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REGISTRATION RIGHTS AGREEMENT
DATED AS OF JULY 8, 1997
BY AND AMONG
SUN HEALTHCARE GROUP, INC.
AS ISSUER,
THE GUARANTORS NAMED HEREIN
AND
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION,
CREDIT SUISSE FIRST BOSTON,
X.X. XXXXXX SECURITIES, INC.
AND
NATIONSBANC CAPITAL MARKETS, INC.
AS INITIAL PURCHASERS
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of July 8, 1997, among SUN HEALTHCARE GROUP, INC., a Delaware
corporation (the "Issuer"), the Guarantors named herein, and XXXXXXXXX,
XXXXXX & XXXXXXXX SECURITIES CORPORATION, CREDIT SUISSE FIRST BOSTON, X.X.
XXXXXX SECURITIES, INC. and NATIONSBANC CAPITAL MARKETS, INC. (collectively,
the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated
July 1, 1997, among the Issuer, the Guarantors and the Initial Purchasers
(the "Purchase Agreement"), which provides for the sale by the Issuer to the
Initial Purchasers of $250,000,000 aggregate principal amount of 9 1/2% Senior
Subordinated Notes due 2007 and the related guarantees by the Guarantors
(collectively, the "Notes"). In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Issuer and the Guarantors have agreed
to provide to the Initial Purchasers and their respective direct and indirect
transferees, among other things, the registration rights for the Notes set
forth in this Agreement. The execution of this Agreement is a condition to
the closing of the transactions contemplated by the Purchase Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings (and, unless otherwise indicated, capitalized terms used
herein without definition shall have the respective meanings ascribed to them
by the Purchase Agreement):
APPLICABLE PERIOD: See Section 2(b) hereof.
EFFECTIVENESS PERIOD: See Section 3(a) hereof.
EFFECTIVENESS TARGET DATE: See Section 4(a)(ii) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
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EXCHANGE NOTES: See Section 2(a) hereof.
EXCHANGE OFFER: See Section 2(a) hereof.
EXCHANGE OFFER REGISTRATION STATEMENT: See Section 2(a) hereof.
GUARANTORS: As defined in the Indenture.
HOLDER: Any holder of Transfer Restricted Securities.
INDEMNIFIED PARTY: See Section 7 hereof.
INDEMNIFIED PERSON: See Section 7 hereof.
INDEMNIFYING PERSON: See Section 7 hereof.
INDENTURE: The Indenture, dated as of the date hereof, by and among
the Issuer, the Guarantors and First Trust National Association as trustee,
pursuant to which the Notes are being issued, as amended or supplemented from
time to time in accordance with the terms thereof.
INITIAL PURCHASERS: See the introductory paragraphs to this Agreement.
INSPECTORS: See Section 3(m) hereof.
ISSUE DATE: As defined in the Offering Memorandum.
ISSUER: See the introductory paragraphs to this Agreement.
LIQUIDATED DAMAGES: See Section 4(a) hereof.
NOTES: See the introductory paragraphs to this Agreement.
OFFERING MEMORANDUM: The final Offering Memorandum dated July 1, 1997
related to the sale of the Notes.
PARTICIPATING BROKER-DEALER: See Section 2(b) hereof.
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PERSON or PERSON: An individual, trustee, corporation, partnership,
joint stock company, trust, unincorporated association, union, business
association, limited liability company, limited liability partnership, firm
or other legal entity.
PROSPECTUS: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule
430A promulgated under the Securities Act), as amended or supplemented by any
pro-spectus supplement, with respect to the terms of the offering of any
portion of the Exchange Notes and/or the Transfer Restricted Securities (as
applicable), covered by such Registration Statement, and all other amendments
and supplements to the Prospectus, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
RECORDS: See Section 4(m) hereof.
REGISTRATION DEFAULT: See Section 4(a) hereof.
REGISTRATION STATEMENT: Any registration statement of the Issuer
and the Guarantors, including, but not limited to, the Exchange Offer
Registration Statement or a registration statement of the Issuer and the
Guarantors that otherwise covers any of the Transfer Restricted Securities
pursuant to the provisions of this Agreement, including the Prospectus,
amendments and supplements to such registration statement, including
post-effective amendments, all exhibits, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
RULE 144: Rule 144 promulgated pursuant to the Securities Act, as
currently in effect, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.
RULE 144A: Rule 144A promulgated pursuant to the Securities Act, as
currently in effect, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.
RULE 415: Rule 415 promulgated pursuant to the Securities Act, as
such rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
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SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated thereunder.
SHELF NOTICE: See Section 2(c) hereof.
SHELF REGISTRATION: See Section 3(a) hereof.
TIA: The Trust Indenture Act of 1939, as amended, and the rules and
regulations of the SEC promulgated thereunder.
TRANSFER RESTRICTED SECURITIES: The Notes upon original issuance
thereof and at all times subsequent thereto, until (i) a Registration
Statement covering such Notes has been declared effective by the SEC and such
Notes have been disposed of in accordance with such effective Registration
Statement, (ii) such Notes are sold in compliance with Rule 144 or are
eligible for sale under Rule 144(k) or (iii) such Notes cease to be
outstanding.
TRUSTEE: The trustee under the Indenture and, if existent, under any
indenture governing the Exchange Notes.
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration
in which securities of the Issuer or a Guarantor are sold to an underwriter
for reoffering to the public.
2. EXCHANGE OFFER
(a) To the extent not prohibited by applicable law or applicable
interpretations of the Staff of the SEC, the Issuer and the Guarantors agree
to file with the SEC within 90 days after the Issue Date a registration
statement under the Securities Act with respect to an offer to exchange (the
"Exchange Offer") any and all of the Transfer Restricted Securities for a
like aggregate principal amount of debt securities of the Issuer and the
Guarantors (the "Exchange Notes"), which Exchange Notes will be (i)
substantially identical in all material respects to the Notes, except that
such Exchange Notes will not contain terms with respect to transfer
restrictions and the identity of the Guarantors may change in accordance with
the terms of the Indenture and, (ii) entitled to the benefits of the
Indenture or a trust indenture which is identical to the Indenture (other
than such changes to the Indenture or any such
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identical trust indenture as are necessary to comply with any requirements of
the SEC to effect or maintain the qualification thereof under the TIA), and
which, in either case, has been qualified under the TIA, and (iii) registered
pursuant to an effective Registration Statement in compliance with the
Securities Act. The Exchange Offer will be registered pursuant to the
Securities Act on an appropriate form of Registration Statement (the
"Exchange Offer Registration Statement"), and will comply with all applicable
tender offer rules and regulations promulgated pursuant to the Exchange Act
and shall be duly registered or qualified pursuant to all applicable state
securities or Blue Sky laws. The Exchange Offer shall not be subject to any
condition, other than that the Exchange Offer does not violate any applicable
law, policy or interpretation of the staff of the SEC. No securities shall
be included in the Exchange Offer Registration Statement other than the
Transfer Restricted Securities and the Exchange Notes. The Issuer and the
Guarantors agree to use their reasonable best efforts to cause such Exchange
Offer Registration Statement to be declared effective under the Securities
Act within 180 days after the Issue Date. Promptly after the Exchange Offer
Registration Statement is declared effective, the Issuer and Guarantors will
commence the offer of Exchange Notes in exchange for properly tendered Notes.
The Issuer and Guarantors will keep the Exchange Offer open for not less than
20 business days (or such longer period required by applicable law) after the
date that the notice of the Exchange Offer referred to below is mailed to
Holders. For each Note validly tendered pursuant to the Exchange Offer, the
holder of such Note will receive the Exchange Notes having a principal amount
at maturity equal to that of the tendered Note.
Each Holder who participates in the Exchange Offer will be required
to represent that any Exchange Notes received by it will be acquired in the
ordinary course of its business, that at the time of the consummation of the
Exchange Offer such Holder will have no arrangement or understanding with any
person to participate in the distribution (within the meaning of the
Securities Act) of the Exchange Notes, and that such Holder is not an
"affiliate" of the Issuer within the meaning of Rule 405 of the Securities
Act (or that if it is such an affiliate, it will comply with the registration
and prospectus delivery requirements of the Securities Act to the extent
applicable). Each Holder that is not a Participating Broker-Dealer will be
required to represent that it is not engaged in, and does not intend to
engage in, the distribution of the Exchange Notes. Each Holder that (i) is a
Participating Broker-Dealer and (ii) will receive Exchange Notes for its own
account in exchange for the Transfer Restricted Securities that it acquired
as the result of market-making or other trading activities will be required
to acknowledge that it will deliver a Prospectus as required by law in
connection with any resale of such Exchange Notes. The Issuer shall allow
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Participating Broker-Dealers and other persons, if any, subject to similar
prospectus delivery requirements to use the Prospectus included in the
Exchange Offer Registration Statement in connection with the resale of the
Exchange Notes. Upon consummation of the Exchange Offer in accordance with
this Agreement, the Issuer and the Guarantors shall have no further
obligation to register Transfer Restricted Securities pursuant to Section 3
of this Agreement.
(b) The Issuer and the Guarantors shall include within the
Exchange Offer Registration Statement a section entitled "Plan of
Distribution," reasonably acceptable to the Initial Purchasers, which shall
contain a summary statement of the positions taken or policies made by the
staff of the SEC with respect to the potential "underwriter" status of any
broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act), of Exchange Notes received by such broker-dealer in the
Exchange Offer (a "Participating Broker-Dealer"). Such "Plan of
Distribution" section shall also allow the use of the Prospectus by all
persons subject to the prospectus delivery requirements of the Securities
Act, including all Participating Broker-Dealers, and include a statement
describing the means by which Participating Broker-Dealers may resell the
Exchange Notes.
The Issuer and the Guarantors shall use their reasonable best
efforts to keep the Exchange Offer Registration Statement effective under the
Securities Act and to amend and supplement the Prospectus contained therein,
in order to permit such Prospectus to be lawfully delivered by all persons
subject to the prospectus delivery requirements of the Securities Act for
such period of time as such persons must comply with such requirements in
order to resell the Exchange Notes; PROVIDED that such period shall not
exceed 90 days after consummation of the Exchange Offer (or such longer
period if extended pursuant to the last paragraph of Section 5 hereof) (the
"Applicable Period").
In connection with the Exchange Offer, the Issuer and the Guarantors
shall:
(a) mail as promptly as practicable to each Holder a copy of the Pro-
spectus forming part of the Exchange Offer Registration Statement, together
with an appropriate letter of transmittal and related documents;
(b) utilize the services of a depositary for the Exchange Offer with
an address in the Borough of Manhattan, The City of New York; and
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(c) permit Holders to withdraw tendered Notes at any time prior to
the close of business, New York time, on the last business day on which the
Exchange Offer shall remain open by sending to the institution and at the
address (located in the Borough of Manhattan, The City of New York)
specified in the notice, a telegram, telex, facsimile transmission or letter
setting forth the name of such Holder, the principal amount of Transfer
Restricted Securities delivered for exchange and a statement that such
Holder is withdrawing his or her election to have such Transfer Restricted
Securities exchanged.
As soon as practicable after the close of the Exchange Offer, the
Issuer and the Guarantors shall:
(i) accept for exchange all Notes tendered and not validly withdrawn
pursuant to the Exchange Offer;
(ii) deliver, or cause to be delivered, to the Trustee for cancella-
tion all Notes so accepted for exchange; and
(iii) cause the Trustee to authenticate and deliver promptly to each
Holder of Notes, Exchange Notes equal in principal amount to the Notes of
such Holder so accepted for exchange.
(c) If (1) prior to the consummation of the Exchange Offer, any
change in law or in the applicable interpretations of the staff of the SEC do
not permit the Issuer and the Guarantors to effect the Exchange Offer, or (2)
if for any other reason the Exchange Offer is not consummated within 225 days
of the Issue Date, then the Issuer shall promptly deliver to the Holders and
the Trustee written notice thereof (the "Shelf Notice"), and the Issuer and
the Guarantors shall file a Registration Statement pursuant to Section 3
hereof. Following the delivery of a Shelf Notice to the Holders of Transfer
Restricted Securities, the Issuer and the Guarantors shall not have any
further obligation to conduct the Exchange Offer pursuant to this Section 2,
PROVIDED that the Issuer and the Guarantors shall have the right,
nonetheless, to proceed to consummate the Exchange Offer notwithstanding
their obligations pursuant to this Section 2(c) (and, upon such consummation,
their obligation to consummate a Shelf Registration shall terminate).
3. SHELF REGISTRATION
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If the Issuer and the Guarantors are required to deliver a Shelf
Notice as contemplated by Section 2(c) hereof, then:
SHELF REGISTRATION. The Issuer and the Guarantors shall prepare and
file with the SEC, within 60 days after such filing obligation arises, a
Registration Statement for an offering to be made on a continuous basis
pursuant to Rule 415 covering all of the Transfer Restricted Securities (the
"Shelf Registration Statement"). The Shelf Registration shall be on Form S-1
or another appropriate form permitting registration of the Transfer
Restricted Securities for resale by the Holders in the manner or manners
reasonably designated by the Holders of a majority in aggregate principal
amount of the outstanding Transfer Restricted Securities (including, without
limitation, an underwritten offering). The Issuer and the Guarantors shall
not permit any securities other than the Transfer Restricted Securities to be
included in the Shelf Registration Statement. The Issuer and the Guarantors
shall use their reasonable best efforts to cause the Shelf Registration
Statement to be declared effective pursuant to the Securities Act on or prior
to 60 days after the filing of such Shelf Registration Statement and to keep
the Shelf Registration Statement continuously effective under the Securities
Act until the earlier of (i) the date which is 24 months after the Issue
Date, (ii) the date that all Transfer Restricted Securities covered by the
Shelf Registration Statement have been sold in the manner set forth and as
contemplated in the Shelf Registration Statement or (iii) the date that there
ceases to be outstanding any Transfer Restricted Securities (the
"Effectiveness Period").
4. LIQUIDATED DAMAGES
(a) The Issuer, the Guarantors and the Initial Purchasers agree
that the Holders of Transfer Restricted Securities will suffer damages if the
Issuer or the Guarantors fail to fulfill their obligations pursuant to
Section 2 or Section 3 hereof and that it would not be possible to ascertain
the extent of such damages. Accordingly, in the event of such failure by the
Issuer or the Guarantors to fulfill such obligations, the Issuer hereby
agrees to pay liquidated damages ("Liquidated Damages") to each Holder of
Transfer Restricted Securities under the circumstances and to the extent set
forth below:
(i) if either the Exchange Offer Registration Statement or the Shelf
Registration Statement has not been filed with the SEC on or prior to the
date specified for such filing; or
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(ii) if either the Exchange Offer Registration Statement or the Shelf
Registration Statement is not declared effective by the SEC on or prior to
the date specified for such effectiveness (the "Effectiveness Target Date");
or
(iii) if an Exchange Offer Registration Statement becomes effective,
and the Issuer and the Guarantors fail to consummate the Exchange Offer
within 45 days of the Effectiveness Target Date with respect to the Exchange
Offer Registration Statement; or
(iv) the Shelf Registration Statement is declared effective by the SEC
and such Shelf Registration Statement ceases to be effective or usable in
connection with resales of Notes during the Effectiveness Period;
(any of the foregoing, a "Registration Default"), then the Issuer shall pay
Liquidated Damages to each Holder, with respect to the first 90-day period
immediately following the occurrence of such Registration Default, in an
amount equal to $.05 per week per $1,000 principal amount of Transfer
Restricted Securities held by such Holder. Upon a Registration Default,
Liquidated Damages will accrue at the rate specified above until such
Registration Default is cured and the amount of Liquidated Damages will
increase by an additional $.05 per week per $1,000 principal amount of
Transfer Restricted Securities with respect to each subsequent 90-day period,
up to a maximum amount of Liquidated Damages of $.25 per week per $1,000
principal amount of Transfer Restricted Securities (regardless of whether one
or more than one Registration Default is outstanding). Following the cure of
any Registration Default relating to any Transfer Restricted Securities, the
accrual of Liquidated Damages with respect to such Registration Default will
cease. A Registration Default under clause (i) above shall be cured on the
date that either the Exchange Offer Registration Statement or the Shelf
Registration Statement is filed with the SEC; a Registration Default under
clause (ii) above shall be cured on the date that either the Exchange Offer
Registration Statement or the Shelf Registration Statement is declared
effective by the SEC; a Registration Default under clause (iii) above shall
be cured on the earlier of the date (A) the Exchange Offer is consummated or
(B) the Issuer and the Guarantors deliver a Shelf Notice to the Holders of
Transfer Restricted Securities; and a Registration Default under clause (iv)
above shall be cured on the earlier of (A) the date the Shelf Registration
Statement is declared effective or (B) the Effectiveness Period expires.
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(b) The Issuer shall notify the Trustee within one business day
after each and every date on which a Registration Default first occurs.
Accrued and unpaid Liquidated Damages shall be paid by the Issuer to the
Holders by wire transfer of immediately available funds to the accounts
specified by them or by mailing checks to their registered addresses if no
such accounts have been specified on each interest payment date provided in
the Indenture (whether or not any interest is then payable on the Notes) and
on each payment date provided in the Indenture including, without limitation,
whether upon redemption, maturity (by acceleration or otherwise), purchase
upon a change of control or purchase upon a sale of assets. Each obligation
to pay Liquidated Damages with respect to any Registration Default shall be
deemed to commence accruing on the date of such Registration Default and to
cease accruing when such Registration Default has been cured. In no event
shall the Issuer pay Liquidated Damages in excess of the applicable maximum
weekly amount set forth above, regardless of whether one or multiple
Registration Defaults exist.
(c) The parties hereto agree that the Liquidated Damages provided
for in this Section 4 constitute a reasonable estimate of the damages that
will be suffered by Holders by reason of the failure to file the Exchange
Offer Registration Statement or the Shelf Registration Statement, the failure
of the Exchange Offer Registration Statement or the Shelf Registration
Statement to be declared effective, the failure to consummate the Exchange
Offer or the failure of the Shelf Registration Statement to remain effective,
as the case may be, in accordance with this Agreement.
5. REGISTRATION PROCEDURES
In connection with the registration of any Exchange Notes or
Transfer Restricted Securities pursuant to Sections 2 or 3 hereof, the Issuer
and the Guarantors shall effect such registration to permit the sale of such
Exchange Notes or Transfer Restricted Securities (as applicable) in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Issuer and the Guarantors shall:
(a) prepare and file with the SEC, a Registration Statement or
Registration Statements as prescribed by Section 2 or Section 3 hereof, and
to use their reasonable best efforts to cause such Registration Statement to
become effective and remain effective as provided herein; provided that if
(1) such filing is pursuant to Section 3 hereof, or (2) a Prospectus
contained in an Exchange Offer Registration Statement filed pursuant to
Section 2 hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes
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during the Applicable Period, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Issuer and the
Guarantors shall furnish to and afford the Initial Purchasers and their
counsel (and, in the case of a Shelf Registration Statement, the Holders of
the Transfer Restricted Securities covered thereby and their counsel and the
managing underwriters, if any) a reasonable opportunity to review copies of
all such documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed. Such
documents shall be so furnished at least 3 business days prior to such
filing, or such later date as is reasonable under the circumstances. The
Issuer and the Guarantors shall not file any Registration Statement or
Prospectus or any amendments or supplements thereto if the Initial Purchasers
and their counsel (and, in the case of a Shelf Registration Statement, the
Holders of a majority in aggregate principal amount of the Transfer
Restricted Securities covered by such Registration Statement and their
counsel, or the managing underwriters, if any), shall reasonably object on a
timely basis (except that documents filed as exhibits that are incorporated
by reference or deemed to be incorporated by reference shall not be subject
to such objections);
(b) prepare and file with SEC such amendments and post-effective
amendments to each Shelf Registration Statement or Exchange Offer
Registration Statement, as the case may be, as may be necessary to keep such
Registration Statement continuously effective for the Effectiveness Period or
the Applicable Period, as the case may be, or such shorter period as will
terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold; cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provisions then in force) under
the Securities Act; and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations of the SEC promulgated thereunder
with respect to the disposition of all securities covered by such
Registration Statement, as so amended, or in such Prospectus, as so
supplemented, and with respect to the subsequent resale of any Notes being
sold by a Participating Broker-Dealer covered by any such Prospectus; the
Issuer and the Guarantors shall be deemed not to have used their reasonable
best efforts to keep a Registration Statement effective during the Applicable
Period or the Effectiveness Period, as the case may be, if they voluntarily
take any action that would result in selling Holders of the Transfer
Restricted Securities covered thereby or Participating Broker-Dealers seeking
to sell Exchange Notes not being able to sell such Transfer Restricted
Securities or such Exchange Notes during such Period, unless (i) such action
is required by applicable law, or (ii) such action is taken by them in good
faith and for valid business rea-
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sons (not including avoidance of their obligations hereunder), including the
acquisition or divestiture of assets;
(c) if (1) a Shelf Registration Statement is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Notes during the Applicable Period, notify the selling
Holders of Transfer Restricted Securities, or each Participating
Broker-Dealer that has provided in writing to the Company a telephone or
facsimile number and address for notices, as the case may be, their counsel
and the managing underwriters, if any, promptly and, if requested, confirm
such notice in writing, (i) when a Prospectus, any prospectus supplement or
post-effective amendment has been filed, and, with respect to a Registration
Statement or any post-effective amendment, when the same has become effective
(including in any such written notice a statement that any Holder may, upon
request, obtain, without charge, one conformed copy of such Registration
Statement or post-effective amendment including financial statements and
schedules, documents incorporated or deemed to be incorporated by reference
and exhibits), (ii) of the issuance by the SEC of any stop order suspending
the effectiveness of a Registration Statement or of any order preventing or
suspending the use of any Prospectus or the initiation of any proceedings for
that purpose, (iii) of the receipt by the Issuer or any Guarantor of any
notification with respect to the suspension of the qualification or
exemption from qualification of a Registration Statement or any of the
Transfer Restricted Securities or the Exchange Notes to be sold by any
Participating Broker-Dealer for offer or sale in any jurisdiction, or the
initiation of any proceeding for such purpose, (iv) of the happening of any
material event or any material information becoming known that makes any
statement made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any changes in
such Registration Statement, Prospectus or documents so that, in the case of
the Registration Statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and that
in the case of the Prospectus, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (v) of the
Issuer's and the Guarantors' reasonable determination that a post-effective
amendment to a Registration Statement would be appropriate;
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(d) if (1) a Shelf Registration Statement is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Notes during the Applicable Period, use their best
efforts to prevent the issuance of any order suspending the effectiveness of
a Registration Statement or of any order preventing or suspending the use of
a Prospectus and, if any such order is issued, to use their reasonable best
efforts to obtain the withdrawal of any such order at the earliest possible
moment;
(e) if a Shelf Registration Statement is filed pursuant to Section
3 hereof and if requested by the managing underwriters, if any, or the
Holders of a majority in aggregate principal amount of the Transfer
Restricted Securities being sold in connection with an underwritten offering,
(i) promptly incorporate in a prospectus supplement or post-effective
amendment such information relating to underwriters, if any, any Holder of
Transfer Restricted Securities or the plan of distribution of the Transfer
Restricted Securities as the managing underwriter, if any, or such Holders
may reasonably request to be included therein, (ii) make all required filings
of such prospectus supplement or such post-effective amendment as soon as
practicable after the Issuer has received notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment
pursuant to clause (i), and (iii) supplement or make amendments to such
Registration Statement with such information as is required in connection
with any request made pursuant to clause (i);
(f) if (1) a Shelf Registration Statement is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Notes during the Applicable Period, furnish to each
selling Holder of Transfer Restricted Securities and to each such
Participating Broker-Dealer who so requests and to each managing underwriter,
if any, without charge, one conformed copy of the Registration Statement or
Registration Statements and each post-effective amendment thereto, including
financial statements and schedules, and, if requested, all documents
incorporated or deemed to be incorporated therein by reference and all
exhibits;
(g) if (1) a Shelf Registration Statement is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Notes during the
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Applicable Period, deliver to each selling Holder, or each such Participating
Broker-Dealer, as the case may be, its counsel, and the underwriters, if
any, without charge, as many copies of the Prospectus or Prospectuses
(including each form of preliminary Prospectus), and each amendment or
supplement thereto and any documents incorporated by reference therein, as
such Persons may reasonably request; and, subject to the last paragraph of
this Section 5 hereof, the Issuer and the Guarantors hereby consent to the
use of such Prospectus and each amendment or supplement thereto by each of
the selling Holders or, during the Applicable Period, each such Participating
Broker-Dealer, as the case may be, and their underwriters or agents, if any,
and dealers, if any, in connection with the offering and sale of the Transfer
Restricted Securities covered by or the sale by Participating Broker-Dealers
of the Exchange Notes pursuant to such Prospectus and any amendment or
supplement thereto;
(h) prior to any public offering of Transfer Restricted Securities
or any delivery of a Prospectus contained in the Exchange Offer Registration
Statement by any Participating Broker-Dealer who seeks to sell Exchange Notes
during the Applicable Period, use their reasonable best efforts to register
or qualify, and to cooperate with the selling Holders of Transfer Restricted
Securities or each such Participating Broker-Dealer, as the case may be, the
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Transfer Restricted Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as any selling
Holder, Participating Broker-Dealer, or the managing underwriters reasonably
request in writing; keep each such registration or qualification (or
exemption therefrom), effective during the period such Registration Statement
is required to be kept effective and do any and all other acts or things
reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Exchange Notes held by Participating Broker-Dealers or
the Transfer Restricted Securities covered by the applicable Registration
Statement; PROVIDED that the Issuer and the Guarantors shall not be required
to (A) qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where they are not then so qualified, (B) take any action that
would subject them to general service of process in any such jurisdiction
where they are not then so subject or (C) subject themselves to taxation in
any such jurisdiction where they are not then so subject;
(i) if a Shelf Registration Statement is filed pursuant to Section
3 hereof, cooperate with the selling Holders of Transfer Restricted
Securities and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold, which certificates
14
shall not bear any restrictive legends and shall be in a form eligible for
deposit with The Depository Trust Company ("DTC"), and enable such Transfer
Restricted Securities to be in such denominations and registered in such
names as the managing underwriters, if any, or Holders may reasonably request
at least two business days prior to any sale of the Transfer Restricted
Securities;
(j) if (1) a Shelf Registration Statement is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Notes during the Applicable Period, upon the
occurrence of any event contemplated by paragraph 5(c)(v) or 5(c)(vi) above,
as promptly as practicable prepare and (subject to Section 5(a) hereof), file
with the SEC, at the expense of the Issuer, a supplement or post-effective
amendment to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein
by reference, or file any other required document so that, as thereafter
delivered to the purchasers of the Transfer Restricted Securities being sold
thereunder or to the purchasers of the Exchange Notes to whom such Prospectus
will be delivered by a Participating Broker-Dealer, any such Prospectus will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(k) prior to the effective date of the first Registration
Statement relating to the Transfer Restricted Securities, (i) provide the
Trustee with certificates for the Transfer Restricted Securities in a form
eligible for deposit with DTC and (ii) use its reasonable best efforts to
provide a CUSIP number for the Transfer Restricted Securities;
(l) in connection with an underwritten offering of Transfer
Restricted Securities pursuant to a Shelf Registration Statement, enter into
an underwriting agreement as is customary in underwritten offerings and take
all other customary and appropriate actions as are reasonably requested by
the managing underwriters in order to expedite or facilitate the registration
or the disposition of such Transfer Restricted Securities, and in such
connection, (i) make such representations and warranties to the
underwriters, with respect to the business of the Issuer, the Guarantors and
the Registration Statement, Prospectus and documents, if any, incorporated
or deemed to be incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in underwritten offerings; (ii)
obtain opinions of counsel to the Issuer
15
and Guarantors and updates thereof in form and substance reasonably
satisfactory to the managing underwriters, addressed to the underwriters
covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested
by underwriters; (iii) obtain "cold comfort" letters and updates thereof in
form and substance reasonably satisfactory to the managing underwriters from
the independent certified public accountants of the Issuer and the Guarantors
(and, if necessary, any other independent certified public accountants of
any subsidiary of the Issuer or the Guarantors or of any business acquired by
any of them for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to each of
the underwriters, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as are reasonably requested by
underwriters as permitted by STATEMENT ON AUDITING STANDARDS NO. 72; and (iv)
if an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable than those set
forth in Section 7 hereof with respect to all parties to be indemnified
pursuant to said Section. The above shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder;
(m) if (1) a Shelf Registration Statement is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Notes during the Applicable Period, make available for
inspection by any selling Holder of such Transfer Restricted Securities being
sold, or each such Participating Broker-Dealer, as the case may be, any
underwriter participating in any such disposition of Transfer Restricted
Securities, if any, and any attorney, accountant or other agent retained by
any such selling Holder or each such Participating Broker-Dealer, as the case
may be, or underwriter (collectively, the "Inspectors"), at the offices where
normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of the Issuer, the
Guarantors and their subsidiaries (collectively, the "Records"), as shall be
reasonably necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of the
Issuer, the Guarantors and their subsidiaries to supply all relevant
information reasonably requested by any such Inspector in connection with
such Registration Statement as is customary for due diligence examinations;
provided, however, that the foregoing inspection and information gathering
shall, to the extent reasonably possible, be coordinated on behalf of the
Inspectors by one counsel designated by and on behalf of all such Inspectors.
Records which the Issuer
16
determines, in good faith, to be confidential and any Records which it
notifies the Inspectors are confidential shall not be disclosed by the
Inspectors, unless (i) the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction or (ii) the
information in such Records has been made generally available to the public,
other than as a result of the disclosure or failure to safeguard by such
Inspector;
(n) provide an indenture trustee for the Transfer Restricted
Securities or the Exchange Notes, as the case may be, and cause the Indenture
to be qualified under the TIA not later than the effective date of the
Exchange Offer or the first Registration Statement relating to the Transfer
Restricted Securities; and in connection therewith, cooperate with the
trustee under any such indenture and the Holders of the Transfer Restricted
Securities, to effect such changes to such indenture as may be required for
such indenture to be so qualified in accordance with the terms of the TIA;
and execute, and use their best efforts to cause such trustee to execute, all
customary documents as may be required to effect such changes, and all other
forms and documents required to be filed with the SEC to enable such
indenture to be so qualified in a timely manner;
(o) use its best efforts to comply with all applicable rules and
regulations of the SEC and, as soon as reasonably practicable after the
effective date of the applicable Registration Statement, make generally
available to the holders of Exchange Notes and the Holders, if any, a
consolidated earning statement of the Issuer that satisfies the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder;
(p) if an Exchange Offer is to be consummated, upon delivery of
the Transfer Restricted Securities by Holders to the Issuer (or to such other
Person as directed by the Issuer), in exchange for the Exchange Notes, xxxx,
or cause to be marked, on such Transfer Restricted Securities that such
Transfer Restricted Securities are being cancelled in exchange for the
Exchange Notes; in no event shall such Transfer Restricted Securities be
marked as paid or otherwise satisfied;
(q) cooperate with each seller of Transfer Restricted Securities
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Transfer Restricted Securities and
their respective counsel in connection with any filings required to be made
with the National Association of Securities Dealers, Inc. (the "NASD");
17
(r) use their reasonable best efforts to take all other steps
necessary to effect the registration of the Transfer Restricted Securities
covered by a Registration Statement contemplated hereby; and
(s) use their best efforts to cause the Transfer Restricted
Securities or the Exchange Notes, as applicable, covered by an effective
registration statement required by Section 2 or Section 3 hereof to be rated
by no more than two rating agencies, if so requested by the Holders of a
majority in aggregate principal amount of Transfer Restricted Securities
relating to such registration statement or the managing underwriters in
connection therewith, if any.
The Issuer and the Guarantors may require each seller of Transfer
Restricted Securities or Participating Broker-Dealer as to which any
registration is being effected to furnish to the Issuer such information
regarding such seller or Participating Broker-Dealer and the distribution of
such Transfer Restricted Securities or Exchange Notes to be sold by such
Participating Broker-Dealer, as the case may be, as the Issuer may, from time
to time, reasonably request. The Issuer may exclude from such registration
the Transfer Restricted Securities or Exchange Notes of any seller or
Participating Broker-Dealer, as the case may be, who fails to furnish such
information within a reasonable time after receiving such request.
Each Holder of Transfer Restricted Securities and each
Participating Broker-Dealer agrees by acquisition of such Transfer Restricted
Securities or Ex-change Notes to be sold by such Participating Broker-Dealer,
as the case may be, that, upon receipt of any notice from the Issuer of the
happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv),
5(c)(v) or 5(c)(vi) hereof, such Holder shall forthwith discontinue
disposition of such Transfer Restricted Securities covered by such
Registration Statement or Prospectus or such Exchange Notes to be sold by
such Participating Broker-Dealer, as the case may be, until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated
by Section 5(j) hereof, or until it is advised in writing by the Issuer that
the use of the applicable Prospectus may be resumed, and has received copies
of any amendments or supplements thereto.
18
6. REGISTRATION EXPENSES
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Issuer and the Guarantors shall be
borne by the Issuer and the Guarantors, whether or not the Exchange Offer or
a Shelf Registration Statement is filed or becomes effective, including,
without limitation, (i) all registration and filing fees (including, without
limitation, (A) fees with respect to filings required to be made with the
NASD in connection with an underwritten offering and (B) fees and expenses of
compliance with state securities or Blue Sky laws (including, without
limitation, reasonable fees and disbursements of counsel in connection with
Blue Sky qualifications of the Transfer Restricted Securities or Exchange
Notes), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Transfer Restricted Securities or Exchange Notes in
a form eligible for deposit with DTC and of printing Prospectuses, (iii) fees
and disbursements of counsel for the Issuer and the Guarantors, (iv) fees and
disbursements of all independent certified public accountants referred to in
Section 5(l)(iii) hereof (including, without limitation, the expenses of any
special audit and "cold comfort" letters required by or incident to such
performance), (v) the fees and expenses of any "qualified independent
underwriter" or other independent appraiser participating in an offering
pursuant to Section 3 of Schedule E to the By-laws of the NASD, (vi) rating
agency fees, (vii) fees and expenses of all other Persons retained by the
Issuer and the Guarantors, (viii) internal expenses of the Issuer and the
Guarantors (including, without limitation, all salaries and expenses of
officers and employees of the Issuer and the Guarantors performing legal or
accounting duties), (ix) the expense of any annual audit and (x) the fees and
expenses incurred in connection with the listing of the securities to be
registered on any securities exchange. Nothing contained in this Section 6
shall create an obligation on the part of the Issuer or any Guarantor to pay
or reimburse any Holder for any underwriting commission or discount
attributable to any such Holder's Transfer Restricted Securities included in
an underwritten offering pursuant to a Registration Statement filed in
accordance with the terms of this Agreement, or to guarantee such Holder any
profit or proceeds from the sale of such Notes.
(b) In connection with any Shelf Registration Statement hereunder,
the Issuer and the Guarantors shall reimburse the Holders of the Transfer
Restricted Securities being registered in such registration for the
reasonable fees and disbursements of not more than one counsel chosen by the
Holders of a majority in aggregate principal amount of the Transfer
Restricted Securities to be included in such Registration Statement.
19
7. INDEMNIFICATION
In connection with any Registration Statement, the Issuer and the
Guarantors jointly and severally agree to indemnify and hold harmless (i) the
Initial Purchasers, (ii) each Holder covered thereby and, with respect any
Prospectus delivery as contemplated by the second paragraph of Section 2(b),
each Participating Broker-Dealer, (iii) each person, if any, who controls
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act), any such Person (any of the persons referred to in this clause
(ii) being hereinafter referred to as a "controlling person"), and (iv) the
respective officers, directors, partners, employees, representatives and
agents of any of such Person or any controlling person (any person referred
to in clause (i), (ii), (iii) or (iv) may hereinafter be referred to as an
"Indemnified Person"), to the fullest extent lawful, from and against any and
all losses, claims, damages, liabilities and judgments (including, without
limitation, any legal or other expenses incurred in connection with defending
and investigating any matter, including any action that could give rise to
any such losses, claims, damages, liabilities or judgments) directly or
indirectly based upon or arising out of any untrue statement or alleged
untrue statement of a material fact contained in such Registration Statement
or any Prospectus (as amended or supplemented if the Issuer shall have
furnished to such Indemnified Person any amendments or supplements thereto),
or any preliminary prospectus, arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except insofar as
such losses, claims, damages or liabilities arise out of or are based upon
(i) any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with information relating to any
Indemnified Person furnished to the Issuer or any underwriter in writing by
such Indemnified Person expressly for use therein, or (ii) any untrue
statement contained in or omission from a preliminary Prospectus or
Prospectus if a copy of the Prospectus (as then amended or supplemented, if
the Issuer shall have furnished to or on behalf of the Holder participating
in the distribution relating to the relevant Registration Statement any
amendments or supplements thereto) was not sent or given by or on behalf of
such Holder to the person asserting any such losses, liabilities, claims,
damages or expenses who purchased Notes, if such Prospectus (or Prospectus as
amended or supplemented), is required by law at or prior to the written
confirmation of the sale of such Notes to such person and the untrue
statement contained in or omission from such preliminary Prospectus or
Prospectus was corrected in the Prospectus (or the Prospectus as amended or
supplemented) or (iii) the Holder has not complied with the last paragraph of
Section 5 of this Agreement.
20
In connection with any Registration Statement in which a Holder of
Transfer Restricted Securities is participating, such Holder of Transfer
Restricted Securities agrees, severally and not jointly, to indemnify and
hold harmless the Issuer, each Guarantor, each person who controls the Issuer
or the Guarantors within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act and the respective partners, directors,
officers, representatives, employees and agents of such person or controlling
person to the same extent as the foregoing indemnity from the Issuer and the
Guarantors to each Indemnified Person, but only with reference to information
relating to such Holder furnished to the Issuer in writing by or on behalf of
such Holder expressly for use in any Registration Statement or Prospectus,
any amendment or supplement thereto, or any preliminary Prospectus. The
liability of any Indemnified Person pursuant to this paragraph shall in no
event exceed the net proceeds received by such Indemnified Person from sales
of Transfer Restricted Securities giving rise to such obligations.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted
against any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (the "Indemnified
Party"), shall promptly notify the person against whom such indemnity may be
sought (the "Indemnifying Person"), in writing, and the Indemnifying Person,
upon request of the Indemnified Party, shall assume promptly the defense of
such action, including the employment of counsel reasonably satisfactory to
the Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding. In any such proceeding, any Indemnified Party shall have
the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party, unless (i) the
employment of such counsel shall have been specifically authorized in writing
by the Indemnifying Person (ii) the Indemnifying Person failed promptly to
assume the defense and employ counsel reasonably satisfactory to the
Indemnified Party or (iii) the named parties to any such action (including
any impleaded parties) include both such Indemnified Party and the
Indemnifying Person, or any affiliate of the Indemnifying Person, and such
Indemnified Party shall have been reasonably advised by counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the Indemnifying Person or such affiliate of
the Indemnifying Person (in which case the Indemnifying Person shall not have
the right to assume the defense of such action on behalf of such Indemnified
Party). In any such case, the Indemnifying Person shall not, in connection
with any one such action or separate but substantially
21
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel),
for all such indemnified parties, which firm shall be designated in writing
by those indemnified parties who sold a majority in outstanding aggregate
principal amount of Transfer Restricted Securities sold by all such
indemnified parties, and any such separate firm for the Issuer and the
Guarantors, their directors, their officers and such control persons of the
Issuer and the Guarantors shall be designated in writing by the Issuer. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, which consent shall not be unreasonably
withheld, but if settled with such consent or if there be a final judgment
for the plaintiff, the Indemnifying Person agrees to indemnify any
Indemnified Party from and against any loss or liability by reason of such
settlement or judgment. No Indemnifying Person shall, without the prior
written consent of the Indemnified Party, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Party is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the
subject matter of such proceeding.
If the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the Indemnifying Person(s) and the Indemnified Party, as well as any other
relevant equitable considerations. The relative fault of the Issuer and the
Guarantors on the one hand and any Indemnified Party(s) on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Issuer and the
Guarantors or by such Indemnified Party(s) and the parties' relative intent,
knowl-
22
edge, access to information and opportunity to correct or prevent such
statement or omission.
The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by PRO RATA
allocation (even if such indemnified parties were treated as one entity for
such purpose), or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Party as a
result of the losses, liabilities, claims, damages, judgments, actions and
expenses referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any reasonable legal
or other expenses actually incurred by such Indemnified Party in connection
with investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 7, in no event shall an Indemnified Person be
required to contribute any amount in excess of the amount by which proceeds
received by such Indemnified Person from sales of Transfer Restricted
Securities or Exchange Notes exceeds the amount of any damages that such
Indemnified Person has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act), shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section 7
will be in addition to any liability which the indemnifying parties may
otherwise have to the indemnified parties referred to above. The Indemnified
Persons' obligations to contribute pursuant to this Section 7 are several in
proportion to the respective principal amount of Notes sold by each of the
Indemnified Persons hereunder and not joint.
8. RULES 144 AND 144A
The Issuer and the Guarantors covenant that they will file the reports
required to be filed by them pursuant to the Securities Act and the Exchange
Act and the rules and regulations adopted by the SEC thereunder in a timely
manner and, if at any time the Issuer and the Guarantors are not required to
file such reports, they will, upon the request of any Holder of Transfer
Restricted Securities, make available information required by Rule 144 and
Rule 144A under the Securities Act in order to permit sales pursuant to Rule
144 and Rule 144A. The Issuer and the Guarantors further covenant that they
will take such further action as any Holder of Transfer Re-
23
stricted Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Transfer Restricted Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144 and Rule 144A or (b) any similar rule or
regulation hereafter adopted by the SEC.
9. UNDERWRITTEN REGISTRATIONS
(a) If any of the Transfer Restricted Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
manage the offering will be selected by the Holders of a majority in
aggregate principal amount of such Transfer Restricted Securities included in
such offering and shall be reasonably acceptable to the Issuer. The Issuer
and the Guarantors shall not be obligated to arrange for more than one
underwritten offering during the Effectiveness Period.
No Holder of Transfer Restricted Securities may participate in any
underwritten registration hereunder, unless such Holder (a) agrees to sell
such Holder's Transfer Restricted Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
(b) Each Holder of Transfer Restricted Securities agrees, if requested
(pursuant to a timely written notice) by the managing underwriters in an
underwritten offering or by a placement agent in a private offering of the
Issuer's or the Guarantors' debt securities, not to effect any private sale
or distribution (including a sale pursuant to Rule 144(k) or Rule 144A under
the Securities Act, but excluding non-public sales to any of its affiliates,
officers, directors, employees and controlling persons), of any of the Notes
except pursuant to an Exchange Offer, during the period beginning 10 days
prior to, and ending 90 days after, the closing date of the underwritten
offering.
The foregoing provisions shall not apply to any Holder of Transfer
Restricted Securities if such Holder is prevented by applicable statute or
regulation from entering into any such agreement.
The Issuer and the Guarantors agree not to offer, sell, contract to sell
or otherwise transfer or dispose of any debt securities of the Issuer or the
Guarantors
24
or any warrants, rights or options to purchase or otherwise acquire debt
securities of the Company or any Guarantor substantially similar to the Notes
(other than (i) the Notes and (ii) commercial paper issued in the ordinary
course of business, during such reasonable and customary period beginning 10
days prior to, and ending 60 days after the closing date of each underwritten
offering made pursuant to such Registration Statement as the managing
underwriters therefor request, without the prior written consent of such
managing underwriters of an underwritten offering of Transfer Restricted
Securities covered by a Registration Statement filed pursuant to Section 3
hereof.
10. MISCELLANEOUS
(a) REMEDIES. In the event of a breach by the Issuer or any Guarantor of
any of its obligations under this Agreement, each Holder of Transfer
Restricted Securities, in addition to being entitled to exercise all rights
provided herein, in the Indenture or, in the case of the Initial Purchasers,
in the Purchase Agreement, or granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement.
Subject to Section 4, the Issuer and the Guarantors agree that monetary
damages would not be adequate compensation for any loss incurred by reason of
a breach by any of them of any of the provisions of this Agreement and hereby
further agree that, in the event of any action for specific performance in
respect of such breach, they shall waive the defense that a remedy at law
would be adequate.
(b) NO INCONSISTENT AGREEMENTS. The Issuer and the Guarantors have
not, as of the date hereof, and they shall not, after the date of this
Agreement, enter into any agreement with respect to any of their respective
securities that is inconsistent with the rights granted to the Holders of
Transfer Restricted Securities in this Agreement or otherwise conflicts with
the provisions hereof. The Issuer and the Guarantors will not enter into any
agreement with respect to any of their respective securities which will grant
to any Person piggy-back registration rights with respect to a Registration
Statement.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to or departures from the provisions
hereof may not be given, unless the Issuer has obtained the written consent
of Holders of at least a majority of the then outstanding aggregate principal
amount of Transfer Restricted Securities. Notwithstanding the foregoing, a
waiver or consent to or
25
departure from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders whose securities are being sold pursuant
to a Registration Statement and that does not directly or indirectly affect,
impair, limit or compromise the rights of other Holders may be given by
Holders of at least a majority in aggregate principal amount of the Transfer
Restricted Securities being sold by such Holders pursuant to such
Registration Statement; PROVIDED that the provisions of this sentence may not
be amended, modified or supplemented except in accordance with the provisions
of the immediately preceding sentence.
(d) NOTICES. All notices and other communications (including,
without limitation, any notices or other communications to the Trustee),
provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, next-day air courier or
telecopier:
(i) if to a Holder of Transfer Restricted Securities, at the most
current address given by the Trustee to the Issuer;
(ii) if to the Issuer or the Guarantors, Sun Healthcare Group,
Inc., 000 Xxx Xxxx, X.X., Xxxxxxxxxxx, Xxx Xxxxxx 00000, Attention:
Chief Financial Officer, with a copy to Shearman & Sterling, 000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxxxx X. Xxxxxx, Esq.; and
(iii) if to any Initial Purchasers, c/x Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Syndicate Department, with a copy to Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP at 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx X. Xxxxxxx, Esq.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business
day after being timely delivered to a nationally recognized next-day air
courier, if made by next-day air courier; and when receipt is acknowledged by
the addressee, if telecopied on a business day on such business day, if not
on a business day, on the first business day thereafter.
26
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee under the
Indenture at the address specified in such Indenture.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties
hereto, including, without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities. The Issuer
and the Guarantors agree that the Holders of the Notes shall be third party
creditor beneficiaries to the agreements made hereunder by the Initial
Purchasers, the Issuer and the Guarantors, and each Holder shall have the
right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights hereunder.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(g) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(i) SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties hereto that they
would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(j) ENTIRE AGREEMENT. This Agreement, together with the Purchase
Agreement, is intended by the parties hereto as a final expression of their
agreement, and is intended to be a complete and exclusive statement of the
agreement and
27
understanding of the parties hereto in respect of the subject matter
contained herein and therein.
(k) NOTES HELD BY THE ISSUER, THE GUARANTORS OR THEIR RESPECTIVE
AFFILIATES. Whenever the consent or approval of Holders of a specified
percentage of Transfer Restricted Securities is required hereunder, Transfer
Restricted Securities held by the Issuer, the Guarantors, or their respective
affiliates (as such term is defined in Rule 405 under the Securities Act)
(other than the Initial Purchasers or subsequent Holders of Transfer
Restricted Securities or Exchange Notes if such subsequent Holders are deemed
to be affiliates solely by reason of their holdings of such Transfer
Restricted Securities or Exchange Notes), shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
(l) SURVIVAL. This Agreement is intended to survive the consummation
of the transactions contemplated by the Purchase Agreement. The
indemnification and contribution obligations under section 7 of this
Agreement shall survive the termination of the Issuer's and the Guarantors'
obligations under sections 2 and 3 of this Agreement.
28
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
SUN HEALTHCARE GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President,
Financial Services and Chief
Financial Officer
GUARANTORS, as listed on Schedule A to
the Purchase Agreement
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President and Chief
Financial Officer of the
Guarantors except for
Accelerated Care Plus, LLC
of which he is Senior Vice
President and Chief
Executive Officer of its
members HC, Inc. and
Cal-Med, Inc.
The foregoing Registration
Rights Agreement is hereby
confirmed and accepted as of
the date first above written.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
CREDIT SUISSE FIRST BOSTON
CORPORATION
X.X. XXXXXX SECURITIES, INC.
NATIONSBANC CAPITAL MARKETS, INC.
By: XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
