EXECUTION COPY
DEBT REGISTRATION RIGHTS AGREEMENT
DATED AS OF
MAY 13, 2002
BY AND AMONG
MARINER HEALTH CARE, INC.
AND
THE PERSONS LISTED ON THE
SIGNATURE PAGES ATTACHED HERETO
TABLE OF CONTENTS
PAGE
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ARTICLE I. Definitions and Rules of Construction............................................................. 2
1.1 Definitions...................................................................................... 2
1.2 Rules of Construction............................................................................ 4
ARTICLE II. Shelf Registration............................................................................... 5
2.1 Filing of Shelf Registration Statement........................................................... 5
2.2 Underwriting Procedures.......................................................................... 6
2.3 Guarantors....................................................................................... 7
ARTICLE III. Demand Registration............................................................................. 7
3.1 Right to Demand Registration..................................................................... 7
3.2 Exceptions to Demand Registrations............................................................... 8
3.3 Blackout Period.................................................................................. 8
3.4 Priority in Registration......................................................................... 9
3.5 Effective Demand Registration.................................................................... 9
3.6 Revocation of Demand Registration................................................................ 10
3.7 Continuous Effectiveness of Registration Statement............................................... 10
3.8 Selection of Underwriters in an Underwritten Demand Registration................................. 10
3.9 Guarantors....................................................................................... 11
ARTICLE IV. Procedures and Expenses.......................................................................... 11
4.1 Registration Procedures.......................................................................... 11
4.2 Information from Holder.......................................................................... 15
4.3 Roadshows........................................................................................ 16
4.4 Holdback Agreements.............................................................................. 16
4.5 Suspension of Disposition........................................................................ 16
4.6 Registration Expenses............................................................................ 17
ARTICLE V. Indemnification................................................................................... 18
5.1 Indemnification by the Company................................................................... 18
5.2 Indemnification by Holders....................................................................... 18
5.3 Conduct of Indemnification Proceedings........................................................... 19
5.4 Contribution, etc................................................................................ 20
ARTICLE VI. Miscellaneous.................................................................................... 20
6.1 Additional Parties............................................................................... 20
6.2 Notices.......................................................................................... 21
6.3 Assignment....................................................................................... 21
PAGE
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6.4 No Third-Party Beneficiaries..................................................................... 22
6.5 Counterparts..................................................................................... 22
6.6 Entire Agreement................................................................................. 22
6.7 Amendment and Waiver............................................................................. 22
6.8 No Waiver........................................................................................ 22
6.9 Headings......................................................................................... 22
6.10 Severability..................................................................................... 22
6.11 GOVERNING LAW.................................................................................... 22
6.12 Specific Performance............................................................................. 22
6.13 Further Assurances............................................................................... 23
DEBT REGISTRATION RIGHTS AGREEMENT
This DEBT REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
May 13, 2002 (the "Effective Date"), is made by and among MARINER HEALTH CARE,
Inc., a Delaware corporation formerly known as Mariner Post-Acute Network, Inc.
(the "Company"), each of the Holders that is the Beneficial Owner of at least
10% or more of the New Senior Notes (as defined in Section 1.1) as of the
Effective Date, as listed on the signature pages attached hereto, each Permitted
Transferee (as defined in Section 1.1) and any other Holders that are the
Beneficial Owners of at least 10% or more of the New Senior Notes as of the
Effective Date who may become parties to this Agreement from time to time
pursuant to and in accordance with Section 6.1 of this Agreement.
RECITALS
A. The Company, its subsidiaries and affiliated partnerships,
joint ventures and limited liability companies that are debtors and debtors in
possession have filed with the United States Bankruptcy Court in the District of
Delaware the Joint Plan of Reorganization, dated as of November 30, 2001 (as
amended for confirmation and confirmed by an order of the United States
Bankruptcy Court for the District of Delaware, dated April 3, 2002, including
all exhibits thereto and all documents incorporated by reference therein or
contained in the documentary supplement thereto, the "Joint Plan").
B. Pursuant to the Joint Plan and the transactions contemplated
thereby, the Company has agreed, among other things, to issue second priority
secured notes in the aggregate principal amount of up to $150,000,000 of the
Company (the "New Senior Notes"). This Agreement shall become effective upon the
issuance of such notes pursuant to the Joint Plan.
C. In accordance with the terms of the Joint Plan, the Company
desires to provide for the registration of the sale by the Holders of the
Registrable Securities (as defined in Section 1.1) from time to time, on the
terms and subject to conditions set forth below.
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements herein contained, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
ARTICLE I.
Definitions and Rules of Construction
1.1 Definitions. All terms defined in the Joint Plan shall have
such defined meanings when used herein or in any Exhibit hereto unless otherwise
defined herein or therein. As used in this Agreement, the following terms shall
have the following meanings:
"Advice" shall have the meaning defined in Section 4.5.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors of such
Person or (b) direct or cause the direction of the management and policies of
such Person, whether by contract or otherwise.
"Agreement" shall have the meaning defined in the Preamble.
"Beneficial Owner" or "Beneficial Ownership" shall have the meaning
defined in Rule 13d-3 under the Exchange Act.
"Blackout Period" shall have the meaning defined in Section 3.3
"Board" means the Board of Directors of the Company or any committee
thereof duly authorized to act on behalf of such Board of Directors.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
close.
"Company" shall have the meaning defined in the Preamble.
"Demand Registration" shall have the meaning defined in Section 3.1.
"Demand Registration Notice" shall have the meaning defined in Section
3.1.
"Demand Request" shall have the meaning defined in Section 3.1.
"Demand Request Threshold" shall have the meaning defined in Section
3.1.
"Effective Date" shall have the meaning defined in the Preamble.
"Effective Period" shall have the meaning defined in Section 2.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extension Period" shall have the meaning defined in Section 4.5.
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"Guarantees" means the guarantees by the Guarantors of the New Senior
Notes.
"Guarantors" means each subsidiary of the Company that has guaranteed
the New Senior Notes pursuant to the Indenture.
"Holders" means the parties to this Agreement on the Effective Date
that are the Beneficial Owners of at least 10% or more of the aggregate
principal amount of all New Senior Notes as of the Effective Date and each other
Person that becomes a party to this Agreement from time to time after the
Effective Date pursuant to and in accordance with Section 6.1 of this Agreement
that was the Beneficial Owner of at least 10% or more of the aggregate principal
amount of all New Senior Notes as of the Effective Date.
"Indemnified Party" shall have the meaning defined in Section 5.3.
"Indemnifying Party" shall have the meaning defined in Section 5.3.
"Indenture" means that certain Indenture dated May 13, 2002 by and
among the Company, the Guarantors and The Bank of New York, as Trustee, pursuant
to which the Company has issued the New Senior Notes.
"Joint Plan" has the meaning defined in Recital A.
"Losses" shall have the meaning defined in Section 5.1.
"Nasdaq" means the Nasdaq Stock Market, Inc.
"New Senior Notes" shall have the meaning as defined in Recital B.
"Permitted Transferee" means any Person who (i) acquires from a Holder
or Holders, in compliance with all applicable securities laws, all or a portion
of such Holder's or Holders' Registrable Securities and, as a result of such
transfer or transfers, has Beneficial Ownership of 10% or more in principal
amount of the New Senior Notes then outstanding and (ii) agrees to be bound by
the terms of this Agreement.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Prospectus" means, with respect to any Registration Statement: if Rule
434 under the Securities Act is relied on, the term sheet that is first filed
pursuant to Rule 424(b) (7) under the Securities Act, together with the
preliminary prospectus identified therein that such term sheet supplements; if
Rule 434 under the Securities Act is not relied on, the prospectus first filed
with the SEC pursuant to Section 424(b) under the Securities Act; and if Rule
434 under the Securities Act is not relied on and no prospectus is required to
be filed pursuant to Rule 424(b) under the Securities Act, the prospectus
included in such Registration Statement at the time when it is or was declared
effective; in each case, as amended or supplemented by any prospectus
supplement, all other amendments and supplements to such prospectus (including
post-effective
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amendments), and all exhibits and all material incorporated by reference or
deemed to be incorporated by reference in such prospectus.
"Registration Request" shall have the meaning defined in Section 2.2.
"Registrable Securities" means any New Senior Notes and the Guarantees
thereof issued to any Holder pursuant to the Joint Plan; provided, however, that
as to any Registrable Securities, such securities shall irrevocably cease to
constitute "Registrable Securities" if: (A) such securities are disposed of
pursuant to an effective registration statement under the Securities Act; (B)
such securities are distributed to the public pursuant to Rule 144; (C) such
securities have been transferred to any Person other than a Permitted
Transferee; or (D) such securities cease to be outstanding.
"Registration Expenses" shall have the meaning defined in Section 4.6.
"Registration Statement" means any registration statement of the
Company and the Guarantors under the Securities Act on a form the Company is
then eligible to use covering any of the Registrable Securities pursuant to the
provisions of this Agreement, including the related Prospectus, all amendments
and supplements to such registration statement (including post-effective
amendments), and all exhibits and all materials incorporated by reference or
deemed to be incorporated by reference in such registration statement.
"SEC" means the Securities and Exchange Commission (or any successor
thereto).
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration" shall have the meaning defined in Section 2.1.
"Shelf Registration Statement" shall have the meaning defined in
Section 2.1.
"Underwritten Offering Notice" shall have the meaning defined in
Section 2.2.
"Underwritten Registration" or "Underwritten Offering" means a
registration in which securities of the Company are sold to one or more
underwriters for reoffering to the public pursuant to a firm commitment
offering.
"Underwriting Request Threshold" shall have the meaning defined in
Section 2.2.
"Violation" shall have the meaning defined in Section 5.1.
1.2 Rules of Construction. Unless the context otherwise requires,
(a) all references to Articles or Sections are to Articles or Sections of this
Agreement, (b) each term defined in this Agreement has the meaning assigned to
it, (c) all uses of "herein," "hereto," "hereof" and words similar thereto in
this Agreement refer to this Agreement in its entirety, and not solely to the
Article, Section or provision in which it appears, (d) "or" is disjunctive but
not necessarily exclusive, and (e) words in the singular include the plural and
vice versa.
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ARTICLE II.
Shelf Registration
2.1 Filing of Shelf Registration Statement. (a) A Holder or
Holders in the aggregate holding 25% or more in principal amount of the New
Senior Notes has the right to request in writing to the Company that the Company
and the Guarantors effect a shelf registration statement (the "Shelf
Registration Statement") covering all or part of their Registrable Securities
with the SEC under and in accordance with the provisions of the Securities Act
(the "Shelf Registration"). Within 15 calendar days after receipt of such
request, the Company shall give notice of such request to the other Holders. The
Company and the Guarantors will include in such registration, all Registrable
Securities held by any selling Holder with respect to which the Company has
received a written request for inclusion therein within 15 calendar days after
the receipt of the Company's notice. The Company shall use its best efforts to
cause, and will cause each of the Guarantors to use its best efforts to cause,
the Shelf Registration Statement (i) to be declared effective under the
Securities Act within 90 days (but in no event more than 180 days) following the
date of the request and (ii) once effective, to remain continuously effective
for a period ending on the earlier of: (A) the first date on which there ceases
to be any Registrable Securities; and (B) the second anniversary of the date on
which the SEC declares such Shelf Registration Statement effective ("Effective
Period") (subject to extension pursuant to Section 4.5). The Company and the
Guarantors shall not register any securities other than Registrable Securities
pursuant to the Shelf Registration Statement; provided, however, that, as
contemplated by the registration rights agreement covering certain New MPAN
Common Stock (as defined in the Joint Plan), dated as of even date herewith,
among the Company and the parties named therein, the Company shall be permitted
to register pursuant to the Shelf Registration Statement other securities of the
Company issued pursuant to the Joint Plan. The plan of distribution contained in
the Shelf Registration Statement shall permit Underwritten Offerings. The Shelf
Registration Statement shall comply as to form in all material respects with the
requirements of the Securities Act and the rules and regulations promulgated
thereunder, permitting registration of such Registrable Securities for resale by
the Holders in the manner or manners designated by them (including, without
limitation, one or more underwritten public offerings). If the Shelf
Registration Statement ceases to be effective for any reason at any time during
the Effective Period (other than because of the sale of all of the securities
registered thereunder), the Company shall use its best efforts to obtain the
prompt withdrawal of any order suspending the effectiveness thereof, and the
Effective Period shall be extended pursuant to Section 4.5 for the Extension
Period.
(b) Effective Registration. A registration shall not be deemed to
have been effected pursuant to a Shelf Registration Statement (i) unless the
Shelf Registration Statement with respect thereto has been declared effective by
the SEC or become effective in accordance with the Securities Act and the rules
and regulations thereunder and kept effective as contemplated by this Section
2.1(b), (ii) if, after it has become effective, such registration becomes
subject to any stop order, injunction or other order or requirement of the SEC
or other governmental agency or court for any reason other than an act or
omission by a Holder or an underwriter selected by the Holders (provided that
this item 2.1(b)(ii) will not be deemed applicable if the Company obtains the
removal of the relevant stop order, injunction or other
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order or requirement and extends the Effective Period as provided in Section
4.5), or (iii) the conditions to closing specified in the purchase agreement or
underwriting agreement entered into in connection with such registration are not
satisfied, other than by reason of some act or omission by Holders or an
underwriter. If a registration pursuant to this Section is deemed not to have
been effected, then the Company and the Guarantors shall continue to be
obligated to effect a registration pursuant to Section 2.1(a) until such
registration is effected. The provisions of Sections 3.3(a), (b) and (c) shall
apply to the Shelf Registration Statement.
2.2 Underwriting Procedures. (a) If Holders of at least 30% in
principal amount of Registrable Securities, determined as of the date hereof
(the "Underwriting Request Threshold") so request in writing to the Company (a
"Registration Request"), the Company and the Guarantors shall effect pursuant to
the Shelf Registration Statement an Underwritten Offering; provided, however,
that the Company and the Guarantors shall not be required to take any action in
response to any such request:
(i) if the Company and the Guarantors have effected an
Underwritten Offering pursuant to this Section 2.2(a)
within the 270-day period immediately preceding such
request;
(ii) if the Holders making such request have not secured
the services of an underwriter or underwriters (it
being understood that neither the Company nor the
Guarantors shall have any obligation to secure the
services of an underwriter on behalf of the Holders);
or
(iii) if entitled to delay action pursuant to Section 3.3.
The Company shall give written notice (an "Underwritten Offering Notice") of the
proposed Underwritten Offering to all Holders within 15 calendar days after
receipt of a valid Registration Request. Such notice shall offer the Holders the
opportunity to include in such Underwritten Offering such amount of Registrable
Securities as each Holder may request. The Company and the Guarantors shall
include in such Underwritten Offering all Registrable Securities for which the
Company has received written requests for inclusion within 15 calendar days
after delivery of the Underwritten Offering Notice, subject to Section 2.2(b).
(b) The Company shall cause the managing underwriter or
underwriters of a proposed Underwritten Offering to permit the Holders that have
requested Registrable Securities to be included in an Underwritten Offering,
undertaken pursuant to Section 2.2(a) above, to include all such Registrable
Securities on the same terms and conditions as all other Registrable Securities
to be included. Notwithstanding the foregoing, if the managing underwriter or
underwriters of such Underwritten Offering advises the Company and the selling
Holders that the total amount of Registrable Securities that such Holders
propose to include in such Underwritten Offering is such as to materially and
adversely affect the success of such Underwritten Offering, then the Company and
the Guarantors shall include in such Underwritten Offering up to the full amount
of Registrable Securities requested to be included in such Underwritten Offering
by the Holders (allocated pro rata among the Holders on the basis of the amount
of Registrable Securities initially requested to be included therein by each
such Holder) so that the total amount of Registrable Securities to be included
in such Underwritten Offering is
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the full amount that, in the written opinion of such managing underwriter or
underwriters, can be sold without materially and adversely affecting the success
of such Underwritten Offering.
(c) Any Registrable Securities may be withdrawn from a proposed
Underwritten Offering at any time before the execution and delivery by such
Holder of the underwriting agreement relating to such Underwritten Offering. In
the event that the number of Holders withdrawing Registrable Securities from a
proposed Underwritten Offering before the execution and delivery of an
underwriting agreement relating to such Underwritten Offering causes the
principal amount of Registrable Securities participating in such offering to
drop below the requirement set forth in Section 2.2(a) above, the Holders
withdrawing their Registrable Securities shall reimburse the Company and the
Guarantors for all of their out-of-pocket fees and expenses (including counsel
fees and expenses) incurred in connection with the proposed Underwritten
Offering in excess of the amount of expenses relating solely to the maintenance
of the Shelf Registration Statement and the Company and the Guarantors shall
have no obligation to proceed with the applicable request for an Underwritten
Offering; provided, however, that if such withdrawal was based on the Company's
failure to comply with its obligations hereunder, such reimbursement shall not
be required and the requested Underwritten Offering shall not be deemed to have
been effected for purposes of Section 2.2(a).
(d) The managing underwriter or underwriters of the Underwritten
Offering relating thereto shall be selected by the Holders of at least a
majority in principal amount of the Registrable Securities proposed to be
included in such Underwritten Offering, subject to the approval of the Company
(which approval shall not be unreasonably withheld or unreasonably delayed).
2.3 Guarantors. The Company will use its best efforts to cause
each of the Guarantors to comply with, and to enable the Company to comply with,
the provisions of, and obligations contained in, this Article II.
ARTICLE III.
Demand Registration
3.1 Right to Demand Registration. On or after the Effective Date,
any Holder holding at least 10% or more in principal amount of Registrable
Securities (determined as of the Effective Date) (the "Demand Request
Threshold") has the right to request in writing to the Company ("Demand
Request") that the Company and the Guarantors effect the registration of all or
part of such Holder's or Holders' Registrable Securities with the SEC under and
in accordance with the provisions of the Securities Act (which written request
shall specify the aggregate principal amount of Registrable Securities requested
to be registered and the intended means of disposition of such shares of
Registrable Securities) ("Demand Registration"). The Company shall give written
notice (a "Demand Registration Notice") of the proposed Demand Registration to
all Holders within 15 calendar days after receipt of a valid Demand Request.
Such notice shall offer the Holders the opportunity to register such amount of
Registrable Securities as each Holder may request. Following receipt of the
Demand Request, if applicable, the provisions of
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Section 2.2 hereof shall apply to the subject Demand Registration. Subject to
Section 3.4, the Company shall file, and shall cause each Guarantor to file with
it, a Registration Statement covering such Holder's or Holders' Registrable
Securities requested to be registered as promptly as practicable (and, in any
event within 60 days) after receipt of such written requests received within 15
calendar days after delivery of the Demand Registration Notice.
3.2 Exceptions to Demand Registrations. Notwithstanding anything in
Section 3.1 above to the contrary, the Company and the Guarantors shall not be
required to take any action pursuant to this Article III:
(i) if the Holder or Holders making such request are not
Affiliates of the Company at the time such request is
made;
(ii) if the Company and the Guarantors have effected a
registration contemplated by this Article III or
Section 2.1 within the 180-day period next preceding
such request (unless the provisions of Section 2.2
are applicable to a Demand Request in which case the
terms of Section 2.2(a)(i) shall apply);
(iii) if a Shelf Registration is effective at the time such
request is made pursuant to which the Holder or
Holders that requested registration could effect the
disposition of such Holder's or Holders' Registrable
Securities in the manner requested and the Company
offered, in accordance with the procedures set forth
herein, to include or did include such Holder's or
Holders' Registrable Securities in such Shelf
Registration; or
(iv) during the pendency of any Blackout Period (as
defined in Section 3.3 hereof).
3.3 Blackout Period. (a) If (i) at any time during the Effective
Period or the period during which Holders may request a Demand Registration
pursuant to Section 3.1, the Company files or proposes to file a registration
statement with respect to an offering of debt securities of the Company for its
own account and (ii) with reasonable notice (and subject to the completion of an
offering that may have been initiated pursuant to a previously delivered
Underwritten Offering Notice) (A) the Company (in the case of an offering that
is not an Underwritten Offering) advises the Holders in writing that the Board
of Directors of the Company has determined, in the good faith exercise of its
reasonable business judgment, that a sale or distribution of Registrable
Securities (whether pursuant to the Shelf Registration Statement or a Demand
Registration) would adversely affect such offering or (B) the managing
underwriter or underwriters, if any, advise the Company in writing (in which
case the Company shall notify the Holders) that a sale or distribution of
Registrable Securities (whether pursuant to the Shelf Registration Statement or
a Demand Registration) would adversely affect such offering, then: (x) the
Holders agree to suspend sales pursuant to the Shelf Registration Statement
during the Blackout Period (as defined below), or (y) the Company and the
Guarantors shall not be obligated to effect the initial filing of a Registration
Statement pursuant to Section 3.1 during the Blackout Period. As used herein the
term "Blackout Period" shall mean the 45
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days prior to the date the Company in good faith estimates (as certified in
writing by an officer of the Company to the applicable Holders) shall be the
date of the filing of, and ending on the date which is 90 days following the
effective date of, the registration statement proposed to be filed by the
Company for its own account (the "Blackout Period").
(b) If the Board determines, in the good faith exercise of its
reasonable business judgment, that the registration and distribution of
Registrable Securities (i) would materially impede, delay or interfere with any
financing, acquisition, corporate reorganization or other significant
transaction involving the Company or (ii) would require disclosure of non-public
material information, the disclosure of which would materially and adversely
affect the Company, the Company shall promptly give the Holders written notice
of such determination and shall be entitled to (x) require that Holders suspend
resale transactions pursuant to the Shelf Registration Statement or (y) postpone
the filing or effectiveness of a Registration Statement for a reasonable period
of time not to exceed 120 days; provided, however, that the Company shall
deliver to the applicable Holders a general statement, signed by an officer of
the Company, of the reasons for such postponement or restriction on use (without
any need to identify with specificity the underlying event or issue which is the
predicate for such delay) and an estimate of the duration of the anticipated
delay. The Company shall promptly notify the applicable Holders of the
expiration or earlier termination of such a period.
(c) Notwithstanding anything in this Section 3.3 to the contrary,
there shall be no more than one delay period as contemplated by this Section 3.3
during any consecutive 12 month period during the time in which Holders may
request a Shelf Registration or a Demand Registration pursuant to Sections 2.1
and 3.1, respectively.
3.4 Priority in Registration. If the Company seeks to include in
any underwritten Demand Registration any securities which are not Registrable
Securities and the managing underwriter advises the Company in writing that in
its opinion the principal amount of Registrable Securities proposed to be
included in the Demand Registration exceeds the principal amount of Registrable
Securities and other securities which can be sold in such offering, the Company
shall include in such registration: (i) first, the principal amount of
Registrable Securities requested to be included which, in the opinion of such
underwriters, can be sold, by the selling Holders pro rata based upon the
aggregate principal amount of Registrable Securities which such Holder proposed
to include in such registration and (ii) second, the securities proposed to be
included in such registration by any other holders as determined by the Company
and the managing underwriter.
3.5 Effective Demand Registration. (a) The Company and the
Guarantors may satisfy their obligations under Section 3.1 by amending (to the
extent permitted by applicable law) any registration statement previously filed
by the Company and the Guarantors under the Securities Act so that such amended
registration statement will permit the disposition (in accordance with the
intended methods of disposition specified as aforesaid) of all of the
Registrable Securities for which a Demand Request has been properly made under
Section 3.1. If the Company and the Guarantors so amend a previously filed
registration statement, they shall be deemed to have effected a registration for
purposes of Section 3.1.
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(b) A registration requested pursuant to Section 3.1 shall not be
deemed to be effected for purposes of Section 3.1: (i) unless it has been
declared effective by the SEC or become effective in accordance with the
Securities Act and the rules and regulations thereunder and kept effective as
contemplated by Section 3.7, provided that a registration which does not become
effective after the Company and the Guarantors have filed a registration
statement with respect thereto solely by reason of the refusal of a selling
Holder to proceed (other than a refusal to proceed based upon the reasonable
advice of counsel relating to a matter with respect to the Company) shall be
deemed to have been effected by the Company and the Guarantors at the request of
such selling Holder unless such selling Holder shall have elected to pay all
Registration Expenses in connection with such registration, (ii) if, after it
has become effective, such registration becomes subject to any stop order,
injunction or other order or requirement of the SEC or other governmental agency
or court for any reason other than an act or omission of a Holder or an
underwriter selected by the Holders, or (iii) the conditions to closing
specified in the purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied, other than by reason of
some act or omission by Holders or an underwriter selected by the Holders.
3.6 Revocation of Demand Registration. A Holder of Registrable
Securities to be included in a Registration Statement pursuant to Section 3.1
may, at any time prior to the effective date of the Registration Statement
relating to such registration, revoke its request to have Registrable Securities
included therein by providing a written notice to the Company. In the event the
number of Holders of Registrable Securities revoking their request causes the
principal amount of Registrable Securities participating in such request to fall
below the requirement set forth in Section 3.1, the Holders of Registrable
Securities who revoke such request shall reimburse the Company for all its
out-of-pocket fees and expenses (including counsel fees and expenses) incurred
in the preparation, filing and processing of the Registration Statement and the
Company shall have no obligation to proceed with the applicable Demand
Registration; provided, however, that, if such revocation was based on the
Company's failure to comply in any material respect with its obligations
hereunder, such reimbursement shall not be required and the requested
registration that has been revoked shall not be deemed to have been effected for
purposes of Section 3.1.
3.7 Continuous Effectiveness of Registration Statement. The
Company shall use its best efforts, and will cause each of the Guarantors to use
its best efforts, to keep a Registration Statement that has become effective as
contemplated by this Article III continuously effective for a period of 90 days
(subject to extension pursuant to Section 4.5) or such shorter period that will
terminate when all Registrable Securities covered by such Registration Statement
have been sold pursuant to such Registration Statement; provided, however, that
in no event will such period expire prior to the expiration of the applicable
period referred to in Section 4(3) of the Securities Act and Rule 174
promulgated thereunder.
3.8 Selection of Underwriters in an Underwritten Demand
Registration. In the event that a registration requested pursuant to Section 3.1
is to be an Underwritten Registration, the managing underwriter or underwriters
of the Underwritten Offering relating thereto shall be selected by the Holders
of at least a majority in principal amount of the Registrable Securities
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proposed to be included in such Underwritten Registration, subject to the
approval of the Company (which approval shall not be unreasonably withheld or
unreasonably delayed).
3.9 Guarantors. The Company shall use its best efforts to cause
each Guarantor to comply with, and to enable the Company to comply with, the
provisions of, and obligations contained in, this Article III.
ARTICLE IV.
Procedures and Expenses
4.1 Registration Procedures. (a) In connection with the
Company's and the Guarantors' registration obligations pursuant to Articles II
and III, the Company and the Guarantors shall effect such registrations to
permit the sale of Registrable Securities by a Holder in accordance with the
intended method or methods of disposition thereof, and pursuant thereto the
Company shall as promptly as reasonably practicable:
(b) Prepare and file with the SEC a Registration Statement or
Registration Statements available for the sale of the Registrable Securities by
the selling Holder in accordance with the intended method or methods of
distribution thereof; provided, however, that the Company (i) shall, before
filing, furnish to each selling Holder, its counsel and the managing underwriter
or underwriters, if any, copies of the Registration Statement or Prospectus
proposed to be filed, which documents shall be subject to the review of such
Holder, its counsel and such underwriters, (ii) shall provide such Persons with
a reasonable opportunity to review and comment on such Registration Statement or
Prospectus, and (iii) shall not file any such Registration Statement or
amendment thereto or any such Prospectus or supplement thereto (including such
documents incorporated by reference and proposed to be filed after the initial
filing of the Registration Statement) to which such selling Holder, its counsel
or such underwriter or underwriters, if any, shall reasonably object on a timely
basis, provided, however, that the Company may file such document in a form
required by law or upon the advice of its counsel.
(c) Prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary;
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 provision then in force) under the Securities Act; and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended methods of disposition by each selling Holder
set forth in such Registration Statement as so amended, or in such Prospectus as
so supplemented.
(d) Promptly notify each selling Holder, its counsel and the
managing underwriter or underwriters, if any, in writing (i) when a Prospectus
or any Prospectus supplement or post-effective amendment has been filed, and,
with respect to a Registration Statement or any post-effective amendment, when
the same has become effective, (ii) of any
11
request by the SEC or any other federal or state governmental authority for
amendments or supplements to a Registration Statement or related Prospectus or
for additional information, (iii) of the issuance by the SEC or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any proceedings
for that purpose, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of any of the Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose, (v) of the occurrence of any
event which makes any statement made in such Registration Statement or
Prospectus untrue in any material respect or which requires the making of any
changes in a Registration Statement or Prospectus or other documents so that,
(A) 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
(B) 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 (vi) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate.
(e) Use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of any
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, at the earliest practicable
date.
(f) If requested by the managing underwriter or underwriters, if
any, or the selling Holder, (i) promptly incorporate in a Prospectus supplement
or post-effective amendment such information as the managing underwriter or
underwriters, if any, and such selling Holder reasonably agree should be
included therein under applicable law and (ii) make all required filings of such
Prospectus supplement or such post-effective amendment as soon as practicable
after the Company has received notification of the matters to be incorporated in
such Prospectus supplement or post-effective amendment; provided, however, that
the Company shall not be required to take any actions under this Section 4.1(f)
that are not, in the opinion of counsel for the Company, in compliance with
applicable law.
(g) Furnish to each selling Holder, its counsel and each managing
underwriter, if any, at least one conformed copy of the Registration Statement
and any post-effective amendment thereto, including financial statements (but
excluding all schedules, all documents incorporated or deemed incorporated
therein by reference and all exhibits).
(h) Deliver to each selling Holder, its counsel and the managing
underwriter or underwriters, if any, as many copies of the Prospectus relating
to such Registrable Securities (including each preliminary Prospectus) and any
amendment or supplement thereto as such Persons may reasonably request and, by
such delivery, the Company shall be deemed to have consented to the use of such
Prospectus or such amendment or supplement thereto by the selling Holder and the
underwriter or underwriters, if any, in connection with the offering and sale of
the Registrable Securities covered by such Prospectus or any amendment or
supplement thereto.
12
(i) Prior to any public offering of Registrable Securities,
register or qualify, or cooperate with each selling Holder, the managing
underwriter or underwriters, if any, and their respective counsel in connection
with the registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions within the United States as
such selling Holder or underwriter or 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 Registrable
Securities covered by the Registration Statement; provided, however, that the
Company shall not be required to (i) qualify generally to do business in any
jurisdiction in which it is not then so qualified or (ii) take any action that
would subject it to general service of process in any jurisdiction in which it
is not then so subject.
(j) Cooperate with the selling Holders and the managing
underwriter or underwriters, if any, to facilitate any filings with the NASD and
the timely preparation and delivery of certificates representing Registrable
Securities to be sold, which certificates shall not bear any restrictive legends
pertaining to resale of such Registrable Securities under the Securities Act,
and cause such certificates to be in such denominations and registered in such
names as the managing underwriter or underwriters, if any, shall request at
least two Business Days prior to any sale of Registrable Securities to the
managing underwriter or underwriters.
(k) As promptly as practicable upon the occurrence of any event
contemplated by Section 4.1(d) (v) or 4.1(d) (vi) hereof, prepare a supplement
or post-effective amendment to each Registration Statement or a supplement to
the related Prospectus, or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Securities being sold
thereunder, such Prospectus will not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(l) Use its best efforts to cause all Registrable Securities
covered by such Registration Statement to be listed on Nasdaq or any other
national securities exchange; provided, however, that the Company then meets the
listing criteria of Nasdaq or any such other national securities exchange.
(m) Engage an appropriate transfer agent and provide such transfer
agent with printed certificates for the Registrable Securities in a form
eligible for deposit with The Depository Trust Company, and provide a CUSIP
number for the Registrable Securities not later than the effective date of a
Registration Statement.
(n) Enter into such agreements (including, in the event of an
Underwritten Offering, an underwriting agreement in form, scope and substance as
is customary in Underwritten Offerings) and take all such other actions in
connection therewith (including those reasonably requested by any selling Holder
or, in the event of an Underwritten Offering, those reasonably requested by the
managing underwriter or underwriters) reasonably necessary or desirable to
expedite or facilitate the disposition of such Registrable Securities, in
connection with an Underwritten Registration, and (i) make such representations
and warranties to each
13
selling Holder and the managing underwriter or underwriters, if any, with
respect to the business of the Company and its subsidiaries, the Registration
Statement or Prospectus, in each case, in form, substance and scope as are
customarily made by issuers to underwriters in Underwritten Offerings and
confirm the same if and when requested, (ii) use its commercially reasonable
best efforts to obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriter or underwriters, if any) addressed to
such selling Holder and the managing underwriter or underwriters, if any,
covering the matters customarily covered in opinions requested in Underwritten
Offerings, (iii) use its commercially reasonable best efforts to obtain
"comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other certified public
accountants of any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data is, or is required to
be, included in the Registration Statement), addressed to each of the managing
underwriter or underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "comfort" letters in
connection with Underwritten Offerings, and (iv) deliver such documents (not
including the delivery of opinions of counsel under clause (ii) above to the
selling Holder) and certificates as may be reasonably requested by the selling
Holder, its counsel, managing underwriter or underwriters, if any, to evidence
the continued validity of the representations and warranties of the Company and
its subsidiaries made pursuant to clause (i) above and to evidence compliance
with any customary conditions contained in the underwriting agreement or similar
agreement entered into by the Company. The foregoing actions shall be taken in
connection with each closing under such underwriting or similar agreement as and
to the extent required thereunder.
(o) Give any selling Holder, its underwriter or underwriters, if
any, and their counsel and accountants, the reasonable opportunity to
participate in the preparation of such Registration Statement, each Prospectus
included therein or filed with the SEC, and each amendment thereof or supplement
thereto, make available for inspection by each of them all pertinent financial
and other records, pertinent corporate documents and properties of the Company
and its subsidiaries, cause the officers, directors and employees of the Company
and its subsidiaries to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with such
Registration Statement and give each of them such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be necessary, in the
reasonable opinion of such selling Holder's and such underwriter's or
underwriters' respective counsel, to conduct a reasonable investigation within
the meaning of the Securities Act; provided, however, that any records,
information or documents that are designated by the Company as confidential at
the time of delivery of such records, information or documents shall be kept
confidential by such Persons unless (i) such records, information or documents
are in the public domain or otherwise publicly available (other than by reason
of breach of this confidentiality provision), (ii) disclosure of such records,
information or documents is required by court or administrative order or is
necessary to respond to inquires of regulatory authorities, or (iii) disclosure
of such records, information or documents, in the reasonable opinion of counsel
to such Person, is otherwise required by law or regulation (including without
limitation pursuant to the requirements of the Securities Act or regulations
promulgated thereunder); provided, however, that in the case of subsections (ii)
and (iii) hereof, prior to making such disclosure the Holder shall, subject to
applicable law, advise and consult with the Company and
14
its counsel as to the timing and content of such disclosure and the nature and
wording of such disclosure and shall use its reasonable best efforts to obtain,
at the Company's expense, confidential treatment therefor. Also, if possible,
the Company shall be given a reasonable time to intervene with the appropriate
authorities in order to prevent disclosure of the confidential information.
(p) Comply with all applicable rules and regulations of the SEC
and make generally available to its security holders earning statements
satisfying the provisions of Section 11(a) of the Securities Act, provided that
the Company shall be deemed to have complied with this Section 4.1(p) if it has
satisfied the provisions of Rule 158 under the Securities Act (or any similar
rule promulgated under the Securities Act).
(q) During the period when a Prospectus is required to be
delivered under the Securities Act, promptly file all documents required to be
filed with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act.
(r) If the selling Holders of at least a majority in principal
amount of the Registrable Securities proposed to be included in any Registration
Statement so request, request acceleration of effectiveness of the Registration
Statement from the SEC, provided at the time of such request the Company does
not, in good faith, believe it is necessary to amend further the Registration
Statement in order to comply with the provisions of this Section 4.1. If the
Company wishes to further amend the Registration Statement prior to requesting
acceleration, it shall have five Business Days to so amend prior to requesting
acceleration.
4.2 Information from Holder. (a) The Company may require each
Holder including its Registrable Securities in any Registration Statement to
furnish to the Company such information regarding the Holder and its intended
plan and method of disposition of such Registrable Securities as the Company
may, from time to time, reasonably request in writing. The Company may refuse to
proceed with the registration of such Holder's Registrable Securities if such
Holder fails to furnish such information within a reasonable time after
receiving such request.
(b) Each selling Holder shall (i) notify the Company of the
occurrence of any event that makes any statement made in a Registration
Statement or Prospectus regarding such selling Holder untrue in any material
respect or that requires the making of any changes in a Registration Statement
or Prospectus so that, in such regard, (A) in the case of a Registration
Statement, it will not contain any untrue statement of a material fact or omit
any material fact required to be stated therein or necessary to make the
statements not misleading and (B) in the case of a Prospectus, it will not
contain any untrue statement of a material fact or omit any material fact
required to be stated or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading and (ii) provide
the Company with such information as may be required to enable the Company to
prepare a supplement or post-effective amendment to any such Registration
Statement or a supplement to such Prospectus as contemplated by Section 4.1(k).
(c) With respect to any Underwritten Offering, the inclusion of a
Holder's Registrable Securities therein will be conditioned upon the execution
and delivery by such
15
Holder of an underwriting agreement in form, scope and substance as is customary
in Underwritten Offerings, provided that a Holder will not be required to make
any representations or warranties other than with respect to such Holder, such
Holder's Registrable Securities, such Holder's intended method of distribution
and such other representations as may be required by law.
(d) If any such Registration Statement to be filed pursuant to
this Agreement refers to any Holder by name or otherwise as a holder of any
securities of the Company, then such Holder shall have the right to require (i)
the insertion therein of language, in form and substance satisfactory to such
Holder, to the effect that the holding by such Holder of such securities is not
to be construed as a recommendation by such Holder of the investment quality of
the Company's securities covered thereby and that such holding does not imply
that such Holder will assist in meeting any future financial requirements of the
Company, or (ii) in the event that such reference to such Holder by name or
otherwise is not required by the Securities Act or any similar federal statue
then in force, the deletion of the reference to such Holder.
4.3 Roadshows. In connection with any Underwritten Offering, the
Company and members of its management (which shall include the President and the
Chief Financial Officer) or such other members of its management acceptable to
the managing underwriter or underwriters shall participate in roadshows and
other similar selling efforts as the managing underwriter or underwriters shall
reasonably deem to be necessary.
4.4 Holdback Agreements. The Company agrees to, if so required by
the managing underwriter or underwriters, not to sell, make any short sale of,
loan, grant any option for the purchase of, effect any public sale or
distribution of or otherwise dispose of any of its senior debt securities during
the seven days prior to and the 90 days after any Underwritten Registration
pursuant to Section 3.8 has become effective, except as part of such
Underwritten Registration and except pursuant to registrations on Form S-4 or
any successor form thereto. During any Blackout Period, the Holders agree, if so
required by the managing underwriter or underwriters, not to sell, make any
short sale of, loan, grant any option for the purchase of, effect any public
sale or distribution of or otherwise dispose of any of the Company's New Senior
Notes.
4.5 Suspension of Disposition. Each selling Holder shall be deemed
to have agreed that, upon receipt of any notice from the Company of the
occurrence of any event of the kind described in Section 4.1(d)(ii),
4.1(d)(iii), 4.1(d)(iv), 4.1(d)(v) or 4.1(d)(vi), such Holder shall discontinue
disposition of Registrable Securities covered by a Registration Statement or
Prospectus until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 4.1(k) or until it is advised in
writing (the "Advice") by the Company that the use of the applicable Prospectus
may be resumed and has received copies of any additional or supplemental filings
that are incorporated or deemed to be incorporated by reference in such
Prospectus. In the event the Company shall give any such notice, the period of
time during which a Registration Statement should remain effective as set forth
in Section 2.1 or Section 3.7 shall be extended by the number of days comprising
the time period commencing on and including the date of the giving of such
notice to and including the date when each seller of Registrable Securities
covered by such Registration Statement shall have received (i) the copies of the
supplemented or amended Prospectus contemplated by Section 4.1(k) or (ii) the
Advice
16
(the "Extension Period"). The Company shall use its commercially reasonable
efforts and take such actions as are reasonably necessary to render the Advice
as promptly as practicable.
4.6 Registration Expenses. (a) Subject to Section 2.2(c) and 3.6,
all fees and expenses incurred by the Company in complying with Articles II and
III and Section 4.1 ("Registration Expenses") shall be borne by the Company.
Such fees and expenses shall include without limitation (i) all registration and
filing fees (including without limitation fees and expenses (A) with respect to
filings required to be made with the National Association of Securities Dealers,
Inc. and (B) of compliance with securities or blue sky laws), (ii) printing
expenses (including without limitation the expenses of printing certificates for
securities in a form eligible for deposit with The Depository Trust Company and
of printing Prospectuses if the printing of Prospectuses is requested by the
selling Holder), (iii) messenger, telephone and delivery expenses, (iv)
reasonable fees and disbursements of counsel for the Company, (v) reasonable
fees and disbursements of one counsel for all selling Holders collectively
(which counsel will be selected by Holders holding a majority in principal
amount of the securities sought to be included in the Registration Statement),
(vi) reasonable fees and disbursements of all independent certified public
accountants referred to in Section 4.1(n) (iii) (including the expenses of any
"comfort" letters required by or incident to such performance), (vii) reasonable
fees and expenses of any qualified "independent underwriter" or other
independent appraiser participating in an offering pursuant to Section 2720(c)
of the Conduct Rules of the National Association of Securities Dealers, Inc.,
and (viii) reasonable fees and expenses all other Persons retained by the
Company. In addition, the Company shall pay its internal expenses (including
without limitation all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, and the
fees and expenses incurred in connection with the listing of Registrable
Securities with each securities exchange, if any, on which similar securities
issued by the Company are then listed or the quotation of such securities on
Nasdaq if similar securities issued by the Company are then quoted on Nasdaq.
(b) Notwithstanding anything to the contrary herein contained, all
underwriting fees, discounts, selling commissions and transfer taxes, if any, in
connection with the sale of Registrable Securities shall be borne by the Holders
proportionately (based on the principal amount of Registrable Securities sold by
a Holder in such offering in relation to the aggregate principal amount of
Registrable Securities sold in such offering).
(c) Notwithstanding anything to the contrary herein contained,
each selling Holder may have its own separate counsel (in addition to the
counsel referred to in clause (v) of Section 4.6(a)) in connection with the
registration of any of its Registrable Securities, which counsel may participate
therein to the full extent provided herein; provided, however, that all fees and
expenses of such separate counsel shall be paid for by such selling Holder.
17
ARTICLE V.
Indemnification
5.1 Indemnification by the Company. (a) The Company shall
indemnify and hold harmless, to the fullest extent permitted by law, each Holder
owning Registrable Securities registered pursuant to this Agreement, its
officers, directors, trustees, agents and employees, each Person who controls
such Holder (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the officers, directors, trustees, agents and
employees of any such controlling Person, from and against all losses, claims,
damages, liabilities, costs (including without limitation the costs of
investigation and attorneys' fees) and expenses (collectively, "Losses"), as
incurred, arising out of or based upon (i) any untrue or alleged untrue
statement of a material fact contained or incorporated by reference in any
Registration Statement, Prospectus or preliminary prospectus, (ii) any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any federal or state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any federal or state
securities law in connection with the offering covered by any Registration
Statement, (each a "Violation") except for a Violation based solely upon written
information furnished to the Company through an instrument provided by such
Holder for use therein or in the preparation thereof; provided, however, that
the Company shall not be liable to any Holder to the extent that any such Losses
arise out of or are based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any preliminary prospectus if either (i)
(A) such Holder failed to send or deliver a copy of the Prospectus with or prior
to the delivery of written confirmation of the sale by such Holder of a
Registrable Security to the Person asserting the claim from which such Losses
arise and (B) the Prospectus would have corrected such untrue statement or
alleged untrue statement or such omission or alleged omission or (ii) such
untrue statement or alleged untrue statement or such omission or alleged
omission is corrected in an amendment or supplement to the Prospectus previously
furnished by or on behalf of the Company, such Holder was furnished with copies
of the Prospectus as so amended or supplemented, and such Holder thereafter
failed to deliver such Prospectus as so amended or supplemented prior to or
concurrently with the sale of a Registrable Security to the Person asserting the
claim from which such Losses arise.
(b) Notwithstanding the foregoing, if in connection with an
underwritten public offering of any Registrable Securities, the Company, the
selling Holder and the underwriters enter into an underwriting or purchase
agreement relating to such offering which contains provisions covering
indemnification among the parties, the indemnification provided thereunder shall
be in addition to (and not in lieu of) the indemnification provided to the
Holders hereunder.
5.2 Indemnification by Holders. Each Holder selling Registrable
Securities in any Registration Statement filed pursuant to the terms hereof
shall, severally and not jointly, hold harmless, to the fullest extent permitted
by law, the Company, its officers, directors, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act), and the directors, officers, agents and
18
employees of any such controlling Person, from and against all Losses, as
incurred, arising out of or based upon any Violation, in each case to the extent
(and only to the extent) that such Violation is based solely upon written
information furnished to the Company through an instrument provided by such
Holder specifically for use therein or in the preparation thereof. In no event
shall the liability of any Holder hereunder be greater in amount than the dollar
amount of the proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
5.3 Conduct of Indemnification Proceedings. If any Person becomes
entitled to indemnity hereunder (an "Indemnified Party"), such Indemnified Party
shall give prompt notice to the party from which such indemnity is sought (the
"Indemnifying Party") of any claim or of the commencement of any action or
proceeding with respect to which such Indemnified Party seeks indemnification or
contribution pursuant hereto; provided, however, that the failure to so notify
the Indemnifying Party shall not relieve the Indemnifying Party from any
obligation or liability except to the extent that the Indemnifying Party has
been prejudiced materially by such failure. If such an action or proceeding is
brought against the Indemnified Party, the Indemnifying Party shall be entitled
to participate therein and, to the extent it may elect by written notice
delivered to the Indemnified Party promptly after receiving the notice referred
to in the immediately preceding sentence, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Party. Notwithstanding the
foregoing, the Indemnified Party shall have the right to employ its own counsel
in any such case, but the fees and expenses of such counsel shall be at the
expense of the Indemnified Party unless (i) the employment of such counsel shall
have been authorized in writing by the Indemnifying Party, (ii) the Indemnifying
Party shall not have employed counsel (reasonably satisfactory to the
Indemnified Party) to take charge of such action or proceeding within a
reasonable time after notice of commencement thereof, or (iii) the Indemnified
Party reasonably shall have concluded (based on the advice of counsel) that
there may be defenses or actions available to it which are different from or
additional to those available to the Indemnifying Party which, if the
Indemnifying Party and the Indemnified Party were to be represented by the same
counsel, could result in a conflict of interest for such counsel or materially
prejudice the prosecution of defenses or actions available to the Indemnified
Party. If any of the events specified in clause (i), (ii) or (iii) of the
immediately preceding sentence are applicable, then the fees and expenses of one
separate counsel for the Indemnified Party shall be borne by the Indemnifying
Party. If, in any case, the Indemnified Party employs separate counsel, the
Indemnifying Party shall not have the right to direct the defense of such action
or proceeding on behalf of the Indemnified Party. All fees and expenses required
to be paid to the Indemnified Party pursuant to this Article V shall be paid
periodically during the course of the investigation or defense, as and when
reasonably itemized bills therefor are delivered to the Indemnifying Party in
respect of any particular Loss that is incurred. Notwithstanding anything to the
contrary contained in this Section 5.3, an Indemnifying Party shall not be
liable for the settlement of any action or proceeding effected without its prior
written consent. The Indemnifying Party shall not consent to entry of any
judgment or enter into any settlement or otherwise seek to terminate any action
or proceeding in which any Indemnified Party is or could be a party and as to
which indemnification or contribution could be sought by such Indemnified Party
under this Article V, unless such judgment, settlement or other termination
provides solely for the payment of money and includes as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release, in form and substance satisfactory to the Indemnified Party, from all
liability in
19
respect of such claim or litigation for which such Indemnified Party would be
entitled to indemnification hereunder.
5.4 Contribution, etc. (a) If the indemnification provided for in
this Article V is unavailable to an Indemnified Party under Section 5.1 or 5.2
in respect of any Losses or is insufficient to hold such Indemnified Party
harmless, then each applicable Indemnifying Party (severally and not jointly),
in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party or Indemnifying Parties, on the one hand, and such Indemnified Party, on
the other hand, in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party or Indemnifying Parties, on the
one hand, and such Indemnified Party, on the other hand, shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission of a material fact, has been taken or made by, or related to
information supplied by, such Indemnifying Party or Indemnifying Parties or such
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include any legal or other fees or expenses incurred by such party
in connection with any action or proceeding.
(b) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5.4 were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding anything contained in this Section 5.4 to the
contrary, an Indemnifying Party that is a selling Holder shall not be required
to contribute any amount in excess of the amount by which the total price at
which the Registrable Securities were sold by such selling Holder to the public
exceeds the amount of any damages which such selling Holder 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.
(c) The provisions of this Article V will survive indefinitely,
notwithstanding any transfer of the Registrable Securities by any Holder.
Nothing herein shall be deemed to abrogate the effects of the statutes of
limitation with respect to causes of action that may be brought under this
Article V.
ARTICLE VI.
Miscellaneous
6.1 Additional Parties. A Person may become a party to this
Agreement and cause the New Senior Notes issued to it on the Effective Date
pursuant to the Joint Plan to be Registrable Securities by delivering to the
Company (a) evidence reasonably satisfactory to the
20
Company that it was the Beneficial Owner on the Effective Date of New Senior
Notes in an amount equal to at least 10% of the aggregate principal amount of
all New Senior Notes issued by the Company on the Effective Date and (b) an
executed acknowledgement by which such Person agrees to be bound by the terms of
this Agreement, which to be effective must be acknowledged by the Company. Once
so acknowledged by the Company, such Person will be a Holder and a party hereto
for all purposes of this Agreement.
6.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made by
delivery in person, by courier service, by facsimile transmission or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
6.2).
(a) If to the Company:
Mariner Health Care, Inc.
Xxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention:
General Counsel
Telecopy: (000) 000-0000
Powell, Goldstein, Xxxxxx and Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
(b) If to a Holder, to the address thereof set forth on the
signature page hereto.
The Company or the Holder by notice to the other may designate additional or
different addresses for subsequent notices or communications.
All such notices and communications shall be deemed to have been delivered or
given: upon delivery, if personally delivered; one Business Day after being
dispatched, if dispatched by same-day or next-day courier guaranteeing timely
delivery; when receipt acknowledged, if sent by facsimile transmission; and five
Business Days after being deposited in the mail, if mailed.
6.3 Assignment. Neither this Agreement nor the rights and
obligations hereunder may be assigned by operation of law or otherwise except
that this Agreement and rights and obligations hereunder may be assigned by any
Holder to a Permitted Transferee thereof, which Permitted Transferee shall be
deemed to be a Holder and a party hereto for all purposes of this Agreement upon
receipt by the Company of such Permitted Transferee's written agreement to be
bound by the terms hereof. Notwithstanding the foregoing, nothing herein
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contained shall restrict the right of any Holder to transfer securities of the
Company held by it.
6.4 No Third-Party Beneficiaries. This Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their respective
successors and permitted assigns and nothing herein, express or implied, is
intended to or shall confer upon any other Person any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
6.5 Counterparts. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute one and the same instrument.
6.6 Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, among
the parties with respect to the subject matter hereof.
6.7 Amendment and Waiver. This Agreement may not be amended or
modified or any provision hereof waived except by an instrument in writing
signed by the Company and both (x) Holders of at least a majority in principal
amount of the Registrable Securities and (y) each Holder of 10% or more in
principal amount of the Registrable Securities. Notwithstanding anything
contained herein to the contrary, a waiver that does not adversely affect all of
the parties hereto may be executed by only the adversely affected party or
parties.
6.8 No Waiver. No failure or delay on the part of any party hereto
in exercising any right, shall operate as a waiver thereof nor shall any single
or partial exercise of any right, power or privilege hereunder preclude the
simultaneous or later exercise of any other right, power or privilege. The
rights and remedies herein expressly provided are cumulative and not exclusive
of any rights or remedies which any party hereto would otherwise have.
6.9 Headings. The descriptive headings contained in this Agreement
are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
6.10 Severability. If any term or other provision of this Agreement
is invalid, illegal or unenforceable under any law or public policy, all other
terms and provisions of this Agreement shall nevertheless remain in full force
and effect. Upon such determination that any term or other provision is invalid,
illegal or unenforceable, the parties hereto shall endeavor in good faith to
replace the invalid, illegal or unenforceable provisions with valid, legal and
enforceable provisions the economic effect of which comes as close as possible
to that of the invalid, illegal or unenforceable provisions.
6.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE.
6.12 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with
22
the terms hereof and that the parties shall be entitled as a matter of right,
without proof of actual damages, to specific performance of the terms hereof, in
addition to any other remedy at law or equity.
6.13 Further Assurances. The parties hereto shall do such further
acts and things necessary to ensure that the terms of this Agreement are carried
out and observed.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement as
of the date first written above.
MARINER HEALTH CARE, INC.
By:
--------------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
OCM ADMINISTRATIVE SERVICES II, L.L.C.
By: OAKTREE CAPITAL MANAGEMENT, LLC
Its Manager
By:
---------------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
By:
---------------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
Address: c/o Oaktree Capital Management, LLC
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxx
24
ACKNOWLEDGEMENT
Reference is hereby made to the Debt Registration Rights Agreement
dated as of May 13, 2002 (the "Agreement"), among Mariner Health Care, Inc., a
Delaware corporation formerly known as Mariner Post-Acute Network, Inc. and each
of the Holders that was a Beneficial Owner of at least 10% or more of the New
Senior Notes as of the Effective Date, as listed on the signature pages thereto,
in which this Acknowledgement is incorporated. The undersigned Holder represents
that it was the Beneficial Owner of at least 10% or more of the aggregate
principal amount of all New Senior Notes issued on the Effective Date. The
undersigned Holder and the Company each agree that the Holder will be a party to
the Agreement for all purposes thereof. Capitalized terms used herein without
definition are defined in the Agreement.
[HOLDER]
By:
---------------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
Address:
----------------------------------------
----------------------------------------
Acknowledged and Agreed:
MARINER HEALTH CARE, INC.
By:
---------------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
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