration Statement; PROVIDED that if the
managing underwriter, if any, of such offering delivers an opinion to the
selling Holders that the total amount of securities which they and the
holders of such piggyback rights intend to include in any Shelf Registration
Statement is so large as to materially adversely affect the success of such
offering (including the price at which such securities can be sold), then
only the amount, number or kind of securities to be offered for the account
of holders of such piggyback rights will be reduced to the extent necessary
to reduce the total amount of securities to be included in such offering to
the amount, number or kind recommended by the managing underwriter prior to
any reduction in the amount of Transfer Restricted Securities to be included.
21
(b) REMEDIES. In the event of a breach by the Issuer or the
Guarantor of any of its obligations under this Agreement, each Holder of
Transfer Restricted Securities, in addition to being entitled to exercise all
rights provided herein, in the Indenture or, in the case of the Initial
Purchasers, in the Purchase Agreement, or granted by law, including recovery
of damages, will be entitled to specific performance of its rights under this
Agreement. Subject to Section 3, the Issuer and the Guarantor agree that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by any of them of any of the provisions of this Agreement
and hereby further agree that, in the event of any action for specific
performance in respect of such breach, they shall waive the defense that a
remedy at law would be adequate.
(c) NO INCONSISTENT AGREEMENTS. The Issuer and the Guarantor have
not, as of the date hereof, and they shall not, after the date of this
Agreement, enter into any agreement with respect to any of their respective
securities that is inconsistent with the rights granted to the Holders of
Transfer Restricted Securities in this Agreement or otherwise conflicts with
the provisions hereof.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to or departures from the provisions
hereof may not be given, unless the Issuer has obtained the written consent
of Holders of at least a majority of the then outstanding aggregate principal
amount of Transfer Restricted Securities. Notwithstanding the foregoing, a
waiver or consent to or 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 Registration Statement and that does not
directly or indirectly affect, impair, limit or compromise the rights of
other Holders may be given by Holders of at least a majority in aggregate
principal amount of the Transfer Restricted Securities being sold by such
Holders pursuant to such Registration Statement; PROVIDED that the provisions
of this sentence may not be amended, modified or supplemented except in
accordance with the provisions of the immediately preceding sentence.
(e) NOTICES. All notices and other communications (including,
without limitation, any notices or other communications to the Trustee),
provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, next-day air courier or
telecopier:
22
(i) if to a Holder of Transfer Restricted Securities, at the most
current address given by the Trustee to the Issuer;
(ii) if to the Issuer or the Guarantor, Sun Healthcare Group,
Inc., 000 Xxx Xxxxxx, X.X., Xxxxxxxxxxx, Xxx Xxxxxx 00000, Attention:
Chief Financial Officer, with a copy to Shearman & Sterling, 000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxxxx X. Xxxxxx, Esq.; and
(iii) if to any Initial Purchasers, x/x Xxxx, Xxxxxxx & Xx.
Xxx., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate
Department, with a copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP at
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxxxxx X. Xxxxxxxxx, Esq.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; one
business day after being timely delivered to a nationally recognized next-day
air courier, if made by next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied on a business day on such
business day, if not on a business day, on the first business day thereafter.
Copies of all such notices, demands or other communications shall
be concurrently delivered by the Person giving the same to the Trustee under
the Indenture at the address specified in such Indenture.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties hereto, including, without limitation and without the need for an
express assignment, subsequent Holders of Transfer Restricted Securities.
The Issuer and the Guarantor agree that the Holders of the Transfer
Restricted Securities shall be third party creditor beneficiaries to the
agreements made hereunder by the Initial Purchasers, the Issuer and the
Guarantor, and each Holder shall have the right to enforce such agreements
directly to the extent it deems such enforcement necessary or advisable to
protect its rights hereunder.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when
23
so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(j) SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties hereto that they
would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(k) ENTIRE AGREEMENT. This Agreement, together with the Purchase
Agreement, is intended by the parties hereto as a final expression of their
agreement, and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein.
(l) SECURITIES HELD BY THE ISSUER, THE GUARANTOR OR THEIR
RESPECTIVE AFFILIATES. Whenever the consent or approval of Holders of a
specified percentage of Transfer Restricted Securities is required hereunder,
Transfer Restricted Securities held by the Issuer, the Guarantor, or their
respective affiliates (as such term is defined in Rule 405 under the
Securities Act) (other than the Initial Purchasers or subsequent Holders of
Transfer Restricted Securities if such subsequent Holders are deemed to be
affiliates solely by reason of their holdings of such Transfer Restricted
Securities), shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
(m) SURVIVAL. This Agreement is intended to survive the
consummation of the transactions contemplated by the Purchase Agreement. The
indemnifica-
24
tion and contribution obligations under Section 7 of this Agreement shall
survive the termination of the Issuer's and the Guarantor's obligations under
Section 2 of this Agreement.
25
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
SUN FINANCING I
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Administrative Trustee
SUN HEALTHCARE GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
The foregoing Registration Rights
Agreement is hereby confirmed and
accepted as of the date first
above written.
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
X.X. XXXXXX SECURITIES INC.
NATIONSBANC XXXXXXXXXX
SECURITIES LLC
XXXXXXXX & CO. INC.
By: BEAR, XXXXXXX & CO. INC.
By: /s/ Xxxxxx Xxxx
---------------------------------
Name: Xxxxxx Xxxx
Title: Senior Managing Director
