Exhibit 10.1
ATRIA COMMUNITIES, INC.
FORM OF
REGISTRATION RIGHTS AGREEMENT
___________, 1996
TABLE OF CONTENTS
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PAGE
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1. Certain Definitions.................................................... 1
1.1 Affiliates........................................................ 1
1.2 Common Shares..................................................... 1
1.3 Person............................................................ 1
1.4 Register; Registered; Registration................................ 2
1.5 Registrable Shares................................................ 2
1.6 Registration Expenses............................................. 2
1.7 Rule 144.......................................................... 2
1.8 Securities Act.................................................... 2
1.9 Selling Expenses.................................................. 2
2. Transferability........................................................ 2
2.1 Restrictions on Transferability................................... 2
2.2 Restrictive Legend................................................ 2
2.3 Notice of Proposed Transfers...................................... 3
3. Registration Rights.................................................... 3
3.1 Requested Registration............................................ 3
3.2 Atria Registration................................................ 6
3.3 Holdback Agreement................................................ 7
3.4 Expenses of Registration.......................................... 7
3.5 Registration Procedures........................................... 8
3.6 Indemnification................................................... 9
3.7 Information by Vencor............................................. 11
3.8 Rule 144 Reporting................................................ 11
3.9 Termination of Atria's Obligations................................ 12
4. No Transfer of Registration Rights..................................... 12
5. Dispute Resolution..................................................... 12
6. Miscellaneous.......................................................... 12
6.1 Governing Law..................................................... 12
6.2 Counsel........................................................... 12
6.3 Delays or Omissions............................................... 12
6.4 Entire Agreement.................................................. 12
6.5 Binding Effect.................................................... 13
6.6 Notices........................................................... 13
6.7 Headings.......................................................... 13
6.8 Counterparts...................................................... 14
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6.9 Severability of Provisions....................................... 14
6.10 Exhibits......................................................... 14
6.11 Number; Gender................................................... 14
6.12 Amendment........................................................ 14
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REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered into
this ____ day of ____, 1996, by and between ATRIA COMMUNITIES, INC., a Delaware
corporation ("Atria"), and VENCOR, INC., a Delaware corporation ("Vencor").
RECITALS:
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A. Pursuant to the terms of that certain Incorporation Agreement dated
June __, 1996, Atria issued ______________ shares of its Common Stock, $.10 par
value per share, to Vencor and certain Affiliates (defined in Section 11) of
Vencor.
B. Atria has filed a Registration Statement of Form S-1 with the
Securities and Exchange Commission (the "Commission") in connection with the
initial public offering of its Common Shares (the "IPO").
C. Atria and Vencor desire to set forth in a single agreement the
registration rights to be granted to Vencor incident to Vencor's and its
Affiliates acquiring the Common Shares.
AGREEMENT:
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NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
1.1 AFFILIATES. "Affiliates" shall mean, with respect to Vencor, any
other person that, directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, Vencor,
including, without limitation, any subsidiary of Vencor. With respect to any
other specified person herein, Affiliate shall mean any other person that,
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or under common control with, such specified person.
1.2 COMMON SHARES. "Common Shares" shall mean the shares of Atria's
Common Stock issued to Vencor and its Affiliates pursuant to the Incorporation
Agreement.
1.3 PERSON. "Person" shall mean any individual, partnership,
corporation, trust or other entity.
1.4 REGISTER; REGISTERED; REGISTRATION. "Register," "registered" and
"registration" shall refer to a registration effected by preparing and filing a
registration
statement in compliance with the Securities Act, and the declaration or ordering
of the effectiveness of such registration statement by the Commission.
1.5 REGISTRABLE SHARES. "Registrable Shares" shall mean (i) the
Common Shares, and (ii) all shares of Atria's Common Stock issued as a dividend
on, or other distribution with respect to, or in exchange or in replacement of,
the Common Shares, excluding in all cases, however (including exclusion from the
calculation of the number of outstanding Registrable Shares), any Registrable
Shares sold or otherwise disposed of by Vencor or any of its Affiliates (except
any sale, distribution or other distribution by such Affiliates to Vencor),
including, without limitation, any sale or other disposition in a registration
pursuant to this Agreement or in any transaction pursuant to Rule 144 (as
defined herein).
1.6 REGISTRATION EXPENSES. "Registration Expenses" shall mean all
expenses incurred by Atria in complying with Sections 3.1 and 3.2, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for Atria, blue sky fees and expenses, and the
expense of any special consents, advice or similar audit services of independent
auditors incident to or required by any such registration (but excluding the
compensation of regular employees of Atria which shall be paid in any event by
Atria).
1.7 RULE 144. "Rule 144" shall mean 17 CFR (S) 230.144 as
promulgated by the Commission pursuant to the Securities Act.
1.8 SECURITIES ACT. The "Securities Act" shall mean the Securities
Act of 1933, as amended, or any similar federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.
1.9 SELLING EXPENSES. "Selling Expenses" shall mean all underwriting
discounts and selling commissions applicable to the sale of shares of Atria's
Common Stock, including Registrable Shares, in any sale pursuant to a
Registration by Atria pursuant to this Agreement.
2. TRANSFERABILITY.
2.1 RESTRICTIONS ON TRANSFERABILITY. The Common Shares shall not be
transferable except upon the conditions specified in this Agreement, which
conditions are intended to ensure compliance with the provisions of the
Securities Act, or, in the case of Section 3.8 hereof, to assist in an orderly
distribution.
2.2 RESTRICTIVE LEGEND. Each certificate representing the Common
Shares or securities issued in respect of the Common Shares, shall (unless
otherwise permitted by the provisions of Section 2.3 below) be stamped or
otherwise imprinted with a legend in the following form (in addition to any
legend required under applicable state securities laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
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AS AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS.
THESE SECURITIES ARE "RESTRICTED SECURITIES" AS DEFINED IN THE
RULE 144 PROMULGATED UNDER THE ACT AND MAY NOT BE SOLD OR OFFERED
FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT (i) IN CONJUNCTION WITH AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS, (ii) IN COMPLIANCE WITH RULE 144
AND AN EXEMPTION UNDER APPLICABLE STATE SECURITIES LAWS, OR (iii)
PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION
THAT SUCH REGISTRATION OR COMPLIANCE IS NOT REQUIRED AS TO SUCH
SALE, OFFER OR DISTRIBUTION.
2.3 NOTICE OF PROPOSED TRANSFERS. Prior to any proposed transfer of
any Common Shares, unless there is an effective registration statement under the
Securities Act covering the proposed transfer, Vencor shall give written notice
to Atria of its intention to effect such transfer. Each such notice shall
describe the manner and circumstances of the proposed transfer in sufficient
detail, and shall be accompanied (except that the requirements set forth in the
balance of this sentence need not be complied with where the proposed
transaction complies with Rule 144 so long as Atria is furnished with evidence
of compliance with such rule) by either (i) an unqualified written opinion of
legal counsel which shall be reasonably satisfactory to Atria addressed to
Atria's counsel, to the effect that the proposed transfer of the Restricted
Securities may be effected without registration of the Securities Act, (ii) a
"no action" letter from the Commission to the effect that the distribution of
such securities without registration will not result in a recommendation by the
staff of the Commission that action be taken with respect thereto, or (iii) such
other showing that may be reasonably satisfactory to legal counsel to Atria,
whereupon Vencor shall be entitled to transfer such Restricted Securities in
accordance with the terms of a notice delivered to Atria. Each certificate
evidencing the Restricted Securities transferred as above provided shall bear
the appropriate restrictive legend set forth in Section 2.2., except that such
certificate shall not bear such restrictive legend if in the opinion of counsel
for Atria such legend is not required in order to establish compliance with any
provisions of the Securities Act or applicable state securities laws.
3. REGISTRATION RIGHTS.
3.1 REQUESTED REGISTRATION.
a. GRANT OF REGISTRATION RIGHTS. If Vencor shall, at any time
and from time to time, request Atria in writing to register under the Securities
Act any Registrable Shares, Atria shall use its reasonable best efforts to cause
the prompt registration of all Registrable Shares specified in such request, and
in connection therewith shall prepare and file on such appropriate form as
Atria, in its reasonable discretion, shall determine, a registration statement
under the Securities Act to effect such registration (including, without
limitation, the execution of an undertaking to file post-effective amendments,
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appropriate qualification under applicable Blue Sky or other state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act).
b. CONDITION TO EXERCISE OF REQUESTED REGISTRATION RIGHTS.
Notwithstanding anything in Section 3.1 to the contrary, Atria shall not be
obligated to effect any such registration, or take other specified actions with
respect to, or cooperate in any offering of, Registrable Shares upon the request
of Vencor pursuant to Section 3.1:
i. in any particular jurisdiction in which Atria would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance unless Atria is already subject to
service in such jurisdiction and except as may be required by the Securities
Act;
ii. within 180 days immediately following the effective
date of the registration statement pertaining to the IPO of Atria;
iii. after Atria has effected four registrations pursuant to
this Section 3.1 that have been declared or ordered effective; or
iv. if the number of Registrable Shares included in
Vencor's request are fewer than 1,000,000 Registrable Shares, or the aggregate
value (as defined herein) of the Registrable Shares included in Vencor's request
is less than $15,000,000. For purposes hereof, the term "value" shall mean, as
applicable, (a) the average of the closing bid prices for the Common Stock of
Atria as listed on the NASDAQ system or such other system on which the Common
Stock of Atria is traded for the five trading days immediately preceding the
date of Vencor's request, or (b) the average of the closing prices listed for
the Common Stock of Atria on the exchange on which the Common Stock of Atria is
listed for the five trading days immediately preceding the date of Vencor's
request.
c. WRITTEN NOTICE. Any requests by Vencor for registration of
Registrable Shares pursuant to Section 3.1 shall (i) specify the number of
Registrable Shares which it intends to offer and sell, (ii) express the
intention of Vencor to offer or cause the offering of such Registrable Shares,
(iii) describe the nature or method of the proposed offer and sale thereof, (iv)
contain the undertaking of Vencor to provide all such information regarding its
holdings and the proposed manner of distribution thereof as may be required (A)
to permit Atria to comply with all applicable laws and regulations, all
requirements of the Commission and any other regulatory or self-regulatory body,
any other body having jurisdiction, and any securities exchange on which the
Registrable Shares are to be listed, and (B) to obtain acceleration of the
effective date of any registration statement filed in connection therewith, and
(v) in the case of an underwritten public offering, specify the managing
underwriter or underwriters of such Registrable Shares, which shall be selected
by Atria.
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d. DELAY OF REGISTRATION. If at the time of the request to
register the Registrable Shares Atria notifies Vencor, within five days of
Vencor's request, that Atria is engaged or has fixed plans to engage within 30
days of the time of the request in an underwritten public offering of securities
for Atria's own account and Atria determines in good faith that such offering
would be materially adversely affected by the registration so requested, Atria
may delay filing a registration statement and may withhold efforts to cause the
registration statement to become effective; provided, however, that Atria shall
only be entitled to postpone for a reasonable period of time, not to exceed 90
days, the filing of any registration statement otherwise required to be prepared
and filed by Atria pursuant to Section 3.1. In addition, notwithstanding
anything herein to the contrary, Atria may delay filing a registration statement
and may withhold efforts to cause the registration statement to become
effective, if Atria determines in good faith that such registration might (i)
interfere with or affect the negotiation or completion of any transaction that
is being contemplated by Atria at the time the right to delay is exercised, or
(ii) involve initial or continuing disclosure obligations that might not be in
the best interests of Atria stockholders. If, after a registration statement
becomes effective, Atria advises Vencor that Atria considers it appropriate for
the registration statement to be amended, Vencor shall suspend any further sales
of its registered shares until Atria advises it that the registration statement
has been amended. The 270 day time period referred to in Section 3.5, during
which the registration statement must be kept current after its effective date,
shall be extended for an additional number of days equal to the number of days
during which the right to sell registered shares was suspended pursuant to the
preceding sentence, but in no event will Atria be required to update the
registration statement subsequent to 545 days after the effective date of the
registration statement.
e. UNDERWRITING. If Vencor intends to distribute the
Registrable Shares, which are covered by its request for registration pursuant
to Section 3.1, by means of an underwriting, Vencor shall so advise Atria as a
part of its request. Atria shall, together with Vencor, enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by Atria. Notwithstanding any other provision of
this Section 3.1.e., if the managing underwriter or underwriters determine that
the underwriting would be materially adversely affected by inclusion in such
underwriting of all of the Registrable Shares requested by Vencor and so advises
Vencor in writing, then Vencor shall reduce accordingly the number of
Registrable Shares that will be included in the registration and underwriting.
No Registrable Shares excluded from the underwriting by reason of the managing
underwriter's or underwriters' marketing or other limitations shall be included
in such registration. Should Vencor disapprove of the terms of the
underwriting, Vencor may elect to withdraw therefrom by written notice to Atria
and the managing underwriter or underwriters.
If the managing underwriter or underwriters have not limited the number of
Registrable Shares to be underwritten, Atria may include securities for its own
account in such registration if the managing underwriter or underwriters so
agree and if the number of Registrable Shares which would otherwise have been
included in such registration and underwriting will not thereby be limited.
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3.2 ATRIA REGISTRATION.
a. GRANT OF PIGGYBACK REGISTRATION RIGHT. If Atria shall, at
any time and from time to time, propose to register any of its Common Shares for
its own account, in connection with an underwritten public offering of Common
Shares solely for cash (other than a registration statement filed on Form S-4 or
any other form filed in connection with any acquisition, merger, consolidation
or stock exchange, a registration statement filed solely in connection with
director or employee benefit plans of Atria, or Atria's IPO) Atria shall:
i. give 10 days advance written notice of the proposed
registration (which shall include a list of the jurisdictions in which Atria
intends to attempt to qualify such Common Shares under the applicable Blue Sky
or other state securities laws); and
ii. include in such registration (and any related
qualification under Blue Sky laws or other compliance), and in any underwriting
involved therein, all of the Registrable Shares specified in a written request
or requests by Vencor, made within 10 days after receipt of such written notice
from Atria.
Notwithstanding anything herein to the contrary, Atria may at any time
prior to the effectiveness of any such registration statement, in its sole
discretion and without the consent of Vencor, abandon the proposed registration
in which Vencor had requested to participate.
b. UNDERWRITING. If the registration of which Atria gives
notices is for a registered public offering involving an underwriting, Atria
shall so advise Vencor as a part of the written notice given pursuant to Section
3.2.a.i. In such event the right of Vencor to register its Registrable Shares
pursuant to Section 3.2 shall be conditioned upon Vencor's participation in such
underwriting and the inclusion of Vencor's Registrable Shares in the
underwriting to the extent provided herein. Vencor shall (together with Atria
and any other stockholders (hereinafter, the "Additional Selling Stockholders")
proposing to offer and sell their shares of Atria Common Stock through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by Atria.
Notwithstanding any other provision of this Section 3.2, if the managing
underwriter or underwriters determine that such offering would be materially
adversely affected by inclusion in such underwriting of all of the Registrable
Shares requested by Vencor, the managing underwriter or underwriters may exclude
a portion of such Registrable Shares from such registration and underwriting.
Atria shall so advise Vencor of the managing underwriter's or underwriters'
determination to exclude a portion of the Registrable Shares from such
registration and underwriting within five days after Vencor delivers its request
pursuant to Section 3.2.b., and the number of shares of Common Stock of Atria
that may be included in the registration and underwriting shall be allocated
among Vencor and the Additional Selling Stockholders in proportion, as nearly as
practicable, to the respective amounts of shares of Common Stock of Atria owned
by Vencor and each of the Additional Selling Stockholders at the time of filing
the registration statement. No Registrable Shares excluded from the underwriting
by reason of the managing underwriter's underwriters' determination shall be
included in
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such registration. If Vencor disapproves of the terms of any such underwriting,
Vencor may elect to withdraw therefrom all or a portion of the Registrable
Shares included in its request for registration by written notice to Atria and
the managing underwriter or underwriters, and the Registrable Shares so
withdrawn from the underwriting shall also be withdrawn from such registration.
If, however, one or more Additional Selling Stockholders withdraw shares of
Common Stock from the underwriting and registration, and by virtue of such
withdrawal of such shares and Vencor's withdrawal of Registrable Shares from
such registration, a greater number of shares of Common Stock may be included in
such registration (up to the maximum of any limitation imposed by the managing
underwriter or underwriters), then Atria shall offer to Vencor and the
Additional Selling Stockholders who have elected to include their shares of
Common Stock in the registration the right to include additional shares of
Common Stock, as applicable, in the registration in the same proportions as were
used above in determining the underwriter limitation.
3.3 HOLDBACK AGREEMENT. Vencor agrees, that upon request of Atria or
the managing underwriter or underwriters in any underwritten offering of any
such Registrable Shares, not to make or cause any offering, sale or other
disposition, directly or indirectly, of any Common Shares (or any other
securities of Atria) without the prior approval of the underwriters for such
period of time (not to exceed 180 days) from the effective date of such
registration as may be requested by Atria or the managing underwriter or
underwriters. In addition, Vencor agrees, that upon request of Atria or the
managing underwriter or underwriters in any underwritten offering and
registration of shares of Common Stock (or other securities of Atria) in which
Vencor (having been given notice and the opportunity as required by Section 3.2)
declines to participate, not to make or cause any offering, sale or other
disposition, directly or indirectly, of any Common Shares (or other securities
of Atria) held by it (other than any such Common Shares sold or otherwise
disposed of pursuant to a previously registered and underwritten offering)
without the prior approval of the managing underwriter or underwriters (but not
to exceed a period of time from the effective date of such registration as the
managing underwriter or underwriters shall have requested of all "affiliates"
(as defined in Rule 144) of Atria).
3.4 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with two registrations under Section 3.1 and all registrations under
Section 3.2 shall be borne by Atria. All Registration Expenses incurred in
connection with registrations under Section 3.1 that are subsequent to the
second such registration shall be borne by Vencor. All Selling Expenses
incurred in connection with any underwritten registration under Sections 3.1
shall be borne exclusively by Vencor unless Atria, pursuant to Section 3.1.e.,
includes shares of Common Stock for its own account in such registration, in
which event the Selling Expenses incurred in connection with such underwritten
registration shall be borne by Vencor and Atria pro rata on the basis of the
number of shares of Common Stock registered by each of Vencor and Atria. All
Selling Expenses incurred in connection with any registration under Section 3.2
shall be borne by Vencor and each Additional Selling Stockholder that
participates in the registration, pro rata on the basis of the number of shares
of Common Stock registered by each of Vencor and the Additional Selling
Stockholders. Vencor shall pay the fees and expenses of its legal counsel, but
if and only to the extent that such legal counsel is in addition to counsel as
may be retained to
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represent both parties in connection with any registration or other matter
relating to this Agreement.
3.5 REGISTRATION PROCEDURES. In each registration effected by
Atria pursuant to this Section 3, Atria will keep Vencor advised in writing as
to the initiation of each such registration and as to the completion thereof. At
its expense, Atria will:
i. keep such registration effective for a period of 270
days or until Vencor has completed the distribution described in the
Registration Statement relating thereto, whichever first occurs; provided,
however, the 270 day time period shall be extended for an additional number of
business days equal to the number of business days during which the right to
sell registered shares was suspended or delayed by Atria pursuant to Section
3.1.d., or Section 3.3 of this Agreement, but in no event will Atria be required
to update the registration statement subsequent to 545 days after the effective
date of the registration statement;
ii. prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;
iii. furnish to Vencor such numbers of copies of a
prospectus, including a preliminary prospectus, that conforms to the
requirements of the Securities Act, the registration statement, and such other
documents (including any exhibits thereto or documents referred to therein) as
Vencor may reasonably request in order to facilitate the disposition of the
Registrable Shares owned by it;
iv. use its reasonable best efforts to register and
qualify the Registrable Shares covered by such registration statement under such
other securities or state securities laws of such jurisdictions as shall be
reasonably requested by Vencor; provided, that Atria shall not be required in
connection therewith or as a condition thereto to qualify to do business,
subject itself to taxation, or to file a general consent to service of process
in any such states or jurisdictions;
v. in the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter or underwriter of such
offering; provided, that the form of underwriting agreement must be reasonably
acceptable to Atria and Vencor with respect to secondary distributions. Vencor
shall also enter into and perform its obligations under such an agreement;
vi. at the closing, furnish unlegended certificates
representing ownership of the Registrable Shares being sold in such
denominations as Vencor or the managing underwriter or underwriters shall
request;
vii. instruct the transfer agent and registrar to release
any stop transfer order with respect to the Registrable Shares being sold;
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viii. promptly notify Vencor of the happening of any event
as a result of which any registration statement or any preliminary prospectus or
the prospectus included in such registration statement, as then in effect, or
any other offering document, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing, and prepare and furnish to Vencor as many copies of a supplement to or
an amendment of such offering document which shall correct such untrue statement
or eliminate such omission, as Vencor shall request; and
ix. take such actions and execute and deliver such other
documents as may be necessary to give full effect to the rights of Vencor under
this Agreement.
3.6 INDEMNIFICATION.
a. ATRIA INDEMNITY. In the case of each registration
contemplated by this Agreement, Atria will indemnify Vencor, each of its
officers and directors, each underwriter and each person who controls any
underwriter, and each person, if any, who controls Vencor or any such
underwriter within the meaning of Section 15 of the Securities Act, and each
person affiliated with or retained by Vencor and who may be subject to liability
under any applicable securities laws, against all claims, losses, damages and
liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, to which they
may become subject under the Securities Act or other federal or state law,
arising out of or based on (i) any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular or other similar document (including any related
registration statement, notification or the like) incident to any such
registration, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made, or (ii) any violation by Atria of any federal, state or common law made or
regulation applicable to Atria in connection with any such registration,
qualification or compliance, and will reimburse Vencor, each of its officers and
directors, the underwriter, and each person controlling Vencor, for any legal
and any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, as incurred;
provided, that Atria will not be liable, and shall have no indemnification
obligation hereunder, in any such case to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue statement
or omission, made in reliance on and in conformity with written information
furnished to Atria by an instrument duly executed by Vencor, and stated to be
specifically for use therein.
b. INDEMNITY BY VENCOR. Vencor will, if Registrable Shares
held by Vencor are included in the securities as to which such registration is
being effected, indemnify Atria, each of its officers and directors, each
underwriter and each person who controls any underwriter, and each person, if
any, who controls Atria or any such underwriter within the meaning of Section 15
of the Securities Act, and each person affiliated with or retained by Atria and
who may be subject to liability under any applica-
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ble securities laws, against all claims, losses, damages and liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, to which they may become
subject under the Securities Act or other federal or state law, arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other similar document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made, and will reimburse Atria, such directors, officers, persons,
underwriters or control persons, for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, as incurred, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to Atria by an instrument duly
executed by Vencor and stated to be specifically for use therein.
c. PROCEDURE FOR INDEMNIFICATION.
i. The party seeking indemnification ("Indemnitee") shall
promptly (within 20 days if a third party has commenced actual litigation
against the Indemnitee) give notice to the party from which indemnification is
sought ("Indemnitor") after the Indemnitee has knowledge of any claim against
the Indemnitor as to which recovery may be sought against the Indemnitee
pursuant to this Section 3.6, or of the commencement of any legal proceedings
against the Indemnitee as to such claim after the Indemnitee has knowledge of
such proceedings, whichever shall first occur, and shall permit the Indemnitor,
at the Indemnitor's cost, to assume the defense of any such claim or any
litigation resulting from such claim; provided, Indemnitee shall have the right
to consent to the counsel selected by Indemnitor to defend any such claim (which
consent shall not be unreasonably withheld by Indemnitee). Such notice shall
specify in reasonable detail the facts known to the Indemnitee giving rise to
such indemnification rights and, if possible, an estimate of the amount of
liability which could result therefrom. The right of the Indemnitee to
indemnification hereunder shall be deemed agreed to unless, within ten days
after the receipt of such notice, the Indemnitee is notified in writing by the
Indemnitor that it disputes the right to indemnification as set forth in such
notice. Failure by the Indemnitor to notify the Indemnitee of the Indemnitor's
election to defend such action within ten days after notice thereof shall have
been given to the Indemnitor, or notification to the Indemnitee by the
Indemnitor that the Indemnitee's right to indemnification is being disputed,
shall be deemed a waiver by the Indemnitor of its right to defend such action.
If the Indemnitee shall be so notified of such dispute of such right to
indemnification, the dispute resolution procedures of Section 8 of the
Incorporation Agreement shall apply. The failure of the Indemnitee to give
notice as provided herein shall relieve the Indemnitor of its obligations under
this Section 3.6.c. only to the extent that such failure to give notice shall
materially adversely prejudice the Indemnitor in the defense of any such claim
or any such litigation, but in no event shall such failure relieve the
Indemnitor from any other liability which the Indemnitor may then have or may
subsequently have to the Indemnitee. The Indemnitor shall not, in the defense of
such claim or any litigation resulting therefrom, consent to entry of any
judgment (except with the consent of the Indemnitee)
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or enter into any settlement (except with the consent of the Indemnitee) which
does not include as an unconditional term thereof the giving by the claimant or
the plaintiff to the Indemnitee of a release from all liability in respect of
such claim or litigation.
ii. If the Indemnitor shall not assume the defense of any
such claim or litigation resulting therefrom, the Indemnitee may defend against
such claim or litigation in such manner as it may deem appropriate. The
Indemnitee may settle such claim or litigation on such terms as it may deem
appropriate and the Indemnitor shall promptly reimburse the Indemnitee for the
amount of such settlement, and all expenses, legal or otherwise, incurred by the
Indemnitee in connection with the defense against, or settlement of, such claim
or litigation. If no settlement of such claim or litigation is made, the
Indemnitor shall promptly reimburse the Indemnitee for the amount of any
judgment rendered with respect to such claim or in such litigation, and of all
expenses, legal or otherwise, incurred by the Indemnitee in the defense against
such claim or litigation. Notwithstanding the foregoing, if the Indemnitor has
disputed the Indemnitee's right to indemnification in accordance with the
provisions of Section 3.6.c.i., the Indemnitor shall not be obligated to pay the
Indemnitee the amounts provided for in this Section 3.6.c.ii. until such dispute
has been resolved and it has been determined that the Indemnitor is required to
make such indemnification.
3.7 INFORMATION BY VENCOR. Vencor shall furnish to Atria such
information regarding Vencor and, as necessary, its Affiliates and the
distribution proposed by Vencor as Atria may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Section 3.7.
3.8 RULE 144 REPORTING. With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time permit
the sale of the Restricted Securities to the public without registration, after
such time as a public market exists for the Common Stock of Atria, Atria agrees
to:
a. use its reasonable best efforts to facilitate the sale of
the Restricted Securities to the public, without registration under the
Securities Act, pursuant to Rule 144, provided that this shall not require Atria
to file reports under the Securities Act and the Securities and Exchange Act of
1934, as amended ("Exchange Act") at anytime prior to Atria's being otherwise
required to file such reports;
b. make and keep public information available, as those terms
are understood and defined in Rule 144 at all times after 90 days after the
effective date of the first registration under the Securities Act filed by Atria
for an offering of its securities to the general public;
c. use its reasonable best efforts to then file with the
Commission in a timely manner all reports and other documents required of Atria
under the Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements);
d. so long as Vencor owns any Restricted Securities to furnish
to Vencor forthwith upon request a written statement by Atria as to the
compliance with the
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reporting requirements of said Rule 144 (at any time after 90 days after the
effective date of the first registration statement filed by Atria for an
offering of its securities to the general public), and of the Securities Act and
the Exchange Act (at any time after it has become subject to such reporting
requirements), a copy of the most recent annual or quarterly report of Atria,
and such other reports and documents so filed by Atria as Vencor may reasonably
request in availing itself of any rule or regulation of the Commission allowing
Vencor to sell any such securities without registration.
3.9 TERMINATION OF ATRIA'S OBLIGATIONS. The obligation of Atria to
register the Registrable Shares pursuant to Section 3.1 or 3.2 of this Agreement
shall expire on the earlier of (i) the date when Vencor ceases beneficially to
own any Registrable Shares, or (ii) the date which is the fifth anniversary of
the date the registration statement for the IPO is declared effective by the
Commission.
4. NO TRANSFER OF REGISTRATION RIGHTS. The registration rights granted
under Sections 3.1 and 3.2 of this Agreement may not be assigned or otherwise
conveyed by Vencor.
5. DISPUTE RESOLUTION. If any dispute arises between Vencor and Atria
with respect to their rights or obligations under the terms of this Agreement,
Vencor and Atria agree to follow the dispute resolution procedure set forth in
Section 8 of the Incorporation Agreement.
6. MISCELLANEOUS.
6.1 GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the Commonwealth of
Kentucky.
6.2 COUNSEL. Atria shall select and employ legal counsel to
represent the parties in the registration of shares of Common Stock under this
Agreement. If, in the judgment of Vencor, it would be appropriate to do so,
Vencor may select counsel to represent it in connection with the registration.
Vencor shall be solely responsible for the fees and expenses of any separate
counsel so selected, and Atria shall have no responsibility or liability
whatsoever with respect thereto.
6.3 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to Vencor, upon any breach or default by Atria under
this Agreement, shall impair any such right, power or remedy of Vencor nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereunder occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of Vencor or any breach
or default under this Agreement, or any waiver on the part of Vencor of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies,
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either under this Agreement, or by law or otherwise afforded to Vencor, shall be
cumulative and not alternative.
6.4 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding of the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements, correspondence, arrangements and
understandings relating to the subject matter hereof.
6.5 BINDING EFFECT. All of the terms, provisions and conditions hereof
shall be binding upon and shall inure to the benefit of and be enforceable by
the parties hereto, and their respective heirs, personal representatives,
successors and assigns. Nothing in this Agreement shall entitle any person to
any claim, cause of action, remedy or right of any kind.
6.6 NOTICES. All notices and other communications required or
permitted hereunder shall be sufficiently given if in writing and personally
delivered against a written receipt, if delivered to a reputable express
messenger service (such as Federal Express, UPS or DHL Carrier) for overnight
delivery, when transmitted by confirmed telephone facsimile (fax) or sent by
registered, express or certified U.S. mail, postage prepaid, addressed as
follows:
To Atria: Atria Communities, Inc.
515 W. Market Street
Louisville, Kentucky 40202
Attention: W. Patrick Mulloy, II, President
and Chief Executive Officer
If to Vencor: Vencor, Inc.
3300 Providian Center
500 W. Market Street
Louisville, Kentucky 40202
Attention: Jill L. Force, Esq., Vice
President and General Counsel
or to such other address as either party hereto shall furnish to the other in
writing. Notices shall be deemed given when personally delivered, when delivered
to an express messenger service, when transmitted by confirmed fax or when
deposited in the U.S. mail in accordance with the foregoing provisions. However,
the time period in which a response to any such notice, demand or request must
be given shall commence to run from the date of personal delivery, the date of
delivery by a reputable messenger service, the date on the confirmation of a
fax, or the date on the return receipt, as applicable.
6.7 HEADINGS. The headings in this Agreement are included for purposes
of convenience only and shall not be considered a part of the Agreement in
construing or interpreting any provision hereof.
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6.8 COUNTERPARTS. This Agreement may be executed in counterparts and
each such executed counterpart shall be deemed an original instrument. It shall
not be necessary in making proof of this Agreement or the terms of this
Agreement to produce or account for more than one of such counterparts.
6.9 SEVERABILITY OF PROVISIONS. If any provision of this Agreement or
the application thereof to any person or entity or circumstance shall to any
extent be held in any proceeding to be invalid or unenforceable, the remainder
of this Agreement, or the application of such provision to persons or entities
or circumstances other than those to which it was held to be invalid or
unenforceable, shall not be affected thereby, and shall be valid and enforceable
to the fullest extent permitted by law, but only if and to the extent such
enforcement would not materially and adversely frustrate the parties' essential
objectives as expressed herein.
6.10 EXHIBITS. All Exhibits to this Agreement shall be deemed to be
incorporated herein by reference and made a part hereof as if set out in full
herein.
6.11 NUMBER; GENDER. Unless the context clearly states otherwise, the
use of the singular or plural in this Agreement shall include the other and the
use of any gender shall include all others.
6.12 AMENDMENT. This Agreement may be amended, modified, superseded,
or canceled only by a written instrument signed by all of the parties hereto and
any of the terms, provisions and conditions hereof may be waived, only by a
written instrument signed by the waiving party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ATRIA COMMUNITIES, INC.
By:
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W. Patrick Mulloy, II, President and
Chief Executive Officer
VENCOR, INC.
By:
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Title:
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