1
Exhibit 10.23
MEMBERSHIP INTEREST PURCHASE AGREEMENT
THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT is entered into as
of this 29th day of May, 1996 among Sunrise Assisted Living, Inc. ("Buyer"),
and Xxxxxx Xxxxxxx and Xxxxxxxxx Xxxxxxx (collectively, "Sellers").
WHEREAS, Sellers are parties to that certain Sunrise Village
House LLC Operating Agreement (the "Operating Agreement") dated as of April 15,
1993, as amended by Amendment No. 1 dated as of June 6, 1994, and as further
amended by a Consent and Second Amendment dated as of January 4, 1995, pursuant
to which, among other things, Sellers jointly own as tenants by the entireties
a thirty (30%) membership interest in Sunrise Village House LLC (the
"Membership Interest").
WHEREAS, Sellers desire to sell to Buyer and Buyer desires to
purchase from Sellers the Membership Interest upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the parties hereto
hereby agree as follows:
1. DEFINITIONS
For all purposes of this Purchase Agreement, certain
capitalized terms specified in Exhibit A shall have the meanings set forth in
that Exhibit A, except as otherwise expressly provided.
2. SALE AND PURCHASE OF MEMBERSHIP INTEREST
2.1. SALE AND PURCHASE OF MEMBERSHIP INTEREST
On the basis of the representations, warranties and agreements
contained herein, and subject to the terms and conditions hereof, Sellers agree
to sell to Buyer, and Buyer agrees to acquire from Sellers, the Membership
Interest, in consideration for which Buyer agrees to issue to the Sellers
52,500 shares of common stock of Buyer (the "Common Stock").
2.2. ADDITIONAL UNDERTAKINGS
Buyer and Sellers acknowledge and agree that transfer of the
Membership Interest is subject to the terms and condition of the Operating
Agreement. Therefore, as a condition concurrent to the consummation of the
purchase and sale set forth in Section 2.1 above, all members of the Sunrise
Village House LLC, simultaneously with the execution of this Purchase
Agreement, shall enter into an Amendment to the Operating Agreement in the form
attached hereto as Exhibit B (the "Amendment") pursuant to which, among other
things, Buyer shall be admitted as a member of the Sunrise Village House LLC.
Sellers further acknowledge and agree that, effective as of the execution of
this Purchase Agreement, Sellers shall be deemed, without
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any further action on their part, to have withdrawn from Sunrise Village House
LLC.
3. REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby represent and warrant to Buyer as follows:
3.1. TITLE TO MEMBERSHIP INTEREST
Since the date of the acquisition of the Membership Interest
by Sellers, there has been no event, or action taken (or failure to take
action) by or against Sellers, which has resulted or might result in the
creation of any Encumbrance on the Membership Interest. Sellers have good,
valid and marketable title to the Membership Interest, free and clear of all
Encumbrances, with full right and lawful authority to sell and transfer the
Membership Interest to Buyer pursuant to this Purchase Agreement.
3.2. AUTHORITY AND CAPACITY; BINDING OBLIGATION
Sellers have full legal right, capacity, power and authority
to execute this Purchase Agreement and to consummate the transactions
contemplated hereby. This Purchase Agreement constitutes a valid and binding
obligation of each Seller, enforceable in accordance with its terms.
3.3. ABSENCE OF VIOLATION
The execution, delivery and performance by Sellers of this
Purchase Agreement, the fulfillment of and the compliance with the respective
terms and provisions hereof, and the consummation of the transactions
contemplated hereby, do not and will not (a) conflict with, or violate any
provision of, any Law having applicability to Sellers, or (b) conflict with, or
result in any breach of, or constitute a default under, any Agreement to which
either Seller is a party.
3.4. NO LITIGATION
There are no actions, suits, claims, arbitrations, proceedings
or investigations pending, threatened or reasonably anticipated against,
affecting or involving Sellers, or the transactions contemplated by this
Purchase Agreement, at law or in equity or admiralty, or before or by any
court, arbitrator or governmental authority, domestic or foreign.
3.5. RESTRICTIONS AND CONSENTS
There are no Agreements, Laws or other restrictions of any
kind to which either Seller is party or subject that would prevent or restrict
the execution, delivery or performance of this Purchase Agreement or result in
any penalty, forfeiture, Agreement termination, or restriction on business
operations of Buyer or Sellers as a result of the execution, delivery or
performance of this Agreement.
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3.6. TRANSFER OF TITLE
Upon payment for the Membership Interest pursuant to the terms
of this Purchase Agreement, Buyer will acquire good, valid and marketable title
thereto, free and clear of all Encumbrances.
3.7. RESIDENCE OF SELLERS
Sellers represent that they are residents of the State of
Maryland.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Sellers as follows:
4.1. ORGANIZATION AND STANDING
Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has the full and
unrestricted corporate power and authority to carry on its business as
currently conducted, to enter into this Purchase Agreement and to carry out the
transactions contemplated hereby.
4.2. AUTHORIZATION
The execution, delivery and performance by Buyer of this
Purchase Agreement, the fulfillment of and the compliance with the respective
terms and provisions hereof, and the consummation by Buyer of the transactions
contemplated hereby have been duly authorized by its Board of Directors (which
authorization has not been modified or rescinded and is in full force and
effect), and will not: (a) conflict with, or violate any provision of, any
term or provision of the certificate or articles of organization of Buyer or
(b) conflict with, or result in any breach of, or constitute a default under,
any Agreement to which Buyer is a party or by which Buyer is bound. No other
action is necessary for Buyer to enter into this Purchase Agreement and to
consummate the transactions contemplated hereby and thereby.
4.3. ISSUANCE OF COMMON STOCK
The Common Stock to be issued to the Sellers pursuant to this
Purchase Agreement shall, upon issuance in accordance with this Purchase
Agreement, be validly issued, fully paid and nonassessable.
4.4. BINDING OBLIGATION
This Purchase Agreement constitutes a valid and binding
obligation of Buyer, enforceable in accordance with its terms.
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5. RESTRICTED SECURITIES
Sellers hereby represent, warrant and covenant as follows:
5.1. NO REGISTRATION UNDER THE SECURITIES ACT
Sellers understand that the Common Stock to be received by
them pursuant to this Purchase Agreement has not been registered under the
Securities Act in reliance upon exemptions contained in the Securities Act or
interpretations thereof, and cannot be offered for sale, sold or otherwise
transferred unless such Common Stock being acquired hereunder subsequently is
so registered or qualifies for exemption from registration under the Securities
Act.
5.2. ACQUISITION FOR INVESTMENT
The Common Stock is being acquired under this Purchase
Agreement by Sellers in good faith solely for their own account, for investment
and not with a view toward resale or other distribution within the meaning of
the Securities Act. The Common Stock will not be offered for sale, sold or
otherwise transferred by Sellers without either registration or exemption from
registration under the Securities Act.
5.3. RESTRICTIVE LEGENDS
The Sellers acknowledge that in connection with the delivery
of the Common Stock, Buyer shall cause the following legend to be placed on the
Common Stock issued to Sellers pursuant to this Purchase Agreement:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY
STATE, AND THUS MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SO
REGISTERED OR UNLESS AN EXEMPTION FROM REGISTRATION
IS AVAILABLE UNDER SUCH ACT AND UNDER ANY SUCH
APPLICABLE STATE SECURITIES LAWS."
5.4. EVALUATION OF MERITS AND RISKS OF INVESTMENT
Sellers have such knowledge and experience in financial and
business matters that Sellers are capable of evaluating the merits and risks of
Seller's acquisition of such Common Stock being acquired hereunder. Sellers
understand and are able to bear any economic risks associated with such
acquisition (including, without limitation, the necessity of holding such
Common Stock for an indefinite period of time, inasmuch as such Common Stock
has not been registered under the Securities Act).
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6. CLOSING
6.1. CLOSING OF SALE AND PURCHASE
Subject to the terms and conditions of this Purchase
Agreement, the Closing shall take place simultaneously with the execution of
this Purchase Agreement.
6.2. DELIVERIES BY SELLERS
At the Closing, Sellers shall deliver to Buyer the following:
(i) a counterpart copy of the Amendment duly executed by
all members (other than Buyer) of the Sunrise Village House
LLC;
(ii) a counterpart copy of the registration rights letter
agreement in the form attached hereto as Exhibit C duly
executed by Sellers; and
(iii) such other Documents as Buyer may reasonably request.
6.3. DELIVERIES BY BUYER
At the Closing, Buyer shall deliver to Sellers the following:
(i) certificates representing the Common Stock;
(ii) a counterpart copy of the Amendment duly executed by
Buyer;
(iii) a counterpart copy of the registration rights letter
agreement in the form attached hereto as Exhibit C
duly executed on behalf of Buyer; and
(iv) such other Documents as Sellers may reasonably
request.
7. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION; REMEDIES
7.1. SURVIVAL OF REPRESENTATIONS
All representations, warranties, covenants, indemnities and other
Agreements made by any party to this Purchase Agreement herein or pursuant
hereto shall survive the Closing and any investigation, audit or inspection at
any time made by or on behalf of any party hereto.
7.2. AGREEMENT OF SELLERS TO INDEMNIFY
Subject to the conditions and provisions of this Article 7,
each Seller hereby agrees to indemnify, defend and hold harmless Buyer from and
against and in respect of all Claims asserted against, resulting to, imposed
upon or incurred by Buyer, directly or indirectly,
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by reason of or resulting from any misrepresentation or breach of any
representation or warranty, or noncompliance with conditions or other
Agreements, given or made by Sellers in this Purchase Agreement.
7.3. AGREEMENT OF BUYER TO INDEMNIFY
Subject to the conditions and provisions of this Article 7.,
Buyer hereby agrees to indemnify, defend and hold harmless Sellers from and
against and in respect of all Claims asserted against, resulting to, imposed
upon or incurred by Sellers, directly or indirectly, by reason of or resulting
from any misrepresentation or breach of any representation or warranty, or
noncompliance with any conditions or other Agreements, given or made by Buyer
in this Purchase Agreement.
7.4. REMEDIES CUMULATIVE
The remedies provided herein shall be cumulative and shall not
preclude the assertion by Sellers or Buyer of any other rights or the seeking
of any other remedies against the other, or their respective successors or
assigns.
8. MISCELLANEOUS
8.1. ADDITIONAL ACTIONS AND DOCUMENTS
Each of the parties hereto hereby agrees to take or cause to
be taken such further actions, to execute, deliver and file or cause to be
executed, delivered and filed such further documents, and to obtain such
consents, as may be necessary or as may be reasonably requested in order to
effectuate fully the purposes, terms and conditions of this Purchase Agreement.
8.2. ASSIGNMENT
No party shall assign its rights and obligations under this
Purchase Agreement, in whole or in part, whether by operation of law or
otherwise, without the prior written consent of the other parties hereto, and
any such assignment contrary to the terms hereof shall be null and void and of
no force and effect.
8.3. ENTIRE AGREEMENT; AMENDMENT
This Purchase Agreement and the Exhibits attached hereto
constitute the entire Agreement among the parties hereto with respect to the
transactions contemplated herein, and it supersedes all prior oral or written
Agreements, commitments or understandings with respect to the matters provided
for herein. No amendment, modification or discharge of this Purchase Agreement
shall be valid or binding unless set forth in writing and duly executed and
delivered by the party against whom enforcement of the amendment, modification,
or discharge is sought.
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8.4. WAIVER
No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Purchase Agreement or under
any other documents furnished in connection with or pursuant to this Purchase
Agreement shall impair any such right, power or privilege or be construed as a
waiver of any default or any acquiescence therein. No single or partial
exercise of any such right, power or privilege shall preclude the further
exercise of such right, power or privilege, or the exercise of any other right,
power or privilege. No waiver shall be valid against any party hereto unless
made in writing and signed by the party against whom enforcement of such waiver
is sought and then only to the extent expressly specified therein.
8.5. SEVERABILITY
If any part of any provision of this Purchase Agreement shall
be invalid or unenforceable in any respect, such part shall be ineffective to
the extent of such invalidity or unenforceability only, without in any way
affecting the remaining parts of such provision or the remaining provisions of
this Purchase Agreement.
8.6. GOVERNING LAW
This Purchase Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of the Commonwealth of Virginia
(excluding the choice of law rules thereof).
8.7. NOTICES
All notices, demands, requests, or other communications which
may be or are required to be given, served, or sent by any party to any other
party pursuant to this Purchase Agreement shall be in writing and shall be hand
delivered, sent by overnight courier or mailed by first-class, registered or
certified mail, return receipt requested, postage prepaid, or transmitted by
telegram, telecopy or telex, addressed as follows:
(i) If to Buyer:
Sunrise Assisted Living, Inc.
0000 Xxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxx X. Xxxxxx, Esq.
with a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxx L.L.P.
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attn.: Xxxxxx X. Xxxxxxx, Esq.
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(ii) If to Sellers:
Xxxxxx and Xxxxxxxxx Xxxxxxx
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
with a copy (which shall not constitute notice) to:
Xxxx X. Xxxxx, Esq.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Each party may designate by notice in writing a new address to which any
notice, demand, request or communication may thereafter be so given, served or
sent. Each notice, demand, request, or communication which shall be hand
delivered, sent, mailed, telecopied or telexed in the manner described above,
or which shall be delivered to a telegraph company, shall be deemed
sufficiently given, served, sent, received or delivered for all purposes at
such time as it is delivered to the addressee (with the return receipt, the
delivery receipt, or (with respect to a telecopy or telex) the answerback being
deemed conclusive, but not exclusive, evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.
8.8. HEADINGS
Article and Section headings contained in this Purchase
Agreement are inserted for convenience of reference only, shall not be deemed
to be a part of this Purchase Agreement for any purpose, and shall not in any
way define or affect the meaning, construction or scope of any of the
provisions hereof.
8.9. EXECUTION IN COUNTERPARTS
To facilitate execution, this Purchase Agreement may be
executed in as many counterparts as may be required. It shall not be necessary
that the signatures of, or on behalf of, each party, or that the signatures of
all persons required to bind any party, appear on each counterpart; but it
shall be sufficient that the signature of, or on behalf of, each party, or that
the signatures of the persons required to bind any party, appear on one or more
of the counterparts. All counterparts shall collectively constitute a single
Agreement. It shall not be necessary in making proof of this Purchase
Agreement to produce or account for more than a number of counterparts
containing the respective signatures of, or on behalf of, all of the parties
hereto.
8.10. LIMITATION ON BENEFITS
The covenants, undertakings and agreements set forth in this
Purchase Agreement shall be solely for the benefit of, and shall be enforceable
only by, the parties hereto and their respective successors, heirs, executors,
administrators, legal representatives and permitted assigns.
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8.11. BINDING EFFECT
Subject to any provisions hereof restricting assignment, this
Purchase Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, heirs, executors,
administrators, legal representatives and assigns.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Purchase Agreement, or have caused this Purchase Agreement to be duly executed
on their behalf, as of the day and year first above written.
BUYER:
SUNRISE ASSISTED LIVING, INC.
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
SELLERS:
/s/ Xxxxxx Xxxxxxx
--------------------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxxxxx Xxxxxxx
--------------------------------------------
Xxxxxxxxx Xxxxxxx
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Exhibit A
Definitions
"AGREEMENT" means any concurrence of understanding and
intention between two or more persons (or entities) with respect to their
relative rights and/or obligations or with respect to a thing done or to be
done (whether or not conditional, executory, express, implied, in writing or
meeting the requirements of contract), including, without limitation,
contracts, leases, promissory notes, covenants, easements, rights of way,
covenants, commitments, arrangements and understandings.
"CLAIMS" means all demands, claims, actions or causes of
action, assessments, losses, damages (including, without limitation, diminution
in value), liabilities, costs and expenses, including, without limitation,
interest, penalties and attorneys' fees and disbursements.
"CLOSING" means the closing of the sale and purchase of the
Membership Interest pursuant to the Purchase Agreement.
"ENCUMBRANCE" means any mortgage, lien, pledge, encumbrance,
security interest, deed of trust, option, encroachment, reservation, order,
decree, judgment, condition, restriction, charge, Agreement, claim or equity of
any kind.
"LAWS" means all foreign, federal, state and local statutes,
laws, ordinances, regulations, rules, resolutions, orders, determinations,
writs, injunctions, awards (including, without limitation, awards of any
arbitrator), judgments and decrees applicable to the specified persons or
entities and to the businesses and assets thereof.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and all laws promulgated pursuant thereto or in connection therewith.
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Exhibit B
Amendment to Operating Agreement
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AMENDMENT NO. 3 TO
SUNRISE VILLAGE HOUSE LLC
OPERATING AGREEMENT
This Amendment No. 3 to the Sunrise Village House LLC
Operating Agreement (this "Amendment") is made as of this 29th day of May, 1996
by and among Xxxxxx Xxxxxxx and Xxxxxxxxx Xxxxxxx, husband and wife (the
"Donohues"), the Manor at Gunston Limited Partnership ("Gunston"), Countryside
Properties Company LP ("Countryside"), Sunrise Atrium Limited Partnership
("Atrium"), Sunrise Partners, L.P. ("SPLP"), Sunrise Assisted Living
Investments, Inc. ("SALII") and Sunrise Assisted Living, Inc. ("Sunrise").
W I T N E S S E T H:
WHEREAS, Sunrise Village House LLC, a Maryland limited
liability company (the "Company"), was formed pursuant to the Articles of
Organization dated December 11, 1992 and filed with the Maryland State
Department of Assessments and Taxation as of December 14, 1992 and the
Operating Agreement dated April 15, 1993, as amended by Amendment No. 1 dated
as of June 6, 1994 and as further amended by a Consent and Second Amendment
dated as of January 4, 1995 (the "Operating Agreement");
WHEREAS, pursuant to a Membership Interest Purchase Agreement
dated as of the date hereof (the "Membership Interest Purchase Agreement"), the
Donohues are assigning their thirty percent (30%) interest in the Company to
Sunrise and withdrawing from the Company.
WHEREAS, execution of this Amendment is a condition concurrent
to the consummation of the transactions contemplated by the Membership Interest
Purchase Agreement.
WHEREAS, the undersigned desire to amend the Operating
Agreement in order to reflect the withdrawal of the Donohues, include the
membership interest of Sunrise, and admit Sunrise as a Member of the Company,
all as set forth below.
WHEREAS, capitalized terms used herein but not defined herein
shall have the meanings ascribed to them in the Operating Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and
other good and valuable consideration, the receipt and sufficiency of which are
acknowledged by the parties, it is hereby agreed as follows:
1. The Operating Agreement is hereby amended to reflect
the withdrawal of the Donohues as Members and to admit Sunrise as a Member.
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2. Paragraph 2.2 of the Operating Agreement is amended
to include the following membership interests:
Member Membership Interest
Sunrise Partners, L.P. 49%
Sunrise Assisted Living, Inc. 30%
Sunrise Atrium Limited Partnership 10%
The Manor at Gunston Limited Partnership 5%
CountrySide Properties Company LP 5%
Sunrise Assisted Living Investments, Inc. 1%
--
100%
4. In accordance with Section 9.1 of the Operating
Agreement, this Amendment shall constitute written consent by all the members
of the assignment of the Donohues' interest to Sunrise.
5. In accordance with Section 9.1 of the Operating
Agreement, Sunrise hereby agrees to be bound by the terms and conditions of the
Operating Agreement and agrees to be personally obligated to the same extent as
any other Member with respect to obligations of the Company.
6. Sunrise shall assume the Donohues' obligations as a
Member in the Company. From and after the date hereof, the net profit, net
losses, net gains, credits, cash flow or transaction proceeds (including those
which have not been distributed) of the Company allocable to the Donohues'
membership interest shall be credited or charged to Sunrise.
7. This Amendment and assignment of the Donohues'
membership interest shall not dissolve the Company and the business of the
Company shall be deemed to have continued notwithstanding such assignment.
8. The Operating Agreement, as amended by this
Amendment, is hereby ratified and confirmed.
9. This Amendment may be executed in separate
counterparts, none of which need contain the signatures of all parties, and all
which taken together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have executed this
Amendment No. 3 to Sunrise Village House LLC Operating Agreement as of the day
and year first above written.
THE MANOR AT GUNSTON, L.P.,
By: Sunrise Northern Virginia Limited
Partnership, General Partner
By: Sunrise Retirement
Investments, Inc., General
Partner
WITNESS:
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxxx, President
----------------------------
COUNTRYSIDE PROPERTIES COMPANY, L.P.,
By: Sunrise Northern Virginia Limited
Partnership, General Partner
By: Sunrise Retirement
Investments, Inc., General
Partner
WITNESS:
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxxx, President
----------------------------
SUNRISE ATRIUM LIMITED PARTNERSHIP
By: Sunrise Atrium, Inc.
General Partner
WITNESS:
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxxx, President
----------------------------
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SUNRISE PARTNERS, L.P.
By: Sunrise Development, Inc.
General Partner
WITNESS:
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxxx, President
----------------------------
SUNRISE ASSISTED LIVING, INC.
WITNESS:
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxxx, President
----------------------------
SUNRISE ASSISTED LIVING
INVESTMENTS, INC.
WITNESS:
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxxx, President
----------------------------
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Acknowledged by:
WITNESS: DONOHUES:
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxxx Xxxxxxx
---------------------------- --------------------------------------------
Xxxxxx Xxxxxxx
WITNESS:
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxxxxxx Xxxxxxx
---------------------------- --------------------------------------------
Xxxxxxxxx Xxxxxxx
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Exhibit C
Registration Rights Letter Agreement
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SUNRISE ASSISTED LIVING, INC.
0000 Xxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
May 29, 1996
Xxxxxx and Xxxxxxxxx Xxxxxxx
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
RE: REGISTRATION RIGHTS FOR XXXXXXX STOCK
Dear Mr. & Xxx. Xxxxxxx:
Reference is made to that certain (i) Membership Interest
Purchase Agreement (the "Purchase Agreement") dated as of May 29, 1996 by and
among Sunrise Assisted Living, Inc. (the "Issuer") and Xxxxxx Xxxxxxx and
Xxxxxxxxx Xxxxxxx, (ii) Registration Agreement (the "Registration Agreement")
dated as of January 4, 1995 by and among the Issuer, the Investors and the
Founders, and (iii) Warrant Agreement (the "Warrant Agreement") dated as of
March 19, 1996 by and between Issuer and Creditanstalt-Bankberein.
Pursuant to and in accordance with the Purchase Agreement, as
of the date hereof, the Issuer is issuing to Xxxxxx and Xxxxxxxxx Xxxxxxx
52,500 shares of the common stock of the Issuer ("Xxxxxxx Stock"). This Letter
Agreement ("Letter Agreement") sets forth the terms and conditions on which the
Issuer shall grant certain registration rights to the holders of Xxxxxxx Stock.
Capitalized terms used herein but not otherwise defined herein shall have the
meanings ascribed to them by the Registration Agreement.
The Issuer hereby grants to the holders of outstanding Xxxxxxx
Stock the same "piggyback registration rights" granted to Holders of
Registrable Shares as are set forth in Section 3 of the Registration Agreement
as if the holders of Xxxxxxx Stock had become parties to the Registration
Agreement for purposes of Section 3 and other provisions of the Registration
Agreement applicable thereto; provided, however, (a) such registration rights
granted hereunder shall be subordinated to (and not inconsistent with) (i) the
registration rights of the holders of the Convertible Preferred Stock (and
other persons) pursuant to the Registration Agreement and (ii) the registration
rights of holders of the Warrants (as defined in
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the Warrant Agreement) and the Warrant Shares (as defined in the Warrant
Agreement) issuable on exercise of the Warrants pursuant to the Warrant
Agreement and (b) such subordination (and consistency) shall be effected by
considering the Xxxxxxx Stock to be included, after inclusion pursuant to the
Warrant Agreement of the Warrants and Warrant Shares issuable on exercise of
the Warrants, in clause (D) of Sections 3(b) and 3(c) of the Registration
Agreement as ". . . other securities requested to be included in such
registration which in the opinion of such underwriter(s) can be sold (after
taking into account the securities to be sold pursuant to clauses (A), (B) and
(C)) without having a material adverse effect on the offering. . . ." and in
clause (C) of Section 2(d) of the Registration Agreement as "...other
securities requested to be included in such registration which in the opinion
of the underwriter(s) can be sold (after taking into account the Registrable
Shares to be sold pursuant to clauses (A) and (B)) without having a material
adverse effect on the offering"; and provided further that notwithstanding any
provision of the Registration Agreement to the contrary, in any registration
thereunder which includes any Xxxxxxx Stock the Issuer shall be obligated to
pay all Registration Expenses of the Issuer and the holders of such Xxxxxxx
Stock shall be obligated to pay the costs and expenses incurred by the holders
of such Xxxxxxx Stock in connection with such registration.
Each holder of Xxxxxxx Stock shall be deemed to have agreed by
acquisition of such Xxxxxxx Stock to the same obligations as Holders of
Registrable Shares and Persons and shall be entitled to the same benefits as
Holders of Registrable Shares and Persons as are set forth in Sections 4, 5, 6,
7, 8, 9, 10, 11, the second sentence of Section 12, and Sections 13, 15, 16,
17, 19 and 20 of the Registration Agreement, as if the holders of Xxxxxxx Stock
had become parties to the Registration Agreement for purposes of such Sections
(or portions thereof) and their Xxxxxxx Stock were Registrable Shares
thereunder.
The registration rights granted to holders of Xxxxxxx Stock
pursuant to this Letter Agreement shall terminate with regard to each holder of
Xxxxxxx Stock, at such time as such holder shall have an unlimited right to
sell its Xxxxxxx Stock shares in the public market without restriction on
volume or otherwise.
The registration rights granted under this Letter Agreement
shall not apply to an Initial Public Offering (as defined in the Warrant
Agreement).
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If the foregoing is in accordance with our mutual
understanding, please so indicate by executing this Letter Agreement below and
returning an original hereof to the undersigned officer of the Issuer at the
address first listed above.
SUNRISE ASSISTED LIVING, INC.
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Acknowledged and Agreed:
/s/ Xxxxxx Xxxxxxx
----------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxxxxx Xxxxxxx
----------------------------------
Xxxxxxxxx Xxxxxxx
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